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The Bulletin: September 6-12

September 12, 2024

The Bulletin: September 6-12

We really need a plan

Signs of Collapse: Broken Things | how to save the world

Lockheed Martin Develops System to Identify and Counter Online “Disinformation,” Prototyped by DARPA

The Seneca Cliff of Petroleum Production – by Ugo Bardi

Is the World Walking Blindfolded Toward a Nuclear War? – Global Research

Was 911 a False Flag?

From the Archives: Martin Armstrong (Correctly) Predicts Chaos

The Blair Witch Project: Former Prime Minister Calls for Global Censorship – JONATHAN TURLEY

The Looming Shift: Oil Markets Signal a Structural Phase-Change | Art Berman

A Short History of Progress | how to save the world

Matt Taibbi: Why Censorship Is Suddenly Fashionable

The Continuing Lies and Crimes. 9.11 X Twenty-Three = Speechlessness – Global Research

17 Signs of Collapse

Crude oil extraction may be well past peak

The Sun Is Doing Something That It Is Not Supposed To Do, And That Could Mean Big Trouble In The Months Ahead

Oil markets are pricing in long-term supply deficits and OPEC+ will face historic lows in spare capacity, warns IEA

June 17, 2022

Oil markets are pricing in long-term supply deficits and OPEC+ will face historic lows in spare capacity, warns IEA

Fatih Birol, head of IEA — IEA Executive Director Fatih Birol.

The IEA issued a warning for global oil markets Wednesday, saying supply challenges will persist.
Three million barrels per day of Russian crude will disappear as sanctions set in, the IEA predicts.
“Severely restricted refining capacity is causing markets to price in long-term supply deficits in key refined products,” the report said.

The current turmoil across energy markets is set to worsen in 2023, as OPEC+ will face severe supply challenges while fuel prices will stay high, the International Energy Agency warned in its first forecast for next year.

The Paris-based think tank said Wednesday that global oil supplies will “struggle” to keep up with rising demand.

In particular, it highlighted that Russian barrels will disappear from this year’s market at a rate of 3 million barrels per day as more sanctions set in. That result in overall OPEC+ production falling by 520,000 barrels per day next year.

“OPEC+ would have to further tap into its dwindling capacity cushion, reducing it to historic lows,” the IEA said in its report.

Over recent months, oil prices have skyrocketed thanks to dwindling stockpiles and repercussions from Russia’s invasion of Ukraine. In March, the price of Brent crude briefly hit $139 a barrel. It’s hovering near $120 Wednesday.

US gas prices, too, have surged, recently breaking the $5-a-gallon threshold for the first time ever. And the IEA warned prices will stay high for a while as refineries live “hand-to-mouth” amid low crude and product inventories.

“Severely restricted refining capacity is causing markets to price in long-term supply deficits in key refined products,” the agency said. “This translates into a structurally elevated product price outlook.”

…click on the above link to read the rest of the article…

Oil Prices Set To Head Even Higher As Market Tightens

June 24, 2021

Oil Prices Set To Head Even Higher As Market Tightens

Solid oil demand is driving up the spot crude prices in every part of the world. This is a clear indication that the physical oil market is finally catching up with the recent rally in the paper market.

The strengthening appetite for crude in Asia and tightening regional markets due to changed differentials between regional benchmarks are, in turn, supportive of the oil futures rally, analysts and traders tell Reuters.

The surging premium of Brent over the Middle Eastern benchmark Dubai now makes shipping crude grades from the Atlantic Basin to Asia uneconomic because they are priced off the Brent benchmark. So Asian demand for Middle Eastern and Russian grades priced off the Dubai benchmark is high, driving the spot premiums for Omani crude and Russia’s ESPO and Sokol grades close to a one-year high.

At the same time, the narrowing discount of WTI Crude to Brent Crude is effectively shutting the arbitrage for U.S. crude to go to Europe and Asia as the less-than-$2 a barrel spread makes shipping American oil to the major import markets uneconomical.

As a result of these dynamics in spreads between regional benchmarks, physical crude supply in each of the regions is tightening. First, because it’s uneconomical to import crude from other regions. Second, because oil demand is rebounding as the summer driving season begins and economies reopen from restrictions in mobility.

In the paper market, Brent Crude prices already hit $75 a barrel this week, for the first time in over two years. WTI Crude was above $73 early on Wednesday as demand strengthened and as U.S. crude oil inventories were estimated by the American Petroleum Institute (API) to have shrunk by 7.199 million barrels for the week ending June 18.

Backwardation in the WTI futures continues to tighten—a sign of a tighter market.

…click on the above link to read the rest of the article…

The Iran-China Axis Is A Fast Growing Force In Oil Markets

March 29, 2021

The Iran-China Axis Is A Fast Growing Force In Oil Markets

One of the things that doesn’t get a lot of discussion in the press is the under-the-table relationship Iran and China have had when it comes to oil. At first glance, they wouldn’t seem to have a lot in common. One is a theocracy with a radical view of non-believers and the other is probably the only example of a successful communist dictatorship since this form of government was created. But, if you look a little deeper they have a couple of things that align their mutual interests strongly. The first is they are both absolute dictatorships, meaning the institutions of government and national policies can be changed at the whim of those at the top. The second thing they have in common, and this is the main takeaway, both countries have serious geopolitical issues with the United States.

Iran suffers from years of sanctions imposed primarily by the U.S. to compel them to comply with U.N. resolutions regarding their atomic program. China views this century as the one in which they displace America as the world’s dominant Super Power. The place where these two authoritarian government’s worldviews align is in their opposition to the U.S.

It’s worth noting China’s apparent success has been funded by western economies over the last 75-years, thanks to our desire to buy everything as cheaply as possible. In that time, China has become the manufacturing center for the world and amassed immense wealth in doing so. The pandemic has caused a rethinking of the wisdom of outsourcing strategic commodities to despotic regimes, but for now, if you buy something other than food odds are it was made in China.

…click on the above link to read the rest of the article…

David Messler, oilprice.com, china, iran, oil markets, oil,

Yergin: Expect Extreme Volatility In Oil Markets

September 12, 2019

Yergin: Expect Extreme Volatility In Oil Markets

Rising pipeline takeaway capacity in the Permian and global oil demand growth at its weakest in a decade are set to lead to more volatility in oil prices in the near term, a prominent energy expert said, joining a growing number of analysts who see prices further depressed by slowing economies and crude demand.

“The pipeline bottlenecks are in the process of being resolved, so a lot more oil is going to come onto the market by the end of the year. We expect the U.S. (crude oil output) to be up to 13 million barrels a day,” IHS Markit’s vice chairman Daniel Yergin told CNBC on Tuesday.

While U.S. production will continue to add more supply in an already oversupplied global market, on the demand side, expectations are getting increasingly pessimistic.

“We’re in one of the weakest periods since 2008 and we think demand growth this year is under a million barrels per day. So you have that factor at the same time as you have more oil coming to the market. So expect some volatility,” Yergin told CNBC in an interview on the sidelines of a conference in Abu Dhabi.

Despite expectations of volatility, IHS Markit’s vice chairman sees Brent Crude prices range-bound in the US$55-65 range.

Yergin is not alone in predicting substantially lower oil demand growth this year than originally anticipated.

The International Energy Agency (IEA) revised down its demand growth estimates for 2019 in its latest Oil Market Report, by 100,000 bpd to 1.1 million bpd, after seeing that between January and May demand growth was just 520,000 bpd, the lowest increase for the period since 2008.

…click on the above link to read the rest of the article…

The Impending Endgame In Oil Markets

November 20, 2018

The Impending Endgame In Oil Markets

U.S. president Trump is facing strong internal pressure to punish Saudi Arabia in the coming days.

For Washington, however, this could be a double-edged sword, as turning on Saudi Crown Prince Mohammed bin Salman could result in two unwanted major geopolitical consequences. The still fresh Jamal Khashoggi murder case continues to make headlines due to a relentless anti-Saudi media and a diplomatic offensive by Turkey, Qatar and Western diplomats, and it could trigger the largest U.S.-Saudi/Arab crisis in decades.

U.S. politicians have set their sights on the position of the young Saudi Crown Prince, based on still unsubstantiated claims of direct involvement by Ankara and unnamed CIA-officials, U.S. president Trump finds himself backed into a corner to deal directly with the Kingdom.

Until now, the U.S. Administration has refrained from mentioning the direct involvement of MbS in the murder of the former Saudi journalist, but has put sanctions on the officials being connected to the case. Inside of the Kingdom, the pressure is also increasing but this time not to remove MbS, but instead to prepare a harsh response to any possible U.S. claims or sanctions on Royal Family members. Senior Saudi officials have already indicated that a direct attack by Washington or European leaders will be met by severe repercussions.

A Western-Turkish move to pressure Saudi King Salman to remove his son from power is at present unrealistic. Looking at the ongoing situation inside of the Kingdom, and in the Arab world, the support gathered the last weeks by the Saudis from their allies UAE, Bahrain, Egypt, Jordan and Lebanon, is clear. No Arab country will allow for a ruling Crown Prince to be removed from power by an outside, non-Arab entity.

…click on the above link to read the rest of the article…

Tight Oil Markets Are Ignoring Supply Risk

July 27, 2018

Tight Oil Markets Are Ignoring Supply Risk

The global oil market is once again in flux as geopolitics and regional conflicts take an increasingly heavy toll on oil supplies. Since the OPEC meeting in Vienna, warning signs that oil markets are heading for a shortage in supply, due to low spare production capacity and growing security threats in and around the Persian Gulf, have not been taken into account.

The perceived oil production increase from the OPEC and Russia agreement has not materialized in full. Analysts are even reporting that the spare production capacity of Saudi Arabia is less than 500,000 bpd.

This lack of production capacity must now become a major point of focus as, in addition to the ongoing Iran-U.S. confrontation in the Strait of Hormuz, Iranian backed Yemeni Houthi rebels have once again attacked Saudi oil tankers in the Red Sea. In response, Saudi Arabia has suspended oil shipments through the Bab El-Mandeb Strait for an undisclosed period of time.

Aramco stated that “in the interest of the safety of ships and their crews and to avoid the risk of oil spill, Saudi Aramco has temporarily halted all oil shipments through Bab El-Mandeb with immediate effect. The Company is carefully assessing the situation and will take further action as prudence demands”.

Even though no casualties have been reported, the current situation is undeniably dangerous and has been escalating this year.

So far in 2018, the Houthis have threatened to increase their attacks on Saudi or Arab Alliance owned vessels. On April 3, a Saudi tanker was shot at with a projectile from Houthi fighters. Several other Houthi attacks have been reported against commercial vessels in the Red Sea and Bab El Mandeb area lately.

…click on the above link to read the rest of the article…

Are Oil Markets Underestimating Iran’s Threats?

July 26, 2018

Are Oil Markets Underestimating Iran’s Threats?

Iranian officials have suggested that they could shut the Strait of Hormuz if the U.S. moved to completely disrupt Iranian oil exports, a dire scenario that would present a supply shock to the oil market.

The prospect of an outage at the Strait of Hormuz repeatedly crops up when tensions between the U.S. and Iran deteriorate, but most analysts dismiss the idea as fanciful.

But the scenario may not be as outlandish as is commonly thought. Bob McNally, founder and president of energy consultancy The Rapidan Group, said that the U.S. is waging economic war against Iran and when a country is backed into a corner like that, “there has to be some risk that the country will lash out, even if it’s against a bigger power.”

“I think the market’s a little complacent,” he told CNBC, referring to the lack of movement in oil prices following the exchange of threats between Rouhani and Donald Trump. He said that Iran has much less leverage compared to 2012 when it was enriching uranium and oil prices were much higher. With oil prices much lower, Iran’s leverage is weaker, which could lead it to take drastic measures, such as shutting the Strait of Hormuz. It’s a “credible threat,” McNally said.

Obviously, that would send oil prices skyrocketing. “When you talk about Iran’s exports, that’s about 2.5 million barrels per day, but if you talk about interrupting the Strait of Hormuz, that’s 19 million barrels a day,” he said. “About 30 percent of…seaborne-traded oil goes through that strait. So that’s a much bigger problem.”

The real pain would depend on the length of the outage. Most analysts argue that the U.S. Navy would beat back Iranian attempts to close the Strait and would manage to reopen the shipping lane in a matter of days.

…click on the above link to read the rest of the article…

The Single Largest Supply Risk In Oil Markets

March 16, 2018

The Single Largest Supply Risk In Oil Markets

Venezuela could be the reason that “tips the market decisively into deficit,” the International Energy Agency said in a new report.

Venezuela lost another 60,000 barrels per day (bpd) in February, according to the Paris-based energy agency, and continues to present the largest supply risk to the global oil market. The IEA noted that even if Venezuela’s production levels hadn’t cratered over the past year, and it produced at the agreed upon level as part of the OPEC deal, the group would still be posting close to a 100 percent compliance level. As it stands, however, Venezuela’s plummeting output put the cartel’s compliance rate closer to 150 percent, the highest figure to date.

Aside from that, the IEA said that not much has materially changed over the past month, but expressed a more bullish outlook towards the market for 2018. Oil inventories happened to climb in January for the first time since July 2017, but only increased by 18 million barrels, or about half of the usual rate for that time of year. In fact, the oil surplus only stood at 50 million barrels, while refined product supplies are actually in a deficit.

The agency slightly revised up its forecast for oil demand for 2018 by 90,000 bpd to 1.5 million barrels per day (mb/d). Demand is particularly strong in China and India. Supply is still expected to grow by 1.3 mb/d in the U.S., a huge figure, but unchanged from previous forecasts. Non-OPEC supply is expected to grow by 1.8 mb/d.

The IEA says that “market re-balancing is clearly moving ahead with key indicators – supply and demand becoming more closely aligned, OECD stocks falling close to average levels, the forward price curve in backwardation at prices that increasingly appear to be sustainable – pointing in that direction.” Inventories are expected to see a “very small stock build” in the first quarter, but then decline for the rest of the year.

…click on the above link to read the rest of the article…

Glut Or Deficit: Where Are Oil Markets Headed?

March 12, 2018

Glut Or Deficit: Where Are Oil Markets Headed?

A flurry of recent oil market forecasts have sent a lot of mixed messages about what to expect both in the near-term and over the next several years. Is U.S. shale about to flood the market, setting off another bust? Or is demand so strong that with the oil market already rapidly tightening, another price rally is in store?

Obviously, nobody knows how to untangle the long list of variables that will ultimately decide what happens next, but the divergence in opinions is rather striking.

By and large, the discrepancy is over the difference between the short-term and the medium-term. Surging U.S. shale production is keeping the market well supplied right now, but soaring demand and the lack of major conventional projects in the works will lead to a price spike somewhere down the line.

Nevertheless, there is also disagreement over the immediate future. We are currently in the “calm before the storm,” according to Gary Ross, global head of oil analytics and chief energy economist at S&P Global Platts. “Pressure is going to build on crude prices,” he said in an interview with the WSJ. “We’re not feeling it now, but we will.”

Ross argues that oil demand is growing so quickly, that the market will absorb all the extra supply. He says China and India alone will take on an additional 1.1 million barrels per day (mb/d). Meanwhile, oil inventories are sharply down, thanks to the OPEC cuts. After refineries finish up maintenance season, the oil market will wake up to the fact that supplies are incredibly tight, Ross argues. “The world is going to be short come peak season,” he told the WSJ. “When the music stops, someone’s not going to have a seat.”

…click on the above link to read the rest of the article…

Geopolitical Risk Is On The Rise In Oil Markets

February 27, 2018

Geopolitical Risk Is On The Rise In Oil Markets

In the long-term, many oil analysts expect the world to become increasingly dependent on oil production from the Middle East, as U.S. shale fades in importance. However, geopolitical turmoil is already causing disruptions in major oil-producing countries in the Middle East, raising questions about the region’s ability to supply the global market in the long run.

The IEA has repeatedly warned that while U.S. shale has led to oversupply in the short run, shale output cannot meet future demand by itself. By the mid-2020s, especially because there are questions about the longevity of U.S. shale, there could be a much greater reliance on the Middle East, just as there was in the past.

However, according to the Oxford Institute for Energy Studies (OIES), the deteriorating geopolitical landscape in the Middle East could leave longstanding scars on the region’s energy sector.

Geopolitical threats are cropping up in various ways in the Middle East and North Africa. Formal institutions have been weakened, and in places like Libya, Yemen and Syria there is an absolute lack of legitimacy in government. Non-state actors have stepped into the void, such as Hezbollah, the Houthis, Libya Dawn, and others, according to OIES. These rivaling power centers make it tricky for oil companies and oilfield services to make investments.

As far as the oil market goes, these geopolitical problems are not obvious just yet. The glut of U.S. shale has inoculated the oil market from instability and unrest for the time being. Also, while there are plenty of sources of conflict and no shortage of potential threats, actual oil production outages have remained minimal. In fact, Iran ramped up production after the removal of international sanctions, while Libya, and Nigeria restored quite a bit of output after serious outages.

…click on the above link to read the rest of the article…

Physical Oil Markets Don’t Lie – Is Another Crash Likely?

February 15, 2018

Physical Oil Markets Don’t Lie – Is Another Crash Likely?

Oil prices are falling and analysts and market players are as eager as ever to explain the decline in accordance with their own bullish or bearish leanings. It’s a natural correction that was only to be expected after the buildup of long bets on crude oil and oil product futures, the bulls insist. It’s the start of a trend, thanks to the major jump in U.S. production, the bears counter. Now, data from physical oil markets has surfaced that supports the bears’ stance.

North Sea Forties, Russian Urals, WTI, and Atlantic diesel have all fallen to their lowest in several months, Reuters reports, citing commodity traders and analysts. These are physical markets — the markets where actual oil is taken from one place and shipped to another to be refined into fuel and other products, as opposed to the speculative futures market. If the physical market points down, chances are the price drop — 15 percent in three weeks — is not just a blip, as OPEC’s Secretary General Mohammed Barkindo said earlier this week.

Interestingly enough, Barkindo also said he had Russian President Vladimir Putin’s word that Russia will not flood the market with oil while the cut deal still holds. The reason this statement is interesting is that it is the latest example of OPEC’s tendency towards upbeat comments that have little substance, unlike the physical oil market data.

RBC Capital Markets’ Michael Tran told Reuters that, “Physical markets do not lie. If regional areas of oversupply cannot find pockets of demand, prices will decline. Atlantic Basin crudes are the barometer for the health of the global oil market since the region is the first to reflect looser fundamentals. Struggling North Sea physical crudes like Brent, Forties, and Ekofisk suggest that barrels are having difficulty finding buyers.”

…click on the above link to read the rest of the article…

How Vulnerable Are Oil Markets To Extreme Weather?

September 7, 2017

How Vulnerable Are Oil Markets To Extreme Weather?

Last week, Hurricane Harvey made landfall in the United States and for days disrupted the national energy industry.

Refineries were closed, pipelines shut down, tankers held out to sea. The price of fuel shot up as gas stations went dry across the country, while crude slumped with a third of the U.S. refinery capacity shut in.

A week later, a recovery is evident and most of the shuttered facilities in Corpus Christi and elsewhere are slowly coming back on line. But the impact of Harvey will likely be felt for weeks. Gas prices, according to EIA data, remain high in PADD 1 and PADD 3 (East Coast and Gulf Coast).

The massive Motiva refinery has resumed partial production, and Goldman Sachs estimates that half of affected capacity will be back-online. But that leaves 1.4 million bpd that could remain off-line through mid-September, depressing prices.

The actual damage to facilities, according to a report from the New Orleans-based Times Picayune, has been relatively minor. Operations are chiefly impeded by flood waters and the inability of staff to return to work. But there have been reports of chemical leaks and pollutant spillages, while clean-up and repair from Harvey to energy infrastructure could take months and cost billions.

The impact of Harvey has had some market watchers ponder the vulnerabilities of the U.S. energy infrastructure, the bulk of which is located in the Gulf region. And a second monster storm, Hurricane Irma, currently barreling towards Florida, has raised questions regarding the long-term security of the national oil and gas industry. Irma could have a major impact on demand as it slams into the U.S. East Coast, further depressing the price as consumption is curtailed.

…click on the above link to read the rest of the article…

The Fed And The Oil Markets On Unsustainable Path As Election Looms

March 18, 2016

The Fed And The Oil Markets On Unsustainable Path As Election Looms

What started the entire correction, in my view, was the carry trade on buying the Euro ahead of more quantitative easing (QE) and the Fed playing games by talking up a recovery and threatening to raise rates. That created a double whammy on a strong U.S. dollar beginning in the summer of 2014 when oil prices peaked.

At the same time, U.S. producers did manage to ramp up output even further in the second half of 2014, at a time of rising inventories. By the first half of 2015 things began to self-correct as inventories began to fall. Oil prices started to make a recovery but reversed as OPEC flooded the market with more oil, which began in late 2014. Meanwhile the nuclear deal with Iran opened up the prospect of a new source of supply, a fact that was overhyped by the media.

Demand remained strong for gasoline despite the weakening global economy, much to the media’s surprise. Inventories rose in absolute terms, but in terms of days of supply, storage remained at much more modest levels, only eclipsing the upper end of the historic five-year range in 2016.

It now appears that the dollar’s strength is starting to reverse, in part due to the perception that the EU central bank implemented a much more aggressive monetary policy easing than expected, leading speculators who went long on the dollar to believe that the trade is over.

…click on the above link to read the rest of the article…

The Danger Of Low Oil Prices For The Global Economy

February 22, 2016

The Danger Of Low Oil Prices For The Global Economy

Oilprice.com wanted to check in with Dr. John C. Edmunds, a Professor of Finance at Babson College, to get his thoughts on the OPEC deal, oil markets, and some developments in Latin America. He is an expert in international finance, capital markets, foreign exchange risk, and Latin American stock markets.

Dr. Edmunds holds a D.B.A. in International Business from Harvard Business School, an M.B.A. in Finance and Quantitative Methods with honors from Boston University, an M.A. in Economics from Northeastern University, and an A.B. in Economics cum laude from Harvard College. He has consulted with the Harvard Institute for International Development, the Rockefeller Foundation, Stanford Research Institute, and numerous private companies.

This interview has been edited for brevity and clarity.

Oilprice.com: I wanted to start off with the OPEC deal that was announced [on February 16], the production freeze. Notably, Iran declined to comment on whether or not they’d freeze production. So most people think that means they won’t, and that they will still pursue their pre-sanctions production levels. I was wondering what you thought of this deal and if it had any practical implications for the oil markets?

Dr. John Edmunds: Well, I would say that it has not come together yet. Pretty soon they are going to do something because there are countries that are really just flat out desperate. I wouldn’t mention Iran specifically, although, they have been years and years without full income. But the ones I’m aware of right now…Nigeria just announced that they couldn’t pay their school teachers.

Venezuela, that place is just flat out desperate. They have had nothing but oil for, well, since the 1920s. And they don’t even know how to grow food.

…click on the above link to read the rest of the article…

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