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Oil Slips As Market Reassesses Iraq

Oil prices fell Tuesday as supply disruption from Iraq remained minimal and those betting on higher prices began to doubt the possibility of more profit to be made. Brent crude was down 0.1% at $113.96 a barrel on ICE Futures Europe, after a gain of 2.1% last week that took it to fresh nine-month highs. WTI was down 0.3% at $105.84 a barrel on the New York Mercantile Exchange. The net long position, or bets that crude will rise, neared record highs in both the U.S. WTI market and Europe’s Brent market this week. This may have gone too far, said Ole Hansen, commodity analyst at Saxo Bank. When insurgents moved to attack cities in Iraq, the oil market shot higher on anticipation of a cut in supplies. But Iraq’s oil fields remain unaffected and very little supply disruption has yet materialized. "Investors have got a bit carried away […]

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Oil Drops as Iraq Violence Seen Sparing Crude Supplies

Brent crude declined for a third day and West Texas Intermediate slipped amid speculation that Iraqi oil production won’t be disrupted by escalating violence in OPEC’s second-largest producer. Futures decreased as much as 0.4 percent in London. Iraqi forces regained control of the Baiji refinery in the north from Islamist militants, and fighting hasn’t spread to the south, home to more than three-quarters of the country’s crude output. In the U.S., a government report tomorrow may show oil stockpiles slid for a fourth week, according to a Bloomberg News survey. “ Iraq is still the talk of the town, even though the situation on the ground has not escalated materially,” Amrita Sen, chief oil markets analyst at London-based consultant Energy Aspects Ltd., said in a report. “Iraqi supply losses have been minimal so far.” Brent for August settlement dropped as much as 50 cents to $113.62 a barrel on […]

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Natural-Gas Futures Fall on Expectations of Growing Stockpiles

Natural-gas prices slid to a four-week low Monday as market participants remain confident that U.S. stockpiles of the fuel would grow at a faster-than-expected pace. Natural gas for July delivery is down 8.5 cents, or 1.9%, at $4.4460 a million British thermal units on the New York Mercantile Exchange. The U.S. Energy Information Administration confirmed Thursday that the amount of gas added to storage was above 100 billion cubic feet for the sixth-consecutive week, a streak that has put a downward pressure on prices. "The market is anticipating a pretty sizable injection again this week," said Phil Flynn, an analyst at Price Futures Group in Chicago. The EIA is scheduled to release the weekly storage data at 10:30 a.m. EDT Thursday. The amount that can be added to stockpiles is largely dependent on demand for electricity, particularly to run air conditioning, which has so far been […]

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Kerry promises 'intense and sustained' U.S. support for Iraq

Secretary of State John Kerry on Monday promised "intense and sustained" U.S. support for Iraq, but said the divided country would only survive if its leaders took urgent steps to bring it together. Hours before Kerry arrived in Baghdad, Sunni tribes who have joined a militant takeover of northern Iraq seized the only legal crossing point with Jordan, security sources said, leaving troops with no presence along the entire western frontier which includes some of the Middle East’s most important trade routes. U.S. President Barack Obama has offered up to 300 American advisers to Iraq but held off granting a request by Prime Minister Nuri al-Maliki’s Shi’ite Muslim-led government for air strikes to counter the two-week advance by Sunni militants. Officials have meanwhile called for Iraqis to form an inclusive government. The insurgency has been fuelled largely by a sense of materialization and persecution among Iraq’s […]

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Kerry promises ‘intense and sustained’ U.S. support for Iraq

Secretary of State John Kerry on Monday promised "intense and sustained" U.S. support for Iraq, but said the divided country would only survive if its leaders took urgent steps to bring it together. Hours before Kerry arrived in Baghdad, Sunni tribes who have joined a militant takeover of northern Iraq seized the only legal crossing point with Jordan, security sources said, leaving troops with no presence along the entire western frontier which includes some of the Middle East’s most important trade routes. U.S. President Barack Obama has offered up to 300 American advisers to Iraq but held off granting a request by Prime Minister Nuri al-Maliki’s Shi’ite Muslim-led government for air strikes to counter the two-week advance by Sunni militants. Officials have meanwhile called for Iraqis to form an inclusive government. The insurgency has been fuelled largely by a sense of materialization and persecution among Iraq’s […]

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Iraq’s Kurds Weigh Dealing With Baghdad or Going It Alone

U.S. Secretary of State John Kerry arrived in Erbil, the Iraqi Kurdish capital, today to make his case for national unity to the ethnic minority that may hold the only winning hand in the country’s sectarian turmoil. Kerry will meet with Massoud Barzani, president of the Kurdistan Regional Government, and other Kurdish leaders, bringing the same plea for cooperation he delivered yesterday to Shiite and Sunni politicians in Baghdad. In advance of Kerry’s arrival from Amman, Jordan, Barzani signaled yesterday that the “time is here” for the Kurds, a minority of 6.5 million, to decide on independence instead of what’s now a semi-autonomous state within Iraq . As fighting rages between extremists and Iraqi forces, the Kurds are in a position to be deal makers in political talks for a new government. “During the last 10 years, we did everything in our ability, we made every effort and show […]

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Kurdish leader cites 'new reality' in Iraq

IRBIL, Iraq (AP) — The president of Iraq’s ethnic Kurdish region declared Tuesday that "we are facing a new reality and a new Iraq" as the country considers new leadership for its Shiite-led government as an immediate step to curb a Sunni insurgent rampage. The comments by Kurdish President Massoud Barzani came as he met with visiting U.S. Secretary of State John Kerry, who is pushing the central government in Baghdad to at least adopt new policies that would give more authority to Iraq’s minority Sunnis and Kurds. Kerry has repeatedly said that it’s up to Iraqis – not the U.S. or other nations – to select their leaders. But he also has noted bitterness and growing impatience among all of Iraq’s major sects and ethnic groups with the government of Prime Minister Nouri al-Maliki. Barzani told Kerry that Kurds are seeking "a solution for the crisis that we […]

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Kurdish leader cites ‘new reality’ in Iraq

IRBIL, Iraq (AP) — The president of Iraq’s ethnic Kurdish region declared Tuesday that "we are facing a new reality and a new Iraq" as the country considers new leadership for its Shiite-led government as an immediate step to curb a Sunni insurgent rampage. The comments by Kurdish President Massoud Barzani came as he met with visiting U.S. Secretary of State John Kerry, who is pushing the central government in Baghdad to at least adopt new policies that would give more authority to Iraq’s minority Sunnis and Kurds. Kerry has repeatedly said that it’s up to Iraqis – not the U.S. or other nations – to select their leaders. But he also has noted bitterness and growing impatience among all of Iraq’s major sects and ethnic groups with the government of Prime Minister Nouri al-Maliki. Barzani told Kerry that Kurds are seeking "a solution for the crisis that we […]

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Iraqi Kurdistan Gets Around $100 Million for First Major Oil Export

ERBIL, Iraq—The semiautonomous Kurdish region of northern Iraq received close to $100 million for the first million barrels of oil it piped to Turkey and shipped to international markets, an official said Monday, marking a critical step in Kurdish efforts to become independent crude exporters. Buyers of oil from the Kurdistan Regional Government, or KRG, deposited $93 million of the $97 million owed on the first tanker of crude at Turkiye Halk Bankasi AS , Turkey’s state-owned lender known as Halkbank, Turkish Energy Minister Taner Yildiz said Monday in Ankara. The payments came in phases and both Baghdad and Kurdish authorities have been notified about their receipt, Mr. Yildiz said. The first deposit for KRG oil exports comes as the regional authorities in Erbil face a significant budget squeeze. Iraq’s central government started cutting off payments to the KRG in January amid a dispute over the Kurds’ contested right […]

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Iraqi Insurgents Secure Control of Border Posts

ERBIL, Iraq — The Sunni militant extremists who have seized a broad area of Iraq extended their control on Monday to the country’s entire western frontier, having secured nearly all official border crossings with Syria and the only one with Jordan, giving them the semblance of the new independent state that they say they intend to create in the region. With the seizure of the Jordan crossing, which militants from the Islamic State in Iraq and Syria first assaulted late Sunday night, the Iraqi military defenses crumpled, as they have in other battlegrounds in the western and northern parts of the country over the past two weeks. ISIS control of the Jordan border raised the risks that its insurgency could menace not just Syria and Iraq, but Jordan and Saudi Arabia, two important American allies. The border seizure came as Secretary of State John Kerry made an emergency visit […]

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Challenges to Shiite Establishment Further Threaten the Future of Iraq

From his modest office in the shrine city of Najaf, Iraq’s highest religious authority, Grand Ayatollah Ali al-Sistani, leader of the country’s Shiite establishment, issued a call to arms asking his followers to join with the government military to stop the blitzkrieg by the Islamic State in Iraq and Syria. But one cleric, Moktada al-Sadr, who led a militia that fought the government and lost in 2008, decided instead that he too would challenge the state. Mr. Sadr revived his Mahdi Army, possibly one of the largest and most experienced battle groups in Iraq, and announced that under no circumstances would it be under the control of the government. His open challenge to Iraq’s Shiite establishment lays bare the latest in a series of cracks that are dividing the country’s three main ethnic groups, the Shiites, Sunnis and Kurds, as the Iraqi state comes unraveled. But […]

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In Iraq’s Sectarian Violence, a Show of Each Side’s Worst

Sectarian violence in Iraq on Monday showed both sides in the conflict at their brutal worst, as Iraqi police officers were reported to have killed scores of Sunni insurgent prisoners along a highway in the south, and militants in the north turned over the bodies of 15 Shiite civilians they had killed, including women and children, only to bomb the cemetery during their funerals, according to one account. In a third episode without clear sectarian links, a family of six, including three children, was found fatally shot in Tarmiya, a Sunni area in Baghdad Province north of the capital. There was no confirmation about who was behind their deaths. The killings of the Sunni prisoners, all of whom had been arrested on terrorism charges but had not been convicted, were reported near Hilla, a town south of Baghdad, and represented the second such episode in less than […]

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Last of Syria’s Known Chemical Arms Are Shipped Abroad for Destruction

After months of delay, Syria exported the last of its known supplies of chemical weapons components on Monday for destruction overseas, the Organization for the Prohibition of Chemical Weapons announced, calling it a major achievement in a country engulfed by war. But the organization, which is helping oversee Syria’s compliance with its chemical disarmament promises, stopped short of pronouncing Syria free of all chemical weapons. It said that verification work was not complete and reminded the Syrian authorities that they have not yet destroyed — as required — a dozen facilities used for making and mixing the munitions. A separate inquiry by the organization into suspected use of chlorine gas bombs in the conflict is also pending. Syria delivered the final stocks of the more than 1,300 tons of chemical agents it had declared to the port of Latakia, where they were loaded aboard a Danish vessel […]

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Iran can make up for Iraqi oil, minister says

Iran has the ability to make up for any supply issues stemming from ongoing conflict in neighboring Iraq, the Iranian oil minister said. Crude oil prices spiked last week on word Islamist insurgents in Iraq had laid siege to an oil refinery north of the capital city Baghdad. Iranian Oil Minister Bijan Zanganeh said Saturday his country was ready to step in should output from Iraq suffer. "Iran has currently enough capacity to make up for Iraq’s oil supply shortage," he told the Oil Ministry’s news agency, Shana, "Iraq’s upheavals aside, Iran has always sought to maintain a steady and stable supply in the oil market." Closure of the Baiji oil refinery in Iraq has caused national supply disruptions, though U.S. officials have said there are no export problems tied directly to the Sunni-led insurgency. Zanganeh said his country was ready to work with foreign companies who may be […]

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Russia, Iran nuclear contract imminent

Russian plans to sign a contract with Iran to help expand the Bushehr nuclear power facility by the end of the year, Russia’s nuclear regulator said Monday. Sergei Kirienko , chief executive at Rosatom State Atomic Energy Corp., said talks with Iranian officials are close to completion. "We hope that by the end of this year we will move on to the final signing and additions to the intergovernmental agreement, and then the according contract," he said Monday. Russia supplies Iran with fuel needed to power its Bushehr nuclear reactor . In March, a spokesman for the Atomic Energy Organization of Iran said the agreement calls for the pair of 1,000-megawatt reactors to be built near the first unit of the Bushehr nuclear power plant . Russia is under pressure from a U.S. government frustrated with the Kremlin’s reaction to Ukraine’s move toward the European Union, […]

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Vietnam asks China to move oil rig

Vietnam’s official media reports a request was sent to the Chinese side asking they remove the oil rig positioned in disputed maritime territory. China in early May dispatched an oil rig to waters claimed by both the Chinese and Vietnamese governments. A second rig was reportedly sent to the region last week. Both sides have met in Hanoi to discuss the situation, though each side blames the other for the lingering tensions. The official Vietnam News reported Sunday surveillance vessels were still operating within 10-12 nautical miles of the first rig. "[They] conducted communication actions requesting the Chinese side to withdraw the rig and ships from Vietnamese waters," the Sunday report said. The report said Chinese vessels positioned around the rig fired water cannons and rammed Vietnamese boats in the region, causing "many" injuries. Pro-government China Daily published a Sunday editorial suggesting Vietnam was painting itself as the victim […]

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China Seen Bolstering Oil Security as Stockpiles Swell to Record

China may be bolstering its emergency crude reserves as refiners in the world’s second-largest oil consumer expanded commercial stockpiles to a record high in May. Crude inventories rose 4 percent from April, China Oil, Gas & Petrochemicals, published by the official Xinhua News Agency, said in an e-mailed report today. That’s about 33.59 million metric tons, or 246.2 million barrels, the most in records going back to January 2010. Gasoline supplies also swelled to a record, climbing 0.9 percent to an estimated 7.6 million tons. China’s commercial oil stockpiles can be channeled for strategic use, according to industry consultants including ICIS-C1 Energy in Shanghai and FGE in Singapore . Refiners accelerated crude imports in April and May as the nation sought to increase its energy security with prices at a “fairly” high level, said Amy Sun, an oil analyst at ICIS-C1. “We believe high commercial stocks may indicate refiners […]

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Upton: GOP has true energy vision

| License Photo Republicans have a true vision of what an "all-of-the-above" energy strategy looks like for the U.S. government, U.S. Rep. Fred Upton, R-Mich., said. Upton, chairman of the House Energy and Commerce Committee, delivered the weekly Republican address. "The U.S. has entered an era of energy abundance, and now we need the architecture — the infrastructure and policies — to support it," he said in his Saturday address . In its monthly market report, the U.S. Energy Information Administration said it estimated U.S. oil production in May averaged 8.4 million bpd, the highest monthly average in a quarter century. Some U.S. lawmakers say the increased output means the government should embrace more oil exports and pipelines like Keystone XL to take advantage of the situation. Upton says the Republican vision is in contrast to a White House strategy that he says delays Keystone XL and forces states […]

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Bakken Shale Rig Count Increases by One to 173

North Dakota Surpasses the 1-million b/d Oil Mark in April 2014 Bakken Oil Production Forecast – NDPA Bakken Oil Production Forecast – NDPA | Click to Enlarge The  Bakken-Three Forks rig count  increased by one to 173 rigs running across our coverage area by the end of last week. The NDIC notes 189 rigs are active in North Dakota, but around 15 of those are in the process of moving in and rigging up. In recent Bakken news, the State of North Dakota has surpassed the 1-million b/d oil mark according to the North Dakota Industrial Commission’s (NDIC) Department of Mineral Resources (DMR), thanks mostly to the Bakken Shale and Three Forks formation. The preliminary data, released in the monthly  Director’s Cut  in June of 2014, revealed April oil production was 1,001,149 b/d. North Dakota is second only to Texas for oil production. Read more:  North Dakota Hits the 1-Million b/d […]

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Study: Pollution laws reduce deaths from lung illness

North Carolina study finds lung disease mortality rates fell sharply after state passed 2002 air quality law Girls play on a soccer field near a complex operated by Duke Energy in Wilmington, N.C., on Wednesday, Feb. 19, 2014. Randall Hill / AP Regulations designed to reduce air pollution in North Carolina have led not just to cleaner air but to fewer deaths from lung diseases, according to a new  study report released Monday . Researchers at Duke University reviewed 17 years of state air quality data and death records, and found a distinct correlation between the start of stricter pollution rules in 2002 and a marked decline in the number of people perishing from emphysema, asthma and pneumonia. The report was published in the International Journal of COPD.  The evidence pointing to the consequences of air pollution rules likely applies globally, the study’s head author said, adding that it […]

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Robert Rapier: Where The US Got Its Oil From in 2013

As events in Iraq continue to unfold, we have been getting quite a few queries on just how much oil the US imports from Iraq. In my previous post –  The Top 10 Oil Producers in 2013 — I showed that even though the US is a major oil producer, we are an even greater oil consumer. So we import millions of barrels a day of oil from over 40 countries — one of which is in fact Iraq. The Energy Information Administration (EIA) tracks US oil imports and finished product exports, and I have tabulated our Top 10 sources of crude oil imports from 2013. Overall, the US imported 7.7 million barrels per day (bpd) of crude oil in 2013, a 2 million bpd decline since 2008. We imported another 2.1 million bpd of finished products like diesel, gasoline, and jet fuel, but we also exported 3.6 million bpd […]

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Pro-Russian Rebels in Ukraine Match Government Cease-Fire

Pro-Russian separatists declared a cease-fire Monday in a surprise move that they said they hoped would lead to a settlement of the conflict in eastern Ukraine. The announcement came as rebel leaders met with representatives of the Ukrainian government in Kiev, including the former president, Leonid D. Kuchma, as well as the Russian ambassador to Ukraine and a representative of the acting chairman of the Organization for Security and Cooperation in Europe. “In answer to the cease-fire by Kiev, we commit to a cease-fire from our side,” said Aleksandr Borodai, the prime minister of the self-declared Donetsk People’s Republic. Mr. Borodai, a Russian citizen, said the cease-fire would last until Friday, matching the timeline of the cease-fire announced last week by the new Ukraine president, Petro O. Poroshenko. “We also hope that in the time of this bilateral cease-fire,” Mr. Borodai continued, “we can agree to […]

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Breakaway regions agree to observe Ukrainian ceasefire

A pro-Russian rebel leader in Ukraine’s breakaway east said Monday that separatist groups would observe a weeklong ceasefire, a move that raises hope of a breakthrough in the crisis but could nonetheless be undone by fighting on the ground. Alexander Borodai, the self-proclaimed prime minister of the so-called Donetsk People’s Republic, said rebels would lay down their arms in line with a  cease-fire declared Friday by the Ukrainian President Petro Poroshenko. "The consultation ended with authorities of the Luhansk and Donetsk Republics agreeing to maintain a ceasefire for their part until the 27th," Borodai said, following the first face-to-face meeting between separatists and intermediaries from the Ukrainian and Russian governments. It comes despite claims from both sides of numerous violations of the proposed ceasefire over the weekend and amid ongoing skepticism over the chances of a more permanent peace. Borodai’s comments came after Monday’s meeting in Donetsk attended by, […]

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No gas siphoning found, Moscow says

There’s no evidence to suggest Russian natural gas bound for Europe was siphoned off during transit through Ukraine, the Russian Energy Ministry said Monday. "According to [the gas meters], there has not been any siphoning off of Russian gas in Ukraine," a ministry spokesman told state news agency RIA Novosti. The Soviet-era gas transmission network in Ukraine carries more than half of the Russian natural gas bound for the European market. Russian energy company Gazprom last week said it would deliver gas to its Ukrainian counterparts only if paid in advance. Gazprom switched to the pre-payment mechanism saying it was frustrated with the $4 billion debt for gas from Ukraine. Gazprom CEO Alexei Miller said last week Ukraine would siphon off the gas for free unless it secured a substantial discount. "Ukraine will not pay off its gas debt, will take our gas for free in […]

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World Energy 2014-2050 (Part 1)

This is a guest post by Political Economist World Energy 2014-2050: An Informal Annual Report The purpose of this informal report is to provide an analytical framework to track the development of world energy supply and demand as well as their impacts on the global economy. The report projects world supply of oil, natural gas, coal, nuclear, hydro, wind, solar, biofuels, and other renewable energies from 2014 to 2050.  It also projects the overall world energy consumption, gross world economic product, energy efficiency, and carbon dioxide emissions from 2014 to 2050. The basic analytical tool is Hubbert Linearization, first proposed by American geologist M. King Hubbert.  Despite its limitations, Hubbert Linearization provides a useful tool helping to indicate the likely level of ultimately recoverable resources under the existing trends of technology, economics, and geopolitics.  Other statistical methods and some official projections will also be used where they are relevant. […]

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Why Standard Economic Models Don’t Work–Our Economy is a Network

The story of energy and the economy seems to be an obvious common sense one: some sources of energy are becoming scarce or overly polluting, so we need to develop new ones. The new ones may be more expensive, but the world will adapt. Prices will rise and people will learn to do more with less. Everything will work out in the end. It is only a matter of time and a little faith. In fact, the Financial Times published an article recently called “ Looking Past the Death of Peak Oil ” that pretty much followed this line of reasoning. Energy Common Sense Doesn’t Work Because the World is Finite  The main reason such common sense doesn’t work is because in a finite world, every action we take has many direct and indirect effects. This chain of effects produces connectedness that makes the economy operate as a network. This network […]

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'Risky Business' Report Aims to Frame Climate Change as Economic Issue

Henry Paulson, former U.S. Treasury secretary, speaks at the annual Milken Institute Global Conference in April. Bloomberg Former Treasury Secretary Henry Paulson , ex-New York Mayor Michael Bloomberg and Tom Steyer, a hedge-fund billionaire and major Democratic donor, are linking arms Tuesday to release a report, Risky Business, that argues U.S. companies should treat climate change as any other business threat. The report, which says climate change could cost the country billions of dollars over the next two decades, is the product of a bipartisan group of former cabinet officers, lawmakers, corporate leaders and scientists. In an interview, Mr. Paulson said the goal is to depoliticize the climate-change debate and instead focus on how it poses an economic risk to U.S. businesses. "The whole point was to have a bipartisan group who agreed on the nature of the problem, which is that climate change is a huge economic risk," […]

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‘Risky Business’ Report Aims to Frame Climate Change as Economic Issue

Henry Paulson, former U.S. Treasury secretary, speaks at the annual Milken Institute Global Conference in April. Bloomberg Former Treasury Secretary Henry Paulson , ex-New York Mayor Michael Bloomberg and Tom Steyer, a hedge-fund billionaire and major Democratic donor, are linking arms Tuesday to release a report, Risky Business, that argues U.S. companies should treat climate change as any other business threat. The report, which says climate change could cost the country billions of dollars over the next two decades, is the product of a bipartisan group of former cabinet officers, lawmakers, corporate leaders and scientists. In an interview, Mr. Paulson said the goal is to depoliticize the climate-change debate and instead focus on how it poses an economic risk to U.S. businesses. "The whole point was to have a bipartisan group who agreed on the nature of the problem, which is that climate change is a huge economic risk," […]

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Bipartisan Report Tallies High Toll on Economy From Global Warming

More than a million homes and businesses along the nation’s coasts could flood repeatedly before ultimately being destroyed. Entire states in the Southeast and the Corn Belt may lose much of their agriculture as farming shifts northward in a warming world. Heat and humidity will probably grow so intense that spending time outside will become physically dangerous, throwing industries like construction and tourism into turmoil. That is the picture of what may happen to the United States economy in a world of unchecked global warming, according to a major new report being put forward Tuesday by a coalition of senior political and economic figures from the left, right and center, including three Treasury secretaries stretching back to the Nixon administration. At a time when the issue of climate change has divided the American political landscape, pitting Republicans against Democrats and even fellow party members against one another, the unusual […]

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Peak Oil – It’s Just a Rumour

Whenever I present a course, someone will inevitably ask: “When, exactly, do you think we will run out of oil?” “Never!” is always my response. The world will never run out of oil. “But”, they protest, “I saw a report about it on TV”. “I saw a YouTube video about it”. “My science teacher showed us a graph”…… When Professor Marion King Hubbert made his predictions almost sixty years ago that US oil production would peak in the mid 1970s and decline thereafter (and so also by the same reasoning would World oil production), little did he realise what consternation he would create! The truth of the matter is that his analysis and predictions were based on proven reserves from conventional oil fields. And it is true, production from these types of fields did indeed start to decline in the 70s much […]

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Iraq Continues to Support Oil Price

Crude prices were on a more even keel Monday, despite violence in Iraq over the weekend that threatened to tip the oil-producing country even further into chaos. Brent crude was up 0.1% $114.93 a barrel on ICE Futures Europe, after a gain of 2.1% last week that took it to fresh nine-month highs. WTI was up 0.2% at $107.06 a barrel on the New York Mercantile Exchange. Prices have for over a week reflected tension in Iraq, where rebel groups have surged through cities in the north and west. The rebel group, known as ISIS, hasn’t yet approached major oil producing areas in the south, so the price increases have so far been based on anxiety rather than the interruption of supply. Brent’s "current price increase is very much reminiscent of its surge in the late summer of 2013, when it was the threat of a military strike against […]

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Brent Rises Near Nine-Month High on Iraq

Brent traded near the highest level since September and West Texas Intermediate gained as militants in Iraq seized more territory and President Obama warned that the crisis may spill over into other countries. Brent futures climbed as much as 0.7 percent in London . Fighters from the Islamic State in Iraq and the Levant took control of Iraq’s border crossings with Jordan and Syria , Hameed Ahmed Hashim, a member of the Anbar provincial council, said by phone yesterday. A Chinese manufacturing gauge rose to a seven-month high in June, indicating that the economy of the world’s second-biggest oil user is picking up. “We see further price gains, regardless of the fact that oil supply remains unaffected” in Iraq, Carsten Fritsch , an analyst at Commerzbank AG in Frankfurt , said by e-mail. “It’s fear that drives prices up, not real supply disruptions. The latter remain very unlikely.” Brent […]

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Oil rises on Iraq conflict, upbeat China data

HONG KONG (AP) — The price of oil rose Monday, with global crude hovering near a nine-month high, after Islamic militants captured more territory in Iraq and a report on Chinese manufacturing indicated that the No. 2 economy is on the mend. In a blitz through Iraq’s western desert over the weekend, the insurgents captured four towns and three border crossings on the country’s frontiers with Jordan and Syria, greatly expanding territory under their control in the country’s north. "Any spillovers of fighting into the oil-producing southern parts of Iraq will likely take oil, in particular the Brent prices (already buoyed at US$115 a barrel) up by another leg," Mizuho Bank analysts in Singapore said in a report. Brent crude, used to price international oils, jumped 63 cents to $115.44 a barrel in London, close to last Thursday’s $115.71, its highest level since Sept. 9 last year. Benchmark U.S. […]

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Bullish Oil Wagers Reach Record as Fighting Engulfs Iraq

Hedge funds increased bets on rising crude prices to a record as fighting in Iraq threatened to disrupt supply from OPEC’s second-biggest member. Speculators raised their net-long position in benchmark West Texas Intermediate by 4.3 percent in the week ended June 17, U.S. Commodity Futures Trading Commission data show. Futures reached a nine-month high on June 13 after fighters from the Islamic State in Iraq and the Levant, or ISIL, seized the northern city of Mosul and advanced toward Baghdad . While production remains unaffected in the south, home to about three-quarters of Iraq’s output, companies including Exxon Mobil Corp. (XOM) and BP Plc (BP/) began evacuating employees. “The betting is that there’s a greater chance that the price will go up further,” Michael Lynch , the president of Strategic Energy & Economic Research in Winchester, Massachusetts , said by phone on June 20. “The fighting is almost certainly […]

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Iran signals may accept snap nuclear inspections

An Iranian nuclear official says the country may accept snap inspections of its atomic facilities should Iran and world powers reach a final agreement over Tehran’s contentious nuclear program. In 2003, Iran accepted the so-called "additional protocol" of snap inspections for two years, but parliament never ratified it. Quoted by official IRNA news agency, atomic energy organization spokesman Behrouz Kamalvandi said: "The government may accept the additional protocol based on its expediency and progress in the nuclear talks, but Iranian parliament makes the final decision." Iran and world powers – the five permanent members of the U.N. Security Council plus Germany – are negotiating to reach a final deal, with the next round convening July 2. The West suspects Iran’s nuclear program has a military dimension, a charge Iran denies.

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Saudi Arabia's Ability to Plug Oil Gap May Be Limited

Saudi Arabia may be willing to use less than half of its declared oil-producing spare capacity to make up for any possible supply shortfalls in Iraq, according to several Gulf officials, meaning its ability to act as a supplier of last resort could be restricted. The Gulf producer, the only country with a significant base of idle capacity, has often said it could ramp up its production to 12.5 million barrels a day in the event of unexpected disruption to oil supplies elsewhere. But Gulf oil officials say that pumping anywhere near that level and sustaining it is only possible on paper. "Saudi Arabia is now producing around 9.7 million barrels a day. Our best case scenario is seeing its output rising by another 1 million barrels a day or 1.3 million if the oil market is in a disastrous state," one Gulf official at the Organization of the […]

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Saudi Arabia’s Ability to Plug Oil Gap May Be Limited

Saudi Arabia may be willing to use less than half of its declared oil-producing spare capacity to make up for any possible supply shortfalls in Iraq, according to several Gulf officials, meaning its ability to act as a supplier of last resort could be restricted. The Gulf producer, the only country with a significant base of idle capacity, has often said it could ramp up its production to 12.5 million barrels a day in the event of unexpected disruption to oil supplies elsewhere. But Gulf oil officials say that pumping anywhere near that level and sustaining it is only possible on paper. "Saudi Arabia is now producing around 9.7 million barrels a day. Our best case scenario is seeing its output rising by another 1 million barrels a day or 1.3 million if the oil market is in a disastrous state," one Gulf official at the Organization of the […]

Posted On : Published By : Tom Whipple
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Total Evacuates Expatriates From Baghdad

French oil company Total SA (TOT, FP.FR) has evacuated its two expatriates from Baghdad as a safety measure on concerns that the Iraqi capital could be targeted by militants led by the Islamic State of Iraq and al-Sham, or ISIS. Total’s two expatriates were evacuated around a week ago, a spokesman for the company said. The decision echoes that of several other foreign oil and gas companies, which have moved to either repatriate their staff or their nonessential workers or at least stand ready to do so, as the ISIS offensive in northern Iraq has spread toward the south and several oil fields. Total has no operations in Iraq’s southern oil fields but has acquired interests in several blocs in Iraqi Kurdistan, which hasn’t been targeted by the militants. Asked whether the company had any workers in Iraqi Kurdistan and if so whether it was considering […]

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Iraqi Kurdish Government Says it Has Delivered Oil Tanker to Buyer

Iraq’s autonomous Kurdish government has successfully delivered a cargo of its oil to buyers for the first time–setting a precedent that could deepen a standoff with Baghdad. The challenge to Iraq’s central government–which opposes the Kurdish sales–comes as it is already battling a successful push by Sunni militants in the North of the country. The destination of the oil appears to be Israel–a move that would put the Middle East nation at odds with U.S.’s support for Baghdad. In a statement late Saturday, the Kurdish Regional Government said one million barrels of its oil piped through the Turkish port of Ceyhan "was safely delivered to the buyers." According to the Fleetmon shipping-tracking Website, a vessel loaded with Kurdistan oil transhipped its cargo to a second tanker that has now reached waters of the port of Ashkelon in Israel. It’s unclear if […]

Posted On : Published By : Tom Whipple
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Iraq’s Military Seen as Unlikely to Turn the Tide

As Iraqi Army forces try to rally on the outskirts of Baghdad after two weeks of retreat, it has become increasingly clear to Western officials that the army will continue to suffer losses in its fight with Sunni militants and will not soon retake the ground it has ceded. Recent assessments by Western officials and military experts indicate that about a quarter of Iraq ’s military forces are “combat ineffective,” its air force is minuscule, morale among troops is low and its leadership suffers from widespread corruption. As other nations consider whether to support military action in Iraq, their decision will hinge on the quality of Iraqi forces, which have proved far more ragged than expected given years of American training. Even now, fighters with the militant Islamic State in Iraq and Syria are consolidating their gains, extending their hold on Euphrates River valley towns, securing access […]

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Kerry in Baghdad to Urge Iraqis to Form New, Inclusive Government

Secretary of State John Kerry arrived in Baghdad on Monday morning to urge the Iraqis to bridge their sectarian differences and form a new, inclusive government. At the start of a series of meetings with representatives of various Iraqi factions , Mr. Kerry met with Prime Minister Nuri Kamal al-Maliki, along with his top advisers, including Saad al-Dulaimi, the acting minister of defense, and Faleh al-Fayed, the Iraqi national security adviser. Mr. Kerry was accompanied by Robert S. Beecroft, the American ambassador to Iraq, and Brett McGurk, the senior State Department adviser on Iraq. The United States’ formal position, which Mr. Kerry underscored at a joint news conference on Sunday with his Egyptian counterpart, is that it is not in the business of picking Iraq’s leaders. But American officials say that it is imperative that the Iraqis quickly form a new government so they can present a […]

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Militants Take Major Border Post; Kerry Hints U.S. Is Open to a New Premier

The Iraqi government said Sunday that Sunni militants had taken control of a major Iraqi post on the Syrian border, strengthening their ability to move men and supplies into Iraq’s heartland. As the government tried to cast the setback in a positive light, saying troops had made a “tactical” decision to withdraw, Secretary of State John Kerry appeared to increase the pressure on Iraq’s leadership by signaling that the United States was open to the selection of a new prime minister who could bridge the deep sectarian divides in the country. “The United States would like to see the Iraqi people find leadership that is prepared to represent all of the people of Iraq,” Mr. Kerry said Sunday in Cairo, at the start of a Middle East trip to rally Arab support on the Iraq crisis. The formal American position, which Mr. Kerry underscored at a news […]

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Iraqi military facing ‘psychological collapse’ after losses, desertions

The 300 U.S. advisers authorized to assist the Iraqi security forces will find an army in crisis mode, so lacking in equipment and shaken by desertions that it may not be able to win back significant chunks of territory from al-Qaeda renegades for months or even years, analysts and officials say. After tens of thousands of desertions, the Iraqi military is reeling from what one U.S. official described as “psychological collapse” in the face of the offensive from militants of the Islamic State of Iraq and Syria (ISIS). The desperation has reached such a level that Prime Minister Nouri al-Maliki is relying on volunteers, who are in some cases receiving as little as a week’s military training, to protect his ever-shrinking orbit of control. “Over time, what’s occurred is that the Iraqi army has no ability to defend itself,” said Rick Brennan, a Rand Corp. analyst and […]

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Tech Talk – More on Iraq

A single picture is sufficient to tell the story of the fate of the Baiji Refinery in Iraq. Recently reached by the ISIS forces, it has been the largest refinery in Iraq, with a capacity of 310 kbd, and has been used to provide products for domestic use. Since it would provide fuel for both sides in the conflict it had been left largely intact, but that “understanding” seems to have fallen apart. Figure 1. View from space of the fire at the Baiji Refinery in Iraq ( Slate ) The remaining significant refineries in Iraq are at Daura near Baghdad which can produce 210 kbd, although promised at 280 kbd and Basra in the south, which can produce 140 kbd . There are an additional 11 very small refineries located around the country. The conflict has already led to a drop in Iraqi exports of around 300 kbd […]

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Egypt: Minister – Oil Sector Carries Out Ambitious Program to Increase Natural Gas Production

Minister of Petroleum and Mineral Resources Sheriff Ismail on Thursday 19/06/2014 said that the oil sector is carrying out an ambitious program for increasing rates of producing natural gas to meet the local needs. In statements while on an inspection tour of Desouk gas field in Kafr el-Sheikh, Ismail added that the plan will be implemented through developing the newly-discovered oil fields and enhancing exploration operations. He further noted there are positive signs about high productivity in the Delta area. The amount of subsidy for petrol, solar and mazut in Egypt during 2012/2013 fiscal year hit 128 billion pounds, said Petroleum and Mineral Resources Minister Sherif Ismail. Meanwhile, Ismail said that this amount of subsidy for petroleum products drains the state budget, adding that it is difficult now to revoke the subsidy system as it is related to several regulations, including the standard of living, unemployment rate, new projects […]

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China Fuel Oil Imports Drop to Lowest Level Since at Least 2003

China , Asia’s second-largest fuel oil importer, cut shipments last month by 60 percent to the lowest level in at least 11 years, data from the General Administration of Customs in Beijing show. Overseas purchases of the residual fuel fell to 1.13 million metric tons in May, down from 2.83 million tons a year earlier and the least since Bloomberg started tracking the figures in January 2003. In the first five months of this year, imports declined 33 percent to 8.4 million tons. China’s smaller, independent refineries in the eastern province of Shandong process fuel oil and crude to make gasoline and diesel. These so-called teapot plants, which account for more than half of the nation’s fuel oil purchases, may be granted more crude-import licenses this year, an official at the National Development and Reform Commission’s Energy Research Institute said in March. “Teapots are getting access to more crude,” […]

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EU ministers: Sanctions if Russia won't cooperate

Several European foreign ministers on Monday threatened further sanctions if Russia fails to cooperate with Ukraine’s proposed peace plan and doesn’t stop the flow of arms and militants across its border into eastern Ukraine. Russia is "conducting a propaganda war with full speed ahead and no signs of them closing the border," said Swedish Foreign Minister Carl Bildt. Armed militants and even tanks continue to cross the border into eastern Ukraine, he asserted. "If the Russians say they don’t know how to close borders, I don’t think that’s a particularly credible statement," Bildt added. British Foreign Secretary William Hague said the European Union will be able to agree further sanctions against Russia at a summit of the bloc’s 28 leaders Friday, if necessary. "Those measures are ready to take," he said. "We look to Russia to take actual action to stop the flow of arms over […]

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EU ministers: Sanctions if Russia won’t cooperate

Several European foreign ministers on Monday threatened further sanctions if Russia fails to cooperate with Ukraine’s proposed peace plan and doesn’t stop the flow of arms and militants across its border into eastern Ukraine. Russia is "conducting a propaganda war with full speed ahead and no signs of them closing the border," said Swedish Foreign Minister Carl Bildt. Armed militants and even tanks continue to cross the border into eastern Ukraine, he asserted. "If the Russians say they don’t know how to close borders, I don’t think that’s a particularly credible statement," Bildt added. British Foreign Secretary William Hague said the European Union will be able to agree further sanctions against Russia at a summit of the bloc’s 28 leaders Friday, if necessary. "Those measures are ready to take," he said. "We look to Russia to take actual action to stop the flow of arms over […]

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Ukraine Says Rebels Ignoring Unilateral Cease-Fire

Ukrainian authorities on Monday accused pro-Russia separatists in the east of blatantly disregarding a unilateral cease-fire declared by Kiev on Friday and continuing attacks on government forces. The charge comes a day after Russian President Vladimir Putin called for Kiev to hold unconditional talks with rebel leaders , saying it was the only way that a peace plan offered by Ukrainian President Petro Poroshenko could be successful. Mr. Poroshenko has said he is willing to talk with anyone who has opposed the government except for those with "blood on their hands." "In response to this offer of peace, the militants and terrorists have continued their armed attacks, blatantly violating the truce," Ukraine’s defense ministry said in a statement. Western leaders are threatening broader sanctions against Russia if Mr. Putin doesn’t move to stop the separatists from fighting and secure stretches of the border under rebel control. Kiev has accused […]

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The Return of the Bad Old Days of Oil Shocks

The Return of the Bad Old Days of Oil Shocks And we thought the bad old days of oil shocks were over. Embargoes, price spikes, gasoline lines in America, a sweater-bedecked president ordering the end of hot water in many facilities, collapsing retail sales as high gasoline and energy prices hit stores as much as a big tax increase would, economic stagflation, or worse. Well, it just might be that we were wrong to believe that danger to our continued prosperity has been removed with the death of theories about “Peak oil.” Certainly, the takeover of part of Iraq by ISIS forces, variously called “militants,” “terrorists,” “gangsters,” and in White House circles thought to be disaffected Sunnis aching to participate in the government of a democratic Iraq, has set nerves jangling among energy planners. True, most of Iraq’s oil production, at around 3 million barrels per day the second […]

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