Trump says the United States does not want wa

Trump  warns Iran it would face ‘obliteration’ if conflict broke out, as aids reveal the president agonized over the decision to launch attacks

President Trump has said the United States does not want a war but warned Iran it would face 'obliteration' if conflict broke out, as senior aids reveal how he agonized over the decision of whether to launch attacks against three Iranian sites President Trump has said the United States does not want a war but warned Iran it would face ‘obliteration’ if conflict broke out, as senior aids reveal how he agonized over the decision of whether to launch attacks against three Iranian sites. Speaking about his decision to NBC on Friday evening, Trump said the US was open to renewed talks with Iran but the possibility of them developing nuclear weapons was out of the question.  And warned Iran that if conflict does come, there will be ‘obliteration like you’ve never seen before,’ before adding ‘but I’m not looking to do that,’ the president told NBC’s Chuck Todd for ‘Meet the Press.’ Trump said Friday he was ready to attack the sites on Thursday night but he called off the strikes after learning the assault would kill an estimated 150 innocent people. ‘We were cocked & loaded to retaliate last night on 3 different sights when I asked, how many will die. 150 people, sir, was the answer from a General. 10 minutes before the strike I stopped it,’ he said in tweets, ‘not proportionate to shooting down an unmanned drone.’ President Trump has said the United States does not want a war but warned Iran it would face ‘obliteration’ if conflict broke out, as senior aids reveal how he agonized over the decision of whether to launch attacks against three Iranian sites The president gave further insight into his tough decision not to launch attacks against the Iranian sites, adding: ‘I didn’t like it. I didn’t think it was proportionate.’ ‘I thought about it for a second and I said, you know what, they shot down an unmanned drone, plane, whatever you want to call it, and here we are sitting with 150 dead people that would have taken place probably within a half an hour after I said go ahead,’ he told NBC. Tehran claimed that it had received a warning via the Gulf state of Oman that an attack was imminent and that Trump wanted to talk to Iran directly. There was no confirmation of that claim from the US.  Tensions have continued to surmount between the two countries, with the US accusing Iran of attack oil tankers in the region, after Iran announced it would soon exceed international agreed limits on its nuclear programme (Iran says the above are debris from a downed US drone recovered inside its territorial waters) The US has now asked the UN Security Council to meet on Monday to discuss Iran.  ‘We have additional avenues of sanctions pressure to impose. We have got additional sanctions for sure,’ a senior administration official said, according to CNN. ‘I would not say that the President is thinking about military options. The primary thing we’re thinking about is additional sanctions.’ This official cautioned, however, that the President has not taken military action entirely off the table. ‘That’s an option the President maintains

Iran says it will respond firmly to any U.S. threat as tension spikes

DUBAI (Reuters) – Iran said on Saturday it would respond firmly to any U.S. threat against it, the semi-official Tasnim news agency reported, amid escalating tension between Tehran and Washington over the shooting down of an unmanned U.S. drone by the Islamic Republic. On Thursday, an Iranian missile destroyed a U.S. Global Hawk surveillance drone. Tehran said the drone was shot down over its territory and Washington said it had occurred in international airspace. U.S. President Donald Trump said on Friday he aborted a military strike to retaliate for Iran’s downing of the U.S. drone because it could have killed 150 people, and signalled he was open to talks with Tehran. Iran has vowed to defend its borders. “Regardless of any decision they (U.S. officials) make… we will not allow any of Iran’s borders to be violated. Iran will firmly confront any aggression or threat by America,” foreign ministry spokesman Abbas Mousavi told Tasnim. Worries about a confrontation between Iran and the United States have mounted despite Trump saying that he has no appetite to go to war with Iran. Tehran has also said it is not seeking a war but has warned of a “crushing” response if attacked. A senior Arab diplomat said the sharply increased tensions would further harm  “De-escalation is very important because tempers are flaring … It’s very important we avoid confrontation right now,” the senior diplomat told Reuters on condition of anonymity. “Confrontation, whatever we think about Trump or Iran, will be disastrous for everyone.” “Any mistake by Iran’s enemies, in particular America and its regional allies, would be like firing at a powder keg that will burn America, its interests and its allies to the ground,” the senior spokesman of Iran’s Armed Forces, Abolfazl Shekarchi, told Tasnim on Saturday. Tensions began to worsen significantly when Trump pulled out of a 2015 nuclear deal between Iran and six powers and reimposed sanctions on the country. The sanctions had been lifted under the pact in return for Tehran curbing its nuclear programme.

Tehran had received a message from U.S. President Donald Trump warning

Already poor relations between Tehran and Washington got worse Thursday morning after Iranian air defence forces shot down a US spy drone they said was operating in Iranian airspace. US President Donald Trump  issued a multipart statement on Friday morning confirming that he had “stopped” a military strike against three sites in Iran after finding out that about 150 people would die in the attack. The tweets followed earlier reports by US media that Trump had reportedly approved an attack on Iran in response to Thursday’s drone shoot-down, but backtracked at the last minute.

Trump said ten minutes before the strike was set to be carried out, he “stopped it,” saying it was “not proportionate to shooting down an unmanned drone.”

“I am in no hurry,” Trump said, boasting that the US military has been rebuilt and was “ready to go,” and that anti-Iranian sanctions were “biting” and that more have been added after the drone shootdown incident. In the tweets, Trump also accused his predecessor Barrack Obama of making a “desperate and terrible deal with Iran,” accusing him of giving them a “free path to Nuclear Weapons, and SOON.” According to the US president, his decision to terminate the deal and to impose tough sanctions have left Iran a “much weakened nation” that was economically “Bust!”

Huge fire rips through Philadelphia refinery, no casualties reported

(Reuters) – Fire ripped through a Pennsylvania oil refinery early on Friday, triggering a huge explosion that local media said rocked homes several miles away. Video footage showed the 335,000-barrels-per-day Philadelphia Energy Solutions refinery, where another fire broke out 11 days ago, engulfed in flames. There were no immediate reports of casualties at the complex, which NBC Philadelphia said employs around 1,000 people. It quoted officials as saying the fire had been contained. The crude section at the Girard Point portion of the refinery was shut down due to the fire, intelligence provider Genscape said. Philadelphia Energy Solutions spokespeople were not immediately available for comment. Nearby roads were closed and thick smoke blanketed most of central and south Philadelphia, NBC Philadelphia said. “Philadelphia Fire Department is asking residents and businesses east of the fire location in south Philadelphia to shelter in place until further notice,” the City of Philadelphia Office of Emergency Management said in a tweet. Three fire stations and a hazardous materials response crew were mobilised, a fire department official said. Fire broke out on June 10 at the same refinery, which according to a source familiar with plant operations affected a 50,000-barrels-per-day catalytic cracking unit.

Trump Approves Strikes on Iran, but Then Abruptly Pulls Back

Donald Trump wearing a suit and tie: “Let’s see what happens,” President Trump said Thursday after Iran shot down an American surveillance drone.
© Erin Schaff/The New York Times “Let’s see what happens,” President Trump said Thursday after Iran shot…

WASHINGTON — President Trump approved military strikes against Iran in retaliation for downing an American surveillance drone, but pulled back from launching them on Thursday night after a day of escalating tensions. As late as 7 p.m., military and diplomatic officials were expecting a strike, after intense discussions and debate at the White House among the president’s top national security officials and congressional leaders, according to multiple senior administration officials involved in or briefed on the deliberations. Officials said the president had initially approved attacks on a handful of Iranian targets, like radar and missile batteries. The operation was underway in its early stages when it was called off, a senior administration official said. Planes were in the air and ships were in position, but no missiles had been fired when word came to stand down, the official said. The abrupt reversal put a halt to what would have been the president’s third military action against targets in the Middle East. Mr. Trump had struck twice at targets in Syria, in 2017 and 2018. It was not clear whether Mr. Trump simply changed his mind on the strikes or whether the administration altered course because of logistics or strategy. It was also not clear whether the attacks might still go forward. Nick  Bit: That will show them  who is boss. Talk about a loser. commander and wimp

U.S. Expected to Strike Back for Iran’s Downing of Drone

Trump: ‘Iran made a big mistake

The US is  likely to take military action against Iran in the coming days for Tehran’s downing a U.S. drone in international airspace on Wednesday near the Strait of Hormuz. The Central Command said an RQ-4 Global Hawk drone aircraft was shot down by an Iranian surface-to-air missile system while operating in international airspace around 7:35 p.m. on Wednesday. President Trump suggested retaliation for the attack is coming. “Iran made a very big mistake,” the president tweeted. Later during an Oval Office meeting with Canadian prime minister Justin Trudeau, Trump was asked about a military strike against Iran and repeated that Iran “made a very big mistake” because the drone was flying over international waters. “Iran made a big mistake. This drone was in international waters, clearly,” he said. “We have it all documented scientifically, not just words. And they made a very bad mistake.” Trump suggested that the drone was mistakenly shot down and noted that “I have a big, big feeling” an Iranian air defense operator erred in attacking the drone, someone “loose and stupid who did it.” Asked what will come next, the president said “You’ll find out.” Air Force Lt. Gen. Joseph Guastella, commander of Central Command air forces, said the RQ-4 drone was conducting surveillance over the Gulf of Oman and the Strait of Hormuz in international airspace near recent IRGC attacks on two tankers. The drone was struck by an IRGC surface-to-air missile fired from a base near Goruk, Iran, he said. “This was an unprovoked attack on a U.S. surveillance asset that had not violated Iranian airspace at any time during its mission,” Guastella said in a statement. “This attack is an attempt to disrupt our ability to monitor the area following recent threats to international shipping and free flow of commerce.” The three-star general also said that Iran falsely claimed the aircraft was shot down over Iran. “The aircraft was over the Strait of Hormuz and fell into international waters.” “At the time of the intercept, the RQ-4 was operating at high-altitude approximately 34 kilometers from the nearest point of land on the Iranian coast,” he said. “This dangerous and escalatory attack was irresponsible and occurred in the vicinity of established air corridors between Dubai, UAE, and Muscat Oman, possibly endangering innocent civilians.” “Iranian reports that the aircraft was over Iran are false,” said CENTCOM spokesman Capt. Bill Urban. “This was an unprovoked attack on a U.S. surveillance asset in international airspace.” Tensions have increased with Iran since last week when the Islamic Revolutionary Guards Corps, Tehran’s shock troops, were caught removing a limpet mine from the hull of a Japanese tanker that had been hit by other mines the United States has concluded came from Iran. “They would be making a big mistake if they doubted the president’s resolve on this,” Bolton added, echoing the president’s tweet. The latest confrontation sent crude oil prices higher over concerns of a new Middle East war. Oil prices increased more than $3 to $63 a barrel, Reuters reports. Options are expected to range from covert action against Iranian military targets using special forces commandos to airstrikes against Iranian bases. The administration is weighing what it regards as proportional responses to recent Iranian actions. That would likely mean an airstrike against Iranian air defense batteries located near the Strait of Hormuz that were involved in shooting down the Global Hawk drone.

Pentagon: New US Troop Deployment to Middle East to Include Patriot Missiles, Drones

The Pentagon revealed Wednesday that the US’ latest troop deployment to the Middle East will also include a Patriot Missile battalion, drones and manned surveillance aircraft. Additionally, the Pentagon has indicated that it doesn’t want war with Iran, but that it is “postured and ready to defend US forces and interests in the region,” Reuters reported. The latest development comes days after then acting Defense Secretary Patrick Shanahan announced on Monday that the US would be sending an additional 1,000 troops to the Middle East to counter alleged Iranian aggression. In a statement released at the time, Shanahan stated that the servicemembers would be used “for defensive purposes to address air, naval and ground-based threats” in the region. “The recent Iranian attacks validate the reliable, credible intelligence we have received on hostile behavior by Iranian forces and their proxy group that threaten United States personnel and interests across the region,” the statement adds. The Monday reveal in addition to the previous deployment of a US aircraft carrier strike group earlier this year was prompted by the US’ claims that Iran was to blame for the recent attacks on oil tankers in the region. Iran has repeatedly rejected the notion that it had anything to do with the strikes. Relations between the US and Iran have largely remained at a simmer since the US opted to pull out of the 2015 Joint Comprehensive Plan of Action, an act which subsequently triggered the restart of a series of sanctions.

Iran Revolutionary Guard shoots down US drone amid tensions

Iran’s Revolutionary Guard shot down a U.S. RQ-4 Global Hawk on Thursday, June 20, 2019, amid heightened tensions between Tehran and Washington over its collapsing nuclear deal with world powers, American and Iranian officials said, though they disputed the circumstances of the incident. (Airman 1st Class D. Blake Browning/U.S. Air Force via AP)

TEHRAN, Iran (AP) — Iran’s Revolutionary Guard shot down a U.S. surveillance drone on Thursday amid heightened tensions between Tehran and Washington over the collapsing nuclear deal with world powers, American and Iranian officials said, though they disputed the circumstances of the incident. The Guard said it shot down the RQ-4 Global Hawk drone over Iranian airspace, while the U.S. said the downing happened over international airspace in the Strait of Hormuz. The different accounts could not be immediately reconciled. The U.S. military’s Central Command called it an “unprovoked attack” and President Donald Trump tweeted that “Iran made a very big mistake” in shooting it down. Previously, the U.S. military alleged that Iran had fired a missile at another drone last week that was responding to the attack on two oil tankers near the Gulf of Oman. The U.S. blames Iran for the attack on the ships; Tehran denies it was involved.

Oil prices jump as downed U.S. drone stokes Middle East tensions

DUBAI/WASHINGTON (Reuters) – Iran has shot down a U.S. drone which the elite Revolutionary Guards said on Thursday was flying over southern Iran, raising fears that a major military confrontation could erupt between Tehran and Washington. Guards website Sepah News said the “spy” drone was brought down over the southern Iranian province of Hormozgan, which is on the Gulf. While Iran’s state news agency IRNA carried the same report, identifying the drone as an RQ-4 Global Hawk, a U.S. official said a U.S. Navy MQ-4C Triton had been shot down in international airspace over the Strait of Hormuz.. The MQ-4C Triton’s manufacturer, Northrop Grumman, says on its website that the Triton can fly for over 24 hours at a time, at altitudes higher than 10 miles, with an operational range of 8,200 nautical miles. The U.S. military has in recent days confirmed an attempt by Iran to shoot down a U.S. drone last week as well as the successful shooting down of one on June 6 by Iran-aligned Houthi forces in Yemen. A senior Iranian security official said on Wednesday Iran would “strongly respond” to any violation of its airspace. “Our airspace is our red line and Iran has always responded and will continue to respond strongly to any country that violates our airspace,” the semi-official Tasnim news agency quoted the secretary of Iran’s Supreme National Security council as saying. Tension between Iran and the United States has spiked since last year when President Donald Trump withdrew from a 2015 nuclear deal between Iran and major powers and reimposed sanctions on it. Concern about a military confrontation has increased since attacks on two oil tankers in the Gulf of Oman last week and on four tankers off the United Arab Emirates on May 12, both near the Strait of Hormuz, a major conduit for global oil supplies. The United States and its regional ally, Saudi Arabia, blamed Iran for the incidents. Iran has denied responsibility. The U.S. military has sent forces, including aircraft carriers, B-52 bombers and troops to the Middle East. However, Trump said he does not seek war with Iran. Iran said last week that it was responsible for the security of the Strait of Hormuz, calling on American forces to leave the Gulf. In protest at Trump’s “maximum pressure”, in May Iran said it would start enriching uranium at a higher level unless other European signatories to the nuclear deal protected its economy from the U.S. sanctions within 60 days.

EIA data show first U.S. crude-supply decline in 3 weeks

Bloomberg News

Oil futures turned higher Wednesday after a U.S. government snapshot of crude supplies revealed a larger-than-expected drawdown in crude stockpiles, the first in three weeks. The market also digested news that the Organization of the Petroleum Exporting Countries and their allies will now hold their ministerial meetings on July 1 and July 2. They had previously been scheduled for June 25-26, but analysts said some producers wanted the meetings to follow the Group of 20 leaders summit held of June 28-29.“Middle East conflict is sure to influence crude prices, with a frenetic end to the month of June as the G20 meeting and more details to emerge on the possibility of an extension to the OPEC+ supply cut agreement,” said Alfonso Esparza, senior market analyst at Oanda, in an email update. West Texas Intermediate crude for July delivery CLN19, -0.45% rose 22 cents, or 0.4%, to $54.12 a barrel on the New York Mercantile Exchange. The July contract, which expires at Thursday’s settlement, had been trading lower ahead of the supply data. August Brent crude BRNQ19, -0.19%  added 14 cents, or 0.2% to $62.28 a barrel on ICE Futures Europe. It wrapped up Tuesday at $62.14, the highest settlement in a week. The Energy Information Administration reported Wednesday that U.S. crude supplies fell by 3.1 million barrels for the week ended June 14. That followed two consecutive weeks of gains.  The American Petroleum Institute on Tuesday reported an 812,000-barrel fall, according to sources. The EIA data also showed that gasoline inventories were down 1.7 million barrels, while distillate stockpiles edged lower by 600,000 barrels last week. The S&P Global Platts survey had shown expectations for supply increases of 1 million barrels each for gasoline and distillates. Broader financial market action continues to color energy market sentiment. Tuesday’s oil-price gains came after a tweet from U.S. President Donald Trump suggested progress in trade talks with China, lifting benchmark stock indexes and easing concerns over energy demand.

Iraq’s Contingency Plan If US-Iran Standoff Blocks Its Oil Exports

Iraq

Iraq is looking to draft contingency plans in case the heightened tension in the Middle East results in some kind of blockade of Iraq’s oil exports through the Persian Gulf—a key lane for almost all of the exports of OPEC’s second-largest oil producer, oil ministry spokesman Assem Jihad told AFP on Monday. “There is no replacement for the southern port and our other alternatives are limited. It’s a source of anxiety for the global oil market,” Jihad told AFP on Monday. Tensions in the Gulf and in the Middle East have dramatically risen since Thursday, when two oil tankers were apparently attacked in the Gulf of Oman, just outside the Strait of Hormuz which connects the Persian Gulf with the Gulf of Oman and the open seas. The daily flows of oil through the Strait of Hormuz account for around 30 percent of all seaborne-traded crude oil and other liquids.  Iran’s Foreign Minister Mohammad Javad Zarif tweeted early on Thursday that “Suspicious doesn’t begin to describe what likely transpired this morning,” referring to the attacks, while the United States directly blamed Iran for the attacks.

The Persian Gulf and then the Strait of Hormuz, which Iran has repeatedly threatened to block, are the key export routes of more than 3 million bpd of Iraqi crude oil from its southern ports lying on the Persian Gulf. According to officials who spoke to Reuters last month, Iraq’s exports from the Gulf ports averaged 3.454 million bpd in May.

Cutting off Iraq’s crude oil exports would be disastrous for the country, which relies very much on oil revenues for its budget income, so the Persian Gulf and the Strait of Hormuz are the lifelines of Iraqi state revenues, industry analyst Ruba Husari told AFP. If Iran tried and closed the Strait of Hormuz, “it’s not going to be closed for long,” U.S. President Donald Trump told Fox & Friends in an interview on Friday, in which he also directly blamed Iran for Thursday’s attacks on the tankers in the Gulf of Oman. “We’re going to guarantee freedom of navigation throughout the straits,” U.S. Secretary of State Mike Pompeo said on Sunday. Iran said on Monday that the Chief of Staff of the Iranian Armed Forces, Major General Mohammad Hossein Baqeri, “said his country is strong enough to act in broad daylight if it intends to stop the flow of oil exports from the Persian Gulf, rejecting accusations about Iran’s involvement in the recent sabotage attacks on 2 oil tankers in the Sea of Oman.” “He added that the Iranian Armed Forces are at present monitoring the enemies’ moves wisely, precisely and round the clock and will give a crushing and open response to any enemy move and in a very broad region,” Iran’s Fars news agency reports.

Trump stages his greatest show yet

Donald and Melania Trump, Mike and Karen Pence
The president’s elaborate reelection rally in Florida featured thousands of adoring supporters.

ORLANDO, Fla. — It was everything Donald Trump wanted, and so much more. The optics-obsessed president was greeted by thousands of adoring supporters when he arrived here on Tuesday to kick off his bid for a second term. In lieu of a red carpet, a sea of red, white and camouflage hats provided the backdrop for his first official campaign rally of the 2020 cycle.As soon as Trump took the stage in his signature red tie, the crowd seemed pleased to have waited. They greeted him with “USA” chants as he recalled the “movement” he started four years ago. “It turned out to be more than just a great political campaign. It turned out to be a great political movement because of you,” the president said, echoing the same nationalist message that became a staple of his first presidential run. “It’s a movement made up of people … who believe that a nation must care for its own citizens first.” Fans camped out since dusk on Monday to secure a spot inside the 20,000-seat Amway Center. They began chanting familiar slogans as anticipation built for the evening’s main act and familiar characters took the stage. Trump’s eldest son, Don Jr., riled up the crowd with a series of attacks against Joe Biden, a telling sign that his father views the former vice president as his likeliest opponent. Vice President Mike Pence promised the crowd that four more years “means more jobs, more judges … and at least four more years to drain the swamp.” Trump picked up where his vice president left off as he took the mic, ticking through the items he can accomplish if granted another term and highlighting what he’s done so far. He talked about passing a criminal justice bill and healthcare reforms for veterans, doubling the child tax credit for American families and confronting the opioid crisis. “Together we’re breaking the most sacred rule of Washington politics: We are keeping our promises to the American people,” he said. But the president couldn’t help but focus on the trials of his first White House bid, too — time he might have otherwise spent targeting his current Democratic opponents. Trump’s re-election launch — with an all-day tailgate party beforehand and a festival-like feel — borrowed a key ingredient from the unorthodox announcement speech he delivered four years ago: Nothing about it was normal, but it was a captivating show. “The days of stealing American jobs and American companies, American ideas and wealth —those days are over,” Trump boldly declared. He argued that the economy was booming thanks to his administration’s deregulatory agenda and the GOP-led tax cuts; that undocumented immigration was finally being confronted thanks to his forceful approach and negotiations with Mexico; and that America was respected again by its allies and adversaries because of his no-nonsense attitude toward foreign leaders. “We’ve made America great again, but how do you give up the number one theme, logo, statement in politics? There’s a new one that really works, and that’s called ‘Keep America Great,’” Trump said, encouraging his supporters to embrace the new slogan. The president repeated his “no collusion” refrain Tuesday night, claiming that the Mueller report on Russian election interference was a “win” for him, even as House Democrats tighten their grip on multiple congressional investigations into his actions before and after becoming president. On Tuesday night, he assured his supporters that he had already fulfilled many of those promises and could do even more if they delivered him four more years. He gave them a show they’ll talk about for weeks and one that he will try to replicate again and again over the next 17 months — a ride that many expect to be every bit as unpredictable as 2016, but the same in so many other ways. “We are one movement, one people, one family and one glorious nation under God. And together we will make America wealthy again, we will make America strong again, we will make America safe again and we will make America great again,” Trump said, exiting the stage to the same Rolling Stones tune that has closed so many of his rallies since 2016.

China Warns of Unpredictable Consequences Amid US Troop Deployment to Middle East

US Acting Secretary of Defence Patrick Shanahan previously announced that the Pentagon had greenlighted the deployment of an additional 1,000 troops, citing “defensive purposes”. China has warned against opening Mideast ‘Pandora’s box’ after the United States authorised the dispatching of additional military personnel to the Middle East “to address air, naval, and ground-based threats” in the region, according to AFP. China’s Foreign Minister Wang Yi stated following a press conference with his Syrian counterpart Walid Muallem that Beijing is urging Tehran to keep its commitments under the nuclear deal, and has warned against scrapping the pact ‘so easily’. Wang noted that the International Atomic Energy Agency had confirmed on multiple occasions that the Islamic Republic has remained committed to its obligations under the nuclear treaty. “The International Atomic Energy Agency has confirmed 15 times that Iran fulfills its obligations under the JCPOA. In the existing situation we hope that Iran will very thoroughly contemplate its decision and will not reject the deal so easily”, Wang said at a press conference held after his talks with Syrian Foreign Minister Walid Muallem. Wang Yi added that China remains firmly committed to protect the Joint Comprehensive Plan of Action, including through cooperation with other signatories for the sake of Arak nuclear reactor modernisation. “China’s commitment to protect the JCPOA remains unchanged. As a specific measure, China will closely cooperate with all the sides in order to reach progress in modernising the Arak nuclear reactor”, Wang said at a press conference held after his talks with Syrian Foreign Minister Walid Muallem. His comment came one day after the Atomic Energy Organization of Iran announced that the country would in late June exceed the enriched uranium stockpile limit outlined in the JCPOA, while it could also exceed the heavy water stockpile limit and the level of uranium enrichment specified in the deal. Iran first announced that it would start suspending some of its voluntary commitments under the JCPOA within 60 days on 8 May – exactly one year after the US unilaterally pulled out from the deal and decided to reinstate all sanctions against the Islamic Republic. The Joint Comprehensive Plan of Action (JCPOA), commonly known as the Iran nuclear deal, was signed in 2015 by Iran and the P5+1 nations — Russia, the US, China, France, the UK plus Germany — after years of tense negotiations. The multilateral accord sought to curb Iran’s nuclear ambitions in exchange for the gradual lifting of economic sanctions on Tehran.

Trump would consider military force vs Iran to prevent nuclear weapon

WASHINGTON (Reuters) – U.S. President Donald Trump would consider using military force to prevent Iran from gaining a nuclear weapon but left open the question if it involved protecting oil supplies, he told Time magazine in an interview published on Tuesday. Striking a different tone than some Republican lawmakers who have urged a military response, Trump told Time the impact of the recent attacks on Norwegian and Japanese oil tankers in the Gulf of Oman had been “very minor” so far. Asked whether he would consider military action against Iran to prevent it from obtaining nuclear weapons or ensure the free flow of oil through the gulf, the president said, “I would certainly go over nuclear weapons, and I would keep the other a question mark.” The United States has blamed Iran for the tanker attacks, citing as evidence a series of images showing an Iran Revolutionary Guard Corps boat removing an unexploded limpet mine from the hull of the Japanese oil tanker attacked on June 13. Acting U.S. Defense Secretary Patrick Shanahan said on Monday the United States was deploying about 1,000 more troops to the Middle East for defensive purposes, citing concerns about the threat from Iran. Tensions have been stoking between Washington and Tehran since the Trump administration decided last year to pull out of the Iran nuclear deal and reimpose sanctions on the Islamic republic. Concerns about a possible confrontation between the two countries have been growing since last week’s tanker attacks. Iran said on Monday it would soon breach internationally agreed curbs on its stock of low-enriched uranium in 10 days, despite calls for it to abide by the limits. Trump said he agreed with U.S. intelligence assessments that Iran was behind the tanker attacks, but he said Tehran had been less hostile toward the United States since he became president. “If you look at the rhetoric now compared to the days when they were signing that agreement (the 2015 Iran nuclear deal), where it was always ‘death to America, death to America, we will destroy America, we will kill America,’ I’m not hearing that too much anymore,” Trump told Time. “And I don’t expect to.”

OPEC+ proposes mid-July meeting to settle dispute over dates

TEHRAN, LONDON and CAIRO (Bloomberg) — OPEC proposed mid-July meetings with its allies in Vienna to discuss extending production cuts, after talks between Russia and Iran made some progress toward resolving a standoff over the date. The oil producers group, which pumps more than half the world’s crude, has been bickering for a month about the timing of ministerial talks. Their failure to agree a date just weeks before their production cuts expire gives turbulent markets little reassurance as crude prices extend their slump. After discussions with his Russian counterpart on Monday, Iran’s Oil Minister Bijan Namdar Zanganeh said he was willing to hold a meeting on July 10 to 12, a week later than most other members had wanted. The Organization of Petroleum Exporting Countries formally proposed those dates to members on Tuesday and said it would await their responses, according to a delegate from the group. While this marked a small victory for Zanganeh, Iran had to drop its previous insistence that OPEC should gather next week. “I don’t have a problem with July 10 to 12,” Zanganeh told reporters in Tehran on Monday. “I cannot meet 3rd or 4th of July. It’s not that I’m opposed to it, I can’t meet then.” Five delegates from the group, who asked not to be named while discussing internal deliberations, said on Monday that they weren’t certain that Iran’s proposal would be accepted by other members. Russian Energy Minister Alexander Novak said he is ready to consider holding the meeting on July 10 to 12, but hasn’t yet discussed the dates with his Saudi counterpart Khalid Al-Falih, according to reports from Interfax and RIA Novosti. The original request to shift the date of the meeting from June to July came from Russia, which despite being an outsider has exerted a strong influence over the group since joining forces almost three years ago. Differences over the timing began as a mere scheduling clash, but escalated rapidly into a diplomatic spat that pitted long-standing regional rivals Saudi Arabia and Iran against each other. The dispute played out amid a broader geopolitical confrontation as the Saudis — and the U.S.– accused Iran of complicity in attacks on two oil tankers near the Strait of Hormuz on June 13. Iran, which is under U.S. sanctions, denied culpability. Algeria, like Iran, initially opposed pushing the meeting to July, saying the new date would conflict with a planned election in the North African country. The Algerians later canceled their July 4 vote, leaving Iran as the sole holdout against the rescheduled meeting. Zanganeh, when asked about Russian minister Novak‘s response to his proposal for July 10-12, said: “He’s not the decision maker, the decision maker is OPEC and OPEC must reach a consensus.” Novak left the meeting in Tehran without speaking to reporters. For all the uncertainty over the meeting date, OPEC and its allies appear to be heading for an extension of their production cuts amid doubts about the strength of global demand as the economy shows signs of slowing. Saudi minister Al-Falih said earlier this month that he was “sure” the curbs will continue beyond June. “There will not be room for the cartel to increase output for the rest of 2019 in our view,” Rystad Energy’s Chief Oil Market Analyst Bjornar Tonhaugen said in a note on Tuesday. “As non-OPEC+ adds more supply than global demand is increasing by, OPEC+ will still be pressured to manage production in order to balance the global market.”

Trump calls attacks on oil tankers ‘very minor,’ but says he’d go to war with Iran over nuclear weapons

Trump calls attacks on oil tankers 'very minor,' but says he'd go to war with Iran over nuclear weapons
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President Trump called an oil tanker attack the U.S. has blamed on Iran “very minor” but said in an interview with Time Magazine he would be willing to go to war to prevent the nation from acquiring nuclear weapons. Trump was noncommittal on whether protecting international oil supplies would be a justification for war, telling the magazine “I would certainly go over nuclear weapons, and I would keep the other a question mark.” Trump told the magazine the Gulf of Oman, where the attack occurred, is less strategically important to the U.S. than it has been in years past, adding it was more relevant to Chinese and Japanese interests. “Other places get such vast amounts of oil there,” Trump told the magazine. “We get very little. We have made tremendous progress in the last two and a half years in energy.” Trump added that while he agreed with assessments blaming Iran for the attack, he believed Iran’s government has been less hostile toward the U.S. since his inauguration. “If you look at the rhetoric now compared to the days when they were signing [the 2015 nuclear deal], where it was always ‘death to America, death to America, we will destroy America, we will kill America,’ I’m not hearing that too much anymore,” he said. The comments come after several days of the Pentagon and State Department indicating all options are on the table in response to the Thursday attack, for which Iran has denied responsibility. Secretary of State Mike Pompeo said Sunday that the U.S. is looking at “a full range of options,” including a potential military response, and is scheduled to visit U.S. Central Command, which oversees U.S. military operations in the Middle East, on Tuesday. Acting Defense Secretary Patrick Shanahan, meanwhile, announced Monday evening the Defense Department has authorized the deployment of about 1,000 additional troops to the region for “defensive purposes.” “The recent Iranian attacks validate the reliable, credible intelligence we have received on hostile behavior by Iranian forces and their proxy groups that threaten United States personnel and interests across the region,” he said in a statement. The U.K. and Saudi Arabia have said they agree with the U.S. assessment, but Germany’s foreign minister has said the U.S. must present further evidence. The owner of one of the two ships involved in the attack has also contradicted the U.S. account. In recent months, Iran has announced it will scale back some of its commitments under the 2015 deal, with Trump withdrew the U.S. from more than a year ago.

US preparing “assault” against Iran

An American guided missile cruiser fires a tomahawk missile during the 2003 US invasion of Iraq [Credit: US Navy]
The Pentagon announced on Monday that the US is sending 1,000 additional troops and other military resources to the Middle East amid belligerent threats against Iran by the Trump administration. The troop movement follows the previous deployment of the USS Lincoln aircraft carrier and its battle group to the Persian Gulf, along with a bomber strike group led by nuclear capable B-52s. An article from the Israeli website Maariv Online, republished in the Jerusalem Post, reported that the Trump administration is actively preparing a “tactical assault” on Iran. The report, based on diplomatic sources at the UN in New York, stated that “since Friday, the White House has been holding incessant discussions involving senior military commanders, Pentagon representatives and advisers to President Donald Trump.” According to Maariv Online, the unnamed officials said that “the military action under consideration would be an aerial bombardment of an Iranian facility linked to its nuclear program.” A Western diplomat commented: “The bombing will be massive but will be limited to one target.” Announcing the troop deployment, acting US Defence Secretary Patrick Shanahan stated: “The recent Iranian attacks validate the reliable, credible intelligence we have received on hostile behaviour by Iranian forces and their proxy groups that threaten United States personnel and interests across the region.” He then absurdly added: “The United States does not seek conflict with Iran.” In reality, the current explosive situation in the Persian Gulf is entirely of Washington’s manufacture. In breach of UN resolutions, the Trump administration unilaterally abrogated the 2015 deal between Iran and the five permanent members of the UN Security Council plus Germany to limit its nuclear program in return for sanctions relief. The US subsequently re-imposed and strengthened its crippling sanctions on Iran aimed at cutting off all oil exports and collapsing the Iranian economy. It also threatened to take punitive economic measures against companies breaching its unilateral sanctions. Washington’s actions amount to an economic blockade of Iran and an act of war. With US Secretary of State Mike Pompeo in the lead, the Trump administration is exploiting attacks on two tankers in the Persian Gulf last Thursday as the pretext for threatening to strike Iran. On Sunday, Pompeo declared that the US was “considering a full range of options,” including “a military response.” The UN sources quoted in the Jerusalem Post article claimed that Trump himself had not been enthusiastic, but had lost his patience and given the green light to Pompeo, who has been pushing for action. Pompeo is due to travel today to US Central Command (CENTCOM) headquarters in Florida. He will meet with two top military leaders—CENTCOM commander General Kenneth McKenzie and General Richard Clarke, head of the Special Operations Command—to “discuss regional security concerns and operations.” CNN noted that the visit was “unusual” as Pompeo was not accompanied by acting US Defence Secretary Shanahan, who was remaining in Washington to “continue to develop options.” The US has also seized on Iranian statements on Monday warning that its low-level enrichment of uranium will exceed the limit set under the 2015 agreement within 10 days to further wind up tensions. Speaking to the media on Monday, US National Security Council spokesman Garrett Marquis branded Iran’s actions as “nuclear blackmail” and insisted it must be met with “increasing international pressure.”

EU Cautious About Gulf Tensions; Frets About Iran Nuclear Deal

E.U. foreign policy chief Federica Mogherini and Iranian Foreign Minister Javad Zarif at the Munich Security Conference in 2016. (Photo by Lennart Preiss/Getty Images)

Berlin (CNSNews.com) – The European Union remained tight-lipped Monday on the tense situation in the Persian Gulf region, but called for de-escalation as it continues efforts to salvage the nuclear deal with Iran. On Monday, the Iranian regime announced that it will in the coming days exceed the 300 kilogram limit of low-enriched uranium (LEU), set by the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear agreement. Not only would the limit be exceeded, Iran’s Atomic Energy Organization spokesman Behrouz Kamalvandi told Iranian television, but the pace of production beyond that point would be increased “drastically.” It’s the latest scaling back of Tehran’s commitments under the JCPOA, whose future has been in the balance since President Trump withdrew unilaterally in May last year. Iran previously warned the E.U. that it would increase uranium enrichment, should the E.U. fail to find a way to salvage the deal in light of restored U.S. sanctions. The move comes amid new tensions in the region, following armed incidents including attacks on tankers which the U.S. and Britain are blaming on Iran. After a meeting of E.U. foreign ministers in Brussels, E.U. foreign policy chief Federica Mogherini told reporters, “Our focus is to keep the agreement in place and keep the implementation of it.”

War with Iran would become ‘Trump’s war’

President Donald Trump cannot want war with Iran. Such a war, no matter how long, would be fought in and around the Persian Gulf, through which a third of the world’s seaborne oil travels. It could trigger a worldwide recession and imperil Trump’s reelection. It would widen the “forever war,” which Trump said he would end, to a nation of 80 million people, three times as large as Iraq. It would become the defining issue of his presidency, as the Iraq War became the defining issue of George W. Bush’s presidency. And if war comes now, it would be known as “Trump’s War.”

For it was Trump who pulled us out of the Iran nuclear deal, though, according to U.N. inspectors and the other signatories – Britain, France, Germany, Russia, China – Tehran was complying with its terms. Trump’s repudiation of the treaty was followed by his reimposition of sanctions and a policy of maximum pressure. This was followed by the designation of Iran’s Revolutionary Guard as a “terrorist” organization. Then came the threats of U.S. secondary sanctions on nations, some of them friends and allies, that continued to buy oil from Iran. U.S. policy has been to squeeze Iran’s economy until the regime buckles to Secretary of State Mike Pompeo’s 12 demands, including an end to Tehran’s support of its allies in Lebanon, Syria, Iraq and Yemen. Sunday, Pompeo said Iran was behind the attacks on the tankers in the Gulf of Oman and that Tehran instigated an attack that injured four U.S. soldiers in Kabul, though the Taliban claimed responsibility. “This unprovoked attack on commercial shipping warrants retaliatory military strikes,” said Sen. Tom Cotton on Sunday.

Continue reading “War with Iran would become ‘Trump’s war’”

Iran reveals it will break uranium stockpile limits dramatically ramping up tensions with Trump

 President Rouhani said his country would stop observing restrictions on its stocks of enriched uranium

IRAN announced today it intends to smash the strict uranium stockpile limits set under the nuclear deal it struck with the world’s leading powers. The hardline country’s shock statement is another blow to a pact already crumbling since the US’s high-profile withdrawal. President Rouhani said his country would stop observing restrictions on its stocks of enriched uranium “Today the countdown to pass the 300 kilograms reserve of enriched uranium has started and in 10 days time we will pass this limit,” said Iran’s atomic energy organisation spokesman Behrouz Kamalvandi. “This is based on the Articles 26 and 36 of the (nuclear deal), and will be reversed once other parties live up to their commitments.” Kamalvandi acknowledged the country has already QUADRUPLED its production of low-enriched uranium. The news is bound to ramp up tensions between Iran and the West already at breaking point following the shock bomb attack on two tankers in the Gulf of Oman. Many international observers believe the attack was an act of “revenge” by Iran after the White House imposed crippling economic sanctions after Donald Trump pulled out of the nuclear deal. Just last month, Iranian President Hassan Rouhani announced his country would stop observing restrictions on its stocks of enriched uranium and heavy water agreed under the 2015 deal. Enriched uranium is essential for developing nuclear weapons and power stations. As part of the agreement Iran also agreed to only enrich their uranium up to 3.67 per cent over the next 15 years. In addition they were barred from building any more heavy-water faculties – a type of nuclear reactor which uses heavy water (deuterium oxide) as a coolant to maintain temperatures in the reactor.Also under the agreement the International Atomic Energy Agency was granted regular access to all Iranian nuclear facilities to ensure Iran maintains the deal. The deal said that if Iran abides by it the nation would receive relief from the US, European Union, and the United Nations Security Council on all nuclear-related economic sanctions. The agreement was reached on July 14 2015 and the world powers signed it in Vienna. Iran, China, France, Russia, UK, USA, Germany and the EU all signed up to the deal.. Under the agreement, Iran pledged to reduce its nuclear capacities and allow inspectors inside the country to monitor its activities in return for relief from international sanctions. The deal set a limit on the number of uranium-enriching centrifuges, and restricted its right to enrich uranium to no higher than 3.67 per cent -well below weapons-grade levels of around 90 per On Sunday Mike Pompeo revealed America is now “considering a full range of options” including using its mighty military amid the rising tensions. The US Secretary of State spoke out after he accused the hardline state of launching the tanker attacks.

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“The United States is considering a full range of options. We have briefed the President a couple of times, we’ll continue to keep him updated,” he said. “We are confident that we can take a set of actions that can restore deterrence which is our mission set,” Pompeo said in an interview on CBS’s Face The Nation. When questioned if a military response was one of the options, Pompeo responded: “Of course.”

Abu Dhabi and Saudi oil-security infrastructure is itself a target

Saudi Arabia announced that two pumping stations serving the pipeline system between its eastern oil province and its export terminal at Yanbu, on the western coast, had suffered a drone attack and had to be put out of service temporarily. The targets of these two attacks are particularly relevant to global oil market security as they are, in themselves, oil-export security infrastructure built by the UAE and Saudi Arabia to reduce their reliance on tanker shipping in the Persian Gulf and Strait of Hormuz.  Fujairah is an oil export terminal and bunkering centre for tanker traffic in and out of the Persian Gulf region. In the 2000s, the Abu Dhabi National Oil Company built a pipeline linking its crude oil production and treatment facilities near the Persian Gulf across the country to its eastern port of Fujairah, on the Gulf of Oman. Along with sizeable investments in oil storage and export infrastructure, this pipeline significantly reduced the UAE’s dependence on the Persian Gulf and Strait of Hormuz for its oil exports, opening an export route directly onto the Indian Ocean. It also allowed for the emergence of Fujairah as a successful bunkering services provider, competing with Singapore for Asia-bound tanker traffic. Therefore, the attack on Fujairah shows that the UAE’s investment in bypassing the Strait of Hormuz is not immune to security risks. The same is true of the reported drone attack on two pumping stations that are part of the east-to-west pipeline system across Saudi Arabia, which was claimed by Yemeni Houthi forces. This pipeline system – sometimes called Petroline – has been built and upgraded in stages, since the 1990s, to service oil refineries and an export terminal on the Red Sea port of Yanbu. Similar to the Abu Dhabi-to-Fujairah one, the Petroline pipeline reduces Saudi Arabia’s dependence on shipping via the Gulf and Hormuz for its oil exports. The attack of Tuesday 14 April does not nullify the security logic for this infrastructure, but shows that the insurance bought by Saudi Arabia against shipping disruptions in the Persian Gulf and Strait of Hormuz is itself subject to security risks.

Saudi Forces Intercept Ballistic Missile Targeting City of Abha – Reports

Yemeni TV channel reported that the group launched drone attacks on Saudi city of Abha and Jizan airports. Saudi forces have intercepted a ballistic missile targeting the city of Abha in southwest of Saudi Arabia, Al-Arabiya TV channel reported. The attack comes a day after another Houthi strike on Saudi Arabia’s Abha Airport with drones. On Wednesday, the Saudi-led coalition confirmed that 26 people were injured as a result of another missile attack by Houthis. The Abha International Airport in Saudi Arabia was continuing operating in regular mode after being hit by a missile strike, the airport informed back then. A Saudi-led coalition has been carrying out airstrikes against the Houthis in Yemen at the nation’s President Abdrabuh Mansour Hadi’s request since March 2015. Yemen, a small nation in the south of the Arabian peninsula, has been engulfed in an armed conflict between the government forces, led by Hadi, and the rebel Houthi movement for several years. The conflict has resulted in a massive humanitarian crisis in the war-torn country.

Iran ‘tried to shoot down a US drone

US MQ9 Drone

Iran missed a hit on a US drone watching over the site of the attacked tankers in the Gulf of Oman by ‘approximately one kilometer’, U.S. Central Command has said. The MQ-9 had observed the Norwegian Front Altair on fire – which 23 mariners were later rescued from – and a spokesperson said it was likely an attempt to intercept the observation from the incident on Thursday. ‘According to our assessment, a modified Iranian SA-7 surface-to-air missile attempted to shoot down a U.S. MQ-9, at 6:45 a.m. local time, June 13, over the Gulf of Oman, to disrupt surveillance of the IRGC attack on the M/T Kokuka Courageous,’ CENTCOM’s Lt. Col. Earl Brown told ABC News on Saturday. ‘The SA-7 was ineffective and its closest point of approach to the MQ-9 was approximately one kilometer. Subsequent analysis indicates that this was a likely attempt to shoot down or otherwise disrupt the MQ-9 surveillance of the IRGC attack on the M/T Kokuka Courageous.’ Iran missed a hit on a US drone watching over site of attacked Gulf of Oman tankers. This undated handout photo provided by the U.S. Air Force shows a MQ-9 Reaper

Oil Tanker Attack: Japan Doesn’t Consider US Accusations Against Iran ‘Convincing’

The United States has accused Iran of orchestrating attacks on two oil tankers in the Gulf of Oman on 13 June, having released video “evidence” which is considered by some of its allies insufficient to prove that Tehran is to blame. The Islamic Republic, for its part, has strongly denied the allegations as groundless. The Japanese government considers the US allegations about Iran’s involvement in the attack on tankers in the Gulf of Oman unconvincing and has asked Washington to provide additional evidence to corroborate the claims, Kyodo news agency reported, citing several government sources. “The government does not share the US view of Iran’s involvement in attacking tankers near the Strait of Hormuz and, as it turned out, appealed to the American side for additional evidence. The opinion is that the US statements are not sufficiently convincing”, the agency wrote. The reported statements follow the release of a video by the US Central Command claiming to show Iranian sailors removing an unexploded mine from the hull of one of the tankers as “proof” of Tehran being the culprit. “I do not think there was a time bomb or an object attached to the side of the ship. A mine doesn’t damage a ship above sea level. We aren’t sure exactly what hit, but it was something flying towards the ship”, Katada was cited as saying by the Japanese media. Iran has vehemently denied its involvement in the incident and urged the United States to stop the “blame game” and false flag operations in the region. US President Donald Trump has, nonetheless, reiterated the accusations by bringing up CENTCOM’s video: “Iran did do it and you know they did it because you saw the boat. You saw the boat at night, successfully trying to take the mine off and that was exposed. I guess one of the mines didn’t explode and it’s probably got essentially Iran written all over it”, Trump told Fox News on Friday.

Saudi Arabia intercepts five drones fired by Iran-linked rebels at same airport that was hit two days ago in missile attack that wounded 26

The latest drones targeted Abha airport, where a rebel missile on Wednesday left 26 civilians wounded (pictured, wreckage at the regional airport earlier this week)

Saudi forces on Friday intercepted five drones launched by Iran-aligned Yemeni rebels, a Riyadh-led military coalition said, in a second assault on an airport in the kingdom’s in two days. The drones targeted Abha airport, where a rebel missile on Wednesday left 26 civilians wounded, and the nearby city of Khamis Mushait, which houses a major airbase, the coalition said in a statement released by Saudi state media. The latest raid comes amid spiralling regional tensions after Washington accused Iran of carrying out attacks that left two tankers ablaze in the Gulf of Oman, the second such incident in a month in the strategic sea lane. ‘The royal Saudi air defence force and air force successfully intercepted and destroyed five unmanned drone aircraft launched by Huthi militia towards Abha international airport and Khamis Mushait,’ the coalition statement said without reporting any casualties. The airport was operating normally with no fights disrupted, the statement added. Huthi-run Al-Masirah TV reported earlier that the Iran-aligned rebels had carried out drone attacks on Abha Airport. Wednesday’s missile strike hit the civil airport in the mountain resort of Abha, which is a popular summer getaway for Saudis seeking escape from the searing heat of Riyadh or Jeddah. The latest drones targeted Abha airport, where a rebel missile on Wednesday left 26 civilians wounded (pictured, wreckage at the regional airport earlier this week)  During a media tour of the airport on Thursday, Saudi authorities said they had closed a part of the arrival lounge after the missile tore a hole in the roof and disrupted flights for several hours. The area was covered in bamboo scaffolding and littered with concrete debris and shards of broken glass. Two passengers, including an Indian national, who suffered mild injuries recalled pandemonium and screams after a loud explosion triggered a blaze, leaving the lounge covered in smoke. A Saudi civil aviation official said authorities were still investigating rebel claims that they fired a cruise missile at the airport. If confirmed that would represent a major leap in the rebels’ military capability, experts say. The official also confirmed that it had not been intercepted by the kingdom’s Patriot anti-missile batteries. Saudi Arabia has repeatedly accused Iran of arming the rebels with sophisticated weapons, a charge Tehran denies. The coalition vowed to ‘take stern action’ to deter the rebels and protect civilians after the missile attack, which drew international condemnation including from the European Union. The coalition intervened in support of the Yemeni government in 2015 when President Abedrabbo Mansour Hadi fled into Saudi exile as the rebels closed in on his last remaining territory in and around second city Aden. Since then, the conflict has killed tens of thousands of people, many of them civilians, relief agencies say. It has triggered what the UN describes as the world’s worst humanitarian crisis, with 24.1 million Yemenis – more than two-thirds of the population – in need of aid.

U.S. farmers face devastation following Midwest floods

WINSLOW, Neb./CHICAGO (Reuters) – Midwestern farmers have been gambling they could ride out the U.S.-China trade war by storing their corn and soybeans anywhere they could – in bins, plastic tubes, in barns or even outside. Now, the unthinkable has happened. Record floods have devastated a wide swath of the Farm Belt across Iowa, Nebraska, South Dakota and several other states. Early estimates of lost crops and livestock are approaching $1 billion in Nebraska alone. With more flooding expected, damages are expected to climb much higher for the region. As river levels rose, spilling over levees and swallowing up townships, farmers watched helplessly as the waters consumed not only their fields, but their stockpiles of grain, the one thing that can stand between them and financial ruin. “I’ve never seen anything like this in my life,” said Tom Geisler, a farmer in Winslow, Nebraska, who said he lost two full storage bins of corn. “We had been depending on the income from our livestock, but now all of our feed is gone, so that is going to be even more difficult. We haven’t been making any money from our grain farming because of trade issues and low prices.” The pain does not end there. As the waters began to recede in parts of Nebraska, the damage to the rural roads, bridges and rail lines was just beginning to emerge. This infrastructure is critical for the U.S. agricultural sector to move products from farms to processing plants and shipping hubs. The damage to roads means it will be harder for trucks to deliver seed to farmers for the coming planting season, but in some areas, the flooding on fields will render them all-but-impossible to use. The deluge is the latest blow for the Farm Belt, which has faced several crises in the last five years, as farm incomes have fallen by more than 50 percent due to a global grain glut. President Donald Trump’s trade policies cut off exports of soybeans and other products, making the situation worse. Soybeans were the single most valuable U.S. agricultural export crop and until the trade war, China bought $12 billion worth a year from American farmers. But Chinese tariffs have almost halted the trade, leaving farmers with crops they are struggling to sell for a profit.  As prices plummeted last year amid the ongoing trade fight, growers, faced with selling crops at a loss, stuffed a historic volume of grain into winding plastic tubes and steel bins. Some cash-strapped families piled crops inside their barns or outside on the ground. Farmers say they are now finding storage bags torn and bins burst open, grain washed away or contaminated. Jeff Jorgenson, a farmer and regional director for the Iowa Soybean Association, said he has seen at least a dozen bins that burst after grains swelled when they became wet. Under U.S. Food and Drug Administration policy, flood-soaked grain is considered adulterated and must be destroyed, according to Iowa State University. Some farmers had been waiting for corn prices to rise just 10 cents a bushel more before making sales, which would earn them a few extra thousand dollars, Jorgenson said. “That’s the toughest pill to swallow,” Jorgenson said. “This could end their career of farming and the legacy of the family farm.”

As of Dec. 1, producers in states with flooding – including South Dakota, Nebraska, Kansas, Minnesota, Iowa, Missouri, Wisconsin and Illinois – had 6.75 billion bushels of corn, soybeans and wheat stored on their farms – 38 percent of the total U.S. supplies available at that time, according to U.S. Department of Agriculture data.

Iowa suffered at least $150 million in damage to agricultural buildings and machinery, and 100,000 acres of farm land are under water, said Keely Coppess, a spokeswoman for the Iowa Department of Agriculture and Land Stewardship. Jorgenson surveyed more than two dozen local farmers to assess the damage and tallied about 1.25 million bushels of corn and 390,000 bushels of soybeans lost just in Fremont County, Iowa, worth an estimated $7.3 million. expect more flooding in coming weeks. “We should have been getting into planting for next season, but now all of our equipment is flooded and it’s going to take at least three to four weeks to bring back that equipment into shape,” said Geisler.

Trump says ‘Iran did do it,’ as U.S. seeks support on Gulf oil tanker attacks

DUBAI/WASHINGTON (Reuters) – The United States on Friday blamed Iran for attacks on two oil tankers at the entrance to the Gulf and said it was seeking international consensus about the threat to shipping, despite Tehran denying involvement in the explosions at sea. Thursday’s attacks raised fears of a confrontation in the vital oil shipping route at a time of increased tension between Iran and the United States over U.S. sanctions and military moves in the Middle East, Tehran’s proxy groups in the region and its nuclear program. “Iran did do it and you know they did it because you saw the boat,” U.S. President Donald Trump told Fox News. He was referring to a video released on Thursday by the U.S. military which said it showed Iran’s Revolutionary Guards were behind the blasts that struck the Norwegian-owned Front Altair and the Japanese-owned Kokuka Courageous in the Gulf of Oman, at the mouth of the Gulf. Iran said the video proved nothing and that it was being made into a scapegoat. “These accusations are alarming,” Foreign Ministry spokesman Abbas Mousavi said. Iran has dismissed earlier U.S. charges that it was behind the attacks and has accused the United States and its regional allies such as Saudi Arabia and the United Arab Emirates of “warmongering” by making accusations against it. Last month, the United States sharply tightened economic sanctions that are damaging the economy of Iran, which in response has threatened to step up its nuclear activity. Tehran has said it could block the Strait of Hormuz, the main route out for Middle Eastern oil, if its own exports were halted.

Trump, who last year pulled the United States out of an agreement between world powers and Tehran to curb Iran’s nuclear program in exchange for some sanctions relief, said any move to close the Strait of Hormuz would not last long but added that he was open to negotiations with Iran. Iran has repeatedly said it will not re-enter talks with the United States unless it reverses Trump’s decision to withdraw from the 2015 nuclear deal. Tehran and Washington have both said they have no interest in starting a war. But this has done little to assuage concerns that the two arch foes could stumble into a conflict. A U.S. official told Reuters on Friday a surface-to-air missile was fired from Iranian territory on Thursday morning at a U.S. drone that was near Front Altair following the attack on the tanker. The missile did not hit the drone, the official said. Trump’s administration is focused on building international consensus following the attacks, U.S. Defense Secretary Patrick Shanahan said. Asked whether he was considering sending more troops or military capabilities to the Middle East, Shanahan said: “As you know we’re always planning various contingencies.” But he emphasized the issue of building consensus. “When you look at the situation, a Norwegian ship, a Japanese ship, the Kingdom of Saudi Arabia, the UAE, 15 percent of the world’s oil flows through the Strait of Hormuz,” he said. “So we obviously need to make contingency plans should the situation deteriorate. We also need to broaden our support for this international situation,” he told reporters. Oil prices rose about 1% on Friday, reflecting the jitters. Insurance costs for ships sailing through the Middle East have jumped by at least 10% after the attacks, ship insurers said. China, the European Union and others have called for restraint from all sides. In a notable signal that close U.S. allies are wary of Washington’s position, Germany said the U.S. video was not enough to apportion blame for Thursday’s attack.

Iran’s crude exports fell to about 400,000 barrels per day (bpd) in May, starving Iran’s economy of its main source of revenue.

Iran says it is in charge of security of Strait of Hormuz – state Radio

DUBAI (Reuters) – Iran said on Friday it was responsible for maintaining the security of the Strait of Hormuz in the Gulf, state radio reported, adding that blaming Tehran for attacks on two oil tankers in the Gulf of Oman was alarming. “We are responsible for ensuring the security of the Strait and we have rescued the crew of those attacked tankers in the shortest possible time,” Radio quoted Foreign Ministry spokesman Abbas Mousavi as saying. “Obviously, accusing Iran for such a suspicious and unfortunate incident is the simplest and the most convenient way for (U.S. Secretary of State Mike) Pompeo and other U.S. officials. These accusations are alarming.” The United States blamed Iran for attacks on two oil tankers in the Gulf of Oman on Thursday that drove up oil prices and raised concern about a new U.S.-Iranian confrontation. It was not immediately clear what caused the explosions that forced the crews to abandon ship and leave both the Norwegian-owned Front Altair and Japanese-owned Kokuka Courageous adrift in waters between Gulf Arab states and Iran. The blasts, south of the Strait of Hormuz, followed last month’s sabotage attacks on vessels off the Fujairah emirate, one of the world’s largest bunkering hubs. Iran has distanced itself from the attacks.

Almost a fifth of the world’s oil passes through the Strait – some 17.2 million barrels per day (bpd). Consumption was about 100 million bpd in 2017, data from analytics firm Vortexa showed.

Iran’s key regional rival Saudi Arabia said that Riyadh was committed to providing reliable oil supplies to global markets. One source said the blast on the Front Altair, which caught fire and sent a huge plume of smoke into the air, may have been caused by a magnetic mine. The firm that chartered the Kokuka Courageous tanker said it was hit by a suspected torpedo, but a person with knowledge of the matter said torpedoes were not used. Tension between Iran and the United States has risen since May last year, when U.S. President Donald Trump pulled out of a 2015 nuclear deal between Iran and major powers that aimed to curb Tehran’s nuclear ambitions in exchange for sanctions relief.

Iran has repeatedly warned it would block the Strait of Hormuz if it cannot sell its oil because of U.S. sanctions.

Tensions have increased further since Trump reimposed sanctions on Iran and acted at the beginning of May to force Iran’s oil customers to slash their imports to zero or face draconian U.S. financial sanctions. Iran’s oil exports, its economy’s lifeblood, have dropped to about 400,000 bpd in May from 2.5 million bpd in April last year.

Iran accuses the US of LYING about the ‘suspicious’ attack on American-linked oil tanker and denies ordering ‘torpedo’ assault

IRAN has accused the US of lying about the “torpedo attack” on an American-linked oil tanker as tensions reach breaking point. US Secretary of State Mike Pompeo blamed Iran for the “blatant” attacks on two tankers which burst into flames in the Gulf of Oman on Thursday. But Iran has hit back at the “unfounded and reckless” claims and accused the US of “warmongering” as part of a “disinformation campaign”. “The US and its regional allies must stop warmongering and put an end to mischievous plots and false flag operations in the region,” Iran’s mission to the United Nations said. “Warning, once again, about all of the US coercion, intimidation and malign behaviour, Iran expresses concern over suspicious incidents for the oil tankers that occurred today.” It came after Pompeo pointed the finger at Iran and the Pentagon released images and footage as “proof” of Iranian involvement.

  • Two oil tankers were seriously damaged in the suspected torpedo attack
  • The US believes Iran is definitely to blame for the shocking attacks
  • Tehran has accused America of ‘Iranophobia’ and says it is innocent
  • Almost 50 sailors had to be rescued from the stricken tankers in the Gulf
  • Oil prices surged by 3.5 per cent after today’s suspected terror attack
  • Iran’s foreign minister has branded the explosions as “suspicious”
  • The US Navy’s 5th Fleet is now investigating the suspected torpedo attack

Pompeo said the attacks were part of a “campaign” of “escalating tension” by Iran which posed a threat to international peace and security. Iran blasted his “inflammatory remarks” and said they amounted to “another Iranophobic campaign”. “Iran categorically rejects the U.S. unfounded claim with regard to 13 June oil tanker incidents and condemns it in the strongest possible terms,” the Iranian mission said in a statement. The hardline Islamic nation added that the US poses the “most significant threat” to the peace and security of the Persian Gulf region. “The US economic war and terrorism against the Iranian people as well as the massive military presence in the region have been and continue to be the main sources of insecurity and instability in the wider Persian Gulf region and the most significant threat to its peace and security,” the statement said. Iran’s foreign minister later dismissed the US accusations as “sabotage diplomacy”.

Two oil tankers damaged and crew evacuated in Gulf of Oman after roclet attack

Two tankers have sustained damage in suspected attacks in the Gulf of Oman and the crew have been evacuated, shipping sources said on Thursday, a month after a similar incident in which four tankers in the region were struck. Oil tanker Front Altair (operating under a Marshall Islands flag) was carrying 75,000 tonnes of naphtha, a petrochemical feedstock, when it was “suspected of being hit by a torpedo” around noon Taiwan time (0400GMT), Wu I-Fang, a senior company official for Taiwan’s state oil refiner CPC Corp told Reuters. He said all crew members have been rescued. The other tanker, The Kokuka Courageous (operating under a Panama flag), was also damaged in the incident, a spokesman for the vessel’s manager BSM Ship Management (Singapore) said. The spokesman said 21 crew had abandoned ship after the incident, which resulted in damage to the ship’s starboard hull. The master and crew were quickly rescued from a lifeboat by the Coastal Ace, a nearby vessel. According to sources cited by IRNA, Iran’s state news agency, Iranian search and rescue teams picked up 44 sailors from the two damaged tankers and took them to the Iranian port of Jask. The vessels were about 70 nautical miles from Fujairah and about 14 nautical miles off Iran.
Statement from owners A statement from the owners of the Kokuka Courageous BSM Ship Management (Singapore), said they are launching “a full-scale emergency response following a security incident on board our managed products carrier the Kokuka Courageous in the Gulf of Oman earlier today.  The United Kingdom Maritime Trade Operations, part of the Royal Navy, earlier said it was aware of an incident in the Gulf of Oman. “UK and its partners are currently investigating,” the group said without elaborating. U.S. Naval forces are assisting tankers in the Gulf of Oman after receiving two distress calls on Thursday, the U.S. Navy’s Bahrain-based Fifth Fleet told Reuters. “We are aware of the reported attack on tankers in the Gulf of Oman. U.S. Naval Forces in the region received two separate distress calls at 6:12 a.m. local time and a second one at 7:00 a.m.,” Joshua Frey of the Fifth Fleet said Oil prices surged by 4% after the report that raises tensions in the Gulf, which have been heightened by a dispute between Iran and the United States. The area is near the Strait of Hormuz, a major strategic waterway through which a fifth of global oil consumption passes from Middle East producers.

Gulf of Oman 2 Oil Tankers Attacked

US Fifth Fleet Receives Distress Calls From 2 Tankers in Gulf of Oman After Reported Attack

Reports about the incident emerged in Middle Eastern media a month after an attack on four vessels off the Emirati coast, which UAE investigators blamed on an unspecified “state actor”. The US Navy’s 5th Fleet said on Thursday that it was assisting two oil tankers targeted in a “reported attack” near the Strait of Hormuz, after the vessels sent disstress calls.

It was not immediately clear who attacked the vessels, one of which has been identified as Front Altair, a crude oil tanker owned by Norway’s Frontline and carrying the flag of the Marshall Islands.

According to shipping newspaper Tradewinds, Frontline’s oil tanker had been “torpedoed” off the coast of the Emirate of Fujairah. Taiwan’S energy firm CPC said it had suspicions that Front Altair, which was carrying 75,000 tonnes of naphtha, was hit by an unknown onject. Meanwhile, shipping company Bernhard Schulte said that its oil tanker Kokuka Courageous was also damaged in the incident. Kokuka was sailing from Saudi Arabia to Singapore with a cargo of methanol. “The hull has been breached above the water line on the starboard side,” the company said in a statement. “All crew are reported safe and only one minor injury reported.” Iran’s state-run Press TV said that two successive blasts affected two oil tankers on Thursday morning in what it described as “attacks”. Reuters says, citing four sources in shipping and trade, that two tankers have been evacuated in the Gulf and that the crew are safe. Brent crude climbed 4.5 per cent in the wake of the reports.Meanwhile, the UK Maritime Trade Operations, a maritime safety group run by the  Royal Navy, has warned about an unspecified incident in the Gulf of Oman between the Emirate of Fujairah and Iran’s coast. The group urged “extreme caution”, given the ongoing tensions in the region between the United States and Iran, and said that an investigation is underway.

A damaged ANDREA VICTORY ship is seen off the Port of Fujairah, United Arab Emirates, May 13, 2019.
© REUTERS / Satish Kumar Video Allegedly Exposing Iranian ‘Sabotage’ of Tanker Shows Men Doing Stunt on Greek Ship – Report

It comes a month after another apparent attack on vessels in the Gulf. On 12 May, four oil tankers — two Saudi, one Emirati and one Norwegian — were targeted off the coast of Fujairah in what the UAE Foreign Ministry described as acts of sabotage. The three countries whose ships were damaged said in a joint statement that limped mines had been placed in a “sophisticated and coordinated operation” by divers. The UAE suggested that it was likely the work of a “state actor” but stop short of identifying the culprit.

US officials, however, were quick to point the finger at Iran. “It’s clear that Iran is behind the Fujairah attack. Who else would you think would be doing it? Someone from Nepal?” said US National Security Adviser John Bolton.

In turn, US Secretary of State Pompeo alleged that Iran had attacked the tankers to raise the global price of oil. Tehran has denied any involvement and called for an investigation.

Yemen war: Houthi missile attack on Saudi airport ‘injures 26’

At least 26 civilians have been injured in a missile attack by Yemen’s rebel Houthi movement on an airport in south-western Saudi Arabia, state media say. Three women and two children were among those hurt when the missile struck Abha airport early on Wednesday, a military spokesman was quoted as saying. A rebel source had earlier claimed that the facility was hit “with precision”. Saudi Arabia leads a coalition of Arab states backing Yemen’s government in its four-year war with the Houthis. Yemen has been devastated by a conflict that escalated in March 2015, when the rebels seized control of much of the west of the country and forced President Abdrabbuh Mansour Hadi to flee abroad.

Alarmed by the rise of a group they believed to be backed militarily by regional Shia power Iran, Saudi Arabia and eight other mostly Sunni Arab states began an air campaign aimed at restoring Mr Hadi’s government.

Coalition military spokesman Col Turki al-Maliki said the missile fired by the Houthis hit the arrival hall at Abha International Airport at 02:21 on Wednesday (23:21 GMT on Tuesday), the official Saudi Press Agency reported. Three women – one Yemeni, one Indian and one Saudi – and two Saudi children are among those hurt. Eight people were taken to hospital after suffering moderate injuries, while 18 others were treated at the scene for minor injuries.  Col Maliki said the attack on a civilian airport, which is about 200km (125 miles) north of the border with Yemen, was a serious violation of international humanitarian law and that it might constitute a war crime. The coalition would “take urgent and timely measures to deter this terrorist militia, and to ensure the protection of civilians and civilian objects”, he added. Col Maliki said work was under way to identify the type of missile involved, but Houthi-run Al-Masirah TV cited a rebel source as saying it was a cruise missile. “The latest US systems were unable to stop the missile. This strike hit the enemy with panic and fear and caused great confusion in their ranks,” the source added. Al-Masirah said it was the second time the Houthis had fired a cruise missile. The first reportedly targeted a nuclear power plant in Abu Dhabi, in the United Arab Emirates, in December 2017. Earlier this week, a Houthi military spokesman said it would target every airport in Saudi Arabia and that the coming days would reveal “big surprise

Crude oil futures fall on bearish API data, demand concerns

Singapore — Crude oil futures were lower during mid-morning trade in Asia Wednesday, amid a build reported in US crude stocks last week while demand and supply concerns continued to exert downward pressure. At 10:35 am Singapore time (0235 GMT), ICE Brent August futures were down 86 cents/b (1.38%) from Tuesday’s settle at $61.43/b, while the NYMEX July light sweet crude futures contract lost 85 cents/b (1.60%) at $52.42/b. According to analyst reports quoting data released Tuesday by the American Petroleum Institute, US crude stocks for the week ended June 7 were up by 4.85 million barrels. “Crude oil futures edged lower … as the American Petroleum Institute reported a surprise build in US stockpile levels,” Benjamin Lu, investment analyst at Phillip Futures, said. Analysts surveyed Monday by S&P Global Platts were looking for US crude stocks for the same period to have increased by 80,000 barrels.The API report was mixed for refined products — a US gasoline stock build of 830,000 barrels and a distillate stock draw of 3.5 million barrels, analysts said. API also reported a stock build of 2.37 million barrels at Cushing, Oklahoma, the delivery point for the NYMEX crude contract. The more definitive US inventory data is due for release from the US Energy Information Administration later Wednesday. “Looks like API is trying to get in line with EIA. Cushing builds are wild! Yet distillate draw is huge!” Price Futures Group senior market analyst Phil Flynn said. “Demand-side concerns became the most salient issue during the past month and contributed to volatility and price declines for risk assets such as commodities and equities,” EIA said in its Short-Term Energy Outlook. The US-China trade conflict, potential tariffs on Mexico and lower industrial activity contributed to concerns of lower-than-expected economic growth, which would curtail oil demand growth. Meanwhile, investors are waiting on the sidelines awaiting a decision from OPEC and non-OPEC members who are set to meet at Vienna on June 25 on their production cut agreement. “OPEC continues to set the scene ahead of this month’s bi-annual meeting. Russia and Saudi Arabia both warned earlier this week that prices could fall if OPEC+ didn’t agree to more supply cuts in H2 2019,” ANZ analysts said in a note. “Oil prices though gathering support from supply cut expectations (OPEC+), look poised to show for lackluster conditions before a firm announcement is made,” Lu said.

US oil demand surging on a wave of new petrochemical plants: BP

London — US oil demand surged 500,000 b/d last year, the biggest increase in more than a decade as the country’s new wave of petrochemical plants soaked up more of its fast-rising, shale-sourced ethane production, BP said Tuesday. The world’s biggest oil consumer saw demand for crude and liquids rise 2.5% to 20.46 million b/d in 2018, accelerating a trend of rising oil demand since a recent trough in 2009, BP said in its annual Statistical Review. The figures showed the US was harnessing more value from its shale-led oil and gas supply boom and the rise of petrochemicals as a key plank in the future world oil demand outlook. “The increased importance of petrochemicals in driving oil demand growth was also evident in the global production breakdown, with products most closely related to petrochemicals accounting for around half of the overall growth in demand,” BP’s chief economist, Spencer Dale, said while presenting the review. The US became the world?s top exporter of ethane in 2015, surpassing Norway, the only other country to ship ethane internationally, according to the US’s Energy Information Administration. Since then, a raft of petrochemical steam crackers, fed by ethane, have been commissioned, mostly on the Texas Gulf Coast and focused on export markets. US ethane production alone, which is separated from raw natural gas at processing plants, surged 20% last year to 1.71 million b/d, EIA data showed. Growing oil demand from the US petrochemicals sector meant the country has become an ‘outlier’ within the developed, high-income OECD economies, Dale said, noting that OECD oil demand resumed a decline trend in 2018 as oil prices firmed. US production of tight oil and natural gas liquids from shale plays jumped 2.2 million b/d last year, BP said, while shale gas acreage saw US gas production surge 86 Bcm, or 12%. In both oil and gas, US hydrocarbon growth marked the biggest ever annual output increase by any country, Dale said. “What you saw last year was really quiet amazing, a unique double first for the US,” Dale told reporters ahead of the presentation. “In case there was any doubt, the US shale revolution is alive and kicking.”Overall, global oil demand grew by an above-average 1.4 million b/d, or 1.5%, to 99.84 million b/d last year, BP said, a slowdown from 1.7 million b/d growth seen in 2017.

China saw the biggest oil demand growth at 700,000 b/d, while India rose by 300,000 b/d, with the developing economies together making up two thirds of of the global increase.

BP’s oil demand figures, which include biofuels and GTL consumption, are higher than the International Energy Agency.

Trump says “make coal great again” but use of the rock at a 41-year low

U.S. coal consumption last year dropped to its lowest level since 1978, according to the U.S. Department of Energy. Demand for other energy sources, particularly natural gas, is taking market share from coal. The Trump administration is investing millions in bolstering the coal industry despite shifts away from coal, including renewable energy. President Donald Trump likes to tout coal, calling it “indestructible” and proclaiming that “coal is back.” Around the U.S., use of the fossil fuel shows a different trend: Coal consumption is at its lowest level in more than 40 years. That’s according to the latest data from the U.S. Department of Energy, which on Monday said coal usage fell to 687 million short tons, its lowest since 1978. Production also fell to its second-lowest level since 1978, the agency said.  Most of that coal is used to produce electric power. Despite the decline in both production and demand, the Trump administration is investing in the coal industry, with the Energy Department on Monday pledging $39 million for research into improving the efficiency of coal plants. “The Trump administration remains committed to ensuring a coal-fueled power plant fleet that provides stable energy to the power grid,” said Assistant Secretary for Fossil Energy Steven Winberg in a statement. Despite the Trump administration’s efforts, coal consumption and production were higher during the Obama administration. The reason: Competing energy sources, especially natural gas, are now taking market share away from coal. The costs of wind and solar energy have also dropped sharply, with a growing number of states and cities embracing renewable energy due to concerns about climate change.  Slumping demand for coal hasn’t been lost on some Trump administration critics. Former New York City Mayor Michael Bloomberg earlier this month pledged $500 million toward an effort to close all remaining domestic coal plants by 2030. His goal is to put the U.S. on a path toward 100% clean energy. Bloomberg noted that 51 coal-fired plants have closed since the 2016 presidential election. “Despite all the bluster from the White House, as a matter of fact, since Trump got elected the rate of closure has gone up,” Bloomberg said. Despite the shrinking U.S. coal industry, coal remains the main driver of carbon emissions, which rose to a new high last year, according to the International Energy Association. Despite such political boosterism, coal sector employment around the U.S. has been decreasing for decades, a victim of shifting demand for new energy sources as well automation and more efficient mining practices. Since 1950, the number of mining jobs around the country has tumbled 88 percent. In West Virginia today, about 14,000 people work in West Virginia’s mines, CBS News recently reported in a look at the state’s coal industry. The dropping price of coal has also has driven eight U.S. coal companies into bankruptcy since 2015, including the three largest—Peabody Energy, Arch Coal and Cloud Peak Energy.

Wall Street’s ‘fear gauge’ is sounding an alarm

Remain vigilant. That’s the apparent message the Cboe Volatility Index is flashing, even as cash equities race toward records.
Wall Street could be in for a rocky ride over the next month.
Wall Street could be in for a rocky ride over the next month. Credit:AP

The VIX Index – often referred to as the market’s “fear gauge” – is up over the past three sessions, as of 1:40 pm. in New York. At north of 16, it’s implying that US stocks will tend to move more than 1 per cent per day over the next month. In recent years, it hasn’t lingered above this level unless equities were weakening.The higher reading belied the brisk advance of more than 2 per cent for the S&P 500 Index over the same three-day stretch. It’s the first time implied volatility has failed to decline amid stock gains of this magnitude since 2009, when the bull market was in its infancy. The two variables tend to move in opposite directions. During Friday’s 1.1 per cent advance in the S&P 500, the VIX – which measures the 30-day implied volatility of the S&P 500 based on out-of-the-money options prices – also moved higher. That’s despite the weekend effect that typically sees the gauge move lower on Fridays, and the passage of a market-moving event – the May non-farm payrolls report. This marked just the 11th time since 2004 that the VIX advanced while the stock benchmark rose at least 1 per cent, according to Macro Risk Advisors derivatives strategist Vinay Viswanathan.”The options market is unwilling to lower its pricing of risk further despite impressive market strength,” he wrote. “The stocks up/vol up move could be a sign from the option market that while equities were performing well, there is still plenty of risk worth protecting against (especially with China trade talks/G-20 lingering on the horizon).” The event premium built into options that encompass the month-end G-20 summit – at which US President Donald Trump and his Chinese counterpart Xi Jinping are slated to talk trade – is off its recent highs, Viswanathan notes. He recommends July put options on the S&P 500 as an opportunity for investors nervous about the outcome to purchase relatively cheap protection. Pravit Chintawongvanich, Wells Fargo’s equity derivatives strategist, said in a note that the fierceness of market rallies is contributing to firmness in the volatility index. For the most part, US stocks have taken the staircase down from a record close on April 30, and rebounded via the elevator. “Up moves count as vol too, and have been pushing realised vol higher,” he wrote. “VIX actually looks low relative to realised vol.” On Monday, the signal sent by a relatively muted retreat in the VIX appears to be a mirage linked to the demand for upside. The most heavily traded options are S&P 500 calls that expire on June 21 with strike prices of 2,900, 3,000 and 3,100. It’s an indication that fund managers who missed most of the 2019 might be looking for a way to get exposure to further gains without worrying about losses should equities reverse lower.

Iran has accelerated production of enriched uranium, IAEA says

VIENNA (Reuters) – Iran has followed through on its threat too accelerate its production of enriched uranium, the U.N. nuclear watchdog’s chief Yukiya Amano said on Monday. Iran’s nuclear deal with major powers caps the amount of low-enriched uranium Iran can produce. Given fluctuations in production, it was not clear when Iran might reach that limit, Amano told a news conference, declining to elaborate further on the production rate.

Russia ‘successfully tests’ hypersonic interceptor missile that can shoot down Western weapons and travels 2½ miles in one second

Russia has conducted a ‘successful’ military test of its state-of-the-art new interceptor missile intended to neutralise incoming Western attacks. The Kremlin declined to name the rocket system shown on video blasting off from Sary-Shagan, an anti-ballistic training range in Kazakhstan.   But it is believed to be the deadly PRS-1M hypersonic interceptor missile, crucial to protecting Moscow and other strategic sites in the region from potential incoming NATO or other enemy missiles.

Russia's new hypersonic interceptor missile blasted-off from Sary-Shagan training range in Kazakhstan
Russia’s new hypersonic interceptor missile blasted-off from Sary-Shagan training range in Kazakhstan

Footage shows the huge missile launching from six different angles, including behind a Russian flag

Hypersonic missiles are so named because they fly faster than the speed of sound. They can be launched from land, air or sea

Hypersonic missiles are so named because they fly faster than the speed of sound. They can be launched from land, air or sea Footage tweeted by the Russian defence ministry shows the unfolding and preparation of the weapon’s vehicle and the moment of launch from six different angles. The missile is shown shooting upwards from the ground leaving a trail of smoke and dust behind it.  ‘Another test-launch of a new Russian interceptor missile was successfully conducted,’ said the ministry. The Kremlin declined to name the rocket system shown on video but it is believed to be the PRS-1M interceptor missile The missile will be key to protecting Moscow and other strategic sites from ‘incoming aerospace weaponry’  Footage posted on Twitter by the Russian defence ministry shows the unfolding and preparation of the weapon’s vehicle ‘After a series of trials, the new interceptor missile confirmed its characteristics and successfully completed the task by striking an assigned target with precision.’ Russian state news agency TASS indicated that the tests were linked to earlier trials at Sary Shagan last year. These involved the upgraded PRS-1M interceptor missile which is described as ‘much faster and deadlier than its predecessor’. The Russian defense ministry intend to use the missile to neutralise incoming Western or NATO attacks Russian state news agency TASS indicated that the most recent tests were linked to earlier trials at Sary Shagan involving the upgraded PRS-1M interceptor missile If the successfully tested missile is indeed the PRS-1M, it carries a nuclear warhead of several kilotons This new missile is a development of the older 53T6 which ‘previously flew several times faster than a bullet and accelerated within seconds to 3 km per second, making it the world’s fastest missile’, said gazeta.ru ‘The modernised version’s speed has already approached 4km per second.’ This is 1.86 miles per second and 2.48 miles per second respectively. State-owned news channel Russia-24 said in a report that the missile launch was successful because it struck ‘an assigned target with precisio. Russia’s President Vladimir Putin described his hypersonic arsenal last year as ‘invincible’ during a state-of-the-nation address ‘The new product’s kill zone is practically one and a half times greater in terms of altitude and range,’ reported gazeta.ru in analysing the PRS-1M. ‘Interception of enemy ICBM warheads is now assured at an altitude substantially higher than 50 km (31 miles). ‘The missile carries a nuclear warhead of several kilotons.’

Canadian oil pipeline congestion sets up lucrative storage play

FILE PHOTO: Crude oil storage tanks at Enbridge’s facility in Sherwood Park are seen against the skyline of Edmonton, Alberta REUTERS/Chris Helgren

CALGARY, Alberta/NEW YORK (Reuters) – Upheavals in the Canadian crude market are providing unique opportunities for firms with sizeable long-term leases on Alberta storage tanks, a cluster that sources say includes Mercuria Energy Group and oil major BP Plc’s trading arm. Canada holds the world’s third-largest crude reserves, but years of delay in building new pipelines has led to oil production outpacing takeaway capacity. A glut of crude has thus been created, increasing demand for storage tanks in the oil sands province of Alberta, which this year introduced production cuts to deal with the oversupply. The opportunity for traders comes from monthly pipeline “apportionment”, when demand to ship crude on certain pipelines exceeds capacity, forcing pipeline operators to ration the number of barrels each shipper can move. The practice is a long standing source of frustration for Canadian producers but offers a lucrative, though risky, play for traders able to swoop in and capitalize on post-apportionment price volatility. Bulging storage tanks are contributing to high apportionment on Canada’s main conduit to the United States, the 2.85 million barrel-per-day (bpd) Enbridge Mainline network.

Even with the Alberta cuts, oil inventories in western Canada hit a record 37.1 million barrels in April and are close to 34 million barrels in May, according to energy information provider Genscape.

One Calgary-based trader said that 37 million barrels is as full as storage can get and that anybody with tankage has been making money. Genscape monitors roughly 62 million barrels of storage in western Canada but at most only 67% is utilized because of pipeline operations and the need to separate grades. Some traders and storage companies are benefiting. BP does not disclose its storage lease position in Canada but the company owns large refineries in the U.S. Midwest which run Canadian heavy crude. BP also declined to comment. Storage rates are not publicly disclosed and vary widely, with long-term tankage cheaper than short-term. One trading source said three-month deals were being offered at around $2 per barrel per month. A four-year deal in Canada costs about $1.50 a barrel a month compared to 30-40 cents per barrel in the U.S. Gulf Coast, other sources said. Monthly storage rates at the U.S. futures hub of Cushing, Oklahoma, are about 30 cents a barrel. Gibson is the dominant storage owner in Hardisty, with 10 million barrels built and this year sanctioned another 2.5 million barrels. Its storage contracts are all long-term leases, averaging 10 years, and its main customers are large oil sands producers. “We get requests all the time for short-term storage but we do not have tanks to do that,” Gibson Chief Executive Officer Steve Spaulding said. Nick Bit: Despite the bullshit the most expensive oil in the world is from the US and Canada is locked up because of lack of pipelines and oil terminals… Here is a news flash the few new pipelines planned are years away….

Ex-IAEA Deputy General Warns Iran Could Have Nuclear Bomb in Six Months

Iran's stocks of nuclear materials still within limits: IAEA
Iranian Presidency/AFP/File Handout
TEL AVIV – Iran could have a nuclear bomb in six to eight months, the former deputy head of the UN’s nuclear watchdog has warned.

Olli Heinonen, who was the deputy director-general of the International Atomic Energy Agency until 2010, said that Israel and the Gulf states “have a reason to worry.” “Israelis need to be worried, and the Gulf states also have reason for concern,” he told Israel’s Army Radio. “How will you be able to ensure your security if Iran achieves nuclear abilities?” He also said that Tehran has not been sticking to its side of the nuclear deal. “Iran is actually weaponizing uranium enrichment without making a weapon,” he claimed. “If they put in their maximum effort,” he said, Iran could produce nuclear weapons in as little as half a year. Heinonen also said that President Donald Trump’s decision to withdraw from the nuclear deal may not have been the best move and could play into Iran’s hands. “I think they felt comfortable [with the Trump decision]. They have the enrichment technology and they can create more centrifuges. Probably they [will be] able to withstand a lot of sanctions,” he stated.“The Ayatollahs can handle the new sanctions, and in the meantime they’re making new centrifuges,” he said. The head of IDF military intelligence on Wednesday claimed that the economic sanctions on Iran were having adverse effects, including Tehran’s decision to increase uranium enrichment as well as attacks — attributed by Israel and the U.S. to Iran — on UAE oil tankers in the Gulf of Oman.“Iran is under growing pressure that is forcing it to take actions connected to oil and to its nuclear project — though for now there are no changes to its policies,” Maj Gen. Tamir Heyman said.

Wells Fargo to pay at least $385 million to settle scam allegations

 

Wells Fargo agreed to pay at least $385 million to settle a class-action lawsuit that it allegedly scammed millions of auto-loan customers into buying insurance they didn’t need. The settlement covers customers who were bilked out of tens of millions of dollars for about 11 years through September 2016, according to court papers filed in Central California federal court. National General Insurance, which was allegedly in cahoots with the bank to place the unnecessary insurance with the customers, will also pay $7.5 million to the class. The US’ third-biggest bank and the insurer “engaged in a more than decade-long scheme that forced millions of Wells Fargo customers to pay for [insurance] they did not need or want, bilking tens of millions of dollars from them in the process,” according to the court filing. The agreement, which is about six times higher than the $64 million Wells initially proposed, will also compensate customers whose credit scores were harmed because of the scam, and pay back customers who lost their vehicles because they couldn’t afford the unnecessary insurance, according to the filing. The total settlement, which still has to get approved by a judge, is likely to be much higher than the total $393.5 million, since lawyers’ fees are not included in the settlement. The alleged scam is one of many that have come to light in the wake of revelations that Wells had opened millions of fake accounts and credit cards in order to meet arbitrary quotas — and inadvertently harmed customers with bruised credit scores and erroneous fees. “Reaching this agreement, which leverages remedies available in our existing remediation plan, is an important step in making things right for customers impacted by this issue,” Nicole Brown, a spokeswoman for Wells Fargo, said in a statement. “We will continue sending individualized letters to customers that clearly set out the remediation amount due to them, as well as a check for that amount. This process will continue until the remediation is complete.”

Banks Are Tired of Losing Money on Fracking Loans

Shale firms explore costly financing options as traditional methods dwindle

The companies behind the U.S. fracking boom are turning to asset sales, drilling partnerships and other alternative – and costly – financing to supplement their cash flow as they face dwindling access to traditional sources of capital after routinely failing to turn a profit for years, according to a WSJ analysis. Producers mostly have avoided borrowing in 2019: There has not been an issuance of public equity by a fracking company since late last year, the longest gap since 2014, and bond issuances by shale companies are on pace to reach their lowest levels in more than a decade. Permian producer Pioneer Natural Resources (NYSE:PXD) is looking to pay for drilling some of its less promising acreage through joint ventures; CEO Scott Sheffield tells WSJ the company is seeking financing for wells it otherwise would not drill for 10-15 years.

Over 170 shale companies have declared bankruptcy since 2015, affecting $100 billion in debt, including 8 bankruptcies already this year.

Describing the current climate for shale companies, Sheffield says, “It’s been a 10-year run and the equity markets are closed, and the investors want return to themselves.” A new report from the Institute for Energy Economics and Financial Analysis and Sightline Institute studied 29 North American shale companies and found a combined $2.5B in negative free cash flow in Q1, even worse than the $2.1B in negative cash flow from Q4 2018 and despite a 16% Q/Q decline in capital spending. “Until fracking companies can demonstrate that they can produce cash as well as hydrocarbons, cautious investors would be wise to view the fracking sector as a speculative enterprise with a weak outlook and an unproven business model,” the report says. Nick Bit  frackers cannot make any money at the present price of oil. At best US oil production will increase by 200,000 Barrels a day this year. Venezuela alone has taken 1.5 million BPD out of the market. Now add Iran, Libya and massive production cuts just confirmed by Russia and the Saudis  and you can see why 200,000 barrels are not squat compared to the 10 million BPD that will  be taken out of the market. And while you are at do not buy into the bulshit of a global trade induced slow down. Presidentie bullshitter has one of 2 choice… get reelected or go to jail. And even that old fool knows that he better have a booming economy to get reelected.

IMF warns of giant tech firms’ dominance

Giant technology companies might cause significant disruption to the world’s financial system, the head of the International Monetary Fund has warned. Christine Lagarde said just a few firms with big data access and artificial intelligence could run the global payment and settlement arrangements. Her warning came as the G20 finance ministers met in Japan. The summit is also discussing the need to close tax loopholes for internet giants like Facebook and Google. One of the options being considered is to tax such companies where they make their profits – rather than where they base their headquarters. “A significant disruption to the financial landscape is likely to come from the big tech firms,” Ms Lagarde said in Japan’s south-western city of Fukuoka. She said such firms “will use their enormous customer bases and deep pockets to offer financial products based on big data and artificial intelligence”. “This presents a unique systemic challenge to financial stability and efficiency,” she added. She cited China as a most recent example. “Over the last five years, technology growth in China has been extremely successful and allowed millions of new entrants to benefit from access to financial products and the creation of high-quality jobs,” Ms Lagarde said. “But it has also led to two firms controlling more than 90% of the mobile payments market.”

US gives Turkey ultimatum on Russian missiles

Turkey has been given a deadline of the end of July to choose between buying US fighter jets and Russian anti-aircraft missile systems. Acting US Defence Secretary Patrick Shanahan set out the ultimatum in a letter to his Turkish counterpart, Hulusi Akar. Turkey, he said, could not have both America’s F-35 advanced fighter jets and Russia’s S-400 systems. The two Nato allies have been locked in a row over the S-400 for months. America argues that the Russian systems are both incompatible with Nato defence systems and pose a security threat, and wants Turkey to buy its Patriot anti-aircraft systems instead. Turkey, which has been pursuing an increasingly independent defence policy, has signed up to buying 100 F-35s, and has invested heavily in the F-35 programme, with Turkish companies producing 937 of the plane’s parts. Mr Shanahan says in his letter that the US is “disappointed” to hear that Turkish personnel have been sent to Russia to train on the S-400. “Turkey will not receive the F-35 if Turkey takes delivery of the S-400,” he writes. “You still have the option to change course on the S-400.” The first four F-35s due to be delivered to Turkey have still not left the US, officially to allow Turkish pilots to train in them in America. Turkish President Recep Tayyip Erdogan said on Tuesday his country was “determined” to proceed with the S-400 deal. “Unfortunately we haven’t received a positive proposal from the American side on the subject of Patriots like the S-400s from Russia,” he said. Turkey has the second-largest army in Nato, a 29-member military alliance set up to defend against what was at the time the Soviet Union. The head of Russia’s state defence conglomerate Rostec, Sergei Chemezov, was quoted as saying on Friday that Russia would start delivering the S-400 to Turkey in “about two months”.

Saudis optimistic about OPEC+ cut extension after talks with Russia

LONDON and MOSCOW (Bloomberg) –Saudi Arabia’s top oil official said he was sure that OPEC+ will extend production cuts into the second half of the year after holding talks with Russia. Ministers from the countries voiced similar concerns about the impact of a slowing global economy on oil prices and talked up the benefits of cooperation. The unified front presented on Friday appeared to resolve signs of division visible in the previous days. Still, the two leaders of the coalition between OPEC and several non-members stopped short of any specific commitments on production volumes after the current output deal expires at the end of this month. They were also unable to fix a date for a meeting to discuss the matter with fellow ministers.“I don’t think the question is at all whether we will extend or not,” Saudi Energy  Minister Khalid Al-Falih said after a panel at the St. Petersburg International Economic Forum chaired by Bloomberg TV. “A rollover is almost in the bag for OPEC. The question is to calibrate with non-OPEC if there needs to be an adjustment from the first half.” Diverging interests and surging market volatility are making the ministers’ decisions more difficult. Oil is torn between the bearish influence of U.S.-instigated trade wars and the bullish threat of supply disruptions from Iran to Venezuela. “I don’t think there will be a need to deepen the cut, but whether we need to scale it back a little bit will depend on what happens in Iran, Venezuela, other countries,” Al-Falih said.  Russian Energy Minister Alexander Novak said. “The situation in the market is far from being a positive one” and demand growth may slow to below 1 MMbpd, so the OPEC+ deal “is a very great instrument for dealing with this uncertainty.” While the Saudis have clearly wanted for some time to extend the group’s production curbs beyond their expiry at the end of this month, Russia had been at best non-committal. President Vladimir Putin showed little concern this week about the latest market moves and said his country was better placed to withstand lower prices than its Gulf ally. Saudi Arabia is able to tolerate lower crude prices than almost anyone else, Al-Falih said. However, letting the market slump again like it did in 2015 — when Brent traded in the $30s―would be “unacceptable,” he said. The kingdom pumped about 9.65 MMbpd in May, which is 700,000 bpd below its target in the OPEC+ deal, Al-Falih said. The kingdom will keep output below its 10.3 MMbpd limit through July, but there’s no need to deepen the cuts, he said. OPEC and its allies haven’t yet confirmed a date for its next ministerial meeting in Vienna. Originally set for late June — just days before the group’s cuts expire — scheduling conflicts mean it has been postponed. Most members have confirmed they can gather in the Austrian capital from July 2 to 4, Novak said. “I’m very confident that when we do meet in a few weeks, we will come to the right decision,” Al-Falih said. If it does extend the cuts, the group can still be responsive to changes in the market. “We can adjust up and down as the need may be.”

Russia, OPEC have ‘different understanding of the fair price’ of oil: Putin

London — Russia and OPEC have divergent views on a “fair price” for oil, but the two sides will continue to cooperate on managing the market, Russian President Vladimir Putin said Thursday. Receive daily email alerts, subscriber notes & personalize your experience. Russia is comfortable with an oil price in the range of $60-$65/b, given that the Russian budget is built on a $40/b price assumption, Putin said, according to a report by Russia’s Prime news agency. At the same time, OPEC’s largest producer and de facto leader, Saudi Arabia, which has a less diversified economy, is seeking higher oil prices as its budget is based on higher oil price levels, Putin said. That makes Saudi Arabia more eager to extend the OPEC/non-OPEC coalition’s production cuts beyond their expiry at the end of the month, but Putin declined to say whether Russia would agree. “We have certain disagreements, linked to a different understanding of the fair price,” he said in St Petersburg. “We have to take into account all the factors: output drop in Iran [and] Venezuela, problems in Libya, Nigeria,…and an increase in consumption in the summer season. I won’t tell you now what considerations we have over what we need to do in the second half of the year, but we will be taking a consolidated decision together with our colleagues in OPEC.” OPEC and 10 non-OPEC allies led by Russia agreed in December to cut a combined 1.2 million b/d in supplies through June. Saudi energy minister Khalid al-Falih is due to meet with Russian counterpart Alexander Novak at the St. Petersburg International Economic Forum this week, as well as in Moscow next week. Venezuelan oil minister Manuel Quevedo, OPEC’s president for this year, is also at the forum. Among his tasks are brokering an agreement for the date of the next OPEC/non-OPEC meeting in Vienna.

Originally scheduled for June 25-26, Russia has requested a date change to July 3-4, but several members, notably Iran, Algeria and Kazakhstan, have said they are opposed to moving the meeting. Putin said Russia has no plans for OPEC membership, “but we have a certain mechanism of cooperation and the decisions will be consolidated”

U.S. commander on Iran: ‘The threat remains very real’

BAGHDAD — The top commander of U.S. forces in the Middle East says he believes the Iranians or their proxies may orchestrate an attack at any moment. “I think the threat is imminent,” Marine Gen. Frank McKenzie said in an exclusive broadcast interview with NBC News in the Iraqi capital. “We continually evaluate our force posture in the region.” The U.S. has beefed up its military presence in the region in an effort to deter Iran and protect American forces and allies. Over the last month, the Trump administration announced that it was sending an aircraft carrier strike group and Air Force bombers to the Middle East, as well as Patriot missiles and additional troops, amid heightened concerns of an Iranian attack.

McKenzie stressed that tensions remain high. “I don’t actually believe the threat has diminished,” McKenzie said after holding a series of meetings with the Iraqi prime minister and defense chief. “…I believe the threat is still very real.”

McKenzie said he was “heartened” by the efforts of the Iraqi government to protect American forces and its allies in the region. Roadside bombs have posed the major danger to American forces in Iraq, McKenzie added, but he said the threat from the Iranians is evolving. “They probe for weakness all the times,” McKenzie said. “I would say the threat has probably evolved in certain ways even as our defensive posture has changed and become more aggressive, and we certainly thank our Iraqi partners for many of the things they’ve done.” “I think we’re still in the period of what I would call tactical warning,” he said. “The threat is very real. ” McKenzie declined to go into specifics on the nature of the threats. A day after the U.S. announced it was sending additional military assets to the region to “send a clear and unmistakable message” to Iran, four oil attackers were attacked in the Persian Gulf. The U.S. suspects Iran was responsible for the attacks; the Iranian government has denied having any role in the incident.

Trump Says There’s a ‘Chance’ of Military Action Against Iran

Image President Trump at a news conference in London on Tuesday during his first state visit to Britain.CreditCreditDoug Mills/The New York Times

 

 

LONDON — In a wide-ranging interview on  President Trump said there was “a chance” of military action against Iran, cast his ban on transgender people serving in the military as an economic decision and admitted using the word “nasty” in connection with Meghan, Duchess of Sussex. He made the remarks on ITV’s “Good Morning Britain” to Piers Morgan, the show’s co-host who was the winner of “The Celebrity Apprentice” in the United States in 2007-8 and someone Mr. Trump considers a friend. Mr. Trump’s state visit has been a whirlwind of ceremonial events with the royal family, including a state banquet on Monday; tea with Prince Charles and his wife, Camilla, Duchess of Cornwall; and political and business meetings on Tuesday with Mrs. May and other top officials in which he urged Britain to forge ahead with plans to quit the European Union, dangling the prospect of a “phenomenal” trade deal with the United States. But his trip has been marked by a continuing feud with the mayor of London, Sadiq Khan, and protests that brought thousands of people to the streets of London with new and old props, including the Trump baby balloon and one called Dump Trump, which shows the president sitting on a golden commode. Mr. Trump, who is often unsettled by reports of protests, sought to play down the demonstrations, calling them “fake news” in a news conference with Mrs. May on Tuesday and tweeting on Wednesday morning that there were actually “big crowds” supporting him. Mr. Trump had set the stage for his second trip to Britain as president with interviews in The Sun and The Sunday Times, both Rupert Murdoch-owned newspapers. Asked by The Sun’s reporter about criticisms that the former Meghan Markle, Prince Harry’s wife, made about him in 2016, Mr. Trump replied, “I didn’t know she was nasty.” He later denied saying the word nasty, even though the exchange had been recorded.  Mr. Trump acknowledged to Mr. Morgan: “They said some of the things that she said and, it’s actually on tape. And I said, ‘Well, I didn’t know she was nasty.’ I wasn’t referring to she’s nasty. I said she was nasty about me. And, essentially, I didn’t know she was nasty about me.” When Mr. Morgan told him that his “nasty” comment could be read different ways, he insisted: “She was nasty to me. And that’s O.K. for her to be nasty. It’s not good for me to be nasty to her, and I wasn’t.” The president said he had had a warm exchange with the duchess’s husband, Prince Harry. “In fact, he spent a lot of time talking to Ivanka and talking to my family. I went up — he couldn’t have been nicer,” Mr. Trump said.

US crude inventories likely down 1.7 million barrels as refiners increase runs

New York — US crude inventories likely fell 1.7 million barrels the week ending May 31, as refiners increased runs while production remained stable, a survey of analysts by S&P Global Platts showed Monday. Crude inventories typically decline heading into the summer as refiners increase runs. Analysts were looking for refiners to increase operations by 0.5 percentage points to 91.7% of capacity, based on last week’s US Energy Information Administration data. However, crude runs likely would have been higher were it not for flooding in the Midwest, which caused operational problems at some refineries, notably HollyFrontier’s 125,000 b/d Tulsa, Oklahoma, plant. Looking forward, US refinery runs are expected to climb to 17.45 million b/d in June, according to S&P Global Platts Analytics. A crude stock draw could also be tempered by healthy supplies. Crude production is expected to remain at roughly 12.3 million b/d, based on last week’s EIA data. US production was up 100,000 b/d the week ending May 24, and up 1.5 million b/d from the same week in 2018. While US rig counts have fallen, output continues to rise, driven by unconventional plays. The Permian Basin has seen a drop of 30 rigs since the beginning of the year, but producers have been tapping into an abundance of drilled but uncompleted wells (DUCs). Permian crude output averaged 4.387 million b/d in May, and is projected to average 4.52 million b/d in July, according to Platts Analytics. Crude prices have fallen in recent weeks, with front-month Cushing WTI down roughly $10/b since May 20. The Midwest flooding also caused Tallgrass the shut the southern leg of its 400,000 b/d Pony Express crude line, which runs from Guernsey, Wyoming, to Cushing, Oklahoma, the WTI delivery and pricing point. The flooding also caused a temporary closure of the 360,000 b/d Ozark Pipeline, which runs from Cushing to Midwest refiners. Considering Midwest refinery demand for crude was lower, Cushing crude inventories likely increased last week. This was reflected in the Cushing WTI discount to Brent, which widened to $11.13/b May 31 from $9.28/b May 24, S&P Global Platts data showed. Crude imports are expected to have risen last week, with US Census data showing increases from Colombia, Brazil and Nigeria. Refining margins are strong throughout the US, and should encourage higher refinery runs and imports. Census data shows more crude from West Africa and Canada entering the US Atlantic Coast last week. While cracking margins show for Bakken railed from North Dakota as more competitive than waterborne grades, rail capacity is limited. Crude exports likely remained high last week. Platts cFlow trade-flow software shows lower crude exports to the Caribbean and Latin America offset by steady exports to Europe, and a jump in exports to Asia, primarily driven by China. However, refining margins in Asia have weakened, and are in some cases negative, which could cause a decline in demand for imported crude down the road if the regional refined products surplus is not cleared. Analysts expect US gasoline inventories to have increased by 208,000 barrels last week, and distillate inventories to have fallen 1.08 million barrels. EIA data for the week ending May 24 showed an unexpected rise in gasoline inventories, and decline in implied demand, which helped push the futures complex lower towards the end of last week. The bulls were looking for signs of a demand increase, considering recent global demand worries stemming from the ongoing US-China trade war. However, the US economy remains strong, and a recovery in implied demand will likely emerge in the EIA data for the week ending May 31, according to Platts Analytics. Economic strength is also bullish for diesel demand. Flooding has likely decreased implied demand for gasoline in the Midwest, but marginally so. Also, while refiners are expected to have increased runs, they have been maximizing diesel production over gasoline. The flooding has delayed plantings, and thus the seasonal increase in Midwest diesel demand. Farmers are expected to increase diesel buying in the coming weeks as they boost activity, although diesel use for farming will likely be below average this year.

Refinery margin tracker: China seen increasing Forties flows in June despite weak margins

New York — Despite negative margins, China is expected to increase volumes of Forties crude in June as North Sea production comes back online after maintenance and repairs, an analysis by S&P Global Platts showed Monday. However, the widening of the Brent-WTI spread last week could send Chinese buyers after more economic US barrels. Last week, Asian cracking margins for Forties fell deeper into negative territory, averaging minus $3.02/b for the week ended May 31, down from the minus $2.80/b the week earlier, Platts Analytics refining margin data showed. Softer demand in China is likely driving margin weakness, with overall Chinese oil demand down 0.3% or about 40,000 b/d, year to date, according to a Monday Tudor Pickering Holt research note, noting this includes “an especially bearish” 2.4% drop in April. TPH notes that China distillate consumption is down 5.9% year to date while gasoline demand is up 3.6% year over year. However, Chinese refinery runs are expected to increase, according to Platts Analytics forecasts, which forecasts June runs at 12.9 million b/d up from the 12.7 million b/d in May as planned refinery work ebbs, increasing the need for more crude. In May, China was the leading importer of Forties, taking in 4.1 million barrels or about 43% of all the crude exports out of the loading point of Hound Point, UK, according to Platts cFlow. Shipping and trade sources report that up to four VLCCs are fixed for June, compared with the two in May as North Sea production returns to more normal levels after planned and unplanned work on fields and facilities. As Ekofisk maintenance begins to wind down, North Sea loadings of BFOE are set to return to more normal levels in July increasing supply. In total, 50 cargoes of Brent, Forties, Oseberg, Ekofisk and Troll are scheduled to load in July for a total of 30 million barrels, up from the 8.4 million barrels in June. But a proposed strike for midnight Monday by Norwegian oil and gas union members over pay and conditions could cut 440,000 b/d of oil equivalent, including from fields such as Oseberg Ost and possibly Ekofisk. Union members are engaged in mandatory talks with Norwegian Oil & Gas mandated after talks held early in May failed to reach a resolution. And although China is seen eyeing North Sea crude, the widening of the Brent-WTI spread last week is making US crude more attractive to Asian refiners, which could have them eschewing North Sea crude for Permian barrels. The WTI-MEH cracking margin in Singapore rose last week to $2.44/b from $1.08/b the week earlier, as the Brent-WTI spread for the week moved out to averaged $11.20/b, creating better economics for US crudes. Platts Analytics expects US crude exports to be 3.35 million b/d, compared with the 3.3 million b/d the week earlier.

US Atlantic Coast Refining Margin Averages ($/b)
Bakken cracking Bonny Light cracking Arab Light cracking Hibernia cracking
Week ending May 31 6.79 9.97 15.12 5.43
Week ending May 24 7.44 10.31 15.04 6.44
Q2 to date 8.68 9.29 14.93 8.11
Q2-18 9.65 11.56 12.66 8.85
Q1-19 4.45 6.38 8.57 3.73
Q4-18 4.22 26.56 18.25 3.21
US Gulf Coast Refining Margin Averages ($/b)
LLS cracking Mars coking Maya coking WCS coking
Week ending May 31 9.8 6.27 9.49 7.95
Week ending May 24 9.26 5.96 8.97 7.52
Q2 to date 9.62 7.67 8.48 7.73
Q2-18 9.82 9.04 11.25 9.4
Q1-19 8.42 5.19 5.99 5.94
Q4-18 7.07 2.78 6.55 4.92
US Midwest Refining Margin Averages ($/b)
Bakken cracking WTI cracking WTS coking WCS coking
Week ending May 31 22.62 20.62 19.61 20.95
Week ending May 24 23.05 21.71 20.21 21.28
Q2 to date 20.33 18.71 17.9 17.48
Q2-18 15.72 18.37 13.82 15.91
Q1-19 11.61 11.22 11.65 10.04
Q4-18 21.04 31.36 11.98 14.12
US West Coast Refining Margin Averages ($/b)
ANS cracking Mixed Light Swt cracking Escalante coking Oriente coking
Week ending May 31 16.51 19.08 16.21 20.04
Week ending May 24 16.76 20.09 16.81 20.87
Q2 to date 22.88 25.85 21.73 28.22
Q2-18 15.77 20.9 18.32 22.18
Q1-19 13 15.19 11 16.02
Q4-18 12.64 16.24 13.61 16.7
Singapore Refining Margin Averages ($/b)
Arab Heavy cracking Arab Medium cracking Dubai cracking Qatar Land cracking
Week ending May 31 0.41 -2.8 -0.57 1.08
Week ending May 24 0.77 -0.62 0.31 2.1
Q2 to date 3.05 1.37 2.38 4.11
Q2-18 1.35 0.01 0.8 2.63
Q1-19 2.47 0.14 0.76 2.84
Q4-18 2.34 1.43 4.63 3.31
ARA Refining Margin Averages ($/b)
Arab Light cracking Brent cracking Houston light sweet crack Urals cracking
Week ending May 31 3.83 5.88 4.01 5.64
Week ending May 24 5.32 7.09 5.03 6.75
Q2 to date 5.58 6.64 4.74 5.51
Q2-18 5.12 6.69 5.4 6.44
Q1-19 3.15 3.64 3.02 3.72
Q4-18 3.71 4.37 3.82 5.09
Italy Refining Margin Averages ($/b)
Urals cracking Azeri Light cracking CPC Blend cracking Houston light sweet cracking
Week ending May 31 2.91 6.11 3.1 6.46
Week ending May 24 2.98 6.18 3.14 5.46
Q2 to date 3.19 6.1 3.64 4.98
Q2-18 5.96 7.61 5.75 6.32
Q1-19 2.91 5.28 3.46 3.52
Q4-18 3.48 5.43 3.59 3.43
Source: S&P Global Platts; Turner, Mason & Co.

 

Oil prices fall on rise in US inventories, supply worries

Reusable: Petrobras oil platform Rio De Janeiro 150703
A Petrobras oil platform floats in the Atlantic Ocean near Guanabara Bay in Rio de Janeiro.

Oil prices resumed their slide on Wednesday, dragged down by a surprise gain in U.S. inventories and comments from the head of Russian state oil producer Rosneft questioning the point of a deal with OPEC to withhold supplies. Oil prices have fallen sharply on fears about slowing global demand, but won a respite on Tuesday after a global stock market rally on hopes of a cut in U.S. interest rates. U.S. crude stocks rose unexpectedly last week, while gasoline and distillate inventories built more than expected, industry group the American Petroleum Institute said on Tuesday. Crude inventories rose by 3.5 million barrels in the week to May 31 to 478 million, compared with analysts’ expectations for a decrease of 849,000 barrels. Official numbers from the U.S. Energy Information Administration (EIA) are due out later on Wednesday. “It was a very bearish number and if confirmed by the EIA it will hammer prices,” said Stephen Innes, managing partner at SPI Asset Management in Bangkok. The oil market has been weighed down by concerns about slowing global growth from the U.S.-Sino trade war and President Donald Trump’s threats last week to place tariffs on Mexican imports. To prevent oversupply and prop up the market, the Organization of the Petroleum Exporting Countries (OPEC), together with allies including Russia, has been withholding production since the start of the year. The group plans to decide later this month or in early July whether to continue the supply curbs. But on Tuesday, the head of oil giant Rosneft, Igor Sechin, said Russia should pump at will and he would seek compensation from the government if cuts were extended. Russia’s average daily oil output has nonetheless dropped to a three year-low after contaminated crude clogged its main export route. Further pressuring oil prices and undermining OPEC’s efforts to tighten the market has been surging U.S. output to record highs, leading to more of its crude being exported. “Does it make sense (for Russia) to reduce (oil output) if the U.S immediately takes (our) market share?” Sechin was quoted as saying by Interfax news agency. “We have to defend our market share,” he said.

Glencore’s head of oil, Alex Beard, retires amid U.S. probes

FILE PHOTO: Alex Beard, head of oil at trading firm Glencore

LONDON (Reuters) – Glencore’s head of oil, Alex Beard, who helped make the firm one of the world’s top three oil trading houses, will retire this month, the company said on Monday in yet another management shake-up amid U.S. probes into its activities. Glencore, founded by trader Marc Rich, has come under U.S. scrutiny in the past year over its business in the Democratic Republic of Congo, where it produces cobalt and copper, and in Venezuela and Nigeria, where it trades oil and refined products. Beard, 52, will be replaced by the head of oil marketing, Alex Sanna, who was key in expanding Glencore’s refined products trading in recent years. Beard’s move follows the retirement of other top allies of Glasenberg – Chris Mahoney, the long-serving head of Glencore’s agricultural business, and Aristotelis Mistakidis, the head of copper. Glencore is worth $44 billion and Mistakidis held a 3.2% stake in the company, worth $1.4 billion at current prices, while Beard held a 2.5% stake worth $1.1 billion. Glasenberg is the largest shareholder of Glencore, with 8.8%, and built the firm from predominantly a trading house into a mining giant via its merger with Xstrata in 2012. He has said he may retire within the next three to five years. Glasenberg, 62, revealed his retirement plans a few months after news broke about U.S. investigations into Glencore. Last July, Glencore said it had received a subpoena from the Department of Justice (DOJ) requesting documents and records on compliance with the U.S. Foreign Corrupt Practices Act and money-laundering statutes. A previous U.S. probe nearly destroyed Marc Rich in the 1980s when the United States accused the company of “trading with the enemy”, Iran. It indicted Rich, who was pardoned years later by President Bill Clinton in 2001 during Clinton’s last days in office. Rich died in 2013. Sources told Reuters the current DOJ investigation was focusing on the role of intermediaries and how they helped Glencore obtain contracts, including in oil trading. In April, Glencore said the U.S. Commodity Futures Trading Commission was also investigating whether the company and its units may have violated certain regulations through “corrupt practices”.The company said that probe was at an early stage and had a scope similar to that of the DOJ investigation. Oxford-educated Beard joined Glencore in 1995 from BP, the biggest trading desk at that time, and became head of oil in 2007. He embarked on expanding the firm into upstream, something trading houses had rarely done before, but the venture into Chad and Equatorial Guinea led to writedowns of over $700 million.

Glencore’s traded oil volumes fluctuated between 4.5 and 6.0 million barrels per day in recent years – on par with rival Trafigura but behind the world’s top trading house, Vitol.

Last year, Glencore’s volumes shrank 17% because of unfavorable market conditions. Sanna’s trading division will continue to report to chief executive Ivan Glasenberg, but oil assets, previously under Beard, will be transitioned to Peter Freyberg, the head of industrial assets, Glencore said on Monday. Sanna, who studied economics in France, holds a master’s degree in international trade from Panthéon-Sorbonne University in Paris.

Oil prices steady as Saudi Arabia indicates prolonged supply cuts

 Pipework is seen at the fuel refining units at Galp Energia SGPS SA’s oil refining plant in Sines, Portugal, on Friday, April 12, 2013. Galp Energia, Portugal’s biggest oil company, increased output in the first quarter from Brazil as its refineries processed more crude. Photographer: Mario Proenca/Bloomberg via Getty Images

NEW YORK (Reuters) – Oil prices steadied on Monday, supported by Saudi Arabia’s comments indicating OPEC and its allies would continue to tighten the crude market following deep losses last week. Saudi Arabia signaled that the Organization of the Petroleum Exporting Countries, together with Russia, would continue managing global crude supplies to avoid a surplus. “We will do what is needed to sustain market stability beyond June. To me, that means drawing down inventories from their currently elevated levels,” Energy Minister Khalid al-Falih was quoted as saying by the Saudi-owned Arab News newspaper. “There’s no doubt that Saudi Arabia has shown a lot of frustration with the price of oil,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “They’re scratching their heads, saying, ‘Hey, we think the market has it wrong and to prove that’s the case, we’re going to keep cutting production until the market gets it right.’” Brent crude prices have dropped almost 20% from their 2018 peak as global supplies tighten following output curbs by OPEC and Russia, as well as a reduction in Iranian and Venezuelan exports due to U.S. sanctions.

Saudi Arabia pumped 9.65 million barrels of oil per day (bpd) in May, a deeper cut than its production target under the global pact to reduce oil supply, a Saudi oil industry source said on Monday. The nation’s output target under the OPEC-led pact is 10.3 million bpd.

A planned June 4 strike by Norwegian workers could also lead to tighter global supply and buttress prices, potentially cutting Norway’s oil and gas output by about 440,000 barrels of oil equivalents per day if mediation efforts fail. Concerns that a U.S.-China trade war, and threats of tariffs on Mexico from the United States, would diminish global crude demand, however, weighed on oil prices. “Focus has shifted from the supply to the demand side as a U.S.-China trade agreement has proven elusive and as worries over the debilitating effects of tariffs on global economic growth have now shifted to Mexico,” Jim Ritterbusch of Ritterbusch and Associates said in a note. High-level talks were set to begin on Monday between Mexican and U.S. officials.

Saudi Aramco raises all July Asia-bound crude by 30-60 cents/b

July Asia-bound Light OSP differential raised by 60 cents. July Asia-bound Arab Medium and Heavy OSP differential at 7-year highs

Singapore — Saudi Aramco has raised the price differentials for all of its five crude oil grades loading in July and bound for Asia, the company said in a notice Sunday. Aramco hiked the July price differential for its flagship Arab Light grade by 60 cents/b to a premium of $2.70/b to the average of Oman/Dubai, the highest since January 2014, when it was a premium of $3.75/b to Oman/Dubai. The Arab Medium and Heavy grade July price differentials were raised by 50 cents/b from June to a premium of $1.95/b to Oman/Dubai and 60 cents/b from June to a premium of 75 cents/b to Oman/Dubai respectively. This was the highest differential for both grades since January 2012, when the Arab Medium grade price differential was at a premium of $2.75/b to Oman/Dubai, and the Arab Heavy grade price differential at a premium of $1.35/b to Oman/Dubai. Aramco also raised the July OSP differential for its Arab Extra Light crude grade bound for Asia by 50 cents/b from June to a premium of $3.20/b to Oman/Dubai. It raised the July OSP differential for Arab Super Light by 30 cents/b from June to a premium of $4.85/b to Oman/Dubai. The July Arab Extra Light grade price differential was the highest since July 2018, when it was at a premium of $3.30/b to Oman/Dubai, while the July Arab Super Light grade price differential was the highest since November 2018, when it was at a premium of $5.45/b to Oman/Dubai.

SAUDI ARAMCO’S JUNE OSP DIFFERENTIALS FOR ASIA ($/B)

Mar Apr May Jun Jul Change
Super Light 3.05 3.05 3.35 4.55 4.85 0.30
Extra Light 0.95 1.45 1.70 2.70 3.20 0.50
Arab Light 0.7 1.20 1.40 2.10 2.70 0.60
Arab Medium 0.45 0.85 1.05 1.45 1.95 0.50
Arab Heavy -0.65 -0.45 -0.25 0.15 0.75 0.60

 

Ship insurers ‘already charging’ war risk premium around Fujairah post-sabotage attacks

Singapore — Shipping and maritime insurers have already started charging war risk premiums in the waters around the Middle East bunkering hub of Fujairah after the insurance coverage area was expanded to include the Persian Gulf and the Gulf of Oman, according to industry executives. Following attacks on four oil tankers near Fujairah on May 12, the Joint War Committee of insurance body Lloyd’s Market Association on May 17 issued a circular adding the Persian Gulf and adjacent waters including parts of Gulf of Oman to the list of areas under risk of “Hull War, Piracy, Terrorism and related perils.” The JWC said the premium will vary and is not automatically added for the insurance cover. Given the circumstances in the Persian Gulf, it would be expected that underwriters are reviewing voyages on a case-by-case basis and acting according to the risk presented, Neil Roberts, secretary for JWC in the Lloyd’s Market Association, told S&P Global Platts. This may involve changing the terms and conditions of the policy, which can also include charging an additional premium, Roberts said. However, he said this premium does not get automatically added. War policies have a seven-day cancellation notice and so the new area is already effective a week after the individual underwriters would have given notice to their clients, he said. Since the JWC circular was issued on May 17, the new notification will have started from May 24, Roberts said. Shipping industry sources said it is the prerogative of the insurers to charge such a premium from the owners, who can then strive to pass it on to the charterers if the market situation so warrants. They confirmed that some of the underwriters are already charging the war risk premium. A dry bulk Supramax owner whose ships pass the Gulf of Oman told Platts that “our underwriters are already charging [war risk] premium” from us.  Japan relies heavily on crude imports from the Middle East — most of which transit through the Strait of Hormuz. Middle Eastern supplies accounted for 89% of Japan’s crude imports of 3.15 million b/d in January-April, according to government data. The expansion of the war risk area comes after Saudi Arabia said two of its oil tankers were victims of a “sabotage attack” off the coast of Fujairah on May 12, while two other vessels — identified by market sources as UAE-flagged and Norwegian-flagged — were also attacked. Fujairah is one of the world’s biggest bunkering hubs and lies just outside of the Strait of Hormuz, a critical chokepoint through which 30% of the world’s seaborne oil transits, giving it a strategic location for oil trading.

Russia’s May Oil Output Hits 11-Month Low on Dirty Oil Crisis

Russia's May Oil Output Hits 11-Month Low on Dirty Oil Crisis
(AP)

Saudi Arabia united the Arab world against Iran. That means conflict could be one step closer

Jeddah, Saudi Arabia (CNN)King Salman of Saudi Arabia has pulled off in Mecca what many had thought unlikely — getting 20 or so disparate Arab nations to unite in a common position against Iran.
And while this achievement came without bellicose threats or new red lines, it is an important milepost on a road that may yet lead to regional conflict.
In middle-of-night, back-to-back summits at Islam’s holiest of sites, the aging but still-attentive Saudi monarch got a double endorsement of his claims that Iran is destabilizing the Middle East and a backing of his call for “the international community to shoulder its responsibility. The six-nation Gulf Cooperation Council and 21 Arab League nations present called for Iran to stop “interfering in the internal affairs” of its neighbors and denounced Tehran’s “threat to maritime security” in the Persian Gulf. For its part, Iran hit back, criticizing the allegations as “baseless” and accusing Saudi Arabia of promoting an “American and Zionist” agenda. Still, Tehran appeared tone-deaf to not one, but two unifying summit communiques urging it to change its behavior.
Trump declares emergency to expedite arms sales to Saudi Arabia and UAE
US pressure was applied to get Qatar to send a high-level delegation to the summits. When the country’s prime minister, Sheikh Abdullah bin Nasser al-Thani, showed up, he was the only leader not to get a customary kiss from the King. While he didn’t get much eye contact from some of the leaders gathered around the GCC table, al-Thani did back the Saudi monarch, saying: “Our participation comes from our support to join Arab and Islamic work and our common security and stability.” It marked the sign of a possible thaw in relations, but also the reemergence of Saudi Arabia from pariah to regional power broker again, which is good timing for its key ally, US President Donald Trump, as he doubles down on sanctions and pressure on Iran.. King Salman himself admitted that “failure to take a firm position against the Iranian regime” in the past had “led to the escalation we see today.”
What we saw in Mecca was a mark being set, that the status quo with Iran will no longer be tolerated by Saudi and its allies. What happens next is in Iran’s court. Talks are an option, but terrorism, insofar as it is perceived as such by Tehran’s neighbors, is not.

Saudi King: Int’l Community Must ‘Use All Means’ Against Iranian Regime

Saudi King Salman hosts an emergency summit of the Gulf Cooperation Council, in Mecca on Thursday, May 30, 2019. (Photo: SPA)

(CNSNews.com) – Saudi King Salman on Thursday demanded that the international community “use all means” to counter Iranian threats to maritime navigation and terror sponsorship, charging that the absence of a “firm” response up to now has encouraged an escalation in malign behavior. Addressing Gulf Cooperation Council (GCC) counterparts in Mecca, Salman accused Iran of responsibility for the sabotage of four oil tankers near the Persian Gulf, as well as drone attacks on key oil infrastructure in Saudi Arabia. Iranian threats to maritime navigation ‘jeopardize world oil supplies,” he said. Secretary of State Mike Pompeo, heading for a European visit where Iran will be on the agenda, told reporters flying with him that the recent incidents “were efforts by the Iranians to raise the price of crude oil throughout the world.” The official Saudi Press Agency quoted Salman as telling GCC leaders their nations must work seriously to preserve security in the light of “the recent criminal acts targeting one of the world’s most important trade routes through sabotage act against four commercial carriers close to the territorial waters of the United Arab Emirates in addition to targeting two oil pumping stations and a number of vital installations in the kingdom.” He argued that a “lack of a deterrent and firm stance to confront the subversive activities of the Iranian regime in the region has led the Iranian regime to continue and escalate these activities as we see today.” “We demand the international community to shoulder its responsibilities towards the threat posed by Iranian practices to the international peace and security, use all means to stop the Iranian regime from interfering in the internal affairs of other countries, sponsoring terrorist activities in the region and the world, and threatening the freedom of maritime navigation in the international straits.” Saudi Arabia on Thursday night opened two of three major “emergency” summits it is hosting this week, with a strong focus on Iran. The summit of the six-member GCC (Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain) was followed by an Arab League summit, while an Organization of Islamic Cooperation (OIC) summit was taking place on Friday. During a visit to the UAE Wednesday, National Security Advisor John Bolton characterized the U.S. response to the Iranian aggression as measured – and evidently effective, noting that there had been no further incidents since the first “three attacks.” The “three attacks” referred to were the sabotage of the oil tankers on May 12 – which Bolton attributed to “naval mines, almost certainly from Iran” – the drone attacks on the Saudi oil infrastructure on May 14, and the firing of a rocket that landed near the U.S. Embassy in Baghdad on May 19. “I think there is no doubt in anybody’s mind in Washington who is responsible for this,” Bolton said. “And I think it’s important that the leadership in Iran know that we know.” Before the three incidents occurred the Trump administration, citing “troubling and escalatory indications and warnings,” sped up the deployment of an aircraft carrier strike group and sent strategic bombers to the region to send a message to Iran. Following the attacks, President Trump approved a request from U.S. Central Command for 1,500 additional U.S. troops to be sent to the region for force protection, including some 600 already deployed to man a Patriot missile defense battery. During a visit to London on Thursday, Bolton said again he did not think anyone who knows the region had any doubt who was responsible for the attacks. The countries whose tankers were targeted – Saudi Arabia, the UAE and Norway – could soon make public the result of their investigations, he told Sky News. Asked what it would take for the U.S. to take action against Iran – since it hadn’t after the allies were targeted – Bolton said, “We’ve made it particularly clear that if American citizens or facilities are threatened or attacked, that there will be a very strong response.” The Iranian regime has denied responsibility for the attacks, and a foreign ministry spokesman called Bolton’s allegation about naval mines “ridiculous.”

Trump to hit Mexico with tariffs in anti-immigration measure

US President Donald Trump has announced tariffs on all goods coming from Mexico, demanding the country curb illegal immigration into the US. In a tweet, Mr Trump said that from 10 June a 5% tariff would be imposed and would slowly rise “until the illegal immigration problem is remedied”. Jesús Seade, Mexico’s top diplomat for North America, said the proposed tariffs would be “disastrous”. Mr Trump declared a national emergency at the US-Mexico border in February. He said it was necessary in order to tackle what he claimed was a crisis at the US southern border. Border agents say they are overwhelmed, but critics say they are mishandling and mistreating migrants. The US president has long accused Mexico of not doing enough to stem the flow of people, and this is his latest attempt to put pressure on the neighbouring state. Mr Seade said Mexico “must respond vigorously” if the tariffs – a tax on products made abroad – were brought in. However, Mexican President Andrés Manuel López Obrador responded by saying he did not want “confrontation”. “I propose deepening our dialogue, to look for other alternatives to the migration problem,” he wrote in a letter on Thursday.

During his election campaign and throughout his time in office, President Trump has sought funds to build a wall on the US-Mexico border. He declared the national emergency at the border in an attempt to divert federal funds for a barrier wall, but a judge blocked his efforts in May. The White House said on Thursday that the president would use the International Emergency Economic Powers Act to implement the new tariffs on Mexico. In a White House statement, Mr Trump said the tariffs would rise by five percentage points each month until 1 October, when the rate would reach 25%. The tariffs would stay at that level “unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory”, he said. President Trump’s latest tariff proposal is driven by a political issue – which is not to say that previous tariff moves did not have any politics behind them. But it is sure to have financial and economic consequences. Stock markets in many countries have already registered significant falls. Japanese car makers were among those hit – they have operations in Mexico which will be affected if President Trump does go ahead.

Summary of Weekly Petroleum Data for the week ending May 24, 2019

U.S. crude oil refinery inputs averaged 16.8 million barrels per day during the week ending May 24, 2019, which was 189,000 barrels per day more than the previous week’s average. Refineries operated at 91.2% of their operable capacity last week. Gasoline
production decreased last week, averaging 9.9 million barrels per day. Distillate fuel production decreased last week, averaging 5.2 million barrels per day. U.S. crude oil imports averaged 6.9 million barrels per day last week, down by 81,000barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 7.0 million barrels per day, 8.5% less than the same four -week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1,087,000 barrels per day, and distillate fuel imports averaged 177,000 barrels per day. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 0.3 million barrels from the previous week. At 476.5 million barrels, U.S. crude oil inventories are about 5% above the five year average for this time
of year. Total motor gasoline inventories increased by
2.2 million barrels last week and are about 1% above the five year average for this time of year. Finished gasoline inventories decreased while blending components inventories increased last week.
Distillate fuel inventories decreased by 1.6 million barrels last week and are about 5% below the five year average for this time of year. Propane/propylene inventories decreased by 0.1 million barrels last week and are about 17% above the five year average
for this time of year. Total commercial petroleum inventories decreased last week by 1.6 million barrels last week. Total products supplied over the last four
-week period averaged 20.3 million barrels per
day, down by 2.0% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.5 million barrels per day, down by 2.2% from the same period last year. Distillate fuel product supplied averaged 4.0 million barrels per
day over the past four weeks, down by 2.6% from the same period last year. Jet fuel product supplied was up 2.9% compared with the same four -week period last year.

Pentagon accuses Iran’s Revolutionary Guards over tanker attacks

WASHINGTON (Reuters) – The U.S. military on Friday accused Iran’s Revolutionary Guards (IRGC) of being directly responsible for attacks on tankers off the United Arab Emirates earlier this month, describing it as part of a “campaign” by Tehran driving new U.S. deployments. “The attack against the shipping in Fujairah we attribute it to the IRGC,” said Rear Admiral Michael Gilday, the director of the Joint Staff, adding the Pentagon attributed limpet mines used in the attack to the IRGC. He declined to describe “the means of delivery” of the mines. The remarks were made at a Pentagon news briefing to explain U.S. plans to send 900 more forces, including engineers, to the Middle East to bolster U.S. defence and extend the deployment of some 600 personnel manning Patriot missiles.

Trump invokes emergency arms sales authority to counter Iran

Decision to speed delivery of 22 deals worth $8 billion; opponents decry administration’s move
Getty Images
President Donald Trump’s administration invoked a rarely used provision of American arms control laws to sidestep Congress and authorize billions of dollars in weapons sales to key Middle East allies.

The Trump administration on Friday invoked a rarely used provision of American arms control laws to sidestep Congress and authorize billions of dollars in weapons sales to key Middle East allies, raising regional tensions and angering lawmakers who characterized the decision as an abuse of power, according to congressional sources. Officials notified Congress that the administration is declaring an emergency under arms control laws amid tensions with Iran to rush through the weapons sales to Saudi Arabia and the United Arab Emirates, two key allies in America’s intensifying confrontation with Iran. People familiar with the details said the sale represents a broad package of 22 separate deals worth about $8 billion. The move, coming the same day President Trump announced he is sending 1,500 more troops to the Middle East, allows the administration to circumvent the traditional congressional review process and speed the delivery of weapons to the Gulf allies.

US orders new troops to Middle East

US President Donald Trump says the deployment of 1,500 additional troops to the Middle East is a “protective” move

Washington (AFP) – The United States said it was deploying 1,500 additional troops to the Middle East to counter “credible threats” from Iran in a move denounced by Tehran on Saturday as “a threat to international peace”. “Increased US presence in our region is very dangerous and a threat to international peace and security and must be confronted,” Foreign Minister Mohammad Javad Zarif told the official IRNA news agency. The escalation of the US military presence follows a decision in early May to send an aircraft carrier strike force and B-52 bombers in a show of force against what Washington’s leaders believed was an imminent Iranian plan to attack US assets. And it comes as the Trump administration is planning to bypass congressional restrictions to sell arms to Saudi Arabia, a close US ally and Iran’s arch-enemy in the region. “This is a prudent response to credible threats from Iran,” acting Defense Secretary Patrick Shanahan said Friday.

President Donald Trump, who approved the deployment, called it “protective.”

Rocket Fired into Baghdad’s Green Zone Less Than One Mile from U.S. Embassy

A rocket was fired into Iraq’s capital of Baghdad on Sunday evening, landing less than a mile from the U.S. Embassy, according to a report.

The rocket did not cause any casualties, according to the Associated Press, citing Iraq’s state-run news agency. It came just days after the U.S. embassy in Baghdad evacuated non-essential personnel amid alleged threats from Iran against U.S. troops and civilian employees in Iraq. It was also the first apparent attack since September, according to the AP. The U.S. military spokesman for U.S. Central Command confirmed an “explosion” outside of the U.S. Embassy compound. “We are aware of an explosion in the International Zone (Green Zone) outside of the U.S. Embassy compound in Baghdad on May 19. There were no U.S. or coalition casualties, and Iraqi Security Forces are investigating the incident,” said Navy Capt. Bill Urban. The rocket was believed to have been fired from east Baghdad, which is home to Iran-backed Shiite militia, according to the news wire. A rocket launcher was discovered by security forces in the eastern neighborhood of Wihda, a security official told the AP. Al-Hurra TV correspondent Steven Nabil tweeted a photo of the alleged launcher:

There are approximately 5,000 U.S. troops in Iraq, ordered there by the Obama administration after the Islamic State in Iraq and Syria (ISIS) gained a foothold in the country in 2014. U.S. officials have sounded the alarm on potential threats posed to them by Iranian or Iranian-backed forces in Iraq who worked to help defeat ISIS but could potentially be turned against U.S. forces. Tensions between the U.S. and Iran have risen in recent weeks amid a U.S. pressure campaign on Iran to come back to the negotiating table on its nuclear program. President Donald Trump exited the Iran deal approximately a year ago, in May 2018. Last month, the administration ended waivers to countries who have not yet stopped importing oil from Iran. Shortly after, administration officials warned they were picking up intelligence about Iranian threats to U.S. forces in the Middle East. Secretary of State Michael Pompeo visited Iraq on a surprise trip with reporters, including one from Breitbart News. During his visit, he met with Iraq’s prime minister and president and discussed weaning Iraq off of Iran’s natural resources and keeping U.S. personnel safe in the country.

Ex-CIA Director Warns Iran to Be ‘Very Careful’ Amid Rising Tensions with US

, 03 April 2006
© AFP 2019 / IRNA Middle East A picture released by the official Iranian News Agency shows members of Iran’s elite Revolutionary Guard riding their boat along with an Iranian naval vessel during manoeuvers along the Gulf Sea and Sea of Oman

Former CIA Director David Petraeus warned Iran that it is going to have to be “very careful” in its responses to the US’ pressure campaign in recent months. The former CIA Director suggested that Iran has a decision to make as to how to approach the US from now until the November 2020 elections, where, as they hope, the US pressure campaign will die down. “They are going to have to make a decision. Either they are going to have to really tighten their belt and keep tightening, because it’s going to get worse,” Petraeus said on ABC’s “This Week.” “There are going to be further screws tightening down in [this] maximum pressure campaign and [they have to] try to grit their teeth and get to November 2020 in hopes that their desired outcome emerges.” “They’re going to have to be very careful not to overplay their hand and result in some kind of response that is quite punitive,” Petraeus added.

President Donald Trump swats at a bee during a National Day of Prayer event in the Rose Garden of the White House, Thursday, May 2, 2019, in Washington
© AP Photo / Evan Vucci
Trump: ‘If Iran Wants to Fight, That Will Be the Official End of Iran’

Tensions between the US and Iran escalated earlier this month when the US imposed more anti-Iranian sanctions and sent an aircraft carrier strike group, a squadron of B-52 bombers and Patriot interceptors to the Middle East to grapple with what Washington describes as a threat emanating from Iran.Trump, however, told reporters earlier this week that he does not want war with Iran, while noting that the US is ready to answer any military action against their forces and warning in a tweet that ”If Iran Wants to Fight, That Will Be the Official End of Iran.”

Saudi Arabia says it seeks to avert war, ball in Iran’s court

RIYADH (Reuters) – Saudi Arabia wants to avert war in the region but stands ready to respond with “all strength and determination” following last week’s attacks on Saudi oil assets, a senior official said on Sunday, adding that the ball was now in Iran’s court. Riyadh has accused Tehran of ordering Tuesday’s drone strikes on two oil pumping stations in the kingdom, claimed by Yemen’s Iran-aligned Houthi group. The attack came two days after four vessels, including two Saudi oil tankers, were sabotaged off the coast of the United Arab Emirates. Iran has denied it was behind the attacks which come as Washington and the Islamic Republic spar over sanctions and the U.S. military presence in the region, raising concerns about a potential U.S.-Iran conflict. “The kingdom of Saudi Arabia does not want a war in the region nor does it seek that,” Minister of State for Foreign Affairs Adel al-Jubeir told a news conference. “It will do what it can to prevent this war and at the same time it reaffirms that in the event the other side chooses war, the kingdom will respond with all force and determination, and it will defend itself and its interests.” Saudi Arabia’s King Salman on Sunday invited Gulf and Arab leaders to convene emergency summits in Mecca on May 30 to discuss implications of the attacks. “The current critical circumstances entail a unified Arab and Gulf stance toward the besetting challenges and risks,” the UAE foreign ministry said in a statement. Saudi Arabia’s Sunni Muslim ally the UAE has not blamed anyone for the tanker operation, pending an investigation. No-one has claimed responsibility, but two U.S. government sources said last week that U.S. officials believed Iran had encouraged the Houthi group or Iraq-based Shi’ite militias to carry it out. The Houthis, who are battling a Saudi-led coalition in Yemen, said they carried out the strike on oil pumping stations in the kingdom, which did not disrupt output or exports in the world’s largest crude exporter.

A Norwegian insurers’ report seen by Reuters said Iran’s Revolutionary Guards were “highly likely” to have facilitated the attack on vessels near the UAE’s Fujairah emirate, a main bunkering hub lying just outside the Strait of Hormuz.

Iraq oil minister calls Exxon Mobil’s evacuation of foreign staff ‘unacceptable’

BAGHDAD (Reuters) – Exxon Mobil’s decision to evacuate its foreign staff from the West Qurna 1 oilfield in southern Iraq on Saturday was “unacceptable and unjustified”, Iraq’s Oil Minister Thamer Ghadhban said on Sunday. “The withdrawal of multiple employees – despite their small number – temporarily has nothing to do with the security situation or threats in the oilfields in of southern Iraq, but it’s for political reasons,” Ghadhban said in a statement. Exxon Mobil, which has a long term contract to improve the oilfield on behalf of Iraq’s state South Oil Company, withdrew all foreign staff, around 60 people, Iraqi officials have said. The evacuation came just days after the United States withdrew non-essential staff from its embassy in Baghdad, out of apparent concern about perceived threats from Iran, which has close ties to Iraqi Shi’ite militia. Ghadhban said he sent a letter to Exxon Mobil asking for the company to immediately return to work at the southern oilfield, ahead of a meeting with company executives later this week. Production at the oilfield was not affected by the evacuation and work was continuing normally, overseen by Iraqi engineers (ha  ha ha), the chief of Iraq’s state-owned South Oil Company which owns the oil field, Ihsan Abdul Jabbar said on Saturday. He added that production remains at 440,000 barrels per day (bpd). Nick Note: one of the secrets of the oil business is production remains the same in the NEWS media no matter what the relaity is at the export terminal

Why The Saudis Must Have Higher Oil prices

Saudi Aramco’s $12bn bond deal fizzles as sell-off continues Offering sinks  marking a quick sell-off that calls into question the depth of the deal’s $100bn of investor orders

Saudi Aramco's $12bn bond deal fizzles as sell-off continues
Aramco issued the debt to investors globally after, at one point, receiving more than $100 billion of orders.

Bonds issued by Saudi Aramco in its unprecedented offering sank marking a quick sell-off that calls into question the depth of the deal’s $100 billion of investor orders.

Risk premiums on the oil giant’s $12 billion of bonds climbed amid a mild drop in oil prices and rising Tensions in the Middle East

For the most actively traded piece of the offering – $3 billion of 3.5 percent bonds due in 2029 – the extra yield investors demanded to own the debt widened to as high as 1.18 percentage points more than US Treasuries in early trading according to the Trace bond-price reporting system. That’s up from 1.05 percentage points when the deal first priced Aramco issued the debt to investors globally after, at one point, receiving more than $100 billion of orders, people with knowledge of the deal said at the time. That allowed the energy giant to borrow at a lower yield than its sovereign parent, even though credit-ratings firms assigned the same grades as the kingdom’s debt. Declines come as oil prices in New York fell from a five-month high.

Saudi Arabia ‘seeks to avert war, ready to respond with force’

Saudi Arabia wants to avert war in the region but stands ready to respond with “all strength and determination” after last week’s attacks on Saudi oil assets, a senior official said, adding that the ball was now in Iran’s court. Riyadh has accused Tehran of ordering Tuesday’s drone strikes on two oil pumping stations in the kingdom, claimed by Yemen’s Houthi group. The attack came two days after four vessels, including two Saudi oil tankers, were sabotaged off the coast of the United Arab Emirates (UAE). Iran has denied it was behind the attacks which come as Washington and the Islamic republic spar over sanctions and the US military presence in the region, raising concerns about a potential US-Iran conflict. “The kingdom of Saudi Arabia does not want a war in the region nor does it seek that,” Minister of State for Foreign Affairs Adel al-Jubeir told a news conference on Sunday. “It will do what it can to prevent this war and at the same time it reaffirms that in the event the other side chooses war, the kingdom will respond with all force and determination, and it will defend itself and its interests.” Saudi Arabia’s King Salman on Sunday invited Gulf and Arab leaders to convene emergency summits in Mecca on May 30 to discuss implications of the attacks. “The current critical circumstances entail a unified Arab and Gulf stance toward the besetting challenges and risks,” the UAE foreign ministry said in a statement. Saudi Arabia’s Sunni Muslim ally the UAE has not blamed anyone for the tanker operation, pending an investigation. No one has claimed responsibility, but two US government sources said last week that US officials believed Iran had encouraged the Houthi group or Iraq-based Shia militias to carry it out.

Oil prices decline, to post a loss for the week

OPEC output drops to lowest in 4 years: Reuters survey
Getty Images

Oil futures headed sharply lower on Friday, pulling back after ending higher for the month of February, as traders weighed data showing a drop in OPEC output to its lowest in four years against a backdrop of weak U.S. economic data and record domestic production. Members of the Organization of the Petroleum Exporting Countries pumped 30.68 million barrels a day in February, down 300,000 barrels a day from a month earlier and the lowest since 2015, according to a survey from Reuters released Friday. “The market has priced in OPEC to extend their production cuts until year end and markets may need a new catalyst to take crude higher,” said Edward Moya, senior market analyst at Oanda. Weaker-than-expected data on U.S. consumer sentiment and manufacturing, on the heels of a fall in Chinese factory activity to its lowest in three years, also raised worries about energy demand. Data Friday showed the final reading of the University of Michigan consumer sentiment index faded in February, with a 93.8 reading, below the MarketWatch-compiled economist consensus of 95.6. Meanwhile, American manufacturing grew their businesses in February at the slowest pace since the election of President Donald Trump in November 2016, with the ISM manufacturing survey falling to 54.2 in February from 56.6. Oil prices took to split paths on Thursday, with U.S. prices extending gains from a weekly drop in domestic crude supplies and front-month global benchmark prices lower on the weaker Chinese economic data, which fed concerns over a demand slowdown. Both benchmarks, however, finished February higher, up a second consecutive month.

Consulting firm JBC Energy said Thursday that crude output from the Organization of the Petroleum Exporting Countries declined by 550,000 barrels a day in February, bringing the oil cartel’s total drop in output since October to 2.2 million barrels a day. That figure is much higher than the 800,000 barrels a day OPEC agreed to cut from October levels.

OPEC, led on a de facto basis by Saudi Arabia, and 10 producers outside the cartel, led by Russia, agreed in December to collectively hold back output by 1.2 million barrels a day for the first half of this year. What’s more, the U.S. Energy Information Administration on Wednesday reported that U.S. crude supplies unexpectedly dropped by 8.6 million barrels. The decline followed five straight weeks of increases and surprised most market forecasters, who expected an increase in stockpiles. Weekly data more broadly has shown that U.S. crude output has surged above a record 12 million barrels a day. The government expects crude output to average 12.4 million barrels a day this year. “Oil prices have been volatile this week,” with a large selloff Monday Large sell off on Monday due to U.S. President Donald Trump’s tweet “about OPEC manipulating price,” said Scott Gecas, chief market strategist at Walsh Trading.

“Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!” Trump tweeted Monday.

“It is very clear that traders are watching headlines with their finger on the button to react to headlines,” said Gecas. And “as the U.S. president continues to increase volatility with every tweet, in my opinion this is what will drive price action until global tensions settle down.

US still aims to cut Iran’s oil exports to zero: State Department official

Tokyo — The US continues to pursue a zero-tolerance policy for its Iran oil sanctions and is urging importers to eliminate all purchases from the Middle East country, Francis Fannon, assistant secretary at the US State Department’s Bureau of Energy Resources, said Monday during a visit to Japan. “The US policy is to drive Iranian exports to zero,” Fannon said during a media briefing in Tokyo. “That policy has not changed. We are unwavering in our policy.” Fannon was asked whether Washington would consider extending Iran sanctions waivers when they expire in May, given falling supplies from Saudi Arabia as a result of the production cut agreement by OPEC and allies, and the ongoing crisis in sanctions-hit Venezuela. He said it was premature to say whether the State Department would grant new waivers in May to the eight countries that were allowed to continue importing Iranian oil in return for promising to significantly cut their dependence on the supplies. Fannon is in Japan after visiting South Korea early last week. Both oil-importing countries are asking Washington to grant them new 180-day waivers to import Iranian crude when the current exemptions expire May 4.

;Asked whether he discussed with Japan efforts to find new crude sources, Fannon said: “We encourage all countries to diversify sources away from Iran.” He said that message was for all of Iran’s customers: “It’s not unique to any one country.” “We recognize that countries need supplies, and are continued to be encouraged that there are alternative sources,” Fannon said, adding that the US Energy Information Administration is projecting a surplus of about 440,000 b/d in 2019 and 630,000 b/d in 2020.

All transactions under the US State Department’s current “significant reduction exemptions” must be completed by May 4. Fresh waivers would start May 5 for countries that the US determines to have been able to significantly reduce Iranian imports in the previous six months. South Korea’s Deputy Foreign Minister Yun Kang-hyeon, Fannon and his counterpart “talked about the Iranian crude issue and South Korea’s efforts toward diversification of sources of crude imports,” a diplomatic source in Seoul told S&P Global Platts.

Saudi Aramco to acquire stake in China’s Zhejiang petrochemical project

Saudi Aramco has signed agreements to acquire a 9% stake in the Zhejiang petrochemical project in the Chinese province of Zhejiang for an undisclosed price The Zhejiang petrochemical project to be built in the city of Zhoushan is planned to have a capacity of 800,000 barrels per day. Saudi Aramco signed an agreement with the Zhoushan government to acquire its 9% stake in the refinery and petrochemical complex. The Arabian company has signed a second agreement with Rongsheng Petrochemical, Juhua Group, and Tongkun Group, the other shareholders of Zhejiang Petrochemical, the holding company of the Chinese petrochemical project. Saudi Aramco said that its involvement in the project will come with a long-term crude supply agreement and the ability to use Zhejiang Petrochemical’s large crude oil storage facility to cater to its customers in Asia.

McCabe: ‘It’s Possible’ Trump Could Be a Russian Asset

On Tuesday’s broadcast of CNN’s “AC360,” former Acting FBI Director Andrew McCabe said it is “possible” that President Trump could be a Russian asset. Host Anderson Cooper asked, “Do you still believe the president could be a Russian asset?” McCabe answered, “I think it’s possible. I think that’s why we started our investigation. And I’m really anxious to see where Director Mueller concludes that.”

Oil gains, with global benchmark prices poised for highest finish since November

Oil futures gained Wednesday, unfazed by data showing a fourth straight weekly rise in U.S. crude supplies, as reports of further reductions to global output and optimism around constructive U.S.-China trade negotiations bolstered prices. De facto leader of the Organization of the Petroleum Exporting Countries, Saudi Arabia, pledged to cut output further in the coming months, according to the Financial Times (paywall), citing oil minister Khalid al-Falih, who said the country would cut an additional 500,000 barrels a day to take production to 9.8 million barrels a day in March.

“This would be [approximately] 500,000 barrels per day less than stipulated in the production cuts agreement, meaning significant over compliance with the requirements,” said analysts at Commerzbank in a research note. Also Wednesday, the International Energy Agency said in a monthly report that global supply fell by 1.4 million to 99.7 million barrels a day in January.The gains for crude come despite data from the Energy Information Administration Wednesday that revealed domestic crude supplies rose by 3.6 million barrels for the week ended Feb. 8. That marked a fourth-straight week rise, and was larger than the 2.7 million-barrel rise expected by analysts polled by S&P Global Platts. The American Petroleum Institute data on Tuesday showed a decline of 998,000 barrels, according to sources. “Despite a big drop in imports due to inclement weather on the Gulf Coast last week, a plumbing of the depths in terms of refinery maintenance has meant we have still seen a build to crude inventories,” said Matt Smith, director of commodity research at ClipperData. Separately, a monthly EIA report released Tuesday revealed higher U.S. crude production forecasts for 2019 and 2020. The report also included higher WTI and Brent price forecasts for this year, but reduced the 2020 price views for both benchmarks by more than 4%. On Tuesday, OPEC said its crude output fell by 797,000 barrels a day in January, month on month, to average 30.81 million barrels a day, in the cartel’s separate monthly production update.

Europe may be on the cusp of a nightmare, but it’s not too late to wake up

 

The sleeping pro-Europe majority must be mobilized to defend its values, George Soros says
Chris McGrath/Getty Images
A man stands with an EU flag during speeches at a demonstration against recent legislative measures introduced by Hungarian Prime Minister Viktor Orban in Budapest.

 

MUNICH, Germany (Project Syndicate) — Europe is sleepwalking into oblivion, and the people of Europe need to wake up before it is too late.

If they don’t, the European Union will go the way of the Soviet Union in 1991. Neither our leaders nor ordinary citizens seem to understand that we are experiencing a revolutionary moment, that the range of possibilities is very broad, and that the eventual outcome is thus highly uncertain.

Most of us assume that the future will more or less resemble the present, but this is not necessarily so. In a long and eventful life, I have witnessed many periods of what I call radical disequilibrium. We are living in such a period today. The first step to defending Europe from its enemies, both internal and external, is to recognize the magnitude of the threat they present. The second is to awaken the sleeping pro-European majority and mobilize it to defend the values on which the EU was founded. The antiquated party system hampers those who want to preserve the values on which the EU was founded, but helps those who want to replace those values with something radically different. This is true in individual countries and even more so in trans-European alliances. The EU’s dominant country is Germany, and the dominant political alliance in Germany — between the Christian Democratic Union (CDU) and the Bavaria-based Christian Social Union (CSU) — has become unsustainable. The alliance worked as long as there was no significant party in Bavaria to the right of the CSU. That changed with the rise of the extremist Alternative für Deutschland (AfD). In last September’s länder elections, the CSU’s result was its worst in over six decades, and the AfD entered the Bavarian Parliament for the first time. The AfD’s rise removed the raison d’être of the CDU-CSU alliance. But that alliance cannot be broken up without triggering new elections that neither Germany nor Europe can afford. As it is, the current ruling coalition cannot be as robustly pro-European as it would be without the AfD threatening its right flank. In the United Kingdom, too, an antiquated party structure prevents the popular will from finding proper expression. Both Labour and the Conservatives are internally divided, but their leaders, Jeremy Corbyn for Labour and Theresa May for the Tories, are so determined to deliver Brexit that they have agreed to cooperate to attain it. The public is also becoming aware of the dire consequences of Brexit. The chances that May’s deal will be rejected on Feb. 14 are growing by the day. That could set in motion a groundswell of support for a referendum or, even better, for revoking Britain’s Article 50 notification.
Italy’s predicament Anti-European forces may look good in comparison: at least they have some principles, even if they are odious.
Europe’s interests It is difficult to see how the pro-European parties can emerge victorious from the election in May unless they put Europe’s interests ahead of their own.

 

Russia ‘has begun to doubt whether Maduro can cling to power in Venezuela due to the country’s disastrous economy and military turning against him’

Russia is losing its faith in Venezuelan President Nicolas Maduro’s ability to emerge victorious from the political crisis gripping the country, Kremlin sources say. Moscow still publicly backs Maduro’s regime but ‘recognizes that the disastrous state of Venezuela’s economy is inexorably draining what remains of his public support’.  The unidentified sources also pointed out that the army, part of which is currently deployed to block an aid shipment of food and medicine from entering the country from Colombia, will be reluctant to continue crack downs on fellow Venezuelans.   This comes as Venezuelan army continues its blockage of a bridge on the border with Colombia ahead of an anticipated humanitarian aid dispatch.  Maduro claims humanitarian aid is a forerunner of a US-led invasion, and defended his decision to order a barricade of the bridge by saying that ‘no one will enter, not one invading soldier.’  Opposition leader Juan Guaido, now recognised as interim president by the West and the US, claims that up to 300,000 people face death if the aid being blocked by Maduro’s army is not delivered.  The opposition-dominated National Assembly, led by presidential challenger Guaido, had warned the armed forces that blocking aid would mean crossing a ‘red line’. ‘You know there’s a red line, you know well there’s a limit, you know that medicines, food and medical supplies are that limit,’ lawmaker Miguel Pizarro said in a message to the military. Venezuelan military officers used a tanker truck and huge shipping container to block access to the Tienditas bridge, which links Cucuta, Colombia to Urena, Venezuela. Franklyn Duarte, an opposition lawmaker from the border state of Tachira, told AFP that troops from the armed forces were blocking the crossing. The aid delivery was being coordinated by Guaido, who has declared himself interim president of the oil-rich country and now enjoys the backing of some 40 countries as Venezuela’s legitimate leader. Maduro, 56, has repeatedly accused the United States of fomenting a coup.  His blockage of food, medicine and necessities to hundreds of thousands of starving Venezuelans came as weapons were discovered in cargo which the government claims was sent from Florida.  The weapons, including  19 rifles and high-calibre ammunition, were found at an airport in the city of Valencia, having been transported on an Airbus jet that flew in on Sunday, the Interior Ministry wrote on Twitter. It is not known who the intended recipient of the weapons was.  The US, which has not ruled out a military intervention in crisis-wracked Venezuela, was the first to recognize him as acting president, followed by a dozen Latin American countries. In his State of the Union address Tuesday night, President Donald Trump reaffirmed US support for Guaido, saying ‘we stand with the Venezuelan people in their noble quest for freedom.’ Britain, France, Germany and Spain were among 20 EU nations to side with Guaido this week after Maduro ignored their demands that he announce new presidential elections by February 3. Guaido is trying to force Maduro from power, set up a transitional government and hold a new presidential poll.

Crude oil futures slip on rising inventory, record high output

Singapore — Crude oil futures fell during mid-morning trade in Asia Thursday as the Energy Information Administration reported higher crude stocks. Additionally, record high domestic output has also capped prices, analysts said. Receive daily email alerts, subscriber notes & personalize your experience. According to EIA data released Wednesday, US crude inventory rose by 1.26 million b/d to 447.21 million barrels, which was well under analysts’ expectations of a 3.7 million-barrel build in an S&P Global Platts survey of analysts conducted on Monday. Meanwhile, record high domestic output, coupled with slowing factory output in Germany also capped prices, analysts said. Despite this, market participants felt that prices would be higher on lower OPEC productions, US sanctions on Venezuela’s PDVSA and supply side issues. OPEC’s oil production fell to a near four-year low in January, according to an S&P Global Platts survey, as the cartel’s new output cuts designed to halt the price slide of late-2018 went into force. OPEC’s crude output plunged to 30.86 million b/d last month, a fall of 970,000 b/d from December, excluding flows from Qatar, which left the production group at the start of the year, the survey of industry officials, analysts and shipping data showed. The month-on-month fall was the biggest since December 2016 and the lowest OPEC output since March 2015, the survey found. In other news, US sanctions on PDVSA, Venezuela’s state-owned oil company, have already had a dramatic impact on global crude and diluent flows and is likely to hasten the already historic collapse of the South American nation’s oil sector. While the sanctions have yet to affect oil prices significantly, that could change if the crisis in Venezuela drags on, S&P Global Platts reported.


Friendly Fed fires world stocks to best January on record

LONDON (Reuters) – Soothing sounds from the Federal Reserve propelled world stocks to their best January on record on Thursday although, having scored stellar gains this time last year only to flop spectacularly, traders were trying not to get too carried away. Crucially, it also said that the rundown of its balance sheet – or the stockpile of bonds it has accumulated over the past 10 years of quantitative easing – could slow too. That ticked all the boxes for financial markets. Wall Street and Asia both rallied and Europe ran up as much as 1 percent] until news that Italy was back in recession and other poor data took the wind out of the sails of most markets bar London. Futures pointed to the U.S. S&P 500 and Nasdaq both rising later though [.N]. That likely move added with Asia’s gains lifted the $4 trillion MSCI world index, which tracks 47 countries, for the 20th day out of the last 23. For January it is up more than 7 percent, which is its best January since the index began in 1990 and the best performance in any month since December 2015. “The rally really does lift all boats,” said Pictet emerging market portfolio manager Guido Chamorro. The gains for stocks were matched in bond markets. Benchmark U.S. Treasury yields, which tend to set the bar for global borrowing costs, had dived significantly and Europe’s big move saw Italian 2-year yields hit their lowest since May. But it was all pain for the dollar. It was struggling near a three-week trough against its major peers and emerging market currencies rose almost in unison having been crushed by the greenback last year. “Risk assets are dancing in the streets and the dollar’s down in the dumps,” Societe Generale strategist Kit Juckes said. “We may yet get a (Fed) rate hike in June, but if what matters is where policy’s heading in the medium term, the FX market would overlook that and sell the dollar anyway.” U.S. stocks were also set for another packed day of data and earnings. Jobless claims figures had already come out showing a 1-1/2 year high, Electric carmaker Tesla missed forecasts again but General Electric surged, marked up almost 10 percent after it beat estimates.

Foxconn may not build $10B Wisconsin plant Trump touted

The 20-million square foot campus was praised by President Donald Trump as proof of his ability to revive American manufacturing.

Donald Trump,Scott Walker,Terry Gou
President Donald Trump, Wisconsin Gov. Scott Walker, left, and Foxconn Chairman Terry Gou participate in a groundbreaking event for the new Foxconn facility in Mt. Pleasant, Wisconsin, on June 28, 2018.Evan Vucci / AP file

Foxconn is reconsidering plans to make advanced liquid crystal display panels at a $10 billion Wisconsin campus, and said it intends to hire mostly engineers and researchers rather than the manufacturing workforce the project originally promised.Announced at a White House ceremony in 2017, the 20-million square foot campus marked the largest greenfield investment by a foreign-based company in U.S. history and was praised by President Donald Trump as proof of his ability to revive American manufacturing. Foxconn, which received controversial state and local incentives for the project, initially planned to manufacture advanced large screen displays for TVs and other consumer and professional products at the facility, which is under construction. It later said it would build smaller LCD screens instead. Now, those plans may be scaled back or even shelved, Louis Woo, special assistant to Foxconn Chief Executive Terry Gou, told Reuters. He said the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the United States, where labor expenses are comparatively high. Rather than manufacturing LCD panels in the United States, Woo said it would be more profitable to make them in greater China and Japan, ship them to Mexico for final assembly, and import the finished product to the United States. Heavily criticized in some quarters, the Foxconn project was championed by former Wisconsin Governor Scott Walker, a Republican who helped secure around $4 billion in tax breaks and other incentives before leaving office. Critics of the deal, including a number of Democrats, called it a corporate giveaway that would never result in the promised manufacturing jobs and posed serious environmental risks. The company’s own growth projections and employment goals suggest the taxpayer investment would take at least 25 years to recoup, according to budget think tank the Wisconsin Budget Project.

US shutdown: Flight delays caused by staff shortages

Staff shortages linked to the US government shutdown have caused significant delays to flights at north-eastern airports. The closure means some federal staff, including air traffic controllers, are currently working without pay. Nancy Pelosi, Speaker of the House of Representatives, has blamed President Trump for the disruption. The delays come one day after air industry unions issued a stark warning about the risk posed to public safety. “In our risk averse industry, we cannot even calculate the level of risk currently at play, nor predict the point at which the entire system will break,” air traffic control, pilot and flight attendant union leaders said in a joint statement. In total about 800,000 employees have been working without pay, or have been temporarily laid off, since areas of the federal government shut down due to lack of funding 35 days ago.

President Trump has refused to approve any new funding agreement that does not include $5.7bn (£4.4bn) for his southern border wall. Democrats in Congress refuse to approve wall funding, so the two sides are stuck at an impasse. In a tweet on Friday, Mrs Pelosi appealed to the president to “stop endangering the safety, security and well being of our nation” and reopen the government. Flights were halted at New York’s LaGuardia airport – the 20th busiest in the country – shortly before 10:00 local time (15:00 GMT). The US Federal Aviation Administration (FAA) confirmed the temporary ground stop was lifted about 45 minutes later – but hundreds of flights there are disrupted. In a statement, the FAA said a “slight increase” in sick leave absences at two air traffic control facilities had led to the schedule changes – which it said was to ensure safety levels were maintained. It said departure delays at Philadelphia, Newark and LaGuardia were linked to the shortages. The FAA has advised the public to check with individual airlines for more information. On Thursday, the CEO of JetBlue Airways said the impact on carriers from the shutdown had so far been limited, but warned it was nearing a tipping point. Southwest Airlines head Gary Kelly has described the shutdown as “maddening” – estimating they have lost out on $10-15m (£7.5-11m) in January sales. On Friday, the Association of Flight Attendants issued a blistering statement in response to the delays. “The aviation system depends on the safety professionals who make it run. They have been doing unbelievably heroic work even as they are betrayed by the government that employs them,” President Sara Nelson said in a statement.

Fed Investigating Deutsche Bank Over Danske Money Laundering

The German bank allegedly facilitated money laundering by acting as a correspondent bank

US authorities are jumping into the ongoing investigation surrounding the Estonian branch of Danske Bank. According to a Bloomberg report, the Federal Reserve (Fed) is now looking at Deutsche Bank’s involvement in what is shaping up to be one of the largest money laundering cases in recent history. The investigation can be traced back to September of 2018. A whistle-blower, who has since been identified as Howard Wilkinson, the branch’s former Head of Trading, revealed that anti-money laundering procedures were not being properly adhered to. It is unclear exactly how much money passed through the Danish bank’s Estonian branch but some outlets have estimated that $230 billion of illicit cash was funnelled through it. According to the Danish Financial Services Authority, the bulk of the money came from Russia and countries that formerly made up the Soviet Union. Deutsche Bank fits into the picture because it allegedly acted as Danske Bank’s main correspondent bank. As with much of the case, many of the details surrounding Deutsche Bank remain murky and it is still unclear as to whether or not the German firm engaged in any wrongdoing.The company’s CEO, Christian Sewing, has already urged members of the public to not judge the firm until more evidence comes to light. Sewing has also said that the bank is pursuing its own internal investigation into the Danske Bank case. According to Bloomberg, the Fed’s investigation into the case, which is yet to be made public, will look at whether Deutsche Bank did enough to assess the funds that were flowing in from Danske Bank. In a statement, Deutsche Bank denied that there was a probe but said that it had received requests for information from regulators across the globe. The German banking giant said that this was “not surprising at all” as regulators want to look at the Dankse Bank case and see what lessons can be drawn from it. Nick Note :t hey are a dead broke piece of shit!

Delaying Brexit worse than no deal, says Liam Fox

Delaying or cancelling Brexit would be a “calamitous” breach of trust with the electorate and worse than leaving the EU with no deal, Liam Fox has said.The Brexiteer minister told BBC’s Radio 4’s Today programme MPs pushing for a delay actually wanted to stop Brexit. He said this was the “worst outcome” of the current wrangles. MPs are proposing alternative plans to the PM’s deal with the EU, including seeking an extension to the UK’s exit date – which is scheduled for 29 March. But the prime minister has said the “right way” to rule out no-deal Brexit is to approve her withdrawal agreement. Under current law, the UK will exit the EU on 29 March, whether or not a deal has been struck. The decision to leave was taken by 52% to 48% in a referendum in June 2016.Liam Fox said MPs should think about the “political consequences” of delaying Brexit not just the “short-term economic consequences”. “There is no doubt that leaving with a deal and minimising disruption both to the UK and our EU trading partners is in our best interest,” the international development secretary said. “But I think the most calamitous outcome would be for Parliament, having promised to respect the result of the referendum, to turn around and say it wouldn’t.” But Conservative Remainer Anna Soubry said it was “not true” that Tory MPs backing a move to prevent a “no deal” Brexit – such as Nick Boles, Nicky Morgan and Sir Oliver Letwin – wanted to stop Brexit and had in fact voted for Theresa May’s withdrawal deal. Mr Boles said Mr Fox had “never been very good at detail”. Former Chancellor George Osborne, a key player in the Remain campaign during the referendum, has said delaying the UK’s exit from the EU was now the “most likely” option. Speaking to BBC business editor Simon Jack in Davos, Mr Osborne, now a newspaper editor, said that the prospect of no-deal meant “the gun is held to the British economy’s head”. “Russian roulette is a game which you should never play because there’s a one-in-six chance that the bullet goes into your head,” he said. Mr Osborne, who was sacked by Mrs May when she became prime minister after the referendum, said his successor Philip Hammond had “sensibly” told businesses that leaving without a deal was not a possibility. “But we now need to hear it from the British prime minister,” he said. The other 27 EU member states would need to agree to an extension of the UK’s departure date. Next Tuesday MPs will get to vote on Theresa May’s way forward on Brexit, after rejecting her initial plan by a record-breaking 230 votes last Tuesday. Mrs May is hoping to tweak the deal to address concerns about the Northern Irish “backstop” among her own backbenchers and Northern Ireland’s Democratic Unionist Party, which she relies on to keep her in power. But MPs are attempting to take control of the Brexit process by tabling amendments to Mrs May’s plans

Oil recovers some losses, but trade and supply worries dominate

NEW YORK (Reuters) – Oil prices steadied on Thursday, boosted by a rebound in U.S. equities, after earlier losses on fears about surging U.S. crude production and a weakening global economy. Brent crude oil futures LCOc1 were down 14 cents to 61.19 a barrel by 2:04 p.m. EST (1904 GMT). U.S. crude futures CLc1 fell 32 cents to $52 a barrel. Earlier in the session, both benchmarks dropped about 2 percent. The Organization of the Petroleum Exporting Countries in its monthly market report cut its forecast for the average demand for its crude in 2019 to 30.83 million barrels per day, down 910,000 bpd from the 2018 average.

OPEC, however, said it cut oil output sharply in December before a new accord to limit supply took effect, suggesting that producers have made a strong start to averting a glut in 2019 as a slowing economy curbs demand

Saudi Arabia led the cuts of 751,000 bpd in December, the biggest month-on-month drop in almost two years.

The group and its allies plan to meet on April 17-18 in Vienna to review the supply reduction deal that began in January.

U.S. crude output has climbed by 2.4 million bpd since January 2018 and stockpiles of crude and refined products have risen sharply, U.S. Energy Information Administration data showed. [EIA/S]“Going forward, we should start getting a little better indication of Saudi production trends. I think that’s going to be supportive to the market,” Ritterbusch said. In response to the drop in price in the second half of last year, OPEC and non-members plan to cut production by a joint 1.2 million bpd this year. Oil is still about 20 percent above the lows reached in late December, but analysts said Brent has been trading in the low $60s and U.S. crude in the low $50s due to ongoing nervousness about relations between Washington and Beijing and China’s economic outlook. “Brent needs to move past $62 before we can talk about $65,” BNP Paribas head of commodities Harry Tchilingurian told the Reuters Global Oil Forum.

BNP Paribas to close proprietary trading desk

PARIS: BNP Paribas, France’s largest listed bank, will close its proprietary trading desk unit Opera within the next three months, a source close to the matter said Friday, confirming an earlier report from Bloomberg.

The bank had already downsized its proprietary trading operations following the 2008 financial crisis in a bid to reduce exposure to market volatility. The bank held the operation in a distinct legal entity called Opera to comply with local banking regulations that ban French banks from directly trading on markets with their own funds. They are only allowed to do market-making for clients. Regulators in France, like in other countries, have toughened rules to prevent banks from speculating on markets with funds from depositors. BNP Paribas didn’t disclose Opera’s performance, but has said the entity handles 600 million euros in capital. The unit is not significant for the bank’s operations and only employs 17 people, mainly in London and Paris, the source said. Nick Note :F&%*  you, you  banking  Corporate Assholes. one of many more to come

OPEC will hold extra meeting if output cuts ‘not enough’: UAE

“What if the 1.2 million barrels of cuts are not enough? I am telling you that if it is not, we will meet and see what is enough and we will do it,” Mazrouei said.
FILE PHOTO: UAE Energy Minister Suhail al-Mazrouei addresses a news conference after an OPEC meeting in Vienna, Austria, June 22, 2018. REUTERS/Heinz-Peter Bader/File Photo By Ahmed Hagagy

KUWAIT (Reuters) – OPEC and allied oil producers are ready to hold an extraordinary meeting and will do what is needed if the current cut in oil output by 1.2 million barrels per day does not balance the market next year, the United Arab Emirates’ energy minister said on Sunday. Extending the output pact signed in early December will not be a problem and producers will do as the market demands, Suhail al-Mazrouei told a news conference at a gathering of the Organization of Arab Petroleum Exporting Countries (OAPEC) in Kuwait. “The plan (to cut oil production) is well studied but if it does not work, we always have the power in OPEC to call for an extraordinary meeting,” he added. “If we are required to extend for (another) six months, we will do it … I can assure you an extension will not be a problem.” Mazrouei was speaking at a joint news conference with the Iraqi and Algerian energy ministers as well as Kuwait’s OPEC governor, Haitham Al-Ghais. Saudi Arabia’s OPEC governor, Adeeb Al-Aama, who attended the OAPEC meeting, said oil market oversupply had fallen to 37 million barrels of crude in November from 340 million barrels in January 2017, when OPEC and its allies began cutting production in an attempt to lift prices. The Iraqi minister, Thamir Ghadhban, said there was an expectation that the output cut decision could be renewed, adding that Iraq would be willing to extend the production agreement in April. OPEC is set to hold its next oil output policy decision meeting that month in Vienna.

Trump has discussed firing Fed Chairman -sources

“We will be watching the prices and how they react over time,” Ghadhban said.

Saudi Arabia is fully committed to the reduction agreement, Al-Aama said, adding that the world’s top oil exporter’s production in January was seen at 10.2 million bpd, lower than its output target of 10.3 million bpd under the recent pact.

The kingdom has over-committed with previous cuts, reducing by more than its share and reaching compliance of 120 percent from January 2017 until May 2018, Al-Aama said.

OPEC’s supply accord commits its 11 participating members to 3% oil cuts: document

London — OPEC kingpin Saudi Arabia has pledged to lower its crude oil output to 10.311 million b/d — a 322,000 b/d cut from its October level — according to a breakdown of member quotas under the producer group’s supply accord obtained by S&P Global Platts. Iraq, OPEC’s second highest producer, will cut 141,000 b/d to reach an output level of 4.512 million b/d and the UAE will cut 96,000 b/d to average 3.072 million b/d, according to the document prepared by OPEC’s secretariat.

OPEC, Russia and nine other non-OPEC allies agreed earlier this month to a combined 1.2 million b/d supply reduction for the first six months of 2019 to shore up what many expect to be weakening market fundamentals ahead.

The document shows that OPEC will shoulder 812,000 b/d of those cuts, while the non-OPEC participants will cut 383,000 b/d.

Saudi energy minister Khalid al-Falih has already pledged that the kingdom’s production will fall to 10.2 million b/d in January, exceeding its commitment.

Russia, the largest non-OPEC participant, has previously said it committed to reduce its production gradually by 230,000 b/d. The document says Russia’s quota under the deal is 11.191 million b/d. Russian energy minister Alexander Novak said his country would lower its output by 50,000 to 60,000 b/d in January. The agreement exempts OPEC members Libya, Iran and Venezuela. For the other 11 OPEC countries, the cuts represent a 3.04% reduction from the baseline October levels, as determined by an average of six independent secondary sources, except for Kuwait, which was given a September benchmark due to bad weather that impacted its production in October.

The non-OPEC countries are also using October as their baseline, except for Azerbaijan, which is using September, and Kazakhstan, which is using November.

OPEC production allocations (million b/d)

COUNTRY REFERENCE LEVEL CUT AMOUNT NEW QUOTA
Algeria 1.057 0.032 1.025
Angola 1.528 0.047 1.481
Congo 0.325 0.010 0.315
Ecuador 0.524 0.016 0.508
Equatorial Guinea 0.127 0.004 0.123
Gabon 0.187 0.006 0.181
Iraq 4.653 0.141 4.512
Kuwait 2.809 0.085 2.724
Nigeria 1.738 0.053 1.685
Saudi Arabia 10.633 0.322 10.311
UAE 3.168 0.096 3.072
TOTAL 26.749 0.812 25.937
Notes:
Iran, Libya and Venezuela are exempted from the cuts
All reference levels are October 2018, except for Kuwait, which is September 2018

Non-OPEC production allocations (million b/d)

COUNTRY REFERENCE LEVEL CUT AMOUNT NEW QUOTA
Azerbaijan 0.796 0.020 0.776
Bahrain 0.227 0.005 0.222
Brunei 0.131 0.003 0.128
Kazakhstan 1.900 0.040 1.860
Malaysia 0.627 0.015 0.612
Mexico 2.017 0.040 1.977
Oman 0.995 0.025 0.970
Russia 11.421 0.230 11.191
Sudan 0.074 0.002 0.072
South Sudan 0.132 0.003 0.129
TOTAL 18.320 0.383 17.937
Notes:
All reference levels are October 2018, except for Azerbaijan, which is September 2018, and Kazakhstan, which is November 2018

 

Shutdown threat recedes as Trump softens stance on wall

Mitch McConnell, John Cornyn, Roy Blunt
Senate Majority Leader Mitch McConnell, R-Ky., joined by Sen. Roy Blunt, R-Mo., left, and Majority Whip John Cornyn, R-Texas, right, arrives to speak to reporters about the possibility of a partial government shutdown, at the Capitol in Washington, Tuesday, Dec. 18, 2018.

WASHINGTON (AP) — President Donald Trump appeared Tuesday to back off his demand for $5 billion to build a border wall, signaling for the first time that he might be open to a deal that would avoid a partial government shutdown. The White House set the tone when press secretary Sarah Huckabee Sanders indicated that Trump doesn’t want to shut down the government, though just last week he said he’d be “proud” to do so. The president would consider other options and the administration was looking at ways to find the money elsewhere, Sanders said. It was a turnaround after days of impasse. Without a resolution, more than 800,000 government workers could be furloughed or sent to work without pay beginning at midnight Friday, disrupting government operations days before Christmas. One option that has been circulating on Capitol Hill would be to simply approve government funding at existing levels, without a boost for the border, as a stopgap measure to kick the issue into the new Congress next month. The chairman of the Appropriations Committee, Sen. Richard Shelby, R-Ala., confirmed late Tuesday his office was preparing legislation to keep government funded, likely into February. The White House preference was for a longer-term package, although the conversation remained fluid and Trump has been known to quickly change course, said a person familiar with the negotiations but not authorized to discuss them by name.

Mounting legal threats surround Trump as nearly every organization he has led is under investigation



President Trump walks across the South Lawn of the White House on Dec. 7. A person familiar with his schedule said Trump spent more time than usual in his official residence this week. (Jabin Botsford/The Washington Post) By David A. Fahrenthold , Matt Zapotosky and Seung Min Kim December 15

Trump’s inaugural committee has been probed by Mueller for illegal foreign donations, a topic that the incoming House Intelligence Committee chairman plans to further investigate next year. Two years after Donald Trump won the presidency, nearly every organization he has led in the past decade is under investigation.Trump’s private company is contending with civil suits digging into its business with foreign governments and with looming state inquiries into its tax practices. Trump’s 2016 campaign is under scrutiny by special counsel Robert S. Mueller III, whose investigation into Russian interference has already led to guilty pleas by his campaign chairman and four advisers. Trump’s charity is locked in an ongoing suit with New York state, which has accused the foundation of “persistently illegal conduct.” The mounting inquiries are building into a cascade of legal challenges that threaten to dominate Trump’s third year in the White House. In a few weeks, Democrats will take over in the House and pursue their own investigations into all of the above — and more.  The ultimate consequences for Trump are still unclear. Past Justice Department opinions have held that a sitting president may not be charged with a federal crime. House Democrats may eventually seek to impeach Trump. But, for now, removing him from office appears unlikely: It would require the support of two-thirds of the Senate, which is controlled by Republicans. However, there has been one immediate impact on a president accustomed to dictating the country’s news cycles but who now struggles to keep up with them: Trump has been forced to spend his political capital — and that of his party — on his defense. On Capitol Hill this week, weary Senate Republicans scrambled away from reporters to avoid questions about Trump and his longtime fixer Michael Cohen — and Cohen’s courtroom assertion that he had been covering up Trump’s “dirty deeds” when he paid off two women who claimed they had affairs with the president before he was elected.

Major hedge funds are scrambling to prevent financial wipeout


Computer monitor with trading software.

 The stars of the biggest hedge funds are losing their shirts as analysts fear a major financial wipeout is imminent.From Ken Griffin’s Citadel, to Israel Englander’s Millennium Management, one big name after another is racking up negative returns lately, amid bad bets in a saturated market.  “Some sectors of the fund industry are crowded and competing with other investment vehicles,” said Nicholas Tsafos at EisnerAmper, who advises hedge funds.There’s also a wide disparity lately in returns among managers chasing similar investment strategies. “That alone should cause the number of closures to increase, as bad managers get fired and money is recirculated into those managers that do better,” said Don Steinbrugge, managing partner at Agecroft Partners, a hedge fund consulting and marketing firm. As hedge funds fall like dominoes (and returns underperform the S&P 500), managers also blame a sharp rise in stock market volatility and low interest rates. Although there are still more launches than failures — and as new money was infused into hedge funds in the first half of 2018 — nervous investors have pulled $10.1 billion from hedge funds through October, according to eVestment. “We remain bearish, as investor positioning does not yet signal ‘The Big Low’ in asset markets,” said Michael Hartnett, chief investment strategist at Merrill Lynch, summing up overall investor sentiment in the firm’s latest fund survey. Analysts are forecasting a surge in redemptions, especially toward year end, as more clients pull money out of losing funds. The news is hardly good for a parade of managers at some of the biggest hedge funds. According to industry reports, November was a bone-crushing month for David Einhorn’s Greenlight Capital, which saw a 3.6 percent loss; Steve Cohen’s Point72 Asset Management, which took a 5 percent hit; Citadel, which absorbed a 3 percent loss; Millenium Management, which ran into the red by 2. 8 percent; and Dmitry Balyasny’s Atlantic Global Fund, with a decline of 3.9 percent and firm-wide job cuts of 125 after losses and withdrawals eliminated $4 billion in assets. And each day brings more depressing news. Most recently, hedge fund closures included Brenham Capital, Brenner West Capital Partners, Tourbillon Capital Partners LP, Highfields Capital Management and Criterion Capital Management.

Saudi Arabia Plans to Slash Oil Exports to US – Reports

DAY 54 - In this March 14, 2017, file photo, President Donald Trump shakes hands with Saudi Defense Minister and Deputy Crown Prince Mohammed bin Salman, in the State Dining Room of the White House in Washington

After flooding the US market with oil in recent months, Saudi Arabia reportedly plans to downgrade exports of crude oil. US-based oil refiners were told to expect a much lower shipment from Saudi Arabia in January than in recent months, following the OPEC agreement to reduce production, sources briefed on the plans of state oil company Saudi Aramco told Bloomberg.

The shipments apparently could hit a 30-year low set in late 2017 of 582,000 barrels a day, which is 40% less than the recent three-month average, sources added on condition of anonymity, as the information they are providing has not been made public.

According to sources, Riyadh hopes to show the market it is making good on its promise to cut supplies following the OPEC decision. The shift in crude exports to the US could potentially have a huge impact on the market because data are available on a weekly basis, while in other regions oil traders only receive official figures on a monthly basis, or not at all. The Saudi energy ministry did not provide any official comment. The decision to cut supplies would demonstrate that Saudi Arabia is sincere with its promise to bring supply and demand in line, yet it might also lead to a conflict of interests with US President Donald Trump, who repeatedly posted on Twitter his demand that OPEC maintain its current levels of supply.

Total Saudi oil exports are expected to drop by 1 million barrels a day in January, down from about 8 million barrels a day in November-December, sources said. Khalid Al-Falih, the Saudi energy minister, told reporters last week that Saudi production will eventually drop in January to 10.2 million barrels a day, down from 11.1 million barrels a day in November.  The export cuts, if they are to be implemented, will affect big US refiners such as Valero Energy Corp., Phillips 66, Chevron Corp., Exxon Mobil Corp., and Marathon Petroleum Corp., forcing them to find other exporters in Mexico, Canada or Venezuela. Saudi’s supply to the US has been 860,000 barrels of crude a day on average so far this year, according to Bloomberg calculations based on weekly customs data, hitting its highest average of 975,000 barrels a day in July-December.

Trump Concerned About ‘Real Possibility’ of Impeachment

MOSCOW (Sputnik) – US President Donald Trump has expressed concern about the possibility of being impeached, CNN reported, citing a source close to Trump. According to the source, Trump believes that impeachment is a “real possibility” after the House of Representatives comes under the control of the Democrats. Another source told the media that Trump’s aides believed that the only problem that might lead to impeachment is the allegations of Trump’s involvement in violating campaign finance rules in the case of Cohen, who brokered the silence of Trump’s mistresses. Additionally, White House officials do not believe that the Robert Mueller-led investigation into the alleged ties between Trump and Russia could lead to the president’s being impeached. Earlier this week, Jerry Nadler, a democratic representative from New York’s 10th Congressional District in the US House of Representatives, said that claims about Trump tasking his former lawyer Michael Cohen with making illegal hush payments to women, who allegedly had affairs with Trump, might result in “impeachable offences” if proven true. Last week, Cohen pleaded guilty to charges of lying to the US Congress about plans to build a Trump-branded real estate project in Moscow. Cohen’s attorneys asked a judge for no jail time for their client, citing his cooperation in the probe into Russia’s alleged role in the 2016 presidential election. Cohen should be sentenced next week in New York. Moscow has repeatedly refuted accusations of meddling in US elections.

EU Commission ready to accept Italy deficit target of 1.95 percent, Finance Minister pushes for 2 percent – La Repubblica

FILE PHOTO: Italian Prime Minister Giuseppe Conte arrives at an extraordinary EU leaders summit to finalis

MILAN (Reuters) – The European Commission is willing to accept an increase in Italy’s deficit target to 1.95 percent for next year, daily newspaper La Repubblica said on Tuesday. The EC has rejected Rome’s draft budget which says the deficit will rise to 2.4 percent of gross domestic product (GDP) in 2019 from 1.8 percent this year. Brussels says it breaks previous commitments to reduce borrowing and will not lower Italy’s large public debt. Italy’s Finance Minister Giovanni Tria is pushing the government to reduce its deficit target to 2.0 percent, to find a compromise with Brussels and avoid a procedure over the country’s budget, La Repubblica added. Rome has in recent weeks shown willingness to reduce the deficit target. But it remains unclear how far it plans to go. Italy’s Prime Minister Giuseppe Conte will meet the commission’s president Jean-Claude Juncker on Wednesday in an attempt to avoid the procedure which would keep Italy under prolonged market pressure and could lead to fines, cuts of EU funds and other financial sanctions.

S&P drops to eight-month low on global growth worries

(Reuters) – The S&P 500 fell to an eight-month low on Monday as Apple Inc, as well as financial and healthcare sectors led losses on mounting worries over global growth, the U.S.-China trade war and uncertainty over Britain’s exit from the European Union. The S&P and the Dow Industrials, already in the red for the year after shedding more than 4.5 percent last week, fell over 1 percent. The Nasdaq reversed after an earlier bounce to drop about 0.5 percent. Markets have been dogged by signs of cooling global growth, concerns over interest rates and worries that escalating tensions between the United States and China could scuttle a fragile trade truce. “You have political tensions with China, the potential for slowing global growth, and other geopolitical tensions, that continue to weigh on the markets,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. All the 11 major S&P sectors were lower. The biggest drag on the market was a 2.5 percent drop in financials as the U.S. Treasury yields dropped further on worries over U.S.-China trade conflict and the Brexit turmoil. [US/] British Prime Minister Theresa May said she was delaying a planned vote in parliament on her Brexit deal as it was set to be rejected “by a significant margin”. The rate-sensitive bank stocks tumbled 3.22 percent on worries that Brexit could hamper global growth, giving the Federal Reserve more reason to slow its pace of interest rate hikes. “If the Fed is slowing, that means economic activity is below normal and that can negatively impact earnings,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. JPMorgan Chase & Co, Wells Fargo & Co, Citigroup Inc and Bank of America Corp fell over 3 percent. Energy stocks retreated 3.1 percent, as oil prices fell. Global pharmaceutical stocks weighed the most on the health index, which fell 1.3 percent and led losses among the seven sectors that were down over 1 percent. Apple dropped 2.1 percent after Qualcomm Inc said it had won a preliminary order from a Chinese court banning the import and sale of several iPhone models in China due to patent violations.

Trump Flies Solo as Perils to Presidency Mount

Trump Flies Solo as Perils to Presidency Mount

(Bloomberg) — The tumult of personnel turnover that’s come to characterize Donald Trump’s administration is suddenly posing a major problem — just as his presidency enters an especially risky phase. The president lacks an immediate successor for Chief of Staff John Kelly following his announcement on Saturday that the retired Marine general would leave the White House. Trump’s failure to line up a replacement before abruptly announcing Kelly’s departure to reporters sets up a potentially chaotic transition for a job crucial to maintaining a semblance of stability under a commander-in-chief famed for his unpredictability, Jennifer Jacobs and Margaret Talev write. The president said yesterday evening that he was interviewing chief-of-staff candidates after Vice President Mike Pence’s top aide, Nick Ayers, turned him down. But Ayers’s rejection of Trump’s overtures hints at the challenge whoever assumes the post will face. Kelly’s successor must help Trump deal with the new Democratic House majority — some members of which would like to see the president impeached — as well as the next phases of Special Counsel Robert Mueller’s probe into alleged Russian election meddling. Added to those are the demands of navigating the 2020 reelection campaign. For U.S. allies in Europe, Asia and beyond, Kelly’s departure means there’s one fewer of the so-called adults in the room to constrain Trump.

Oil prices surge 4 percent on OPEC-led output cuts of 1.2 million bpd

 

. Russian Energy Minister Alexander Novak confirmed the combined output cuts of 1.2 million bpd, saying that the market will be oversupplied through the first half of the year.

NEW YORK (Reuters) – Oil prices jumped more than 4 percent on Friday as Saudi Arabia and other producers in OPEC, as well as allies like Russia agreed to reduce output to drain global fuel inventories and support the market. The Organisation of the Petroleum Exporting Countries and its Russia-led allies, referred to as “OPEC+,” agreed to slash production by a combined 1.2 million barrels per day from 2019, larger than the minimum 1 million bpd that the market had expected, despite pressure from U.S. President Donald Trump to reduce the price of crude. The producer club will curb output by 800,000 bpd from January while non-OPEC allies contribute an additional 400,000 bpd of cuts, Iraqi Oil Minister Thamer Ghadhban said after OPEC concluded two days of talks in Vienna. Russian Energy Minister Alexander Novak confirmed the combined output cuts of 1.2 million bpd, saying that the market will be oversupplied through the first half of the year.

A 1.2 million-bpd cut, if implemented fully, “should be enough to largely attenuate, but not eliminate, expected implied global inventory builds in the first half of next year,” said

Harry Tchilinguirian, global oil strategist at BNP Paribas in London told the Reuters Global Oil Forum. Oil prices have plunged 30 percent since October as supply has surged and global demand growth has weakened. Prices fell almost 3 percent on Thursday after OPEC ended a meeting in Vienna with only a tentative deal to tackle weak prices. Talks with other producers were held on Friday. But Iran gave OPEC the green light on Friday to reduce oil output after finding a compromise with rival Saudi Arabia over a possible exemption from the cuts, an OPEC source said. Oil output from the world’s biggest producers – OPEC, Russia and the United States – has increased by 3.3 million bpd since the end of 2017 to 56.38 million bpd, meeting almost 60 percent of global consumption.  The surge is mainly due to soaring U.S. oil production C-OUT-T-EIA, which has jumped by 2.5 million bpd since early 2016 to a record 11.7 million bpd, making the United States the world’s biggest producer. Trump has asked OPEC to keep prices low, pleading with the Saudis in twitter messages. Russia had initially balked at cutting production alongside OPEC.

The U.S. Just Became a Net Oil Exporter for the First Time in 75

America turned into a net oil exporter last week, breaking almost 75 years of continued dependence on foreign oil and marking a pivotal — even if likely brief — moment toward what U.S. President Donald Trump has branded as “energy independence.”The shift to net exports is the dramatic result of an unprecedented boom in American oil production, with thousands of wells pumping from the Permian region of Texas and New Mexico to the Bakken in North Dakota to the Marcellus in Pennsylvania. While the country has been heading in that direction for years, this week’s dramatic shift came as data showed a sharp drop in imports and a jump in exports to a record high. Given the volatility in weekly data, the U.S. will likely remain a small net importer most of the time. “We are becoming the dominant energy power in the world,” said Michael Lynch, president of Strategic Energy & Economic Research. “But, because the change is gradual over time, I don’t think it’s going to cause a huge revolution, but you do have to think that OPEC is going to have to take that into account when they think about cutting.” The shale revolution has transformed oil wildcatters into billionaires and the U.S. into the world’s largest petroleum producer, surpassing Russia and Saudi Arabia. The power of OPEC has been diminished, undercutting one of the major geopolitical forces of the last half century. The shift to net exports caps a tumultuous week for energy markets and politics. OPEC and its allies are meeting in Vienna this week, trying to make a tough choice whether to cut output and support prices, risking the loss of more market share to the U.S. “The week started with Qatar leaving OPEC; then a mysterious U.S.-Saudi bilateral meeting in Vienna; followed by a canceled OPEC press conference, and now the latest news that the U.S. turned last week into a net petroleum exporter,” said Helima Croft, commodities strategist at RBC Capital Markets LLC and a former analyst at the Central Intelligence Agency. The U.S. sold overseas last week a net 211,000 barrels a day of crude and refined products such as gasoline and diesel, compared to net imports of about 3 million barrels a day on average so far in 2018, and an annual peak of more than 12 million barrels a day in 2005, according to the U.S. Energy Information Administration. The EIA said the U.S. has been a net oil importer in weekly data going back to 1991 and monthly data starting in 1973. Oil historians that have compiled even older annual data using statistics from the American Petroleum Institute said the country has been a net oil importer since the mid-1940s, when Harry Truman was in the White House. U.S. crude exports are poised to rise even further, with new pipelines from the Permian in the works and at least nine terminals planned that will be capable of loading supertankers. The only facility currently able to load the largest ships, the Louisiana Offshore Oil Port, is on pace to load more oil in December than it has in any other month.

The massive Permian may be even bigger than previously thought. The Delaware Basin, the less drilled part of the field, holds more than twice the amount of crude as its sister, the Midland Basin, the U.S. Geological Service said Thursday. While the net balance shows the U.S. is selling more petroleum than buying, American refiners continue to buy millions of barrels each day of overseas crude and fuel. The U.S. imports more than 7 million barrels a day of crude from all over the globe to help feed its refineries, which consume more than 17 million barrels each day. In turn, the U.S. has become the world’s top fuel supplier.

Israel Begins Anti-Tunnel Effort Along Border With Lebanon

Israel has been building defensive obstacles along a roughly seven-mile stretch of its border with Lebanon since 2015.CreditSebastian Scheiner/Associated Press

 

JERUSALEM — Israel started a military operation on Tuesday to expose and thwart offensive tunnels Hezbollah had been building across the Lebanese border, the military said, the first time that Israel has taken open action to combat underground passageways in the north. The effort, called Operation Northern Shield, was aimed at an unspecified number of tunnels in the area of Metula, said Lt. Col. Jonathan Conricus, A spokesman for the Israel Defense Forces. None of the tunnels were ready to be used, he said, and the army was neither asking civilians in the area to evacuate nor calling up reserves. But it declared an area around Metula, in the northernmost reaches of the Galilee panhandle, a closed military zone and said it had “enhanced its presence and readiness” in the north and was “prepared for various scenarios.” Prime Minister Benjamin Netanyahu said the early stages of the operation had already proven successful. “Whoever tries to harm the state of Israel will pay a heavy price,” he said in a statement. He added that Israel would continue to act, “openly and covertly, to ensure the security of Israel.” Brig. Gen. Ronen Manelis, the chief military spokesman, said Israel was prepared for a “broad operation over several weeks.” It was expected to extend beyond the Metula area, along the border. The military also warned Hezbollah and soldiers of the Lebanese Army to stay away from the tunnels, saying their lives were in danger, though the Israeli Foreign Ministry emphasized that the operation was taking place on the Israeli side of the border, within Israeli territory. With the winding down of the civil war in neighboring Syria, Israel appears to have increasingly shifted its focus to Lebanon. Hezbollah, the Lebanese Shiite organization backed by Iran, has been fighting for years against insurgent groups in Syria to defend the rule of President Bashar al-Assad, and Israel has been working intensively to prevent Iran’s efforts to entrench itself in Syria. But Israel has also been warning in recent months of Iranian efforts to strengthen Hezbollah in Lebanon, making a conflagration seem only a matter of time. While Israeli experts said the action against the tunnels could lead to an escalation, it was not immediately clear if, or how, Hezbollah would respond. “Now the ball is in the Hezbollah court,” said Yaakov Amidror, a former Israeli national security adviser and retired general. “They can react and the reaction to their reaction might be devastating,” he told reporters on Tuesday, in an apparent effort to deter Hezbollah. Israeli officials have accused Iran of helping Hezbollah build underground factories in Lebanon to upgrade the militant group’s arsenal of missiles. In addition, Israeli news outlets have reported that Iran has been flying advanced weaponry directly to Beirut, bypassing overland routes through Syria that Israel has repeatedly bombed.

OPEC works on deal to cut output, still needs Russia on board

VIENNA (Reuters) – OPEC and its allies are working towards a deal this week to reduce oil output by at least 1.3 million barrels per day, four sources said, adding that Russia’s resistance to a major cut was so far the main stumbling block. The logo of the Organization of the Petroleum Exporting Countries (OPEC) is seen at OPEC’s headquarters in Vienna, Austria June 19, 2018. REUTERS/Leonhard Foeger OPEC meets on Thursday in Vienna, followed by talks with allies such as Russia on Friday, amid a drop in crude prices caused by global economic weakness and fears of an oil glut due largely to a rise in U.S. production. The producer group’s de facto leader, Saudi Arabia, has indicated a need for steep reductions in output from January but has come under pressure from U.S. President Donald Trump to help support the world economy with lower oil prices. Possibly complicating any OPEC decision is the crisis around the killing of journalist Jamal Khashoggi at the Saudi consulate in Istanbul in October. Trump has backed Saudi Crown Prince Mohammed bin Salman despite calls from many U.S. politicians to impose stiff sanctions on Riyadh. The sources, three from the Organization of the Petroleum Exporting Countries and one from a non-OPEC producer, said the meetings were taking place in a difficult environment and that Russia’s position would be key in reaching a deal. “Russia is playing tough,” one of the OPEC sources said. Another OPEC source said: “The Saudis are working hard on the cut. But if Russia says no cut, then we (OPEC) won’t cut.” Russian sources have indicated the country could contribute some 140,000 bpd to a reduction, but Middle East-dominated OPEC insists Moscow cut by 250,000-300,000 bpd. Two sources said talks were focusing on a pro-rata cut of 3-3.5 percent from October output levels, with no exemptions for any member. Sources also said OPEC could delay a decision to cut if the main criteria such as Russia’s involvement were not met, even though doing so would mean a further fall in prices. “OPEC can always meet again in February, for example, and decide on a cut then. Those who were not able or willing to cooperate will be wanting to cut then,” one source said. Saudi Arabia previously insisted on a need to reduce production. It was unclear whether the apparent shift in position was caused by OPEC using negotiation tactics to bring Russia on board or by pressure from Trump to refrain from cutting output. US, China offer differing takes on trade ceasefire In October 2018, OPEC pumped 32.916 million bpd, while its non-OPEC allies pumped 18.252 million bpd, according to the group’s internal data. The non-OPEC source said a deal could still be done this week, though details remained unclear: “The Saudis and Russians have an agreement to cut. They are just working on the final details on the volumes and mechanisms.” Brent oil prices LCOc1 rose more than 2 percent on Tuesday, boosted by expectations OPEC would reduce output [O/R].

Trump’s China car tariffs claim sows confusion

A proposed cut by China to tariffs on US car imports created confusion in Washington, a day after it was announced by US President Donald Trump. Beijing has not yet confirmed the move and President Trump’s advisers appeared less certain about the agreement.

Uncertainty also surrounded the details of the broader trade war truce struck by the US and China at the G20 summit. Amid scant details, carmaker Ford told the BBC it is “looking forward to learning more” about the truce. The US accuses China of unfair trading practices and tariffs are intended to counter Chinese practices that make it difficult for American companies to compete. Tariffs, in theory, make US-made products cheaper than imported ones, and encourage consumers to buy American. After months of escalating threats, Washington and Beijing said they had reached a temporary agreement in their bruising trade dispute at the G20 meeting in Argentina over the weekend. Central to the deal was an agreement between President Trump and China’s President Xi Jinping t The US president later said in a tweet that Beijing had “agreed to reduce and remove tariffs on cars coming into China from the US”.His comments relate to the 40% tariff China imposes on US vehicle imports, which were brought in as part of the trade battle in July. The rate is much higher than the 15% it places on other trading partners and forced many carmakers in China – the world’s largest car market – to raise prices. The day after the announcement, there was confusion over the details in Washington, with senior figures in the White House contradicting each other. Asked whether China would remove the 40% auto tariffs Larry Kudlow, the US president’s top economic adviser, said he “believed that commitment was made”. In a briefing to reporters, he also said the US did not yet have a “specific agreement” on auto tariffs. Another senior White House figure, trade adviser Peter Navarro, said only that the issue “certainly came up” in discussions at the G20. Confusion has also arisen over when the agreed 90-day period for negotiations will kick in, with some saying it begins now, others claiming it starts in January.

Trump Calls Truce in China Trade War a Big Success, but Little Is Known About the Deal

President Trump in a bilateral dinner meeting with President Xi Jinping during the Group of 20 summit meeting.Announces Trade Deal

President Trump in a bilateral dinner meeting with President Xi Jinping during the Group of 20 summit meeting.CreditCreditTom Brenner for The New York Times

 

WASHINGTON — President Trump cast his Saturday meeting with President Xi Jinping of China as a huge win for the United States, insisting that American farmers and automakers would reap immediate benefits from a trade truce that has yet to produce any concrete commitments and created more questions than answers about what China is truly prepared to offer. Mr. Trump and Mr. Xi agreed during the G-20 meeting in Buenos Aires to pause the trade war between the world’s two largest economies for 90 days and work to resolve several areas of tension, including the trade gap between what America imports from China and what China buys from the United States. But nothing beyond their official statements exists and deep divisions remain, particularly related to China’s industrial policies and its treatment of American companies. That did not stop Mr. Trump from declaring victory for farmers, automakers and other key political constituencies in the wake of the meeting — statements that helped send volatile financial markets higher on Monday.  Despite talk of a grand bargain, the meeting’s outcome has been clouded by conflicting signals from the White House over how long the truce will last, what commitments China actually made and the president’s tweets touting wins that others in his administration said did not technically exist. “Farmers will be a very BIG and FAST beneficiary of our deal with China,” Mr. Trump said in a Twitter post on Monday. “They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants.” In a separate tweet late Sunday night, Mr. Trump said that China had agreed to reduce and remove tariffs on cars coming into China from the United States. The current tariff rate is 40 percent, which China reached in response to Mr. Trump’s tariffs on $250 billion worth of goods, and it was not clear to what level it would fall.

Russia may still be reluctant to go along with a Saudi-led cut in oil output

Citing two industry sources, Reuters reported that Russia is becoming more convinced that it needs to reduce oil output along with OPEC

One of the big uncertainties of the upcoming meeting of major oil producers next week is whether Russia will cooperate with any decision by the Organization of the Petroleum Exporting Countries to reduce production. A lot is at stake at the Dec. 6 meeting in Vienna of OPEC and non-OPEC oil producers following a more than 30% drop in oil prices since early October. That hefty decline may not be enough of an incentive for Russia to cooperate because it can produce a barrel of oil at a much cheaper rate than OPEC member Saudi Arabia. Still, on Thursday, citing two industry sources, Reuters reported that Russia is becoming more convinced that it needs to reduce oil output along with OPEC, but that it is “still bargaining” with Saudi Arabia, the group’s biggest oil producer, over when and by how much to cut. The news agency had reported just two weeks earlier that two high-ranking Russian sources said Russia wants to be left out of any OPEC-led oil production cuts. Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman are expected to meet on the sidelines of the Group of 20 summit in Buenos Aires that gets under way on Friday. “Major oil exporters…need to address their own respective economic interests,” said Peter Kiernan, lead energy analyst at the Economist Intelligence Unit, pointing out that Saudi Arabia’s break-even point for oil prices is at $70 and the “vast majority of Middle East exporters need a price of at least $50, as does Russia.” “OPEC also needs to keep the market in balance and avoid stocks building too quickly as this will depress prices,” he said. That’s why OPEC launched its output-cutting strategy in the first place, he said, reaching an agreement in 2016 that was implemented in 2017. By the middle of this year, that “approach was shown to be successful.” From the end of 2016 to the beginning of June this year, front-month contract prices for global benchmark Brent crude LCOF9, -1.39%  had climbed by more than 30%. In late June, however, Saudi Arabia and Russia agreed to raise production, which “pleased” U.S. President Donald Trump, who had been calling for an increase, said Kiernan. “Back then, the surplus in stocks had been soaked up and with the expectations that Iran’s exports would be cut severely at the end of the year, both Saudi Arabia and Russia thought that an increase in supply was warranted to avoid too much market tightening,” he said. “They therefore had their own reasons for increasing supply at the time.” Oil futures climbed to their highest settlement in nearly four years in early October, with Brent crude topping $85 a barrel and U.S. benchmark West Texas Intermediate oil settling above $76 a barrel, in large part to due to expectations that U.S. sanctions on Iran’s energy sector would tightening global supplies. Those sanctions took full effect on Nov. 5 but at the same time, Trump granted eight countries, including China, temporary waivers to continue buying Iranian oil, effectively erasing that threat to global supplies. Prices then saw a more than 30% plunge to their lowest levels in more than a year, from the October peaks. On Wednesday, Brent settled at $58.76, while WTI finished at $50.29. On Thursday, WTI briefly dipped below $50 a barrel for the first time since October 2017 before rebounding in the wake of the Reuters report. With the lower break-even oil price, however, Russia is in “much better shape,” then Saudi Arabia, said Phil Flynn, senior market analyst at Price Futures Group. Russia is using “the Saudi’s pain, not to mention its problems with the [murder of journalist Jamal Khashoggi], to their political advantage,” he said. “Yet despite the drama, [OPEC] will have to cut and it’s clear that the Russians just want to watch the Saudis squirm a bit.”

Cohen was in ‘close and regular contact’ with Trump White House staff, legal team while crafting misstatement to Congress

President Trump’s former personal lawyer Michael Cohen was in “close and regular contact” with White House staff and Trump’s legal team while he was crafting misstatements to Congress, according to a new court filing late Friday night. Cohen pleaded guilty on Thursday to making misstatements before congressional intelligence committees while testifying about his contacts with Russians during the 2016 presidential campaign. In the court filing in the Southern District of New York, Cohen’s lawyers wrote that the false statements “sprung regrettably from Michael’s effort, as a loyal ally and then-champion” to help push forward Trump’s political messaging. Cohen followed the political messaging that Trump, identified as “Client-1” in the documents, his staff and supporters “repeatedly and forcefully broadcast.” The Hill has reached out to the Trump White House for comment. In cooperating with special counsel Robert Mueller’s Russia investigation, Cohen said he lied about the effort to build a Trump Tower in Moscow, including his plans to travel to Russia, contacts with Russian officials in connection with the project and how long the property plans were discussed within the Trump Organization, according to court documents. Cohen reportedly discussed the idea of a Trump Tower Moscow with Russian press secretary Dmitry Peskov, two U.S. law enforcement officials told BuzzFeed on Thursday. The Trump Organization reportedly planned to give a $50 million penthouse in the tower to Russian President Vladimir Putin while the company was in negotiations in 2016. Trump and his spokespeople were trying to portray that contact as having ended before the Iowa caucuses on Feb. 1, 2016, according to the Cohen’s court filing. He justified making the false statements to Congress on the grounds that the Moscow project did not end up going forward, Cohen’s lawyers wrote. The plea from Cohen marks the first time he has been charged by Mueller as part of the special counsel’s investigation into Russia’s election interference and possible collusion between Trump’s campaign and Moscow. Cohen’s lawyers wrote in Friday’s court documents that the investigation has caused “deep and lasting strain,” writing that authorities are investigating the threats of physical harm Cohen and his family have reportedly received. Cohen has voluntarily met with Mueller’s team seven times throughout the course of the investigation and will “continue to make himself available” to the office for additional questioning, the documents state. His lawyers wrote that he decided to cooperate to “re-point his internal compass true north toward a productive, ethical and thoroughly law abiding life.” Trump accused Cohen of “lying” in order to escape a longer prison sentence. “He’s trying to get a much lesser sentence by making up the story,” Trump said this week, adding “everybody knows about this deal.” Cohen is expected to be sentenced for guilty pleas he made earlier this year in a case in the Southern District of New York later this month. Cohen pleaded guilty to several federal crimes in August, including violating campaign finance law. Cohen suggested that he violated the law at Trump’s direction. The charges stemmed from a $130,000 nondisclosure payment he gave to Stormy Daniels to silence the adult-film star, who claims to have had an affair with Trump in 2006.

Pipeline so far unscathed by North Slope’s strongest earthquake ever

ANCHORAGE, Alaska (KTUU) – Crews conducting inspections along the Trans-Alaska Pipeline have so far found no problems following Sunday’s M6.4 earthquake near Kaktovik.

Alyeska Pipeline Service Company, the firm that manages TAPS, says it has completed broad checks and aerial surveys of the pipeline and its facilities between pump stations 1 and 4, a 150-mile stretch. Starting on Tuesday, the company will begin going through everything with a fine-toothed comb. “We’re going to go back through and check for settlements, movements, any kind of smaller issues that might have presented in the last 24 hours, or that we missed the first time around,” said Alyeska spokesperson Kate Dugan. Michael West, who directs the Alaska Earthquake Center, said Sunday’s earthquake likely produced no more than a couple centimeters of vertical ground motion. That’s well within what the pipeline is designed to withstand. “Each section of the pipeline might have different designed allowances depending on the seismic activity for that zone,” Dugan said. “But as we saw for this earthquake, even in a less-likely area, the pipeline operated as it was supposed to and did not have any issues.” Anywhere that it’s above ground, the pipeline has an allowance of up to two feet of ground movement, and much more in areas near major fault lines. Near the Denali Fault Line, for example, the pipeline can handle 20 feet of lateral and 5 feet of vertical ground movement. The Denali Fault was the site of a massive 7.9M earthquake in 2002, but even that was not enough to cause main line damage to the pipeline. TAPS was operational after only a few minor repairs. Meanwhile, scientists and the Alaska Earthquake Center are still compiling data from the earthquake, which was the largest ever recorded on the North Slope. West says he thinks the shaker underscores the lack of data the center has for seismic activity in this part of Alaska. “Nobody’s ever spent a lot of time trying to understand the earthquake hazards in the Eastern Brooks Range, and I think it’s very likely that we have just historically underestimated what it’s capable of,” West said. Aftershocks continue to shake Alaska the day following massive 7.0 magnitude quake. Nick Note: this may not be the end but the start of massive quakes

CIA Intercepts Underpin Assessment Saudi Crown Prince Targeted Khashoggi

Mohammad Salman ‘probably ordered’ killing relies in part on 11 messages he sent to adviser who oversaw hit squad around time it killed journalist How did the CIA conclude that journalist Jamal Khashoggi was killed on the orders of Saudi Crown Prince Mohammed bin Salman? WSJ’s Warren P. Strobel has an exclusive look at the secretive evidence behind the assessment. Saudi Crown Prince Mohammed bin Salman sent at least 11 messages to his closest adviser, who oversaw the team that killed journalist Jamal Khashoggi, in the hours before and after the journalist’s death in October, according to a highly classified CIA assessment. The Saudi leader also in August 2017 had told associates that if his efforts to persuade Mr. Khashoggi to return to Saudi Arabia weren’t successful, “we could possibly lure him outside Saudi Arabia and make arrangements,” according to the assessment, a communication that it states “seems to foreshadow the Saudi operation launched against Khashoggi.” Mr. Khashoggi, a critic of the kingdom’s leadership who lived in Virginia and wrote columns for the Washington Post, was killed by Saudi operatives on Oct. 2 shortly after entering the Saudi consulate in Istanbul, where he sought papers needed to marry his Turkish fiancée. Excerpts of the Central Intelligence Agency’s assessment, which cites electronic intercepts and other clandestine information, were reviewed by The Wall Street Journal. The CIA last month concluded that Prince Mohammed had likely ordered Mr. Khashoggi’s killing, and President Trump and leaders in Congress were briefed on intelligence gathered by the spy agency. Mr. Trump afterward questioned the CIA’s conclusion about the prince, saying “maybe he did; and maybe he didn’t.” The previously unreported excerpts reviewed by the Journal state that the CIA has “medium-to-high confidence” that Prince Mohammed “personally targeted” Khashoggi and “probably ordered his death.” It added: “To be clear, we lack direct reporting of the Crown Prince issuing a kill order.” The electronic messages sent by Prince Mohammed were to Saud al-Qahtani, according to the CIA. Mr. Qahtani supervised the 15-man team that killed Mr. Khashoggi and, during the same period, was also in direct communication with the team’s leader in Istanbul, the assessment says. The content of the messages between Prince Mohammed and Mr. Qahtani isn’t known, the document says. It doesn’t say in what form the messages were sent. It is unclear from the excerpts whether the 2017 comments regarding luring Mr. Khashoggi to a third country cited in the assessment are from Prince Mohammed directly, or from someone else describing his remarks. Saudi Arabia has acknowledged Mr. Khashoggi was murdered in the consulate. But it has denied Prince Mohammed had any role and blamed the operation on rogue operatives. The Saudi Public Prosecutor’s office last month announced charges against 11 Saudis in connection with Mr. Khashoggi’s death, saying it would seek the death penalty in five cases. The office didn’t release their names. The U.S. Treasury Department in mid-November slapped sanctions on 17 Saudis whom it linked to the killing. But Mr. Trump, in a statement days later, said he intended to maintain strong relations with the crown prince because of Saudi Arabia’s opposition to Iran, its investments in the U.S. and its role in the oil market. The Trump administration’s posture has angered many in Congress, and the intercepts and intelligence gathered by the CIA may complicate Mr. Trump’s efforts to maintain relations with Prince Mohammed, the de facto leader one of the world’s biggest oil producers. The two are among the world’s leaders meeting this weekend in Buenos Aires for a summit of Group of 20 nations. Earlier this week, the Senate voted to begin consideration of a resolution to withdraw U.S. support for a Saudi-led military coalition fighting against Houthi rebels in Yemen, with senators venting their frustration over Mr. Trump’s reluctance to hold Prince Mohammed responsible for Mr. Khashoggi’s death.

May’s Brexit deal prospects ebb as top ally rejects i

 

FILE PHOTO: Conservative politician Michael Fallon arrives at the BBC in central London, Britain, July 10, 2018. REUTERS/Hannah McKay

LONDON (Reuters) – One of British Prime Minister Theresa May’s most trusted lawmakers said on Tuesday he will not back her Brexit deal, further stacking the odds against it passing through parliament next month. Under the deal secured with EU leaders on Sunday, Britain would leave the bloc in March with continued close trade ties. But the agreement has attracted criticism from lawmakers of all parties, both from supporters of a cleaner break with the EU and from opponents of Brexit. Michael Fallon, May’s former defence secretary who resigned last year after a journalist accused him of sexual harassment, told BBC radio that British negotiators should head back to Brussels to secure a better divorce agreement. Asked whether he would vote against the current deal, Fallon said: “As it stands at the moment, yes. I don’t think this gives us the certainty that we need and it is therefore a gamble.” Some Brexit-supporting lawmakers in May’s Conservative Party could support her deal if she sets out when she will quit, The Times newspaper reported. May told lawmakers on Monday that no better deal was available and that no one could predict what would happen if they rejected it. May has 314 active Conservative lawmakers in the 650-seat House of Commons and would need around 320 votes to ratify the deal under current attendance projections, when it goes to lawmakers on Dec. 11. Falling business morale points to weak German growth Her de facto deputy prime minister, Cabinet Office Minister David Lidington, told the BBC on Tuesday that no other plan was on the table. “There’s no plan B because the European Union itself is saying the deal that is on the table is the one that we have had to compromise over,” Lidington said. Asked if Britain could delay Brexit to get a better deal, he said: “It’s not government policy and I don’t really see that gets us anywhere because the EU has made its position very clear.”

Palladium Prices Soar, & Russia Has Plenty of the Precious Metal

Palladium has enjoyed the best market performance among major metals in 2018, thanks in large part to tough new Chinese car pollution standards which have pushed automotive producers to install catalytic converters which contain the metal in their cars. Palladium prices have appreciated over 9 percent on the New York Stock Exchange year-to-date, hitting just short of $1,170 per ounce on Friday, with futures jumping 5.2 percent last week alone and market analysts telling Bloomberg that the bull run is just getting started.  The silvery-white precious metal, used in pollution control devices, electronics, jewellery, groundwater treatment equipment, chemical applications and dentistry, has enjoyed a steady upward climb in value over the last decade, starting off at a low of $235 per ounce in November 2008. Close to 70 percent of demand is driven by the automotive market, according to CPM Group, a New York-based commodities research firm. And with car sales remaining steady despite fears of a decline in many other industries, investors are expecting palladium’s climb to continue over the short to medium term. “The market has a very positive fundamental outlook,” Maxwell Gold, director of investment strategy at Scotland-based investment firm Aberdeen Standard Investments told Bloomberg. “We’ve been dealing with supply deficits going on eight years, and that’s expected to continue. Supply has certainly been an issue on the mining front as well as the draw-down of existing stockpiles,” he added. With palladium prices climbing above those of its sister-metal, platinum (which closed at $843 per ounce on Friday), investors say its possible that platinum may replace palladium in many automotive and industrial applications. However, Standard Chartered Bank precious metals analyst Suki Cooper said it would take at least 18-24 months for manufacturers to make the switch, not to mention the costs and headaches associated with doing so. Where does Russia come into all this? Well, the country is rich in both precious metals, and enjoys the status of being the world’s largest palladium producer, mining some 81 tonnes of the precious metal in 2017. Norilsk Nickel alone accounted for 41 percent of total global palladium production the same year. Norilsk Nickel, which also engages in the extraction and refining of platinum, cobalt, silver, gold, tellurium and selenium, increased its palladium output by 6 percent in 2017, and platinum output by 4 percent. It is looking to continue growing its output amid market concerns about the closure of mines in South Africa, the world’s second-largest palladium producer. Zimbabwe, Canada and the United States round out the top five global palladium producers, with their total output amounting to just 27 percent of combined Russian and South African output in 2015.

Oil plunges nearly 8 percent despite talk of output cut

BOSTON (Reuters) – Oil prices slumped up to nearly 8 percent to the lowest in more than a year on Friday, posting the seventh consecutive weekly loss, amid intensifying fears of a supply glut even as major producers consider cutting output. Oil supply, led by U.S. producers, is growing faster than demand and to prevent a build-up of unused fuel such as the one that emerged in 2015, the Organization of the Petroleum Exporting Countries is expected to start trimming output after a meeting on Dec. 6. But this has done little so far to prop up prices, which have dropped more than 20 percent so far in November, in a seven-week streak of losses. Prices were on course for their biggest one-month decline since late 2014. A trade war between the world’s two biggest economies and oil consumers, the United States and China, has weighed upon the market. “The market is pricing in an economic slowdown – they are anticipating that the Chinese trade talks are not going to go well,” said Phil Flynn, an analyst at Price Futures Group in Chicago, referring to expected talks next week between U.S. President Donald Trump and his Chinese counterpart Xi Jinping at the G20 summit in Buenos Aires. “The market doesn’t believe that OPEC is going to be able to act swiftly enough to offset the coming slowdown in demand,” Flynn said.

Brent crude futures settled down $3.80 a barrel, or 6.1 percent at $58.80. During the session, the benchmark dropped to $58.41, the lowest since October 2017.

U.S. West Texas Intermediate crude (WTI) lost $4.21, or 7.7 percent, to trade at $50.42, also the weakest since October 2017. In post-settlement trade, the contract continued to fall. For the week, Brent fell 11.3 percent and WTI posted a 10.8 percent decline, the largest one-week drop since January 2016. Market fears over weak demand intensified after China reported its lowest gasoline exports in more than a year amid a glut of the fuel in Asia and globally. Stockpiles of gasoline have surged across Asia, with inventories in Singapore, the regional refining hub, rising to a three-month high while Japanese stockpiles also climbed last week. Inventories in the United States are about 7 percent higher than a year ago. Crude production has soared as well this year. The International Energy Agency expects non-OPEC output alone to rise by 2.3 million barrels per day (bpd) this year while demand next year was expected to grow 1.3 million bpd.

Adjusting to lower demand, top crude exporter Saudi Arabia said on Thursday that it may reduce supply as it pushes OPEC to agree to a joint output cut of 1.4 million bpd.

However, Trump has made it clear that he does not want oil prices to rise and many analysts think Saudi Arabia is coming under U.S. pressure to resist calls from other OPEC members for lower crude output. If OPEC decides to cut production at its meeting next month, oil prices could recover, analysts say. “We expect that OPEC will manage the market in 2019 and assess the probability of an agreement to reduce production at around 2-in-3. In that scenario, Brent prices likely recover back into the $70s,” Morgan Stanley commodities strategists Martijn Rats and Amy Sergeant wrote in a note to clients. If OPEC does not trim production, prices could head much lower, potentially depreciating toward $50 a barrel, argues Lukman Otunuga, Research Analyst at FXTM.

Mark Connors, global head of portfolio and risk advisory at Credit Suisse, told Reuters this week that the action among macro and CTA funds reflects a risk-aversion trade, as net long positions have dropped from near five-year highs to roughly even exposure between longs and shorts. Hedge funds and other money managers cut their net long positions in Brent by 32,263 contracts to 182,569 in the week ended Nov. 20, according to data provided by the Intercontinental Exchange (ICE) on Friday. That’s the lowest net long position since December 2015. Volatility, a measure of investor demand for options, has spiked to its highest since late 2016, above 60 percent, as investors have rushed to buy protection against further steep price declines. The decline in oil prices pulled U.S. energy shares lower. Oil majors Exxon Mobil Corp and Chevron Corp fell more than 3 percent and were the leading decliners on the Dow Jones Industrial Average Oilfield service providers Schlumberger NV and Halliburton Co also fell nearly 3 percent.

Oil prices hit year low as OPEC considers output cut

LONDON (Reuters) – Oil prices fell to their lowest in more than a year on Friday, on course for their biggest one-month decline since late 2014, even as oil producers considered cutting production to try to stem a rising global surplus. Oil supply, led by U.S. producers, is growing more quickly than demand and to ward off a build-up of unused fuel such as the one that emerged in 2015, the Organization of the Petroleum Exporting Countries is expected to start trimming output after a meeting planned for Dec. 6. But this has done little so far to prop up prices. The value of a barrel of oil has dropped by around 20 percent so far in November, in a seven-week streak of losses. “Oil bears have re-asserted their authority,” said Tamas Varga, analyst at London brokerage PVM Oil. “The weakness is the continuation of the prevailing bearish sentiment aided a little bit by the stronger dollar.” Volatility has spiked to its highest since late 2016, as investors have rushed to buy protection against further steep price declines. Volatility, a measure of investor demand for a particular option, has jumped above 60 percent for very bearish near-term sell options, double what it was two weeks ago. Oil production has surged this year. The International Energy Agency expects non-OPEC output alone to rise by 2.3 million bpd this year. Oil demand next year, meanwhile, is expected to grow by 1.3 million bpd.

Adjusting to lower demand, top crude exporter Saudi Arabia said on Thursday that it may reduce supply as it pushes OPEC to agree to a joint output cut of 1.4 million bpd. If OPEC agrees to cut production at its meeting next month, oil prices could recover sharply, analysts say.

“We expect that OPEC will manage the market in 2019 and assess the probability of an agreement to reduce production at around 2-in-3. In that scenario, Brent prices likely recover back into the $70s,” Morgan Stanley commodities strategists Martijn Rats and Amy Sergeant wrote in a note to clients.

U.S. Durable Goods Orders Plunge 4.4% In October, Much More Than Expected

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A report released by the Commerce Department on Wednesday showed a much steeper than expected drop in new orders for U.S. durable goods in the month of October, with the sharp decline largely reflecting a substantial decrease in orders for transportation equipment.

The Commerce Department said durable goods orders plunged by 4.4 percent in October following a revised 0.1 percent dip in September.

Economists had expected orders to slump by 2.5 percent compared to the 0.7 percent increase that had been reported for the previous month. The steep drop in durable goods orders was primarily due to the sharp pullback in orders for transportation equipment, which tumbled by 12.2 percent in October after climbing by 0.9 percent in September. Orders for non-defense aircraft and parts plummeted by 21.4 percent in October after plunging by 19.3 percent in September, while orders for defense aircraft and parts nosedived by 59.3 percent after soaring by 117.1 percent. Excluding the substantial decrease in orders for transportation equipment, durable goods orders inched up by 0.1 percent in October after a revised 0.6 percent decrease in September. Ex-transportation orders had been expected to rise by 0.4 percent compared to the 0.1 percent uptick originally reported for the previous month.

The uptick in ex-transportation orders came as notable increases in orders for electrical equipment, appliances and components and computers and electronic products were partly offset by a significant decline in orders for primary metals. The report also said orders for non-defense capital goods excluding aircraft, a key indicator of business spending, were nearly unchanged in October after falling by 0.5 percent in September. Shipments in that category rose by 0.3 percent in October, barely reversing the drop seen over the two previous months.”This report is another piece of evidence that suggests the sharp rise in interest rates is beginning to restrain economic growth,” said Michael Pearce, Senior U.S. Economist at Capital Economics. He added, “The weakness of business investment is particularly disappointing because it should have been boosted by the tax changes at the beginning of the year.” The Commerce Department also said shipments of durable goods fell by 0.6 percent in October after jumping by 1.0 percen

 

U.S. Consumer Sentiment Deteriorates More Than Initially Estimated November

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Consumer sentiment in the U.S. unexpectedly deteriorated by more than initially estimated in the month of November, according to a report released by the University of Michigan on Wednesday. The report said the consumer sentiment index for November was downwardly revised to 97.5 from the preliminary reading of 98.3. Economists had expected the consumer sentiment index to be unrevised at 98.3, which was still down slightly from 98.6 in October. “Although the data recorded a decline of 2.8 Index points following the election, the drop was related more to income than political party,” said Surveys of Consumers chief economist Richard Curtin. “Among those with incomes in the bottom third, the Sentiment Index rose by 10.4 points and fell by 6.6 points among those in the top third of the income distribution,” he added. “In contrast, the Sentiment Index remained unchanged among Democrats and Republicans.” The report said the current economic conditions index for November was downwardly revised to 112.3 from 113.2 and is now below the October reading of 113.1. The index of consumer expectations dipped to 88.1 from 89.3. On the inflation front, one-year inflation expectations slipped to 2.8 percent in November from 2.9 percent in October, while five-year inflation expectations rose to 2.6 percent from 2.4 percent.

Oil rebounds after previous session’s slide, but glut worries persist

NEW YORK (Reuters) – Oil prices rose more than 1 percent on Wednesday, recovering from the lowest levels in months, after U.S. government data showed strong demand for gasoline and diesel, but gains were limited by concern over rising global crude supply. U.S. crude stocks USOILC=ECI rose 4.9 million barrels last week, the Energy Information Administration said. More than expected. Crude inventories have risen for nine straight weeks, the longest streak of increases since March 2017. [EIA/S] Crude stocks at the Cushing, Oklahoma, delivery hub for WTI USOICC=ECI fell 116,000 barrels, the first drop in nine weeks, EIA said. Gasoline stocks USOILG=ECI fell 1.3 million barrels to the lowest level since December 2017, while distillate stockpiles USOILD=ECI dropped by 77,000 barrels, the EIA data showed. “The report was somewhat bearish due to the large crude oil inventory build, but the drawdown in refined product inventories and the big jump in refinery activity could signal the end of the recent string of mostly bearish reports,” said John Kilduff, a partner at Again Capital Management in New York. However, Wednesday’s gains did little to reverse overall market weakness. Crude fell more than 6 percent in the previous session, while world equities tumbled as investors grew concerned about economic growth prospects. Brent has fallen by more than 25 percent since reaching a 4-year high of $86.74 on Oct. 3, reflecting concern about forecasts of slowing demand in 2019 and ample supply from Saudi Arabia, Russia and the United States.

Worried by the prospect of a new supply glut, the Organization of the Petroleum Exporting Countries is talking about reducing output just months after increasing production.

OPEC, Russia and other non-OPEC producers are considering a supply cut of between 1 million barrels per day (bpd) and 1.4 million bpd at a Dec. 6 meeting, sources familiar with the issue have said. However, Saudi Arabia may find taking action to support prices harder, analysts said, with U.S. pressure to keep them low. U.S. President Donald Trump on Wednesday praised Saudi Arabia for helping to lower oil prices. Riyadh could feel more inclined to heed U.S. demands after Trump promised on Tuesday to be a “steadfast partner” of Saudi Arabia despite saying Crown Prince Mohammed bin Salman may have known about a plan to murder journalist Jamal Khashoggi. “It’s fair to say that the price of oil is going to continue to be pretty volatile between now and Dec. 6 when OPEC meets,” said Brian Kessens, managing director at Tortoise. “There’s going to be a lot of different rhetoric and anticipation of what will actually transpire.

Trump thanks Saudi Arabia for lower oil prices

US President Donald Trump sees Saudi Crown Prince Mohammed bin Salman as a key strategic partner in the Middle East (AFP Photo/MANDEL NGAN)

Washington (AFP) – US President Donald Trump on Wednesday ignored criticism that he gave Saudi Arabia a free pass on the murder of a dissident journalist, instead praising the Islamic kingdom for keeping oil prices low. Trump, on holiday at his Florida Mar-a-Lago Club, doubled down on an unusually worded statement from Tuesday that he was essentially ignoring the killing of Jamal Khashoggi because of what he said were more important US strategic and commercial interests.

“Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy! $54, was just $82,” he tweeted. “Thank you to Saudi Arabia, but let’s go lower!”

The fulsome praise for Saudi Arabia’s help in maintaining cheap oil built on comments he made Tuesday at the White House, saying that “if we broke with them, I think your oil prices would go through the roof.””They’ve helped me keep them down,” he said.The focus on oil prices is one strand of Trump’s argument against punishing the US ally for Khashoggi’s death, even though the CIA reportedly found strong evidence that de facto Saudi leader, Crown Prince Mohammed bin Salman, was involved. Khashoggi, a US resident who wrote for The Washington Post and had been critical of Prince Mohammed, was lured to the Saudi consulate in Istanbul on October 2, killed and reportedly dismembered. After lengthy denials, Saudi authorities admitted responsibility and said 21 people had been taken into custody. However, a CIA analysis leaked to the US media went further, reportedly pointing the finger at Prince Mohammed, who has especially close contacts with the Trump White House. In a formal statement Tuesday — released just after nearly the entire White House press corps had left to cover the lighthearted annual ritual of the president sparing a turkey from the Thanksgiving table — Trump said the prince “could very well be” in on the crime. But he then went on to flatly reject any suggestion of punishing the Saudi leader, saying Washington “intends to remain a steadfast partner.” Trump’s reasoning was that Saudi Arabia and the United States are partners in opposing Iran and the Saudis have committed to $450 billion in weapons contracts and other investments, as well as being a major oil producer. “Very simply it is called America first!” Trump concluded. This was in contrast to previously stated positions where Trump promised a tough response, warning in an October interview with The Wall Street Journal, for example, that the US-Saudi relationship “would take a while to rebuild.” Trump’s posture has provoked rare dissension among the ranks of senior Republicans. Senator Lindsey Graham said on Fox News that Prince Mohammed is “crazy.” “It’s not too much to ask an ally not to butcher a guy in a consulate,” he said. And Senator Bob Corker, the Republican leader of the foreign relations committee, tweeted scathingly: “I never thought I’d see the day a White House would moonlight as a public relations firm for the Crown Prince of Saudi Arabia.” Corker and the senior Democrat on the committee, Bob Menendez, demanded that the Trump administration issue a clear statement on whether Prince Mohammed was involved. Another prominent Republican, Senator Rand Paul, added “Let’s put America first, not Saudi Arabia,” while Khashoggi’s old employer the Post said in an editorial that Trump’s position meant “a world where dictators know they can murder their critics and suffer no consequences.” Secretary of State Mike Pompeo pushed back in a radio interview Wednesday, saying: “We are going to make sure that America always stands for human rights. We’ve watched the Saudis actually move in that direction during our time in office as well. “It’s not an unblemished record, but there certainly have been steps forward.”

WTI Crude Oil Price Plunge

From its 2018 peak on October 3 to November 13, the price of a barrel of West Texas Intermediate crude oil fell by 27%. In the later stage of its decline, it closed at a lower price for 12 consecutive days, something it’s not done in at least 35 years. This of course has significant first order implications for the energy industry and for the economy at large. Perhaps less intuitive, however, is the effect that a falling oil price may have on Fed policy. As the price of oil has fallen, so too have inflation expectations. Over last six weeks, the 5-year breakeven inflation rate has fallen from 2.07% to 1.88%. Regressing the breakeven rate against the price of oil from the beginning of 2009 through November 13 generates this relationship:

5yr BE = 0.932+0.01*WTI, with an R square of nearly 40%.

This has had the effect of pushing one measure of the real fed funds rate (fed funds rate minus 5-year breakeven rate) up to its highest level since January 2009. While the market’s expectation of a December rate hike remains largely unchanged, its outlook on subsequent hikes in 2019 has become less clear. If oil continues to fall, and inflation expectations with it, the Fed’s efforts to normalize policy may involve an earlier-than-expected intermission.

Oil slumps 7 percent as equities slide fuels demand worries

NEW YORK (Reuters) – Oil prices tumbled about 7 percent on Tuesday, with U.S. crude plunging to its lowest level in more than a year, caught in a broader Wall Street selloff that was fed by rising concerns about slowing global economic growth. U.S. West Texas Intermediate (WTI) crude futures were down $3.90, or 6.8 percent, at $53.30 per barrel by 2:01 p.m. EST (1901 GMT). The contract fell as much as 7.7 percent earlier in the session to $52.77 a barrel, the lowest since October 2017. So far in the session, more than 868,000 front-month WTI contracts had changed hands, exceeding the daily average over the last 10 months. Brent crude futures fell $4.50, or 6.7 percent, to $62.29 a barrel. The international benchmark fell as much as 7.6 percent to $61.71, the lowest level since December 2017. Tuesday’s drop extended a slide that has been largely unimpeded since early October. WTI prices have fallen more than 30 percent from their near-four-year peaks in early October, weighed down by surging supply and the selloff in risk assets worldwide. “For the time being it’s more about risk,” said Jim Ritterbusch, president of Ritterbusch and Associates. “When the stock market comes off 8 or 9 percent, it tends to conjure up images of a weak global economy and that feeds into expectations of weaker-than-expected oil demand.”The S&P 500 index .SPX hit a three-week low on Tuesday as weak results and forecasts from big retailers fanned worries about holiday season sales, while tech stocks continued to slide on concerns about iPhone sales. Global stock markets have suffered a shakeout in the past two months, pressured by worries of a peak in corporate earnings growth, rising borrowing costs, slowing global economic momentum and international trade tensions. Amid the uncertainty, financial traders have become wary of oil markets, seeing further downside risk to prices from the growth in U.S. shale production as well as the deteriorating economic outlook. Prices ticked lower after U.S. President Donald Trump said the United States intends to remain a “steadfast partner” of Saudi Arabia even though “it could very well be” that Saudi Crown Prince Mohammed bin Salman had knowledge of the killing of journalist Jamal Khashoggi last month in Turkey. Oil markets have been concerned about potential supply disruptions amid heightened tensions between the United States and Saudi Arabia over the killing.But experts said any threat to supplies were limited to begin with. “I never really understood the premium behind some kind of friction between U.S. and Saudi Arabia from a policy standpoint … It really is a too-big-to-fail relationship,” said Joe McMonigle, senior energy policy analyst at Hedgeye Risk Management in Washington. Apple gives stocks the holiday blues “I think today what’s driving oil is the continued equity selloff, and oil is really collateral damage.” Meanwhile, the United States was considering adding Venezuela, one of its biggest crude suppliers, to Washington’s list of state sponsors of terrorism but no final decision has been made, a person familiar with the deliberations said late on Monday. Expectations for a ninth straight week of U.S. crude inventory increases also weighed on prices. Analysts polled ahead of weekly data forecast crude stocks rose about 2.9 million barrels last week. U.S. crude production has soared almost 25 percent this year, to a record 11.7 million barrels per day (bpd). The Organization of the Petroleum Exporting Countries is pushing for a supply cut of 1 million bpd to 1.4 million bpd when it meets on Dec. 6. The OPEC envoy for the United Arab Emirates said it was very likely that the group would reduce its output but the exact level had yet to be decided.

The International Energy Agency (IEA), however, warned OPEC and other producers of the “negative implications” of supply cuts, with many analysts fearing a spike in crude prices could erode consumption.

“We are entering an unprecedented period of uncertainty in oil markets,” IEA Executive Director Fatih Birol said on Monday.

Trump stands by Saudi Arabia despite Khashoggi murder

FILE PHOTO – U.S. President Donald Trump talks to the media on the South Lawn of the White House in Washington, U.S., before his departure to California, November 17, 2018. REUTERS/Yuri Gripas

WASHINGTON (Reuters) – President Donald Trump vowed on Tuesday to remain a “steadfast partner” of Saudi Arabia despite saying that Saudi Crown Prince Mohammed bin Salman may have known about the plan to murder dissident journalist Jamal Khashoggi last month. Defying pressure from U.S. lawmakers to impose tougher sanctions on Saudi Arabia, Trump also said he would not cancel military contracts with the kingdom. Such a “foolish” move would only benefit Russia and China, said the U.S. president, whom critics accuse of exaggerating the importance of those weapons sales to the American economy.

Subprime Rises: Credit Card Delinquencies Blow Through Financial-Crisis Peak at the 4,705 Smaller US Banks

In the third quarter, the “delinquency rate” on credit-card loan balances at commercial banks other than the largest 100 banks – so the delinquency rate at the 4,705 smaller banks in the US – spiked to 6.2%. This exceeds the peak during the Financial Crisis for these banks (5.9%). The credit-card “charge-off rate” at these banks, at 7.4% in the third quarter, has now been above 7% for five quarters in a row. During the peak of the Financial Crisis, the charge-off rate for these banks was above 7% four quarters, and not in a row, with a peak of 8.9% These numbers that the Federal Reserve Board of Governors reported Monday afternoon are like a cold shower in consumer land where debt levels are considered to be in good shape. But wait… it gets complicated. The credit-card delinquency rate at the largest 100 commercial banks was 2.48% (not seasonally adjusted). These 100 banks, due to their sheer size, carry the lion’s share of credit card loans, and this caused the overall credit-card delinquency rate for all commercial banks combined to tick up to a still soothing 2.54%. In other words, the overall banking system is not at risk, the megabanks are not at risk, and no bailouts are needed. But the most vulnerable consumers – we’ll get to why they may end up at smaller banks – are falling apart:

Credit card balances are deemed “delinquent” when they’re 30 days or more past due. Balances are removed from the delinquency basket when the customer cures the delinquency, or when the bank charges off the delinquent balance. The rate is figured as a percent of total credit card balances. In other words, among the smaller banks, at the end of Q3, 6.2% of the outstanding credit card balances were delinquent.The credit card business is immensely profitable, and so banks are willing to take some risks. It’s immensely profitable for three reasons:

  • The fee the bank extracts from every transaction undertaken with its credit cards (merchant pays), even if the credit-card holder pays off the balance every month and never incurs any interest expense.
  • The fees the bank extracts from credit card holders, such as annual fees, late fees, etc.
  • The huge spread between the banks’ cost of funding and the interest rates banks charge on credit cards.

So how low is the banks’ cost of funding? For example, in its third-quarter regulatory filing with the SEC (10-Q), Wells Fargo disclosed that it had $1.73 trillion in total “funding sources.” This amount was used to fund $1.73 trillion in “earning assets,” such as loans to its customers or securities it had invested in.

This $1.73 trillion in funding was provided mostly by deposits: $465 billion in non-interest-bearing deposits (free money), and $907 billion in interest bearing deposits; for a total of $1.37 billion of ultra-cheap funding from deposits.

In addition to its deposits, Wells Fargo lists $353 billion in other sources of funding – “short-term and long-term borrowing” – such as bonds it issued. For all sources of funding combined, so on the $1.73 trillion, the “total funding cost” was 0.87%. Nearly free money. Rate hikes no problem. In Q3, Wells Fargo had $36.8 billion in average credit-card balances outstanding (not including balances it had securitized and sold off), carrying an average interest rate of 12.77%! So, with its cost of funding at 0.87%, and the average interest rate of 12.77% on its credit card balances, Wells Fargo is making an interest margin on credit cards of 11.9 percentage points. In other words, this is an immensely profitable business – hence the incessant credit-card promos. The thousands of smaller banks cannot offer the same incentives and lack the marketing clout to attract this large pool of customers with good credit. So they market to customers with less stellar credit, or with subprime-rated credit — and charge higher interest rates. 30% sounds like a deal, even if the customer will eventually buckle under that interest rate and will have to default. That’s why banks take risks and don’t mind higher charge-offs: they’re getting paid for them! At some point, it gets expensive. And greed could pose a big problem for a little bank. In that case, the FDIC might swoop in on a Friday evening and shut down the bank over the weekend. No biggie. Happens routinely. The real problem with credit cards isn’t the banks – credit card debt is not big enough to topple the US banking system. It’s the consumers, and what it says about the health of consumers.The overall numbers give a falsely calming impression about how vulnerable a portion of consumers really are. Credit card debt and other revolving credit has reached $1.0 trillion (not seasonally adjusted). This is about flat with the prior peak a decade ago. So no problem?

Since the prior peak of credit-card debt in 2008, the US population has grown by 20 million people, and there has been a decade of inflation and nominal wage increases, and so the overall burden per capita is far lower today than it was in 2008 (though student loans and auto loans have shot through the roof). But this overall data hides the extent to which the most vulnerable consumers are getting into trouble with their credit cards, having borrowed too much at usurious rates. They’ll never be able to pay off or even just service those balances. For them, there is only one way out – to default. The fact that this process is now taking on real momentum shows that the group of consumers that are falling apart is expanding. And these are the good times, of low unemployment in a growing economy.

Home builder confidence tumbles the most since 2014 as housing headwinds catch up

Sentiment didn’t fall this sharply from one month to another even during the worst of the housing crisis

Bloomberg News/Landov Contractors work on a KB Home project.

The National Association of Home Builders’ monthly confidence index plunged eight points to 60 in November.

The many headwinds that have been dogging the industry finally showed up in this report. Labor is still expensive, lots are still scarce, lumber is at the mercy of tariff politics, and now, mortgage rates are rising and customers are holding back. NAHB, the building industry’s Washington lobby, noted in a press release that the reading of 60 is still “positive,” but that “customers are taking a pause.” The eight-point plunge is only reminiscent of the nine-point drop just after the 9/11 attacks and one other instance, a 10-point drop, in early 2014. The overall reading is the lowest since mid-2016. November’s results badly missed the Econoday consensus of a flat reading. In November, the sub-gauge of current conditions fell seven points to 67, the tracker of expected future conditions plunged 10 points to 65, and the gauge of buyer traffic was down eight points, to 45. Any reading over 50 signals improvement. The gauge of builder sentiment has long been considered an early read on the pace of construction, an important economic indicator considering how desperately more new homes have been needed. But such a sharp drop may presage something more sinister than a slower pace of building. Home builders were one of the first groups to feel the top of the market cycle just before the Great Recession. In June 2005, NAHB’s index hit 72, its cycle high. It started to tumble the next month, and by mid-2006 stood in contraction territory. To be sure, builders may not be the canary in the coal mine now as they were a decade ago. And many economists have called the top of the housing cycle already. Still, such a sharp drop can only seem ominous.  “Housing is performing at a moderately high level, but it also appears to be settling into a plateau,” Jefferies economists wrote after the NAHB release. “Moderation in housing activity is a blessing that delays what has previously been an inevitable development of excesses. While the pace of housing market activity has decelerated, there are no signs of threatening excesses such as inventory overhangs and a surge in delinquencies.” Moody’s Investors Service on Monday downgraded its outlook on the U.S. building materials industry, saying that “private residential construction growth is decelerating.”

Pence: US will hold those responsible for Khashoggi’s murder accountable

Pence: US will hold those responsible for Khashoggi's murder accountable
© Getty Images

Vice President Pence on Saturday vowed to hold those responsible for the murder of dissident journalist Jamal Khashoggi accountable after a CIA assessment found that the Saudi crown prince ordered his death. Pence told reporters while traveling in Papua New Guinea for events surrounding an Asia-Pacific summit that he “can’t comment on classified information” but said Khashoggi’s death last month was an “atrocity.” “It was also an affront to a free and independent press and the United States is determined to hold all of those accountable who are responsible for that murder,” he said, according to pool reports. Pence added that the U.S. is “going to follow the facts” on Khashoggi’s death while saying that the Trump administration wanted to find a way to preserve a “strong and historic partnership” with the Saudi kingdom. The vice president’s comments came after reports that the CIA had concluded that Saudi Crown Prince Mohammed bin Salman ordered the killing of Khashoggi inside the country’s consulate in Istanbul. The intelligence agency reportedly examined a phone call between the crown prince’s brother Khalid bin Salman, who is the Saudi ambassador to the U.S., and Khashoggi. Khalid allegedly insisted on the call that Khashoggi would be safe going to the Saudi consulate in Istanbul to get paperwork for his marriage to his Turkish fiancée. The Washington Post reported that it was unclear if Khalid knew Khashoggi was to be killed at the consulate, but said that he made the call at the direction of his brother. The call was reportedly intercepted by U.S. intelligence. Khashoggi was a Washington Post columnist living in Virginia who was critical of the Saudi government before he disappeared at the country’s consulate in Istanbul on Oct. 2. The Saudis insisted for weeks that Khashoggi left the consulate alive but later claimed he died during a physical altercation with officials who were acting without orders. The Saudi Embassy in Washington claimed Friday that Khalid never had any phone conversations with Khashoggi. “The claims in this purported assessment is false. We have and continue to hear various theories without seeing the primary basis for these speculations,” a spokesperson for the embassy said. The Trump administration on Thursday announced sanctions against 17 Saudis for their alleged roles in Khashoggi’s death.

Saudi crown prince ordered Khashoggi’s assassination: CIA

CIA believes Saudi crown prince ordered Khashoggi killing: sources
CIA believes Saudi crown prince ordered Khashoggi killing: sources

Washington: The CIA has concluded that Saudi Crown Prince Mohammed bin Salman ordered the assassination of journalist Jamal Khashoggi in Istanbul last month, contradicting the Saudi government’s claims that he was not involved.

The CIA’s assessment, in which officials have said they have high confidence, is the most definitive to date linking Mohammed to the operation and complicates the Trump administration’s efforts to preserve its relationship with a close ally.

The CIA believes Saudi Crown Prince Mohammed bin Salman ordered the killing of journalist Jamal Khashoggi in Istanbul, according to sources familiar with the matter.

A team of 15 Saudi agents flew to Istanbul on government aircraft in October and killed Khashoggi inside the Saudi consulate, where he had come to pick up documents that he needed for his planned marriage to a Turkish woman. In reaching its conclusions, the CIA examined multiple sources of intelligence, including a phone call that the prince’s brother Khalid bin Salman, the Saudi ambassador to the United States, had with Khashoggi, according to the people familiar with the matter who spoke on the condition of anonymity. Khalid told Khashoggi, a contributing columnist to The Washington Post, that he should go to the Saudi consulate in Istanbul to retrieve the documents and gave him assurances that it would be safe to do so. It is not clear if Khalid knew that Khashoggi would be killed, but he made the call at his brother’s direction, according to the people familiar with the call, which was intercepted by US intelligence. Fatimah Baeshen, a spokeswoman for the Saudi embassy in Washington DC, said the ambassador and Khashoggi never discussed “anything related to going to Turkey.” She added that the claims in the CIA’s “purported assessment are false. We have and continue to hear various theories without seeing the primary basis for these speculations.” The CIA’s conclusion about Mohammed’s role was also based on the agency’s assessment of the prince as the country’s de facto ruler who oversees even minor affairs in the kingdom. “The accepted position is that there is no way this happened without him being aware or involved,” said a US official familiar with the CIA’s conclusions. The CIA sees Mohammed as a “good technocrat,” the US official said, but volatile and arrogant, someone who “goes from zero to 60, doesn’t seem to understand that there are some things you can’t do.” CIA analysts believe he has a firm grip on power and is not in danger of losing his status as heir to the throne despite the Khashoggi scandal. “The general agreement is that he is likely to survive,” the official said, adding that Mohammed’s role as the future Saudi king is “taken for granted.”

A spokesperson for the CIA declined to comment.

Over the past several weeks, the Saudis have offered multiple, contradictory explanations for what happened at the consulate. This week, the Saudi public prosecutor blamed the operation on a rogue band of operatives who were sent to Istanbul to return Khashoggi to Saudi Arabia, in an operation that veered off course when the journalist “was forcibly restrained and injected with a large amount of a drug resulting in an overdose that led to his death,” according to a report by the prosecutor.

The assassination of Khashoggi, a prominent critic of Mohammed’s policies, has sparked a foreign policy crisis for the White House and raised questions about the administration’s reliance on Saudi Arabia as a key ally in the Middle East and bulwark against Iran.

President Donald Trump has resisted pinning the blame for the killing on Mohammed, who enjoys a close relationship with Jared Kushner, the president’s son-in-law and senior adviser. Privately, aides said, Trump has been shown evidence of the prince’s involvement but remains skeptical that Mohammed ordered the killing. The audio shows that Khashoggi was killed within moments of entering the consulate, according to officials in multiple countries who have listened to it or been briefed on its contents. Khashoggi died in the office of the Saudi consul general, who can be heard expressing his displeasure that Khashoggi’s body now needed to be disposed of and the facility cleaned of any evidence, according to people familiar with the audio recording. The CIA also examined a call placed from inside the consulate after the killing by an alleged member of the Saudi hit team, Maher Mutreb, a security official who has often been seen at the crown prince’s side and who was photographed entering and leaving the consulate on the day of the killing.

Worried by oil slump, OPEC and partners discuss larger supply curbs: sources

DUBAI/LONDON (Reuters) – OPEC and its partners are discussing a proposal to cut oil output by 1.4 million barrels per day (bpd), three sources familiar with the issue said, although Russia may not be on board for such a large reduction. Worried by a drop in oil prices due to slowing demand and record supply from Saudi Arabia, Russia and the United States, the Organization of the Petroleum Exporting Countries is talking about a U-turn just months after increasing production. Such a shift could anger U.S. President Donald Trump, who urged OPEC on Monday not to cut supply. It also risks handing market share to the United States, while the sources said Russia might not be willing to back such a move. A steep slide in prices has surprised many oil market participants. Brent crude has fallen from a four-year high of $86 a barrel in early October to $66 on Wednesday. Just weeks ago, some trading firms were talking of $100 oil. The sources, who declined to be identified by name as the talks are confidential, said a cut of 1.4 million bpd – equal to 1.4 percent of world demand – was one option discussed by energy ministers from Saudi Arabia, non-OPEC Russia and other nations in Abu Dhabi on Sunday.

OPEC and a group of non-OPEC nations, led by Russia, have been cooperating to limit oil supply since the start of 2017. They partially unwound their reduction in June after pressure from Trump to lower prices. The OPEC-led deal got rid of a glut that built up in 2014 as supply from the United States and other countries outside the group soared. OPEC production rose too, after the then Saudi Oil Minister Ali al-Naimi blocked an OPEC curb on supplies to preserve market share.

This time, Saudi Energy Minister Khalid al-Falih has publicly spoken of a need to lower supplies by 1 million bpd, showing price support is trumping market share. OPEC meets on Dec. 6 to set policy for 2019.

A new round of OPEC-led supply cuts in 2019 would further support U.S. shale oil production, potentially repeating the cycle that played out in 2014. Oil prices LCOc1 rose on Wednesday, after Tuesday’s 6.6 percent drop, the largest one-day loss since July. With three weeks to go until the Dec. 6 meeting in Vienna, OPEC and its partners have not settled on a final figure for a new supply cut, the sources said. One of the three sources said a minimum cut of 1 million bpd was being considered and it could be larger than 1.4 million bpd. Another source, an OPEC delegate, agreed that a larger cut than 1.4 million bpd was possible, depending on the market. Nigeria and Libya, which are exempt from the current supply limiting accord, could be included in a new agreement, two of the sources familiar with the matter said. “We are talking about a cut from everyone, including Nigeria and Libya because their production has exceeded the cap in recent months,” one source said. While Nigeria and Libyan output has risen, another OPEC member Iran is facing lower exports due to U.S. sanctions that started this month. Tehran might not be called upon to deliver a voluntary cut, another of the three sources said. Iran, which was angered by higher Saudi and Russian production in response to pressure from Trump, will welcome supply cuts by those producers. OPEC officials were not sure whether Russia will join another round of supply cuts. Russian Energy Minister Alexander Novak said on Wednesday no emergency action was warranted to stem the decline in prices. “The market is quite volatile today. We remember that the oil price was sharply rising in the same way, now it is going down. We have to look into long-term development, into how the price will be stabilized,” he said in Singapore. But OPEC officials hope Moscow will come round eventually.

Pound falls sharply as risk of chaotic Brexit rises

London (CNN Business)The British pound dropped sharply on Thursday after two key UK government ministers resigned, plunging the Brexit process into deep uncertainty and hiking the risk of a chaotic rupture with the European Union. Brexit Secretary Dominic Raab said in a statement on Thursday that he “cannot in good conscience support the terms proposed for our deal” to leave the European Union. He is the second Brexit Secretary to resign this year. Work and Pensions Secretary Esther McVey resigned about an hour later, saying the draft deal does not honor the result of the Brexit referendum in 2016. There were more resignations at a junior level from May’s government, and an open call from one leading Brexit supporter for May to resign. The United Kingdom is due to leave the bloc — its biggest trading partner — on March 29, 2019. The pound fell as much as 1.8% against the dollar to below $1.28 following the resignations. Shares in UK banks declined sharply, with Lloyds (LYG) and Barclays (BCS) shedding roughly 5% and Royal Bank of Scotland dropping nearly 9%. The political upheaval could derail the Brexit deal that Prime Minister Theresa May has painstakingly negotiated with the European Union. May said Wednesday that she had secured the support of her cabinet for the deal, but its future is now in real doubt. She also warned that the alternatives to her plan were leaving the European Union without a deal, or Brexit not happening at all. Investors are most worried about a scenario in which Britain crashes out of the European Union without having negotiated an orderly departure. That would mean new trade barriers, disruption to supply chains for food, medicines and manufactured goods, and a shock to the broader economy. “The risk of very disorderly Brexit is increasing as we speak,” said John Wraith, head of UK rates strategy at UBS. The International Monetary Fund said in a report published Wednesday that a disorderly exit from the European Union would “lead to widespread disruptions in production and services,” and severe market consequences. “A sudden shift in investors’ preference for UK assets could lead to a sharp fall in asset prices and a hit to consumer and business confidence,” the IMF warned. Over the long run, the fund said the UK economy would be 5% to 8% smaller under a “no deal scenario” than if the country had remained in the European Union.

Trump takes aim at Mueller as speculation over Russia probe’s end grows

Washington (CNN)President Donald Trump is acting like he knows something about the Russia investigation that the rest of America has yet to learn.

His Twitter explosion on Thursday targeting special counsel Robert Mueller — his “thugs” and his “witch hunt” investigation — came without an apparent immediate cause. But Trump’s temper apparently boiled over after meetings on three successive days between the President and his lawyers as they work out written answers for Mueller about alleged collusion between his campaign and Russia in the 2016 campaign. The Washington Post reported on Thursday that there are at least two dozen questions about events that took place before the 2016 election. “There are some that create more issues for us legally than others,” Trump’s lawyer Rudolph Giuliani told the paper. Some questions were “unnecessary” and others were “possible traps” or might be irrelevant, he said. For Trump, there’s no easy way out of his funk Giuliani’s striking complaint about a perjury trap appears to raise the question of why he might be worried about such an issue — if the President were simply to tell the truth, in answers that will be scrubbed by his legal advisers. The questions resulted from a tortuous negotiation between Trump’s lawyers and the White House over the President’s testimony. They only relate to the collusion part of the investigation and do not concern allegations that the President obstructed justice in the firing of former FBI Chief James Comey.
Trump’s huddles with his lawyers coincided with intense activity around the Mueller investigation, which largely went quiet in the days leading up to the midterm elections earlier this month.
The comings and goings have left Washington on tenterhooks amid mounting speculation that significant action by the special counsel could be imminent. In the past, the President’s tirades about Mueller have sometimes coincided with developments in the special counsel probe. There are expectations that Mueller, who has not unveiled any indictments since July, could be preparing more. CNN has reported that he has also started writing a final report on his investigation. Whitaker backlash prompts concern at the White House
The President’s fury sparked questions over whether he has any advance knowledge of any indictments Mueller may be preparing, or has gleaned other insight about the case from his new acting-Attorney General Matthew Whitaker. Much of Mueller’s work is taking place behind closed doors, but the evident bustle suggests plenty of reasons for Trump’s dark mood. Those events included a visit by Trump’s former personal lawyer, Michael Cohen, who is facing jail time on tax and fraud charges, to the special counsel’s office on Monday. Attorneys for Trump’s former campaign chief Paul Manafort, who is cooperating with Mueller after his own conviction, were seen at Mueller’s office this week. Jerome Corsi, an associate of former Trump political adviser Roger Stone said on Monday he expects to be indicted for giving false information to Mueller or the grand jury. Corsi later suggested in an interview with Reuters that he’s in plea talks with Mueller’s team.
Stone, who also appears to be in Mueller’s sights, released text messages with an alleged Wikileaks back channel about “big news” about Hillary Clinton’s campaign six days before the site released hacked emails. Trump’s son, Donald Trump Jr. has reportedly told friends that he could he could be indicted, possibly over a meeting he and other Trump campaign officials held with a Russian lawyer promising “dirt” on Clinton. With all that in mind, Trump’s Thursday morning tweetstorm appears to reveal a President fuming with resentment about the probe and possibly deeply concerned about what it might reveal. Mueller’s questions likely offered Trump his most explicit sense yet as to where the investigation may be going and could perhaps offer him some hints about what witnesses have told Mueller. And the task of answering the questions, under the risk of perjury, may be a deeply unpleasant experience for him. “The inner workings of the Mueller investigation are a total mess. They have found no collusion and have gone absolutely nuts,” Trump tweeted. “They are screaming and shouting at people, horribly threatening them to come up with the answers they want,” the President said, in a comment that could be interpreted as evidence that he has inside knowledge of the investigation. “These are Angry People, including the highly conflicted Bob Mueller, who worked for Obama for 8 years. They won’t even look at all of the bad acts and crimes on the other side. A TOTAL WITCH HUNT LIKE NO OTHER IN AMERICAN HISTORY!” Trump wrote in one of his most furious attacks on Mueller. Mueller was actually appointed to head the FBI in 2001 by President George W. Bush, and stayed for the rest of his administration and three years into President Barack Obama’s term. Obama later extended his 10-year term for another two years.  Speaking on CNN’s “The Situation Room” Democratic Rep. Mike Quigley defended Mueller and his team, adding “if they are going to do something, I suspect it will be rather soon.” “Obviously, the President had a bad week and he doesn’t like these questions, so he is lashing out because he is afraid to take responsibility, frankly for anything,” Quigley said. The President also revealed his anger about the Russia probe in an interview with The Daily Caller on Wednesday, which to some observers seemed like an tacit admission that he had appointed Whitaker after firing Attorney General Jeff Sessions in order to rein in the special counsel.
“Matthew Whitaker is a very respected man. He’s — and he’s, very importantly, he’s respected within DOJ,” Trump told the conservative website. “You know, look, as far as I’m concerned this is an investigation that should have never been brought. It should have never been had,” he said. “It’s something that should have never been brought. It’s an illegal investigation.”
Democrats have warned that Whitaker, who is on record with fierce criticisms of the Mueller probe, and now oversees it, is nothing but a political henchman inserted into the top Justice Department job to rein in Mueller. His appointment has added fresh urgency to an effort on Capitol Hill to protect Mueller. Republican Sen. Jeff Flake warned he would not vote to advance judicial nominees unless a bill shielding the special counsel got a floor vote. Senate Republican Majority Leader Mitch McConnell blocked a vote on Wednesday on the measure, which would allow any decision by Trump to fire the special counsel to be challenged in court.

Oil rebounds from steep selloff as OPEC, partners discuss supply cut

NEW YORK (Reuters) – Oil rose nearly 2 percent on Wednesday, recouping some of the previous session’s heavy selloff, on growing prospects that the Organization of the Petroleum Exporting Countries and allied producers would cut output at a meeting next month to prop up prices. After a record 12 straight days of losses and the steepest one-day loss in more than three years, the oil market reversed course after Reuters reported that OPEC and its partners were discussing a proposal to cut output by up to 1.4 million barrels per day (bpd), more than officials had mentioned previously. Oil markets are being pressured by surging supply from OPEC, Russia, the Unites States and other producers and worries that a global economic slowdown could cut into energy demand. This has pushed the price of global benchmark Brent down more than 20 percent since early October, one of the biggest declines since a price collapse in 2014. “The market has cratered over the last few weeks and the pop today is related to the chatter that producers could cut up to 1.4 million bpd in 2019,” said Gene McGillian, vice president of market research for Tradition Energy in Stamford, Connecticut. “Maybe some of the fears of extra supplies and reduced demand have finally been priced into the market, but I wouldn’t say that a bottom has set in yet.” As oil has crashed from its October high, natural gas futures NGc1 soared as much as 56 percent during that time to a 4-1/2 year high. Oil’s latest selloff was exacerbated as traders unwound long oil-short natural gas trade, market participants said. The relative strength index (RSI) for both Brent and U.S. crude remained below 30, a technical level often regarded as signaling a market that has fallen too far. Financial firms hedging the risk incurred by selling put options to oil producers generated added downward pressure when prices fall toward option strikes, Goldman Sachs said in a note. “This market is attempting to find a price bottom following an unprecedented 12 consecutive days of decline,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

“Although the supply surplus is still relatively modest, the market is focusing on the dynamic of expansion in the overhang that will need to show signs of reversal before a price bottom can be established.”

In its monthly report, the Paris-based International Energy Agency (IEA) said the implied stock build for the first half of 2019 is 2 million bpd. The IEA left its forecast for global demand growth for 2018 and 2019 unchanged from last month, but cut its forecast for non-OECD demand growth, the engine of expansion in world consumption. U.S. crude output from its seven major shale basins was expected to hit a record 7.94 million bpd in December, the U.S. Energy Information Administration (EIA) said on Tuesday. Oil prices plummet on fears of weak global demand The surge in onshore output has helped overall U.S. crude production C-OUT-T-EIA hit a record 11.6 million bpd, making the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia. Most analysts expect U.S. output to climb above 12 million bpd in the first half of 2019. The rise in U.S. production is contributing to higher stockpiles. Ahead of industry storage data on Wednesday and the government’s report on Thursday, analysts forecast a 3.2 million-barrel rise in crude inventories, the eighth straight weekly build. [EIA/S]

Sterling, euro stocks scuttled as Brexit deal hits the rocks

LONDON (Reuters) – Sterling tumbled and the rest of Europe’s share markets groaned on Thursday, after a long-awaited Brexit agreement was thrown into chaos as Britain’s chief negotiator for the deal quit just 12 hours after it had been unveiled. Up until that point markets had looked relatively calm. Asia had cheered news that China and the United States were back in contact about their bitter trade dispute and oil was holding steady again having snapped out of a record losing streak.

But then came the hammer blow. London’s Brexit minister Dominic Raab quit in protest at Prime Minister Theresa May’s deal for leaving the European Union.

“No democratic nation has ever signed up to be bound by such an extensive regime, imposed externally without any democratic control over the laws to be applied, nor the ability to decide to exit the arrangement,” he said in his resignation letter. Cue a sterling meltdown. The currency slumped a full cent to $1.2830 GBP= and though that made the FTSE stronger — a weaker pound makes life easier for exporters on the index — the rest of Europe sank swiftly into the red. [.EU] “The reaction is sterling shows that the chance of no Brexit deal has spiked,” said Tim Graf, Head of Macro Strategy for EMEA at State Street Global Markets. Nick Note: as you know we have a trade for this… don’t let them shit you over and over again. their will be no deal.. this will be the nastiest divorce ever

Saudi prosecutor seeks death penalty in Khashoggi murder case

Death penalty sought for five out of 11 suspects charged with the journalist’s murder

Jamal Khashoggi
Jamal Khashoggi was killed in Saudi Arabia’s Istanbul consulate on 2 October. Photograph: Johnny Green/PA

Saudi Arabia’s top prosecutor is recommending the death penalty for five suspects charged with ordering and carrying out the killing of Saudi writer Jamal Khashoggi. Saudi Al-Mojeb told journalists in a rare press conference in Riyadh on Thursday that Khashoggi’s killers had set in motion plans for the killing on 29 September, three days before he was killed inside the kingdom’s consulate in Istanbul. The prosecutor says the highest-level official behind the killing is Saudi former deputy intelligence chief Ahmad al-Assiri, who has been fired for ordering Khashoggi’s forced return. The prosecutor says 21 people are now in custody, with 11 indicted and referred to trial. Turkey has blamed the highest ranks of power in Saudi Arabia for Khashoggi’s brutal death, saying the kingdom sent an assassination squad for him.

Saudi Arabia is reducing oil supply and OPEC may cut too

Abu Dhabi, UAE (CNN Business)Saudi Arabia will reduce oil supply next month in response to lower demand, and more cuts could follow next year. Speaking at a conference in Abu Dhabi, Saudi energy minister Khalid Al Falih said the kingdom’s oil output would fall by 500,000 barrels per day in December. Members of the Organization of Petroleum Exporting Countries (OPEC) and its allies could reduce supply further next year if needed, he added. “The consensus among all members is that we need to do whatever it takes to balance the market,” Al Falih said. “If that means trimming supply by a million [barrels per day], we will do it.” Global oil prices tumbled into a bear market last week, down more than 20% from their recent peak. Fear of a global economic slowdown and a decision by the United States to allow some countries to keep buying Iranian crude oil following the reintroduction of sanctions have hit market sentiment.

BP (BP) CEO Bob Dudley said the Saudi cut represented “quite a bit of oil.” “That probably would adjust sentiment and get [prices] back into a corridor with less volatility,” he told CNN Business.
A senior OPEC source said the cartel and other major producers are discussing cutting production by as much as 1.2 million barrels per day. A decision could be taken at the next OPEC meeting in Vienna on December 6. A cut of that magnitude would reverse a decision in June by OPEC and Russia to pump over a million barrels per day more to make up for the expected loss of Iranian exports.
“The size of any potential cut will depend on how much oil demand growth slows down, how much Iranian supply falls due to US sanctions, and how fast US supply rises,” said Giovanni Staunovo, an analyst at UBS. Russia appears to need more convincing that it should be cutting production.
Russia’s energy minister Alexander Novak said in Abu Dhabi on Sunday it was too early to make a decision to reverse course and cut supply.
“We’re going to do everything we can to keep supply and demand inventories within a reasonably narrow band, ” Al Falih said on Monday, during a debate moderated by CNN Business’ Emerging Markets Editor John Defterios. “We hope that markets will calm down.” Crude prices jumped by as much as 2% on the prospects of reduced supply from OPEC. US crude oil futures were trading around $60.80 per barrel, $1.50 higher than on Friday. The United States last week said eight jurisdictions — China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey — would be able to continue buying Iranian oil for six months without fear of US penalties under sanctions on trading with Iran. “The sanctions on Iran have turned out to be a damp squib for the time being with the Trump administration granting exemptions,” said Devesh Mamtani, head of investments and advisory at Century Financial, a brokerage firm in Dubai. “The exemptions have even surprised Saudi Arabia as oil supplies from Iran are likely to spike in the coming days,” he added. UAE energy minister Suhail Al Mazrouei, who is also OPEC president, said the cartel wouldn’t allow the market to become oversupplied. “We will assure you that when we meet in December we will go to the market with the solution that will ensure market stability,” he said.

Oil struggles to find footing after 7 percent slump, sentiment stays weak

SINGAPORE (Reuters) – Oil markets struggled to find their footing on Wednesday after plunging by 7 percent the previous session, with surging supply and the specter of faltering demand keeping investors on edge. U.S. West Texas Intermediate (WTI) crude oil futures were at $55.54 per barrel at 0159 GMT, down 15 cents from their last settlement. International benchmark Brent crude oil futures LCOc1 were up 4 cents at $65.51 per barrel. Markets fell by more than 7 percent the previous day. Crude oil has lost over a quarter of its value since early October in what has become one of the biggest declines since prices collapsed in 2014. The slump in spot prices has turned the entire forward curve for crude oil upside down. Spot prices in September were significantly higher than those for later delivery, a structure known as backwardation that implies a tight market as it is unattractive to put oil into storage. By mid-November, the curve had flipped into contango, when crude prices for immediate delivery are cheaper than those for later dispatch. That implies an oversupplied market as it makes it attractive to store oil for later sale. Oil markets are being pressured from two sides: a surge in supply and increasing concerns about an economic slowdown. U.S. crude oil output from its seven major shale basins is expected to hit a record of 7.94 million barrels per day (bpd) in December, the U.S. Department of Energy’s Energy Information Administration (EIA) said on Tuesday. That surge in onshore output has helped overall U.S. crude production C-OUT-T-EIA hit a record 11.6 million bpd, making the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia. Most analysts expect U.S. output to climb above 12 million bpd within the first half of 2019.

“This will, in our view, cap any upside above $85 per barrel (for oil prices),” said Jon Andersson, head of commodities at Vontobel Asset Management.

The surge in U.S. production is contributing to rising stockpiles. U.S. crude stocks climbed by 7.8 million barrels in the week ending Nov. 2 to 432 million as refineries cut output, data from industry group the American Petroleum Institute showed on Tuesday. The producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) has been watching the jump in supply and price slump with concern. OPEC has been making increasingly frequent public statements that it would start withholding crude in 2019 to tighten supply and prop up prices.

Saudi Arabia says need for 1 mln bpd cut in oil

“OPEC and Russia are under pressure to reduce current production levels, which is a decision that we expect to be taken at the next OPEC meeting on Dec. 6,” said Andersson.

That puts OPEC on a collision course with U.S. President Donald Trump, who publicly supports low oil prices and who has called on OPEC not to cut production.

Saudi energy minister Khalid Al Falih said the kingdom’s oil output would fall by 500,000 barrels per day in December.

Saudi Aramco's Ras Tanura oil refinery and oil terminal.
Saudi Aramco’s Ras Tanura oil refinery and oil terminal.

Abu Dhabi, UAE (CNN Business)Saudi Arabia will reduce oil supply next month in response to lower demand, and more cuts could follow next year. Speaking at a conference in Abu Dhabi, Saudi energy minister Khalid Al Falih said the kingdom’s oil output would fall by 500,000 barrels per day in December. Members of the Organization of Petroleum Exporting Countries (OPEC) and its allies could reduce supply further next year if needed, he added. “The consensus among all members is that we need to do whatever it takes to balance the market,”

Al Falih said. “If that means trimming supply by a million [barrels per day], we will do it.”

Global oil prices tumbled into a bear market last week, down more than 20% from their recent peak. Fear of a global economic slowdown and a decision by the United States to allow some countries to keep buying Iranian crude oil following the reintroduction of sanctions have hit market sentiment. Iran is still exporting oil as sanctions deadline passes BP (BP) CEO Bob Dudley said the Saudi cut represented “quite a bit of oil.”
“That probably would adjust sentiment and get [prices] back into a corridor with less volatility,” he told CNN Business. A senior OPEC source said the cartel and other major producers are discussing cutting production by as much as 1.2 million barrels per day. A decision could be taken at the next OPEC meeting in Vienna on December 6.
A cut of that magnitude would reverse a decision in June by OPEC and Russia to pump over a million barrels per day more to make up for the expected loss of Iranian exports. “The size of any potential cut will depend on how much oil demand growth slows down, how much Iranian supply falls due to US sanctions, and how fast US supply rises,” said Giovanni Staunovo, an analyst at UBS. Russia appears to need more convincing that it should be cutting production. Russia’s energy minister Alexander Novak said in Abu Dhabi on Sunday it was too early to make a decision to reverse course and cut supply. “We’re going to do everything we can to keep supply and demand inventories within a reasonably narrow band, ” Al Falih said on Monday, during a debate moderated by CNN Business’ Emerging Markets Editor John Defterios. “We hope that markets will calm down.”
Crude prices jumped by as much as 2% on the prospects of reduced supply from OPEC. US crude oil futures were trading around $60.80 per barrel, $1.50 higher than on Friday. The United States last week said eight jurisdictions — China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey — would be able to continue buying Iranian oil for six months without fear of US penalties under sanctions on trading with Iran. “The sanctions on Iran have turned out to be a damp squib for the time being with the Trump administration granting exemptions,” said Devesh Mamtani, head of investments and advisory at Century Financial, a brokerage firm in Dubai. “The exemptions have even surprised Saudi Arabia as oil supplies from Iran are likely to spike in the coming days,” he added. UAE energy minister Suhail Al Mazrouei, who is also OPEC president, said the cartel wouldn’t allow the market to become oversupplied.
“We will assure you that when we meet in December we will go to the market with the solution that will ensure market stability,” he said.

OPEC mulls oil output cuts as risk of global glut grows

AFP/Getty Images Officials at the Joint Ministerial Monitoring Committee meeting on Nov. 11 discussed potential crude production cuts.

Major oil producers discussed potential reductions to crude production at their latest meeting, as concerns over growth in output combined with expectations for a slowdown in demand, prompting prices to post their largest monthly loss in more than two years. The meeting, held in Abu Dhabi over the weekend, came ahead of the latest updates on supply and demand due out this week from the Energy Information Administration (EIA), OPEC and the International Energy Agency (IEA). The Joint OPEC-non-OPEC Ministerial Monitoring Committee debated over whether an output reduction next year of about one million barrels a day would be necessary to avoid a glut of global supplies, according to The Wall Street Journal. JMMC officials, which include Organization of Petroleum Exporting Countries member Saudi Arabia as well as non-member Russia, monitor implementation of the crude output-cut agreement that began on Jan. 1, 2017, between members and nonmembers. The EIA recently reported that U.S. crude-oil production reached 11.3 million barrels a day in August, surpassing 11 million barrels a day for the first time on a monthly basis and making the nation the leading crude-oil producer in the world. Oil prices logged hefty October declines, with U.S. benchmark West Texas Intermediate crude CLZ8, -1.89%  posting a loss of nearly 10.8% and global benchmark Brent crude LCOF9, -1.72%  down 8.8% for the month—their largest monthly percentage losses since July 2016. Saudi Arabia and other major oil producers had raised production as global supplies tightened ahead of U.S. sanctions on Iran’s energy sector but as the sanctions kicked in earlier this month, the U.S. granted waivers to eight nations, allowing them to temporarily continue to import Iranian crude. They included China, which is among the largest importers of Iran’s crude.

A decision on production is expected at the next OPEC meeting, which will be held on Dec. 6 in Vienna.

In a press release dated Sunday, the JMMC said that prospects in 2019 point to “higher supply growth than global requirements,” and also noted th at the “dampening of global economic growth prospects … could have repercussions for global oil demand in 2019—and could lead to widening the gap between supply and demand.” “Comments from this weekend’s meeting between OPEC and other major producers suggest that policymakers are increasingly concerned by the recent fall in oil prices,” said Jason Tuvey, senior emerging markets economist at Capital Economics, in a note Monday. “OPEC’s de facto leader, Saudi Arabia, floated the idea of fresh oil output cuts. Oil Minister Khalid al-Falih said that the “Kingdom would lower its supply by 500,000 [barrels per day] in December.” “Algos don’t sleep and have a built-in advantage to pounce on all opportunities to violently shove a market,” said Michael Bertuccio, founder and chief executive officer of Houston-based HB2 Inc., a private oil and gas company, referring to a type of automated trading done with mathematic formulas. There’s “no better time” for that to happen “than a quiet Friday [after Thanksgiving] when all the humans are in food comas fueled by turkey.”

Exclusive – Russia clashes with Western oil buyers over new deals as sanctions loom

FILE PHOTO: The Rosneft logo is pictured on a safety helmet in Vung Tau, Vietnam April 27, 2018. REUTERS/Maxim Shemetov/File Photo

MOSCOW (Reuters) – Russian energy majors are putting pressure on Western oil buyers to use euros instead of dollars for payments and introducing penalty clauses in contracts as Moscow seeks protection against possible new U.S. sanctions. Seven industry sources told Reuters that Western oil majors and trading houses have clashed with Russia’s third and fourth biggest producers, Gazprom Neft and Surgutneftegaz, over 2019 oil sales contract terms during unusually tough annual renegotiation in recent weeks. The development mirrors a similar stand-off between Western buyers and Russia’s top oil producer, Rosneft (ROSN.MM). Earlier this week, trading sources told Reuters that Rosneft wants Western oil buyers to pay penalties from 2019 if they fail to pay for supplies in the event that new U.S. sanctions disrupt sales. Now sources have told Reuters that Surgutneftegaz and Gazprom Neft have also clashed with their buyers over penalties and the use of euros and other currencies to replace the dollar in contracts. “It is part of the same trend – the Russian oil industry is working on mitigating new sanctions risks. The buyers in turn argue they cannot carry those risks so we are trying to find compromises,” said one source with a Western buyer involved in negotiations, asking not to be named as the talks are confidential. Russia has been under U.S. and EU sanctions since 2014 when it invaded Ukraine’s Crimean peninsula. The sanctions have been repeatedly widened to include new companies and sectors, making it tough for Russian oil firms to borrow money abroad, raise new capital or develop Arctic and unconventional deposits. President Vladimir Putin’s administration has been hoping for a thaw in relations with the United States since President Donald Trump came to power but Washington has imposed new sanctions instead, including on some of Russia’s richest people. Russian businesses are preparing for a new wave of sanctions expected in the coming weeks. The firms are trying to diversify away from dollar payments and tapping Asia for more of their financing and technology needs. According to four industry sources, Surgutneftegaz asked buyers to be prepared to switch from dollar to euro payments in contracts, and insisted on buyers being effectively responsible for any losses arising from sanctions.

“They basically said – sanctions don’t matter. Buyers have to find a way to pay, or to return purchased goods, or pay penalties,” a source with a big trading house said.

Gazprom Neft has also asked buyers to use euros in payments and bear financial responsibility for contract breaches in the case of new sanctions, according to three sources. Russia supplies over 10 percent of global oil, so drastic sanctions against it could lead to a steep spike in oil prices. All global oil majors rely on Russia to feed their refineries, especially in Europe and Asia, and hence they cannot just walk away from annual contract negotiations if they are unhappy with terms. Talks with both Gazprom Neft and Surgutneftegaz have been progressing slowly and painfully, according to trading sources. Several Western buyers have managed to agreed compromises with Surgutneftegaz and Gazprom Neft, but others are still in tough talks with the producers, the sources said. Russia clashes with Western oil buyers over new deals as sanctions loom All Surgutneftegaz’s contracts are bespoke and are negotiated individually in the Siberian town of Surgut by the firm’s management and visiting Western trading bosses. The sources declined to name companies that have already reached compromise deals. In one such compromise, a large European buyer agreed to the use of euros in payments in exchange for Surgutneftegaz dropping its demand for penalties from buyers who fail to pay for cargoes. “We have been arguing that if sanctions make it impossible to pay for an oil cargo, how on earth are we supposed to pay penalties,” one trading source said. “So we have agreed that the payment remains suspended for the entire duration of sanctions – just like it works with Iran,” he added.

U.S. to impose new duties on Chinese aluminium sheet products

FILE PHOTO: A worker checks aluminium rolls at a warehouse inside an industrial park in Binzhou, Shandong province, China April 7, 2018. China Daily via REUTERS

WASHINGTON (Reuters) – The U.S. Commerce Department on Wednesday said it would impose final anti-dumping and anti-subsidy duties on Chinese common alloy aluminium sheet products of 96.3 percent to 176.2 percent. The decision marks the first time that final duties were issued in a trade remedy case initiated by the U.S. government since 1985. The Trump administration has promised a more aggressive approach to trade enforcement by having the Commerce Department launch more anti-dumping and anti-subsidy duties on behalf of private industry. “We will continue to do everything in our power under U.S. law to restrict the flow of dumped or subsidized goods into U.S. markets,” said Commerce Secretary Wilbur Ross in a statement. The final aluminium sheet duties, however, were reduced from those first imposed in April and July. The initial combined range was 198.4 percent to 280.46 percent. In 2017, imports of common alloy aluminium sheet from China were valued at an estimated $900 million, the Commerce Department said. The flat-rolled product is used in transportation, building and construction, infrastructure, electrical and marine applications. The U.S. International Trade Commission (USITC) is scheduled to make its final injury determinations on Dec. 20 after it voted 4-0 in January to authorise the investigation. U.S. aluminium industry firms including Aleris Corp (ALSD.PK), Arconic Inc (ARNC.N), Constellium NV (CSTM.N), Jupiter Aluminium Corp, JW Aluminium Company and Novelis Corp [NVLXC.UL] testified in December 2017 about what they termed a surge “in low-priced, unfairly traded imports of common alloy sheet from China.” The firms said the volume of aluminium sheet product imports had increased by nearly 750 percent over the last decade and by more than 91 percent between 2014 and 2017. This resulted in “significant market share gains by Chinese imports at the direct expense of the U.S. industry.” Heidi Brock, president and CEO of the Virginia-based Aluminium Association, said in a statement the body and its members were “extremely pleased” with the decision. Wen Xianjun, vice president of the China Nonferrous Metals Industry Association, whose department leads aluminium anti-dumping negotiations with the United States, told Reuters on Thursday even the reduced final U.S. duties made common alloy sheet exports to the country impossible. “We think we are causing no harm to the United States. We are just waiting for the USITC to judge,” Wen said. China’s aluminium exports fell by 3.6 percent from September to 482,000 tonnes in October, the lowest since May, according to customs data released on Thursday.

China October exports surprisingly strong in race to beat higher U.S. tariffs

BEIJING (Reuters) – China reported much stronger-than-expected exports for October as shippers rushed goods to the United States, its biggest trading partner, racing to beat higher tariff rates due to kick in at the start of next year. Import growth also defied forecasts for a slowdown, suggesting Beijing’s growth-boosting measures to support the cooling economy may be slowly starting to make themselves felt. The upbeat trade readings from China offer good news for both those worried about global demand and for the country’s policymakers after the economy logged its weakest growth since the global financial crisis in the third quarter. October was the first full month after the latest U.S. tariffs on Chinese goods went into effect on Sept. 24, in a significant escalation in the tit-for-tat trade battle. But analysts continue to warn of the risk of a sharp drop in U.S. demand for Chinese goods early in 2019, with all eyes now on whether presidents Donald Trump and Xi Jinping can make any breakthroughs on trade when they meet later this month. China’s exports rose 15.6 percent last month from a year earlier, customs data showed on Thursday, picking up from September’s 14.5 percent and beating analysts’ forecasts for a modest slowdown to 11 percent. “The strong export growth in October was buoyed by front-loading activities by exporters…,” said Iris Pang, Greater China Economist at ING in Hong Kong, noting the month is traditionally quieter due to long holidays. “We expect exports to remain strong towards the end of the year as businesses are afraid of a failure in the Trump-Xi meeting, which could lead to broader tariffs on more Chinese goods from the U.S.” Pang said. Washington has vowed to hike the tariff from 10 percent to 25 percent at the turn of the year, while Trump has warned that if talks with Xi are not productive, he could quickly slap tariffs on another $267 billion in Chinese imports. Despite several rounds of U.S. duties this year, China’s exports have been surprisingly resilient as firms ramped up shipments before even tougher measures went into effect. Container ship rates from China to the U.S. West Coast remain near record highs, suggesting shipments will remain solid well into November and possibly early December. China’s exports to the U.S. rose 13.2 percent from a year earlier in October. In another positive sign, China’s exports by volume also showed solid growth, according to Oxford Economics, which estimated they rose “an impressive” 9.9 percent. But analysts say robust export readings won’t last much longer, noting Chinese factory surveys have been showing contracting export orders for months. U.S. orders for Chinese goods at the latest Canton fair dropped 30.3 percent from a year earlier by value, as higher U.S. tariffs made goods from batteries to farm tractors more expensive.

Manchin: We’re ‘on the verge’ of a constitutional crisis due to Sessions’s firing

Sen. Joe Manchin (D-W.Va.) said Thursday that the U.S. is on the “verge” of a constitutional crisis because of the forced resignation of Attorney General Jeff Sessions.  “I think it’s a big mistake to let Sessions go,” Manchin, who was the only Democratic senator to vote to confirm the former attorney general, said on “CBS This Morning.”

Manchin pointed to the potential ramifications Sessions’s ouster could have on special counsel Robert Mueller‘s investigation into Russia’s election interference to back up his claim.  His comments came just a day after Sessions formally resigned from his role at the Department of Justice at President Trump‘s request. Trump announced on Twitter on Wednesday that Matthew Whitaker, Sessions’s chief of staff, will serve as acting attorney general.  Whitaker, who has publicly criticized certain elements of the Mueller investigation, will now oversee it. Deputy Attorney General Rod Rosenstein had been overseeing the probe since Sessions recused himself in early 2017.  Democratic lawmakers, including Manchin, have criticized Whitaker’s oversight of the Mueller probe. “What raises my concerns is a person that’s been so vocal against the investigation that was going on is [put] in charge a day after the [midterm] election,” Manchin told CBS. “I think that gives concern to every senator, Democrat and Republican. We are a country — the rule of law is everything. “Looking like it’s been tilted one way or the other is wrong.”

Trump has repeatedly called the Russia investigation a “witch hunt,” and on Wednesday said that he could fire everyone in Mueller’s office if he wanted. He said he would not take that step for political reasons, however.

Trump faces a blitz of investigations from Democratic-run House

FILE PHOTO: U.S. President Donald Trump walks on stage at a campaign rally on the eve of the U.S. mid-term elections at the Show Me Center in Cape Girardeau, Missouri, U.S., November 5, 2018. REUTERS/Carlos Barri

WASHINGTON (Reuters) – Armed with subpoenas and a long list of grievances, a small group of lawmakers will lead the investigations poised to make President Donald Trump’s life a lot tougher now that Democrats have won a majority in the U.S. House of Representatives. Using their control of House committees, Democrats can demand to see Trump’s long-hidden tax returns, probe possible conflicts of interest from his business empire and dig into any evidence of collusion between Russia and Trump’s campaign team in the 2016 election. Trump said early on Wednesday that House investigations would be countered by investigations of Democrats by the Senate, which remains in Republican hands after Tuesday’s congressional elections. “If the Democrats think they are going to waste Taxpayer Money investigating us at the House level, then we will likewise be forced to consider investigating them for all of the leaks of Classified Information, and much else, at the Senate level. Two can play that game!” the president said on Twitter. Senate Republican Leader Mitch McConnell’s office was not immediately available for comment on Trump’s tweet. Democrats said Republican lawmakers will no longer be able to protect Trump from a watchful Congress. “The American people have demanded accountability from their government and sent a clear message of what they want from Congress,” Representative Jerrold Nadler, the New York Democrat poised to become chairman of the House Judiciary Committee, said in a tweet after Democrats claimed the majority.

Trump “may not like it, but he and his administration will be held accountable to our laws and to the American people.”

Nadler, once described by Trump as “one of the most egregious hacks in contemporary politics,” is one of three prominent Democrats who have clashed with the president and who will take over key House committees when the new Congress convenes in January. The others are Elijah Cummings, who will almost certainly head the House Oversight Committee, and Adam Schiff of the Intelligence Committee, slammed by the president as “sleazy.” Control of the committees – where they are currently the highest-ranking Democrats – will give them the power to demand documents and testimony from White House officials and important figures in Trump’s campaign team and businesses, and to issue subpoenas if needed. They will also have more money and staff for investigations that could delay or derail Trump’s agenda. “I plan to shine a light on waste, fraud, and abuse in the Trump administration,” Cummings said on Wednesday. “I want to probe senior administration officials across the government who have abused their positions of power and wasted taxpayer money, as well as President Trump’s decisions to act in his own financial self-interest,” he said in a statement. The White House could respond to committee demands by citing executive privilege, but that would likely result in court battles. A first salvo in the battle is expected to come from Representative Richard Neal, who is the likely Democratic chairman of the tax-writing House Ways and Means Committee and who has said he will demand Trump’s tax returns from Treasury Secretary Steven Mnuchin. Such a move could set in motion a cascade of probes into any disclosures the documents might hold. Women candidates make history at the polls Even before the election, Schiff said his committee would look at allegations that Russian money may have been laundered though Trump’s businesses and that Moscow might have financial leverage over the president. Nadler’s panel would handle any effort to impeach Trump, depending on the outcome of Special Counsel Robert Mueller’s federal probe into Russian meddling in the 2016 U.S. elections and possible Trump campaign collusion with Moscow. The panel is expected to look for ways to protect Mueller and his probe from any Trump effort to torpedo the investigation or suppress its findings. Trump denies any collusion by his campaign and has long denounced Mueller’s investigation as a witch hunt. Moscow has denied meddling in the 2016 election. Nadler’s committee is unlikely, however, to move quickly toward impeachment. He has said that any impeachment effort must be based on evidence of action to subvert the Constitution that is so overwhelming it would trouble even some Trump supporters. Nadler, Cummings and Schiff are expected to coordinate their efforts and seek bipartisan cooperation to avoid the appearance of unbridled partisanship ahead of the 2020 presidential election. Still, Republicans accuse Democrats of preparing to abuse their authority with political attacks on Trump and his allies. They predict a partisan drive that could backfire on Democrats, like the Republican effort to impeach former President Bill Clinton did in the 1990s. “There will be irresistible pressure to overreach in their investigations and ultimately impeach the president,” said Republican strategist Michael Steel. Cummings’ team says his Oversight Committee will also focus on public issues including skyrocketing prescription drug costs, the opioid epidemic, voting rights, the Census and the U.S. Postal Service. Reporting by David Morgan and Susan Cornwell; Additional reporting by Patricia Zengerle, Amanda Becker, Susan Heavey and Mark Hosenball; Editing by Peter Cooney and Frances Kerry

Oil falls as rising production feeds concerns of an oversupply

Natural-gas futures decline after larger-than-expected rise in U.S. supplies
Getty Images

Oil futures edged lower Thursday, as recent data showing sizable increases in crude output from major producers fed oversupply concerns. Crude output in Saudi Arabia, Russia and the U.S. had climbed ahead of U.S. sanctions on the Iranian energy sector, which were expected to contribute to tighter global oil supplies. The sanctions began earlier this week, but the U.S. granted eight countries temporary waivers—allowing them to continue buying Iranian oil.

Meanwhile, data showing strong crude imports by China in October helped to limit losses in oil prices.

U.S. production climbed by 400,000 barrels a day to 11.6 million barrels a day for the week ended Nov. 2, the Energy Information Administration said in its weekly petroleum supply report issued Wednesday. That marked a record high, and the “pace of the increase was the highest since October of last year when Hurricane Nate caused [1 million barrels a day] of Gulf production to come offline and then quickly return,” said Tyler Richey, co-editor of the Sevens Report. “But unlike last October, there are no extenuating circumstances for this sizeable production spike.” The EIA report also revealed a seventh straight weekly rise in U.S. crude supplies, up 5.8 million barrels last week. The weekly output data followed an updated forecast from the EIA released Tuesday, which raised the 2018 and 2019 outlooks on domestic crude production. For 2019, the government expects a production average of 12.06 million barrels a day. While worries about the Iran sanctions had previously served to boost oil prices, an October swoon in part reflected expectations that increased output by Saudi Arabia and Russia would largely offset the lost barrels. Saudi Arabia’s production rose to 10.67 million barrels a day in October, according to an S&P Global Platts survey Wednesday. That was the most in the 30-year history of the survey, which also showed that the Organization of the Petroleum Exporting Countries’ October output edged down by 30,000 barrels to 33.04 million barrels a day.

Russia’s crude production rose to a post-Soviet record of 11.4 million barrels a day in October, according to Bloomberg.

“While the focus was on the embargo against Iran and Venezuela’s output struggles over the past months, i.e. the risks of too little supply, the market increasingly looks concerned about the prospects of too much supply,” said Norbert Ruecker, head of macro and commodity research at Julius Baer, in a note. “The petro-nations under the lead of Saudi Arabia and Russia have opened their taps, civil-war-torn Libya surprised with strong exports as of late, and the pipeline bottlenecks no longer seem to be too much of a temporary constraint for the U.S. shale boom,” he said. Meanwhile, Chinese government data showed the country imported 9.61 million barrels a day of crude in October, noted analysts at Commerzbank, after refinery processing had climbed to a record in September, pointing to increased demand for crude. The selloff in crude last month may have been used by Chinese refineries to stock up on Iranian oil before U.S. sanctions began to bite, they said, noting Bloomberg data that showed Iranian oil shipments to China rose to 741,000 barrels a day last month—the second-highest level of the year. Natural-gas futures declined after the EIA reported on Thursday a larger-than-expected rise of 65 billion cubic feet for the week ended Nov. 2.

Trump moves to deny asylum to most migrants who cross border illegally

Proclamation to require asylum-seekers to apply only at border crossings

Getty Images President Donald Trump speaks at the White House on Wednesday.

The Trump administration is moving ahead with a plan to limit when and where foreign nationals can apply for asylum at the U.S. border with Mexico. The administration will publish a new rule aimed at pushing asylum seekers to already crowded  border crossings and deny the opportunity to apply for asylum to nearly all immigrants caught crossing the border illegally. In a call with reporters Thursday, senior administration officials said President Donald Trump is expected to sign a presidential proclamation that blocks illegal border crossers from the asylum process. The administration officials said the president has the authority to limit asylum for some foreigners under the Immigration and Nationality Act. The rule change and expected proclamation — which could be signed as early as Friday and effectively changes U.S. immigration law — is aimed at reducing the volume of immigrants crossing the border illegally to seek asylum in the U.S. It comes as part of a focus by the president on a group of thousands of mostly Central American migrants making their way to the U.S. in multiple caravans traveling through Mexico. The groups are several hundred miles away from the nearest stretch of U.S. border in Texas’ Rio Grande Valley.

Trump says ‘I think we’ll make a deal with China’ on trade

WASHINGTON (Reuters) – U.S. President Donald Trump said on Friday that he will likely make a deal with China on trade, adding that a lot of progress had been made to resolve the two countries’ differences but warning that he still may impose more tariffs on Chinese goods. “China very much wants to make a deal,” Trump told reporters in Washington just hours after his top economic adviser expressed caution about talk of a possible U.S.-China trade agreement. “We’ve had a very good discussions with China, we’re getting much closer to doing something,” Trump said before departing the White House for a campaign event. “I spoke with President Xi (Jinping) yesterday. They very much want to make a deal,” Trump said. “I think we’ll make a deal with China, and I think it will be a very fair deal for everybody, but it will be a good deal for the United States.” Trump said he will discuss trade with Xi when the two meet for dinner on the sidelines of the G20 leaders’ summit at the end of November in Buenos Aires, Argentina. His administration has demanded that Beijing make sweeping changes to its policies on intellectual property protections, technology transfers, industrial subsidies and domestic market access, along with steps to reduce a $375 billion U.S. good strade deficit with China.Trump said a deal with China would also be good for Beijing. “If we can open up China and make it fair, for the first time ever — this should have done years ago by other presidents but it wasn’t — I am very much willing to do it. But China very much wants to make a deal,” he said.

Trump’s comments came a day after a phone call with Xi that he described as “very good.”.

U.S. President Donald Trump holds a campaign rally at Huntington Tri-State Airport in Huntington, West Virginia, U.S., November 2, 2018. REUTERS/Carlos Barria

The president’s remarks helped U.S. stocks to trim their losses on a day that started with market optimism over a Bloomberg report quoting unnamed sources as saying that Trump had ordered his cabinet to draw up terms for a China trade deal.

But by midday, shares had turned negative, weighed down by Apple Inc.’s (AAPL.O) disappointing earnings forecast and comments from White House economic adviser Larry Kudlow that he was less optimistic than previously about a deal betweenWashington and Beijing.

Kudlow, speaking on CNBC, contradicted the Bloomberg report and added: “There’s no mass movement, there’s no huge thing. We’re not on the cusp of a deal.”

Stocks soar on jobs reports, hopes of U.S.-China trade deal

One of China’s vice commerce ministers Wang Bingnan said on Saturday the country is willing to resolve trade issues with the United States through mutually respectful talks and on an equal footing, similar to past comments from Beijing.

Trump administration officials have said U.S.-China trade talks cannot resume until Beijing outlines specific actions it would take to meet U.S. demands for sweeping changes to policies on technology transfers, industrial subsidies and market access.

Trump said that if a deal is not made with China, he could impose tariffs on another $267 billion in Chinese imports into the United States, adding that China’s economy had “been hit very hard” by previous U.S. tariffs.

The United States has imposed tariffs on $250 billion (192.74 billion pounds)worth of Chinese goods so far, while China has retaliated with $110billion worth of tariffs on U.S. goods.

The Trump administration also has taken action to hit the Chinese semiconductor industry, indicting two companies accused of stealing trade secrets and banning U.S. software and equipment exports to one of them

Reporting by Roberta Rampton, Susan Heavey and David Lawder in Washington; Additional reporting by Li Zheng and Engen Tham in Shanghai; Writing by David Lawder; Editing by Steve Orlofsky and Chizu Nomiyama & Kim Coghill

Trump says he can defy US Constitution to end birthright citizenship

© Nicholas Kamm, AFP | In this file photo taken on October 27, 2018, US President Donald Trump speaks with reporters before departing for a rally in Murphysboro, Illinois.

President Donald Trump vowed to end the right of citizenship to children born in the United States to non-citizens and illegal immigrants in his latest bid to dramatically reshape immigration policies just days before the midterm elections. Trump would target the citizenship right through an executive order, he told news website Axios in an interview published on Tuesday, a move that would prompt a legal fight.  The right of US citizenship is granted to US-born children under the 14th Amendment of the Constitution, which cannot be changed by the president. The text of the 14th Amendment reads: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside.” Current Supreme Court precedent shows that the children of non-citizens born in the United States are citizens. It was unclear what specific action his order would pursue, and Trump gave no details. He did not say when he planned to sign the executive order, or how the White House would go about reviewing the change. He has previously lied about proposed executive orders, which have gone unfulfilled.  “This is blatantly unconstitutional,” Omar Jadwat, head of the ACLU Immigrants’ Rights Project told Reuters. “The president obviously cannot overturn the Constitution by executive order. The notion that he would even try is absurd.” Changing an amendment in the Constitution would require the support of two-thirds of the US House of Representatives and the Senate, and the backing of three-fourths of US state legislatures at a constitutional convention. But Trump said he has talked to his legal counsel and was advised he could enact the change on his own. Asked about the dispute over such presidential powers, Trump said he stood by his comments. “It’s in the process. It’ll happen,” he told Axios in the interview, which will air in full on the HBO pay cable channel on Sunday. Trump also claimed that the US is the only country to have such a policy, which is entirely false. There are about 30 countries that apply the principle of birthright citizenship. Some conservatives have long pushed for an end to the guarantee of birthright citizenship. Republican Senator Lindsey Graham welcomed Trump’s announcement on Twitter, calling the practice a “magnet for illegal immigration”.

But other Republicans pushed back on the news, saying that a key tenet of the American Constitution could not be changed so easily. “You cannot end birthright citizenship with an executive order,” said House Speaker Paul Ryan. “You obviously cannot do that,” he continued, speaking to Kentucky radio station WVLK on Tuesday. Trump, whose hard-line immigration stance helped him win the White House, has seized on the issue in recent weeks in the run-up to the November 6 vote that has Americans sharply divided and grappling with race and national identity. His latest comments also come after the deadliest attack on Jews in US history on Saturday and a series of bombs sent to top Democrats and other Trump critics last week. Democrats and other critics have condemned the president’s rhetoric as inflammatory, urging Trump to tone down his language and calling on voters to use the elections as a way to reject such policies. US Senator Chris Coons, a Democrat on the Senate Foreign Relations Committee, told MSNBC that Trump “was driving a false narrative on immigration” in many ways to stoke fear and turn it into an election issue.

Oil prices down on rising supply, trade war

NEW YORK (Reuters) – Oil prices dropped more than 1 percent on Tuesday on signs of rising supply and concern that global economic growth and demand for fuel will fall victim to the U.S.-China trade war. Earlier in the session, Brent reached a session low of $75.09 a barrel, the lowest since Aug. 24. WTI slumped to $65.33 a barrel, the weakest since Aug. 17. Prices were little changed in post-settlement trade after industry group the American Petroleum Institute reported U.S. crude inventories rose 5.7 million barrels last week, more than analysts’ forecast for a 4.1 million-barrel build. Investors will look to official government data on U.S. inventories due to be released Wednesday. Both crude benchmarks have fallen about $10 a barrel from four-year highs reached in the first week of October and were on track to post their worst monthly performance since July 2016. Oil has been caught in the global financial market slump this month, with equities under pressure from the trade fight between the world’s two largest economies. The United States has imposed tariffs on $250 billion worth of Chinese goods, and China has responded with retaliatory duties on $110 billion worth of U.S. goods. U.S. President Donald Trump said on Monday he thinks there will be “a great deal” with China on trade but warned that he has billions of dollars worth of new tariffs ready to go if a deal is not possible. Trump said he would like to make a deal now but that China was not ready. He did not elaborate. “One discussion that is developing is that (trade tensions) are hurting demand for crude oil. There’s probably an element of truth to that,” said Bob Yawger, director of futures at Mizuho in New York. The International Energy Agency (IEA) said high oil prices were hurting consumers and could dent fuel demand at a time of slowing global economic activity. Oil production from Russia, the United States and Saudi Arabia reached 33 million barrels per day (bpd) for the first time in September, Refinitiv Eikon data showed. C-RU-OUT C-OUT-T-EIA PRODN-SA That is an increase of 10 million bpd since the start of the decade and means the three producers alone now meet a third of global crude demand. The United States is set to impose new sanctions on Iranian crude from next week, and exports from the Islamic Republic have already begun to fall. Saudi Arabia and Russia have said they will pump enough to meet demand once U.S. sanctions are imposed. China, Japan factory output weakens in face of trade threat “The fact that this price weakness is developing just ahead of the official kickoff of the Iranian oil sanctions suggests an amply supplied market in which additional supply was brought to market well in advance of a likely acceleration in Iranian export decline,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

Trump accuses media of stoking ‘great anger’ in US

Despite calls for him to cool his overheated rhetoric after the deadly synagogue shooting and pipe bomb mailings, President Trump on Monday continued his assault on the “Fake News Media” by continuing to accuse them of stoking rage.

“There is great anger in our Country caused in part by inaccurate, and even fraudulent, reporting of the news. The Fake News Media, the true Enemy of the People, must stop the open & obvious hostility & report the news accurately & fairly,” he wrote on his Twitter account.

“That will do much to put out the flame of Anger and Outrage and we will then be able to bring all sides together in Peace and Harmony. Fake News Must End!,” the president posted, just two days after 11 people were gunned down by a man yelling “all Jews must die” at a Pittsburgh synagogue. The tweets also come three days after Cesar Sayoc was arrested for sending 14 pipe bombs through the postal system to a number of prominent Democrats, including former President Barack Obama, his Vice President Joe Biden, and Trump’s 2016 presidential opponent, Hillary Clinton — all outspoken critics of Trump’s. GOP Sen. James Lankford of Oklahoma said Trump can’t be blamed for the actions of a “hate-filled individual” at the synagogue, but urged the president to tamp down his rhetoric because it “doesn’t help the basic dialogue.” “I’ve said this to the president before: The president needs to be more clear in his rhetoric and doesn’t need to be as caustic in his rhetoric,” Lankford said Sunday on CBS’ “Face the Nation.” Anthony Scaramucci, the former White House communications director, said Trump doesn’t need to go to “war with the media.” “There’s no need to have a war with the media,” he told CNN’s “State of the Union” on Sunday. “You know, as far as I’m concerned, you can have an adversarial relationship, but we should be de-escalating this stuff.” But Democrat Rep. Adam Schiff said Trump’s comments set a tone “of division, often one of hatred, sometimes one of incitement of violence against journalists, and there is no escaping our responsibility.” “This president’s modus operandi is to divide us,” the California lawmaker said on CNN. “It’s not enough that on the day of a tragedy he says the right words, if every other day of the year he’s saying things to bring us into conflict with one another.” Trump condemned the synagogue shooting as “anti-Semitic” and “pure evil.” “There must be no tolerance for anti-Semitism in America or for any form of religious or racial hatred or prejudice,” Trump said during a rally Saturday in Illinois.

11 Dead, Several Others Shot At Pittsburgh Synagogue

robert bowers 11 Dead, Several Others Shot At Pittsburgh Synagogue(Photo Credit: Pennsylvania Department of Transportation)

PITTSBURGH (KDKA) – Eleven people have been killed and a number of others injured after a shooting at The Tree of Life Synagogue in Squirrel Hill on Saturday. Police sources tell KDKA’s Andy Sheehan the gunman, Robert Bowers, walked into the building and yelled, “All Jews must die.” Sheehan’s sources also confirmed that eleven people have died. No children are among the deceased. Bowers was reportedly armed with an AR-15 and three handguns. The initial call to 911 was made around 9:54 a.m. and officers were dispatched to the scene within a minute. Two officers arrived on the scene and observed a male who was carrying an assault-style weapon, according to police. Bowers opened fire on the two officers and then retreated back into the building. One of the officers suffered a gunshot wound to the hand and the other officer received several cuts to his face from shrapnel and broken glass. Pittsburgh SWAT officers arrived on scene, formed a small team and entered the building. Upon entering the building officers observed the devestation. SWAT medics carried two victims, one male and one female, outside of the building. The victims were transported to UPMC Presbyterian Hospital for treatment. Officers began searching the third floor of the synagogue when they encountered Bowers again, who opened fire on the SWAT team. One officer was shot multiple times and critically wounded and another officer was also shot multiple times by Bowers. The remaining SWAT officers engaged Bowers while the two injured officers were carried outside to Pittsburgh Paramedics. Bowers was injured in the exchange of gunfire. After being taken into custody, the suspect made statements to an officer that he wanted all Jews to die and also that Jews were committing genocide on his people, according to authorities.

The global selloff has erased $5 trillion from stock and bond markets in October

IStockphoto What’s a few trillion gone from investors’ portfolios?

The recent stampede by investors has erased about $5 trillion in value from global stock and bond markets in October alone. But that shouldn’t be severe enough to affect the economy, for now, according to economists at Deutsche Bank. Still, unless the markets regain their footing soon, the pressure for the Federal Reserve to reassess their monetary policy will continue to mount, they said. “Academic studies of the wealth effect find that households and companies don’t react to short-term fluctuations in their wealth but instead react to a moving average of where their wealth levels are,” said Torsten Slok, chief international economist at Deutsche Bank Securities, said in a note to clients. As the chart below illustrates, global markets shed roughly $5 trillion in market cap just this month, but the total value of equity and debt markets has increased $15 trillion from 2017.

“The bottom line is that we need a more significant correction before it will begin to have a meaningful impact on the economic outlook,” he said. The Fed said wages and prices are rising in its 12 districts and overall economic activity expanded at a “modest to moderate” pace, according to the Beige Book released on Wednesday. The report, which compiles anecdotal observations about the economy, by and large suggests that the Fed is likely to stay on course to execute its fourth rate rise of 2018 in December and deliver additional increases next year unless there is a more dramatic unwind in the financial markets. Much of the stock market’s volatility have been blamed on worries over the adverse impact of higher rates as the 10-year Treasury yield TMUBMUSD10Y, -1.35%  spiked in early October to 3.261%, a level not seen since 2011. A rise in yields leads to steeper borrowing cost for corporations and eventually can slow economic expansion. It can also call make bonds an attractive alternative to more volatile equities. Gross domestic product grew 3.5% in the third quarter, compared with 4.2% in the second quarter, according to a government report Friday. Data showed that consumer spending rose in the latest quarter but was offset by a slowdown in business and residential investment. Even so, with U.S. stocks reeling, the threshold for the Fed to reconsider its hawkish stance may be near, according to Matthew Luzzetti, senior economist at Deutsche Bank. “The recent financial market turbulence should not affect the Fed outlook dramatically unless it becomes more severe and protracted,” he said earlier this month.For that to happen, the Deutsche Bank’s financial conditions index would have to move down to near zero, per the following chart.

“A further 10% decline in equities, which would amount to a roughly 15% decline from the recent peak…would be needed to tighten financial conditions by enough to materially impact the Fed,” said Luzzetti. U.S. stocks headed south Friday with the S&P 500 SPX, -1.73%  and the Dow Jones Industrial Average DJIA, -1.19%  turning red for the year as disappointing results from a handful of megacap companies weighed on investors’ sentiment. The sharp selloff this month has prompted at least one market expert to suggest that stocks are in the midst of a sustained downward spiral. “With the S&P 500 only five weeks removed from its all-time high, we’ve not been definitive about labeling this move a new cyclical bear market. But it’s very likely we are experiencing one,” said Doug Ramsey, chief investment officer at Leuthold Group, in a report.

He noted that the MSCI ACWI Ex-USA Index, a benchmark for 46 foreign markets, closed only 0.1% away from “official” bear territory and the market action reminds him of the dismal summer days of 1990. “While the big event in that year’s first half was the Japanese stock market’s collapse from its late-1989 high, foreign markets of all stripes were down sharply by the time the S&P 500 saw its final high in mid-July,” he said. Back then, the MSCI ACWI Ex-USA bottomed out ahead of the S&P 500, something which Ramsey expects to recur fairly soon.

US Economy Grew by Healthy 3.5% in Third Quarter

President Donald J. Trump (Photoby Joe Raedle/Getty Images)

The U.S. economy grew by a healthy 3.5% in the third quarter of 2018. As Ed Morrissey notes, “For the first time in more than three years, the US economy grew at an annualized rate of 3% in GDP in two successive quarters. The third quarter expansion measured 3.5% following Q2’s 4.2%.” As the Associated Press observes, “The result was slightly higher than many economists had been projecting. It was certain to be cited by President Donald Trump as evidence his economic policies are working.” As CNBC notes, inflation also remains low: “The U.S. economy grew at a faster-than-expected rate in the third quarter as inflation was kept in check and consumer spending surged, according to data released by the Commerce Department on Friday…. “The department said the PCE price index, a key measure of inflation, increased by 1.6 percent last quarter, much less than the 2.2 percent increase expected by economists polled by StreetAccount.” Unemployment recently fell to 3.7 percent, the lowest since 1969. Minority and disabled workers have made major job gains. The Trump administration has helped fuel economic growth by bringing an end to the wave of burdensome and unnecessary new red tape issued by the Obama administration. That red tape often confused businesses, and made them more reluctant to hire people due to increased costs. Since 2017, employers have been able to hire new employees and make new investments without worrying as much that the ground rules will change and make them regret their earlier decision. As Wayne Crews of the Competitive Enterprise Institute noted in 2017, Trump has pruned unnecessary regulations more vigorously than any president since Reagan. And over “1,500 Obama rules in the pipeline but not finalized were withdrawn or delayed.” Crews says this focus on “cutting red tape is exceptionally good news for consumers, businesses and the economy.” In recent years, “the U.S. federal regulatory burden has amounted to nearly $2 trillion annually. This amounts to a hidden tax of nearly $15,000 per household in a given year.” Pruning more regulations “would jumpstart the economy, finally resulting in the economic relief Americans have been waiting for: more jobs and higher wages. It would also help small business owners, driving more growth, investment, and productivity.”However, the strong economy may not last. Many Obama-era regulations were so burdensome or politically risky that the Obama administration issued them in 2016, but with compliance dates in 2017 or 2018. That created an economic time-bomb for the incoming Trump administration. Although the Trump administration tried to delay the compliance dates of these costly regulations, liberal judges have blocked some of the delays based on procedural technicalities, such as the failure to solicit comment from the public before doing so. (It can take two years to repeal or alter a regulation through a formal notice-and-comment rulemaking process). When Obama took over from Bush in 2001, liberal think-tanks such as the Center for American Progress claimed that a new administration’s delays of agency rules issued in the waning days of the previous administration didn’t require an agency to go through “notice and comment” before the delay could go into effect. But after Trump unexpectedly won the 2016 election, liberal think-tanks and interest groups changed their tune. With liberal backing, special-interest groups sued the Trump administration, and got liberal judges to block some of the Trump administration’s delays based on the very procedural requirements that liberals previously claimed didn’t apply. With Trump picking new judges to fill over 100 judicial vacancies, the federal judiciary may get more conservative. As a result, the administration may get a more sympathetic hearing in future challenges to the administration’s delay or repeal of economically-harmful Obama-era regulations. But that depends on the U.S. Senate voting to confirm more conservative judges. The Senate is almost evenly divided between Republicans and Democrats now, and the Democrats are voting together against Republican nominees — not just against conservatives, but even against well-respected moderate Republicans who served capably in the Bush administration. If the Democrats retake the Senate, they are expected to block any future appointments to the Supreme Court while Trump is in office. They are also expected to block virtually all appointments of judges to the federal appeals courts (and perhaps even to federal district courts), leaving many federal judgeships vacant. Initially, the Chief Justice would likely declare “judicial emergencies” in various regions of the country, but as the problem spreads, this would do little to help.

The stock market has fallen in the past month, perhaps reflecting political risks. As one commentator notes, socialism is gaining ground in the Democratic Party.

For example, self-proclaimed socialist Julia Salazar unseated a Democratic incumbent. She did so even though she received plenty of negative press coverage. According to a Gallup survey, 57 percent of Democrats have a positive view of socialism, while most don’t have a positive view of capitalism. Former President Obama recently endorsed self-proclaimed “Democratic Socialist” Alexandra Ocasio-Cortez for Congress. Even a liberal-leaning web site admits that her economic proposals would cost the country $42 trillion. That would bankrupt America.

Fitch says it no longer assumes Britain will get a smooth Brexit

FILE PHOTO: The Fitch Ratings logo is seen at their offices at Canary Wharf financial district in London,Britain, March 3, 2016. REUTERS/Reinhard Krause

LONDON (Reuters) – Ratings agency Fitch said on Friday it no longer assumed that Britain would leave the European Union in a smooth transition and said an acrimonious and disruptive “no deal” Brexit could lead to a further downgrade of its sovereign credit rating. “In Fitch’s view, an intensification of political divisions within the UK … has increased the likelihood of an acrimonious and disruptive ‘no deal’ Brexit. “Such an outcome would substantially disrupt customs, trade and economic activity, and has led Fitch to abandon its base case on which the ratings were previously predicated.” Previously Fitch had assumed Britain would leave the EU in March next year with a transition deal in place and the outline of a future trade deal with the bloc. But Prime Minister Theresa May has struggled to agree a deal that can secure the backing of Brussels and her own lawmakers in the Conservative Party. The ratings agency currently rates British government debt at AA with a negative outlook which means a further lowering of the rating is possible. Fitch cut its top-notch AAA rating on Britain in 2013, citing the outlook for weaker public finances. Ratings downgrades up to now have had little impact on investors’ appetite for British government debt, which is still seen as a safe asset at times of political or economic turmoil. But downgrades are embarrassing for May’s Conservative government, which emphasised preserving the country’s AAA rating when it embarked on an austerity programme in 2010.

US mail bombs: Cesar Sayoc charged after campaign against Trump critics

A 56-year-old man has been arrested in Florida in connection with a mail-bombing campaign aimed at critics of US President Donald Trump. US officials named the man as Cesar Sayoc. He faces five charges including mailing explosives and threatening ex-presidents. Mr Trump said the acts were “despicable and have no place in our country”. Fourteen items have been sent in recent days to figures including ex-President Barack Obama and actor Robert de Niro. Two were found in Florida and New York City on Friday morning. Later, two more were discovered in California. Billionaire and Democrat donor Tom Steyer said that a package sent to him had been intercepted at a mail facility in Burlingame, and another addressed to Democrat Senator Kamala Harris was reported in Sacramento. The incidents come less than two weeks before the US mid-term elections, with politics highly polarised. The president praised law enforcement for the quick arrest of the suspect, describing the search as looking for a “needle in a haystack”. “These terrorising acts are despicable and have no place in our country,” he said. The comments were in stark contrast to Mr Trump’s tweet earlier in the day, when he suggested the incidents, which he described as “‘Bomb’ stuff”, were slowing Republican “momentum” in early voting. But Mr Trump returned to the theme later, accusing US media of exploiting the latest case. “The media’s constant, unfair coverage, deep hostility and negative attacks… only serve to drive people apart and to undermine healthy debate,” he said at a rally in North Carolina. US media reports suggest Mr Sayoc is a registered Republican who attended some of Mr Trump’s rallies in 2016 and 2017. However, the president rejected any suggestion that his rhetoric had contributed to the attacks. “I heard he was a person that preferred me over others. There’s no blame, there’s no anything,” Mr Trump said. Former intelligence chief James Clapper, one of the recipients of Friday’s packages, told CNN: “This is definitely domestic terrorism, no question in my mind.” He said that anyone who had been a critic of President Trump needed to be on the alert and take extra precautions.

“I’m not suggesting a direct cause-and-effect relationship between anything he’s said or done and the distribution of these explosives. But I do think he bears some responsibility for the coarseness of civility of the dialogue in this country,” he added.

Cesar Sayoc was caught at a vehicle parts shop in the city of Plantation, Florida. FBI Director Christopher Wray revealed that he was detained after his fingerprint was allegedly found on one of the packages. Officials also said DNA and mobile phone data were used to track the suspect down. The Department of Justice said he faced up to 48 years in jail. “We will not tolerate such lawlessness, especially political violence,” US Attorney General Jeff Sessions said at a news conference. “Let this be a lesson to anyone, regardless of their political beliefs, that we will use the full force of the law against you.” Law enforcement agencies said Mr Sayoc lives in Aventura, Florida. In 2002, he was arrested for making a bomb threat in Miami-Dade County, and received one year of probation for the charge. Mr Sayoc has a criminal record dating back to 1991 in Broward

Malls fear Sears bankruptcy signs will scare off buyers

If you’re going out of business, try not to make too much of a fuss about it.

As Sears gears up to close some 142 stores after filing for Chapter 11 bankruptcy, some mall operators are worried that big banners and garish signs could spoil the holiday vibe at their shopping centers — and further tarnish the already-battered image of shopping malls. In a filing in US Bankruptcy Court on Monday, big mall owners including Macerich and Brixmor sought to clamp down on attention-getting tactics used by liquidators, including strobe lights, bullhorns and balloons. Likewise, the landlords are looking to ban phrases including “Total Liquidation Sale,” “Going out of Business,” “Everything Must Go” and “Bankruptcy Sale.” Consider the neighboring stores, the mall owners pleaded in their Monday filing. “Shopping center tenants bargain for a certain environment as part of their decision to lease space in centers,” the mall operators said in the filing, arguing that folks handing out fliers about liquidation sales aren’t part of that deal. Indeed, five landlords were so concerned about potential violations that they asked a bankruptcy judge to approve a list of do’s and don’ts before these sales get seriously underway in their malls — the biggest one among them South Coast Plaza in Irvine, Calif. Sears didn’t hire one of the more prominent liquidators like Gordon Brothers, Hilco or Tiger Capital, instead choosing lesser-known Abacus Advisors Group, said bankruptcy attorney David Pollack of Ballard Spahr, who represents Brixmor. “It’s more of a proactive measure, but we also haven’t been able to make contact with the liquidator to make an agreement with them,” Pollack said. In the meantime, the mall operators are not leaving anything to chance. They’ve asked the court to ban neon or “day-glo” signs, and to limit the number of signs Sears is permitted to display in its own stores to five. They’re also asking that any signs not be visible from the “doors or windows of the store.”Exterior signs are out of the question, the landlords contend, while any window signs have to be displayed 12 inches away from the window and cannot take up more than 50 percent of the space. “Landlords have a primary interest in maintaining an aesthetic appearance in the shopping centers for the benefit of all the tenants, especially during the holiday season,” the mall companies wrote. The concerns come amid reports that Sears’ biggest shareholder and former chief executive, Eddie Lampert, is trying to secure a $300 million loan to keep some of the better stores open and humming, sources confirmed to The Post. Lampert is in talks with Cyrus Capital Partners, which holds some of Sears’ existing debt. The bankruptcy loan is in addition to a $300 million loan from Sears’ lenders, including Bank of America, Citigroup and Wells Fargo, which have agreed to provide a temporary lifeline to the 125-year-old retailer.

Two Wells Fargo executives go on leave of absence amid sales scandal review

A Wells Fargo logo is seen in New York City, U.S. January 10, 2017. REUTERS/Stephanie Keith

(Reuters) – Wells Fargo & Co said on Wednesday it put two executives on leave in connection with ongoing regulatory reviews into the bank’s retail sales practices. Chief Administration Officer Hope Hardison and Chief Auditor David Julian have begun leaves of absence and will no longer be members of the bank’s operating committee, the bank said. The bank declined to comment on the reason for the moves, which it announced in a press release. Hardison is a 24-year veteran of Wells Fargo and assumed the CAO role in 2015, according to the company website. Julian joined Wells through its merger with Wachovia Corp and has served as chief auditor since 2012, according to LinkedIn. Wells Fargo has been coping with the fallout of a sales practice scandal since late 2016, when it was revealed that millions of fake accounts may have been opened in customers’ names by bankers facing lofty sales targets.

Since then the bank has been hit with penalties including a $1 billion fine and a cap on assets put in place by the Federal Reserve.

Earlier this week, the bank settled for $65 million with the New York attorney general’s office which alleged that the bank misled investors about its sales practices. The fourth-largest U.S. lender is still facing inquiries into its customer sales abuses by the Department of Justice, the Securities and Exchange Commission and the Department of Labor, according to Wells Fargo’s most recent regulatory disclosure. The bank is also facing several class-action lawsuits from angry customers. “We remain steadfast in our focus on making things right for customers and building a better Wells Fargo,” Chief Executive Officer Tim Sloan said in a statement on Wednesday.

Trump admits ‘there’s no proof’ of his ‘unknown Middle Easterners’ caravan claim

President Donald Trump on Tuesday defended his unsubstantiated assertion that “unknown Middle Easterners” are traveling in a migrant caravan traveling north to the United States from Central America, but admitted “there’s no proof of anything.” “They could very well be,” Trump reiterated during a bill signing in the Oval Office, referring to Middle Eastern individuals embedded in the caravan. “I have very good information.” However, pressed for the proof of Middle Eastern individuals in the caravan by CNN’s Jim Acosta, Trump said “there’s no proof of anything.” “There’s no proof of anything but they could very well be,” Trump said. On Monday, Trump tweeted “criminals and unknown Middle Easterners are mixed” into the migrant caravan moving toward the United States. He called this a “national emergy” (sic). However, there have been no reports, in the press or publicly from intelligence agencies, to suggest there are “Middle Easterners” embedded in the caravan he’s referring to. Trump added Tuesday that “there’s a very good chance” of Middle Eastern individuals being in the caravan. “I also think that over a course of a period of time you (will) have (Middle Eastern individuals in the caravan), or they don’t necessarily have to be in that group. But certainly, you have a lot of people coming up through the southern border from the Middle East and other places that are not appropriate for our country,” he said. “They don’t necessarily have to be in that group,”

Trump also said Tuesday. “But certainly you have people coming up through the southern border, from the Middle East and other places that are not appropriate for our country. And I’m not letting them in.”

Vice President Mike Pence also said that the Honduran President Juan Hernandez told him over a phone call today that the migrant caravan was financed by Venezuela and organized by leftist groups. “At the President’s direction I spoke with President Hernandez of Honduras. He told me that the caravan that is now making its way through Mexico headed for the southern border was organized by leftist organizations and financed by Venezuela,” Pence said. “And the Democrats maybe?” Trump joked. Pence also declined to offer specific proof that Middle Eastern individuals are in the caravan, instead citing a statistic of how many suspected terrorists are prevented from coming into the country daily. “The United States of America intervenes and prevents 10 terrorists or 10 suspected terrorists from coming into our country every day. So, it is inconceivable that there would not be individuals from the Middle East as part of this growing caravan,” Pence said. Trump said he does not believe he is stoking fear for political gain by addressing the caravan. “No, not at all,” he said, “I’m a very non-political person. And that’s why I got elected President.”

Counterterrorism official contradicts Trump: No sign ISIS or ‘Sunni terrorist groups’ are in caravan

(CNN)For days, as migrants have traveled thousands of miles toward the US-Mexico border, President Donald Trump has warned of the dangerous people who make up their pack. He’s tweeted that “[c]riminals and unknown Middle Easterners” are “mixed” in with the caravan, and, on Monday afternoon, doubled down on his claims, telling reporters on the South Lawn of the White House to “go into the middle” of the caravan and “search. You’re gonna find MS-13. You’re gonna find Middle Eastern.” While the President insinuates terrorists have infiltrated the group that CNN crews have observed to include mostly mothers and their children, a senior counterterrorism official has also refuted the President’s claim. “While we acknowledge there are vulnerabilities at both our northern and southern border, we do not see any evidence that ISIS or other Sunni terrorist groups are trying to infiltrate the southern US border,” a senior counterterrorism official told CNN. Officials at the Department of Homeland Security have been less direct, but have disproved the President’s point nonetheless. When asked for evidence for the President’s claim that “[c]riminals and unknown Middle Easterners are mixed in” with caravan migrants, a DHS official responded with a hodgepodge of numbers: “In FY 18, CBP apprehended 17,256 criminals, 1,019 gang members, and 3,028 special interest aliens from countries such as Bangladesh, Pakistan, Nigeria, and Somalia. Additionally, CBP prevented 10 known or suspected terrorists from traveling to or entering the United States every day in fiscal year 2017.” None of that, however, proves that criminals or people from the Middle East are in the caravan crowd. And on top of that, the countries the DHS official mentioned are actually South Asian and African, not in the Middle East. There was also no mention of whether Customs and Border Protection made those apprehensions at the southwest border or elsewhere. It is also unclear how or where CBP prevented terrorists from traveling to the United States. CBP spokesperson Corry Schiermeyer said she would not comment on the President’s tweets, and referred additional questions to DHS, which oversees CBP. Former Homeland Security acting Undersecretary John Cohen told CNN that there has “clearly been an effort” by the administration to create a sense of fear as the caravan gets closer to the US.

“That fear, from a law enforcement perspective, is highly misplaced,” Cohen said. “It may be effective at energizing the base, but it creates a needless fear of the caravan.”
The President’s tweets and comments come just about two weeks ahead of the 2018 midterm elections, where he is emphasizing immigration as a key issue. Trump has, without evidence, accused Democrats of allowing immigrants to overrun the borders. The President has said, “Democrats want caravans. They like the caravans. A lot of people say, ‘I wonder who started that caravan …’ ” Trump has often returned to immigration as a talking point that will motivate his base voters to go to the polls in the midterms, and his policies on immigration have been cited as one of the key factors that led to his victory in 2016. Right-wing news outlets had speculated about a terror-connection in the caravan in the days leading up to Trump’s morning tweet. On Fox News Sunday morning, Tom Fitton, a conservative legal advocate, cited remarks by the president of Guatemala, who said earlier this month at a conference in Washington, DC, that his country had arrested nearly 100 people “highly linked to terrorist groups, specifically ISIS.”

Netflix’s New $2 Billion in Borrowing Raises Wall Street Eyebrows

The streamer’s long-term debt has soared north of $10 billion, though Moody’s says ratings and outlook remain stable.

Netflix’s insatiable appetite for content, both original and licensed, is causing the giant streamer to borrow another $2 billion, and Wall Street has mixed emotions on the matter. While Monday’s disclosure of additional debt didn’t immediately knock the stock down, several hours later shares had given back the day’s gains and ended by trading down 1 percent. Longtime skeptic Michael Pachter of Wedbush Securities says the additional debt did not come as a surprise, considering Netflix’s penchant for reporting negative cash flow. “It is precisely what we modeled,” says Pachter. “So long as they burn cash, they will have to raise capital to fund their content spending.” Netflix is a victim of its own success. Its original content streamed on demand has proved so popular it has attracted many copycats, so Netflix must spend wildly to keep up with relative upstarts like Amazon, CBS All Access, HBO Now and Hulu. It also must replenish what it is gradually losing from Warner Bros. and Disney, as each of them prepare to launch their own services next year that will directly compete with Netflix. This means that if Netflix users want to stream episodes of Friends or the movie Coco, for example, they eventually won’t have the option without signing up for yet-to-be named services from Warners and Disney, respectively. ”

They’re burning around $3 billion a year, so we should expect them to borrow around $3 billion a year for the foreseeable future,” Pachter says of Netflix.

With the additional $2 billion, Netflix’s long-term debt has soared north of $10 billion, though Moody’s says ratings and outlook remain stable.

Netflix’s spending on content is expected to be about $8 billion this year alone, though some speculate it could swell to $13 billion. The streamer boasts some 137 million subscribers, and it is depending on signing millions more globally to keep the rapid growth investors have grown accustomed to. “Despite the continuing issuances of debt to fund the company’s negative cash flows, we expect leverage to drop gradually over time as the transition from licensed content to produced original content levels off and newer international markets begin to contribute to profits and overall margins improve,” says Neil Begley, an analyst with Moody’s. “The interest rate charged will reflect their perceived ability to repay, and until creditors refuse to lend to them, I expect the cash-burn and borrowing cycle to continue,” adds Pachter. Netflix bulls agree that more spending is in the cards; they just aren’t overly concerned about it. The stock, after all, has nearly doubled in two years amid heavy borrowing and negative cash flow. “Netflix is willing to invest heavily to be the global leader in entertainment for the next several decades. If you want to go to the moon, you have to burn a lot of fuel,” says Ben Weiss, chief investment officer at 8th & Jackson Capital Management.