Houthi spokesperson Yahya Sarae stated on Monday that the militia targeted the United States military cargo ship Ocean Jazz in the Gulf of Aden with naval missiles as a response to the US and UK assaults on Yemeni Armed Forces installations. “The Yemeni Armed Forces continue to take all defensive and offensive procedures within the right to defend dear Yemen and in confirmation of the continued Yemeni position in support of Palestine. The Yemeni armed forces continue to respond to any American or British aggression against our country by targeting all sources of threat in the Red and Arab Seas,” the statement posted on Telegram said. In addition, the spokesperson warned that any future act of aggression will not be left “unanswered and unpunished.”
Houthis reportedly seek more weapons from Iran
The Lebanon-based Houthi movement increased its efforts to procure additional weapons from Iran, Politico reported on Sunday, citing intelligence reports from the United States and other Western nations. The intelligence reportedly suggests a proactive pursuit by the rebels to bolster their arsenal, heightening tensions in the strategically significant Red Sea region and raising concerns about the group’s intent to intensify attacks on shipping in the area. In response to the strikes conducted thus far, the US and the UK both targeted Houthi positions in Yemen.
West Texas Intermediate (WTI) climbed over 2.3% on Wednesday as rising tensions in two conflict zones outweighed supply and demand fundamentals that should have put downward pressure on crude prices. At 12:37 p.m. ET on Wednesday, WTI was up 2.59%, trading at $75.31, for a $1.90 gain on the day, while Brent crude was up 1.90%, trading at $80.05, for a $1.49 gain on the day. Overall, weakening demand and slowing economic growth have kept oil prices from soaring on geopolitical developments, Wednesday’s gains reflect an intensification of Israel’s war in Gaza, rising tension across the MIddle East, new developments on the Russia-Ukraine battlefield, and continued attacks on shipping in the Red Sea. This week has seen some of the most intense fighting in Gaza since the October 7 Hamas attack on Israel, with the Israelis targeting two hospitals and advancing into a coastal district in southern Gaza, Reuters reports. The intensification of the conflict prompted the European Union’s foreign policy chief, Josep Borrell, to say on Monday that Israel’s goal of destroying Hamas in Gaza was failing and the only way out of this conflict is a peace deal involving a two-state solution. Also putting upward pressure on oil prices is new momentum in the Russia-Ukraine conflict, where a drone attack on a Russia fuel export terminal run by Russian Novatek on the Baltic Sea caused a fire that led to shutdown of operations. Fundamentals, however, continue to keep a lid on rising prices, with higher oil production and a mixed bag in terms of growth outlook subduing the impact of geopolitical developments. IG analyst Tony Sycamore told CNBC that “production is higher and the growth outlook in China and Europe is mixed at best, while GDP data this week is expected to show the velocity of the U.S. economy has slowed considerably”. NN: Did anyone not know this would unleash the bloodthirsty drug crazed monsters of Islam?
Former President and front-runner in the Republican leadership race, Donald Trump, has promised to ban the creation of a central bank digital currency (CBDC) during a campaign stop in New Hampshire. “As your president, I will never allow the creation of a central bank digital currency,” Trump said on stage, joined by crypto-friendly former candidate Vivek Ramaswamy, who recently suspended his campaign. ” he continued. “Such a currency would give a federal government, absolute control over your money. They could take your money, and you wouldn’t even know it was gone.” CBDCs are digital versions or tokenized versions of cash that are issued and regulated by central banks that may or may not use blockchain as an underlying technology.
Crude oil inventories in the United States rose this week by 483,000 barrels for the week ending January 12, according to The American Petroleum Institute (API), after analysts predicted a draw of 2.4 million barrels. The API reported a 5.215-million-barrel draw in crude inventories in the week prior. On Tuesday, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by 0.6 million barrels again this week. Inventories are now at 355.6 million barrels.Oil prices were mixed ahead of the API data release. At 4:20 pm ET, Brent crude was trading down 0.26% at $78.09—but up $0.67 per barrel compared to where it was this same time last week. The U.S. benchmark WTI was trading up on the day by 0.59% at $72.83, up $0.76 per barrel compared to this time last week. Gasoline inventories saw another large build this week, rising by 4.86 million barrels after rising by 4.896 million barrels in the week prior. As of last week, gasoline inventories are now about 1% above the five-year average for this time of year, according to EIA data. Distillate inventories also rose this week, by 5.21 million barrels, after rising by 6.873 million barrels in the week prior. Distillates are roughly 4% below the five-year average.
OVERNIGHT: US strikes back on Houthi sites in Yemen
The U.S. military fired another wave of ship- and submarine-launch missile strikes against Houthi-controlled sites Wednesday, U.S. officials said, marking the fourth time in days it has directly targeted the group in Yemen as violence that ignited in the wake of the Israel-Hamas war continues to spill over in the Middle East. The strikes were launched from the Red Sea and hit 14 missiles that the command deemed an “imminent threat.” The strikes followed the official announcement that the U.S. has put the Houthis back on its list of specially designated global terrorists. The sanctions that come with the formal designation are meant to sever violent extremist groups from their sources of financing. “Forces conducted strikes on 14 Iran-backed Houthi missiles that were loaded to be fired in Houthi controlled areas in Yemen,” Central Command said in a statement posted on X late Wednesday. “These missiles on launch rails presented an imminent threat to merchant vessels and U.S. Navy ships in the region and could have been fired at any time, prompting U.S. forces to exercise their inherent right and obligation to defend themselves.” Despite the sanctions and military strikes, including a large-scale operation Friday carried out by U.S. and British warships and warplanes that hit more than 60 targets across Yemen, the Houthis are continuing their harassment campaign of commercial and military ships. The latest incident occurred Wednesday when a one-way attack drone was launched from a Houthi-controlled area in Yemen and struck the Marshall Islands-flagged, U.S.-owned and -operated M/V Genco Picardy in the Gulf of Aden. The U.S. has also strongly warned Iran to cease providing weapons to the Houthis. On Thursday a U.S. raid on a dhow intercepted ballistic missile parts the U.S. said Iran was shipping to Yemen. Two U.S. Navy SEALs remain unaccounted for after one was knocked off the vessel by a wave during the seizure and the second followed the overcome SEAL into the water. On Wednesday, Pentagon Press Secretary Maj. Gen. Pat Ryder said the U.S. would continue to take military action to prevent further attacks. “They are exploiting this situation to conduct attacks against the ships and vessels from more than 50 countries … around the world. And so we’re going to continue to work with our partners in the region to prevent those attacks or deter those attacks in the future,” Ryder said. There have been several incidents since the Friday joint operations. The Houthis fired an anti-ship cruise missile toward a U.S. Navy destroyer over the weekend, but the ship shot it down. The Houthis then struck a U.S.-owned ship in the Gulf of Aden on Monday and a Malta-flagged bulk carrier in the Red Sea on Tuesday. In response Tuesday, the U.S. struck four anti-ship ballistic missiles that were prepared to launch and presented an imminent threat to merchant and U.S. Navy ships in the region. Hours later, the Houthis claimed responsibility for the attack on the Malta-flagged bulk carrier Zografia. The ship was hit, but no one was injured and it continued on its way. NN: Talk about swatting the bear.
The Organization of the Petroleum Exporting Countries (OPEC) decided to leave the global oil demand forecast for 2024 unchanged at 2.2 million barrels per day (bpd), the group’s January report showed on Wednesday. The oil demand is expected to see growth of 1.8 million bpd next year.Positive economic, manufacturing, and services sector activity is expected to further support China’s economic recovery this year, thus putting Beijing as the key driver of demand growth in the next 12 months. In 2025, demand for all oil products is projected to “fully” recover to its pre-pandemic levels. Total world oil demand is anticipated to reach 104.4 million bpd, supported by strong air travel demand, healthy road mobility, industrial construction, and agricultural activities in non-OECD countries, putting the region’s demand at 2 million bpd in 2024 and 1.7 million bpd in 2025. Demand in OECD countries is expected to grow by 300,000 bpd this year, and by 100,000 in 2025. r NN: Its up how far Iran w.ants to push things. I think pretty far
Brent Crude oil prices are expected to average $74 per barrel this year, Citi said in a note, revising down its previous forecast by $1 a barrel, due to expectations of excess supply. The researchers at the bank also slashed their Brent forecast for 2025 by $10 per barrel, and now see the international benchmark averaging $60 a barrel next year. “We believe softer market fundamentals, absent major supply disruptions, will result in OPEC+ rolling over its Q1 2024 production cuts throughout the whole 2024 and start tapering them only in H2 2025,” Citi’s analysts wrote in a note carried by Reuters. Due to the OPEC supply management, Brent prices are likely to hold above $70 a barrel this year, as the cartel and its partners in the OPEC+ alliance are expected to keep the market “finely balanced,” according to Citi. The analysts, however, warned that the rising tensions in the Red Sea and the Gulf of Oman could lead to a spike in the risk premium in oil prices in the short term. Barring a major geopolitical escalation resulting in a large supply outage—which cannot be discounted—, oil prices are unlikely to reach $100 a barrel in 2024 as American oil production and exports are rising faster and higher than expected, and market sentiment about demand is downbeat, especially for the first half of 2024. Expected weak global economic growth would slow oil demand growth in 2024, keeping the average U.S. benchmark WTI Crude oil price below $80 per barrel, according to the monthly Reuters poll at end-December, in which analysts revised down their forecasts for 2024 from the previous month’s projections. Brent Crude prices are now expected to average $82.56 per barrel this year, down from the $84.43 consensus forecast in the November poll. In the December Reuters survey, only one of 34 contributors said they expected the average Brent Crude prices to be above $90 per barrel in 2024
The Houthis vowed to continue to attack ships in the Red Sea. The United States and the United Kingdom, with support from Australia, the Netherlands, Canada, and Bahrain, carried out airstrikes on the Houthis on January 11. “The American and British enemy bears full responsibility for its criminal aggression against our Yemeni people, and it will not go unanswered and unpunished,” a Houthi spokesperson said. The Houthis have carried out 27 attacks on commercial ships in the Red Sea since October. “The Iran-backed Houthis pose a serious threat to shipping and they must be deterred from further attacks. The Houthis have acted with impunity, attacking more than two dozen ships over a period of two months. The U.S. and UK airstrikes are an important first response. Iran is using the Houthis as a proxy, encouraging their drone and missile attacks. It is essential that Iran be held accountable for its support of the Houthis.” — Seth J. Frantzman, FDD Adjunct Fellow “Degrading Houthi long-range strike capabilities in a one-off strike or sporadic series of attacks is one thing, but signaling an intent to mete out punishment over time if Houthi maritime harassment continues is another. Currently, the Houthis and their patron in Tehran have no incentive to believe this strike was not a copy-paste from Biden of his Iraq and Syria retaliation, which also failed to restore deterrence.” — Behnam Ben Taleblu, FDD Senior Fellow “After October 7, the Houthis attempted and failed to mount a successful attack against southern Israel. Consequently, they altered their strategy and began targeting international shipping companies in the Red Sea, aiming to exert pressure on the international community to halt the Gaza conflict. However, this approach may be flawed, since it inadvertently prompted the United States and other global powers to retaliate by targeting Houthi assets in Yemen.” — Joe Truzman, Senior Research Analyst at FDD’s Long War Journal The U.S. and UK airstrikes on the Houthis on January 11 came as a counterattack to two months of Houthi assaults on shipping in the Red Sea. “These strikes are in direct response to unprecedented Houthi attacks against international maritime vessels in the Red Sea—including the use of anti-ship ballistic missiles for the first time in history,” the White House said in a statement. The 27 Houthi attacks on shipping have affected more than 50 countries. “More than 2,000 ships have been forced to divert thousands of miles to avoid the Red Sea—which can cause weeks of delays in product shipping times,” the statement noted. The Houthis support Hamas and claim their attacks are in response to the war in Gaza. The first Houthi attack occurred on October 19, when the Houthis launched cruise missiles and drones targeting Israel. A U.S. Navy warship in the Red Sea intercepted the attack. The Houthis continued their attacks in late October and expanded their assaults, hijacking a ship in November and vowing to blockade all ships linked to Israel transiting the Red Sea.
Chronology of event
“Iran Seizes Oil Tanker Off Coast of Oman,”
“U.S., UK Shoot Down Largest Houthi Missile and Drone Barrage in Red Sea,”
“China’s Largest Shipping Company Suspends Transports to Israel Due to Houthi Attacks,”
United States Central Command (CENTCOM) confirmed that the US forces carried out another airstrike on Houthi targets in Yemen on January 13. “This strike was conducted by the USS Carney (DDG 64) using Tomahawk Land Attack Missiles and was a follow-on action on a specific military target associated with strikes taken on Jan. 12 designed to degrade the Houthi’s ability to attack maritime vessels, including commercial vessels,” CENTCOM said in a statement. The military also confirmed that the latest attack targeted a Houthi radar site in Yemen.
Oil jumped as the US and allies launched airstrikes against Houthi rebels in Yemen, stepping up retaliation for attacks on ships in the Red Sea that have imperiled flows of fuel and goods through the vital waterway. President Joe Biden said strikes had been successfully conducted against a number of targets used by the Iranian-backed group, with US officials saying radar sites and missile launchers were hit. Global benchmark Brent crude rose as much 2.5% to above $79 a barrel as investors attempted to gauge the likelihood of whether the strikes will spark a broader conflict in the Middle East. The Houthis had launched their largest assault to date on shipping in the Red Sea earlier this week, despite the presence of a US-led naval force. That prompted warnings of retaliation from Washington. Iran also seized a tanker off the coast of Oman on Thursday, further inflaming the situation. The US-led strikes mark an escalation of tensions in the Middle East that have been rising since the Hamas attack on Israel in early October. The Houthis have been firing missiles at ships on an almost-daily basis over the past two months, and have vowed not to let up until Israel ends its assault on Gaza. The major danger for prices is if Iran is drawn directly into the conflict, which could threaten output and flows in a region that produces a third of the world’s crude. That’s reintroducing a war-risk premium to the market, which had been weakening due to rising non OPEC+ supply and slowing demand growth. “A ratcheting up in the conflict suggests a greater potential for disruptions, and the need for vessels to divert,” aiding prices, said Warren Patterson, head of commodities strategy at ING Groep NV. “However, the bigger risk is if this spreads and we start to see threats to flows coming out of the Persian Gulf. While we believe the risk of this is low, the impact would be significant.”President Biden left open the possibility of additional moves against the Houthis. “I will not hesitate to direct further measures to protect our people and the free flow of international commerce as necessary,” he said. The airstrikes are a gamble for the US and the UK, which have repeatedly said a priority amid the Israel-Hamas fighting is to keep it from spreading. There are concerns from Saudi Arabia and nations that such action will inflame tensions, and after the US-led action, Riyadh issued a call for restraint. The Houthi assaults in the Red Sea have prompted many commercial shippers to direct vessels around the southern tip of Africa, rather than risk a passage through the waterway that links to the Suez Canal. That’s increased costs. Ahead of the strikes, Citigroup Inc. estimated that geopolitical risks in the Middle East had added $2 to $3 barrel to Brent, and said the premium may increase substantially if supply disruptions expanded. Standard Chartered Plc, meanwhile, has said oil was underpriced by at least $10.
Brent’s prompt spread — the difference between its two nearest contracts and a key metric — signaled tighter near-term conditions. The gap was 37 cents a barrel in backwardation, up from 3 cents on the first trading day of the year. “The fluctuations in prices will absolutely remain in place as the situation develops,” said Vandana Hari, founder of consultancy Vanda Insights. “It’s an uneven tug-of-war between a bearish outlook on fundamentals and a supportive Mideast risk premium. As of now, both can be expected to remain in play.”
Tensions in the Middle Eastern shipping lanes continued to run high on Thursday amid reports of a hijacked oil tanker in the Gulf of Oman, which was boarded by masked individuals and forced to alter course toward Iran. The UK Marine Trade Operations (UKMTO) said on Thursday that it had received a report of a vessel being boarded by 4-5 armed unauthorized persons in an area east of Sohar, Oman. “Unauthorised boarders are reported to be wearing military style black uniforms with black masks,” the UKMTO said. The ship “has altered course towards Iranian territorial waters and communications with the vessel have been lost,” the UK authority said. According to TankerTrackers.com, the oil tanker “which the Iranians have boarded today in the Gulf of Oman is the ST NIKOLAS”, which is carrying Iraqi oil. Formerly known as the SUEZ RAJAN, the tanker was previously seized by the U.S. government after being found to transport a million barrels of Iranian oil in connection to a U.S. company, TankerTrackers.com noted. At the time of the incident, the vessel was traveling to the Turkish port of Aliaga after loading crude from the Iraqi Basrah Oil Terminal. A spokesperson for Empire Navigation, the company managing the St. Nikolas, told CNBC that it lost contact with the vessel on Thursday, but could not confirm an unauthorized boarding. It was not immediately clear who boarded the oil tanker, but the latest incident shows that tensions in the waters in the Middle East are escalating. Early on Thursday, oil prices rose by nearly 2% amid intensified attacks on commercial shipping in the Red Sea this week. On Wednesday, Israel stepped up its attacks on Gaza and the Yemeni Houthis carried out what UK Defence Secretary Grant Shapps called the largest attack in the area yet. Per media reports citing U.S. Central Command, the U.S. and UK forces in the Red Sea shot down 21 drones and missiles on Tuesday alone. NN: the shit is hitting the fan!