The Israeli Defense Forces (IDF) on Sunday disclosed its unsuccessful attempt to intercept a drone launched from Lebanon towards Nahariya. The drone crashed in the city, sparking a fire that firefighters are said to be extinguishing. There have been no reported injuries resulting from the incident and authorities are assessing the situation and investigating the origins of the drone’s launch. NN: Back to the drawing board. Or in this case the Cadcam machine. These system were designed to intercept rockets that ark in the sky. Low-flying drones that fly on a horizontal axis are a hard target. Worse yet even harder to pickup on radar because they have little metal and hide in the ground clutter. It is a brand new world.
OPEC+ Extends Oil Cuts Into 2025
OPEC and its partners in OPEC+ this weekend decided to extend their production cuts, including both voluntary and group-wide cuts, until 2025.
Energy Intelligence’s Amena Bakr reported that the voluntary cuts specifically would be extended until the third quarter of 2024, after which the countries currently cutting would begin to bring back production if the market conditions are right. Goldman Sachs Group Inc. said the decision was bearish given a recent increase in inventories, but UBS Group AG and RBC Capital Markets LLC expressed confidence the alliance will continue to diligently manage the market. Most analysts had expected OPEC+ to extend the curbs through to the end of the year.
Oil prices slipped despite the news of the solid extension of the overall cuts, likely because most of the total cuts, which amount to some 3.66 million bpd, per Bakr, come from the voluntary scheme, totaling some 2.2 million bpd. Another reason for the reaction of oil traders was probably the upward adjustment of the UAE’s production quota. The OPEC member has been grumbling against the production cuts so the rest of the cartel raised its production baseline by 300,000 bpd at this weekend’s meeting. However, “The deal should allay market fears of OPEC+ adding back barrels at a time when demand concerns are still rife,” Energy Aspects’ Amrita Sen told Reuters. The agreement aims to keep supporting oil prices while easing the production restraints against which some members — such as the United Arab Emirates — have chafed as they sought to have their output levels upgraded.
“The market had not expected an unwinding of the cuts from October,” said Vandana Hari, founder of Vanda Insights in Singapore. “On the positive side for OPEC+, the agreement should help maintain cohesion. A long term continuation of lopsided cuts would have been a source of friction.” Trading volumes were higher than usual on Monday, but oil option skews are still signaling bearishness. So-called puts — which profit from lower prices — remain at a wide premium over the opposite calls.Oil capped a monthly loss on Friday in part due to persistent concerns around the demand outlook for China, the world’s biggest crude importer. The prompt spread for Brent briefly slipped into a bearish contango structure last week, and fuel markets have been flashing signs of weakness.Futures are still higher this year after geopolitical tensions from the Middle East to Ukraine raised concerns about supply. Israel has pushed back on a cease-fire plan laid out by US President Joe Biden, as the war in Gaza approaches its eighth month. “We are waiting for interest rates to come down and a better trajectory when it comes to economic growth … not pockets of growth here and there,” Saudi Arabia’s energy minister Abdulaziz bin Salman said, as quoted by Reuters, in comments on what market conditions OPEC would be looking for to start rolling back the cuts.
OPEC+ reportedly agrees to extend production cuts
Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing nations at a meeting on Sunday reached a tentative agreement to prolong production cuts until the year’s end, the Wall Street Journal reported, citing delegates. Delegates reportedly indicated that OPEC+ outlined a plan to extend significant oil supply reductions into the latter half of the year amid efforts to prevent a global surplus and stabilize prices. The decision coincides with Saudi Arabia’s initiation of a substantial share sale for its national oil giant, Aramco, generating substantial funds for the country’s economic overhaul.
OPEC+ Has Outline of Deal to Extend Cuts
- OPEC+ ministers are gathering to discuss oil production policy
- They already have the outline of a deal to extend “voluntary” supply cuts into the second half, delegates said
- Talks continue on extending separate, group-wide curbs into 2025
One factor that could provoke OPEC+ to unveil a surprise today is the recent buildup in short positions in crude futures markets. Earlier this month, speculative Brent shorts held by hedge funds and other managers reached the highest level since the depths of the pandemic in late 2020.
It’s the kind of level that’s triggered a reaction in the past from the Saudis: Energy Minister Prince Abdulaziz bin Salman once threatened to leave bearish traders “ouching like hell.”
Nigeria successfully negotiated an increase in its output target to 1.5 million barrels a day for this year. That’s up from the 1.38 million originally allocated to the country based on an initial assessment of its production capacity. It looks like those third-party assessments might have been right after all, with the nation falling further behind its new target each month.
There’ll be a lot of attention on overseas participation after global funds largely balked at the valuation expectation during the company’s mega IPO in 2019. That left the Saudi government mostly reliant on local money.
Here’s a look at how the output cuts have been shared among OPEC+ members:
Kremlin official threatens war against NATO if Ukraine uses US weapons against Russia
The dramatic policy shift follows the Kremlin’s assault on the city of Kharkiv and a chorus of pressure from European allies.
The decision draws Biden even deeper into a war where Russian President Vladimir Putin has repeatedly raised the prospect of a nuclear strike, a concern for a U.S. leader who matured amid the U.S.-Soviet nuclear confrontations of the 1960s.
Biden has been cautious about escalation — but also mindful that the Ukrainians have repeatedly been granted greater capabilities and faced down a Kremlin that did little in response. A growing number of the United States’ European allies in recent days also had urged the administration to lift its opposition, signaling an intent to allow their own weapons to be used against military targets on Russian soil. Although Ukraine has used some European arms as well as their own to fight back, Washington’s say-so has been the most important because of the quantity and the quality of its equipment. NN: This bears watching. It a major esculation that i do not believe the Biden administration has though through
Key Oil Ministers Head to Riyadh as OPEC+ Plans Change Again
Major OPEC+ producers will gather in Riyadh this weekend to debate oil output cuts after the Saudi-led group revised its meeting plans for a second time. Top officials from Kazakhstan, Russia, the United Arab Emirates and Kuwait are among those due to convene in the Saudi capital on Sunday, according to officials. They’ll discuss prolonging supply curbs to the end of this year — and potentially into 2025, said delegates, asking not to be named because the information was private. The Organization of Petroleum Exporting Countries and its partners had originally scheduled the June 2 meeting at its headquarters in Vienna, but a week ago shifted the conference online. The sessions held by the 22-nation group will still be held virtually, OPEC’s secretariat said on Friday. The fluctuating plans add intrigue to a meeting that had been widely expected to ratify existing production policy, extending output cuts at their current levels. All of the countries so far confirmed to be going to Riyadh are making roughly 2 million barrels-a-day of extra production cuts — in addition to group-wide supply curbs — that currently expire at the end of this quarter. Saudi Arabia, Algeria, Iraq and Oman are also participating in these so-called “voluntary” supply reductions. Kazakhstan confirmed earlier on Friday that its Energy Minister, Almasadam Satkaliyev, will join the meeting in the Saudi capital. On the same day as the OPEC+ meeting, Riyadh plans to sell more shares in state oil company Saudi Aramco, a move that could raise as much as 44.8 billion Saudi riyals ($12 billion). The deal will test global investors’ appetite for the world’s biggest oil exporter, and could add further incentive for supporting oil markets.
Houthis say they targeted US vessels
The Yemeni militant group Houthis said they launched a second attack on USS Dwight D. Eisenhower, a United States aircraft carrier, north of the Red Sea. They also claimed they targeted a US destroyer and three other vessels. A Houthi spokesperson said the Eisenhower was attacked with “a number of missiles and drones.” There are no reports of casualties or damage.
US upset by Israel’s response to Biden’s publicity stunt
The White House expressed disappointment with the initial response of Israeli Minister without Portfolio Benny Gantz to United States President Joe Biden’s proposed hostage deal, Walla News reported, citing a US official. Gantz and Defense Minister Yoav Gallant were briefed before the speech, though details of Gantz’s reaction remained undisclosed. Washington is also said to be disappointed by Gantz’s lack of a public statement regarding Biden’s remarks.
Trump: I am political prisoner of falling nation
Former United States President Donald Trump took to Truth Social again to comment on him being found guilty on 34 counts of first-degree falsifying business records by claiming he is “a political prisoner of a falling nation.” “But I will soon be free, November 5th, and Make America Great Again!” he added in capital letters. Trump previously said he will appeal the verdict.
Trump’s team says he raised $52.8M since verdict
The team leading former United States President Donald Trump’s 2024 campaign claimed he raised $52.8 million since the former head of state was found guilty on 34 counts of first-degree falsifying business records. In the posts on social media, the campaign dismissed the trial as President Joe “Biden’s sham trial.” Meanwhile, Trump insisted he will appeal the verdict.
Biden urges Hamas to accept Israel’s ceasefire deal……….Netanyahu: Ceasefire tied to Hamas dismantling
United States President Joe Biden urged Hamas to accept Israel’s proposal for a new ceasefire deal. “Now is the time to raise your voices and demand that Hamas comes to the table, agrees to this deal, and ends this war that they began,” Biden wrote on X, formerly known as Twitter. Previously, Biden confirmed that Israel proposed a ceasefire deal that would last six weeks. United States Secretary of State Antony Blinken and Turkish Foreign Minister Hakan Fidan had a telephone call during which they discussed Israel’s proposal for a new ceasefire agreement with Hamas. “They discussed the deal’s extensive benefits for the people of Gaza, including a massive influx of humanitarian assistance, the return of Palestinians to North Gaza, and the beginning of the reconstruction of Gaza. The Secretary underscored that the proposal is in the interests of both Israelis and Palestinians,” the State Department’s statement read.
The document noted that Blinken underscored that Hamas “should accept the deal and that every country with a relationship with Hamas should press it to do so without delay.”
Netanyahu: Ceasefire tied to Hamas dismantling
Israeli Prime Minister Benjamin Netanyahu emphasized that a permanent ceasefire in Gaza hinges on the dismantling of Hamas’s military and governance structures. This statement followed US President Joe Biden’s acknowledgment of Israel’s proposed three-phase ceasefire deal, contingent on Hamas releasing hostages. “Israel’s conditions for ending the war have not changed,” Netanyahu said. NN: Their is no peace deal. See BlackMask Market News and Commentary:
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