BlackMask Breaking News

Crude oil prices started the week with a gain following a drone attack in Jordan that killed three U.S. military servicemen. The news added to the bullish momentum of continuing Houthi strikes on ships in the Red Sea to push Brent crude well over $80 per barrel, with the benchmark close to touching $84 in midmorning trade in Asia. West Texas Intermediate moved closer to $80 per barrel following the news of the deadly attack that led many to brace up for further escalation in the latest Middle Eastern conflict. “We believe the death of three U.S. service members today in Jordan marks a critical inflection point in the ongoing conflict in the Middle East and raises a specter of a more substantial U.S. involvement in the war,” RBC Capital Markets’ Helima Croft wrote in a note, as quoted by Reuters. “It does appear that even with any softening we’re seeing to demand, geopolitics is shaping up so that oil prices could have more upside risk in them,” Mizuho Bank Asia chief economist Vishnu Varathan told Bloomberg. Vandana Hari of Vanda Insights, on the other hand, noted that the price rise could have been more substantial: “The question is, why have we not seen Brent shoot up toward $90 or higher?” she told Bloomberg. “There would need to be a direct hit on a Middle Eastern oil cargo or oil production infrastructure for prices to skyrocket.” Indeed, there was a Houthi strike on a fuel tanker passing through the Gulf of Aden last week but while it helped prices go higher, it was not much higher. But this could yet change. “With oil tankers linked to the U.S. and UK now under threat of attack, the market is likely to reprice the risk of disruptions,” analysts from ANZ said in a note quoted by Reuters.NN:  To date their has been no real affect on oil. Which means that things could get real ugly real fast

United States President Joe Biden confirmed three US service members lost their lives and numerous others were wounded in an unmanned aerial drone attack near the Jordan-Syria border on Saturday night. Biden attributed the attack to radical Iran-backed militant groups operating in Syria and Iraq and noted that the details are still being gathered. The president affirmed his commitment to combat terrorism and vowed to hold those responsible accountable. His statement did not specify the exact number of injuries, though CNN earlier reported at least two dozen service members were wounded in the assault.

Solid economic growth figures from the U.S. and news about China’s economic stimulus combined this week to push oil prices higher. Benchmarks could post their biggest weekly rise since October this week, Reuters said, with supply uncertainty in the Middle East contributing to the bullish sentiment. U.S. GDP in the fourth quarter of last year expanded by 3.3%, which was substantially higher than what analysts had expected, which was 2% growth. Meanwhile, in China, the central bank said it would inject the equivalent of $140 billion into the economy to stimulate faster growth by cutting the amount of reserves local banks need to hold. In the Middle East tensions continue running high, with the Yemeni Houthis striking a U.S.-owned cargo vessel this week following the second round of attacks on targets in Yemen by U.S. and UK forces. Earlier this week reports emerged that Washington had asked Beijing to talk to Tehran and get the Iranians to convince the Houthis to stop attacking ships in the Red Sea. These reports were followed by news, based on unnamed sources, that Chinese officials had approached Iran’s leadership with a request to tell the Houthis to dial down the anti-ship violence. “Basically, China says: ‘If our interests are harmed in any way, it will impact our business with Tehran. So tell the Houthis to show restraint'” one source from the Iranian government told Reuters. Chinese vessels are not targets for the Houthis but the disruption of traffic in the Red Sea has hurt Chinese exporters by significantly lengthening the time needed for their goods to reach their end destination in Europe, adding to costs. Oil traders appear to have finally started noticing these developments and have factored the disruption into their trading decisions. On Thursday, Brent crude topped $80, jumping above $82 before retreating somewhat, and West Texas Intermediate reached a two-month high of some $77 per barrel on Thursday. Prices fell back slightly on Friday morning but remained elevated for the week.

Negotiators reportedly closer to reaching Gaza hostage deal

An uncertain supply picture has oil markets on edge, with disruptions and geopolitical risks being counterbalanced by rising production in Norway and Libya. Economic uncertainty is adding downward pressure to oil prices. The continued rerouting of ships from Asia to Europe has been greatly reducing the availability of spot tankers that could be chartered, lifting the price of shipping, especially when it comes to clean products. As Bloomberg reports, the day rate for shipping a cargo of gasoline from northwest Europe to the US East Coast has tripled since the start of the year, nearing $38,000 per day this week. US and UK forces conducted strikes on eight Houthi targets late Monday, making it even more likely that Red Sea disruptions will be longer than expected as the previous attack on January 11 had triggered a round of retaliatory strikes. Routing tankers carrying refined products through the Cape adds $1 million to freight costs, equivalent to a $1.5/bbl premium, despite the fact there is no canal passing along the way (the Suez Canal has just hiked its 2024 prices to roughly $500-600,000 per passage). Fitch Ratings estimated on Wednesday that the ongoing shipping disruptions in the Red Sea will maintain the oil price premium, as well as premiums in the wider commodity markets, including gas, chemicals, and fertilizers. Many companies are choosing to reroute vessels via the Cape of Good Hope in the very south of Africa to avoid possible attacks by Houthis in the Red Sea.However, Fitch is currently keeping its 2024 Brent oil price projection of $80 per barrel barring any “material disruptions to actual oil production, or a wider escalation of attacks to more vital oil transport routes in the region.” The ratings agency said it expects the global oil market to remain well-supplied in 2024, which should “cushion any impact from potentially protracted or escalated disruptions.” Its TTF gas price assumption for 2024 is also unchanged at $12/mcf.

Saudi Arabia’s crude oil exports inched up in November from October to reach a five-month high, data from the Joint Organizations Data Initiative (JODI) showed on Monday. Crude oil exports from the world’s top crude exporter rose by 39,000 barrels per day (bpd) to around 6.34 million in November, up from October’s 6.3 million bpd level, according to the latest available data in JODI, which compiles self-reported data from many countries. Yet, Saudi crude oil production fell in November by 122,000 bpd to 8.82 million bpd—the lowest level so far for 2023, per the data in JODI, as the Kingdom continues to cut production as part of the OPEC+ agreement and reduces voluntarily output by an extra 1 million bpd. Saudi Arabia’s crude oil production in November was below the five-year average range for the period 2018 through 2022, the data showed. The volume of direct burn of crude fell slightly in November, and so did refinery runs, according to JODI. Saudi crude oil and oil products closing stocks fell by 4.05 million barrels to 230.4 million barrels in November. Of these, product inventories dropped by 4.19 million barrels, while crude inventories increased by 140,000 barrels. Saudi Arabia’s crude oil production and exports in early 2024 are expected to be around the levels reported in the most recent JODI datasets as the Kingdom has pledged to continue its voluntary production cut of 1 million bpd by the end of the first quarter of the year.   Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said at the end of 2023 that the OPEC+ production cuts could extend beyond March 2024 if the market requires it. The Saudi energy minister also criticized in early December commentators for failing to understand the group’s output agreement and suggested that this would change once “people see the reality of the deal.”

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

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.