Oil supply increases from the Americas will be more than enough to meet demand growth this year, putting downward pressure on oil prices this year in the absence of a major geopolitical escalation in the Middle East, the International Energy Agency’s (IEA) Executive Director Fatih Birol told Bloomberg on Tuesday. The IEA sees global oil demand growth significantly weakening in 2024 from 2023, Birol said, adding that the agency sees consumption growing by 1.2 million barrels per day (bpd) to 1.3 million bpd this year. The weaker demand growth will be the result of slowing economic growth, including in China, and a rise in electrification of transport, the IEA’s head said. On the supply front, growth from the Americas – driven mostly by the U.S., but also Canada, Brazil, and Guyana – will be “more than enough to meet global oil demand growth and put downward pressure on prices,” Birol told Bloomberg. In the absence of major geopolitical turmoil, or major extreme weather events, the IEA expects a “comfortable oil market and comfortable moderate price evolution,” the agency’s executive director added. In case geopolitical conflicts do not escalate further to threaten oil supply from the Middle East, oil prices would remain at around current levels and not stoke inflation further – which would be good news for the global economy, especially for emerging markets, Birol noted. In its latest available monthly report for January, the IEA raised its 2024 demand growth outlook for a third consecutive month, expecting global oil demand to rise by 1.2 million bpd this year compared to 2023, easing from the 2.3 million bpd annual growth last year. The IEA may have revised up – again – its oil demand growth forecast, but its projections are well below those of OPEC, which expects robust demand growth both this year and next. OPEC’s outlook for this year is demand to grow by 2.2 million bpd—around 1 million bpd more than the IEA expects. NN: China’s real estate wipe-out is killing oil demand. Which means after the war premium is out of the market oil will be under $70 Brent until oil demand picks up in the third quarter.
Oil Prices Start the Week Lower on Hopes of a Diplomatic Solution in Gaza
Crude oil began trade this week with a loss after Israel said it was done with bombing southern Gaza for the time being, suggesting a decline in supply disruption risk. Both Brent crude and West Texas Intermediate were modestly down after trade opened in Asia, with the decline possibly moderated by news of another Houthi attack on a vessel in the Red Sea
However, a recent statement from the Iranian foreign minister added to the downside potential in oil, after the official said “Developments in Gaza are moving toward a diplomatic solution.”
The statement was made after Hossein Amirabdollahian visited Lebanon for talks with senior Hamas officials. In further bearish news, Plains All American Pipeline said in its 2023 financial report presentation it expected oil production from the Permian to break another record this year, reaching 6.4 million bpd, Bloomberg reported earlier today. The report also noted a new oil demand forecast by Goldman Sachs, which pointed out expectations of further EV expansion in China, undermining oil demand. Also on the bearish side, the Fed signaled once again it had no immediate plans for rate cuts, which is bound to keep oil price range-bound for the time being. On the bullish side, the Houthis have attacked yet another ship in the Red Sea, according to a statement from the United Kingdom Maritime Trade Operations authority. The UKTMO reported earlier today that a ship’s captain had signaled the vessel had been hit by two missiles in the Bab el-Mandeb strait off the coast of Yemen. The Yemeni Houthis have kept attacking ships moving through the Red Sea despite retaliatory attacks by the U.S. and the UK against targets on land. Most traffic has been rerouted from the Middle East to Africa, with positive implications for oil demand as the rerouting adds more than a week to the average journey from Asia to Europe. NN: By Ramadan this will be over for now.
US envoy: Houthis have until Feb. 16 to stop Red Sea attacks
United States Ambassador to Yemen Steven Fagin said in a post on social media on Friday that the time for Yemen’s Houthi rebels is ticking before Washington’s “terrorist group” classification comes into force. “The designation of the Houthis as a terrorist group will take effect on February 16, but it can be reviewed if the Houthi militia ceases their activities in the Red Sea and the Gulf of Aden,” Fagin stated. So far, the militant group has shown no willingness to desist in its attacks on ships passing through the Red Sea.
US allies to prove adherence to int’l law
United States President Joe Biden issued a memorandum on Friday requiring US allies who receive military aid from the country to provide assurances of their adherence to international law amid criticism regarding the US’s support for Israel. The memorandum established that the Secretary of State and Secretary of Defense are required to obtain “credible and reliable written assurances,” from foreign governments receiving US “defense articles and defense services” of their adherence to international human rights and international humanitarian law. The secretaries of Defense and State will also be required to provide periodic congressional reports to enable “meaningful oversight.” As stated in the memorandum, it will not apply to air defense systems and non-lethal defense articles and services.
US tells Israel it will not support Rafah offensive
The US national security spokesperson has warned Israel against conducting an offensive against Rafah, the last refuge of Palestinians fleeing the Israeli army’s assault on Gaza. John Kirby said the US would not support an attack on the southern town. He added that the secretary of state, Antony Blinken, had expressed his concern to Israeli officials during his recent visit.
Rafah is a ‘pressure cooker of despair’ as Palestinians flee south, says UN agency
The UN humanitarian office on Friday voiced concern about the hostilities in Khan Younis that have forced more people to flee to Rafah in the south of Gaza, describing the border town as a “pressure cooker of despair”, reports Reuters.
“I want to emphasise our deep concern about the escalation of hostilities in Khan Younis, which has resulted in an increase in the number of internally displaced people seeking refuge in Rafah in recent days,” said Jens Laerke, a spokesperson for the UN office for the coordination of humanitarian affairs.
“Thousands of Palestinians have continued to flee to the south, which is already hosting over half the population of about 2.3 million people … Rafah is a pressure cooker of despair, and we fear for what comes next.” Israeli forces will continue their Gaza military campaign to Rafah, the Israeli defence minister, Yoav Gallant has said, despite the huge numbers of Palestinian civilians there. NN: Its over…. Israel’s free ride is over. Defeated by the worlds biggest underground city. Devoted to terrorism.
Biden: Israel’s response in Gaza ‘over the top’
United States President Joe Biden expressed his view that Israel’s actions in Gaza in response to Hamas’ October 7 attacks have been “over the top.” “The conduct of the response in the Gaza Strip has been over the top…I’m pushing very hard now to deal with this hostage ceasefire because, as you know, I’ve been working tirelessly on this deal to lead to a sustained pause,” Biden pointed out during a press briefing at the White House. In response to inquiries about his age and cognitive capabilities in light of Counsel Robert Hur’s findings that he displayed a weak memory during an interview on the retention of classified information, Biden reassured the press that his memory is “fine.” NN: Its over.. Israel will be forced into a shaky truce. In essence Israel has been forced to surrender. A undefeated Hamas will be back bigger and badder then before Oct 7th.
EU reportedly agrees on military action in Red Sea…….. Oil extends gains, rises 2.5%
The European Union member states are said to have agreed on the details of the Aspides operation aimed at ensuring the security of commercial shipping in the Red Sea, German news agency DPA reported on Thursday. The launch of the military operation is expected to be officially confirmed during the bloc’s foreign minister’s meeting in Brussels on February 19. Namely, the mission’s headquarters is expected to be set up in the Greek city of Larissa, the outlet said. Previously, European Union’s High Representative for Foreign Affairs and Security Policy Josep Borrell noted that the bloc’s planned maritime mission will be “purely defensive” and protect commercial vessels from the Houthi group’s attacks.
Oil extends gains, rises 2.5%
The prices of oil futures continued to grow on Thursday following reports that the European Union agreed to conduct a military operation in the Red Sea in order to ensure the security of commercial shipping. The news seemingly created worries that the conflict in the Middle East could become even greater, potentially affecting the supply of crude. West Texas Intermediate (WTI) for March contracts surged 2.56% to $75.78 per barrel at 11:47 am ET. Brent for April deliveries jumped 2.51% to $81.20 per barrel.
US confirms killing of senior Kataib Hezbollah leader
The United States Central Command confirmed on Wednesday that its forces carried out a “unilateral strike” in Iraq which killed a Kataib Hezbollah commander as a response to the attack that took the lives of three American service members in Jordan last month. The commander is said to be “responsible for directly planning” and “participating” in attacks on American forces in the region. “The United States will continue to take necessary action to protect our people. We will not hesitate to hold responsible all those who threaten our forces’ safety,” the Central Command said in a statement. The Pentagon previously noted that indications were showing the involvement of the Kataib Hezbollah group in the attack on the US base in Jordan. The militant group later announced an end to all military operations against the US forces to prevent “embarrassment” to the Iraqi government. NN: I guess he is sorry now.
Blinken pushes for Palestinian state in meeting with Netanyahu
United States Secretary of State Antony Blinken met on Wednesday with Israeli Prime Minister Benjamin Netanyahu and again voiced Washington’s support for the establishment of a Palestinian state, according to a statement by State Department spokesperson Matthew Miller. During his visit to Israel, Blinken remarked that the two-state solution to the Israeli-Palestinian conflict is “the best way to ensure lasting peace and security for Israelis and Palestinians alike and greater integration for the region.” Additionally, Blinken reiterated that Israel has the right to self-defense, but stated that it is urgent to “de-escalate tensions” in the West Bank and to avoid the conflict spreading to other parts of the region. NN: Their will be peace when Hamas is neutralized.
Uncertainty in Oil Markets as Speculation Overshadows Fundamentals
Rumors and speculation appear to be driving oil markets this week, adding to volatility as the world awaits a potential ceasefire agreement between Israel and Hamas. Speculation has overshadowed market fundamentals this week, with unsubstantiated reports of an impending ceasefire between Israel and Palestine dragging Brent futures below $80 per barrel again. On the fundamental side, with OPEC+ rolling over its policy and refusing to change its pre-set course, unforeseen refinery outages in the United States might have an even more lasting impact on prices by weakening US demand even further. NN: SEE BlackMask Marker New and Commentary Titled: