BlackMask Breaking News

Aug 6 (Reuters) – Russia launched a multi-wave overnight attack on Ukraine with 70 air-assault weapons including cruise and hypersonic missiles as well as Iranian-made drones, Kyiv’s Air Force said on Sunday, and at least 10 missiles appear to got through air defences. Local media said a worker at a grain silo had been wounded in the overnight attack, which appeared to be focused on an area of western Ukraine, far from the front line. President Volodymyr Zelenskiy said people had been killed and wounded in an earlier hit to a blood transfusion centre in the town of Kupiansk, a railway hub fewer than 10 miles from the front in the eastern Kharkiv region. Rescue workers were extinguishing a fire at the scene, he said on Saturday evening, describing the strike as a “war crime.” He did not say how many casualties there were. Russia denies deliberately targeting civilians in a full-scale invasion that has killed thousands of people, uprooted millions and destroyed cities. NN: As you can see these attacks represent a serious escalation in Putin’s war. The world is in denial. Soon this war will spread to NATO countries and then its Rock and Roll time.

One of Russia’s biggest oil tankers was struck by a maritime drone, the latest salvo in a Ukrainian military campaign employing unmanned vehicles to attack far-away Russian targets by air and by sea. The Russian-flagged ship, the Sig, was hit by a drone carrying 450 kilograms (992 pounds) of TNT shortly before midnight, according to a Ukraine Security Service source. The strike created a hole in the vessel’s engine room at the waterline on the starboard side, forcing the 11-strong crew to fight the water intake, Russian authorities said. The flooding eventually stopped. Russia’s Federal Agency for Marine and River Transport said no casualties were reported and that the Sig was not carrying oil when the drone crashed into ship. Ukrainian officials, however, said some crew were injured and that the tanker was carrying fuel for the Russian military. The strike on the Sig came just hours after Ukrainian sea drones targeted a major naval base in Novorossiysk, a coastal city on the Black Sea that is home to Russia’s largest port by volume of cargo handled. An amphibious Russian landing ship was hit, leaving it tilting badly and sitting very low in the water. Ukraine has stepped up its attacks using unmanned aerial vehicles in recent weeks, hitting targets well within Russian territory, including in Moscow. The new generation of powerful sea drones, however, could open up a new front for Kyiv in the 18-month conflict. The weapons are fast, semi-submersible drones, and are proving very difficult to defend against. They can be easily launched at sea and at least some variants are capable of traveling several hundred miles to their targets. Their payloads so far have proven capable of crippling large vessels.The two sea-based attacks Friday took place near the Kerch Strait, which connects the Crimean Peninsula to mainland Russia.

Friday’s assault is one of the biggest to date. In addition to the attacks on the Sig and the naval base, Friday morning saw Ukrainian aerial drones target an oil storage facility in Feodosia, a town on the Crimean Peninsula’s south coast. Ten unmanned aerial vehicles in total were downed over Crimea, according to Russia’s Defense Ministry

Ukrainian authorities have vowed to continue targeting the bridge and ships navigating Ukrainian territorial waters, even if they are controlled by Russia. The head of the Ukrainian Security Service, Vasyl Maliuk, called such attacks “absolutely logical and effective.” Maliuk said that if the Russians wanted such incidents to stop, “they have the only option to do so – to leave the territorial waters of Ukraine and our land.” Ukraine’s State Hydrological Service also warned ships against using several Russian ports due to the war.

Ukrainian agencies, especially the Security Service, have been notably vocal about the use of these drones in the Black Sea after months of reticence.

Their use is both a moral boost and battlefield advantage, allowing Kyiv to exploit a new, domestically engineered technology at sea while its forces are are struggling to take ground in the counteroffensive on land. BlackMask Pod Cast:

Major Escalation Russian Oil Tankers Attacked

Saudi Arabia extends cut of 1 million barrels of oil a day through September

DUBAI, United Arab Emirates (AP) — Saudi Arabia said Thursday it will extend its unilateral production cut of 1 million barrels of oil a day through the end of September in its effort to boost flagging energy prices. The Saudi reduction, which began in July, comes as the other OPEC+ producers have agreed to extend earlier production cuts through next year. The kingdom announced the extension in a statement on the state-run Saudi Press Agency, quoting an anonymous official in the kingdom’s Energy Ministry. The official added that the cut “can be extended or deepened” if the need arises.

“In Fitch’s view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025,” the ratings agency said.

Fitch also highlighted the rising general government deficit, which it anticipates will rise to 6.3% of gross domestic product in 2023, from 3.7% in 2022. “Cuts to non-defense discretionary spending (15% of total federal spending) as agreed in the Fiscal Responsibility Act offer only a modest improvement to the medium-term fiscal outlook,” Fitch said.

The agency also noted that a combination of tightening credit conditions, weakening business investment and a slowdown in consumption could lead the economy into a “mild” recession in the fourth quarter of 2023 and first quarter of next year. The White House disagreed with Fitch’s downgrade. “It defies reality to downgrade the United States at a moment when President Biden has delivered the strongest recovery of any major economy in the world,” press secretary Karine Jean-Pierre said.This isn’t the first time a rating agency has downgraded the U.S. Standard & Poor’s cut the nation’s credit rating to AA+ from AAA in 2011 after Washington managed to avoid a default. At the time, the agency highlighted political risk as part of its reasoning. NN: this great for us because it it eliminates some buyers for US debt and get us a higher yield. This is political statement not a decision based on credit worthiness. Their is no change in the debt profile of US treasuries.

West Texas Intermediate topped $82 per barrel earlier this week and Brent crude jumped above $85 per barrel as demand forecasts suggested a sizeable supply deficit for the second half of the year. Production remains constrained by OPEC+ cuts and outages As a result, the U.S. Department of Energy just pulled back an offer to buy 6 million barrels of crude for the strategic petroleum reserve. The offer was made in early July, when WTI was trading below $72. At the time of writing, Brent crude was trading at $83.11 per barrel.

EIA: US crude inventories down by 17 million barrels

After the startling revision in U.S. oil demand in May, the EIA estimated an inventory draw of 17 million barrels for the final week of July, which compared with a modest decline of 700,000 barrels for the previous week. Commercial crude oil inventories in the United States, which are not taking into account those in the Strategic Petroleum Reserve, slumped by 17 million barrels to 439.8 million barrels in the week ending July 28, falling to its lowest level since January this year, the Energy Information Administration (EIA) revealed in its report on Wednesday. The figure marked a larger-than-expected draw. The country’s inventories now stand 1% below the five-year average for this time of year. US crude oil refinery inputs averaged 16.5 million barrels per day for the corresponding timeframe, which is 40,000 barrels per day more than the previous week’s average. Refineries operated at 92.7% of their operable capacity last week, while gasoline production rose, averaging 9.8 million barrels per day. Imports of crude oil in the country averaged 6.7 million barrels per day last week, rising by 301,000 barrels per day. Total commercial petroleum inventories declined by 10.4 million barrels. NN: I bet your glad we took the freeging money and ran yesterday at the highs..

After climbing by 13% in July, oil prices were dragged lower on the first day of August by further disappointing economic data out of China. Oil bulls thoroughly enjoyed the 13% month-on-month increase in oil prices in July, but the first day of August provided another head-scratcher as Chinese manufacturing contracted in July with the PMI index dropping to 49.2. Perceived as a positive sign for metals markets that expect Beijing to splash the cash on stimulus, Chinese woes have nevertheless halted the rise in oil prices, sending ICE Brent below $85 per barrel. However, should Saudi Arabia extend its 1 million b/d production cut, there might be a new bullish narrative to counter the year-long Chinese blues. US national gasoline prices gained 16 cents per US gallon last week, hitting $3.75/USG on Monday, as heat-related refinery outages curbed product supply and robust countrywide demand lowered gasoline stocks to their lowest July level since 2015. NN: Gasoline inventories are suppose to drop this time of year. From a refinery stand point summer gasoline build is over. They switch to heating oil and a different formula winter gasoline. China demand is leveling off still at record imports. One   interesting event i am monitoring is the big drop in import into India. they went ballistic on the Russia Urals oil price increase.

(Reuters) – Goldman Sachs on Sunday revised up its global oil demand forecast for the year while sticking to its 12-month Brent price projection of $93 per barrel as higher realized inventories offset the demand boost from a less pessimistic growth outlook. Goldman analysts estimate global oil demand climbed to an all-time high of 102.8 million barrels per day (bpd) in July and see solid demand driving a larger-than-expected 1.8 million bpd deficit in the second half this year and a 0.6 million bpd deficit in 2024. A reduced recession risk and a strong effort by the Organization of the Petroleum Exporting Countries (OPEC) to push up prices support Goldman’s view on higher oil prices and an outlook for less volatility, the analysts wrote in a note. Oil prices hovered near three-month highs on Monday, set to post their biggest monthly gains in over a year on expectations that Saudi Arabia would extend voluntary output cuts into September and tighten global supply.  Saudi supply cuts have brought back deficits, the Goldman analysts said, adding that they see the extra 1 million bpd Saudi cut to last through September and be halved from October. The Wall-Street bank upgraded its oil demand estimate by around 550,000 bpd and sees 2023 supply higher by around 175,000 bpd.

The bank maintained its $86 a barrel Brent forecast for December 2023, and it expects prices to rise to $93 per barrel in the second quarter next year as supply deficits continue.

“However, the significant rise in OPEC spare capacity over the past year, the return to growth in international offshore projects, and declining U.S. oil production costs limit the upside to prices,” it said. Brent futures were trading around $84 a barrel by 0353 GMT, while West Texas Intermediate (WTI) U.S. crude was around $80. NN: Oil is in the danger zone. When they all see what we see and oil has had its biggest run since the Russian Invasion i get nervous. I cover this in today’s BlackMask Market Update: Play It Again Same.

The Federal Reserve’s preferred inflation measure edged higher in July, reversing some of the prior month’s sharp drop as the central bank works to bring inflation back to its 2% target. The Personal Consumption Expenditures (PCE) Index excluding the cost of food and energy, or so-called “core” PCE, rose 4.2% over the prior year in July, in-line with economist expectations and up from 4.1% in June, data released by the Commerce Department on Thursday showed. On a headline basis, which includes all categories, PCE inflation rose 3.3% year-over-year in July, up from 3% the month prior and in line with expectations. NN: Inflation is not dead. And what is more important the FED ( 2 ton gorilla) agrees. Now you wanna here the story assholes in the fake news media don’t tell you. The inflation numbers get worse from here on out. Food and energy inflation is back. And wage push inflation will bring a tear to your eye. Unions workers are getting humongous bonuses and pay increases.  Double digit Fed Funds Rates here we come.