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Oil rises 1% on settlement amid fears of supply shortages


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3 minutes ago, Theseus said:

Remember a bunch of Colonialists that didn't have very many weapons stood up against the world's most powerful superpower at the time and defeated them. This was done not meeting them on the battlefield but through guerilla warfare. They declared independence and formed the US of A. With might and strength comes major issues to support system" rel="">support troops. Never underestimate a weaker opponent.

Not disagreeing with your point...and agree we should never underestimate them. However my experience, multiple deployments, (it is my opinion) they don’t have the heart, will, or intestinal fortitude to go toe to toe with us!

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5 minutes ago, CSM (R) Thackrey said:

Not disagreeing with your point...and agree we should never underestimate them. However my experience, multiple deployments, (it is my opinion) they don’t have the heart, will, or intestinal fortitude to go toe to toe with us!

Not to mention. That is a lazy bunch over there.

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  • yota691 changed the title to Oil markets tumble after three-day gains
 
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Oil
  


 Arab and international


Economy News Baghdad

Oil prices fell on Friday in quiet trading after a three-day gain, but received support from Saudi Arabia's suspension of crude through an important shipping corridor, a drop in US inventories and a decline in trade tensions between Washington and Europe.

London Brent crude <LCOc1> fell 5 cents to $ 74.49 a barrel by 0319 GMT, after rising 0.8 percent on Thursday. The contracts are heading for a 2 percent gain this week, the first increase in four weeks.

US West Texas Intermediate crude futures fell 5 cents to $ 69.56 a barrel after rising 0.5 percent in the previous session. The contract is set to record a weekly loss of 1.3 percent in a fourth straight decline.

Saudi Arabia said on Thursday it would temporarily suspend shipments of oil transported through the Bab al-Mandab Strait in the Red Sea after an attack by the Houthi movement allied with Iran in Yemen.

Any closure of the Bab al-Mandab strait between the coasts of Yemen and Africa on the southern tip of the Red Sea would stop shipments passing through the Suez Canal and the Sumid pipeline linking the Red Sea to the Mediterranean.

US President Donald Trump and European Commission President Jean-Claude Juncker struck a surprise deal on Wednesday, ending the risk of an immediate trade war between the two sides.


Views 5   Date Added 27/07/2018

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Editorial Date: 2018/7/27 10:50  136 times read
Low oil prices
The price of oil fell on Friday in quiet trading after three days of gains, but it received support from Saudi Arabia's suspension of crude transit through an important shipping corridor, a decline in US stocks and a decline in trade tensions between Washington and Europe.
 
London Brent crude <LCOc1> fell 5 cents to $ 74.49 a barrel by 0319 GMT, after rising 0.8 percent on Thursday. 
The contracts are heading for a 2 percent gain this week, the first increase in four weeks. 
US West Texas Intermediate crude futures fell 5 cents to $ 69.56 a barrel after rising 0.5 percent in the previous session. The contract is set to record a weekly loss of 1.3 percent in a fourth straight decline. 
Saudi Arabia said on Thursday it would temporarily suspend shipments of oil transported through the Bab al-Mandab Strait in the Red Sea after an attack by the Yemeni Houthi movement.
Any closure of the Bab al-Mandab strait between the coasts of Yemen and Africa on the southern tip of the Red Sea would stop shipments passing through the Suez Canal and the Sumid pipeline linking the Red Sea to the Mediterranean. 
US President Donald Trump and European Commission President Jean-Claude Juncker struck a surprise deal on Wednesday, ending the risk of an immediate trade war between the two sides.
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8 minutes ago, SocalDinar said:

Liberal pukes saving the planet

 

Liberal pukes slaving the planet...

 

In The Mean Time......................................

 

Go Moola Nova (YEAH AND YEE HAW, BABY, READY WHEN YOU ARE BROTHER (OR SISTER) - LET 'ER BUCK!!!)!!!

:rodeo:   :pirateship:

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Suspension of Bab al-Mandeb Oil Shipments May Be a Good Thing

The development that no one wanted has finally transpired with Saudi Arabia suspending its oil shipments in the Bab al-Mandeb Strait in wake of two of its giant tankers, which were carrying 4 million barrels of oil, coming under attack by the Houthi militia on Wednesday night. Reuters meanwhile, reported a Kuwaiti official as saying that his country may follow in Riyadh’s footsteps and also stop shipments in the 18-mile wide strait, one of the world’s busiest.

The Houthis’ ongoing terrorist attacks against ships in the area may lead to the strait’s complete closure, meaning petroleum tankers from Saudi Arabia, Kuwait, the United Arab Emirates and Iraq may be forced to change their routes and sail from the southern-most tip of Africa. This will consequently lead to longer transportation times and greater costs. More serious though, is that the world will then be unable to confront the repercussions of this closure.

According to the US Energy Information Administration, some 4.8 million barrels of crude oil and oil derivatives pass through Bab al-Mandeb every day. Experts predict that oil prices will be affected by the increase in marine transportation costs and the use of strategic reserves, which will cost between 1 and 3 dollars per barrel.

Most importantly, the suspension of global oil supplies is very dangerous for the world economy. Saudi Arabia had previously warned of this and said that successive attacks on tankers pose a dangerous threat on the freedom of navigation and global trade in the Mandeb Strait and Red Sea. Additionally, the ongoing use of Yemen’s Hodeidah port as a launchpad for terrorist attacks and rocket and arms smuggling remains the greatest problem in securing supply routes in the strait.

Securing freedom of navigation in Bab al-Mandeb and finding a secure route for transporting crude oil, which is important for oil derivatives to reach Europe and the global markets, is the responsibility of all countries that benefit from navigation in the strait. This responsibility is not limited to Saudi Arabia and members of the Arab coalition alone. If the world were concerned about the possibility of Iran obstructing oil shipments through the Arab Gulf and Hormuz Strait, then it should realize that Tehran has been doing so for three years in Bab al-Mandeb. This is evidence that the danger of Iran’s backing of the Houthi militia is affecting the entire world, not just the countries of the region that are playing their part in confronting Tehran’s destabilizing actions.

The Houthis, together with the Iranians, have for the past three years been violating international law, and yet, no one in the international community - while not disregarding the major role played by the American administration of President Donald Trump - dealt with them seriously. It is impossible not to distinguish between a tanker, carrying two million barrels of oil, and a warship. This was confirmed by Qassem Soleimani, commander of the Iranian Revolutionary Guards’ Quds Force, on Thursday when he said that the “Red Sea was no longer safe.”

This is where Saudi Arabia’s decision to suspend oil shipments through Bab al-Mandeb could be a good thing. It could serve as a warning to the international community of the Houthi-Iranian alliance that is harming the world economy. Perhaps the suspension may pave the way for reaching a decisive decision to form an international coalition to stop this threat on international navigation.
 
 
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ENTER THE USA MILITARY - we have exactly the right moment ( and the right POTUS ) in History to take control of this entire M.E. Shyte Storm situation once and for all. . . and we will have M.E. Allies in the fight. Fasten your seat belts folks, this will probably be a bumpy ride.

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On 7/26/2018 at 8:01 PM, jmartin1145 said:

I joined the Navy way back in the Carter days because I thought we were going to war with Iran. I am going to leave it at that because I didn't want to get into the fact that in peace time, the military is boring.

Peace time military is all about making weight. Know what you mean.  

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fit

Oil prices rose on Monday as the WTI rose after four-week losses, but gains were limited by the impact of trade tensions on markets .

London Brent crude futures rose 31 cents to $ 74.42 a barrel, while US crude futures rose 31 cents, or 0.5 percent, to $ 69 a barrel, according to Reuters. 

US energy companies pointed to the addition of three oil drilling platforms in the week ending July 27, as drilling companies increased their activities for the first time in the last three weeks, according to data released on Friday .

Analysts say trade tensions remain between Washington and Beijing, although they have fallen between the United States and the European Union, affecting crude prices.

 

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The suspension of oil shipments through the strait of Bab el-Mandeb this week by Saudi Arabia, coming shortly after a threat by Iran to shut the strait of Hormuz, raised a lot of questions about the vulnerability of the oil trade to just a handful of chokepoints around the world. But what are countries and oil producers doing to alleviate that risk?

In a previous article, I detailed the top 4 chokepoints that pose a risk to oil supplies. Let’s look now at some of the projects and schemes intended to work around those chokepoints.

Strait of Hormuz

Nearly a fifth of the oil trade, or nearly 19 million barrels per day (mb/d) of crude oil, passes through the Strait of Hormuz, combined with nearly a third of global LNG supplies.

Saudi Arabia and the UAE each have pipelines that have the capability to ship oil outside of the Persian Gulf, circumventing the Strait of Hormuz, but by and large these options are operating way below capacity.

Saudi Arabia has the nearly 750-mile Petroline (or East-West Pipeline), which runs across Saudi Arabia from the oil fields in the East to the Red Sea in the West at the Yanbu port. (The old Trans-Arabian Line, which ran from Saudi Arabia to Lebanon, has been out of service for decades).

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Through the Petroline system, some Saudi oil can avoid having to pass through the Strait of Hormuz (or Bab el-Mandeb for that matter), linking up with tankers in the Red Sea and from there towards the Suez Canal and the Mediterranean.

The pipeline system, consisting of two lines, has a capacity of 4.8 mb/d. According to S&P Global Platts, the system has a throughput of about 1.9 mb/d, which means that 2.9 mb/d of the system’s capacity sits idle. According to the EIA, Saudi Aramco announced plans a while ago to boost capacity at the East-West pipeline to as much as 7 mb/d, with the intention of bringing the addition online by the end of this year, but has made little progress on that front.

In addition, the UAE has the Abu Dhabi Crude Oil Pipeline, which has a capacity of 1.5 mb/d. The pipeline runs from the Habshan onshore field in Abu Dhabi to Fujairah on the Gulf of Oman, bypassing Hormuz. S&P Global Platts says about 0.5 mb/d is running through that line, with 1 mb/d of unused capacity. Related: Tight Oil Markets Are Ignoring Supply Risk

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The Abu Dhabi Crude Oil Pipeline runs from Abu Dhabi to Fujairah, bypassing Strait of Hormuz

Meanwhile, Iran has spent several decades mulling over plans to build out oil export capacity on its southeastern coast beyond the Strait of Hormuz, in the event of disruption at its main terminal at Kharg Island inside the Persian Gulf. Iran launched a tender last year to build a section of the pipeline, which it hopes will be online in the early 2020s. The pipeline would help move oil from the Caspian to the Gulf of Oman.

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Jask, the proposed destination of a long distance pipeline that would allow Iranian oil to be exported outside of the Strait of Hormuz

Strait of Malacca

Over in Asia, the second largest chokepoint, the Strait of Malacca, is extremely narrow – just 1.7 miles wide at its narrowest point. Through that Strait more than 16 mb/d of oil travels. China is overwhelmingly dependent on the Strait, and this vulnerability has led to several Chinese initiatives to find alternatives.

Top of the list is the Myanmar-China pipeline, which started operations a little more than a year ago after years of delay. The pipeline was part of China’s “One Belt, One Road” program, a massive infrastructure campaign across much of Asia. The pipeline loads oil shipments from the Bay of Bengal, and ships it to China’s Yunnan province, where PetroChina has a refinery. The pipeline has a capacity of 440,000 bpd. There is also a natural gas pipeline that runs along the same route, with a capacity of 424 billion cubic feet per year.

1532722100-nick2707d.png

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China has also been considering a multi-billion-dollar pipelinethat would carry crude oil from Pakistan’s coastal port of Gwadar to Western China. That initiative has not broken ground, although Gwadar figures into a much broader strategic plan for China, beyond oil shipments. Related: Oil Prices Slip As Rig Count Inches Higher

1532722143-nick2707e.png

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Suez Canal

The Suez Canal is a third major chokepoint, although the upside of this one is that it is located in a single country, not between multiple countries, such as the Straits of Hormuz and Malacca. Still the canal cannot handle fully laden VLCCs, which means that some oil tankers have to offload their cargo onto the SUMED pipeline, which connects the Red Sea to the Mediterranean, bypassing the Canal. The SUMED pipeline is the only alternative route, otherwise tankers would have to travel around the southern tip of Africa, adding 2,700 miles to the trip for a tanker traveling from Saudi Arabia to the United States.

There are not alternatives to the Strait of Bab el-Mandeb, expect for the aforementioned East-West pipeline in Saudi Arabia. A closure of the Strait would force tankers to travel around Africa’s southern coast.

By and large, the alternative routes to these major chokepoints are only partial-solutions, if at all. The capacity to bypass some of the most vital bottlenecks remains relatively marginal. The oil trade is still highly dependent, and thus, highly vulnerable, to any lengthy outage.

 

https://oilprice.com/Energy/Energy-General/Bypassing-The-Worlds-Key-Oil-Chokepoints.html

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OPEC’s oil production jumped to a 2018 high in July, as Saudi Arabia and its close Gulf allies boosted production, a Reuters survey showed on Monday.

OPEC’s production was also increased due to the acceptance of a new member, the Congo Republic, which has been a membernow for more than a month.

According to the survey, OPEC’s crude oil production rose by 70,000 bpd from June to stand at 32.64 million bpd in July—the highest production level for 2018 so far.

At the end of June, Saudi Arabia and Russia had OPEC and its Moscow-led non-OPEC partners agree to cut compliance rates to 100 percent from the very high compliance of more than 150 percent in previous months. According to Saudi Arabia, the cut in compliance would translate into a production boost of around 1 million bpd by OPEC and its non-OPEC partners. The Saudis and their Gulf allies the United Arab Emirates (UAE) and Kuwait, plus non-OPEC Russia, are basically the only oil-producing countries part of the deal capable of boosting their oil production.

According to the Reuters survey, Saudi Arabia’s production in July so far has been 10.65 million bpd, up from 10.60 million bpd in June, but exports were close to June’s levels because the Saudis increased domestic use at power plants and refineries.

Kuwait and the UAE have increased their respective production by 80,000 bpd and 40,000 bpd this month, following the OPEC+ decision to boost output.

 

Production in Nigeria has also recovered after Shell lifted the force majeure on Bonny Light exports, and Iraq also increased its exports from the southern oil ports. Related: How U.S. Shale Flipped The Script In Global Oil Markets

The biggest drop in production was in Iran—by 100,000 bpd, as U.S. sanctions loom, serving as a deterrent for buyers, the Reuters survey found.

The other OPEC members with drops in production were Venezuela, Angola, and Libya, according to the survey.

OPEC’s compliance rate dropped to 111 percent in July from a revised 116 percent in June, still above the 100-percent compliance rate agreed upon at the June meeting.

Saudi Arabia had opened the taps even before the agreement to ease the production cuts to respond to the high oil prices and supply disruptions, judging from OPEC’s Monthly Oil Market Report that showed the Saudis boosted their oil production in June by more than 400,000 bpd.

 

https://oilprice.com/Energy/Energy-General/OPEC-Oil-Production-Hits-2018-High-In-July.html5

 

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  • yota691 changed the title to Oil rises 1% on settlement amid fears of supply shortages
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