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Dec 29, 2018 | oilprice.com
Russia is not as desperate for higher oil prices as is Saudi Arabia. There are a few reasons for this. One of the key reasons is that the Russian currency is flexible, so it weakens when oil prices fall. That cushions the blow during a downturn, allowing Russian oil companies to pay expenses in weaker rubles while still taking in U.S. dollars for oil sales. Second, tax payments for Russian oil companies are structured in such a way that their tax burden is lighter with lower oil prices.
Saudi Arabia needs oil prices at roughly $84 per barrel for its budget to breakeven.
... ... ...
Igor Sechin, the head of Russia's state-owned Rosneft, said that oil prices "should have stabilized, because everyone was supposed to be scared" by the enormous OPEC+ production cuts. "But nobody was scared," he said, according to Bloomberg. He blamed the Federal Reserve's rate tightening for injecting volatility into the oil market, because traders have sold off speculative positions in the face of higher interest rates.
...
Novak offered the market some assurances that the OPEC+ coalition would step in to stabilize the market if the situation deteriorates, suggesting that OPEC+ has the ability to call an extraordinary meeting. He told reporters on Thursday that the market still faces a lot of unknowns. "All these uncertainties, which are now on the market: how China will behave, how India will behave... trade wars and unpredictability on the part of the U.S. administration... those are defining factors for price volatility," Novak said.
Nevertheless, Novak predicted the 1.2 mb/d cuts announced in Vienna would be sufficient.
Some analysts echo Novak's sentiment that, despite the current panic in the market, the cuts should be sufficient. "We are looking at oil prices heading towards $70 to $80 quite a recovery in 2019. That's really predicated on the thought that first of all, OPEC still is here. And I think that the market is underestimating that they are going to cut supply by 1.2 mb/d," Dominic Schnider of UBS Wealth Management told CNBC . "And demand looks healthy so we might find ourselves into 2019 in a situation where the market is actually tight."
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Dec 29, 2018 | www.nakedcapitalism.com
Jerri-Lynn here. This is the latest installment in Justin Mikulka's excellent series on the fracking beat, Finances of Fracking: Shale Industry Drills More Debt Than Profit . The industry lacks even the excuse of profit to justify the environmental costs it inflicts – yet the mainstream media continue to swallow industry waffle. I've crossposted other articles in the series, and I encourage interested readers to look at them – the entire series is well worth your time.
By Justin Mikulka, a freelance writer, audio and video producer living in Trumansburg, NY. Originally published at DeSmog Blog
2018 was the year the oil and gas industry promised that its darling, the shale fracking revolution, would stop focusing on endless production and instead turn a profit for its investors. But as the year winds to a close, it's clear that hasn't happened.
Instead, the fracking industry has helped set new records for U.S. oil production while continuing to lose huge amounts of money -- and that was before the recent crash in oil prices.
But plenty of people in the industry and media make it sound like a much different, and more profitable, story.
Broken Promises and Record ProductionGoing into this year, the fracking industry needed to prove it was a good investment (and not just for its CEOs, who are garnering massive paychecks ).
In January, The Wall Street Journal touted the prospect of frackers finally making "real money for the first time" this year. "Shale drillers are heeding growing calls from investors who have chastened the companies for pumping ever more oil and gas even as they incur losses doing so," oil and energy reporter Bradley Olson wrote.
Olson's story quoted an energy asset manager making the (always) ill-fated prediction about the oil and gas industry that this time will be different.
Is this time going to be different? I think yes, a little bit," said energy asset manager Will Riley. "Companies will look to increase growth a little, but at a more moderate pace."
Despite this early optimism, Bloomberg noted in February that even the Permian Basin -- "America's hottest oilfield" -- faced "hidden pitfalls" that could "hamstring" the industry.
They were right. Those pitfalls turned out to be the ugly reality of the fracking industry's finances.
And this time was not different.
On the edge of the Permian in New Mexico, The Albuquerque Journal reported the industry is "on pace this year to leap past last year's record oil production," according to Ryan Flynn, executive director of the New Mexico Oil and Gas Association. And yet that oil has at times been discounted as much as $20 a barrel compared to world oil prices because New Mexico doesn't have the infrastructure to move all of it.
Who would be foolish enough to produce more oil than the existing infrastructure could handle in a year when the industry promised restraint and a focus on profits? New Mexico, for one. And North Dakota. And Texas.
In North Dakota, record oil production resulted in discounts of $15 per barrel and above due to infrastructure constraints.
Texas is experiencing a similar story. Oilprice.com cites a Goldman Sachs prediction of discounts "around $19-$22 per [barrel]" for the fourth quarter of 2018 and through the first three quarters of next year.
Oil producers in fracking fields across the country seem to have resisted the urge to reign in production and instead produced record volumes of oil in 2018. In the process -- much like the tar sands industry in Canada -- they have created a situation where the market devalues their oil. Unsurprisingly, this is not a recipe for profits.
Shale Oil Industry 'More Profitable Than Ever' -- Or Is It?However, Reuters recently analyzed 32 fracking companies and declared that "U.S. shale firms are more profitable than ever after a strong third quarter." How is this possible?
Reading a bit further reveals what Reuters considers "profits."
"The group's cash flow deficit has narrowed to $945 million as U.S.benchmark crude hit $70 a barrel and production soared," reported Reuters.
So, "more profitable than ever" means that those 32 companies are running a deficit of nearly $1 billion. That does not meet the accepted definition of profit.
A separate analysis released earlier this month by the Institute for Energy Economics and Financial Analysis and The Sightline Institute also reviewed 32 companies in the fracking industry and reached the same conclusion: "The 32 mid-size U.S.exploration companies included in this review reported nearly $1 billion in negative cash flows through September."
NINE-YEAR LOSING STREAK CONTINUES FOR US FRACKING SECTOR
Oil and gas output is rising but cash losses keep flowing. # CSG # Fracking # Shale # Gas # FrackFreeNT # FrackFreeWA # FrackFreeNSW # FederalICAC # Auspol https://www. sightline.org/2018/12/05/nin e-year-losing-streak-continues-for-us-fracking-sector/
5 18:04 - 9 Dec 2018 Twitter Ads information and privacy Nine-year losing streak continues for US fracking sector - Sightline InstituteA look at 32 US fracking-focused companies spent nearly $1 billion more on drilling and related capital outlays than they generated by selling oil and gas.
sightline.orgThe numbers don't lie. Despite the highest oil prices in years and record amounts of oil production, the fracking industry continued to spend more than it made in 2018. And somehow, smaller industry losses can still be interpreted as being "more profitable than ever."
The Fracking Industry's Fuzzy MathOne practice the fracking industry uses to obfuscate its long money-losing streak is to change the goal posts for what it means to be profitable. The Wall Street Journal recently highlighted this practice, writing: "Claims of low 'break-even' prices for shale drilling hardly square with frackers' bottom lines."
The industry likes to talk about low "break-even" numbers and how individual wells are profitable -- but somehow the companies themselves keep losing money. This can lead to statements like this one from Chris Duncan, an energy analyst at Brandes Investment Partners:
"You always scratch your head as to how they can have these well economics that can have double-digit returns on investment, but it never flows through to the total company return."
Head-scratching, indeed.
The explanation is pretty simple: Shale companies are not counting many of their operating expenses in the "break-even" calculations. Convenient for them, but highly misleading about the economics of fracking because factoring in the costs of running one of these companies often leads those so-called profits from the black and into the red.
The Wall Street Journal explains the flaw in the fracking industry's questionable break-even claims: "break-evens generally exclude such key costs as land, overhead and even at times transportation."
Other tricks, The Wall Street Journal notes, include companies only claiming the break-even prices of their most profitable land (known in the industry as "sweet spots") or using artificially low costs for drilling contractors and oil service companies.
While the mystery of fracking industry finances appears to be solved, the mystery of why oil companies are allowed to make such misleading claims remains.
Wall Street Continues to Fund an Unsustainable Business Model Ryan Popple @rcpoppleSee Ryan Popple's other Tweets Twitter Ads information and privacyThe US shale / fracking formula... 1.) borrow billions at low interest rates 2.) lose money forcing oil & gas from marginal fields 3.) leave someone else stuck with the financial losses & environmental destruction https://www. sightline.org/2018/10/17/us- fracking-financial-red-flags/
22 15:12 - 24 Oct 2018 Twitter Ads information and privacy Financial Red Flags for Fracking - Sightline InstituteAmerica's fracking boom has been a world-class bust. Fracking companies have spent far more on drilling than they've earned by selling oil and gas.
sightline.orgWhy does the fracking industry continue to receive more investments from Wall Street despite breaking its "promises" this year?
Because that is how Wall Street makes money . Whether fracking companies are profitable or not doesn't really matter to Wall Street executives who are getting rich making the loans that the fracking industry struggles to repay.
An excellent example of this is the risk that rising interest rates pose to the fracking industry. Even shale companies that have made profits occasionally have done so while also amassing large debts . As interest rates rise, those companies will have to borrow at higher rates, which increases operating costs and decreases the likelihood that shale companies losing cash will ever pay back that debt.
Continental Resources, one of the largest fracking companies, is often touted as an excellent investment. Investor's Business Daily recently noted t hat "[w]ithin the Oil& Gas-U.S.Exploration & Production industry, Continental is the fourth-ranked stock with a strong 98 out of a highest-possible 99 [Investor's Business Daily] Composite Rating."
And yet when Simply Wall St. analyzed the company's ability to pay back its over $6 billion in debt, the stockmarket news site concluded that Continental isn't well positioned to repay that debt. However, it noted "[t]he sheer size of Continental Resources means it is unlikely to default or announce bankruptcy anytime soon." For frackers, being at the top of the industry apparently means being too big to fail.
As interest rates rise, common sense might suggest that Wall Street would rein in its lending to shale companies. But when has common sense applied to Wall Street?
Even the Houston Chronicle, a major paper near the center of the fracking boom, recently asked, "How long can the fracking spending spree last?"
For the past decade U.S. fracking firms have been spending more than they're taking in - by about $80 million per year at the 60 largest companies. With investors cracking down and interest rates rising, some are asking how much longer it can go on. https://www. houstonchronicle.com/business/energ y/article/How-long-can-the-fracking-spending-spree-last-13228180.php?utm_campaign=twitter-premium&utm_source=CMS%20Sharing%20Button&utm_medium=social
6 15:04 - 14 Sep 2018 Twitter Ads information and privacy How long can the fracking spending spree last?After a decade of U.S. oil and gas companies spending beyond their means, a debate is underway in the energy and investment sectors on whether to keep pumping money into oil fields to keep the boom...
houstonchronicle.comThe Chronicle notes the epic money-losing streak for the industry and how fracking bankruptcies have already ended up "stiffing lenders and investors on more than $70 billion in outstanding loans."
So, is the party over?
Not according to Katherine Spector, a research scholar at Columbia University's Center on Global Energy Policy. She explains how Wall Street will reconcile investing in these fracking firms during a period of higher interest rates: "Banks are going to make more money [through higher interest rates], so they're going to want to get more money out the door."
Follow the DeSmog investigative series: Finances of Fracking: Shale Industry Drills More Debt Than Profit
Harry , December 20, 2018 at 6:12 am
Some points.
1. The Sightline Institute methodology had 33 cos. Not 32. I would bet the Reuters reporter took out one company out from the analysis. Bear in mind XOP has 72 or so companies so there is a lot of scope for cherry picking there too.
2. What bank wants to run an oil company? The banks lent to a sector which conned them. I guess rates were too low for too long. Those loans/bonds are only recoverable if oil prices are high. The oil men know they are long a massive call option, and you can't take it off them. They can't get new money so they won't give back the old.
3. Diamondback and maybe 8 others make money. Infrastructure in the right place and good geologies.
4. The numbers are unfair to Andarko cos the cut off misses a bunch of cash coming back in q3
Still, a well timed piece
TimR , December 20, 2018 at 10:16 am
Wrt 2, are you saying there's a contest between the banks and oil men? How is it likely to play out?
Pym of Nantucket , December 20, 2018 at 10:27 am
Remember Enron? We're clearly not smart enough to understand the genius of how this is profitable. I guess we should just step aside and watch the smart guys spin straw into gold. I'm sure they will share the wealth with the land owners right?
John k , December 20, 2018 at 11:34 am
If they don't pay the lease they're kicked off the land. They'll share until bk.
Harry , December 20, 2018 at 4:38 pm
These oil men are not stupid. They like to get their DUCs in a row – wells drilled but uncompleted. If oil goes up enough they can open the DUCs in less than 2 months. Its the weakly capitalized ones who will pump oil out of a reservoir with low oil prices to service debt. Also by drilling they often validate a lease which would void if they didnt drill. However by not pumping they dont have to pay any royalties – just rents.
Below $50 on WTI a lot of the sector doesn't generate enough cashflow to meet investment plans.
leapfrog , December 20, 2018 at 1:47 pm
Yes, I remember the infamous "Grandma Millie" talk between Enron traders.
rd , December 20, 2018 at 4:27 pm
I think a lot of the funding is with junk bonds. So most of those bonds are sold to investors, including ETFs, mutual funds, and pension funds. Many of the banks are just middlemen and will probably not be left holding too much of the bag if they haven't kept them on their own books or written lots of stupid derivatives on them.
This should be a much smaller sector than the housing sector so a sub-prime mortgage bond-like crash shouldn't have the impact of 2008. But who knows, the main thing aI marvel about with the financial sector is their unerring ability to take something that should be relatively safe, weaponize it, and threaten global financial stability with it.
Wukchumni , December 20, 2018 at 6:56 am
I've watched in horror from a distance in regards to fracking, and then a few days ago, this planning area map for open hydraulic fracking leases has me surrounded in a sea of red
https://eplanning.blm.gov/epl-front-office/projects/nepa/100601/153195/187750/Planning_Area_Map.pdf
We're on a fractured rock aquifer in the foothills here that's separate from the one on the valley floor, and because it gets scant use in Ag, and not many people live here (we're 2.5x as big as Paradise,Ca. in size, with 1/10th of the population and at a similar altitude) nobody's hard rock wells had any issues with going dry during the lengthy drought and having to drill hundreds if not a thousand feet deeper in search of H20, as was occurring to the farmers et al on the fruited plain.
I sure don't like the idea of a fractured rock aquifer and fracking
One thing going against us, is land is cheap here, it's nature acres, nice to look at. but no development potential, as the trees are all in the way, and what sorry sap is going to cut down oaks a couple hundred old and level the hills to put in tiny boxes?
That villain doesn't exist, luckily.
But if you were to dangle large amounts of money at the owners of such low value acres, in oil leases?
And the idea it was all a circle jerk by Wall*Street & Big Oil, to get the money!
.
Makes it even harder to swallowRBHoughton , December 20, 2018 at 5:32 pm
Its not just the environmental damage. Banks lending to frackers will be precedent creditors. They'll keep loaning until whatever value in the company that can be extracted in extremis has been used up. One can easily imagine the sort of accounting Wall Street uses.
SittingStill , December 20, 2018 at 7:23 am
So when these companies finally go bust, faced with the diminishment of oil production, will US taxpayers be forced to bail out the industry because of the economic/national security implications of the prospects of eviscerated US oil production volumes? If so, Wall Street wins yet again.
Pym of Nantucket , December 20, 2018 at 10:21 am
A gigantic hidden cost is the liabilities associated with the resulting abandoned wells. This is why this fall there was a Supreme Court challenge in Canada to a ruling on who gets paid first in such cases. In Canada the reclamation costs fall to the remaining producers who share costs of the Orphan Well Association. In the US, it is completely off the books, and therefore falls to the government to clean up abandoned plays when companies go bust.
So, taxpayers could be on the hook both if there is a government bailout on bad loans, a al 2008/2009, AND will have to pay to clean this up (it's expensive, by the way, there are thousands and thousands of these sites that need to be remediated). I suspect the reason all this is happening is a strategic effort to use tax payer backstopped risk to punish Russia to daring to exist.
rd , December 20, 2018 at 10:42 am
This is similar to mines and old waste dumps. If the owners were limited partnerships or companies that went bankrupt with no remaining solvent pieces, then there is no money in the kitty to clean them up. The remaining game in town then is Superfund and state programs for inactive hazardous waste sites and orphan wells.
The RCRA Subtitle C and D regulations in the 1980s and early 90s required landfill operators to set aside funds in lock-boxes so that if they went bankrupt, the state could access those funds to close the landfills. The landfills typically charge a fee per ton just to fund these financial assurance accounts and they need to keep them on file with the states. Unfortunately, the resource extraction industry has generally been able to successfully fight against these types of requirements as "job-killers".
jackiebass , December 20, 2018 at 7:39 am
One economic problem with fracked gas wells is they only produce large quantities of gas for a short time. It's usually 2 to 3 years. After that production tanks. I suspect a similar thing happens with fracked oil wells. I I've in NY close to the PA boarder. For about 4 years, fracking was really booming. Now it has almost stopped. You see big lots filled with fracking equipment gathering rust. It didn't take most people long to realize that only a few made money while the rest pay the bill for all of the damage done. I'm glad in NY state they banned fracking. I own 50 acres and refused to buy into a leasing deal before fracking was banned. My biggest concern was my well water becoming contaminated as well as losing control over how my land is used. A big problem is that a company is allowed to drill under your land even if you don't have a lease agreement with them. They have to pay you but they can also pollute your well. If that happens your property becomes of no value and useless.
SimonGirty , December 20, 2018 at 12:45 pm
We'd become curious about folks moving to the NE tip of PA, as it looked like NJT might actually reopen rail service to all those $80-$140K houses, right before Williams/ Transco's Constitution Pipeline finally caused hundreds of new fracked wells? We'd guessed the only effect of the '16 election was who'd be prodding retirees into GasLand Poconos. Seems like a great location for a remake of Green Acres meets Deliverance? https://www.njherald.com/20180410/lackawanna-cutoff-project-may-finally-be-back-on-track
Looks like there's a mess of unwatchable YouTube videos. I wonder if refugees have any idea of what could happen up there?ape , December 20, 2018 at 7:56 am
Yes, when liquidity has a much smaller time constant then actual production, the rules of liquidity will decouple from the production and actually dominate the process.
This is well-known from physics, and why many economic theories are obviously and fundamentally wrong.
As long as the economy is financialized with almost infinite velocity, nothing in the real world (including profits) will actually drive the system. This is trivially obvious.
peter , December 20, 2018 at 8:01 am
New definition of profit: less of a loss then expected.
diptherio , December 20, 2018 at 8:40 am
Let's add that to GAAP, shall we?
Olga , December 20, 2018 at 8:21 am
And yet, Far West Texas is booming – not sure what to make of it all. And – as in 'irony' – some of that boom is powered by wind.
d , December 20, 2018 at 8:44 am
This kind of thing makes me chuckle. So the CEOs and other suits at the fracking companies are scamming their investors to enrich themselves. Hard to feel bad about it (even though a fair number of the investors are probably "institutional") if it wasn't for the needless environmental destruction that goes along with these two groups of elites ripping each other off.
Phemfrog , December 20, 2018 at 10:04 am
Very broadly speaking, wouldn't this be a good real-world example of MMT? There is a natural resource we want to extract, we have the manpower and machinery to do it, so we just do it? The money to fund it is limitless bound only by the constraints of the resource itself. Wall street is just a rent-extracting intermediary
Am I off base here?
John k , December 20, 2018 at 11:42 am
Mmt cab be used to fund war or any other negative thing. Or build schools and hospitals.
One can be rational or irrational.a different chris , December 20, 2018 at 10:06 am
It's ironic that, having lived thru the 80's when the financial "geniuses" took over and it was all about ROI – Westinghouse somehow came to the conclusion that you could make 6% on golf courses (they didn't even know, I don't think) instead of 2% on industrials (that was probably correct) so they basically sold the store. Except for the nukes, sigh.
The comments above, apes's for instance, point to the whole slosh of money. And there is some truth to that. But in this case, I'm afraid much of the answer is that people in the oil bidness make oil wells because that's what they know how to do. ROI, Scmoi O I.
Of all the industries that are gone because they weren't allowed to "do what they know" because it was "cheaper to offshore" – read a greater ROI to Wall Street – how come the worst is the only one that keeps its nose to the grindstone and does the actual work it knows how to do?
Seamus Padraig , December 21, 2018 at 6:45 am
Because you have to drill where the oil/gas is actually located. You can't do it in China, where the labor would be cheaper.
a different chris , December 21, 2018 at 10:41 am
No, what I meant was those other ones just "diversified" or whatever the word of the moment was, just did whatever made the people at the top money.
But oil/gas is different. They just "have to go get it". It's like termites and wood. I respect that, even if it's the wrong thing to do. If I must refer to The Terminator again, "it's what they do. It's ALL they do".
PS: there is oil/gas everywhere. I worked in the "bidness,"btw.
Andrew John , December 20, 2018 at 12:52 pm
So frackers can take out billions of unpayable debt and discharge it in bankruptcy, but I get to carry a millstone of student debt around my neck for the rest of my life? Great system we got here. Pretty flipping great.
Ford Prefect , December 21, 2018 at 10:14 am
You should have issued a junk bond on yourself instead of taking a student loan. You could then just default on the junk bond (after having written some derivatives to short it to profit from your financial demise).
Mike R. , December 20, 2018 at 1:40 pm
I have a different take on all this fracking.
I believe it was decided at the highest levels of our government to support it; including financially if necessary. The basis for this support and secrecy would be national security. Easy enough to see how this could have transpired.All that said, if my theory is correct, the frackers will be bailed in some form or fashion. Probably the next QE will pick up the tab or perhaps the DOD is funding it indirectly already.
Just a theory, no pressure.
steven , December 20, 2018 at 3:50 pm
Your take parallels Pym of Nantucket's. Ever since the end of WWII, the United States has been allowed to just 'print money', first to pay for its contest with the former Soviet Union for global hegemony and then to 'pay for' its energy and the products its industries could no longer profitably produce – at least as profitably as they could by off-shoring those industries. This is all really just an extension of 'petrodollar warfare' – gigantic bluff the US can continue to go it alone if necessary – having salted the central banks of 'developing countries' with all the 'reserve currencies' they realistically need, at least if the depredations of the likes of George Soros are held in check.
In summary, fracked oil is propping up not just Big Oil but the US military industrial complex and ultimately Wall Street and its banks. As long as the US can control the world's access to energy (and possibly retard its transition to renewable sources?), US politicians and bankers can continue to 'print money' (i.e. export debt) and sustain the whole rotten edifice of US and Western 'political economy'.
As usual Michael Hudson has it right:
"Finance is the new form of warfare – without the expense of a military overhead and an occupation against unwilling hosts." It is a competition in credit creation to buy foreign resources, real estate, public and privatized infrastructure, bonds and corporate stock ownership. Who needs an army when you can obtain the usual objective (monetary wealth and asset appropriation) simply by financial means?
greg , December 20, 2018 at 11:38 pm
The time will come, as a result of this, that the US will have to go it alone. They are turning your money to shit. Unless our corporate masters sell out the rest of the country to foreigners, like they already have much of our nation's productive capital.We won't be alone, but like Greece, we will no longer be independent or free.
This kind of crap increasingly pervades our economy. Military. Finance. Healthcare. Like money with Gresham's Law, bad investment drives out good. Every cost is also someone's profit opportunity, so costs are magnifying and spinning out of control. More and more the welfare of society depends on 'borrowed' money.
It's like the modern day pyramids. Nicely dressed piles of rocks in the desert. Total waste and destruction of resources. It also destroyed the social capital of Ancient Egypt, and turned them into slaves of Pharoah. It was the people of Egypt who paid for the pyramids, with their labor and their liberties.
So that's what else is going on. Your freedoms are going down those wells. And up the towers of finance. The Egyptians, at least, got something to look at. They already had the barren wastelands.
Cynthia , December 20, 2018 at 1:40 pm
At least these depressed oil prices from over fracking in the US will make Saudi Arabia poorer. Possibly poorer to the point that widespread social unrest ensues there, leading to the dethroning of the House Of Saud, which, in turn, will cause the dethroning of their chief covert friend and ally Israel.
Then in order to stave off social unrest here in the US, we'll have to cut off ties with these two roguish troublemakers in the region. Much needed balance of power will then be restored to the region with Iran and Syria restored to their former glory, sparking peace and prosperity from Pakistan and Afghanistan to Egypt, Somalia and Yemen.
I don't know if the pieces on the chessboard will ever realign this way, but it's rather amusing to speculate that this realignment could possibly be triggered by the stupidity and shortsightedness of the US to over frack!
rd , December 20, 2018 at 4:22 pm
Russia as well.
Nick Stokes , December 20, 2018 at 7:11 pm
You got it backwards. KSA and Russia need lower oil prices to force US producers off the field and get their supply chains back. Your thinking like a 1970's person. Think 2010's.
rd , December 21, 2018 at 10:19 am
This is a non-climate change reason why developing electric vehicles in North America, Europe, and China would be good. It would strip away much of the demand for oil which is a major funding source for Russia and KSA.
Gene Prodersky , December 20, 2018 at 7:13 pm
Your thinking 20th century. KSA and Russia need lower prices to support their supply chain. Everything you said, think the opposite.
whiteylockmandoubled , December 21, 2018 at 12:47 am
Jesus Herbert Walker Christ. Is anyone else getting sick of this stupid series? If you keep writing the same article every year, and Wall Street keeps engaging in the same apparently irrational behavior, you might want to rethink your smug pose and ask yourself whether there might be some additional digging to do to understand what the hell is going on.
The contrast between this series and Hubert Horan's Uber work is striking. Horan not only points out the fact that Uber is unprofitable, but also clearly shows who has an interest in extending the hype, and how and why the bandwagon keeps rolling. This series is the complete opposite.
Fracking "investors" aren't getting ripped off, and they're not stupid. You've just completely missed half the point of the Master LImited Partnership structure. For the limited partners, the losses are a feature, not a bug. Until MLP shares are cashed in, they generate tax losses for the LPs. Those losses are valuable generally, but 501c3s, especially love them because they allow non-profits to offset Unrelated Business Income.
Go to Guidestar or Nonprofit Explorer and pull down the 990T of any nonprofit with a few billion dollars worth of invested assets. Line 5 (usually blank but filled in as a long attachment at the end) is almost invariably a who's who of the fracking industry, with thousands of dollars in losses from each company. In any given year, LPs only liquidate positions in a small number of the companies their holding each year, allowing them to avoid taxes with the annual losses, then cash in (at least sometimes) when the value of the company is high.
The industry's a scam, but just as much of the taxpayers as of the investors.
Yves Smith , December 21, 2018 at 3:10 am
Do you make a habit of putting your foot in your mouth and chewing? Because you did it here, by copping a 'tude while being 100% wrong.
Passive tax exempt investors have no use for losses. Zero. Zip. Nada.
An investor in a limited partnership is a passive investor. Income from a passive investment NEVER generates Unrelated Business Income. If the idiocy you presented was correct, no endowment or public pension fund could ever show a net profit from their investments in private equity and hedge funds without it being taxed as UBI. There would literally be no private equity industry as we know it because most of its money comes from tax exempt investors, namely public pension funds, endowments, foundations, private pension funds.
UBI results from activity conducted by the not for profit. The classic example is an art museum's gift shop. See IRS Publication 598 (emphasis ours):
Unrelated business income is the income from a trade or business regularly conducted by an exempt organization and not substantially related to the performance by the organization of its exempt purpose or function, except that the organization uses the profits derived from this activity.
https://www.irs.gov/pub/irs-pdf/p598.pdf
Limited partners are required to be passive and have nada to do with the operation of the partnership. They typically make double sure that their investment income won't be characterized as business income. As one tax expert confirmed by e-mail:
Endowments/exempts/pension funds can wind up having UBTI when they don't structure their investments through corporations. They rarely fail to do this structuring. They wouldn't put themselves in the position of deliberately incur UBTI and then go hunting for losses to offset it.
So it is possible that you heard of a not-very-competent endowment that wound up seeking tax losses, but that would be highly unusual, when you incorrectly said the opposite.
There are other tells that you don't even remotely understand the how limited partnerships work, such as your comment "In any given year, LPs only liquidate positions in a small number of the companies their holding each year, allowing them to avoid taxes with the annual losses."
Limited partnerships are pass-through entities. LPs receive their pro-rata share of income and loss annually. They do not need to sell to recognize gains or losses resulting from their participation in operations.
The mainstream journalist who first wrote about the pervasiveness of losses in fracking after oil prices started trading in the new normal of $70 a barrel and below, John Dizard of the Financial Times, explained why frackers would keep drilling at losses as long as they could get their hands on funding, so this is entirely consistent with his forecast. And Dizard's column is for wealthy individuals and he is conversant with tax issues, unlike you.
Better trolls, please.
Rajesh K , December 21, 2018 at 1:05 pm
Better than Ghost Cities in China!!!
Why? Not sure, but it's in Murica, has to be better right ;)
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Dec 28, 2018 | www.bloomberg.com
Hedge funds are keeping their cool in the most tumultuous end of the year for oil since the 2008 financial crisis, betting on better days ahead.
They boosted wagers on rising Brent prices for a third straight week amid expectations that OPEC and allies will follow through on a deal to reduce output. The vote of confidence comes against a backdrop of turmoil in financial markets that saw one measure of oil-price volatility jump the most on record in November and head for its highest year-end level in a decade.
"There is a little more optimism and neutrality coming into markets and we're getting some positive signs," said Ashley Petersen, an oil analyst at Stratas Advisors LLC in New York. "It's not as if demand is tanking tomorrow and supply is going to triple. We're seeing a little more rationale enter markets, a little more of a wait-and-see mode."
Although the global crude benchmark has declined about 15 percent since OPEC and its allies came together and announced an agreement to reduce output on Dec. 7 -- extending its plunge since early October to 40 percent -- producers have signaled dedication to the deal.
OPEC and its allies aim to publish a statement in January on the implementation of the agreement to cut production, according to Russia's Energy Minister Alexander Novak. He also said the market may see the impact of the cuts in January or February, and if necessary, the group can convene before its scheduled meeting in April. At the same time, a decline in Iranian imports to Japan adds another positive sign .
Hedge funds' net-long position -- the difference between bets on higher Brent prices and wagers on a drop -- rose 6.7 percent to 162,249 contracts for the six days ended Dec. 24, ICE Futures Europe data show. Longs rose, while shorts declined to the lowest level since late November. The report was for a period shorter than a week because of the Christmas holiday.
Analysts surveyed by Bloomberg forecast Brent to average $70 a barrel in 2019 as the market tightens, OPEC's supply cuts take effect and unintended losses in Venezuela and Iran increase.
So far, the apparent confidence from hedge funds and analysts hasn't yet translated into a calmer market. After surging a record 86 percent in November, the Chicago Board Options Exchange Oil Volatility Index ended Friday at 53.11. The last time it finished the year above 51 was 2008.
In the U.S., the Commodity Futures Trading Commission's commitments of traders report with a tally of wagers on West Texas Intermediate and other assets won't be published during the government shutdown, according to a Dec. 22 notice.
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Dec 27, 2018 | peakoilbarrel.com
shallow sand x Ignored says: 12/26/2018 at 4:43 pm
So to keep everyone happy, here are some averages for the all wells EFS, Bakken and Permian. Decided to exclude Niobrara, oil numbers are much lower.GuyM x Ignored says: 12/26/2018 at 5:38 pm2015 Q3 36 months of production: 162,635 BO most recent monthly rate 58.6 BOPD
2016 Q3 24 months of production: 169,078 BO most recent monthly rate 103.5 BOPD
2017 Q3 12 months of production: 136,850 BO most recent monthly rate 213.1 BOPDFor 2015 162,635 x .80 x $45 = $5,854,860
7% severance $409,840
$5 per BO LOE $650,540
$2 per BO G & A $260,216
Net = $4,534,264I lowered the costs some to make the economics more favorable from the standpoint of those who love the sub $2 gasoline. Might be ok to look at 10K and 10Q if anyone would like to plug in different cost estimates.
The 2016 wells described above are at $4,713,894 per well after 24 months.
The 2017 wells described above are at $3,815,378 per well after 12 months.Of course, I was just trying to make a point that wells drilled in 2015 that had seen 3 years of weak (and one year of average) oil prices were going to be total losers that would not payout within any reasonable time horizon, if at all.
To continue, there is no mention in these numbers of how much land costs. I seem to recall many Permian players paying $15-60K per acre. So a two mile DSU would cost $19.2 million to $76.8 million. I just ignored land costs completely. Further, each of these companies has interest expense. One can go to the 10K's and 10Q's to see how much that is costing each per BOE. I just ignored interest expense too.
These wells are a lousy investment at $50 WTI. Only gets worse as the oil price sinks.
I think this all started because maybe GuyM was actually giving some credence to EOG guidance. I don't blame GuyM, or anyone else, for believing what the companies say.
I do argue until we see some well payout data (hard data, not power point variety) from these companies, we should assume the wells generally do not payout within 36 months, or even 60 months.
I do agree, wells have residual value after 36 and 60 months. I also agree that much higher oil prices make this business a money maker. Finally, I agree the wells have improved every year, although it is looking like 2016 might have been the high water mark, with later wells not moving the needle much higher.
Time for me to exit for awhile. I was just trying to remind people of the numbers. I think most of the investing public has figured it out, based on where these companies are trading since oil dumped again.
Good analysis, and thanks, again. No amount of increased productivity could make them profitable at $45, especially not $37, or $16. The clock is ticking. Yeah, EOG has gone from over $120 to $87.
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Dec 27, 2018 | peakoilbarrel.com
TechGuy x Ignored says: 12/24/2018 at 10:20 pm
We come full circle back to the Jan. 2009 Lows! Lowest was Jan 16 at $36.GuyM x Ignored says: 12/24/2018 at 10:35 pm
Folks, I think we hit a recession!Recession usually lags 9 months after the market crash, but, yeah. We are basically there.Dennis Coyne x Ignored says: 12/25/2018 at 7:30 amRecession is based on GDP not the stock market or price of oil.GuyM x Ignored says: 12/25/2018 at 7:47 amhttps://www.bea.gov/data/gdp/gross-domestic-product
Q3-2018 was 3.4% GDP growth. Very good for an advanced economy.Of course. But traditionally, crashes take from cash/growth after a period of time. Nine months to a year, and growth in GDP precedes bull markets by the same. It's not a fritzing law, but it's logical, and normal. Has been since I started following it in the 60's.HHH x Ignored says: 12/25/2018 at 8:04 amLast crash was different, in that the GDP growth declined before the crash, due to housing. But, if the crash persists, my bet would be a lack of cash, eventually, to support growth.
There are huge losses, we don't see that are happening now in the derivative market, besides the stock markets. There was something like 384 trillion just in interest rate bets in derivatives, that half are losing right now.
This is no traditional crash. FED can stop hiking interest rates and market might pause an consolidate before going lower but lower they go. Until FED stops allowing it's balance sheet to shrink, down is the direction for markets. Back when QE was full blown stuff like gov. shutdown and trade wars were the very thing that made markets go higher because it meant more QE for longer.GuyM x Ignored says: 12/25/2018 at 8:12 amThere is nothing organic about the recovery of markets since 2008-2009. All assets and markets are mispriced. Price discovery wasn't allowed to happen after 2008-2009. Truth is true price discovery won't be allowed to happen this time either.
Fed is manufacturing a market crash so they can do the next round of QE. Fact is QE works but you can't end it and you sure as hell can't reverse it. QE creates the illusion that everything is fine. There is a credibility issue if you can't ever end QE though. That's where the Fed finds itself now.
Your right. Each crash is different. This one is just a slow meltdown.HHH x Ignored says: 12/25/2018 at 8:46 amAnd, since I have been following it, there has never been anything organic about market growth, it's always BS. There was nothing organic about the first big market crash in the early part of last century, it was purely speculative. The tulip crash, before established markets was speculative.
Growth in GDP and markets are two separate animals. Although, as the previous crash proves, GDP decline can affect the market, as well as market crashes affecting GDP.
The stock market, and now especially derivatives, are nothing other than a gigantic Las Vegas casino. Elves in the market strive to maintain that there is a relation, but in the end, it doesn't pan out.
Well the Dow has had its largest monthly loss ever recorded this December unless market recovers some of that between now and the end of the year. Slow meltdown maybe not. It's currently at about -4,200 which tops the largest monthly drop during 2008-2009 by about 1,000 points.GuyM x Ignored says: 12/25/2018 at 8:53 amJust further to drop than the previous ones. Half would be about 10k more points. But, there is nothing magical about half, it could stop well before that.HHH x Ignored says: 12/25/2018 at 9:01 am
The analysis of the drop is still being speculated. The ones that make sense, so far, is that there was a lot of market fear (tariffs, ad nauseum). Sell offs happened, snow balling into covering margin calls. If so, that is a normal scenario, but I think the Fed raising interest rates, and continuing to unravel QE is also a major, if not the major reason. There are a bunch of other reasons that don't make a lot of sense. One blaming oil price. I think that is yet to come, but not this time.Unwinding of FED's balance sheet is also on autopilot. They don't have to have a Fed meeting to vote on it like a rate hike. Much easier to deflect the blame elsewhere for the resulting market decline.Ron Patterson x Ignored says: 12/25/2018 at 1:09 pm-4,200 which tops the largest monthly drop during 2008-2009 by about 1,000 points.GuyM x Ignored says: 12/25/2018 at 2:19 pmHey, it it's the precentage drop that counts. What was the largest monthly percentage drop in the 2008-2009 crash? I would wager it was far greater than the percentage drop this December.
This article is about the huge 1,175 one day drop last February, but the point still holds.
Dow Jones Suffers Worst Point Drop Ever, But Percentage Loss Is Not Historic
The Dow's 4.6% loss on Monday was the worst since August 2011. But it didn't even crack the top-20 of all-time losses. It was just the 25th worst loss since 1960.
The Dow's biggest one-day percentage loss was the 22.6% Black Monday crash on Oct. 19, 1987. In point terms, that was "only" 508 points. In second place, the Dow crashed 12.8% on Oct. 28, 1929.
Looks like the biggest percentage drop for a month was Feb 2009, at around 21%. Eclipsing this month. But, it had also been going down for a long time. What was this month, around 16%? But, it's just started,
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Dec 27, 2018 | peakoilbarrel.com
shallow sand x Ignored says: 12/24/2018 at 2:33 pm
WTI $42.58GuyM x Ignored says: 12/24/2018 at 3:08 pmWTI Midland $34.34
Flint Hills posting ND Light Sweet $16.75.
Seems the break even is pretty low, as EIA has predicted about a million bpd increase out of shale in 2019Adam B x Ignored says: 12/24/2018 at 5:53 pmIt doesn't matter whether you provide storage or increase the number of refineries, shale production is relatively dead at these prices. The prices just need to stay ridiculously low for awhile to stop the EIA and IEA from producing more imaginary oil, and face reality. Yeah, that would affect my wells, but I would hope for a better price, later.
Less than $17 a barrel? Bakken is done for awhile. And there is NOBODY in the Permian breaking even at $34. Remember what happened in 2015? Yeah, production dropped by over a million barrels. These prices are as bad as 2015, and we have a bigger drop potential. Those pipeline builders gotta be really worried. But, they should be anyway. How are you going to keep the pipeline flowing if you can't take what's in there out, because there is nowhere to put it? How many mentally challenged people are working in the Permian?
The amazing part is, this time there is no glut, at all. Inventories will drop, but just let it happen. We have to forever eradicate the Permian and shale production will save the world song. It's a thousand times more irritating than listening to Bing Crosby's white Christmas on January1st. There ain't no fritzing Santa Clause, EIA!
Seems like a lot of year end liquidation of oil futures perhaps. That's the only explanation I've got for how oil is this low. Probably will bounce back to the low 50's WTI by late January. It will be interesting to see December through February US production data to see what effect this price dive has done.Financier x Ignored says: 12/25/2018 at 4:24 pmHi GuyM,GuyM x Ignored says: 12/25/2018 at 4:43 pm"Those pipeline builders gotta be really worried. But, they should be anyway."
What do you think the issues are that the pipeline companies are worried about
right now? I would appreciate your thoughts on this.Two thoughts, immediately. The price is such now, that if it stays anywhere close to that for awhile, completions won't be as expected, and there won't be enough oil to fill them. The second is, that if the E&Ps had the right price, and did produce, there is probably not enough shipping until late 2020 or 2021 to handle 2.5 million bpd extra. No place to store it, and refineries can't use high API. Unless, I am missing something. Pipelines can't make much money because a pipeline is filled, it has to be flowing.Dennis Coyne x Ignored says: 12/24/2018 at 5:47 pmIts gonna go to zero. Just kidding.GuyM x Ignored says: 12/24/2018 at 6:03 pm
Doubt these prices will be sustained.Maybe not zero, but could be a lot more. It's reacting to the stock market, now. Dow down 15% and still going. This is no simple correction, as that stops at around 10%, usually. Been a long, long time since the last bear market, and is past due. Everything dives, until they come to grips that commodities are a different animal. That may take months, or longer depending on how bad it gets. Who knows, each bear market has a different generation, and it's always new to them.Adam B x Ignored says: 12/24/2018 at 9:04 pm
Especially this one, as it has been so long. New ball game.
I think it was EN who posted how rate hikes can cause this on a historical basis. Based on that chart, we could be in a significant bear market. Bubbles are going to pop. Not sure what the derivative markets are looking like, but they can't be healthy. The derivative markets are many times bigger than the regular stock markets. Think Lehman Brothers, and margin call. Lehman didn't fail over bad home loans, they failed over the derivatives of home loans. This time, it won't be housing, but something will give. They made a big effort to control the banks after the last fiasco in 2008, but made NO effort in regulating derivatives. Brilliant. Some of the weaker oil companies may be in trouble. JMO.Right on the move from 18,000 to 27,000 in the Dow was just hot air as we are seeing now. Investors realize there isn't a fed put and are freaking out, how far will it sink before Powell and company call off the dogs and say no more rate hikes and stop quantitative tightening..cause it's on "autopilot" according to them. All I want is 4% on an 18 month CD, fat chance now.GuyM x Ignored says: 12/24/2018 at 10:07 pmThe autopilot is also the monthly selling of Bonds held by the Fed, which also acts as interest rate increases.Watcher x Ignored says: 12/24/2018 at 7:19 pmhahahahahahaahahahaGuyM x Ignored says: 12/24/2018 at 7:27 pmThe inventory nazis will be out soon with a surprise discovery that there was more in storage than they ever suspected.
Don't you worry none. In the finest traditions of capitalism and free markets, various govts will be taking action soon. To do something.
Yeah, they are convening as we speak. Never fear. Trust in your government, not your 401k.🤪TechGuy x Ignored says: 12/24/2018 at 10:20 pmA Minsky moment, day, week, month or year(s). Aka margin call on highly leveraged margin is probably the cause. Hence, duck it's hitting the fan.
https://seekingalpha.com/amp/article/4229895-something-happeningIn other words, if you have to sell those paper barrels for margin calls, and there is too few to buy, because they are selling, also; then price goes down, because there are too many paper barrels, and not enough buyers. Probably, the original paper sellers lose their butt, and have to sell something to cover their margins. Everyone now is paying homage to the margin god. Because, there was never any real money to cause the stock market to soar like an eagle.
Which reverses itself later, because when it is time to sell new paper barrels, less are sold, enabling the price to go up (if anyone has any money left). Everyone else is busy ducking Guido, because the value of what they had left in their portfolio was not enough to cover margin. Er, I think
Anyway, that's Guy's course negative 101, on the current status of oil prices.
We come full circle back to the Jan. 2009 Lows! Lowest was Jan 16 at $36.GuyM x Ignored says: 12/24/2018 at 10:35 pm
Folks, I think we hit a recession!Recession usually lags 9 months after the market crash, but, yeah. We are basically there.Dennis Coyne x Ignored says: 12/25/2018 at 7:30 amRecession is based on GDP not the stock market or price of oil.GuyM x Ignored says: 12/25/2018 at 7:47 amhttps://www.bea.gov/data/gdp/gross-domestic-product
Q3-2018 was 3.4% GDP growth. Very good for an advanced economy.Of course. But traditionally, crashes take from cash/growth after a period of time. Nine months to a year, and growth in GDP precedes bull markets by the same. It's not a fritzing law, but it's logical, and normal. Has been since I started following it in the 60's. Last crash was different, in that the GDP growth declined before the crash, due to housing. But, if the crash persists, my bet would be a lack of cash, eventually, to support growth. There are huge losses, we don't see that are happening now in the derivative market, besides the stock markets. There was something like 384 trillion just in interest rate bets in derivatives,that half are losing right now.HHH x Ignored says: 12/25/2018 at 8:04 amThis is no traditional crash. FED can stop hiking interest rates and market might pause an consolidate before going lower but lower they go. Until FED stops allowing it's balance sheet to shrink, down is the direction for markets. Back when QE was full blown stuff like gov. shutdown and trade wars were the very thing that made markets go higher because it meant more QE for longer.GuyM x Ignored says: 12/25/2018 at 8:12 amThere is nothing organic about the recovery of markets since 2008-2009. All assets and markets are mispriced. Price discovery wasn't allowed to happen after 2008-2009. Truth is true price discovery won't be allowed to happen this time either.
Fed is manufacturing a market crash so they can do the next round of QE. Fact is QE works but you can't end it and you sure as hell can't reverse it. QE creates the illusion that everything is fine. There is a credibility issue if you can't ever end QE though. That's where the Fed finds itself now.
Your right. Each crash is different. This one is just a slow meltdown. And, since I have been following it, there has never been anything organic about market growth, it's always BS. There was nothing organic about the first big market crash in the early part of last century, it was purely speculative. The tulip crash, before established markets was speculative.HHH x Ignored says: 12/25/2018 at 8:46 am
Growth in GDP and markets are two separate animals. Although, as the previous crash proves, GDP decline can affect the market, as well as market crashes affecting GDP.The stock market, and now especially derivatives, are nothing other than a gigantic Las Vegas casino. Elves in the market strive to maintain that there is a relation, but in the end, it doesn't pan out.
Well the Dow has had its largest monthly loss ever recorded this December unless market recovers some of that between now and the end of the year. Slow meltdown maybe not. It's currently at about -4,200 which tops the largest monthly drop during 2008-2009 by about 1,000 points.GuyM x Ignored says: 12/25/2018 at 8:53 amJust further to drop than the previous ones. Half would be about 10k more points. But, there is nothing magical about half, it could stop well before that.HHH x Ignored says: 12/25/2018 at 9:01 am
The analysis of the drop is still being speculated. The ones that make sense, so far, is that there was a lot of market fear (tariffs, ad nauseum). Sell offs happened, snow balling into covering margin calls. If so, that is a normal scenario, but I think the Fed raising interest rates, and continuing to unravel QE is also a major, if not the major reason. There are a bunch of other reasons that don't make a lot of sense. One blaming oil price. I think that is yet to come, but not this time.Unwinding of FED's balance sheet is also on autopilot. They don't have to have a Fed meeting to vote on it like a rate hike. Much easier to deflect the blame elsewhere for the resulting market decline.Ron Patterson x Ignored says: 12/25/2018 at 1:09 pm-4,200 which tops the largest monthly drop during 2008-2009 by about 1,000 points.GuyM x Ignored says: 12/25/2018 at 2:19 pmHey, it it's the precentage drop that counts. What was the largest monthly percentage drop in the 2008-2009 crash? I would wager it was far greater than the percentage drop this December.
This article is about the huge 1,175 one day drop last February, but the point still holds.
Dow Jones Suffers Worst Point Drop Ever, But Percentage Loss Is Not Historic
The Dow's 4.6% loss on Monday was the worst since August 2011. But it didn't even crack the top-20 of all-time losses. It was just the 25th worst loss since 1960.
The Dow's biggest one-day percentage loss was the 22.6% Black Monday crash on Oct. 19, 1987. In point terms, that was "only" 508 points. In second place, the Dow crashed 12.8% on Oct. 28, 1929.
Looks like the biggest percentage drop for a month was Feb 2009, at around 21%. Eclipsing this month. But, it had also been going down for a long time. What was this month, around 16%? But, it's just started,GuyM x Ignored says: 12/25/2018 at 11:13 amMerry Christmas from S Padre Island at 75 Degrees F.Hightrekker x Ignored says: 12/25/2018 at 12:00 pmVery white this morning in Bend Oregon.Watcher x Ignored says: 12/25/2018 at 2:18 pmSo markets look down 14ish% YTD. Still 4 days to worsen that or better that.GuyM x Ignored says: 12/25/2018 at 2:22 pmYou know, there is no law of the universe that says markets can't be down more than 10% this year, and next year, and the next, and the next for 10 years or so. Never done that before? So what? Never printed 25% of GDP before. Never API 40.6 WTI before. After 10 yrs, scarce oil, scarce life.
You have that right. The world is full of surprises.Watcher x Ignored says: 12/25/2018 at 7:09 pmAnd, I do not see QE, again. Different folks in the Fed. So, banks will lose big time on easy money, and getting more is not going to be easy like last time. Over the past two years, I have been getting endless calls and letters wanting to loan me money. Bet that slows down.
And, because bear markets have a tendency to stick around for a few years, oil supply may put a blanket on improvement. So it could be possible for continued decline, rather than a rebound. Or, one real big final decline. No end to the possibilities.
One, I really see as a possibility, is another export ban. Think about it. Gasoline prices go up due to a shortage. We could be in a recession with stagflation. The public, and the illiterate congress would not be able to comprehend API. We are just exporting oil, when gas prices are high. In a way, they would be right. Think how that would affect 2.5 million bpd pipeline expansions, and extra shipping improvements.
Or, we could elect another flawed icon for President-Elon. Who would promise a Tesla for every family, or a free trip to Mars.
Ok, this is fun, but pointless.
Wrong govts.GuyM x Ignored says: 12/25/2018 at 7:21 pmThink in terms of the big SWFs. It is they that seek action.
As for quoting indices vs their histories, this sounds like a good thing. Just be sure that you quote an index that has the same companies in it as it did historically. The Dow with Apple will be difficult data to find for 1960. But you can find GE in it for then.
Ever notice they don't add a company that is failing? And never remove one that is doing well? Similarly we should only quote WTI 39.6 API price. Difficult data to find.
SWFs? Meaning.GuyM x Ignored says: 12/25/2018 at 7:11 pmhttps://www.cnbc.com/2018/12/24/whats-a-bear-market-and-how-long-do-they-usually-last-.htmlQuick turnaround of the market from this point has no historical precedence. Although, if it does not go down much more, 3 to 5 months is possible.
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Dec 25, 2018 | www.zerohedge.com
The artificial bull market is officially over, with the SPX officially entering bear market today. BTFD is dead. Worst single day drop ahead of Christmas since 1918! As the first bear market in years hits the most artificial stock market in history...
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Trump is right, the Fed is the problem, but not for raising rates. Trump and the MSM media are saying the Fed is making a policy mistake by raising rates as the economy slows, and more importantly because the stock market is selling off. The current FF rate is sitting between 2.25 and 2.5%, which historically is still low and accomodative. But Trump should have stuck to his campaign version of the Fed, when he called out the Fed for the bubble in stocks, and for keeping rates to low which led to what he called a "big fat ugly bubble." After his election, he embraced the stock market, and now he owns it.The Fed is the problem because they cut rates to Zero and held it there for 7 years. The Fed is the problem for helping orchestrate the bailouts. The Fed is the problem because they did multiple rounds of QE which did NOTHING for the middle class and the average Americans, instead it made the rich richer and created the largest wealth inequality. The Fed is the problem because they waited too long to begin raising rates, which helped create the largest asset bubbles the world had ever seen.
And on CNBC, as the market has been selling off nonstop, they have the audacity to ask 'why the relentless selling'?! As the market rallied 342% over the last 10 years, not once did they ever ask why the relentless buying. Not once were they or anyone else worried about the repercussions. They were cheerleading the entire time. Not once did anyone mention that the Fed's reckless policies led to a dangerous rally in stocks and across multiple asset classes. People thought the party would and could never end.
So as the market is only down -20%, today former Hollywood movie director turned Treasury Secretary sent the markets into deeper selling as he made headlines for calling Bank CEO's and consulting with the Plunge Protection Team (PPT) about the market conditions and liquidity. We haven't even seen panic in the markets yet, and we are consulting bank ceo's and the PPT??? But once again, the old conspiracy theory of the existence of the PPT became a fact.
Mnuchin confirmed their existence. Now all of a sudden we are seeing "recession fears" headlines all over the place, but a few months ago when stocks were at records you never heard the "r" word. Yet they love to say the stock market is not the economy. The longest artificial bull market is officially over. Now we will see just how bad it will get. We are only down -20%, and it is a long way down if this is only the start.
Merry Christmas.
Scipio Africanuz , 1 hour ago link
Goggles Pisano , 1 hour ago linkThey herded folks into gambling ventures, while piling them high with alcohol (debt), just like in Vegas. We're tempted to just give up, and let the chips fall wherever. Some folks think recalibration comes without unpleasantness. Making America Great Again, requires sacrifice, work, and determination but if folks would rather sacrifice their children to the Moloch of a levitated market, perhaps we're interacting with the wrong people and ought just quit.
It's depressing that folks claim they wanna go to heaven, but keep looking longingly at hell...
Pollygotacracker , 2 hours ago linkI think if you write a financial article you need to know basic math. S&P 666 to S&P 2940 is 340%, not over 400%.
(2940 less 666) divided by 666.......it'a not difficult.
I stayed out of this abomination of a market once I made the money back I lost in 2008. Never again, I said to myself. The Fed herds people into stocks, houses, whatever they think they can pump and dump. Why doesn't Trump shut them down?
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Dec 24, 2018 | www.zerohedge.com
Authored by Nick Cunningham via Oilprice.com,
If the goal of the OPEC+ cuts was to boost oil prices, then the deal is clearly failing.
OPEC+ is scrambling to figure out a way to rescue oil prices from another deep downturn. WTI is now down into the mid-$40s and Brent into the mid-$50s, both a 15-month low. U.S. shale continues to soar, even if shale producers themselves are now facing financial trouble with prices so low. Oil traders are clearly skeptical that OPEC+ is either willing or capable of balancing the oil market.OPEC+ thought they secured a strong deal in Vienna in early December, but more needs to be done, it seems. OPEC's Secretary-General Mohammad Barkindo wrote a letter to the cartel's members, arguing that they need to increase the cuts. Initially, the OPEC+ coalition suggested that producers should lower output by 2.5 percent, but Barkindo said that the cuts need to be more like 3 percent in order to reach the overall 1.2 million-barrel-per-day reduction.
More importantly, the group needs to detail how much each country should be producing. "In the interests of openness and transparency, and to support market sentiment and confidence, it is vital to make these production adjustments publicly available," Barkindo told members in the letter, according to Reuters . By specifying exactly how much each country will reduce, the thinking seems to be, it will go a long way to assuaging market anxiety about the group's seriousness.
Still, the plunge in oil prices this month is evidence that traders are not convinced.
The view is "that the U.S. will continue to grow like gangbusters regardless of price and overwhelm any OPEC action," Helima Croft, the chief commodities strategist at Canadian broker RBC, told the Wall Street Journal .
"Unless there is a real geopolitical blowup, it could take time for these cuts to really shift sentiment."
While cuts from producers like Saudi Arabia will help take supply off of the market, OPEC might help erase the surplus in another unintended way. Bloomberg raises the possibility that low oil prices could increase turmoil in some OPEC member states . The price meltdown between 2014 and 2016 led to, or at least exacerbated, outages in Libya, Venezuela and Nigeria. The same could happen again.
Just about all OPEC members need much higher oil prices in order to balance their books. Saudi Arabia needs roughly $88 per barrel for its budget to breakeven. Libya needs $114. Nigeria needs $127. Venezuela needs a whopping $216. Only Kuwait -- at $48 per barrel -- can balance its books at prevailing prices. Brent is trading in the mid-$50s right now.
... ... ...
DFGTC , 34 minutes ago link
The math is quite simple:
1) Oil ABOVE $75/barrel (real terms) causes global recession and lower productivity.
2) Oil BELOW $75/barrel causes economic damage in Saudi Arabia, and clears out a LOT of bad junk dept in the shale patch.
3) Oil BELOW $55/barrel (for too long), and you can say hello to shortages ... sooner than you might think.
(they call these "tight oil plays" for a reason folks)
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Dec 24, 2018 | turcopolier.typepad.com
Don't ,forget John Bolton's late October visit to Azerbaijan, Georgia and Armenia where he pragmatically refined US priorities for each country including the indication for sanction waving in respect of South Stream energy. Bolton's tour followed on from a visit to Moscow. DJT had a 50 minute private meeting with Erdogan at the G20 followed by a further extended phone call on the 14th December and the final call on the 21st immediately prior to the Policy announcement. This marks considered policy and unfortunately for the Rojave Kurds their interest were found wanting in the balance. There will be complementary side deals involving Iran, Assad, Putin and Netanyahu. There then remains Idlib.
https://www.dailysabah.com/...
https://www.tccb.gov.tr/en/...
https://www.tccb.gov.tr/en/...
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Dec 22, 2018 | peakoilbarrel.com
Energy News x Ignored says: 12/18/2018 at 3:50 pm
Chart showing previous rate raising cycles and recessionsGuyM x Ignored says: 12/18/2018 at 11:27 pm
https://pbs.twimg.com/media/DutmqNRVYAE9YqT.jpgThat's interesting!Iron Mike x Ignored says: 12/19/2018 at 12:34 amWow the only difference in the last one is that the FED or any central bank in the world right now, doesn't have any ammunition left to kick start the economy back with cheap money. Quite worrying.
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Dec 22, 2018 | peakoilbarrel.com
Dennis Coyne x Ignored says: 12/21/2018 at 11:45 am
https://www.marketwatch.com/story/oversold-oil-market-will-give-way-to-gains-in-2019-experts-predict-2018-12-20GuyM x Ignored says: 12/21/2018 at 2:26 pmOverall, oil prices will continue to "be difficult to predict," said Youngberg. "2019 will be volatile just as 2018 was."
Even so, he still offered some predictions for next year. He sees WTI prices averaging $60 a barrel and global benchmark Brent averaging $66 in 2019. That would mark increases of roughly 30% for WTI and 20% for Brent from Thursday's levels.
US stocks are decreasing at a slow time of year at about 2% a month. US will have minimal growth in 2019, in all likelihood at current or even at $60 due the current low price. OPEC plus is up to about a 1.5 million cut, so even at zero growth inventories will go away. So, an equilibrium is assured
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Dec 22, 2018 | peakoilbarrel.com
GuyM x Ignored says: 12/19/2018 at 2:10 pm
Know it's not fair to ask with the recent price drop, but considering $46 a barrel price, which shale play is going to contribute to a 600k barrel increase next yearGuyM x Ignored says: 12/19/2018 at 3:20 pmBy my logic, prices should be substantially higher, already. But, there is NO current discussion which I believes touches on reality. Oil companies have to feel the same way. Hence, my expectation of reduced capex through the first half. But, that's using logic over future actions, which is a losing proposition. Oil prices will be volatile, and discussions over supply/demand will be far from reality. That's a pretty good guess.
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Dec 22, 2018 | peakoilbarrel.com
Watcher
x Ignored says: 12/18/2018 at 10:56 pm So what are people going to say if the price goes low $40s, production increases and companies post losses? And then the next year exactly the same thing happens. And the next. Reply
GuyM x Ignored says: 12/18/2018 at 11:03 pm
Er, "that's a lot of bankruptcies"?Energy News x Ignored says: 12/19/2018 at 6:00 amYes I don't believe chapter 11 bankruptcies stopped much production in 2016, will have to wait and see if higher rates and a weaker junk bond market do anythingshallow sand x Ignored says: 12/19/2018 at 6:33 am$WTI-Midland at 38.99
Bloomberg chart: https://pbs.twimg.com/media/DuwquiPXcAAQfL5.jpgEN.Eulenspiegel x Ignored says: 12/19/2018 at 7:11 amLook at the EIA field crude production page, which I assume for 2015, 2016 and 2017 is now fairly accurate.
Production dropped more than 1.1 million BOPD from the 2015 peak.
The Permian frenzy appears to have been the primary driver of growth since, with US production up 3 million BOPD from 9/15-9/18.
The price unfortunately needs to drop another $10 or so and stay there for awhile, as many are hedged on a percentage of barrels in the Permian and I assume there is still quite a bit of acreage that is not HBP.
I wound up owning FANG when it bought EGN. It is down $48 pretty quickly, and has been considered one of the best independents in the Permian. I have heard claims they are profitable in the $20s so I guess maybe we will find out.
The algos have been in charge of the oil market for awhile. Wouldn't surprise me if we challenge 2016 low, if for no other reason than short to medium term oil prices near little relation to the physical market.
When they're profitable in the 20s, they should have now tons of cash and dividends. At the 60$ WTI they should have made much more than 50% earning from total revenue, and should be able to finance whole 2019 drilling program from cash they already earned.GuyM x Ignored says: 12/20/2018 at 8:42 amOtherwise, they lied.
I really can't fathom being profitable at $20.
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Dec 22, 2018 | oilprice.com
Bearish supply-side factors
Economic downturn . Perhaps the largest pricing risk, and one of the hardest to predict, is the possibility of an economic downturn . The global economy has already thrown up some red flags, with slowing growth in China, contracting GDP in parts of Europe, currency crises in emerging markets and financial volatility around the world. The tightening of interest rates looms large in many of these problems. "Alarm bells are starting to ring. Demand growth has been a pillar of strength for the oil market since prices fell and has exceeded 1 million b/d every year since 2012," WoodMac's Simon Flowers wrote. "We forecast 1.1 million b/d in 2019, but the trend is at risk." The U.S.-China trade war could still drag down the global economy, but financial indicators are already flashing warning signs.
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Dec 22, 2018 | peakoilbarrel.com
GuyM x Ignored says: 12/20/2018 at 6:16 pm
Looks like a lot of bubbles bursting. Not likely to bounce back, so not much financing available to float pure Permian players. Doesn't look good for any increase in production. Oil prices will probably stay low with Dow for awhile. Until inventories get closer to zero. Madness.dclonghorn x Ignored says: 12/20/2018 at 10:12 pmInteresting article from Goehring investment bank. They estimate that KSA remaining reserves are around 50 billion bbls, instead of the 260 b claimed. They also (surprise) think that was the reason the Aramco IPO was pulled. I also thought the Aramco IPO would never happen because they would not be able to buy an acceptable reserve report.Iron Mike x Ignored says: 12/20/2018 at 11:59 pmhttp://blog.gorozen.com/blog/what-is-the-real-size-of-the-saudi-oil-reserves-pt-2/2
Fifty billion does seem low, however its probably much closer than KSA's 260.
Interesting, they are probably right.dclonghorn x Ignored says: 12/21/2018 at 6:15 am
I knew Aramco would pull out of the IPO. They are one of the most secretive companies. How you going to float on the NYSE or London SE with no transparency, which is required by law.
50 billion sounds about right in my worthless opinion. Interestingly enough that would be more or less close to the Permian basin reserves.
I think peak oil will arrive without many people noticing until after it has occurred.A few more thoughts about the referenced Goering report.First, the basis or their report: "We have good data going up to 2008, however after that point data becomes difficult to find."
Does anyone else have good data on Ghawar production through 2008. Actual Saudi production data is hard to come by, and I would like to see a table of Ghawar production through 2008 if it is out there.
Based on their 2008 data they have included a Hubbert Linearization which is the basis for their claim.Second, if their production data and linearization are correct, they have not been adjusted for improved results from better technology. I believe the multi lateral super wells Saleri described in his 2005 SPE paper have allowed KSA to recover several percent of additional original oil in place, as well as to maintain high production rates longer.
Third is that it appears many of those super wells were drilled beginning in mid 2000's. It would make sense that the change in Saudi attitudes regarding production restraint between 2014 and now could be due to those multilateral wells watering out.
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Dec 22, 2018 | peakoilbarrel.com
shallow sand x Ignored says: 12/20/2018 at 7:54 pm
Coffee. I hope if you have been investing in the Appalachian gas players that you have been short.Coffeeguyzz x Ignored says: 12/20/2018 at 9:02 pmThe only investment class in oil and gas that may be worse over the past ten years would be the service sector, particularly the drillers.
Interesting that, despite all the activity, the US onshore drillers are becoming penny stocks. I have pointed out Nabors. The rest are all tanking bad it appears.
You made a big deal out of a very long lateral operated by Eclipse Resources. Eclipse equity closed at 76 cents a share.
I am not so sure that ultra cheap oil and gas is such a great thing for the US, given we are now the world's largest producer of both.
Shallowshallow sand x Ignored says: 12/21/2018 at 12:31 amI never have, nor will I ever in the future, take any financial stake in these or any other companies.
As I have stated numerous times over the years, my primary interest is in operations who is doing what, how it is being done, who is doing it better – or claims to be.
My initial interest in this site way back when was to learn why some people seemed to think this so called Shale Revolution was No Big Deal a retirement party, in the words of Berman.
It was quickly apparent to me that a great deal of unawareness vis a vis industry developments permeated this site's participants.
This, alongside several predisposing factors to NOT want the shale production to explode upwards provided fertile grounds for the soon 12 to 16 million barrels per day US oil production, along with 100+ Bcfd gas production to be a spectaculsrly unforseen reality.
What I prefer or not prefer is secondary to what I believe to be occurring, shallow.
If anyone cares to spend 3 minutes reading the April, 2017 USGS press release accompanying the Haynesville/Bossier assessment, they will read the following from Walter Guidroz, Program Coordinator of the USGS Energy Resources Program
"As the USGS revisits many of the oil and gas basins of the US, we continually find that technological revolutions of the past few years have truly been a game changer in the amount of resources that are now technically recoverable".
Addendum Eclipse is being shut down/folded into another entity.
The lead engineer behind their ultra long laterals is now working with the new outfit from which this technology will continue to spread.No offense meant coffee. I know some who post here like to tangle with you. I am not interested in that, just straightforward discussion.Shale has surprised the heck out of me, and has made me several times strongly consider liquidating my entire investment in oil and gas, absent maybe keeping just a couple of KSA like cheap (to quote PXD CEO) LOE wells to fool around with. Had I known in 2012-13 that this was coming, would have sold all but those few "piddle around with wells." It has been absolutely no fun when these price crashes occur, and is especially no fun knowing that this shale miracle is less profitable than an operation producing less than one bopd per well from very, very old and tired wells.
You have to admit that the way the shale is being developed is destroying the oil and gas industries that are developing it.
Particularly hard hit are the service companies, many which are already bankrupt.
Even XOM, which I have owned for many, many years (prior to the merger, I owned both Exxon and Mobil) has hit the skids, having fallen through the $70 per share barrier.
Range Resources is at $10.26, a level not seen since 2004. It traded as high as $90 before the 2014 crash.
EQT was over $100. Today $18.55
Whiting was nearly $400 (accounting for a reverse split) and now is $21.98
CHK closed at $1.84. All time high was $64.
Nabors Industries, the largest onshore US driller closed at $2.09. Traded at split adjusted $10 in 1978.
Halcon Resources Corp. was over $3,000 split adjusted at one time, went Ch 11 BK, now at $1.65, looking not so good re: BK again.
We shall soon see who can access what in the way of capital to keep going assuming oil prices stay below $50 WTI for a considerable time.
I guess I am always concerned about whether businesses make money. Seems to me that would be of some importance to you, but it isn't, and I suppose there is no harm in that.
I have yet to work anywhere where making money was not the primary motivation.
If the money wasn't important, the shale executives would not make so much of it, I suppose.
I have always had a hard time understanding why they kept drilling wells in Appalachia when the gas was selling for 50 cents per mcf. Not important to you, but maybe to others.
Anyway, if we didn't have different views, places like this wouldn't be very interesting.
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Dec 22, 2018 | finance.yahoo.com
Chinese refineries that used to purchase U.S. oil regularly said they had not resumed buying due to uncertainty over the outlook for trade relations between Washington and Beijing, as well as rising freight costs and poor profit-margins for refining in the region.
Costs for shipping U.S. crude to Asia on a supertanker are triple those for Middle eastern oil, data on Refinitiv Eikon showed.
A senior official with a state oil refinery said his plant had stopped buying U.S. oil from October and had not booked any cargoes for delivery in the first quarter.
"Because of the great policy uncertainty earlier on, plants have actually readjusted back to using alternatives to U.S. oil ... they just widened our supply options," he said.
He added that his plant had shifted to replacements such as North Sea Forties crude, Australian condensate and oil from Russia.
"Maybe teapots will take some cargoes, but the volume will be very limited," said a second Chinese oil executive, referring to independent refiners. The sources declined to be named because of company policy.
A sharp souring in Asian benchmark refining margins has also curbed overall demand for crude in recent months, sources said.
Despite the impasse on U.S. crude purchases, China's crude imports could top a record 45 million tonnes (10.6 million barrels per day) in December from all regions, said Refinitiv senior oil analyst Mark Tay.
Russia is set to remain the biggest supplier at 7 million tonnes in December, with Saudi Arabia second at 5.7-6.7 million tonnes, he said.
19 hours ago This is an economic/political tight rope for both countries. China is the largest auto market in the world with numerous manufacturers located inside its borders. Apple sales will disappoint inside China after Meng's arrest over Iran sanctions (Huawei is a world heavy weight in terms of sales), and this has already begun inside China due to national pride. Canada has already seen one trade agreement postponed over her detention. US firm on the main have already issued orders to not have key employees travel to their Chinese plants unless absolutely necessary for fear of retaliation. Brussels is actively working on a plan to bypass US Iranian sanctions, which are deeply unpopular in Europe.
The key to this solution might be in automotive. Oil is possibly on the endangered bargaining list. Russia is a key trading partner (for years) with China and, along with Saudi Arabia and Iran (or even without Iran) will be able to supply their needs. Our agricultural sector, particularly in soybeans, has been hit hard, forcing the US govt. into farm subsidies. Brazil just recorded a record harvest in soybeans. The US could counter with lifting Meng from arrest in return for an agricultural break, but those negotiations won't make the mainstream news. Personally, I think her arrest was a very ill-thought move on the part of law enforcement, as the benefits don't even begin to outweigh the massive retaliation to US firms operating inside their borders. It is almost akin to arresting Tim Cook of Apple or Apple's CFO. You don't kill a bug with a sledge hammer.
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Dec 19, 2018 | www.theamericanconservative.com
Christopher Halloran / Shutterstock.com , European External Action Service/Flickr Reimposed sanctions on Iran are cruel and unnecessary, and they are also ineffective :Iranian Foreign Minister Mohammad Javad Zarif on Saturday said US sanctions will have no impact on the policies of the Islamic republic at home or abroad.
"It is obvious that we are facing pressure by the US sanctions. But will that lead to a change in policy? I can assure you it won't," Zarif told the Doha Forum policy conference in Qatar.
"If there is an art we have perfected in Iran and can teach to others for a price, it is the art of evading sanctions," he added.
Sanctions typically fail to change regime behavior, and they are even more likely to fail if there is no practical way for the targeted regime to get out from under sanctions short of surrender. The more importance that a regime places on the policies that the outside government wants to change, the greater the likelihood of failure will be. When the outside government's goals threaten the regime's security or even its very survival, there is no question of making a deal.
Because the Trump administration is pursuing regime change in all but name, there is no chance that Iran will yield to U.S. pressure. The administration's demands are so ambitious and excessive that no self-respecting state could agree to them without giving up its sovereignty and independence. It should be clear by now that pressure and coercion inspire defiance and intransigence. If the U.S. wants to see changes in Iranian international behavior, it would need to provide assurances and incentives that make taking that risk worth their while. Since this administration has made a point of reneging on commitments already made to Iran, there are no assurances that it could make that the Iranian government could trust, and the administration is allergic to offering any incentives to its negotiating partners for fear of appearing "weak."
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Nov 24, 2018 | www.thenation.com
Zbigniew Brzezinski: America's Grand Strategist By Justin Vaïsse; Catherine Porter, trans.
Underlying that purpose are at least two implicit assumptions. The first is that, when it comes to statecraft, grand strategy actually exists, not simply as an aspiration but as a discrete and identifiable element. The second is that, in his writings and contributions to US policy, Kissinger himself qualifies as a strategic virtuoso. For all sorts of reasons, we should treat both of these assumptions with considerable skepticism.
That Brzezinski, who died last year at age 89, lived a life that deserves to be recounted and appraised is certainly the case. Born in Warsaw in 1928 to parents with ties to Polish nobility, Brzezinski had a peripatetic childhood. His father was a diplomat whose family accompanied him on postings to France, Germany, and eventually to Canada. The Nazi invasion of 1939, which extinguished Polish independence, also effectively ended his father's diplomatic career. With war engulfing nearly all of Europe, Brzezinski would not set foot on Polish soil again for nearly two decades.
Although the young Brzezinski quickly adapted to life in Canada, the well-being of Poles and Poland remained an abiding preoccupation. After the war, he studied economics and political science at McGill University, focusing in particular on the Soviet Union, which by then had replaced Germany as the power that dominated the country of his birth. Brzezinski was a brilliant student with a particular interest in international affairs, a field increasingly centered on questions related to America's role in presiding over the postwar global order.
After graduating from McGill, Brzezinski set his sights on Harvard, which at the time was the very archetype of a "Cold War university." Senior faculty and young scholars on the make were volunteering to advise the national-security apparatus just then forming in Washington. For many of them, the Soviet threat appeared to eclipse all other questions and fields of inquiry. In this setting, Brzezinski flourished. Even before becoming an American citizen, he was thoroughly Americanized, imbued with the mind-set that prevailed in circles where members of the power elite mixed and mingled. Partially funded by the CIA, the Russian Research Center, Brzezinski's home at Harvard, was one of those places.
From his time in Cambridge, he emerged committed, in his own words, to "nothing less than formulating a coherent strategy for the United States, so that we could eventually dismantle the Soviet bloc" and, not so incidentally, thereby liberate Poland. To this cause, the young Brzezinski devoted himself with single-minded energy.
A s a scholar and author of works intended for a general audience, Zbig, as he was widely known, was nothing if not prolific. Churning out a steady stream of well-regarded books and essays, he demonstrated a particular knack for "summarizing things in a concise and striking way."
Clarity took precedence over nuance.
And with his gift for stylish packaging -- crafting neologisms ("technetronic") and high-sounding phrases ("Histrionics as History in Transition") -- his analyses had the appearance of novelty, even if they often lacked real substance.
Whether writing for his fellow scholars or addressing a wider audience, Brzezinski had one big idea when it came to Cold War strategy: He promoted the concept of "peaceful engagement" as a basis for US policy.
Convinced that the Soviet Union and the Soviet bloc were internally fragile, he believed that economic and cultural interaction with the West would ultimately lead to their collapse. The idea was to project strength without provoking confrontation, while patiently exerting indirect influence.
Yet little of the Brzezinski oeuvre has stood the test of time. The American canon of essential readings in international relations and strategy, beginning with George Washington's farewell address and continuing on through works by John Quincy Adams, Alfred Thayer Mahan, Hans Morgenthau, and a handful of others (the list is not especially long), does not include anything penned by Brzezinski. Although Vaïsse, a senior official with the French foreign ministry, appears to have read and pondered just about every word his subject wrote or uttered, he identifies nothing of Brzezinski's that qualifies as must-reading for today's aspiring strategist.
This limited academic influence probably did not bother Zbig; he never saw himself as a mere scholar. He was a classic in-and-outer, rotating effortlessly from university campuses to political campaigns, and from government service to plummy think-tank billets. According to Vaïsse, Brzezinski never courted the media. Even so, he demonstrated a pronounced talent for getting himself in front of TV cameras, becoming a frequent guest on programs like Meet the Press . He knew how to self-promote.
Toward the end of his life, Brzezinski even had a Twitter account. His last tweet, from May 2017, both summarizes the essence of his worldview and expresses his dismay regarding the presidency of Donald Trump: "Sophisticated US leadership is the sine qua non of a stable world order. However, we lack the former while the latter is getting worse."
F rom the time Brzezinski left Harvard in 1960 to accept a tenured position at Columbia, he made it his mission to nurture and facilitate that sophistication. For Zbig, New York offered a specific advantage over Cambridge: It provided a portal into elite political circles. As it had for Kissinger, the then-still-influential Council on Foreign Relations provided a venue that enabled Brzezinski to curry favor with the rich and powerful, and to establish his bona fides as a statesman to watch. Henry's patron was Nelson Rockefeller; Zbig's was Nelson's brother David.
Although not an ideologue, Brzezinski was a liberal Democrat of a consistently hawkish persuasion. Committed to social justice at home, he was also committed to toughness abroad. In the 1960s, he supported US intervention in Vietnam, treated the domino theory as self-evidently true, and argued that, with American credibility on the line, the United States had no alternative but to continue prosecuting the war. Even after the war ended, Vaïsse writes, Brzezinski "did not view Vietnam as a mistake."
Yet Vietnam did nudge Brzezinski to reconsider some of his own assumptions. In the early 1970s, with an eye toward forging a new foreign policy that might take into account some of the trauma caused by Vietnam, he organized the Trilateral Commission. Apart from expending copious amounts of Rockefeller money, the organization produced little of substance. For Brzezinski, however, it proved a smashing success. It was there that he became acquainted with Jimmy Carter, a Georgia governor then contemplating a run for the presidency in 1976.
Zbig and Jimmy hit it off. Soon enough, Brzezinski signed on as the candidate's principal foreign-policy adviser. When Carter won, he rewarded Brzezinski by appointing him national-security adviser, the job that had vaulted Kissinger to the upper ranks of global celebrity.
Zbig held this post throughout Carter's one-term presidency, from 1977 to 1981. It would be his first and last time in government. After 1981, Brzezinski went back to writing, continued to opine, and was occasionally consulted by Carter's successors, both Democratic and Republican. Yet despite having ascended to the rank of elder statesman, never again did Brzezinski occupy a position where he could directly affect US policy.
Because of Brzezinski's limited influence on foreign policy after Carter, Vaïsse's case for installing him in the pantheon of master strategists therefore rests on the claim that on matters related to foreign policy, the Carter presidency was something less than a bust. Vaïsse devotes the core of his book to arguing just that. Although valiant, the effort falls well short of success.
From the outset of his administration, Carter accorded his national-security adviser remarkable deference. Brzezinski was not co-equal with the president; yet neither was he a mere subordinate. He was, Vaïsse writes, "the architect of Carter's foreign policy," while also exercising "an exceptional degree of control" over its articulation and implementation.
In a characteristic display of self-assurance and bureaucratic shrewdness, as the new president took office, Brzezinski gave him a 43-page briefing book prescribing basic administration policy. Under the overarching theme of "constructive global engagement," Brzezinski identified 10 specific goals. The first proposed to "create more active and solid cooperation with Europe and Japan," the 10th to "maintain a defense posture designed to dissuade the Soviet Union from committing hostile acts." In between were less-than-modest aspirations to promote human rights, reduce the size of nuclear arsenals, curb international arms sales, end apartheid in South Africa, normalize Sino-American relations, terminate US control of the Panama Canal, and achieve an "overall solution to the Israeli-Palestinian problem."
While Brzezinski's agenda was as bold as it was comprehensive, it nonetheless hewed to the Soviet-centric assumptions that had formed the basis of US policy since the end of World War II. Zbig recognized that the world had changed considerably in the ensuing years, but he also believed that any future changes would still occur in the context of a continuing Soviet-American rivalry. His strategic perspective, therefore, did not include the possibility that the international order might center on something other than the binaries imposed by the Cold War. The disintegration of the Soviet bloc and eventually of the Soviet Union itself was, in his view, a nominal goal of American foreign policy, but not an immediate prospect.
Using Brzezinski's 10 policy objectives as a basis for evaluating his performance, Vaïsse gives the national-security adviser high marks. "Few administrations have known so many tangible successes in only four years," he writes, citing the Panama Canal Treaty, the Israeli-Egyptian peace agreement, and improved relations with China. Yet while Panama remains an underappreciated achievement, the other two qualify as ambiguous at best. The Camp David accords did nothing to resolve the Palestinian issue that underlay much of Israeli-Arab enmity; it produced a dead-end peace that left Palestinians without a state and Israel with no end of problems. And the Brzezinski-engineered embrace of China, enhancing Chinese access to American technology and markets, accelerated that country's emergence as a peer competitor.
More troubling still was Brzezinski's failure to anticipate or to grasp the implications of the two developments that all but doomed the Carter presidency: the 1978 Iranian Revolution and the 1979 Soviet intervention in Afghanistan. Vaïsse does his best to cast a positive light on Brzezinski's role in these twin embarrassments. But there's no way around it: Brzezinski misread both -- with consequences that still haunt us today.
The Iranian Revolution, which Brzezinski sought to forestall by instigating a military coup in Tehran, offered a warning against imagining that Washington could shape events in the Islamic world. Brzezinski missed that warning entirely, although he would by no means be the last US official to do so. As for the Kremlin's plunge into Afghanistan, widely interpreted as evidence of the Soviet Union's naked aggression, it actually testified to the weakness and fragility of the Soviet empire, already in an advanced state of decay. Again, Brzezinski -- along with many other observers -- misread the issue. When clarity of vision was most needed, he failed to provide it.
Together, these two developments ought to have induced a wily strategist to reassess the premises of US policy. Instead, they resulted in decisions to deepen -- and to overtly militarize -- US involvement in and around the Persian Gulf. While this commitment is commonly referred to as the Carter Doctrine, Vaïsse insists that it "was really a Brzezinski doctrine."
Regardless of who gets the credit, the militarization of US policy across what Brzezinski termed an "arc of crisis" encompassing much of the Islamic world laid the basis for a series of wars and upheavals that continue to this day. If, as national-security adviser, Brzezinski wielded as much influence as Vaïsse contends, then this too forms part of his legacy. When it mattered most, the master strategist failed to understand the implications of the crisis that occurred on his watch.
The most glaring problem anyone faces in trying to assert Brzezinski's mastery of world affairs, however, rests not in Iran or Afghanistan, but in how the Cold War came to an end. Indeed, Brzezinski viewed it as essentially endless. As late as 1987, just two years before the fall of the Berlin Wall, he was still insisting that "the American-Soviet conflict is an historical rivalry that will endure for as long as we live."
B rzezinski was certainly smart, flexible, and pragmatic, but he was also a prisoner of the Cold War paradigm. So too were virtually all other members of the foreign-policy establishment of his day. Indeed, subscribing to that paradigm was a prerequisite of membership. Yet this adherence amounted to donning a pair of strategic blinders: It meant seeing only those things that it was convenient to see.
Which brings us back to Zbig's last tweet, with its paean to American leadership as the sine qua non of global stability. The tweet neatly captures the mind-set that the foreign-policy establishment has embraced with something like unanimity since the Cold War surprised that establishment by coming to an end. This mind-set gets expressed in myriad ways in a thousand speeches and op-eds: The United States must lead. There is no alternative; history itself summons the country to do so. Should it fail in that responsibility, darkness will cover the earth.
This is why Trump so infuriates the foreign-policy elite: He appears oblivious to the providential call that others in Washington take to be self-evident. Yet adhering to this post–Cold War paradigm is also the equivalent of donning blinders. Whatever the issue -- especially when the issue is ourselves -- it means seeing only those things that we find it convenient to see.
The post–Cold War paradigm of American moral and political hegemony prevents us from appreciating the way that the world is actually changing -- rapidly, radically, and right before our very eyes. Today, with the planet continuing to heat up, the nexus of global geopolitics shifting eastward, and Americans pondering security threats for which our pricey and far-flung military establishment is all but useless, the art of strategy as practiced by members of Brzezinski's generation has become irrelevant. So too has Zbig himself.
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Dec 14, 2018 | peakoilbarrel.com
Eulenspiegel, 12/12/2018 at 12:44 pm
In other sources US growth is more 1.9 mb/year, source is Rystad:GuyM, 12/12/2018 at 2:04 pmhttps://oilprice.com/Energy/Crude-Oil/OPEC-Came-Up-Short-Heres-What-They-Should-Do.html
Looks like the USA is supplying half of the world soon at these growth rates.
As far I know Bakken is still pipeline limited the next time, so no growth from there?
So it falls most to GOM, Eagle ford and Permian, which can grow without pipelines?
EF does not have pipeline problems, but it is not going to grow at $55 or less oil price. If prices rise to $80, yes. But, the price will need to be consistent for a good long while.GOM has hit its high back in August according to SLa and George.
We won't have much, or any growth in the first half of 2019, no matter what the hype is, unless prices spike.
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Dec 14, 2018 | peakoilbarrel.com
ProPoly, 12/13/2018 at 12:35 pm
Yeah, seems highly unlikely at best that Eagle Ford will ever regain its high. Even the EIA forecast – notorious blue sky that it is – only gets it back to 1.5 million bpd. And that on a theory of producers shifting from Permian due to logistical constraints in the latter.It's a mature area, only so many decent spots to drill.
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Dec 14, 2018 | peakoilbarrel.com
shallow sand, 12/13/2018 at 9:49 am
Dennis.Hickory, 12/13/2018 at 10:54 amI think the frustration of a small business oil producer should be obvious.
My family and I have pretty much decided producing oil in the US is not a real business anymore. How can one have a real business when there are so many fixed costs, that do not change much, with the price of the product sold moving up and down like a yo-yo? Add to that at least 50% of the voting public thinking what you are doing is evil. It is now much more preferred that one grow harvest and sell cannabis so people can get high, rather than produce oil for gasoline, diesel, plastics and the numerous other daily used consumer products.
You have done a lot of construction work, so I am sure you know the feeling when there is a recession and work drops way off. At least you might get some sympathy in that situation. Farmers get a government payment. Oil people get laughed at.
We basically lost $20 a barrel in the blink of an eye. In our case, that is over $100K per month of income loss. This after 2015-17, where the price was less than half what it had been 2011-14.
Take the family out here that is living on 20 BOPD, doing all the work themselves. Selling 600 BO per month. That family just saw a $12,000 hit to the top line. The expenses didn't change except for fuel, which has fallen some. Probably less than $1,000 per month savings there.
Imagine what would happen if the boss walked into the tech campus of a firm in Silicon Valley and said everyone was taking a $12,000 per month pay cut immediately. Would be a lot of knashing of teeth.
Now imagine the pay cut was pretty much in conjunction with an erratic President, supported almost 100% by the industry, ironically, who erroneously thinks .30 a gallon lower gasoline prices will be a boon to the US economy. With the alternative being a party openly hostile to the industry, who cannot differentiate between small business owners with small footprints and corporate titans who make no money on the product, but make billions off the corporate largess. We are all terrible polluters who need to get hit with a carbon tax and made to jump through environmental testing hoops despite we are emitting less than the tiny amounts of methane we were emitting 30 years ago.
It is incredibly frustrating.
Shallow. Thanks for explaining how it looks from where you stand.As much as I hate to think this way, it raises the idea that the government should have a price stability mechanism in place that shields producers from the volatility of the dysfunctional market. Maybe gets updated every 6 months depending on market conditions or something like that. I'm sure everyone would hate it.
Maybe the government should even have a longrange an energy policy. Like a ten yr plan. I know crazy thinking.
shallow sand, 12/13/2018 at 12:43 pm
Regarding my small oil business rant above. Small business is a tough place, not just in the oil industry, but all over.Longtimber, 12/13/2018 at 3:22 pmI think of the grocery store owners. Those guys had a pretty good thing going in small towns 30 years ago. Now they are gone if there is a Walmart nearby.
Same with department stores. The mall in a mid sized town nearby is halfway a ghost town now.
Capitalism can be brutal. But it doesn't seem that another way has proven to be a better idea either. We tend to take freedom for granted in the USA. We are very lucky we have the freedom we do have.
I don't know that price controls are a good idea. I don't know what the answer is to market volatility. We benefitted from getting into oil when no one wanted to touch it, and really did well from 2005–14. Since then, not so good, but maybe our time will come once more.
Overall, shouldn't complain. Just trying to give a unique perspective. Also trying to let everyone know that there are a lot of hardworking small business owners in upstream oil and they aren't the terrible people some make them out to be.
Everything in the media these days is very urban centered and also very East Coast dominant. So different perspectives from different regions is always good, I think.
!! Runners-up for Quote of the Year !!Synapsid, 12/13/2018 at 7:14 pm
from above:
"Shale oil is a by-product of easy monetary policies which are being withdrawn."
in a way kinda
https://www.zerohedge.com/news/2018-12-11/real-implications-new-permian-estimates
"Now, I know FOR A FACT that American energy dominance is within our grasp"
and it keeps getting more better
"Reilly stressed, "Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.""
Pretty Powerful results for just a by-product!Was it JH Kunstler that pointed out that "energy dominance" is kinda kinky?
shallow sand,farmlad, 12/13/2018 at 10:04 pmI always look forward to your posts. I think there's nothing more important here, and that's a high bar.
Shallow SandDennis Coyne, 12/14/2018 at 12:35 am
Neo Capitalism or Creditism might be better terms to describe our current monetary and economic system. When central banks can issue Credit and lend it to their pets by the billions and when those corporations go under they just issue more Credit to the corporations that take their place. This is not Capitalism where companies and individuals produce something valuable and return a profit that they can then reinvest as Capital.This current economic system is destroying the sources of wealth and valuables. It encourages burning down the house to stay warm. I used to dream of being a big farmer but more and more I feel lucky when I see the stress and fear that so many of the bigger farmers are dealing with.
I appreciate your great contribution to this site. I've learned so much from your comments. They've increased my confidence that this shale business would not be here if it were not for the biggest ponzi scheme to date. And that the peak of Oil production per Capita that was reached in 1979 will never again be topped in my lifetime even with all this fraud on its side.
Some great musings from Charles Hugh Smith
https://www.oftwominds.com/blogoct18/zombies10-18.htmlshallow sand,Boomer II, 12/13/2018 at 1:52 pmYour perspective is much appreciated. I continue to hope for higher oil prices as that is what will allow us to get through the energy transition.
Oil consumption might head down.Frugal, 12/13/2018 at 8:48 pmThis one on recession.
This one on automation.
https://www.nytimes.com/2018/12/13/opinion/robots-trump-country-jobs.html
Currently, legacy decline is just above 500,000 barrels per month. This means that if production is to be increased by 100,000 barrels per month then new wells must produce 600,000 barrels per month of new oil.Watcher, 12/14/2018 at 12:00 amIf US new oil production is indeed increasing by 600,000 barrels/day per month, this is a mind-blowing number -- 7.2 million barrels/day per year. Has new oil production ever increased by this much anywhere else in the World?
Do we have a computation of what % of total US oil production is from wells < 1 year old? Or even < 3 mos old.Dennis Coyne, 12/14/2018 at 12:29 amWatcher,Go to shaleprofile.com to get an idea. In August 2018 roughly 25% of US C+C is from wells which started producing in the first 8 months of 2018.
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Dec 13, 2018 | www.zerohedge.com
Besides that, Saudi Arabia requires the organization to maintain a high level of oil production due to pressure coming from Washington to achieve a very low cost per barrel of oil. The US energy strategy targets Iranian and Russian revenue from oil exports, but it also aims to give the US a speedy economic boost. Trump often talks about the price of oil falling as his personal victory. The US imports about 10 million barrels of oil a day, which is why Trump wrongly believes that a decrease in the cost per barrel could favor a boost to the US economy. The economic reality shows a strong correlation between the price of oil and the financial growth of a country, with low prices of crude oil often synonymous of a slowing down in the economy.
It must be remembered that to keep oil prices high, OPEC countries are required to maintain a high rate of production, doubling the damage to themselves. Firstly, they take less income than expected and, secondly, they deplete their oil reserves to favor the strategy imposed by Saudi Arabia on OPEC to please the White House. It is clearly a strategy that for a country like Qatar (and perhaps Venezuela and Iran in the near future) makes little sense, given the diplomatic and commercial rupture with Riyadh stemming from tensions between the Gulf countries.
In contrast, the OPEC+ organization, which also includes other countries like the Russian Federation, Mexico and Kazakhstan, seems to now to determine oil and its cost per barrel. At the moment, OPEC and Russia have agreed to cut production by 1.2 million barrels per day, contradicting Trump's desire for high oil output.
With this last choice Qatar sends a clear signal to the region and to traditional allies, moving to the side of OPEC+ and bringing its interests closer in line with those of the Russian Federation and its all-encompassing oil and gas strategy, two sectors in which Qatar and Russia dominate market share.
In addition, Russia and Qatar's global strategy also brings together and includes partners like Turkey (a future energy hub connecting east and west as well as north and south) and Venezuela. In this sense, the meeting between Maduro and Erdogan seems to be a prelude to further reorganization of OPEC and its members.
LetThemEatRand , 9 hours ago link
The Dreadnought , 8 hours ago linkIt's crazy to think of all of the natural gas burned off by the world's oil producers. I think of those oil platforms that have a huge burning flame on top. This is the kind of **** that reminds us that the people who control the world care not for the people who live here. Can't make a buck from it? ******* burn it.
Koba the Dread , 7 hours ago linkRight fuckin' A
Ms No , 9 hours ago linkConsider though that those oil producers are only in it for the money; it's not an avocation with them. I imagine if there was a way to salvage the natural gas, it would be done. Mo Muny would dictate it.
serotonindumptruck , 8 hours ago linkThis could be the beggining of a level 5 popcorn event. It started a year or two ago and when I saw it everybody laughed. Well look at it now. Saudi wants to defect. They have had nothing but problems with the House of Sodomy for quite some time now.
I wonder what Mossad and the CIA are planning.
Brazen Heist II , 8 hours ago linkA False Flag operation to block the Strait of Hormuz?
Ms No , 9 hours ago linkThey are planning on removing Salman junior if he doesn't stop embarrassing their sorry asses
jmarioneaux , 9 hours ago linkIf this leads to war in the Persian Gulf Edgar Cayce called it. The empire will burn that place down before losing it. They may fail but something is going to go down.
Are the Sauds still full heartedly pushing the Zionist mission in Yemen?
"...submissive allies as Saudi Arabia"
Is that what they call it now?
PeaceForWorld , 6 hours ago linkI feel something big is coming with Iran.
TeraByte , 9 hours ago linkAs an Iranian-American I have been waiting for something big to happen with Iran. I am really tired of waiting. I hope that Iran will grow some balls and fight the coalition. I know that there are 80 million lives in danger, including my mom going back to Iran for a short term. But this has been like a long torture and unending nightmare.
There is no multipolarity yet, but a bipolar hype of the world dominance run by US and its vassals. An awakening will be harsh, when these realize their emperor goes naked.
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Nov 20, 2018 | www.unz.com
annamaria, November 13, 2018 at 6:43 pm GMT
@Z-man The "wannabe Zionists (Bolton)" has been trying hard to show his loyalty to the Jewish State.Z-man , says: November 13, 2018 at 7:21 pm GMTThe latest tragicomic attempt by the mustached "person of easy morals": "John Bolton Says "No Evidence" Implicating Crown Prince On Khashoggi Kill Tape" https://www.zerohedge.com/news/2018-11-13/john-bolton-says-no-evidence-implicating-crown-prince-khashoggi-kill-tape
Comment section (David Wooten): "According to the crown prince himself, Trump's [Jewish] son-in-law gave him a secret list of his enemies -- the ones like Al Aweed who were tortured and shaken down for cash. Khashoggi might even have been on that list.
One or more of the tortured ones likely tipped off Erdogan, which is why Turkey only needed to enter the consulate, retrieve the recorded audio device they planted, and walk out with the evidence. Turkey also has evidence that puts MbS' personal doctor and other staff arriving in Turkey at convenient times to do the job -- and probably more. Khashoggi was anything but a nice person but Trump cannot say that or he'll likely be accused of involvement in his murder.
Dissociation is made far more difficult by the fact that Jared is a long time friend of Netanyahu who, like Jared, has befriended MbS .
Trump won't fire his son-in-law, so if Jared doesn't have the decency to resign on his own, he may well be responsible for Trump's downfall in addition to his own. Trump's silly daughter, Ivanka, needs to go to.
Were it not for the Khashoggi affair, fewer Republican seats would have been lost in the election."
-- Time for Bolton to send for the clairvoyant Theresa May who has managed to accuse Russia, and Mr. Putin personally, in the Skripals' poisoning n the absence of any evidence .
These people -- Bolton, May, Gavin Williamson and likes -- are a cross of the ever-eager whores and petty brainless thieves. To expose themselves as the willing participants in the ZUSA-conducted farce requires a complete lack of integrity.
Of course, there is no way to indict the journalist's murderers since the principal murderer is a personal friend of Netanyahu and Jared.
Jump, Justice, jump, as high as ordered by the "chosen."
By the way, why do we hear nothing about Seth Rich who was murdered in the most surveilled city of the US?
@annamaria A 1st grader can see that MbS was behind the murder of Kashoggi.annamaria , says: November 14, 2018 at 12:49 pm GMTTrump won't fire his son-in-law, so if Jared doesn't have the decency to resign on his own, he may well be responsible for Trump's downfall in addition to his own. Trump's silly daughter, Ivanka, needs to go to.
I've been hoping for this since they moved to Washington with 'big daddy'.
@Anon " crappy bedtime reading the woolyheadedness "Z-man , says: November 14, 2018 at 1:58 pm GMTHey, Anon[436], is this how your parents have been treating you? My condolences.
If you feel that you succeeded with your "see, a squirrel" tactics of taking attention from the zionists' dirty and amoral attempts at coverup of the murder of the journalists Khashoggi, which was accomplished on the orders of the clown prince (the dear friend of Bibi & Jared), you are for a disappointment.
One more time for you, Anon[436]: the firm evidence of MbS involvement in the murder of Khashoggi contrasts with no evidence of the alleged poisoning of Skripals by Russian government.
The zionists have been showing an amazing tolerance towards the clown prince the murderer because zionists need the clown prince for the implementation of Oded Yinon Plan for Eretz Israel.
The stinky Skripals' affair involves harsh economic actions imposed on the RF in the absence of any evidence , as compared to no sanctions in response to the actual murder of Khashoggi, which involved MbS according to the available evidence . Thanks to the zionists friendship with the clown prince, the firm evidence of Khashoggi murder is of no importance. What else could be expected from the "most moral" Bibi & Kushner and the treasonous Bolton.
@annamariaThe stinky Skripals' affair involves harsh economic actions imposed on the RF in the absence of any evidence, as compared to no sanctions in response to the actual murder of Khashoggi, which involved MbS according to the available evidence. Thanks to the zionists friendship with the clown prince, the firm evidence of Khashoggi murder is of no importance. What else could be expected from the "most moral" Bibi & Kushner and the treasonous Bolton.
Bears repeating.
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Dec 08, 2018 | peakoilbarrel.com
Survivalist, 12/06/2018 at 6:43 pm
My apology if this was posted on the last thread; an Interesting article from Jean LaherrereGoneFishing, 12/06/2018 at 7:07 pmThoughts on the Future of World Oil Production
https://www.resilience.org/stories/2018-12-05/thoughts-on-the-future-of-world-oil-production/
I hope the oily side of the blog finds it interesting.
Great article, thanks. Author says US LTO will be done by 2040, which makes sense. The speed and acceleration of sinking oil production is critical since we have not been strongly pursuing alternatives. If the production is down 50 percent by 2030 to 2035 it's going to be a tough go. If it falls faster then we are in severe trouble.Dennis Coyne, 12/07/2018 at 10:38 amGone Fishing,Michael B, 12/06/2018 at 9:33 pmJean Laherrere knows a lot, but on LTO I think he may be wrong.
From the piece linked above:
The best approach for forecasting future production is the extrapolation of past production (called Hubbert linearization). For Eagle Ford the trend can be extrapolated toward an ultimate quantity of 3 Gb.The USGS estimates about a 12.5 Gb mean for the TRR of the Eagle Ford, when economics is considered the URR might be reduced to 10Gb under a reasonable oil price scenario (AEO 2018 reference oil price scenario).
Recent USGS estimates for the Permian Delaware Basin have lead to a revision of my US tight oil estimate to a mean of 74 Gb with peak probably in 2025 to 2030. Decline will be relatively steep from 2030 to 2040, if the USGS estimates for the US tight oil resource prove correct.
This is a terrific article. It takes all the confusions around oil and articulates them beautifully. His review really makes me want to buy the book.yvest, 12/07/2018 at 7:03 amThis is a delight to me because while I've always liked Laherrere's charts, I find his English writing atrocious (not all his fault as a native speaker of French). This could alienate lay readers, which is too bad because his message really needs to get out there.
The uncertainties he notes are shocking. That we have spent the last ten years pissing away our remaining "pennies" on a driving spree, instead of using it to build a renewable future, really makes me think that the backside of the peak is going to be awful.
Laherrere's knowledge is magisterial. Good on the editor who worked with him on this.
Indeed the amount of work that Jean is producing is truly quite amazing. By the way what about Kjell Aleklett ? According to his blog he didn't publish anything since 2017, the case ?Jeff, 12/07/2018 at 7:07 amThe "issue" with Jean is that he also is a climato skeptic (regarding CO2 effects) and this has been detrimental to his ressource studies.
But one exercice in comparing the urgencies (taking the IPCC models just as they are), and feeding them with the resource aspects of Laherrere, clearly shows that peak oil or even peak fossile is the most urgent matter (knowing that anyway the mitigation measures, dimishing fossile fuels burning, are usually the same, except stuff like CSS, that will most probably never happen anyway).
Some elements (and Laherrere charts) in below post about this, sorry in French, but should go ok in gg translate :
http://www.oleocene.org/phpBB3/viewtopic.php?p=2275983#p2275983Also below ppt in English from B Durand and Laherrere :
http://aspofrance.viabloga.com/files/BD_Fossils_Fuels_Ultimate_2015.pdfAleklett has retired.yvest, 12/07/2018 at 7:11 amOk but the case also for Laherrere, and since 20 years or something !yvest, 12/07/2018 at 7:09 amAnd on this subject the most impressive chart is probably below one :Dennis Coyne, 12/07/2018 at 10:42 am[img] https://iiscn.files.wordpress.com/2018/12/lahererre-et-scenarios-giec.png [/img]
Overall the terrible deficit of the "resource message" compared to the climate/CO2 one, could be seen as a key reason for no measures being taken for the two aspects
Guym,GuyM, 12/07/2018 at 11:20 amLaherrere also suggests a 3 Gb URR for Eagle Ford where the USGS TRR mean estimate is about 12.5 Gb and when economic assumptions are applied the ERR is probably about 10 Gb.
You are much more familiar with the Eagle Ford, at $80/b (2017$) does a 3 Gb URR estimate seem correct?
Seems low.Dennis Coyne, 12/07/2018 at 11:50 amGuym,GuyM, 12/07/2018 at 12:52 pmThanks. Does 10 Gb seem reasonable or is that too high? Average of USGS mean and Laherrere's estimate would be about 6.5 Gb, again you know the area so your estimates would probably be better than most.
It's pretty difficult to measure with strictly an $80 price. Some depends on gas price. There are three windows in the EF. Oil, gas/condensate, and mostly gas. Gas has barely been touched, and is the biggest window. Geologically older. It still will produce some oil and condensate. If any, it will be mostly condensate. But it is still production as yet mostly untouched. Gas/condensate has been drilled, and is responsible for the higher api coming out of the EF, but in the past few years, less has been drilled due to the api. Oil window is being drilled, but there is still plenty of tier two and three areas to go. Not so much tier one. How do you measure that, and at what oil and gas price. I would say 12 is possible, but it includes a lot of condensate and gas.Dennis Coyne, 12/07/2018 at 1:01 pmYou could look at the USGS assessment of the Delaware in the same light. It may be there, but is it cost productive? You may only get gas and/or condensate, depending on geological age of the formation. Or, you may have to keep chasing after anything, as it moves quickly as wells are drilled.
Thanks for the correction. Yes Gas prices would also be needed. The 10 Gb was C+C and yes there is probably lots of condensate. I guess I would make it $4/ MCF for NG, you would probably need condensate and NGL prices to do a full analysis, way too many moving parts for me.GuyM, 12/07/2018 at 1:21 pmGot that right. Here's my cracker jacks geology assessment in the Permian. midland and Delaware basins are slightly different, but the both have a wolfcamp as the lower level. It's primarily a shale from my view of core samples. From the Bone Springs to the bottom wolfcamp, there is no clear formation that acts as a container, Bone Springs looks like it is closer to a sandstone, but closely formed from my view of the core samples. Not conducive to water flooding due to lack of "walls". But, because of the lack of walls, the oil/condensate/gas travels when wells are drilled. Indications are that EF has the same problems, but not as fast? Very simplistic, and possibly wrong viewpoint.Doug Leighton, 12/06/2018 at 6:51 pmAnd there is a fairly wide variety of prices depending on what comes out. I'm still trying to figure out my pay Stubbs.
LARGEST CONTINUOUS OIL AND GAS RESOURCE POTENTIAL EVERMichael B, 12/06/2018 at 9:35 pmToday, the U.S. Department of the Interior announced the Wolfcamp Shale and overlying Bone Spring Formation in the Delaware Basin portion of Texas and New Mexico's Permian Basin province contain an estimated mean of 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey (USGS). This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources.
https://www.sciencedaily.com/releases/2018/12/181206135643.htm
I'll be curious to hear others' assessments of this. Zinke is really jumping up and down with the pom-poms on this one.GuyM, 12/06/2018 at 10:49 pmThe Easter Bunny, Santa Clause, Tooth Fairy, but no Trolls? Conventional? They are out of their Fxxng minds. Dept of the Interior is sharing the same hospital suite with the EIA. Both digging for that phantom oil.Dennis Coyne, 12/07/2018 at 10:44 amSomebody ought to tell the oil companies to quit using all this fracking stuff. All they need to do is drill straight down. Sheesh!
Guym,GuyM, 12/07/2018 at 11:56 amYour estimate of Permian Basin URR is ? Generally the USGS does a pretty good job in my opinion.
I'm not a geologist, but your original projections peaking in 2025 appear reasonable to me. Slow peak, not a huge peak like some. To add to that, JG Tulsa (below post), who is a working geologist in the area, agrees with a mid 2020's peak. I'm not stupid enough to argue with expertsDennis Coyne, 12/07/2018 at 1:05 pmGuym,GuyM, 12/07/2018 at 1:50 pmYou are clearly smarter than me. I do tend to listen when geologists and geophysicists try to educate me.
Here is a preliminary estimate for US LTO assuming USGS mean estimates are correct, the Permian is up to date, but the older Bakken, EF, Niobrara, and US other LTO scenarios need to be revised to reflect the AEO reference oil price scenario. Peak about 9 Mb/d in 2025, also shown is an older estimate from June 2018 (before the recent Delaware Basin Wolfcamp and Bonespring assessment from the USGS.)
I think your original is closer to reality.Coffeeguyzz, 12/06/2018 at 11:11 pmThis 46 billion barrels oil – along with 20 billion barrels NGLs and 281 Tcf gas – is for the Delaware Basin Wolfcamp and Bone Spring only.Dennis Coyne, 12/07/2018 at 8:54 am
Combined with the earlier Midland Basin assessments of the Wolfcamp and Spraberry of 24 billion barrels combined, the total so far Technically Recoverable Resource is over 70 billion barrels oil.Just as the Haynesville jumped from 39 Tcf to over 300 Tcf as the Haynesville/Bossier, the Mancos from 1.6 to 66 Tcf, the Barnett from 26 to 52 Tcf, the Bakken/TF will jump next assessment and both the Utica and Marcellus will skyrocket.
Coffeeguyzz,Watcher, 12/07/2018 at 2:55 amI know less about Marcellus, but Bakken/Three Forks was recently assessed in 2013, the new assessment may be an increase, but I won't speculate in advance what it will be.
The 46 Gb mean undiscovered TRR for the Wolfcamp (Delaware Basin) and Bonespring is a surprise to me, based on this the Permian tight oil TRR would be about 74 Gb, before this assessment I had guessed 8 Gb for Delaware Wolfcamp based on output compared to Midland Wolfcamp (it was about 30% of Midland so I took the 20 Gb Midland Wolfcamp times 0.3 and rounded to 8 Gb). My previous mean estimate for Permian tight oil TRR was 38 Gb, so I was too low by more than a factor of 2. My F5 (5% probability TRR might be higher) estimate was 54 Gb before and the F95 estimate was 20 Gb, these are revised to F95=43 Gb and F5=113 Gb.
For the entire US I had a previous TRR estimate of 70 Gb for all of the US, this is revised to 107 Gb for the mean US tight oil TRR.
An interesting development that might push the US peak in tight oil a little later and/or a little higher. My F5 model had the Permian peak at about 7.5 Mb/d in 2027, a new model might result in 2029 at 9.5 Mb/d, for the US as a whole, other tight oil plays might be declining by 2029, so the overall US peak might be 2027 or 2028, based on current information.
https://pubs.usgs.gov/fs/2018/3073/fs20183073.pdfWatcher, 12/07/2018 at 3:19 amThe formal report. The references are . . . a bit odd. There is a sense the whole thing is dependent on technology results assessment from IHS.
Meaning, I don't see anything here that suggests USGS sent teams out to look at rock for this whole area. They seem to have taken info from other IHS papers -- and the recent ones from USGS were for what looks like much more limited geographic areas. Looks like IHS encouraged extrapolation.
Btw someone at Bloomberg has declared this is a X2 on previous estimates. That would suggest 46 billion barrels of oil we're not just added to the US resource database. It would be more like 23.ProPoly, 12/07/2018 at 9:49 amThe Bloomberg guy didn't seem all that sharp, and so let's not take that as gospel.
Probably worth noting that it would not take much variance to move this resource into an API 45+ or even 50+ configuration, and given the NAT gas and NGL estimates, that would seem a pretty credible scenario. In which case it's not oil.
"Extrapolation" fits with it being undiscovered TRR.Dennis Coyne, 12/07/2018 at 10:17 amThis reminds me a lot of ANWAR (wasn't oil) and Monterey (not actual technically recoverable, our bad).
The Monterrey estimate was a study done for the EIA which was poorly done (it was not a USGS estimate), the USGS estimates tend to be pretty good and have tended to be on the conservative side, though we won't know for sure until all the oil is produced and the last well is shut in. Every resource estimate involves extrapolation and/or modelling of future well output by definition.Dennis Coyne, 12/07/2018 at 9:58 amSome estimates are better than others, for example the USGS estimates are better than the EIA estimates in most cases.
Thanks Doug,Dennis Coyne, 12/07/2018 at 10:10 amPreviously I has guessed (incorrectly) that Permian mean TRR would be 38 Gb, this new assessment would lead to a revision to about 74 Gb for mean TRR of the Permian Basin tight oil resource.
In the scenario below I have a 253,000 well scenario (about 6 times more than my ND Bakken/Three Forks mean scenario with 42,000 wells completed.) I assume new well EUR starts to decrease in Jan 2023(about 3 years after my estimate of the future ND Bakken EUR decrease start as Permian ramp up started about 3 years after Bakken). This assumption is easily modified.
Peak is about 2028 with peak output at about 7000 kb/d (currently Permian tight oil output is about 2750 kb/d based on EIA tight oil production estimates by play).
The scenario above does not consider economics. When we consider the discounted net revenue over the life of the well and assume this must equal the real well cost in order for the well to be completed using the assumptions below, then we find an economically recoverable resource (ERR) scenario.GuyM, 12/07/2018 at 10:25 amEconomic assumptions (all costs in constant 2017$) are:
real oil prices in 2017$ follow the EIA AEO 2018 Reference Brent Oil Price scenario
royalties and taxes are 32% of wellhead revenue
transport cost is $4/b
OPEX is $2.3/b plus $15000 per month per well
real annual discount rate is 7% (nominal rate is 10% at 3% annual inflation rate)
real well cost=9.5 million 2017US$Peak output is unchanged but wells completed are reduced to 173,000 and ERR=60 Gb.
The indications from drilling companies, so far, operating in the Delaware do not seem to jive with the assessment of grandiosity. So, I am more than skeptical. The government can create all the reserves they want, but if the oil companies can't get it out of the ground?? My understanding is that there is a core area in West Texas and NM. EOG is there. Extends a few Counties in West Texas and NM starting around Loving County. Even there, it is high api. Outside of that, it is highly sporadic. If you extrapolate what they are doing in tiny Loving County to the rest of the Delaware, you can come up with these numbers. But, you can't. As I read, there are over 800 Ducs outside of this area. You leave them as Ducs, because you pretty much know what the completion will look like after drilling. Basically, the report is hogwash. It's pretty easy to tell on the Texas side, as you can pull up completions by county.Dennis Coyne, 12/07/2018 at 10:53 amGuym,JG Tulsa, 12/07/2018 at 11:10 amIt may require higher oil prices and the associated gas is a problem, not enough infrastructure to move it.
Also the USGS simply does a resource assessment, these are not reserves, no economic assessment was done, the USGS leaves that to others.
I have often been skeptical of USGS Assessments (such as Bakken Assessment in 2013), looking at proved reserves and cumulative production to data in the ND Bakken/Three Forks, the 11 Gb mean TRR estimate from 2013 looks pretty good.
This may look different in 2023.
As a working petroleum geologist in the Delaware Basin and others, I will say USGS and EIA assessments are considered a joke. They do little to take into account the actual geology, or changes in the thermal maturity of the rock across a basin, it is more multiply an average well performance for a certain amount of acres drilled, times the total area of the basin, minus the number of drilled wells.GuyM, 12/07/2018 at 11:22 amEverything is more complex than that. Right now operators are drilling the best, most economic parts of the Delaware basin, at the going rate it will not be too many years before they have to shift over to other benches of the Wolfcamp or Bone Spring, which will be less productive. for deeper Wolfcamp benches you get more condensate, less oil, much more gas, you might go from a 10,000′ lateral making 1-2 MMBO in the Wolfcamp A, down to one making 300-500 MBO.
Still a decent well when you add in the gas, but if you take that across a large area that will lead to a substantial decline in new well performance. I would not doubt oil production peaks in the mid-2020s as people drill up the best rock, and have to keep shifting to less productive horizons.
Thank you. That was my take on all, but I'm no geologist. Nice to have a professional opinion.Dennis Coyne, 12/07/2018 at 1:21 pmThanks JG Tulsa,GuyM, 12/07/2018 at 4:59 pmCan you give us your estimate of the TRR or ERR of the Delaware Wolfcamp and Bonespring. There is a wide range in the USGS TRR estimate from 27 to 71 Gb with a mean of 46 Gb and a median of 45 Gb. Would you say that 27 Gb is too high? It seems clear you think that 46 Gb is far too optimistic. Note that the mean ERR would probably be around 38 Gb if the mean TRR estimate was correct and prices follow the AEO 2018 reference price scenario. For the F95 USGS TRR estimate the ERR would be around 21 Gb.
Maybe you could also comment on other USGS assessments for Eagle Ford, Wolfcamp Midland basin and Spraberry. Perhaps you could give us the "correct assessment".
I agree the EIA assessments are not good, economists do not know much about geophysics. The people at the USGS are scientists, though they have limited information and thus use statistical analysis to fill the data gaps.
Come on, Dennis. He may be a geologist, but my bet he is mortal, like you and I. I really believe your first graph with 8 million as the high is the best I have seen. The tail of that is probably not ever to be properly guessed, until it happens.Watcher, 12/07/2018 at 2:53 pmDood, one of the most frequent points we deal with on this blog is the claim that technology in horizontal fracking has multiplied output tremendously -- excluding from consideration stage count/length.GuyM, 12/07/2018 at 3:57 pmThe extra production "per well" seems to be from the well being longer in length and thus consuming more water and proppant. Is this true, or is there some magical improvement in proppant type or fracking pressure or whatever?
It's mostly the length of the lateral, although some is due to increased fracking stages within the lateral (more holes in the pipe). Better drilling is another, although extra lateral makes up most of it. The laterals, in general, are about twice as long.Michael B, 12/07/2018 at 8:41 amUS becomes a net oil exporter.Watcher, 12/07/2018 at 11:33 amHanh? And this paragraph strikes this lay reader as utterly incoherent:
The U.S. sold overseas last week a net 211,000 barrels a day of crude and refined products such as gasoline and diesel, compared to net imports of about 3 million barrels a day on average so far in 2018, and an annual peak of more than 12 million barrels a day in 2005, according to the U.S. Energy Information Administration.
From EIA: "In 2017, the United States consumed about 19.96 million barrels per day." Let's call it 20.
Also from EIA: US weekly field production ending 11/30: 11.7 million barrels.
20-11.7=8.3????
True? Fudging? Lying? What am I missing?
Then, you read further into the article:
While the net balance shows the U.S. is selling more petroleum than buying, American refiners continue to buy millions of barrels each day of overseas crude and fuel. The U.S. imports more than 7 million barrels a day of crude from all over the globe to help feed its refineries, which consume more than 17 million barrels each day.
WTF.
It's all measured in barrels.Michael B, 12/07/2018 at 1:38 pmThe US refines a lot of imported oil -- for export. There is refinery gain in this. This means a barrel comes in. It is refined to various constituent parts like gasoline, diesel, kerosene, etc. The VOLUME of these parts are liquids of less density and this means their volume is greater. So a barrel of crude will yield a sum total of more than 1 barrel of liquids of lower density. Since these products are exported, the barrel count is in favor of exports vs the barrel count imported.
This is not a huge effect, but it's significant.
There's an EIA page for US sales volume consumed. If you add up all the products you get well over 15 million bpd. US production is rather less than that. Imports must exceed exports.
Thanks for trying to explain it to me. Maybe it's just too complicated for me to understand.kolbeinh, 12/07/2018 at 1:41 pmI still can't reconcile the headline, "US becomes a net oil exporter" with the EIA's numbers: The US consumes 20 million barrels a day. The US produces 12 million barrels a day. But, yes, they're net exporters. Whatever.
After 14 years, the niceties of peak oil still escape me.
I am not sure I follow you entirely, but for heavier crude oils there is waste to get to diesel (a bit higher than 30 API). And for extra light oil there is a huge waste to get to diesel, as much has to be segregated to petroleum gas and gasoline components due to length of carbon chain.Watcher, 12/07/2018 at 2:50 pmThe case for diesel shortage in 2020 due to shipping legislation is still very much legit.
I was talking about imported crude (that would not be LTO and probably diesel rich) being refined into a larger number of barrels of product vs the barrels of input crude. They export. It's a bias towards export.Eulenspiegel, 12/07/2018 at 8:55 amI think mostly the report derives from very noisy weekly data. The US is not a net exporter.
So the oil cut is out: 1.2 mb. Together with russia and others. So LTO is saved, the frenzy can go on soon.
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Dec 08, 2018 | peakoilbarrel.com
kolbeinh , says: 12/07/2018 at 9:45 am
Yes, it is all a big show!GuyM , says: 12/07/2018 at 5:18 pmThe peak oil theme is very much forgotten in all the turmoil, but is very real still.
How much more reserves to classify as probable (2p) is a movable target, it depends on the oil price.
And how rapid the extraction rates of reserves can extend to difficult to say; technology and not at least the 3D maps of reservoirs coupled with improved seismic data, more precise drilling and lower costs due to excess oil service capacity (at least for offshore) have countered the inevitable declining quality of oil reservoirs and size of new ones coming online for some time now.
I agree that 2019 will show big declines in OECD inventory primarily because core OPEC wants it. (increasing KSA premiums to the US +3,5 dollars in Jan and lowering it to Asia).
The next question is how high oil prices will go before there is some reaction from the nations that have spare storage/capacity. I am thinking there is some relief in increased pipeline capacity in Texas in 2H 2019 and also Johan Sverdrup in Norway (since I follow things close to home) in the same time period to save the oil market in winter 2020.
Or still more likely, a spike in oil prices in 2H 2019 and a recession soon thereafter.
Who knows..the only thing certain is that oil is being pressured towards the final "spare capacity" (whatever that is) and that a recession will come anyway as a result of the low oil price environment the last 4 years.
Offshore is hit hard, so are supply in places "too risky" for cheap financing the hidden secret of the oil market (why so few news stories covering this?)
Saved from $40 oil, but I really doubt there will be much of a frenzy at $52 oil price. Hopefully, that will give them enough cash flow for stationary. They need to write Christmas letters to their shareholders telling them everything will be better next year.
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Dec 08, 2018 | oilprice.com
We will also have to see how long it takes for the shale frackers modify their behavior in the face of $50 oil. We haven't seen any signs so far, with a few rigs continued to be added each week. At some point the frackers will wake up and determine that oil at $50 doesn't go as far as oil at $75 and tap the brakes just a hair. We are also due for a seasonal pause in some of the U.S. Northern areas, as winter takes a bite out of drilling activity.
In practical terms we will probably be well into the first quarter before we see any impact from OPEC production cuts. However, once we do, it will be like June of 2017 all over again, and the price of oil could strongly respond to the upside.
By David Messler for Oilprice.com
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Dec 05, 2018 | www.youtube.com
https://democracynow.org - As the media memorializes George H.W. Bush, we look at the lasting impact of his 1991 invasion of Iraq and the propaganda campaign that encouraged it. Although the Gulf War technically ended in February of 1991, the U.S. war on Iraq would continue for decades, first in the form of devastating sanctions and then in the 2003 invasion launched by George W. Bush. Thousands of U.S. troops and contractors remain in Iraq. A largely forgotten aspect of Bush Sr.'s war on Iraq is the vast domestic propaganda effort before the invasion began. We look at the way U.S. media facilitated the war on Iraq with journalist John "Rick" MacArthur, president and publisher of Harper's Magazine and the author of the book "Second Front: Censorship and Propaganda in the 1991 Gulf War."
Democracy Now! is an independent global news hour that airs weekdays on nearly 1,400 TV and radio stations Monday through Friday. Watch our livestream 8-9AM ET: https://democracynow.org
Please consider supporting independent media by making a donation to Democracy Now! today: https://democracynow.org/donate
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Dec 08, 2018 | smh.com.au
"U.S. political pressure is clearly a dominant factor at this OPEC meeting, limiting the scope of Saudi actions to rebalance the market," said Gary Ross, chief executive of Black Gold Investors and a veteran OPEC watcher. channelnewsasia.com 10 May 2018
Donald Trump could hardly have chosen a more treacherous economic moment to tear up the "decaying and rotten deal" with Iran. The world crude market is already tightening very fast. Joint production curbs by Opec and Russia have cleared the four-year glut of oil. There is no longer an ample safety buffer against supply shocks. The geopolitical "premium" on prices has returned. Tensions run high:
The Maduro regime in Venezuela is entering its last agonies, and the country's oil industry is imploding. North America has run into an infrastructure crunch. There are not yet enough pipelines to keep pace with shale oil output from the Permian Basin of west Texas, and it is much the same story in the Alberta tar sands. The prospect of losing several hundred thousand barrels a day of Iranian oil exports would not have mattered much a year ago. It certainly matters now.
World leaders respond to President Trump's move to reimpose economic sanctions on Iran while pulling the United States out of the international agreement aimed at stopping Tehran from obtaining a nuclear bomb.
Oil price shock is looming
It is the confluence of simmering political crises in so many places that has driven Brent crude to $US77 a barrel, up 60 per cent since last June. "We believe an oil price shock is looming as early as 2019 as several elements combine to form a 'perfect storm'," said Westbeck Capital. It predicts $US100 crude in short order, with $US150 coming into sight as the world faces a crunch all too reminiscent of July 2008. The fund warns that the investment collapse since 2014 is about to deliver its sting. Declining fields are not being replaced. Output from conventional projects has until now been rising but will fall precipitously by 1.5 million barrels a day next year. By then global spare capacity will be down to a lethally thin 1 per cent. US shale cannot plug the gap. "The mantra after 2014 of lower for longer has lulled oil analysts into a torpor," Westbeck said. Needless to say, a spike to $US150 would precipitate a global recession.
The US might hope to weather such a traumatic episode now that it is the world's biggest oil producer but it would be fatal for oil-starved Europe. Such a scenario would test the unreformed euro to destruction. Britain, France and Germany may earnestly wish to preserve the Iran deal but they can do little against US financial hegemony and the ferocity of "secondary sanctions". The US measures cover shipping, insurance, and the gamut of financial and logistical support for Iran's oil industry.In the end, there are infinitely greater matters at stake than barrels of oil.Any European or Asian company that falls foul of this will be shut out of the US capital markets and dollarised international payments system. The EU has talked of beefing up the 1996 Blocking Regulation used to shield European companies from extraterritorial US sanctions against Libya. But this is just bluster. No European company with operations in the US would dare flout the US Treasury. "A choice for corporate Europe between the US and Iran is unequivocally going to fall the way of the US," said Richard Robinson from Ashburton Global Energy Fund.Rise in oil prices turns malign
He said Europe will have to slash its imports from Iran by 60 per cent because groups such as ENI or Total will refuse to ship the oil, whatever the strategic policy of the EU purports to be. This dooms the nuclear deal (JCPOA) since Iran will not abide by the terms if the EU cannot deliver on its rhetoric, let alone come through with the $US200 billion ($251 billion) of foreign investment coveted by Tehran.
David Fyfe from oil traders Gunvor said we do not yet have enough details from Washington to judge how quickly companies will have to act. He estimates that sanctions will cut Iran's exports by up to 500,000 barrels a day later this year. "It could well be much more in 2019," he said.
Late last year it was still possible to view rising oil prices as benign, the result of a booming world economy. This year it has turned malign. Global growth has rolled over. The broad IHS index of raw materials has been falling since February.
Europe's catch-up spurt fizzled out in the first quarter. Japan's GDP probably contracted. The higher oil price is itself part of the cause.
$US500 billion extra 'tax'
Even at current levels, it acts as an extra $US500 billion "tax" this year for consumers in Asia, Europe and America. Not all of the windfall enjoyed by the petro-powers is recycled quickly back into global spending.
One cause of the slowdown is the credit squeeze in China, which is ineluctably feeding through into the real economy with a delay. Proxy indicators suggest that true growth has fallen below 5 per cent.
My own view is that monetary tightening by the US Federal Reserve - and declining stimulus from the European Central Bank - is doing more damage than widely presumed.
Higher US interest rates are pushing up borrowing costs for much of the world. Three-month dollar Libor rates used to price $US9 trillion of global contracts have risen 76 basis points since January.
The Fed is shrinking its balance sheet, draining international dollar liquidity at a quickening pace. If the Fed is not careful, it will tip the US economy into a stall.
Ominously, we are seeing the first signs of a US dollar rally, tantamount to a "short squeeze" on Turkey, Argentina and Indonesia, among other emerging market debtors.
Toxic combinationThe combination of a slowing economy and an oil supply shock is toxic, even if the "energy intensity" of world GDP is now half the level of 30 years ago.
Opec and Russia can of course lift their output cap at any time, though that alone will not restore the full 1.8m barrels a day of original curbs. Venezuela is now in unstoppable free-fall.
The Saudis have pledged to uphold the "stability of oil markets" and to help "mitigate the impact of any potential supply shortages". Kuwait and Abu Dhabi could add a little. Yet cyclical forces may be moving even beyond their control.
In the end, there are infinitely greater matters at stake than barrels of oil. Trump is throwing US power behind Saudi Arabia in the epic Sunni-Shia battle for dominance over the Middle East, and behind Israel in its separate battle with Iran.
What can go wrong?Both conflicts are on a hair trigger. Israel attacked an Iranian air base in Syria last month and killed seven revolutionary guards. This is a dangerous escalation from proxy conflict to direct hostilities. The JCPOA nuclear deal may be all that restrains the Iranian side from lashing out.
Saudi Arabia's impetuous young leader Mohammad bin Salman is itching to settle the score of all scores with Iran, the Iranian revolutionary guard are in turn itching to launch a one-year dash for nuclear weapons, and Trump is itching for regime change. What can go wrong?
The Daily Telegraph, London
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Dec 06, 2018 | oilprice.com
Russia Economic Report said that OPEC was the single most important factor for oil price outlooks in the short term."As non-OPEC oil supply growth is expected to be greater than that of global demand, the outlook for oil prices depends heavily on supply from OPEC members," the report's authors noted. The level of spare capacity among OPEC members is estimated to be low at present, suggesting there are limited buffers in the event of a sudden shortfall in supply of oil, raising the likelihood of oil price spikes in 2019."
The World Bank is not alone in seeing OPEC's spare capacity as an important factor for oil prices going forward. Spare capacity provides a cushion against price shocks as evidenced most recently by the June decision of the cartel and Russia to start pumping more again after 18 months of cutting to arrest a too fast increase in oil prices. They had the capacity to do it and prices stopped rising, helped by downward revisions of economic forecasts.
Now, the oil market is plagued with concerns about oversupply, but this could change quite quickly if there is any sign that OPEC is nearing the end of its spare production capacity. As to the likelihood of such a sign emerging anytime soon, this remains to be seen.
The U.S. Energy Information Administration estimates OPEC's spare capacity at a little over 1 million bpd as of the fourth quarter of this year. That's down from 2.1 million bpd at the end of 2017, but with Venezuela's production in free fall and with Iran pumping less because of the U.S. sanctions, the total spare capacity of the group has declined substantially.
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Dec 04, 2018 | community.oilprice.com
Normally I don't quote entire articles, but this is a Panic Service Announcement (and a gentle ribbing).Marina SchwarzMy comment at the bottom, after the article.
The Psychological Origins of American Russophobia
The main reason so many Americans buy into the anti-Russian craze is not only due to what people are told by the government and media, but by how they think and process information. For if Americans were taught how to analyze and think properly they would not fall for the blatant propaganda.
For example, we are told that the Nazis discovered the secret of repetition as a means of programming people into believing something to be true, but we are not taught why this practice is so effective.
The psychological reason behind this trick has to do with "pattern recognition". Human beings – through evolution – have learned to identify a phenomenon as real and true because it repeats again and again and again. After a while, the mind interprets this consistent pattern as proof of truth value. In psychological terms, "schemata" are created by a layering of memories similar in nature over time so that all events associated with the phenomenon are perceived through a prism of previous repetitions. In other words, even if a certain type of behavior is different from the norm it will still be identified as belonging to the typical pattern regardless. It is literally a trick of the mind.
The American knee-jerk reaction to the recent Kerch bridge incident is a case in point. Ignoring facts, people automatically placed Russian behavior in the "aggressive" category because they have been programed by constant repetition for many years to think this way. Not having been taught this trick of the mind even educated people buy into the narrative unaware that their schemata dictate that the belief must be reinforced. All experiences regarding Russia are simply put into one box labeled "aggressive behavior".
Another psychological cause of why Americans buy into the "Russia is aggressive" narrative is due to "confirmation bias". For a variety of reasons many Americans demonize Russians. Part of this is due to the fact that people actually enjoy having a "bad guy" to hate. This is why outlaw cowboys and mafia gangsters are so popular in American culture. We love our "anti-heroes" as much if not more than our heroes. Putin, of course, is the prototypical "baddie". He's a real-life Boris from the Bullwinkle cartoon who satisfies our need to boo and hiss the proverbial bad guy.
To a certain extent, pattern recognition comes into play as well because in America TV shows and films over the past two decades evil Russian spies and mafia types have figured prominently. The repeating portrayals create schemata which then create stereotypes that frame how we think.
Russophobia, however, will not last forever because it is essentially based upon lies. Truth always wins out over time and fantasy gives way to reality. Despite the censorship on social media and the attempts to silence RT America the truth will eventually triumph.
For gagging the tongue of truth is always followed by a long-suppressed shout that echoes ever louder throughout the ages.
===============================
My comment:
The most basic form of mind control is repetition.
The most basic form of mind control is repetition.
The most basic form of mind control is repetition.
... ... ...
The most basic form of mind control is repetition.Well, Dr. Paul Whatshisname is obviously an agent of Putin. Did I even need to say this?A/PlagueOn a serious note, repetition works perhaps shockingly well. I was taught in my childhood that Germans are bad because Hitler and Russia was good because twice saviors. Simple and effective. However, with no social media at the time, critical thinking was also available so I could outgrow the propaganda.
Tom Kirkman... ... ...
Are you on a salary in "Russia Today" or a volunteer?
Marina SchwarzOn 12/5/2018 at 10:29 AM, A/Plague said: Are you on a salary in "Russia Today" or a volunteer?I try to gently (and if possible, humorously) nudge people to question the "official narrative". CNN / WaPo is far worse propaganda than RT. RT is clearly biased, but they are open about their pro-Russia bias. CNN pretends to be objective "journalism".
And sometimes I feel like commenting in the same vein of this little guy, bouncing all over excitedly:
By the way, did you know RT was nominated for an Emmy this year? It actually has a few nominations. Shocking, right? I suspect a lot of the people who say "Ew, RT, propaganda," have never read anything from RT. I have. they regularly republish Reuters and the FT as well as major U.s. outlets. I don't know what to think about that, it's so confusing.Tom KirkmanDan Warnick16 hours ago, Marina Schwarz said: By the way, did you know RT was nominated for an Emmy this year? It actually has a few nominations. Shocking, right? I suspect a lot of the people who say "Ew, RT, propaganda," have never read anything from RT. I have. they regularly republish Reuters and the FT as well as major U.s. outlets. I don't know what to think about that, it's so confusing.Rodent16 hours ago, Marina Schwarz said: By the way, did you know RT was nominated for an Emmy this year? It actually has a few nominations. Shocking, right? I suspect a lot of the people who say "Ew, RT, propaganda," have never read anything from RT. I have. they regularly republish Reuters and the FT as well as major U.s. outlets. I don't know what to think about that, it's so confusing.When I read their articles I am mindful that they are Russian. Having said that, they seem to publish a lot of good content, and much of it is from Reuters and other (mostly) reputable sources. Editorials are free for anyone to research for themselves. Pretty much the same as other pubs.
Laying conspiracy theories aside for one moment (and I do so love a good conspiracy theory), let's chat about this Russia panic.Dan WarnickI am not one to panic in general. Sure, I have a food, guns, and water stash in my basement. I'm generally well prepared. There are Russia-is-the-boogeyman theories, and then there are Russia-boogey-man-theories-are-silly theories. Of course they both can't be right.
But where do these theories come from?
I am sure I'm not going to do a very good job explaining my self in the rant that follows. But I'm going to give it a good college try.
I want to talk about the Russia Boogeyman theory. First, there's no way to explain this other than to divulge my age. So I'm just going to spit it out right here and get that out of the way. I'm 40. I've been 40 for approximately 5 years, stubbornly refusing to go further than that. There. I said it. Now that that's out of the way, it's important to note that children are sponges. As such, they are impressionable and in young childhood, traumatic events can have a profound and lasting effect, and even change how someone thinks.
When I was about 10ish, in about 1983, a movie came out. If you lived in America, and likely even if you didn't, and you're over the age of 40 (or if you've been 40 for a while), you've seen it. It's a movie called "The Day After". It was a huge production and it aired on television. The most watched TV movie ever. And ranked as one of the top 10 movies ever by several sources. You millennial whippersnappers will have no clue what I'm talking about. Read on anyway, if you'd like. I'm all inclusive.
The movie was about nuclear warfare, and most importantly, the aftermath. The setting was a small town in Kansas, I think. A small town that very closely resembled my home town, making it particularly impactful (I know that's not a word. Sue me.) to me at the time. In the movie, which although was a complete work of fiction was very realistic, Russia unleashed nuclear weapons. It was freaky. So eerily unsettling was it that I obsessed about it after I saw it. I thought about it every night. I remember being so afraid that in the event of a nuclear blast, I might be separated from my family. I remember pondering if I would rather be obliterated in the blast immediately, or whether I would prefer to be spared instant death only to survive without my family under horrid conditions. I also remember drills at school around that same time that were designed to get people prepared in the event of such a disaster. While it may have done so, it also solidified in my mind that there was a real possibility these events would unfold.
Nearly two years post-freaky-movie, Sting released it's "Russia" song, about Russians loving their children too. Although it was not talked about much at the time, since life proceeded as normal, in my mind I remember thinking that I didn't much care if the Russians loved their children, because they were looking to wipe us off the map. And I lived near the Soo Locks, and I distinctly remember knowing (but I don't have any idea where I came by this information) that the Locks would be a nuclear target in the event of a strike, since it is a main thoroughfare for ships.
You can't undo that kind of fear, no more than you can undo my fear of spiders. I know in my head that spiders, at least where I live, are not poisonous and they cannot harm me. I know it. But my head cannot eradicate the intense creepiness that even thinking about spiders conjures up. Likewise, no rational thought about Russia can completely undo a fear that was borne as a child.
There you have it. My Russia hysteria may be founded or unfounded--I know not. But I do not have the power within me to change this mindset.
Okay Russia-boogeyman-theories-are-silly promoters: fire away.
Great description of what life was like back then, er, so I was told, by older people. Not those of us born in the 60's, er, I mean the 70's, er, the 80's. Yeah, that's it, the 80's!Marina SchwarzWe had attack training at school in the 80s -- complete with gas masks and stuff -- on the other side of the Iron Curtain for when the imperialists invaded, what can I say. I was too distracted by everything to pay attention, though. @Rodent , your story tells me your propaganda was better than our propaganda, perish the thought. The Cold War was a blast, right?RodentP.S. Stephen King has done a really good overview of this stage in the U.S. entertainment industry, by the way. The stages of horror in movies. behind the curtain we only had heroic movies about the Second World War. I shall now hypothesize that the Soviet bloc lost the Cold War because its entertainment industry was absent. End of hypothesizing. Thank you for your attention.
Rodent8 hours ago, Marina Schwarz said: We had attack training at school in the 80s -- complete with gas masks and stuff -- on the other side of the Iron Curtain for when the imperialists invaded, what can I say. I was too distracted by everything to pay attention, though. @Rodent , your story tells me your propaganda was better than our propaganda, perish the thought. The Cold War was a blast, right?P.S. Stephen King has done a really good overview of this stage in the U.S. entertainment industry, by the way. The stages of horror in movies. behind the curtain we only had heroic movies about the Second World War. I shall now hypothesize that the Soviet bloc lost the Cold War because its entertainment industry was absent. End of hypothesizing. Thank you for your attention.
Makes sense. Not surprisingly the movie makers (supposedly) did not want to have Russia be the first striker in the movie, but they needed to borrow some footage from the DoD, and the govt. refused to play ball unless Russia struck first. The guy who made the movie, while he was making it, reportedly would go home at night literally sick to his stomach at the horrific nature of the movie. It went rounds and rounds with the censors who thought it might not be suitable for families.
Also interesting, speaking of Russia-led propaganda, and coming from someone who has dabbled a tiny bit in white-hatishness, if you google "The Day After Russia" as I did to inquire about the movie, there is actually a Russian movie titled "the day after" about zombies. Yup, let's just bury those search results! It's a conspiracy!!!
There is another interesting thread here about the different search results showing up for different people. What shows up when YOU google "The Day After"?
You know, speaking of conspiracies, there is a fairly logical opinion that that movie was designed to scare the bajeezus out of people so they wouldn't vote for Reagan a second term.
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Dec 04, 2018 | www.zerohedge.com
by Tyler Durden Tue, 12/04/2018 - 00:05 178 SHARES Authored by Mehdi Hasan via The Intercept,
The tributes to former President George H.W. Bush, who died on Friday aged 94, have been pouring in from all sides of the political spectrum. He was a man "of the highest character," said his eldest son and fellow former president, George W. Bush. "He loved America and served with character, class, and integrity," tweeted former U.S. Attorney and #Resistance icon Preet Bharara. According to another former president, Barack Obama , Bush's life was "a testament to the notion that public service is a noble, joyous calling. And he did tremendous good along the journey." Apple boss Tim Cook said : "We have lost a great American."
In the age of Donald Trump, it isn't difficult for hagiographers of the late Bush Sr. to paint a picture of him as a great patriot and pragmatist; a president who governed with "class" and "integrity." It is true that the former president refused to vote for Trump in 2016, calling him a " blowhard ," and that he eschewed the white nationalist, "alt-right," conspiratorial politics that has come to define the modern Republican Party. He helped end the Cold War without, as Obama said , "firing a shot." He spent his life serving his country -- from the military to Congress to the United Nations to the CIA to the White House. And, by all accounts, he was also a beloved grandfather and great-grandfather to his 17 grandkids and eight great-grandkids .
Nevertheless, he was a public, not a private, figure -- one of only 44 men to have ever served as president of the United States. We cannot, therefore, allow his actual record in office to be beautified in such a brazen way. "When a political leader dies, it is irresponsible in the extreme to demand that only praise be permitted but not criticisms," as my colleague Glenn Greenwald has argued , because it leads to "false history and a propagandistic whitewashing of bad acts."
The inconvenient truth is that the presidency of George Herbert Walker Bush had far more in common with the recognizably belligerent, corrupt, and right-wing Republican figures who came after him - his son George W. and the current orange-faced incumbent - than much of the political and media classes might have you believe.
Consider:
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He made a dishonest case for war . Thirteen years before George W. Bush lied about weapons of mass destruction to justify his invasion and occupation of Iraq, his father made his own set of false claims to justify the aerial bombardment of that same country. The first Gulf War, as an investigation by journalist Joshua Holland concluded , "was sold on a mountain of war propaganda."
For a start, Bush told the American public that Iraq had invaded Kuwait " without provocation or warning ." What he omitted to mention was that the U.S. ambassador to Iraq, April Glaspie, had given an effective green light to Saddam Hussein, telling him in July 1990, a week before his invasion, "[W]e have no opinion on the Arab-Arab conflicts, like your border disagreement with Kuwait."
Then there is the fabrication of intelligence. Bush deployed U.S. troops to the Gulf in August 1990 and claimed that he was doing so in order "to assist the Saudi Arabian Government in the defense of its homeland." As Scott Peterson wrote in the Christian Science Monitor in 2002, "Citing top-secret satellite images, Pentagon officials estimated that up to 250,000 Iraqi troops and 1,500 tanks stood on the border, threatening the key U.S. oil supplier."
Yet when reporter Jean Heller of the St. Petersburg Times acquired her own commercial satellite images of the Saudi border, she found no signs of Iraqi forces; only an empty desert. "It was a pretty serious fib," Heller told Peterson, adding: "That [Iraqi buildup] was the whole justification for Bush sending troops in there, and it just didn't exist."
President George H. W. Bush talks with Secretary of State James Baker III and Secretary of Defense Dick Cheney during a meeting of the cabinet in the White House on Jan. 17, 1991 to discuss the Persian Gulf War. Photo: Ron Edmonds/AP
He committed war crimes. Under Bush Sr., the U.S. dropped a whopping 88,500 tons of bombs on Iraq and Iraqi-occupied Kuwait, many of which resulted in horrific civilian casualties. In February 1991, for example, a U.S. airstrike on an air-raid shelter in the Amiriyah neighborhood of Baghdad killed at least 408 Iraqi civilians . According to Human Rights Watch , the Pentagon knew the Amiriyah facility had been used as a civil defense shelter during the Iran-Iraq war and yet had attacked without warning. It was, concluded HRW, "a serious violation of the laws of war."
U.S. bombs also destroyed essential Iraqi civilian infrastructure -- from electricity-generating and water-treatment facilities to food-processing plants and flour mills. This was no accident. As Barton Gellman of the Washington Post reported in June 1991: "Some targets, especially late in the war, were bombed primarily to create postwar leverage over Iraq, not to influence the course of the conflict itself. Planners now say their intent was to destroy or damage valuable facilities that Baghdad could not repair without foreign assistance. Because of these goals, damage to civilian structures and interests, invariably described by briefers during the war as 'collateral' and unintended, was sometimes neither."
Got that? The Bush administration deliberately targeted civilian infrastructure for "leverage" over Saddam Hussein. How is this not terrorism? As a Harvard public health team concluded in June 1991, less than four months after the end of the war, the destruction of Iraqi infrastructure had resulted in acute malnutrition and "epidemic" levels of cholera and typhoid.
By January 1992, Beth Osborne Daponte, a demographer with the U.S. Census Bureau, was estimating that Bush's Gulf War had caused the deaths of 158,000 Iraqis, including 13,000 immediate civilian deaths and 70,000 deaths from the damage done to electricity and sewage treatment plants. Daponte's numbers contradicted the Bush administration's, and she was threatened by her superiors with dismissal for releasing " false information. " (Sound familiar?)
He refused to cooperate with a special counsel . The Iran-Contra affair , in which the United States traded missiles for Americans hostages in Iran, and used the proceeds of those arms sales to fund Contra rebels in Nicaragua, did much to undermine the presidency of Ronald Reagan. Yet his vice president's involvement in that controversial affair has garnered far less attention. "The criminal investigation of Bush was regrettably incomplete," wrote Special Counsel Lawrence Walsh, a former deputy attorney general in the Eisenhower administration, in his final report on the Iran-Contra affair in August 1993.
Why? Because Bush, who was "fully aware of the Iran arms sale," according to the special counsel, failed to hand over a diary "containing contemporaneous notes relevant to Iran/contra" and refused to be interviewed in the later stages of the investigation. In the final days of his presidency, Bush even issued pardons to six defendants in the Iran-Contra affair, including former Defense Secretary Caspar Weinberger -- on the eve of Weinberger's trial for perjury and obstruction of justice. "The Weinberger pardon," Walsh pointedly noted, "marked the first time a president ever pardoned someone in whose trial he might have been called as a witness, because the president was knowledgeable of factual events underlying the case." An angry Walsh accused Bush of "misconduct" and helping to complete "the Iran-contra cover-up."
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Nov 29, 2018 | www.moonofalabama.org
Russ , Nov 28, 2018 3:28:31 PM | link
Why are U.S. troops in the Middle East?
In an interview with the Washington Post U.S. President Donald Trump gives an answer :
Trump also floated the idea of removing U.S. troops from the Middle East, citing the lower price of oil as a reason to withdraw."Now, are we going to stay in that part of the world? One reason to is Israel ," Trump said. "Oil is becoming less and less of a reason because we're producing more oil now than we've ever produced. So, you know, all of a sudden it gets to a point where you don't have to stay there."
It is only Israel, it is no longer the oil, says Trump. But the nuclear armed Israel does not need U.S. troops for its protection.
And if it is no longer the oil, why is the U.S. defending the Saudis?
Trump's Secretary of State Mike Pompeo disagrees with his boss. In a Wall Street journal op-ed today he claims that The U.S.-Saudi Partnership Is Vital because it includes much more then oil:
[D]egrading U.S.-Saudi ties would be a grave mistake for the national security of the U.S. and its allies.The kingdom is a powerful force for stability in the Middle East. Saudi Arabia is working to secure Iraq's fragile democracy and keep Baghdad tethered to the West's interests, not Tehran's. Riyadh is helping manage the flood of refugees fleeing Syria's civil war by working with host countries, cooperating closely with Egypt, and establishing stronger ties with Israel. Saudi Arabia has also contributed millions of dollars to the U.S.-led effort to fight Islamic State and other terrorist organizations. Saudi oil production and economic stability are keys to regional prosperity and global energy security.
Where and when please has Saudi Arabia "managed the flood of refugees fleeing Syria's civil war". Was that when it emptied its jails of violent criminals and sent them to wage jihad against the Syrian people? That indeed 'managed' to push millions to flee from their homes.
Saudi Arabia might be many things but "a powerful force for stability" it is not. Just ask 18 million Yemenis who, after years of Saudi bombardment, are near to death for lack of food .
Pompeo's work for the Saudi dictator continued today with a Senate briefing on Yemen. The Senators will soon vote on a resolution to end the U.S. support for the war. In his prepared remarks Pompeo wrote:
The suffering in Yemen grieves me, but if the United States of America was not involved in Yemen, it would be a hell of a lot worse.What could be worse than a famine that threatens two third of the population?
If the U.S. and Britain would not support the Saudis and Emirates the war would end within a day or two. The Saudi and UAE planes are maintained by U.S. and British specialists. The Saudis still seek 102 more U.S. military personal to take care of their planes. It would be easy for the U.S. to stop such recruiting of its veterans.
It is the U.S. that holds up an already watered down UN Security Council resolution that calls for a ceasefire in Yemen:
The reason for the delay continues to be a White House worry about angering Saudi Arabia, which strongly opposes the resolution, multiple sources say. CNN reported earlier this month that the Saudi crown prince, Mohammed bin Salman, "threw a fit" when presented with an early draft of the document, leading to a delay and further discussions among Western allies on the matter.We recently wrote that pandering to the Saudis and keeping Muhammad bin Salman in place will hurt Trump's Middle East policies . The piece noted that Trump asked the Saudis for many things, but found that:
There is really nothing in Trump's list on which the Saudis consistently followed through. His alliance with MbS brought him no gain and a lot of trouble.Trump protected MbS from the consequences of murdering Jamal Khashoggi. He hoped to gain leverage with that. But that is not how MbS sees it. He now knows that Trump will not confront him no matter what he does. If MbS "threws a fit" over a UN Security Council resolution, the U.S. will drop it. When he launches his next 'adventure', the U.S. will again cover his back. Is this the way a super power is supposed to handle a client state?
If Trump's instincts really tell him that U.S. troops should be removed from the Middle East and Afghanistan, something I doubt, he should follow them. Support for the Saudi war on Yemen will not help to achieve that. Pandering to MbS is not MAGA.
Posted by b on November 28, 2018 at 03:12 PM | Permalink
Comments Pompeo: "Saudi Arabia has also contributed millions of dollars to the U.S.-led effort to fight Islamic State and other terrorist organizations."
Everyone knows it's the US presence in the Middle East which creates terrorists, both as proxies of and in resistance to the US imperial presence (and often one and then the other). So reading Orwellian language, Pompeo is saying the US wants to maximize Islamic terrorism in order to provide a pretext for creeping totalitarianism at home and abroad.
lysias , Nov 28, 2018 3:35:15 PM | link
The real reason is to maintain the petrodollar system, but there seems to be a conspiracy of silence never to mention it among both supporters and opponents of Trump.Ross , Nov 28, 2018 3:41:42 PM | linkjames , Nov 28, 2018 3:47:06 PM | linkThere is really nothing in Trump's list on which the Saudis consistently followed through. His alliance with MbS brought him no gain and a lot of trouble.He did get to fondle the orb - although fuck knows what weirdness was really going on there.
thanks b... pompeo is a very bad liar... in fact - everything he says is about exactly the opposite, but bottom line is he is a bad liar as he is thoroughly unconvincing..uncle tungsten , Nov 28, 2018 3:49:24 PM | linkeveryone knows why the usa is in the middle east.. to support the war industry, which is heavily tied to the financial industry.. up is down and down is up.. that is why the usa is great friends with ksa and israel and a sworn enemy of iran... what they don't say is they are a sworn enemy of humanity and the thought that the world can continue with their ongoing madness...
oh, but don't forget to vote, LOLOL.... no wonder so many are strung out on drugs, and the pharma industry... opening up to the msm is opening oneself up to the world george orwell described many years ago...
Take a wafer or two of silicon and just add water. The oil obsession has been eclipsed and within 20 years will be in absolute disarray. The warmongers will invent new excuses.karlof1 , Nov 28, 2018 4:33:18 PM | linkA hypothetical: No extraordinary amounts of hydrocarbons exist under Southwest Asian ground; just an essential amount for domestic consumption; in that case, would Zionistan exist where it's currently located and would either Saudi Arabia, Iraq and/or Iran have any significance aside from being consumers of Outlaw US Empire goods? Would the Balfour Declaration and the Sykes/Picot Secret Treaty have been made? If the Orinoco Oil Belt didn't exist, would Venezuela's government be continually targeted for Imperial control? If there was no Brazilian offshore oil, would the Regime Change effort have been made there? Here the hypotheticals end and a few basic yet important questions follow.A. Person , Nov 28, 2018 5:20:13 PM | linkPrevious to the 20th Century, why were Hawaii and Samoa wrested from their native residents and annexed to Empire? In what way did the lowly family farmers spread across 19th Century United States further the growth of its Empire and contribute to the above named annexations? What was the unspoken message sent to US elites contained within Frederic Jackson Turner's 1893 Frontier Thesis ? Why is the dominant language of North America English, not French or Spanish?
None of these are rhetorical. All second paragraph questions I asked of my history students. And all have a bearing on b's fundamental question.
b says, "And it its no longer the oil, why is the U.S. defending the Saudis?"Tobin Paz , Nov 28, 2018 5:50:19 PM | linkThe US has a vital interest in protecting the narrative of 9/11. The Saudis supplied the patsies. Mossad and dual-citizen neocons were the architects of the event. Hence, the US must avoid a nasty divorce from the Saudis. The Saudis are in a perfect blackmailing position.
Maybe Trump is unaware, but the fracking boom is a bubble made possible by near zero interest rates:NOBTS , Nov 28, 2018 6:08:53 PM | linkU.S. SHALE OIL INDUSTRY: Catastrophic Failure Ahead
Of course, most Americans have no idea that the U.S. Shale Oil Industry is nothing more than a Ponzi Scheme because of the mainstream media's inability to report FACT from FICTION. However, they don't deserve all of the blame as the shale energy industry has done an excellent job hiding the financial distress from the public and investors by the use of highly technical jargon and BS.Oil is the untold story of modern history.
S.A. is a thinly disguised US military base, hence the "strategic importance" and the relevance of the new Viceroy's previous experience as a Four Star General. It's doubtful that any of the skilled personnel in the SA Air Force are other than former US/Nato. A few princes might fancy themselves to be daring fighter pilots. In case of a Anglo-Zio war with Iran SA would be the most forward US aircraft carrier. The Empire is sustained by its presumed military might and prizes nothing more than its strategically situated bases. Saud would like to capture Yemen's oil fields, but the primary purpose of the air war is probably training. That of course is more despicably cynical than mere conquest and genocide.Pft , Nov 28, 2018 6:08:56 PM | linkTrump is the ultimate deceiver/liar. Great actor reading from a script. The heel in the Fake wrestling otherwise known as US politics. It almost sounds as if he is calling for an end of anymore significant price drops now that he has got Powell on board to limit interest rate hikes. After all if you are the worlds biggest producer you dont want prices too low. These markets are all manipulated. I cant imagine how much insider trading is going on. If you look at the oil prices, they started dropping in October with Iran sanctions looming (before it was announced irans shipments to its 8 biggest buyers would be exempt) and at the height of the Khashoggi event where sanctions were threatened and Saudi was making threats of their own. In a real free market prices increase amidst supply uncertainty.psychohistorian , Nov 28, 2018 6:35:06 PM | linkRegardless of what he says he wants and gets now, he is already planning a reversal. Thats how the big boys win, they know whats coming and when the con the smaller fish to swim one way they are lined up with a big mouth wide open. Controlled chaos and confusion. For every winner there must be a loser and the losers assets/money are food for the Gods of Money and War
As for pulling out of the Middle East Bibi must have had a good laugh. My money is on the US to be in Yemen to protect them from the Saudis (humanitarian) and Iranian backed Houthis while in reality we will be there to secure the enormous oil fields in the North. Perhaps this was what the Khashoggi trap was all about. The importance of oil is not to supply US markets its to deny it to enemies and control oil prices in order to feed international finance/IMF
@ Pft who wrote: "The importance of oil is not to supply US markets its to deny it to enemies and control oil prices in order to feed international finance/IMF"Augustin L , Nov 28, 2018 6:37:43 PM | linkBINGO!!! Those that control finance control most/all of everything else.
Pnyx , Nov 28, 2018 7:02:31 PM | link
Saudi Arabia literally owns close to 8% of the United States economy through various financial instruments. Their public investment funds and dark pools own large chunks from various strategic firms resting at the apex of western power such as Blackstone. Trump and Pompeo would be stupid to cut off their nose to spite their face... It's all about the petrodollar, uncle sam will ride and die with saudi barbaria. If push comes to shove and the saudis decide to untether themselves from the Empire, their sand kingdom will probably be partitioned.The oil certainly still plays an important role, the u.s. cannot maintain the current frack oil output for long. For Tronald's term in office it will suffice, but hardly longer. (The frack gas supplies are much more substantial.)Likklemore , Nov 28, 2018 7:07:15 PM | linkPersonal interests certainly also play a role, and finally one should not make u.s. foreign policy more rational than it is. Much is also done because of traditions and personal convictions. Often they got it completely wrong and the result was a complete failure.
Let us watch what Trump does with this or if the resolution makes it to daylight:Midwest For Truth , Nov 28, 2018 7:29:46 PM | linkSenate advances Yemen resolution in rebuke to Trump
The Senate issued a sharp rebuke Wednesday to President Trump, easily advancing a resolution that would end U.S. military support for the Saudi-led campaign in Yemen's civil war despite a White House effort to quash the bill.The administration launched an eleventh-hour lobbying frenzy to try to head off momentum for the resolution, dispatching Defense Secretary James Mattis and Secretary of State Mike Pompeo to Capitol Hill in the morning and issuing a veto threat less than an hour before the vote started.
But lawmakers advanced the resolution, 63-37, even as the administration vowed to stand by Saudi Arabia following outcry over the killing of journalist Jamal Khashoggi.
"There's been a lot of rhetoric that's come from the White House and from the State Department on this issue," said Sen. Bob Corker (R-Tenn.), chairman of the Foreign Relations Committee. "The rhetoric that I've heard and the broadcasts that we've made around the world as to who we are have been way out of balance as it relates to American interests and American values." [/]
LINK TheHillBut Mattis says there is no smoking gun to tie the Clown Thug-Prince to Kashoggi's killing.
TheHillAnd Lyias @ 2 is a bingo. Always follow the fiat.
Soon, without any announcements, if they wish to maintain selling oil to China, KSA will follow Qatar. It will be priced in Yuan...especially given the escalating U.S. trade war with China.
2019 holds interesting times. Order a truckload of popcorn.
You would have to have your head buried in the sand to not see that the Saudi "Kings" are crypto-Zionistas. Carl Sagan once said, "One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle. We're no longer interested in finding out the truth. The bamboozle has captured us. It's simply too painful to acknowledge, even to ourselves, that we've been taken. Once you give a charlatan power over you, you almost never get it back." And Mark Twain also wrote "It's easier to fool people than to convince them that they have been fooled."karlof1 , Nov 28, 2018 7:59:31 PM | linkGee, not one taker amongst all these intelligent folk. From last to first: 1588's Protestant Wind allowed Elizabeth and her cronies to literally keep their heads as Nature helped Drake defeat the Spanish Armada; otherwise, there would be no British Empire root to the USA, thus no USA and no future Outlaw US Empire, the British Isles becoming a Hapsburg Imperial Property, and a completely different historical lineage, perhaps sans World Wars and atomic weapons.robjira , Nov 28, 2018 8:08:58 PM | linkTurner's message was with the Frontier closed the "safety valve" of continental expansion defusing political tensions based on economic inequalities had ceased to be of benefit and future policy would need to deal with that issue thus removing the Fear Factor from the natives to immigrants, and from wide-open spaces to the inner cities. Whipsawing business cycles driving urban labor's unrest, populist People's Party politics, and McKinley's 1901 assassination further drove his points home.
Nationwide, family farmers demanded Federal government help to create additional markets for their produce to generate price inflation so they could remain solvent and keep their homesteads, which translated into the need to conduct international commerce via the seas which required coaling stations--Hawaii and Samoa, amongst others--and a Blue Water Navy that eventually led to Alfred T. Mahan's doctrine of Imperial Control of the Oceans still in use today.
As with Gengis Khan's death in 1227 that stopped the Mongol expansion to the English Channel that changed the course of European history, and what was seen as the Protestant Wind being Divine Intervention, global history has several similar inflection points turning the tide from one path to another. We don't know yet if the Outlaw US Empire's reliance on Saudi is such, but we can see it turning from being a great positive to an equally potential great negative for the Empire--humanity as a whole, IMO, will benefit greatly from an implosion and the relationship becoming a Great Negative helping to strip what remains of the Emperor's Clothing from his torso so that nations and their citizens can deter the oncoming financialized economic suicide caused by massive debt and climate chaos.
Vico's circle is about to intersect with Hegel's dialectic and generate a new temporal phase in human history. Although many will find it hard to tell, the current direction points to a difficult change to a more positive course for humanity as a whole, but it's also possible that disaster could strike with humanity's total or near extinction being the outcome--good arguments can be made for either outcome, which ought to unsettle everyone: Yes, the times are that tenuous. But then, I'm merely a lonely historian aware of a great many things, including the pitfall inherent in trying to predict future events.
"The suffering in Yemen grieves me, but if the United States of America was not involved in Yemen, it would be a hell of a lot worse." And I'll bet Pompeo said that with a straight face, too. lmfaoimo , Nov 28, 2018 8:25:35 PM | linkAnd as for "...keep[ing] Baghdad tethered to the West's interests and not Tehran's," I'm guessing the "secretary" would have us all agree "yeah, fk Iraqi sovereignty anyway. Besides, it's not like they share a border with Iran, or anything. Oh, wait..."
p.s. Many thanks for all you have contributed to collective knowledge, b; I will be contacting you about making a contribution by snail mail (I hate PayPal, too).
"... a powerful force for stability in the Middle East."karlof1 , Nov 28, 2018 8:52:24 PM | link"Instability" more like it.
Paid for military coup in Egypt. Funding anti-Syrian terrorists. Ongoing tensions with Iran. Zip-all for the Palestinians. WTF in Yemen. Wahhabi crazy sh_t (via Mosque building) across Asia. Head and hand chopping Friday specials the norm -- especially of their South-Asian slave classes. Ok, so females can now drive cars -- woohoo. A family run business venture manipulating the global oil trade and supporting US-petro-$ hegemony recently out of goat herding and each new generation 'initiated' in some Houston secret society toe-touching shower and soap ceremonies before placement in the ruling hierarchy back home. But enough; they being Semites makes it an offence to criticize in some 'free' democratic world domains.
Likklemore @14--Peter AU 1 , Nov 28, 2018 9:44:50 PM | linkInstead of the "rebuke to Trump" meme circulating around, I found this statement to be more accurate:
"'Cutting off military aid to Saudi Arabia is the right choice for Yemen, the right choice for our national security, and the right choice for upholding the Constitution,' Paul Kawika Martin, senior director for policy and political affairs at Peace Action, declared in a statement. ' Three years ago, the notion of Congress voting to cut off military support for Saudi Arabia would have been politically laughable .'" [My Emphasis]
In other words, advancing Peace with Obama as POTUS wasn't going to happen, so this vote ought to be seen as an attack on Obama's legacy as it's his policy that's being reconsidered and hopefully discontinued.
Trump, Israel and the Sawdi's. US no longer needs middle east oil for strategic supply. Trump is doing away with the petro-dollar as that scam has run its course and maintenance is higher than returns. Saudi and other middle east oil is required for global energy dominance.Pft , Nov 29, 2018 1:15:05 AM | linkEnergy dominance, lebensraum for Israel and destroying the current Iran are all objectives that fit into one neat package.
Those plans look to be coming apart at the moment so it remains to be seen how fanatical Trump is on Israel and MAGA. MAGA as US was at the collapse of the Soviet Union.
As for pulling out of the Middle East Bibi must have had a good laugh. Remember when he said he wanted out of Syria. My money is on the US to be in Yemen before too long to protect them from the Saudis (humanitarian) and Iranian backed Houthis, while in reality it will be to secure the enormous oil fields in the North. Perhaps this was what the Khashoggi trap was all about.james , Nov 29, 2018 1:57:51 AM | linkThe importance of oil is not to supply US markets its to deny it to enemies and control oil prices in order to feed international finance/IMF .
@16 karlof1.. thanks for a broader historical perspective which you are able to bring to moa.. i enjoy reading your comments.. i don't have answers to ALL your questions earlier.. i have answers for some of them... you want to make it easy on us uneducated folks and give us less questions, like b did in his post here, lol.... cheers jamesb , Nov 29, 2018 2:33:04 AM | linkThis came faster than assumed:jim slim , Nov 29, 2018 4:04:44 AM | linkYemen war: US Senate advances measure to end support for Saudi forces
The US Senate has advanced a measure to withdraw American support for a Saudi-led coalition fighting in Yemen.That is quite a slap for the Trump administration. It will have little consequences in the short term (or for Yemen) but it sets a new direction in foreign polices towards the Saudis.In a blow to President Donald Trump, senators voted 63-37 to take forward a motion on ending US support.
Secretary of State Mike Pompeo and Defence Secretary Jim Mattis had urged Senators not to back the motion, saying it would worsen the situation in Yemen.
...
The vote in the Senate means further debate on US support for Saudi Arabia is expected next week.
However, correspondents say that even if the Senate ultimately passes the bipartisan resolution it has little chance of being approved by the outgoing House of Representatives.
Pompeo is a Deep State Israel-firster with a nasty neocon agenda. It is to Trump's disgrace that he chose Pompeo and the abominable Bolton. At least Trump admits the ME invasions are really about Israel.mina , Nov 29, 2018 4:14:20 AM | linkduterte...idris deby...so many democrats visiting Netanyahu lately!!Rhisiart Gwilym , Nov 29, 2018 4:49:48 AM | link@Uncle Tungsten, 5:Rancid , Nov 29, 2018 5:58:26 AM | linkTake a look at some of the - informed - comments below the vid to which you linked. Then think again about an 'all electric civilisation within a few years'. Yes, and Father Christmas will be providing everything that everyone in the world needs for a NAmerican/European standard of living within the same time frame. Er - not.
'Renewables' are not going to save hitech industrial 'civilisation' from The Long Descent/Catabolic Collapse (qv). Apart from any other consideration - and there are some other equally intractable ones - there is no - repeat NO - 'renewable' energy system which doesn't rely crucially on energy subsidies from the fossil-hydrocarbon fuels, both to build it and to maintain it. They're not stand-alone, self-bootstrapping technologies. Nor is there any realistic prospect that they ever will be. Fully renewable-power hitech industrial civilisation is a non-deliverable mirage which is just drawing us ever further into the desert of irreversible peak-energy/peak-everythig-else.
@16 karlof1. I also find your historical references very interesting. We do indeed seem to be at a very low point in the material cycle, it will reverse in due course as is its want, hopefully we will live to see a positive change in humanity.Russ , Nov 29, 2018 7:24:10 AM | linkJohn 28bob sykes , Nov 29, 2018 7:37:37 AM | linkFor example we know Tesla didn't succeed in splitting the planet in half, the way techno-psychotics fantasize. As for that silly link, how typical of techno-wingnuts to respond to prosaic physical facts with fantasies. Anything to prop up faith in the technocratic-fundamentalist religion. Meanwhile "electrical civilization" has always meant and will always mean fracking and coal, until the whole fossil-fueled extreme energy nightmare is over.
Given the proven fact that the extreme energy civilization has done nothing but embark upon a campaign to completely destroy humanity and the Earth (like in your Tesla fantasy), why would a non-psychopath want to prop it up anyway?
It is still the oil, even for the US. The Persian Gulf supplies 20% of world consumption, and Western Europe gets 40% of its oil from OPEC countries, most of that from the Gulf. Even the US still imports 10% of its total consumption.y , Nov 29, 2018 7:47:36 AM | linkPeter AU 1 | Nov 28, 2018 9:44:50 PM | 20Guerrero , Nov 29, 2018 10:16:10 AM | link
b | Nov 29, 2018 2:33:04 AM | 23
USD as a world reserve currency could be one factor between the important ones. With non US support the saud land could crash under neighbours pressure, that caos may be not welcomed.Posted by: karlof1 | Nov 28, 2018 7:59:31 PM | 16Yes!
Humble people around where I live have mentioned that time is speeding up its velocity; there seems to be a spiritual (evolutionary)/physical interface effect or something...
Tolstoy, in the long theory-of-history exposition at the end of War and Peace, challenges 'the great man' of History idea, spreading in his time, at the dawning of the so-called: European Romantic period of Beethoven, Goerte and Wagner, when the unique person was glorified in the name of art, truth, whatever (eventually this bubble burst too, in the 20th C. and IMO because of too much fervent worship in the Cult of the Temple of the Money God. Dostoyevki's great Crime and Punishment is all about this issue.)
Tolstoy tries to describe a scientifically-determined historical process, dissing the 'great man of History' thesis. He was thinking of Napoleon Bonaparte of course, the run-away upstart repulican, anathema to the established order. Tolstoy describes it in the opening scene of the novel: a fascinating parlor-room conversation between a "liberal" woman of good-birth in the elite circles of society and a military captain at the party.
...only tenuously relevant to karlofi1's great post touching upon the Theory of History as such; thanks.
Now as to the question: ¿Why is Trump supporting Saudi Arabia? Let me think about that...
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Nov 28, 2018 | peakoilbarrel.com
HuntingtonBeach x Ignored says: 11/27/2018 at 10:01 pm
Where does the auto industry go from here?likbez x Ignored says: 11/28/2018 at 12:24 amThe concept of car ownership could change, too. Today, privately owned cars spend most of their lives parked and unused. Self-driving cars of the future are expected to be on the roads for a much bigger portion of the day -- once they drive you to work, they can drive someone else to the grocery store. That means roads could be filled with fewer vehicles overall.
Self-driving cars will hasten the switch from gasoline-powered automobiles to electric vehicles. The sensors and computers calling the shots will need electrical power, rather than horsepower that gasoline engines provide.
HuntingtonBeach,You probably never studied computer science in depth. One probably needs a degree in electrical engineering to understand huge problems on this technological path. But some problems are visible even for mere mortals: The problem with self-driving cars is that computers are very stupid (let's put it politely handicapped) drivers that can't sense a lot of things that human sense. They are good only for "normal" situations and limited traffic scenarios, for example following the car in front of you at (10+your speed) or greater distance at speeds higher than 25 miles per hour. In congested bumper-to-bumper traffic with crazy from spending 4 hours on the road human drivers cutting you left and right, they are useless unless they can communicate with the car in front of you and the car behind you getting their "intentions" beforehand. This is probably possible using Bluetooth or WiFi, but is far ahead of us and requires developing protocols and standardizing actions taken by self-driving cars across various manufacturers. The maximum you can envision now is autonomous delivery of an empty car (no passengers) as a very low speed (like Google maps cars) to the driver.
Self-driving cars will hasten the switch from gasoline-powered automobiles to electric vehicles. The sensors and computers calling the shots will need electrical power, rather than horsepower that gasoline engines provide.
I like your enthusiasm, but from an engineering point of view, this solution is less attractive than driving cars on natural gas, and biodiesel. Right now early Tesla enthusiasts are still not chased out of their expensive neighborhood, but soon they might suffer stigma and find dead cats in their backyard, especially if other people air conditioning goes out in summer, or electrical heating at winter due to their hobby ;-). Early Tesla buyers are either "conspicuous consumption" junkies or the followers some secular cult of the "Second coming of the electric cars." Rational person right now probably would buy a hybrid. In California as far as I can tell this is mostly prestige issues that drive people to buy Tesla, especially among IT specialists. Most of those people (for various reasons including inferiority complex) are luxury car buyers anyway.
In 2016, there were about 222 million licensed drivers in the United States. Each driver on average drives 13,474 miles each year. Now assuming 0.300 kilowatts per mile please (which means no heating and air conditioning in those cars) and even distribution of those miles during the year (so each driver drives 13,474/365 miles a day) calculate how much energy needs to be produced for, say 80% of that car to be electric. Add 20% losses in transmission and charging. Now divide by 12 hours as the most car will be charged at night, right?
Two problems:
1. How to generate so much energy for the cars needed each night? Are you advocating mass buildup of nuclear power stations? Because neither solar nor wind can work without compensating nuclear (gas powered -- you need rapid switch on/off) for night time in case of the electric car is owned by the majority of the population. East-West high voltage lines can help, but in a very limited way (only three hours difference). Who will pay for this giant infrastructure project?
2. Liability questions arising are very complex. The question to you: when self-driving car electronics detects a child is running directly in front of the car and determines that it can't stop in time and will hit the child unless it crashes the car into the pole and possibly kills one of the passengers in the front seats, whom it should save: passengers of the car or the child?
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Nov 28, 2018 | oilprice.com
JP Morgan has revising its outlook on Brent crude to US$73 per barrel on average, CNBC reports . The bank's earlier forecast was for an average Brent crude price of US$83.50 a barrel.
The head of the bank's Asia-Pacific oil and gas operations, Scott Darling, told CONB analysts had factored in the increase in supply in North America that will occur in the second half of 2019 and will eventually pressure prices even lower in 2020, to an average US$64 in that year.
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Nov 28, 2018 | peakoilbarrel.com
Survivalist x Ignored says: 11/22/2018 at 11:11 am
https://m.phys.org/news/2018-11-greenhouse-gas-atmosphere-high.htmlHightrekker x Ignored says: 11/22/2018 at 2:06 pmWith regards to all the smart people deciding to soon do the right thing I highly doubt it.
1891 -- Dr. Edward L. Bernays, lives, Wien, the "father of public relations" credited with getting women to smoke & helping United Fruit overthrow Guatemalan President Arbenz; A lovely piece of humanity: "with Bernays there is no consistency, no character, no integrity, no conscience, no bravery, no truth." A nephew of Sigmund Freud (his sister Anna's son).Would be perfect for the current 'Potemkin village' .
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Nov 27, 2018 | peakoilbarrel.com
Hickory x Ignored says: 11/21/2018 at 10:59 am
I'm not sure why Professor Li brings up the 'capitalist system' so prominently in the article?Ron Patterson x Ignored says: 11/21/2018 at 11:43 am
Perhaps I don't know the proper definition.
Seems to me that communist or socialist systems can produce just as much CO2.Depends more on how many people, and their level of industrialization.
The only connection I can see is debt-fueled growth.
If you maximize the economic growth with as much debt as you can muster (borrowing from the future economic production and wealth), you can grow far into overshoot. Like we have now.
Perhaps this is more likely in a capitalist system. I'm not at all sure that is true.Capitalism is simply the default system. The history of civilization has been a history of capitalism. It has always been a dog eat dog world. To blame anything on capitalism is nothing more than blaming it on human nature.Hickory x Ignored says: 11/21/2018 at 1:18 pmAgree Ron.HuntingtonBeach x Ignored says: 11/21/2018 at 1:30 pm"Capitalism is simply the default system"Minqi Li x Ignored says: 11/21/2018 at 5:02 pmI would have said capitalism is simply the natural system. Other wise I think your right on. Regulations are capitalism guard rails to a civil and successful society. Those who call for a change to a different system are just ill informed.
There was no capitalist world system 500 years ago. Even 200 years ago, it was still restricted to Western Hemisphere plus a fraction of Eurasia. In fact, even the English word "capitalism" was not yet invented then. In 1848, Marx talked about "bourgeois society". So there is not such a thing called "natural system"HuntingtonBeach x Ignored says: 11/21/2018 at 6:48 pmThere were no humans a million years ago, not even half a million years ago. So there is no such of thing called humans. Oh I see how this works now.Hightrekker x Ignored says: 11/21/2018 at 7:22 pmCapitalism is very recent development.Joe Clarkson x Ignored says: 11/22/2018 at 10:55 am
First developed in Netherlands and England in the sixteenth to seventeenth centuries, and wasn't part of the global world until colonization.
It will be gone shortly, as it needs a expanding economy.
What comes next?
Who knows?Capitalism – an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. Synonyms: free enterprise, private enterprise, the free market; enterprise cultureJay Woods x Ignored says: 11/22/2018 at 9:48 amThe free market has always existed, albeit at low percentage levels of total production, which was mostly subsistence agriculture or hunting and gathering. It is certainly true that capitalism has expanded greatly with the dramatic increase in production that came with widespread use of fossil fuels, but the concept of private enterprise and private trade didn't spring out of nothing. It was always there.
There were even private markets under pre-fossil-fuel feudalism, in which the politically powerful were mostly concerned with defense and taxation. Lots of trade opportunities were given to people by the state, but they were given to private enterprises. There were also private traders operating without state support at the same time.
Even tribal groups engaged in trade, although it is often difficult to discern a distinction between "the state" and "private enterprise" in tribal circumstances.
Capitalism as a word didn't exist but the mercantile economy (profitable trade) has been going on well before money and money has been around for 5K years.Survivalist x Ignored says: 11/21/2018 at 2:51 pmThe Grim Pollution Picture in the Former Soviet UnionMinqi Li x Ignored says: 11/21/2018 at 4:56 pm
https://www.huffingtonpost.com/armine-sahakyan/the-grim-pollution-pictur_b_9266764.htmlTroubled Lands- The Legacy of Soviet Environmental Destruction
https://www.rand.org/pubs/commercial_books/CB367.htmlIt seems to me that capitalism has no monopoly on damaging the environment. I'd suggest rapidly destroying the environment is more a function of being an industrial economy, whether capitalist or some other. Non-industrial economies seem to destroy the environment more slowly.
First of all, people who lived in former socialist societies did not call these societies "communism". That's an American expression later imposed on the rest of the worldNick G x Ignored says: 11/21/2018 at 5:09 pmSecondly, 20th century socialisms were a part of the capitalist world system and had to play the system's basic game–economic growth
Thirdly, according to the world system theory (and agreed by many others), the essential feature of capitalism is the pursuit of endless accumulation of capital.
Someone might say you can have market without growth. It is possible to have a non-growth economy if the market is not dominant, like all the pre-capitalist societies. But if the market is dominant, then you have competition everywhere and competition forces everyone to pursue growth. If you do not grow, you fail and you are eliminated. That happens both to individuals and countries
Lastly, at least a large minority of environmentalists agree that economic growth is fundamentally incompatible with sustainability. So if you agree with point three and four, you have to conclude that so long as capitalism exists, there is no hope for sustainability.
a large minority of environmentalists agree that economic growth is fundamentally incompatible with sustainability.Minqi Li x Ignored says: 11/21/2018 at 5:43 pmI would disagree. In fact, I'd say that some of the push for this idea has come from ultra-conservatives like the Heartland Institute, which hopes to discredit environmentalists.
Have you seen evidence for the idea that this is an idea held by a large minority of environmentalists?
Resilience.orgNick G x Ignored says: 11/21/2018 at 6:03 pmAnd, just under this post, there are at least a few
Certainly it's fair to say that growth sustainability has yet to be proved unless you think we are already on a sustainability path
resilience.orgMinqi Li x Ignored says: 11/23/2018 at 12:28 pmThe article you provided starts with "To read the accounts in the mainstream media, one gets the impression that renewable energy is being rolled out quickly and is on its way to replacing fossil fuels without much ado, while generating new green jobs."
That's an explicit acknowledgement that the author is outside the mainstream.
it's fair to say that growth sustainability has yet to be proved
I would strongly disagree. I would describe the idea that investing in renewable power and EVs would necessarily destroy economic growth as a fringe idea, outside the economic and environmental mainstream. It is an extraordinary idea, which needs extraordinary evidence.
For instance, I think it's fair to say that Germany is both an engineering and environmental leader, and that the general consensus in German environmental circles is that a transition away from FF is compatible with economic growth.
Nick, I said "a large minority"Nick G x Ignored says: 11/23/2018 at 2:04 pmYes, I understood. And I'm disagreeing. I think it's a small minority – a fringe.Hightrekker x Ignored says: 11/21/2018 at 7:13 pmThe idea of a "large minority" suggests some degree of acceptance by the general environmental community. It suggests that this is a strong contender in the "marketplace of ideas". As the author of the article you provided acknowledged: he's out of the mainstream. He's arguing to try to change that, but .his opinion is definitely outside the general consensus. It's not generally considered a "strong contender".
Thirdly, according to the world system theory (and agreed by many others), the essential feature of capitalism is the pursuit of endless accumulation of capital.alimbiquated x Ignored says: 11/23/2018 at 7:43 am
Well not really–
The essence is:
"The capitalist mode of production proper, based on wage-labour and private ownership of the means of who derive their income from the surplus product produced by the workers and appropriated freely by the capitalists."But agree– appropriate or die by the hands of those with greatest greed.
"Communism" is not an American word or idea. It comes from Europe. But it's true that it's gotten to be an empty word.Green People's Media x Ignored says: 11/21/2018 at 7:49 pmI've stopped using the term "capitalism" because it elicits so damn many knee-jerk reactions. Of late, I always refer to "neoliberalism" and then if I feel like picking a fight, I'll follow in parentheses (end-stage capitalism, that is). Neoliberalism is the end-stage of the global economic system, in which I include China as well, because it's the period of total rent-seeking (completely unearned wealth) and what I like to call The Mother Of All Asset Bubbles (MOAAB).Watcher x Ignored says: 11/21/2018 at 11:26 amAll of U.S. energy policy since the Greatest Recession Ever, Dude began in Dec. 2007 has been fostering full-out flat-out shale production in order to squash the less-diversified energy-dependent economies such as Venezuela, Iran (where it hasn't succeeded, yet) and even Russia (hasn't succeeded). But it's left the USA as the Hegemon of global energy at the present moment.
This should leave the USA in the position for loads more unearned wealth-accumulation at least until there is a bust in the fracked energy production. All this does is prolong the length of the end stage of the economic system, in my humble opinion. At some point we'll have to reckon with the end of the end stage.
B.G.
Where is the oil focused post -- even if one of those Open Thread things? I'm not seeing it.GoneFishing x Ignored says: 11/21/2018 at 11:30 amOpec October Production
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Nov 27, 2018 | peakoilbarrel.com
Watcher , 11/24/2018 at 12:16 pm
And so . . . Sovereign Wealth Funds and Shale. Are they funding those loans?Longtimber , 11/24/2018 at 8:01 pmAnswer -- not really. There was a hyped announcement of Singapore's SWF sending money to Chesapeake. But that was in 2010.
Reporters who dare to look into this don't seem to find much. They retreat to the sanctuary of narrative. Something like this "With renewables smashing oil's future, SWFs that are mostly funded by oil and gas are reluctant to invest in anything related to oil or gas."
Uh huh.
Worth noting that China has 4 SWFs that clearly were not funded by oil or gas -- but they aren't really SWFs either. They are just money in accounts at the PBOC and of course that entity can declare itself to have whatever amount it wishes (just like the Fed's Balance Sheet). (Note surprisingly in this context that Hong Kong (listed as one of China's) has a "SWF" of about 1/2 trillion dollars, which is absurd). But . . . China's money isn't oil or gas derived and even they aren't pouring into profitable oil or gas so diversification may not be the motivator in this. (Venezuela doesn't count, there will be no profit there)
BTW narrative embracers, y'all might want to examine why Tesla's stock didn't fall. Answer, Saudi's SWF owns 5% of the company in total and they don't sell more or less any of their holdings. This is a common trait of SWFs. They seldom sell anything. tra la tra la
Last but not least, and wow this is intriguing, there is CONSIDERABLE talk of the UK creating a SWF funded by shale gas that hasn't flowed yet. Gotta be an agenda there.
http://www.artberman.com/2018-oil-price-collapse-explained-macrovoices-interview-20-nov-2018/Energy News , 11/25/2018 at 6:21 amBrazilian oil exports, ANP (Units 1000 barrels per day)Energy News , 11/25/2018 at 10:20 am6 month moving average of net exports (crude oil + products)
September is at 678
Average 2018 so far 446
Average 2017 full year 492
Chart https://pbs.twimg.com/media/Ds1_S8EXQAAmY0n.jpgCrude oil – The recent spike highs in crude oil exports must be coming from inventory draws. As the sum of refinery processing plus net crude oil exports is higher than crude oil production.
Chart https://pbs.twimg.com/media/Ds2Aqz9WsAANjjJ.jpgIn the longer term, from 2014, crude oil net exports have increased due to an increase in production and a decrease in refinery processing
https://pbs.twimg.com/media/Ds2CmdiWwAEQrF2.jpgTwitter – Donald J. TrumpWatcher , 11/25/2018 at 11:12 am
So great that oil prices are falling (thank you President T). Add that, which is like a big Tax Cut, to our other good Economic news. Inflation down (are you listening Fed)!
1:46 pm – 25 Nov 2018
https://twitter.com/realDonaldTrumpHe's right about the Fed and inflation. That's pretty serious stuff. If the Fed suspends its increases a lot of things are going to change globally.HHH , 11/25/2018 at 12:49 pmWhat exactly is going to change if the Fed suspends it's increases? Dollar liquidity is still going to be an issue globally. Low oil price means less dollar liquidity particularly outside USA. Market demands nothing less than full blown more QE and lower interest rates. There is globally about 20 times the amount of dollar denominated debt as there is physical dollars to service that debt. That is what happens when the FED drops interest rates from 5.25% to 0.25%. Everybody borrowed dollars. FED can't exit without putting us right back where we were in 2009. They also can't continue. Why can't they continue? Answer is simple, the amount they create to keep things going has to be an ever increasing amount at an ever lower interest rate. Otherwise debt deflation happens. They hit a brick wall and can do nothing. So they will try to deflate it a little at a time. By raising interest rates and unwinding QE a little at a time. Then something major happens and it deflates a bunch all at once.
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Nov 25, 2018 | www.zerohedge.com
Authored by Irina Slav via Oilprice.com,
The Southern Gas Corridor on which the European Union is pinning most of its hopes for natural gas supply diversification away from Russia is coming along nicely and will not just be on schedule, but it will come with a price tag that is US$5-billion lower than the original budget , BP's vice president in charge of the project told S&P Global Platts this week.
"Often these kinds of mega-projects fall behind schedule. But the way the projects have maintained the schedule has meant that your traditional overspend, or utilization of contingency, has not occurred," Joseph Murphy said, adding that savings had been the top priority for the supermajor.
The Southern Gas Corridor will carry natural gas from the Azeri Shah Deniz 2 field in the Caspian Sea to Europe via a network of three pipelines : the Georgia South Caucasus Pipeline, which was recently expanded and can carry 23 billion cubic meters of gas; the TANAP pipeline via Turkey, with a peak capacity of 31 billion cubic meters annually; and the Trans-Adriatic Pipeline, or TAP, which will link with TANAP at the Turkish-Greek border and carry 10 billion cubic meters of gas annually to Italy.
TANAP was commissioned in July this year and the first phase of TAP is expected to be completed in two years, so Europe will hopefully have more non-Russian gas at the start of the new decade. But not that much, at least initially: TANAP will operate at an initial capacity of 16 billion cubic meters annually, of which 6 billion cubic meters will be supplied to Turkey and the remainder will go to Europe. In the context of total natural gas demand of 564 billion cubic meters in 2020, according to a forecast from the Oxford Institute for Energy Studies released earlier this year, this is not a lot.
Yet at some point the TANAP will reach its full capacity and hopefully by that time, TAP will be completed. Surprisingly, it was the branch to Italy that proved the most challenging, and BP's Murphy acknowledged that. While Turkey built TANAP on time to the surprise of the project operator, TAP has been struggling because of legal issues and uncertainty after the new Italian government entered office earlier this year.
At the time, the government of Giuseppe Conte said the pipeline was pointless but, said Murphy, since then he has accepted the benefits the infrastructure would offer, such as transit fees. And yet local opposition in southern Italy remains strong but BP still sees first deliveries of gas through Italy in 2020.
The BP executive admitted that at first the Southern Gas Corridor wouldn't make a splash.
"The 10 Bcm/year into Europe is not a game-changer from a volume point of view, but it is a game-changer from a new source of product into mainland Europe perspective and it can be expanded."
Meanwhile, however, Russia and Turkey are building another pipeline, Turkish Stream, that will supply gas to Turkey and Eastern Europe, as well as possibly Hungary. The two recently marked the completion of its subsea section. Turkish Stream will have two lines, each able to carry up to 15.75 billion cubic meters. One will supply the Turkish market and the other European countries.
In this context, the Southern Gas Corridor seems to have more of a political rather than practical significance for the time being , giving Europe the confidence that it could at some future point import a lot more Caspian gas because the infrastructure is there.
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Nov 25, 2018 | community.oilprice.com
Strangely, I found the attached image after making the above post (or else I would have included it). In the image you can see Al-Waleed bin Talal, and look who is with him! They seem pretty chummy.
On 11/24/2018 at 4:14 AM, Qanoil said: think especially of alwaleed bin talal who was the largest shareholder in citigroup (who, thanks to wikileaks was found to have selected nearly every member of hussein obama's cabinetI also heard that Al-Waleed bankrolled Obama's education at Harvard and got him started in politics. Supposedly, here is the source:
"When asked about Obama by the show's host, Dominic Carter, the respected black politico Percy Sutton casually explained that he had been "introduced to [Obama] by a friend." The friend's name was Dr. Khalid al-Mansour.
Who is Khalid Abdullah Tariq Al-Mansour Ph.D? He co-founded the United Bank of Africa, the World United Bank of Africa and the Saudi African Bank. Since 1996, Dr. Al-Mansour has been a legal and financial Consultant to various public and private companies., including none other than Al-Waleed.
According to Sutton, al-Mansour was "raising money" for Obama's education and had asked him to "please write a letter in support of [Obama] a young man that has applied to Harvard." Sutton gladly obliged. When Sutton died in December 2009 -- "an enormous loss" said Obama."
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Nov 23, 2018 | www.zerohedge.com
Oil continues collapsing. The 7% move today is probably magnified due to lack of liquidity post-Thanksgiving, but nevertheless the move is huge. Oil is down 34% from recent highs. Fundamentals and real economy do not change this quick, so expect to hear about more "hedge(ed) funds" blowing up. After all this is a 3 sigma move .
What´s next for oil nobody knows, but 50 USD is a rather big level to watch. For believers in Fibonacci, 50 is the 50% retracement from the 2016 lows.
Oil volatility, OIV index, is now in full explosion mode. This is pure panic and these levels won´t be sustainable longer term, but the rise in oil volatility is simply amazing.
As we outlined earlier, oil stress started spreading to credit several weeks ago. We have been pointing out, no bounce in equities until we possibly see some stabilization in credit . For the equity bulls, unfortunately credit continues imploding. European iTraxx main continues the move violently higher.
Similar chart is to be found for the US CDX IG index.
Below chart shows the CDX IG index (white) versus oil (inverted, orange). The relationship is rather clear. Add to this crowded positions and low liquidity and the moves continue feeding of each other, causing enormous p/l pain and further risk reduction among funds.
European iTraxx main (inverted white) is now "aggressively" under performing the Eurostoxx 50 index (orange). The moves in credit are starting to feel rather "panicky", helping VIX and other related volatilities higher.
Given the continuation in oil prices, we ask ourselves when will the market start to realize Fed can´t be tightening as aggressively as (still) priced in. Maybe time for the Powell put to revive?
For more related reading check out AskBrokers.com
Source: charts by Bloomberg
MaxFreedom , 6 hours ago link
New_Meat , 5 hours ago linkIs every market massively manipulated?
to ask the question is to provide the answer.
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Nov 24, 2018 | www.zerohedge.com
Authored by Tom Luongo,While the Trump Administration still thinks it can play enough games to derail the Nordstream 2 pipeline via sanctions and threats, the impotence of its position geopolitically was on display the other day as the final pipe of the first train of the Turkstream pipeline entered the waters of the Black Sea.
The pipe was sanctioned by Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan who shared a public stage and held bilateral talks afterwards. I think it is important for everyone to watch the response to Putin's speech in its entirety. Because it highlights just how far Russian/Turkish relations have come since the November 24th, 2015 incident where Turkey shot down a Russian SU-24 over Syria.
https://www.youtube.com/embed/TkFR25SArYM
When you contrast this event with the strained and uninspired interactions between Erdogan and President Trump you realize that the world is moving forward despite the seeming power of the United States to derail events.
And Turkey is the key player in the region, geographically, culturally and politically. Erdogan and Putin know this. And they also know that Turkey being the transit corridor of energy for Eastern Europe opens those countries up to economic and political power they haven't enjoyed in a long time.
The first train of Turkstream will serve Turkey directly. Over the next couple of years the second train will be built which will serve as a jumping off point for bringing gas to Eastern and Southern Europe.
Countries like Bulgaria, Hungary, Italy, Greece, Serbia and Slovakia are lining up for access to Turkstream's energy. This, again, is in stark contrast to the insanely expensive Southern Transport Corridor (STC) pipeline set to bring one-third the amount of gas to Italy at five times the initial cost .
Turkstream will bring 15.75 bcm annually to Turkey and the second train that same amount to Europe. The TAP – Trans Adriatic Pipeline -- will bring just 10 bcm annually and won't do so before 2020, a project more than six years in the making.
Political RealitiesThe real story behind Turkstream, however, is, despite Putin's protestations to the contrary, political. No project of this size is purely economic, even if it makes immense economic sense. If that were the case then the STC wouldn't exist because it makes zero economic sense but some, if not much, political sense.
No, this pipeline along with the other major energy projects between Russia and Turkey have massive long-term political implications for the Middle East. Erdogan wants to re-take control of the Islamic world from the Saudis.
This is why they have the Saudis on a residual-poison-type drip feed of information relating to the death of Jamal Khashoggi to extract maximal value from the situation as Erdogan plays the U.S. deep state against the Trump/Mohammed bin Salman (MbS) alliance.
The U.S. deep state wants Trump weakened and MbS removed from power. Trump needs MbS to advance his plans for securing Israel's future and prolong the dollar's long-term health. Erdogan is using this rift to extract concessions left and right while continuing to do whatever he wants to do vis a vis Syria, Iran and his growing partnership with Russia.
Erdogan is in a position now to drive a very hard bargain over U.S. involvement in Syria, which neither faction in the U.S. government (Trump and the deep state) wants to give up on.
By controlling the oil fields in the eastern part of Syria and blocking the roads leading from Iraq the U.S. is playing a game it can't win because ultimately the Kurds will either have to be betrayed by the U.S. to keep Erdogan happy or cut a deal with the Syrian government for their future alienating the U.S.
This has been the ultimate end-game of the occupation of eastern Syria for months now and time is on both Putin's and Erdogan's side. Because the U.S. can't pressure Turkey to stop growing closer to Russia and Iran.
Eventually the U.S. troops in Syria will be nothing more than an albatross around Trump's neck politically and he'll have to announce a pull out, which will be popular back home helping his re-election campaign for 2020.
The big loser in this is Israel who is now having to circle the wagons politically since Putin put the screws to Benjamin Netanyahu for his part in the deaths of 15 Russian airmen back in September by closing the Syrian airspace and allowing mostly free movement of materiel to Lebanon.
Netanyahu, as I talked about last week, is now in a very precarious position after Israel was forced to sue for peace thanks to the unprecedentedly strong response by the Palestinians in Gaza.
Elijah Magnier commented recently that it this was the net result of Trump's unconditional support of Israel which united the Arab resistance rather than dividing and conquering it.
But the US establishment decided to distance itself from the Palestinian cause and embraced unconditionally the Israeli apartheid policy towards Palestine: the US supports Israel blindly. It has recognised Jerusalem as the capital of Israel, suspended financial aid to UN institutions supporting Palestinian refugees (schools, medical care, homes), and rejected the right of return of Palestinians. All this has pushed various Palestinian groups, including the Palestinian Authority, to acknowledge that any negotiation with Israel is useless and that also the US can no longer be considered a reliable partner. Moreover, the failed regime-change in Syria and the humiliating conditions place on Arab financial support were in a way the last straws that convinced Hamas to change its position, giving up on the Oslo agreement and joining the Axis of the Resistance.
Project Netanyahu, as Alistair Crooke termed it , was predicated on keeping the support of the Palestinians split with Hamas and the Palestinian Authority at odds and then grinding out the resistance in Gaza over time.
Trump's plans also involved the formation of the so-called "Arab NATO" the summit for which has been put off until next year thanks to Erdogan's deft handling of the Saudi hit on Khashoggi. There are still a number of issues outstanding -- the financial blockade of Qatar, the war in Yemen, etc. -- that need to be resolved as well before any of this is even remotely possible.
At this point that plan has failed and the clash with Israel last week proved it is unworkable without tacit approval of Turkey who is gunning for the Saudis as the leaders of the Sunni world.
Show me the MoneyBut, more importantly, over time, a Turkey that can ween itself off the U.S. dollar over the next decade is a Turkey that can survive politically the upheaval to the post-WWII institutional order coming over the next few years.
Remember, all of this is happening against the backdrop of a U.S. and European political order that is failing to maintain the confidence of the people it governs.
The road to dollar independence will be long and hard but it will be possible. Russia is the model for this having successfully removed the dollar from a great deal of its trade and is now reaping the benefits of that stability.
And projects like Turkstream and the soon to be completed Power of Siberia Pipeline to China will see the gas from both trade without the dollar as the intermediary.
If you don't think this de-dollarization of the Russian economy is happening or significant, take one look at the Russian ruble versus the price of Brent crude in recent weeks. We've had another historic collapse in oil prices and yet the ruble versus the dollar hasn't really moved at all.
The upward move from earlier this year in the ruble (not shown) came from disruptions in the Aluminum market and the threat of further sanctions. But, as the U.S. puts the screws even tighter to Russia's finances by forcing the price of oil down, the effect on the ruble has been minimal.
With today's move Brent is off nearly $30 from its October high ( a massive 35% drop in prices) just seven weeks ago and the Ruble hasn't budged. The Bank of Russia hasn't been in there propping up its price. Normally this would send the ruble into a tailspin but it hasn't.
The other so-called 'commodity currencies' like the Canadian and Australian dollars have been hit hard but not the ruble.
Set the Way Back Machine to 2014 when oil prices cratered and you'll see a ruble in free fall which culminated in a massive blow-off top that required a fundamental shift in both fiscal and monetary policy for Russia.
This had to do with the massive dollar-denominated debt of its, you guessed it, oil and gas sector. Today that is not a point of leverage.
Today lower oil prices will be a forward headwind for Russian oil companies but a boon to the Russian economy that won't experience massive inflation thanks to the ruble being sold to cover U.S. dollar liabilities.
Those days are over.
And so too will those days come for Turkey which is now in the process of doing what Russia did in 2015, divest itself of future dollar obligations while diversifying the currencies it trades in.
Stability, transparency and solvency are the things that increase the demand for a currency as not only a medium of exchange but also as a reserve asset. Russia announced the latest figures of bilateral trade with China bypassing the dollar and RT had a very interesting quote from Prime Minister Dmitri Medvedev.
No one currency should dominate the market, because this makes all of us dependent on the economic situation in the country that issues this reserve currency, even when we are talking about a strong economy such as the United States," Medvedev said.
He added that US sanctions have pushed Moscow and Beijing to think about the use of their domestic currencies in settlements, something that "we should have done ten years ago."
" Trading for rubles is our absolute priority, which, by the way, should eventually turn the ruble from a convertible currency into a reserve currency, " the Russian prime minister said.
That is the first statement by a major Russian figure about seeing the ruble rise to reserve status, but it's something that many, like myself, have speculated about for years now.
Tying together major economies like Turkey, Iran, China and eventually the EU via energy projects which settle the trade in local currencies is the big threat to the current political and economic program of the U.S. It is something the EU will only embrace reluctantly.
It is something the U.S. will oppose vehemently.
And it is something that no one will stop if it makes sense for the people on each side of the transaction. This is why Turkstream and Nordstream 2 are such important projects they change the entire dynamic of the flow of global capital.
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RioGrandeImports , 21 seconds ago link
Jack Oliver , 3 hours ago linkOil and commodity markets were used as a finishing move on the Soviet system. The book, "The Oil Card: Global Economic Warfare in the 21st Century" by James R. Norman details the use of oil futures as a geopolitical tool. Pipelines change the calculus quite a bit.
Fantome , 4 hours ago linkDe - Dollarisation is sweeping the world !!
Soros funded 'migration' to Europe has also failed and created a massive cultural and economic burden on Europe.
The Soros/Rothschild plan to destroy Middle Eastern countries and displace the people was - of course - motivated by the Rothschilds 'bread and butter ' - OIL ( the worlds largest traded commodity ) !!
... ... ...
Rubicon727 , 1 hour ago link...Where ever they go, they [neoliberals] get organised, identify the institutions/establishments/courts to infiltrate and then use that influence to -
* Hijack the economy.
* Corrupt the society.
As the current trend shows, the nexus of the international economic activity is shifting east. Turkey is not making a mistake aligning itself with the goals of Russia, Iran and China. Although there is still a huge debt of the previous deeds that has to be paid.
... ... ...
Joiningupthedots , 4 hours ago link"Half of the US billionaires are Jews while only being less then 3% of the population. And it doesn't stop there. They work collectively to hijack the institutions critical for the operations of the democracy."
Some worthy observations, especially with all the US "Think Tanks." But I would include the number of non-Jewish elites who have banded together with the Jewish elite and who have greatly aided in eating out the very heart of America.
Consuelo , 4 hours ago linkI read on here previously some dimwit comment about "America prints a bill for 2 cents while other countries have to earn a dollars worth of equity to buy it and we can do this forever" kind of thing. Not if other countries don't supply the demand you can't :)
History also shows that ANY smaller entity (Israel) that depends on a larger entity (America) for its survival becomes a failed entity in the long run. Just saying.
DEDA CVETKO , 4 hours ago linkI think you could quite reasonably replace the term 'depends on a larger entity', with a term that better describes a (smaller) ' parasite ' on a (larger) host...
scraping_by , 2 hours ago linkUS Guvmint to the World: My way or the highway. The World to the US Guvmint: HIGHWAY!!!!!
CatInTheHat , 4 hours ago linkFrom your lips to God's ear. The American Empire is all cost and no benefit to the great majority of Americans. The MIC and that's it. Politicians on the right wave the flag and politicians on the left describe a politically correct future. All on our dime.
adonisdemilo , 4 hours ago linkIsrahell is losing its status via Putins peaceful diplomacy and trade with ME countries who are not onboard with the Yinon plan. This is why RUSSIAGATE, led by dual Israhelli democrats in Congress. There is always a foreign policy issue attached to their demonizing of other countries. This is also why the UK just sent UK soldiers to Ukraine declaring war on Russia for "invading Ukraine" and not telling parliament or the UK people.
UK/US blind support for Israhell will get us all killed.
max_is_leering , 2 hours ago linkWe do know that UK soldiers have been sent to the Ukraine. We also know that, according to elements in the Government and the Civil Service, Russia invaded and annexed the Ukraine, which is just another reason to not trust the Government--any Government.
IronForge , 4 hours ago linkit's Crimea by the way, and it wasn't annexed... Crimeans voted to re-unite with Russia after they saw the NAZI hell breaking loose in Ukieville
The Terrible Sweal , 4 hours ago linkWRONG!!!!! NordStream Eins und Zwei are the Prizes, because DEU, Scandinavia, CHE, and FRA will Benefit. TRK Wins 2nd Prize with TRKStream and SouthStream Pipelines. Losers are BGR and EU_PARAGOV, since BGR went from Prime Partner to Trickledown Transiteer.
Bingo Hammer , 1 hour ago linkThe US has ripped open its own ballsack through arrogance and beligerence.
opport.knocks , 4 hours ago linkActually it was a little country in the ME that owns the US that ripped open the US ballsack
DEDA CVETKO , 5 hours ago linkThe other so-called 'commodity currencies' like the Canadian and Australian dollars have been hit hard but not the ruble.
The Canadian dollar is only down $0.025 from its October 1st high, and still has not touched the June low.
JohninMK , 3 hours ago linkUltimately, along with Nordstream and Turkstream, there will also be a Polarstream (leading to UK and Iceland) and Southstream (which was already begun but temporarily suspended after Obama threatened Bulgaria via Angela Merkel).
And, oh...I am sure there will also be a Ukrostream (also known as Mainstream) unfortunately the Ukronazi government of Ukrainistan doesn't know this just yet. They will find out in due course, I am sure.
raalon , 4 hours ago linkWell, that's some confused comments.
First PolarStream is highly unlikely both because laying it would be extremely difficult and expensive and because Iceland has no need for gas as it is sitting on thermal reserves and the UK won't deal with Russia.
You are correct on SouthStream.
As to UkroStream (I assume you mean Ukraine) it is already in existence and has been for 50 plus years. Given the bad history between the parties the Russians will want to stop that route asap, hence the timing of NordStream 2 and TurkStream. So in the future UkroSream is going to end, not start.
21st.century , 5 hours ago linkThe US and Israel are the threats to world Peace. Just how many countries has Russia attacked lately
Mr. Kwikky , 5 hours ago linklong-term political implications for the Middle East. Erdogan wants to re-take control of the Islamic world from the Saudis.
SA still has control of the Hajj -- religious tourism - command by the Magic Book that even Turkish mohammadist must complete. +/- 18% of SA GDP-- and SA isn't sharing any of that loot.
Ticip is required to go and throw rocks at the black orb -- and do the Muslim Hokey Pokey along with all the rest.. oh, and pay the SA kings for the privilege !
the war's are about religious tourism
InsaneBane , 5 hours ago link..What about "The Grand Chessboard", Zbigniew hello where are you? /s
Winston Churchill , 5 hours ago link..Rotting in hell /s
JohninMK , 3 hours ago linkZbigniew plagarized MacKinder, who plagarized someone else. The playbook is that old.
The new 3D Grand Chessboard is being played very quietly out of Moscow.
The article is a wee bit deceptive. Whilst this was indeed the last bit of under sea pipe they were celebrating, it should be pointed out the stunning speed that they achieved, about a mile a day some to a depth of over 1000 feet, quite an achievement on land, let alone at sea. This is quite interesting, especially the map
https://www.rt.com/business/444344-russia-turkish-stream-opening/
Also, as its landfall in Turkey is west of the Bosphorus, that is west of Istanbul, maybe that 'for Turkish use' is a cover for its primary purpose, supplying the Balkans as well as Turkey from January 2020.
Note the significance of the start to pump date, December 2019, the same as NordStream 2. What else happens then? Oh yes, the gas transit contract with Ukraine ends. The combination of these two new pipelines to a very great extent replace that agreement. Even though politically everyone is saying Ukraine ($4B p.a. transit fees) should be protected.
Take another look at the map, note that it takes a dogleg south to Turkey. If at that point it had gone straight ahead it would have gone to Bulgaria as SouthStream. But the US and its EU vassal stopped that. Maybe the second pipeline the Russians are now discussing will resurrect that route.
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Nov 24, 2018 | turcopolier.typepad.com
Snowden accuses Israeli cybersecurity firm of enabling Khashoggi murder: Play Hide
What do people make of the fact that it seems Khashoggi apparently was recently married, the picture of him with his supposed fiancée was clearly photoshopped (used the same photo from his WaPo profile), and his family has indicated they knew nothing of this new fiancée?Pat Lang Mod -> Vicky SD , 11 hours agoIt also seems interesting how the US has a tape of MBS ordering his silencing when we apparently knew little at the outset. Seems this turd is starting to stink a bit.
Automated SIGINT collection produces such volumes of material based on standing targets that it often takes a while to sift through it. MBS's phone would be such a target. In any event Trump doesn't want to hear it.Eric Newhill -> Pat Lang , 9 hours agoSir,Pat Lang Mod -> Eric Newhill , 8 hours agoYou would not consider as viable the hypothesis that Trump is using the assassination, and evidence of MbS' ordering of it, as leverage to achieve various objectives that MbS wasn't on board with (a resolution of the Yemen situation? Oil pricing? toning down jihadi support in the MENA? Other?).
It's viable but I don't think Trump is that subtle.
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Nov 24, 2018 | www.zerohedge.com
RioGrandeImports, 21 seconds ago link
Oil and commodity markets were used as a finishing move on the Soviet system. The book, "The Oil Card: Global Economic Warfare in the 21st Century" by James R. Norman details the use of oil futures as a geopolitical tool. Pipelines change the calculus quite a bit.
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Nov 24, 2018 | peakoilbarrel.com
Fred Magyar x Ignored says: 11/22/2018 at 11:34 am
https://cleantechnica.com/2018/11/22/peak-oil-drastic-oil-shortages-imminent-says-iea/Ron Patterson x Ignored says: 11/22/2018 at 1:59 pmLOL!
Peak Oil & Drastic Oil Shortages Imminent, Says IEA
LOL!Fred Magyar x Ignored says: 11/22/2018 at 4:18 pmSorry Fred, but that joke just went right over my head. Why am I not laughing?
Twas a sarcastic laugh at the expense of the IEAGeorge Kaplan x Ignored says: 11/23/2018 at 2:21 amThat discovery chart shows the problem well, I hadn't seen it before. The big blip in deep water discoveries in the 2000s from improved technologies and higher prices contributed greatly to the subsequent glut and price collapse – and now what's left? There hasn't been much of an uptick in exploration despite the price rally, offshore drillers continue to go bust, leasing activity still fairly slow – the tranches get bigger as the last, less attractive bits are released but lease ratio falls, Permian dominates all news stories. Why would the recent decline curve turn around? And the biggest surprise might be that gas is just as bad as oil, so the recent boost in supplies from condensate and NGL might also have run its course.Survivalist x Ignored says: 11/23/2018 at 9:33 amSo we need to bring on approx 40 million barrels a day by 2025 to stay flat?George Kaplan x Ignored says: 11/23/2018 at 12:31 pm
Should be an interesting 7 years!I tracked FIDs for oil through 2017, I've been a bit less diligent this year so may have missed some, but for greenfield conventional plus oil sands I have for the remainder of 2018 through 2025: 400, 1770, 1170, 800, 985, 70, 250, 400 kbpd added – about 6 mmbpd total, nothing after 2025, plus another 1 mmbpd from ramp ups from this year. Only pretty small projects could get done now before 2022, and there aren't many of those left. Anything else would need to come from brownfield (in-fill), LTO or new discoveries (including existing known resources that become reserves once a development decision is made).Hugo x Ignored says: 11/23/2018 at 5:34 amGDP and Energy consumptionFred Magyar x Ignored says: 11/23/2018 at 5:46 amThe link between GDP and energy consumption is very clearly shown in the graph.
https://ourfiniteworld.com/2012/10/25/an-economic-theory-of-limited-oil-supply/comment-page-2/
High economic growth matched high growth in energy consumption and recessions saw fall in energy consumption.
Since 90% of the energy consumed comes from burning the stored energy in coal, oil, gas and wood. It is hardly surprising that during high economic growth CO2 emissions increase also.
Those who not not wish to see this link, obviously think Peak Oil is not a problem. GDP growth will continue even though oil becomes more scarce.If oil production falls by just 1% per year, taking into account new vehicle production. The world would have to produce 90 million electric cars each year in order to prevent oil prices from destroying other users such as the aviation industry.
This year 1.5 million fully electric cars were made and according to several people here peak oil is no more then 4 years away.
Since 90% of the energy consumed comes from burning the stored energy in coal, oil, gas and wood. It is hardly surprising that during high economic growth CO2 emissions increase alsoHugo x Ignored says: 11/23/2018 at 7:40 amI have a hunch that we are about to see some major changes to that paradigm.
FredHickory x Ignored says: 11/23/2018 at 12:21 pmI hope you are correct, but I have done some calculations on what is needed.
According to reports around $1.7 trillion was invested in energy supply in 2017. $790 billion on oil, gas and coal supply. $320 billion was spent on solar and wind.
During 2017 oil consumption increased by 1 million barrels per day. Gas consumption increased by 3% and even coal consumption went up.The world needs to spend about $2.5 trillion per year on wind, solar and batteries in order to meet increased energy demand and reduce fossil fuel burning by about 1% per year. This obviously depends on GDP growth being about average.
Since recent scientific observations have discovered that Greenland, the Arctic and Antarctica melting much faster than anyone thought. The shift needs to be a minimum of 2.5%. Thus a spending of around £4 trillion per year is needed.
I do not see any country spending a minimum of 12 times more on solar and wind in the next 3-5 years. It would take every country doing so.
Agreed Hugo. The world is only making token moves towards installation of the necessary wind and solar.GoneFishing x Ignored says: 11/23/2018 at 12:44 pm
This coming decade will see everyone scrambling to get the equipment built and installed.
Looks like centralized planning (China) is going to beat 'the market' on being the primary supplier. Our 'free' market has tariffs on PV imported. Brilliant.
Does having a 5 (or 10 yr) plan make you communist?
Or just smart."The world needs to spend about $2.5 trillion per year on wind, solar and batteries in order to meet increased energy demand and reduce fossil fuel burning by about 1% per year. This obviously depends on GDP growth being about average."HuntingtonBeach x Ignored says: 11/23/2018 at 5:14 pm
1% per year? You have got to be kidding.
The global oil consumption for transport is about 39.5 million barrels of oil per day. Using PV to drive EV transport would mean an investment of 2.2 trillion dollars in PV to provide global road transport energy.
So what do we use next year's money for?
."The global oil consumption for transport is about 39.5 million barrels of oil per day"GoneFishing x Ignored says: 11/23/2018 at 6:51 pm39.5 million is only gasoline in the world. Add diesel and jet fuel and you get to about 75 million barrels a day for transportation or about 75% of oil produced.
I was specifically talking about road transport.Hickory x Ignored says: 11/24/2018 at 12:33 am
Argue with these guys.
https://www.statista.com/statistics/307198/forecast-of-oil-consumption-in-road-transportation/Did you get the point? That Hugo overstated the cost of renewables to replace fossil fuels by a huge amount and understated their effect by another huge amount.
We have a couple of people that consistently do that on this site.You may have just been talking about transport energy, but the others of us were having some back and forth about fossil fuel replacement in general.
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Nov 23, 2018 | www.cnn.com
New York (CNN Business) The meltdown in the oil market has caught almost everyone off guard. In the span of mere weeks, crude prices went from a four-year high to a full-blown bear market. The oil crash -- crude is down more than 30% from its recent peak -- was triggered by a series of factors that combined to spook traders who once saw $100 oil on the horizon. "The sheer scale of the move is triggering unpleasant memories of 2014 and 2015," said Michael Tran, director of global energy strategy at RBC Capital Markets, alluding to the last oil downturn. US oil prices plummeted another 7% on Friday, breaking below $51 a barrel for the first time in 13 months. President Donald Trump celebrated the oil crash. Read More "Oil prices getting lower, Great! Like a big Tax Cut for America and the World. Enjoy!" Trump tweeted on Wednesday. "Thank you to Saudi Arabia, but let's go lower!" But the oil slide can't be explained by a simple tweet.
... ... ...
American shale oil boom Although Trump praised Saudi Arabia, his tweet omitted the central role played by America in the oil plunge. Lifted by the shale oil boom, the United States recently overtook Russia and Saudi Arabia to become the world's largest oil producer for the first time since 1973. The International Energy Agency predicts US output will have soared by more than 2 million barrels per day in 2018. It's expected to climb further next year. No other country has ramped up production to that degree.... ... ...
Demand Fear
Appetite for oil in the United States has been "very robust," but the IEA warned last week of "relatively weak" demand in Europe and developed Asian countries. And the IEA flagged a "slowdown" in demand in India, Brazil and Argentina caused by high prices, weak currencies and deteriorating economic activity .
Last month the International Monetary Fund downgraded its 2019 GDP estimates for both China and the United States because of the trade war. Global GDP is expected to slow from 2.9% in 2018 to 2.5% next year. That's never good news for oil, which powers the economy.
... ... ...
Fast money
Commodities, much like stocks, are influenced by large bets made by hedge funds and other traders. Analysts say the oil plunge was exacerbated by the unwinding of massive bullish bets by financial players.
The managed money community's long positions in crude plunged in late October to the lowest level since early 2016 when crude crashed to $26 a barrel, according to RBC.
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Nov 22, 2018 | 247wallst.com
The future of oil prices is in great flux. The huge boom in American and Canadian shale output has added tremendously to the overall global supply of oil. The United States, as a matter of fact, has become almost energy independent. At the same time, data from the International Energy Agency shows that worldwide demand has flattened, to some extent because of a drop in supply from emerging markets. These factors would seem to argue for oil prices to range close to the current price of $58. However, crude was at $74 just a month ago, and the circumstances that drove it up have not entirely disappeared.
Venezuela, which has the world's largest proven oil reserves, is in political and economic turmoil. Iran's exports will be curtailed by sanctions. Tensions with Saudi Arabia have not been so high in years after the murder of journalist Jamal Khashoggi. The Saudis already have said they plan to cut production.
From what individuals pay for gasoline and heating oil to airline fuel prices to petrochemical products, a spike in crude would be damaging. (Ironically, a very sharp drop in oil prices is sometimes the sign of a falloff in global demand, and thus a signal of an overall slowdown in worldwide GDP.)
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Nov 20, 2018 | thenewkremlinstooge.wordpress.com
Warren November 20, 2018 at 10:23 am
TheRealNews
Published on 20 Nov 2018
CIA officials are signaling Saudi Crown Prince Mohammed bin Salman must be replaced. Is this all about the killing of Jamal Khashoggi? Professor Asad AbuKhalil says there are other political reasons.Mark Chapman November 20, 2018 at 5:03 pm
Fear not! I heard on the news on my way home that Trump has decided Saudi Arabia will not be punished for the killing of Khahsoggi with termination of current arms contracts. The Donald reasons that if that happens, the KSA will just buy its weapons elsewhere. And nobody in the military-industrial complex wants that. I am very confident Justin Trudeau will interpret that as a signal that Canada likewise should not cut off its nose to spite its face, and so Canada will not 'punish' its good friend, either. Therefore, Saudi Arabia will experience no punishment whatsoever for its admitted murder of an inconvenient American journalist. There are limits to western indignation, after all. So the west will content itself with revoking the KSA's invitation to the Spring Strawberry Social, and double down on its insistence that Crimea is Ukraine and must be returned to Kiev's control, and the west will never accept its 'annexation'. Never, never, never. There are some issues on which the west has spine to spare. So if you want a noisy western journalist removed, slip the Saudis a few bucks, and they can probably make it happen with no recriminations.kirill November 20, 2018 at 5:23 pmThe recognition of Crimea as part of Ukraine by Washington and its minions is totally worthless. It is not based on law and justice, it is based on self-interest (as in the USA had big plans to acquire Crimea and build a massive naval base there). The use of the word annexation is propaganda drivel.et Al November 21, 2018 at 9:38 amUkraine annexed Crimea in 1991 and the ICJ has ruled that local ethnic majorities have a right to self determination. If independence is good enough for Kosovo, it is good enough for Crimea. No amount of special pleading by Washington and its bootlicks about Kosovo being "special" has any merit.
I'm afraid you are wrong about the ICJ Kirill. The ICJ dodged the actual issue. They ruled that making a declaration of independence is not against international law, not whether anyone/whatever/blah blah blah actually has the right to independence. Possibly because they did not want to cross Pandora's Rubicon Boxkirill November 21, 2018 at 10:51 amthe adoption of the declaration of independence of the 17 February 2008 did not violate general international law because international law contains no 'prohibition on declarations of independence
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Some call it 'unique', others call it a precedent , therefore 'not unique'. If the West argues that the ICJ said it was ok, then it is also ok for Crimea to declare independence. Or, if they claim that Crimea is not independent, that Kosovo cannot be either, hence, as you point out the use of the word ' annexation ' and other creative circumlocutions to avoid mentioning that secession was first and the clear comparison with Kosovo which would not serve them well at all.
https://nyujilp.org/icj-rules-on-kosovo-independence/
The International Court of Justice today held that international law did not prohibit Kosovo's declaration of independence, while sidestepping the larger issue of Kosovo's statehood
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But, this is not the first time the West has decided what international law is for itself when back in 1991 the European Council ministers themselves appointed the Badinter Commission to give it a legal figleaf for recognizing the administrative borders of Yugoslavia as international. I've posted this link before, but once more with feeling:
How the Badinter Commission on Yugoslavia laid the roots for Crimea's secession from Ukraine
http://blogs.lse.ac.uk/europpblog/2015/02/20/how-the-badinter-commission-on-yugoslavia-laid-the-roots-for-crimeas-secession-from-ukraine/Thanks for the clarification. But it is all a house of cards. Given that empires and countries have continually fissioned into pieces through the whole of relevant history, the notion of "territorial integrity" is bogus and a corollary of "might makes right". As long as the country can suppress secessionists it has territorial integrity, when it becomes too weak everything falls apart. There is no international law. And if ware to assume a common law regime that is not maintained by legislatures, then secession is fully legal if the local majority wants it hard enough.et Al November 21, 2018 at 12:17 pmWe know it is nothing but the Law of the Jungle. It's just that the fancy dress shop has expanded and has a lot more more costumes on offer to its clients.Mark Chapman November 21, 2018 at 7:01 pmQuite so; however, as I have frequently pointed out before – notably here –when the west trots out its I-never-said that-exactly smokescreen, it is helpful to read what various western countries wrote as legal opinions, and the arguments they used to support their reasoning. Where Kosovo is concerned, a classic is the Polish opinion, written by (or more likely for) its then-Foreign Minister, Radek Sikorski. He wrote, in part;
" a state is commonly defined as a community which consists of a territory and a population subject to an organized political authority; that such a state is characterized by sovereignty the existence of the state is a question of fact, the effects of recognition by other states are purely declaratory. A declaration of independence is merely an act that confirms these factual circumstances, and it may be difficult to assess such an act in purely legal terms."
Legal opinions are usually replete with bafflegab to confuse the easily-bored and the pressed-for-time readers. But Mr. Sikorski made what he must have believed was a very convincing case that a sovereign state-within-a-state is characterized by an ethnic population, a pre-existing degree of autonomy (so that the entity demonstrates the capability to function autonomously), and its own functioning institutions such as banks and infrastructure.
Which of those is not descriptive of Crimea? It was even called "The Autonomous Republic of Crimea", for Christ's sake. Sikorski doubtless had an inkling that the Kosovo precedent might come back to bite NATO, and so tried to duck a justification which might read like a precedent, but it was unavoidable.
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Nov 22, 2018 | thenewkremlinstooge.wordpress.com
kirill November 14, 2018 at 6:35 am
These American fucktards actually think they can replace Russian gas supply to the EU. With what you utter void heads? America had a net export capacity of 5 bcm in 2017 because it imported about 87 bcm from Canada. When you fuckwad, douchebags get 150 bcm export capacity, then start yapping. Until then, STFU.Of course, it is clear to anyone with a functional brain that the US is totally dishonest on claiming to want to supply the EU. In fact, it wants to saddle the EU with onerous LNG contracts to third parties (e.g. Qatar) who can currently and for the near term supply the volumes of LNG needed. At the same time the US damages the Asian tigers by increasing LNG prices.
It is time for all the US bootlicks (Japan, the EU) to tell Uncle Scumbag to shove himself in his own ass. The US is not even pretending to treat these countries with respect.
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Nov 22, 2018 | www.euractiv.com
The US has repeatedly taken position against Nord Stream 2, a Russia-sponsored pipeline planned to bring gas to Germany under the Baltic Sea. But this time Washington warned against another such pipeline, bringing Russian gas under the Black Sea.
US Energy Secretary Rick Perry called on Hungary and its neighbors to reject Russian gas pipelines which Washington says are being used to cement Moscow's grip on central and eastern Europe.
Energy diversification would be crucial for the region, as Russia has used energy as a weapon in the past, he said, as quoted by Reuters.
"Russia is using a pipeline project Nord stream 2 and a multi-line Turkish stream to try to solidify its control over the security and the stability of Central and eastern Europe," Perry added during a visit to Budapest.
Last July, Hungary signed a deal with Russia's Gazprom to link the country with the Turkish Stream pipeline by end-2019.
true 14/11/2018 at 09:46
Rick Perry is a salesman. He wants us Europeans to buy USA gas. Which is why he is against North Stream 2 and Turkish Stream. Not because Russia may use gas to blackmail Europe -- unlike the USA, which blackmails Europe to sanction Iran and Russia –. No, he just wants us to buy America.
Despite the fact that gas produced in the USA is far more expensive than Russia's. Well, what can you expect from a minister in the government of a tycoon? What else can you expect from today's USA?
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Nov 22, 2018 | thenewkremlinstooge.wordpress.com
Mark Chapman November 15, 2018 at 1:09 pm
One way or another, Gazprom is going to have to pay Ukraine $2.6 Billion, so they might as well just do it and have it over with. Of course the Ukies will prance and jump up and down in the streets and yell 'Slava Ukrainy' – and hasten off to prepare new lawsuits in search of more money from the Russian state. But a Swiss court has ordered all Nord Stream partners to not make any payments to Gazprom, instead to pay all monies owed to Gazprom to Swedish bailiffs, who will redistribute it to Ukraine until they recover all their money.https://www.naturalgasworld.com/ns2-in-trouble-gazprom-hopeful-65959
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Nov 21, 2018 | www.theamericanconservative.com
The imposition of new, more stringent sanctions targeting Iranian oil sales by the Trump administration has once again raised the question: is this even a viable policy?The Council on Foreign Relations defines sanctions as "a lower-cost, lower-risk, middle course of action between diplomacy and war." In short, sanctions do not represent policy per se, but rather the absence of policy, little more than a stop-gap measure to be used while other options are considered and/or developed.
Not surprising, sanctions have rarely -- if ever -- succeeded in obtaining their desired results. The poster child for successful sanctions as a vehicle for change -- divestment in South Africa during the 1980s in opposition to the Apartheid regime -- is in reality a red herring. The South Africa sanctions were in fact counterproductive , in so far as they prompted even harsher policies from the South African government. The demise of Apartheid came about largely because the Soviet Union collapsed, meaning the South African government was no longer needed in the fight against communism.
Another myth that has arisen around sanctions is their utility in addressing nonproliferation issues. Since 1994, the U.S. has promulgated non-proliferation sanctions under the guise of executive orders signed by the president or statutes passed by Congress. But there is no evidence that sanctions implemented under these authorities have meaningfully altered the behaviors that they target. Better known are the various sanctions regimes authorized under UN Security Council resolutions backed by the United States, specifically those targeting Iraq, North Korea, and Iran.
The Iraq sanctions were, by intent, a stop-gap measure implemented four days after the Iraqi invasion of Kuwait and intended to buy time until a military response could be authorized, organized, and executed. The nature of the Iraq sanctions regime was fundamentally altered after Operation Desert Storm, when the objective transitioned away from the liberation of Kuwait, which was achieved by force of arms, to the elimination of weapons of mass destruction, which was never the intent of the sanctions to begin with. The potential for sanctions to alter Iraqi behavior was real -- Iraq had made the lifting of sanctions its top priority, and thanks to aggressive UN weapons inspections, was effectively disarmed by 1995.
This potential, however, was never realized in large part to the unspoken yet very real policy on part of the U.S. that sanctions would not be lifted on Iraq, regardless of its level of disarmament, until which time its president, Saddam Hussein, was removed from power. Since the sanctions were not designed, intended, or capable of achieving regime change, their very existence became a policy trap -- as the sanctions crumbled due to a lack of support and enforcement, the U.S. was compelled to either back away from its regime change policy, which was politically impossible, or seek regime change through military engagement. In short, American sanctions policy vis-à-vis Iraq was one of the major causal factors behind the 2003 decision to invade Iraq.
One of the flawed lessons that emerged from the Iraq sanctions experience was that sanctions could contribute to regime change, in so far as they weakened the targeted nation to the point that a military option became attractive. This is a fundamentally flawed conclusion, however, predicated on the mistaken belief that Iraq's military weakness was the direct byproduct of sanctions. Iraq's military weakness was because its military had been effectively destroyed during the 1991 Gulf War. Sanctions contributed significantly to Iraq being unable to reconstitute a meaningful military capability, but they were not the cause of the underlying systemic problems that led to the rapid defeat of the Iraqi military in 2003.
The "success" of the Iraq sanctions regime helped guide U.S. policy regarding North Korea in the 1990s and 2000s. Stringent sanctions, backed by Security Council resolutions, were implemented to curtail North Korea's development of nuclear weapons and ballistic missile delivery systems. Simple cause-effect analysis shows the impotence of this effort -- North Korea's nuclear and ballistic missile capability continued unabated, culminating in nuclear-tipped intercontinental ballistic missiles capable of reaching U.S. soil being tested and deployed. The notion that sanctions could undermine the legitimacy of the North Korean regime and facilitate its collapse was not matched by reality. If anything, support for the regime grew as it demonstrated its willingness to stand up to the U.S. and proceed with its nuclear weapons and ballistic missile programs.
The Victims of Iran Sanctions Iran Deserves Credit for the Ruin of ISISThe Trump administration labors under the fiction that it was the U.S. policy of "maximum pressure" through sanctions that compelled North Korea to agree to denuclearization. The reality, however, is that it is North Korea, backed by China and Russia, that has dictated the timing of the diplomatic breakthrough with the U.S. ( the so-called "Peace Olympics" ), and the pace of associated disarmament. Moreover, North Korea's insistence that any denuclearization be conducted parallel to the lifting of economic sanctions demonstrates that it is in full control of its policy, and that the promise of the lifting of economic sanctions has not, to date, prompted any change in Pyongyang's stance. While President Donald Trump maintains that the U.S. will not budge from its position that sanctions will remain in place until North Korea disarms, the fact of the matter is that the sanctions regime is already collapsing, with China opening its border, Russia selling gasoline and oil, and South Korea engaged in discussions about potential unification.
The U.S. has lost control of the process, if indeed it was ever in control. It is doubtful that the rest of the world will allow the progress made to date with North Korea to be undone, leaving the U.S. increasingly isolated. Insisting on the maintenance of a sanctions regime that has proven ineffective and counterproductive is not sustainable policy. As with Iraq, U.S. sanctions have proven to be the problem, not the solution. Unlike Iraq, North Korea maintains a robust military capability, fundamentally altering the stakes involved in any military solution the U.S. might consider as an alternative -- in short, there is no military solution. One can expect the U.S. to alter its position on sanctions before North Korea budges on denuclearization.
Iran represents a far more complex, and dangerous, problem set. The United States has maintained sanctions against Iran that date back to the 1979 Iranian Revolution that overthrew the Shah, and the seizure of the U.S. embassy and resultant holding of its staff hostage for 444 days. The U.S. policy vis-à-vis Iran has been one where the demise of the ruling theocracy has been a real, if unstated, objective, and every sanctions regime implemented since that time has had that outcome in mind. This is the reverse of the Iraqi case, where regime change was an afterthought to sanctions. With Iran, the issue of nuclear non-proliferation was an additional justification for sanctions. Here, disarmament concerns eventually trumped regime change desires, to the extent that when the U.S. was confronted by the reality that sanctions would not achieve the change in behavior desired by Tehran, and the cost of war with Iran being prohibitively high, both politically and militarily, it capitulated. It agreed to lift the sanctions in exchange for Iran agreeing to enhanced monitoring of a nuclear program that was fundamentally unaltered by the resulting agreement, known as the Joint Comprehensive Program of Action, or JCPOA.
When Trump withdrew from the JCPOA, he did so in an environment that was radically different than the one that was in play when President Barack Obama embraced that agreement in July 2015. Today, the U.S. stands alone in implementing sanctions, while Iran enjoys the support of the rest of the world (support that will continue so long as Iran complies with the provisions set forth in the JCPOA.) Moreover, Iran is working with its new-found partners in Europe, Russia, and China to develop work-arounds to the U.S. sanctions.
The coalition of support that the U.S. has assembled to confront Iran, built around Israel and Saudi Arabia, is not as solid as had been hoped -- Israel is tied down in Gaza, while Saudi Arabia struggles in Yemen, and is reeling from the fallout surrounding the murder of Jamal Khashoggi .
Concerns that strict sanctioning of Iranian oil would result in a spike in global oil prices prompted Trump to grant waivers to eight of Iran's largest purchasers of oil, creating a situation where Iran's oil-based income will increase following the implementation of sanctions. The bottom line is that the current round of U.S. sanctions targeting Iran will not achieve anything.
For the meantime, Iran will avoid confrontation, operating on the hope that it will be able to cobble an effective counter to U.S. sanctions. However, unlike Iraq, Iran has a very capable military. Unlike Korea, however, this military is not equipped with a nuclear deterrent.
If history has taught us anything, it is that the U.S. tends to default to military intervention when sanctions have failed to achieve the policy goal of regime change. Trump, operating as he is under the influence of Secretary of State Mike Pompeo and National Security Advisor John Bolton, is not immune to this trap. The question is whether Iran can defeat the sanctions through workarounds before they become too crippling and the regime is forced to lash out in its own defense. This is one race where the world would do well to bet on Iran, because the consequences of failure are dire.
Scott Ritter is a former Marine Corps intelligence officer who served in the former Soviet Union implementing arms control treaties, in the Persian Gulf during Operation Desert Storm, and in Iraq overseeing the disarmament of WMD. He is the author of Dealbreaker: Donald Trump and the Unmaking of the Iran Nuclear Deal (2018) by Clarity Press.
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Nov 20, 2018 | www.unz.com
jilles dykstra , says: November 14, 2018 at 12:21 pm GMT
@tac The Torah, biblical and Quran stories were written in agrarian societies where capitalistic enterprise hardly existed.
Loans were for not dying of hunger in the period between when the food of the last harvest had been used completely, and the new harvest was still in the future.
Thus interest was seen as blackmailing people, they needed money to prevent dying of starvation.
There was enterprise long ago, and trade over long distances, in the early centuries for example swords from Damascus were famous in Europe, and exported to Europe.
Investment for business was the exception, even the first iron smelting installations were simple, those who wanted them could build them by themselves.
The idea that invested money could yield money came later, when installations became more complex, ships bigger, etc.
With investment came risk, there was not much risk in consumptive loans, they normally could paid out of the coming harvest.
And so the problem began, a church not understanding capitalism, an agrarian society based on barter changing into a money using capitalistic society.
Commercial people had no problem with interest, even now Muslims do not have problems with interest.
What they do is simply giving interest other names, such as a fine for repaying late.
It has been agreed that the repayment will be late, so anybody is happy.
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Nov 20, 2018 | www.unz.com
tac , says: November 14, 2018 at 6:35 am GMT
@renfro And there you have it in a nutshell: usary -- the usurper of civilization, the enslaver of humanity, the seed of ultimate degeneracy. It seems humanity is adverse to learn from history. It is an interesting side-note that both Christianity and Islam both prohibit the use of usury (a consideration worthy of mention when one contemplates the ongoing wars in the ME) and some who here take shots at Farakhann, 'neo-nazis', blue-hair and other deplorables.Our dilemma today is the same that occurred in Rome. Our country and people will suffer the same fate if usury continues as it has. From the onset of history, it has been the moneychangers, who have exploited mankind for pure profit. Usury is an abomination against God's statutes, which manipulates and destroys people, families, and nations. It is by the profits made from usury used to attack Christianity. One needs only to ask- who is in control of usury worldwide? Didn't Rome suffer from these same people? Usury brings forth an insidious side to all people. The temptation to borrow is powerful, and it always polarizes lender against borrower where the former becomes the master and the later, the slave. As a vice, neighbor is pitted against his neighbor, and nation against nation.
[...]
The Roman government was far too corrupt already with its politicians bought by moneychangers for any fledgling Christian sect to have an affect on its decline. The moneychanger's demand was perpetually self-serving, which was disparate to the common good of the populace. Originally, Rome was founded as a republic. The unchecked influence of the moneychangers caused it to change into a democracy. A republic is derived through the election of public officials whose attitude toward property is respected in terms of law for individual rights. A democracy is derived through the election of public officials whose attitude toward property is communistic and respects the "collective good" of the population instead of the individual. This is the resultant system that moneychangers bring to civilization. The subversion of power is a sleight of hand that changes the right of the individual into what is often called the "collective good" of the people (communistic), which is always controlled by an alliance of powerful interests.
There is no reference in the article to the moneychangers and their lawyers sowing the seeds for Roman society to suffocate under its own lethargic weight. Lawyers were indeed a problem to Rome. The Romans were so concerned by lawyers' opprobrious effect on public morale that they attempted to curb their influence. In 204 BC, the Roman Senate passed a law prohibiting lawyers from plying their trade for money. As the Roman republic declined and became more democratic, it became increasingly difficult to keep lawyers in check and prevent them from accepting fees under the table. Indeed, they were very useful to the moneychangers. The lawyers fed upon corruption and accelerated the downward plunge of Roman civilization. Some wealthy Romans began sending their sons to Greece to finish their schooling, to learn rhetoric (Julius Caesar was one example) -- a lawyer's cleverness in oration. This compounded Rome's growing woes.
[...]
The moneychangers destroyed Rome from within by first monopolizing usury, monopolizing the precious mineral trade and then disproportionately magnifying the temporal businesses of prostitution (including pedophilia and homosexuality), and slavery. Constantine (306-337 AD) was the first Roman emperor to issue laws, which radically limited the rights of Jews as citizens of the Roman Empire, a privilege conferred upon them by Caracalla in 212 AD. The laws of Constantius (337-361 AD) recognized the Jewish domination of the slave trade and acted to greatly curtail it. A law of Theodosius II (408-410 AD), prohibited Jews from holding any advantageous office of honor in the Roman state. Always the impetus was buying influence concerning their trade.
[...]
Usury has been the opiate that has ruined the ingenuity of many of its civilizations. As this Jewish craft spread, the people increasingly suffered from the burdens of indebtedness. So troubling was the effects of usury that Lex Genucia outlawed usury in 342 BC. Nevertheless, ways of evading such legislation were found and by the last period of the Republic, usury was once again rife. Emperors like Julius Caesar and Justinian tried to limit the interest rate and control its devastating effects (Birnie, 1958). Entertainment was a way to temporarily set aside the burdens of indebtedness. It was a way to festively indulge in all the glory that Rome had to offer. Rome soon became drunk on hedonism. Collectively, entertainment helped disguise the collapsing of a great power. Spectator blood sports, brothels, carnivals, festivals, and parties substituted for everything that was wrong with Rome.
[...]
Rome became a multi-cultural state much like our own in the United States. Indeed, it was truly an international city. Foreigners of every nation resided and worked there. The Romans soon intermarried and had children with the many foreigners. This included concubines from the numerous slaves won through war. Rome had an extraordinary large slave population and was estimated to make up about two-thirds of its population at one time.
[...]
Eventually, the Romans lost their tribal cohesion and identity. The population of Rome had changed and so did its character. Increasing demands were made of the ruling patricians. The aristocrats tried to appease the masses, but eventually those demands could not be sustained. Rome had become bankrupt. The effects of usury polarized the patrician class against an increasingly dispossessed and burdened class of citizens.
[...]
Rome was bankrupt and was collapsing. The parasitic nature of usury and its effect on government was too complex for the uneducated plebeians to understand (see Addendum for an illustration of usury's power). Indeed, it was the moneychangers with the use of their lawyers that destroyed pagan Rome. The Jewish interests did not control all usury. However, they were a people well recognized as being extremely loyal to each other and adept in the black craft of usury. To all others (gentiles) they showed hate and enmity. Throughout history the weapon of usury is used again and again to destroy nations.
[...]
Fortunately, the writings of Cicero survived the burning of libraries. In the case against Faccus, we can see the crafts of the Jews are the same today. The Jews clearly held great influence in politics as a result of their professions and profited immensely at the expense of Rome. We can further deduce by the case of Faccus that the Jews were not concerned with the interests of Rome, but rather for their own interests. The Jewish gold was being shipped from Rome and its provinces throughout the empire to Jerusalem. Why? We also know that the Jews had utter contempt and hatred of the Romans. This contempt is demonstrated by their breaking of Roman law, which Faccus tried to uphold. If we look closer, we see that gold has a very special meaning to all Jewry unlike any other people.
[...]
There are enough records for us to piece together what actually occurred in Rome that led to its downfall. Rome fell as a result of corruption and the lack of cohesion of its own people. But, it was the instrument of usury that brought about this corruption and allowed its gold and silver to be controlled by Jewish interests.
[...]
It was Christianity that put an end to the destructive nature of usury on its people (see addendum for usury example). Rome's treasury became barren as a result of the moneychangers. It weakened the Roman Empire immeasurably, and thrust untold millions in poverty, debt, and in prison. It was Christianity that halted the influence of the Jews and their destructive trades and practices. And, the Christian faith spread throughout the former Roman Empire. All of the European people eventually became Christianity's vanguard and champion. Without the strict adherence to the moral ethos, any civilization will devolve into the religion of Nimrod.
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Nov 19, 2018 | consortiumnews.com
Mark A Goldman , November 14, 2018 at 10:17 pm
According to my calculations (admittedly simplistic), the world has past the point of peak oil and in aggregate cannot produce enough oil to meet present and future demand and that may very well be why the US is doing its best to destroy or damage as many economies in the world as it can even if it has to go to war to do it. Once it becomes well established that we are past peak oil no telling what our financial markets will look like. Would appreciate hearing from someone who has more expertise than I have. https://www.gpln.com
anon4d2s , November 14, 2018 at 10:23 pm
Why are you trying to change the subject? Please desist.
Mark A. Goldman , November 15, 2018 at 1:01 pm
I'm offering you the, or a, motive of why the deep state is pursuing the agendas we see unfolding, which is to say, the crimes, the lies, the treason that the likes of Clapper, Bush, Obama, Clinton and others are pursuing to cover up their reaction to their own fears. Of course 9/11, the false flag coup and smoking gun that proves my point is still the big elephant in the room and will eventually bring us down if the truth is never released from its chains.
Mark A. Goldman , November 15, 2018 at 2:43 pm
I didn't change the subject. I'm offering you an answer as to the motive of why so many officials are willing to trash the Constitution in order to accomplish their insane agendas. It's all about money and power and the terrified Deep State fear of facing the blowback from the lies that have been propagated by the government and media regarding just about everything. Here's another place you might want to look in addition to my website: https://youtu.be/CDpE-30ilBY It's not just about oil. But this is where the rubber's going to meet the road. This is about what's going to hit the fan at any moment and in the absence of the Truth, we are all going to face this unprepared. 9/11 is still the smoking gun. It not just a few liars and cheats we're talking about.
Mark A. Goldman , November 15, 2018 at 11:58 pm
I didn't change the subject. The purpose of the search for WMD was to misdirect the public's attention away from the real purpose of the invasion which was to gain control of Iraq's oil reserves primarily. Misdirection is primary skill used by those in power and very effectively.
Mark A Goldman , November 14, 2018 at 11:23 pm
On my website you might want to review what I wrote here: "Why the Economy Can't Recover" https://www.gpln.com/audacityofhope.htm
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Nov 19, 2018 | www.moonofalabama.org
Last week's posts on Moon of Alabama :
- November 12 - False Reports In U.S. Media Suggest A Great Deception
We were first to point out that the NYT's characterization of an old North Korean missile site as "deception" was pure nonsense. Newsweek , 38north.org , NKNews.org , The Nation and others now also condemned the neo-conned NYT propaganda.
- November 13 - The Short War With Gaza Exposed Israel's Weakness - Updated
- November 14 - Netanyahoo's Likely Fall Destroys Trump's Middle East Strategy
The war let to the loss of Netanyahoo's majority in the Knesset. He is now trying to stall new elections in which he could lose his job.
Trump's Middle East policy is in total disarray. Nothing is working as planned. Netanyahoo will probebaly fall. Saudi Arabia will not make nice with Qatar. There will be no Arab NATO or anti-Iran alliance. MbS is despised but will stay on the job. Yemen is starving. The U.S. is at odds with Turkey over support for the Kurds. Trumps knows and hates this :
The adviser who talks to Trump said: "If the president had his way, he would stay entirely out of the Middle East and all of the problems."The piece was the first to point out the difference between the Saudi investigation, which put blame on Major General Ahmed al-Asiri, and the names on the U.S. sanction list published at the same time. The Treasury declaration blamed MbS advisor Saud al-Qahtani as mastermind behind the Khashoggi murder, while the Saudis carefully avoided that. We now learn that the person in the U.S. National Security Council who put al-Qahtani on the list was fired :
On Friday evening, Kirsten Fontenrose, the National Security Council official in charge of U.S. policy toward Saudi Arabia, resigned, administration officials said. The circumstances of her departure weren't clear. But Fontenrose had previously been placed on administrative leave, according to people familiar with the matter.Fontenrose had played a key role in the administration's decision about which Saudis to sanction in response to Khashoggi's killing, these people said.
I suspect that MbS tried, via Trump's son-in-law Kushner, to save al-Qahtani (and himself). Trump clearly wanted to do that, but Fontenrose blew the plan by pushing for al-Qahtani to be sanctioned. The CIA also sabotaged the planned exculpation of MbS by 'leaking' its judgment about MbS' personal responsibility to the press. ( WaPo published the CIA conclusion in Arabic , another point the Saudis will hate.) Trump is furious that the CIA (again) sabotaged his policy:
Asked about reports that the CIA had assessed involvement by Mohammed, the president said: "They haven't assessed anything yet. It's too early."
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Nov 17, 2018 | theduran.com
The Express UK reports that Russia and Saudi Arabia's 'long-term relationship' will not only survive, but grow, regardless of geopolitical turmoil and internal Saudi scandal as the energy interests between both nations bind them together.
... ... ...
But IHS Market vice chairman Daniel Yergin said the decision was unlikely to jeopardise the relationship between the two allies.
The Saudis have faced significant international criticism in the wake of the killing of journalist Jamal Khashoggi at the Saudi consulate in Turkey.
Speaking to CNBC, Mr Yergin made it clear that Moscow and Riyadh would continue to be closely aligned irrespective of external factors.
He explained: "I think it's intended to be a long-term relationship and it started off about oil prices but you see it taking on other dimensions, for instance, Saudi investment in Russian LNG (liquefied natural gas) and Russian investment in Saudi Arabia.
"I think this is a strategic relationship because it's useful to both countries."
Saudi Arabia and Russia are close, especially as a result of their pact in late 2016, along with other OPEC and non-OPEC producers, to curb output by 1.8 million barrels per day in order to prevent prices dropping too far – but oil markets have changed since then, largely as a result.
The US criticised OPEC, which Saudi Arabia is the nominal leader of, after prices rose.
Markets have fluctuated in recent weeks as a result of fears over a possible drop in supply, as a result of US sanctions on Iran, and an oversupply, as a result of increased production by Saudi Arabia, Russia and the US, which have seen prices fall by about 20 percent since early October.
Saudi Arabia has pumped 10.7 million barrels per day in October, while the figure for Russia and the US was 11.4 million barrels in each case.
Mr Yergin said: "It's the big three, it's Saudi Arabia, Russia and the US, this is a different configuration in the oil market than the traditional OPEC-non-OPEC one and so the world is having to adjust."
BP Group Chief Executive Bob Dudley told CNBC: "The OPEC-plus agreement between OPEC and non-OPEC producers including Russia and coalition is a lot stronger than people speculate.
"I think Russia doesn't have the ability to turn on and off big fields which can happen in the Middle East.
"But I fully expect there to be coordination to try to keep the oil price within a certain fairway."
Markets rallied by two percent on Monday off the back of the Saudi decision to cut production , which it justified by citing uncertain global oil growth and associated oil demand next year.
It also suggested waivers granted on US sanctions imposed on Iran which have been granted to several countries including China and Japan was a reason not to fear a decline in supply.
Also talking to CNBC, Russia's Oil Minister Alexander Novak indicated a difference of opinion between Russia and the Saudis, saying it was too soon to cut production, highlighting a lot of volatility in the oil market.
He added: "If such a decision is necessary for the market and all the countries are in agreement, I think that Russia will undoubtedly play a part in this.
"But it's early to talk about this now, we need to look at this question very carefully."
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Nov 16, 2018 | peakoilbarrel.com
likbez says: 11/16/2018 at 1:42 am
Shallow sand mentioned EV as a sign that oil consumption might go down.I view EVs as inefficient natural gas powered cars, or worse. And the key problem is its lithium battery. See http://www.epa.gov/dfe/pubs/projects/lbnp/final-li-ion-battery-lca-report.pdf
The cost of producing a large lithium battery is high and it is "perishable product", which will not last even 10 years. The average life expectancy of a new EV battery at about five (Tesla) to eight years. Or about 1500 cycles (assuming daily partial recharge, which prolongs the life of the battery) before reaching 80% of its capacity rating. https://www.quora.com/What-is-the-cycle-lifetime-of-lithium-ion-batteries
Battery performance and lifespan begins to suffer as soon as the temperature climbs above 86 degrees Fahrenheit. A temperature above 86 degrees F affects the battery pack performance instantly and often permanently. https://phys.org/news/2013-04-life-lithium-ion-batteries-electric.html
It is also became almost inoperative at below freezing point temperatures. For example it can't be charged.
So they need to be cooled at summer and heated at winter. Storing such a car on the street is out of question. You need a garage.
And large auto battery typically starts deteriorating after three years of daily use or 800 daily cycles.
Regular gas, and , especially, diesel cars can last 20 years, and larger trucks can last 30 years.
Recycling of lithium batteries is problematic
http://users.humboldt.edu/lpagano/project_pagano.htmlIn a way EVs can be called "subprime cars." Or "California cars", if you wish (California climate is perfect for this type of cars)
Switching to motorcycles for personal transportation can probably help more in oil economy aria then EVs.
That also suggest that "peak oil consumption" for the next five to ten years remains a myth.
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Nov 16, 2018 | www.amazon.com
Similarly, the real story of oil is of fortunes lost, betrayal, war, espionage, and intrigue. In the end, inevitably, the story of oil is a story of depletion. Petroleum is a nonrenewable resource, a precious substance that took tens of millions of years to form and that is gone in a comparative instant as we extract and burn it. For many decades, oil-hungry explorers, using ever-improving technology', have been searching for ever-deteriorating prospects as the low- hanging fin its of planet Earth's primordial oil bounty gradually dwindle. Oil wells have been shut in, oil fields exhausted, and oil companies bankrupted by the simple, inexorable reality of depletion.
It is impossible to understand the political and economic history of the past 150 years without taking account of a central character in the drama -- oil, the magical wealth-generating substance, a product of ancient sunlight and tens of millions of years of slow geological processes, whose tragic fate is to be dug up and combusted once and for all. leaving renewed poverty in its wake. With Oil, Power, and War, Matthieu Auzanneau has produced what I believe is the new definitive work on oil and its historic significance, supplanting even Daniel Yergin's renowned The Prize, for reasons I'll describe below.
The importance of oil's role in shaping the modern world cannot be overstated. Prior to the advent of fossil fuels, firewood was humanity's main fuel. But forests could be cut to the last tree (many were), and wood was bulky. Coal offered some economic advantages over wood. But it was oil -- liquid and therefore easier to transport; more energy-dense; and simpler to store -- that turbocharged the modern industrial age following the development of the first commercial wells around the year 1860.
John D. Rockefeller's cutthroat, monopolist business model shaped the early industry, which was devoted mostly to the production of kerosene for lamp oil (gasoline was then considered a waste product and often discarded into streams or rivers). But roughly forty years later, when Henry Ford developed the automobile assembly line, demand for black gold was suddenly as explosive as gasoline itself.
Speaking of explosions, the role of petroleum in the two World Wars and the armament industry' in general deserves not just a footnote in history books but serious and detailed treatment such as it receives in this worthy volume. Herein we learn how Imperial Japan and Nazi Germany literally ran out of gas while the Allies rode to victory in planes, ships, and tanks burning refined US crude. Berlin could be cut off from supplies in Baku or North Africa, and Tokyo's tanker route from Borneo could be blockaded -- but no one could interrupt the American war machine's access to Texas tea.
In the pages that follow, we learn about the origin of the decades-long US alliance with Saudi Arabia, the development of OPEC, the triumph of the petrodollar, and the reasons for both the Algerian independence movement and the Iranian Revolution of 1979. Auzanneau traces the postwar growth of the global economy and the development of consumerism, globalization, and car culture. He recounts how the population explosion and the Green Revolution in agriculture reshaped demographics and politics globally -- and explains why both depended on petroleum. We learn why Nixon cut the US dollar's tether to the gold standard just a year after US oil production started to decline, and how the American economy began to rely increasingly on debt. The story of oil takes ever more fascinating turns -- with the fall of the Soviet Union after its oil production hit a snag; with soaring petroleum prices in 2008 coinciding with the onset of the global financial crisis; and with wars in Iraq, Syria, and Yemen erupting as global conventional oil output flatlined.
As I alluded to above, comparisons will inevitably be drawn between Oil, Power, and War and Daniel Yergin's Pulitzer-winning "The Prize", published in 1990. It may be helpful therefore to point out four of the most significant ways this work differs from Yergin's celebrated tour de force.
The most obvious difference between the two books is simply one of time frame. The Prize's narrative stops in the 1980s, while Oil, Power, and War also covers the following critical decades, which encompass the dissolution of the Soviet Union, the first Gulf War, 9/11, the US invasions of Afghanistan and Iraq, the global financial crisis of 2008. and major shifts within the petroleum industry as it relies ever less on conventional crude and ever more on unconventional resources such as bitumen (Canada's oil sands), tight oil (also called shale oil), and deepwater oil.
Finally, unlike Yergin and other historians of the oil industry, Auzanneau frames his tale of petroleum as a life cycle, with germination followed by spring, summer, and autumn. There is a beginning and a flourishing, but there is also an end. This framing is extremely helpful, given the fact that the world is no longer in the spring or summer of the oil era. We take petroleum for granted, but it's time to start imagining a world, and daily life, without it.
Taken together, these distinctions indeed make Oil, Power, and War the definitive work on the history of oil -- no small achievement, but a judgment well earned.
Over the past decade, worrisome signs of global oil depletion have been obscured by the unabashed enthusiasm of energy analysts regarding growing production in the United States from low-porosity source rocks. Termed "light tight oil," this new resource has been unleashed through application of the technologies of hydrofracturing (tracking) and horizontal drilling.
US liquid fuels production has now surpassed its previous peak in 1970, and well-regarded agencies such as the Energy Information Administration are forecasting continued tight oil abundance through mid-century.
Auzanneau titles his discussion of this phenomenon (in chapter 30), "Nonconventional Petroleum to the Rescue?" -- and frames it as a question for good reason: Skeptics of tight oil hyperoptimism point out that most production so far has been unprofitable. The industry has managed to stay in the game only due to low interest rates (most companies are heavily in debt) and investor hype. Since source rocks lack permeability, individual oil wells deplete very quickly -- with production in each well declining on the order of 70 percent to 90 percent in the first three years. That means that relentless, expensive drilling is needed in order to release the oil that's there. Thus the tight oil industry can be profitable only if oil prices are very high -- high enough, perhaps, to hobble the economy -- and if drilling is concentrated in the small core areas within each of the productive regions. But these "sweet spots" are being exhausted rapidly. Further, with tight oil the energy returned on the energy invested in drilling and completion is far less than was the case with American petroleum in its heyday.
It takes energy to fell a tree, drill an oil well, or manufacture a solar panel. We depend on the energy payback from those activities to run society. In the miraculous years of the late twentieth century, oil delivered an averaged 50:1 energy payback. It was this, more than anything else, that made rapid economic growth possible, especially for the nations that were home to the world's largest oil reserves and extraction companies. As the world relies ever less on conventional oil and ever more on tight oil, bitumen, and deepwater oil, the overall energy payback of the oil industry is declining rapidly. And this erosion of energy return is reflected in higher overall levels of debt in the oil industry and lower overall financial profitability.
Meanwhile the industry is spending ever less on exploration -- for two reasons. First, there is less money available for that purpose, due to declining financial profitability; second, there seems comparatively little oil left to be found: Recent years have seen new oil discoveries dwindle to the lowest level since the 1940s. The world is not about to run out of oil. But the industry that drove society in the twentieth century to the heights of human economic and technological progress is failing in the twenty-first century.
Today some analysts speak of "peak oil demand." The assumption behind the phrase is that electric cars will soon reduce our need for oil, even as abundance of supply is assured by fracking. But the world is still highly dependent on crude oil. We have installed increasing numbers of solar panels and wind turbines, but the transition to renewable is going far too slowly either to avert catastrophic climate change or to fully replace petroleum before depletion forces an economic crisis. While we may soon see more electric cars on the road, trucking, shipping, and aviation will be much harder to electrify. We haven't really learned yet how to make the industrial world work without oil. The simple reality is that the best days of the oil business, and the oil-fueled industrial way of life, are behind us. And we are not ready for what comes next.
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Nov 15, 2018 | peakoilbarrel.com
Mike Sutherland x Ignored says: 11/14/2018 at 10:19 pm
This fracking can't go on much longer. They've drilled out much of the sweet spots already, and from what I hear, there are already 7 'child' wells being drilled for every 'parent' well. (as I understand it, a 'child' well is drilled in close proximity to the 'parent' without – hopefully-hitting and drawing from the same formation') If fracking were to stop tomorrow, you'd lose over 600k bbls/day in production immediately and the whatever is leftover tapering off to zero over the course of two-three years.Stephen Hren x Ignored says: 11/14/2018 at 10:06 amThe question is: Just how long will the USA be able to continue to increase production in order to hold off peak oil?Eulenspiegel x Ignored says: 11/14/2018 at 10:42 amYes will it go bankrupt first or continue to run on until peak and depletion. Meanwhile it drags down the oil price artificially making most other oil development less likely, and increasing volatility.
The FED is reducing money supply by 50 billions per month at the moment. The first feeling it will be comanies needing to sell junk bonds.Stephen Hren x Ignored says: 11/14/2018 at 10:50 amThis is a big ploblem for the relentless "drill baby drill" programs of several LTO companies.
And a global economic crises, even if only a few years long, will crash oil prices AND credit supply. This will hurt LTO more than the oil price crash from 2015.
Oil bonds appear to be starting to feel the burn at $55/barrel.Mike Sutherland x Ignored says: 11/14/2018 at 10:38 pmhttps://seekingalpha.com/article/4222006-oil-plunges-energy-junk-bonds-turn-dangerous
Yes Ron, thank you for an excellent post.Watcher x Ignored says: 11/14/2018 at 11:40 pmOn the shale topic; it is marvelously stupefying to observe a heavily indebted shale industry supplying increasing volumes of oil, to an extent that the price/bbl never hits a level where any debt reduction can be realized. (to say nothing of profit)
Its' almost as if they have no intention of becoming solvent.
Some time ago presented estimate of oil used to create and move food in the US. My recall is the number wasn't huge.Recently came across new data. Will get around to laying it out.
25% of total US consumption. Tractors, insecticides, some fertilizer(transport of those to the field), transport of animal food to hogs, beef, etc, transport of human food to shelves, transport of people to the shelf and home. 15% pre transport of human food, 10% transport human food.
Pretty efficient agriculture in the US. No squeezing that 5 mbpd.
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Nov 14, 2018 | turcopolier.typepad.com
Colonel Salam , what do you think of retired general Abizad becoming new US' ambassador to KSA. To me installing an Arabic speaking Arab American general as the new ambassador to the kingdom sounds like the Borg is becoming concerned with kingdom' stability when changes come. They probably don't want to repeat the mistake of keeping Sullivan during IRI. So sorry for OT.Pat Lang Mod -> Kooshy , 6 hours agoAbizaid is a good man but he is Lebanese American and the Saudis will try to buy him off and if that doesn't work will undermine him. I wish him luck.
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Nov 14, 2018 | www.barnesandnoble.com
In this sweeping, unabashed history of oil, Matthieu Auzanneau takes a fresh, thought-provoking look at the way oil interests have commandeered politics and economies, changed cultures, disrupted power balances across the globe, and spawned wars. He upends commonly held assumptions about key political and financial events of the past 150 years, and he sheds light on what our oil-constrained and eventually post-oil future might look like.
Oil, Power, and War follows the oil industry from its heyday when the first oil wells were drilled to the quest for new sources as old ones dried up. It traces the rise of the Seven Sisters and other oil cartels and exposes oil's key role in the crises that have shaped our times: two world wars, the Cold War, the Great Depression, Bretton Woods, the 2008 financial crash, oil shocks, wars in the Middle East, the race for Africa's oil riches, and more. And it defines the oil-born trends shaping our current moment, such as the jockeying for access to Russia's vast oil resources, the search for extreme substitutes for declining conventional oil, the rise of terrorism, and the changing nature of economic growth.
We meet a long line of characters from John D. Rockefeller to Dick Cheney and Rex Tillerson, and hear lesser-known stories like how New York City taxes were once funneled directly to banks run by oil barons. We see how oil and power, once they became inextricably linked, drove actions of major figures like Churchill, Roosevelt, Stalin, Hitler, Kissinger, and the Bushes. We also learn the fascinating backstory sparked by lesser-known but key personalities such as Calouste Gulbenkian, Abdullah al-Tariki, and Marion King Hubbert, the once-silenced oil industry expert who warned his colleagues that oil production was facing its peak.
Oil, Power, and War is a story of the dreams and hubris that spawned an era of economic chaos, climate change, war, and terrorism -- as well as an eloquent framing from which to consider our options as our primary source of power, in many ways irreplacable, grows ever more constrained.
The book has been translated from the highly acclaimed French title, Or Noir .
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Nov 13, 2018 | www.zerohedge.com
Saudi Arabia has fully complied with OPEC+ agreement in every month through May. Since then it has cut supply, but by less than it pledged to curb. October is 1st time it has increased output above the starting point.
WTI has now retraced 60% of the two-year uptrend...
WTI Crude is now down over 6% YTD to its lowest since Dec 2017.
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Nov 12, 2018 | peakoilbarrel.com
islandboy says: 11/01/2018 at 10:22 am
I guess it's time to break out the champagne!dclonghorn says: 11/02/2018 at 8:29 pmU.S. monthly crude oil production exceeds 11 million barrels per day in August
U.S. crude oil production reached 11.3 million barrels per day (b/d) in August 2018, according to EIA's latest Petroleum Supply Monthly, up from 10.9 million b/d in July. This is the first time that monthly U.S. production levels surpassed 11 million b/d. U.S. crude oil production exceeded the Russian Ministry of Energy's estimated August production of 11.2 million b/d, making the United States the leading crude oil producer in the world.
Dennis, Coffee's comment did not turn me into a shale cheerleader. I suppose I am more in the shale sceptic camp for the reasons you mention and others.Coffeeguyzz says: 11/02/2018 at 10:16 pmNevertheless, I think Coffee's comment was correct, it does appear that shale producers in the Bakken have expanded the area that produces exceptional wells. As one who underestimated shale's viability before, I don't want to repeat the same mistake.
As you note, it is difficult to predict when average well productivity in the Bakken (or anywhere) will occur. I had thought that current drilling levels would be inadequate to sustain 1.15 million bpd production levels, but somehow they are increasing production there. It does appear that for now, the shale operators are having some success.
How long that success will last depends not only on the operational decisions made, but macro factors such as debt, interest rates, and the economy will play out, and eventually Bakken production will decline. But for nowAnd in a brief follow upWatcher says: 11/01/2018 at 11:35 pmI have not read Continental's conference call transcript yet (Seeking Alpha provides them), but it seems the suit from Continental now feels they will recover – from present completions – 15 to 20 per cent of the OOIP.
That is huge as the norm was 3 to 5 per cent a few years back.Why isn't Continental's credit rating better than 1 notch above junk?Mike says: 11/02/2018 at 8:05 pmAll of this bullshit is straight, I mean straight off Continental's self servicing investor presentation bullshit, Coffee. You need to wrap your head around some SEC filings, use some common sense and think for yourself. As opposed to letting someone else do your thinking for you.Boomer II says: 11/03/2018 at 3:03 amWatcher is correct, CLR's credit rating, its credit score, so to speak, is so bad it could not in the real world buy a pickup truck without its mama co-signing the note. If its wells are sooooooo much better, why don't they pay some of that $6 billion plus dollars of debt back? I mean really, who in their right mind would actually WANT to pay $420MM a year in interest on long term debt if it didn't have to? Never mind, you can't answer that.
If you are not in the oil business and have never balanced an oil well's checkbook in your life, which Coffee hasn't, then you don't know that higher productivity comes with a higher cost in the shale biz. The bottom line then is that the bottom line does not change if it did the shale oil industry would be paying down some debt, right? Its not. Private debt is skyrocketing.
Are things getting better for the shale biz? Right. Case in point, the largest pure Permian Basin oil and associated gas producer, Concho, the genius behind a recent $8 billion dollar acquisition from RSP, LOST $199MM 3Q2018. Inventories are going back up, prices are down 18% the past month and what does the shale oil industry do?
It adds more rigs.
Productivity is not the same as profitability. In the real oil biz you learn that on about day six.
"If its wells are sooooooo much better, why don't they pay some of that $6 billion plus dollars of debt back? I mean really, who in their right mind would actually WANT to pay $420MM a year in interest on long term debt if it didn't have to?"Mike says: 11/03/2018 at 7:59 amI wonder about debt service, too.
When Dennis runs his scenarios he says that at a certain oil price, these companies will be quite able to pay down debt.
But will they? Or will they just pay themselves as much as they can as long as they can get away with it, and then declare bankruptcy and walk away.
I'll take door two.Reno Hightower says: 11/04/2018 at 9:37 amWe had 5-6 years of the highest, sustained oil prices in history and the shale oil industry could NOT make a profit. People seem to think now things have changed for some reason, that the shale oil industry has now become more ethical, and temporarily higher productivity of wells, and some imaginary oil price off in the future (for most shale guys its now down in the mid to low $50's) will allow them to pay down debt. Its absurd logic, but keeps people occupied, I guess, speculating about it.
I urge folks to ignore the guessing, and the lying, (Hamm's 20% of OOIP in the Bakken is a big 'ol whopper) and look at the shale industry's financial performance over the past 10 years and decide for yourselves if it is sustainable or not.
One thing to add. The shale companies did all this in the lowest interest rate environment we have had in a long time. They could not pay off their debt or even put a dent in it. What is going to happen when their interest costs increase 30-50% over the next 2-3 years?JG Tulsa says: 11/07/2018 at 3:31 pmI was a former employee of Newfield, when we were drilling gas wells in the Arkoma Basin in 2007 and gas prices were the highest they had ever been, it was not cash flow positive. It actually ate all the revenue from the rest of the company. Getting to be in the black for the play was always a year off. a decade later it never got there, they just got more and more debt sold more producing assets to pay for it to keep the shell game going and just got bought by Encanna. I have seen the same at every public company I have worked for, many of them survived the downturn only because costs dropped and so did the cost of debt. Now with increasing costs and cost of debt there will likely be many bankruptcies.GuyM says: 11/02/2018 at 12:41 amYeah, I agree with Mike, Rystads announcements are mainly just self serving hogwash. Yes, oil production in the US looks to be close to 11.3 million for August. EIA's reported production for Texas is only about 50k over my high estimate, so I see nothing to argue about. GOM is the main surprise, and George and others are better suited to comment on that. The understanding I had was that it was temporary. As far as Texas goes, I'm pretty sure it is the high, for awhile. Completions dictate how much oil comes out of the ground, not drilling rigs. That is for unconventional wells, not conventional. That is why I think the EIA's DPR is a ridiculous measurement assessment. Apples and oranges. Articles that I have read indicate a significant decrease in completions in the Permian by the end of August. Texas production is not all about the Permian. A significant amount was contributed by the Eagle Ford and other areas. All completions have slowed to the point that by the end of September, they were at slightly over 60% of June's completion numbers according to RRC statistics. Significant drop, and it will show up in following months. First years decline rates will assure that it will drop slightly from this point. $64 WTI won't motivate it to expand to any extent. The next year will see US wavering along the 11.1 million barrel level, I still think. Unless, George thinks the GOM increase is somewhat permanent, which I doubt.Hickory says: 11/02/2018 at 9:59 amJune completions
http://www.rrc.state.tx.us/media/46402/ogdc0618.pdf
July completions
http://www.rrc.state.tx.us/media/46805/ogdc0718.pdf
August completions
http://www.rrc.state.tx.us/media/47577/ogdc0818.pdf
Sept completions
http://www.rrc.state.tx.us/media/47968/ogdc0918.pdf
This is a very definite trend. From 914 oil completions in June to 553 oil completions in September.Of course, no one needs to take my word for it. They can compare Texas production numbers:
http://www.rrc.state.tx.us/oil-gas/research-and-statistics/production-data/texas-monthly-oil-gas-production/
To historical completion numbers here:
http://www.rrc.state.tx.us/oil-gas/research-and-statistics/well-information/monthly-drilling-completion-and-plugging-summaries/archive-monthly-drilling-completion-and-plugging-summaries-archive/And try to locate a time in history when production is trending up, while completions are trending down. There is usually a several month lag by the time production slows. Takes a while to get out of the ground if they are completed towards the end of the month.
Don't you just love simple logic? Like: fire burns, water is wet, stuff like that?
How do these projections (hogwash) help Rystad? By preaching the 'good' word to their paying audience? I don't know their business.GuyM says: 11/02/2018 at 1:47 pmThey are a consulting business. How much business will they generate if they tell negative stuff?kolbeinh says: 11/02/2018 at 1:55 pmI second that. Being from Norway myself, and having actually been working in consulting some years ago. It looks nice on paper, but the world is changing and it is wise to look out for deception and that is often the case in consulting (customer/revenue first and reality second).Hickory says: 11/02/2018 at 10:11 pmYeh, but they don't score a lot of points with customers by being far off the mark on projections.ECAS says: 11/02/2018 at 1:55 pmBased on the shaleprofile data it looks as if well productivity increased alot in 2016 and 2017 due to longer laterals and increased proppant intensity. 2018 well productivity looks to be trending pretty close to 2017, so the productivity gains from longer lats and increased proppant might have been exhausted by now. Therefore, comparing 2018 well completion numbers to any pre 2017 completion numbers won't tell you much, but a comparison of 2018 and 2017 numbers should. In the 4 months ending in September 2018 completions grew year over year by almost 70% from 2017, hence the large assumed increase in production in the last four months of 2018. What is interesting though is that it looks like the free lunch from increased lats and proppant looks to be almost over, and any future increases in production must be the result of an increase in completion activity, which should result in some inflation for the service providers going forward. And, according to Schlumberger, if you adjust for the longer lats and increased proppant it actually appears that productivity is starting to trend down (and the increased usage of poor quality in basin sand will likely contribute to this as well)Mike says: 11/02/2018 at 8:13 pmI take your word for it. Thank you, BTW. You are the only one left on this site that has any common sense regarding shale oil economics and the burden all that massive, massive amount of debt has on running a business where your assets decline at the rate of 28-15% annually. Everybody else seems mesmerized by productivity.shallow sand says: 11/03/2018 at 12:22 pmIf folks think I am biased (my "parade" was over 20 years ago) look see what Rune Likvern says here: https://www.oilystuffblog.com/single-post/2018/11/01/Cartoon-Of-the-Week .
Dennis.Dennis Coyne says: 11/04/2018 at 6:36 pmPaying the debt off will depend very much on future oil and natural gas prices.
Once growth slows the companies will be companies operating many low volume wells. Investors will want these companies to pay dividends because they will not be in a position to grow. The operating costs will be higher, even though CAPEX will drop.
You are very confident prices will be high in the future. I suspect they will be volatile in the future, as they have been for the past 20 years.
So, on a company by company basis, timing will be critical, IMO.
Shallow sand,shallow sand says: 11/04/2018 at 11:03 pmThe prices can be thought of as 3 year average prices, yes there will be volatility, my "low price scenario" has Brent Oil Price in 2017 $ never rising above $80/b. I cannot hope to predict the exact oil price and of course oil prices will be volatile, but the average over time allows a pretty good estimate.
Also a company by company model is a little too much work. I just do the industry average, some companies will be better and some worse than average.
It certainly is the case that oil prices have been volatile and I agree this will continue, but the three year trend in prices (centered 3 year average) has been up $7/b for the past year, my expectation is that this trend will continue and the 3 year centered average price will reach $80/b (in 2017$) by 2021 or 2022. The trend of oil prices will be higher, if the peak arrives by 2025 as I expect prices (3 year centered average oil price in 2017$) are likely to reach $100/b by 2024 or 2025.
Dennis.Dennis Coyne says: 11/05/2018 at 2:23 pmI think company by company because I have an investment in a private company. I know how important timing is in the upstream industry to individual companies.
Likewise, I understand you aren't all that interested in individual companies. No problem there.
On the price, I understand why you use different scenarios. However, the average price over the next three years could be $100 or $50 WTI. Pretty much close to what we saw 2011-14 and 2015–17.
I was recently in a major city and saw more Tesla's than I ever had, including my first Model 3 sighting.
Our little area now has two Model S, with the early adopter trading his 2012 for a 2018.
Shallow sand,shallow sand says: 11/05/2018 at 6:33 pmPretty doubtful it will be $50/b over the next three years, in my opinion. If you believe that you should find another business
More likely is a gradual increase in oil prices as we approach peak oil, the futures strip is likely to be wrong on oil price (today's future strip). For Brent futures the current strip goes from $73/b (Jan 2019) to $61 (Dec 2026). By Contrast the EIA's AEO 2018 reference oil price scenario for Brent crude has the spot price at $87.50/b in 2026, chart below has their scenario (which I think may be too low.)
As always clicking on the chart give a larger view.
Dennis.Dennis Coyne says: 11/06/2018 at 9:59 amThe price could be $50 from 2019-2021, and then $125 from 2022-2025. (Averages, of course).
So in that scenario I'd feel pretty bad if I sold out in say 2020.
Your models are ok, I have no problem with you doing them. We try to make a budget for every year.
However, the price is far too volatile to model anything very far into the future, just like we cannot budget past one year, and usually have to make adjustments to that.
Our price has dropped over $10 in less than one month. That makes a huge difference, yet that level of volatility is common and has been for many years.
What oil prices were you modeling in June, 2014 for 2015-17? Our timing was very fortunate to say the least. Many leases bought 1997-2005. Had we bought the same leases 2011-14 for the market prices of 2011-14, we would be bankrupt, absent having hedged everything for four years, which is very difficult to do.
On a flowing barrel basis, I have seen leases sell as low as $2,000 per barrel and as high as $180,000 per barrel in our basin from 1997-2018. That is what an oil price range of $8-140 per barrel will do.
Few companies with zero debt ever go BK. We would with WTI at $30 for about three years. Is that likely? No, but oil did drop below that level in 2016.
Shallow Sand,shallow sand says: 11/08/2018 at 4:44 pmThe volatility is a big problem, there is no doubt of that. When imagining the "big picture". I use the estimates of the EIA's AEO as a starting point then add my personal perspective (that at some point oil output will peak.) Below is a chart with my guess from Dec 2014 for future Brent oil prices in constant 2014$, nominal Brent spot price is give for comparison.
Clearly my guess was not very good, the EIA guess from the AEO 2015 was also not great, but better than my guess. Future guesses will be equally bad.
What was your forecast in Dec 2014 for WTI?
Dennis.Dennis Coyne says: 11/08/2018 at 6:10 pmIn 2013 we assumed prices in a range of $60-120 WTI moving forward.
In June of 2014 when oil spiked up and we received $99.25 in the field, we suspected oil would fall and it began to. We again continued to assume $60 WTI would be a low.
We were dead wrong, of course.
Oil dropped again today. We will get $67 in the field for October sales paid in November. However, our price today is down to $56.50. That is about a $60,000 per month revenue hit to a small company which employs 8 full time employees, one part time employee office manager and utilized numerous contractors (rigs, electricians, etc.).
Corn here is $3.51 per bushel today. Less than a month ago it was $2.96 per bushel.
Yes, yes, a hedging program would mitigate the price volatility.
Until you actually try to hedge with money at risk, don't talk to me about that. It's about as easy as trading stocks. It is also very expensive due to the volatility. Or, if you do SWAPS or Collars, you need to put up a lot of margin money.
Shallow sand,TechGuy says: 11/07/2018 at 2:25 pmHedging seems a risky business, not sure I would come out ahead by hedging. You are in a tough business, the volatility sucks. The silver lining is that prices will be increasing.
Shallow Sand Wrote:
"Paying the debt off will depend very much on future oil and natural gas prices."I don't think so. When energy prices rise, so do prices of everything else, included interest rates. The only way the shale drillers could play off there debt is if the left large number of completed wells untapped (ie leave it in the ground) while taking advantage of cheap debt & low labor\material costs. Then selling the oil when prices & costs have soared above investment costs.
The issue is that as soon as a well is completed, they start producing, at market prices. Thus when oil prices rise most of the oil is already produced & drilling new wells (using more debt) does not pay down the old debt.
Also consider the costs shale drillers will need for decommissioning older\depleted well. I believe the cleanup cost is between $50K & $100K per drill site. To date have any shale drillers spent money on clean up for depleted wells yet, or is it all deferred (ie never going to happen)?
FWIW: I don't believe any of the shale companies are in game for the long term. They are simply a modern Ponzi scam, taking investor money & providing an illusion of profitabity by selling a product below cost. They will continue to play the game until investor capital dries up.
I suspect that most shale drillers will go bust in the next 5 years when the bulk of their bonds come due & they won't have the ability to refinance it or pay it off. If I recall correctly Shale drillers will need to payoff or refinance about $270B in high-yield bonds between 2020 & 2022.
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Nov 12, 2018 | peakoilbarrel.com
Survivalist says: 11/03/2018 at 12:13 am
To put it mildly, I'm not an expert on where to find info Ghawar. Perhaps brighter minds will chime in.
http://peakoilbarrel.com/closer-look-saudi-arabia/
http://crudeoilpeak.info/category/saudi-arabiaMy guess is that much of KSA will look a lot like the shabby end of Yemen before too long. This will perhaps strand some assets. Once the House of Saud fragments further among competing clans/factions (Faisal, Sudairi, Abdullah, Bin Sultans) things will hasten. Collapse is preceded by intra-elite rivalry over a shrinking pie, so to speak.
Caspian Report has a nice set on KSA if you look for them. Here's one-
https://youtu.be/9tHwvZ9XDLU
And another-
https://youtu.be/hh8isVX3H9wHightrekker once commented something quite apt, along the lines of~ 'And all this is probably like the Austrians in 1913 arguing about who their next Habsburg Ruler is going to be'.
From what I understand there are 4000 Saudi princes (a suspiciously round number, so likely an approximate). It all should make for a very bloody affair. Hopefully Iran will do the right thing and kick 'em while they're down.
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Nov 09, 2018 | nationalinterest.org
Only well calibrated multilateral political, economic and diplomatic pressure brought to bear on Iran with many and diverse partners will produce the results we seek.
"Then there were none" was Agatha Christie's most memorable mystery about a house party in which each guest was killed off one by one. Donald Trump's policy toward Iran has resulted in much the same: a vanishing one by one of American partners who were previously supportive of U.S. leadership in curbing Iran, particularly its nuclear program.
Dozens of states, painstakingly cultivated over decades of American leadership in blocking Iran's nuclear capability, are now simply gone. One of America's three remaining allies on these issues, Saudi Arabia, has become a central player in American strategy throughout the Middle East region. But the Saudis, because of the Jamal Khashoggi killing and other reasons, may have cut itself out of the action. The United Arab Emirates, so close to the Saudis, may also fall away.
Such paucity of international support has left the Trump administration dangerously isolated. "America First" should not mean America alone. The United States risks losing the cooperation of historic and proven allies in the pursuit of other U.S. national security interests around the world, far beyond Iran.
... ... ...
European allies share many of our concerns about Iran's regional activities, but they strongly oppose U.S. reinstitution of secondary sanctions against them. They see the Trump administration's new sanctions as a violation of the nuclear agreement and UN Security Council resolutions and as undermining efforts to influence Iranian behavior. The new sanctions and those applied on November 5 only sap European interest in cooperating to stop Iran.
... ... ...
The United States cannot provoke regime change in Iran any more than it has successfully in other nations in the region. And, drawing on strategies used to topple governments in Iraq and Afghanistan, the United States should be wary of launching or trying to spur a military invasion of Iran.
Lt. Gen. James Clapper (USAF, ret.) is the former Director of National Intelligence. Thomas R. Pickering is a former U.S. ambassador to the United Nations, Russia and India.
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Nov 10, 2018 | www.zerohedge.com
Authored by Irina Slav via Oilprice.com,
Russian VTB, a state-owned bank, funded a significant portion of the Qatar Investment Authority's acquisition of a stake in oil giant Rosneft , Reuters reports , quoting nine unnamed sources familiar with the deal.
VTB, however, has denied to Reuters taking any part in the deal.
"VTB has not issued and is not planning to issue a loan to QIA to finance the acquisition," the bank said in response for a request for comment.
The Reuters sources, however, claim VTB provided a US$6 billion loan to the Qatar sovereign wealth fund that teamed up with Swiss Glencore to acquire 19.5 percent in Rosneft last year. Reuters cites data regarding VTB's activity issued by the Russian central bank that shows VTB lent US$6.7 billion (434 billion rubles) to unnamed foreign entities and the loan followed another loan of US$5.20 billion (350 billion rubles) from the same central bank.
The news first made headlines in December, taking markets by surprise, as Rosneft's partial privatization was expected by most to be limited to Russian investors. The price tag on the stake was around US$11.57 billion (692 billion rubles), of which Glencore agreed to contribute US$324 million. The remainder was forked over by the Qatar Investment Authority, as well as non-recourse bank financing.
Russia's budget received about US$10.55 billion ( 710.8 billion rubles ) from the deal, including US$ 270 million (18 billion rubles) in extra dividends. Rosneft, for its part, got an indirect stake in Glencore of 0.54 percent.
Later, it emerged that QIA and Glencore planned to sell the majority of the stake they had acquired in Rosneft to China's energy conglomerate CEFC, but the deal fell through after Beijing set its sights on CEFC and launched an investigation that saw the removal of its chief executive. The investigation was reportedly part of a wide crackdown on illicit business practices on the part of private Chinese companies favored by Beijing.
solidtare , 30 minutes ago link
Took z/h almost 2 years, and of course from a tertiary source - Reuters
John Helmer nailed this scam 2 years ago, and got hammered for it
- http://johnhelmer.net/the-rosneft-share-sale-is-a-genuine-piece-of-unhacked-russian-fake-news-the-truth-of-which-the-swiss-government-has-ordered-glencore-to-produce-for-us-government-inspection-so-everyone-will-know-the/
- http://johnhelmer.net/rosneft-tries-3-monkey-solution-for-its-share-sale-problem-italians-and-swiss-too/
- http://johnhelmer.net/info-warfare-leaves-scars-on-website/
- https://www.nakedcapitalism.com/2016/12/the-story-that-russia-does-not-want-you-to-see-the-rosneft-share-sale-as-a-sham-transaction.html
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Nov 09, 2018 | seekingalpha.com
Seeking protection against possible new U.S. sanctions, Russian energy majors are heaping pressure on Western oil buyers to use euros instead of dollars for payments, as well as penalty clauses in contracts.
Russia supplies over 10% of global oil, so severe sanctions could affect crude prices.
Global oil majors further rely on Russia to feed their refineries, especially in Europe and Asia, so they cannot just walk away from annual contract negotiations.
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Nov 07, 2018 | www.theamericanconservative.com
Originally from: The Futility of Trump's Iran Policy By Daniel Larison November 6, 2018, 10:54 AM • The administration's policy seems sure to fail on its own terms, and it is also the wrong thing to do.The Trump administration's plan to throttle the Iranian economy is as poorly-conceived as it is cruel:
"For ordinary people, sanctions mean unemployment, sanctions mean becoming poor, sanctions mean the scarcity of medicine, the rising price of dollar," said Akbar Shamsodini, an Iranian businessman in the oil and gas sector who lost his job six months ago as European companies started to pull out of Iran in fear of US sanctions.
" By imposing these sanctions, they want to force Iranians to rise up in revolt against their government but in practice, they will only make them flee their country [bold mine-DL]," he said, adding that ironically it would be Europe that would have to bear the burden of such a mass migration.
"We're being squashed here as an Iranian youth who studied here, worked here, the only thing I'm thinking about now is how to flee my country and go to Europe."
If a foreign power waged an economic war against your country, would you be likely to respond to that foreign coercion by effectively taking their side against your own government? Of course not. The idea that Iranians will do the work of their country's enemies by rising up and toppling the regime has always been far-fetched, but it is particularly absurd to think that Iranians would do this after they have just seen their economy be destroyed by the actions of a foreign government.
People normally do not respond to economic hardship and diminishing prospects by risking their lives by starting a rebellion against the state. As Mr. Shamsodini says above, it is much more likely that they will leave to find a way to make a living elsewhere. All that strangling Iran's economy will manage to do is push young and ambitious Iranians to go abroad while inflicting cruel collective punishment on everyone that remains behind. Making Iranians poorer and more miserable isn't going to encourage them to be more politically active, much less rebellious, but will instead force them to focus on getting by. That is likely to depress turnout at future elections, and that is more likely to be good news for hard-line candidates in the years to come.
Iran hawks typically don't understand the country that they obsess over, so perhaps it is not surprising that they haven't thought any of this through, but their most glaring failure is not taking into account the importance of nationalism. When a foreign power tries dictating terms to another nation on pain of economic punishment, this is bound to provoke resentment and resistance. Like any other self-respecting nation, Iranians aren't going to accept being told what to do by a foreign government, and they are much more likely to band together in solidarity rather than start an uprising against their own government. The stronger the nationalist tradition there is in a country, the more likely it is that the reaction to foreign threats will be one of defiance and unity. It simply makes no sense to think that the U.S. can pressure a proud nation to capitulate like this.
The administration's policy seems sure to fail on its own terms, and it is also the wrong thing to do. President Washington exhorted his countrymen in his Farewell Address : "Observe good faith and justice towards all nations; cultivate peace and harmony with all." The administration's Iran policy represents the total rejection of that advice. If the U.S. followed Washington's recommendations, it would not be abrogating an agreement that it had just negotiated a few years earlier, and it would not be punishing an entire country for the wrongs of a few. Instead, the U.S. would have built on the success of the earlier negotiations and would have sought to reestablish normal relations with them.
Sid Finster November 6, 2018 at 11:56 am
The Administration's Iran policy is identical to the Iraq policy from 1990 – 2003, in that is it is designed to provide an excuse for a war.
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Nov 07, 2018 | www.wsj.com
Oil prices are on the cusp of a bear market one month after hitting four-year highs as a wave of supply has returned to hit crumbling confidence in global growth.
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Nov 06, 2018 | www.moonofalabama.org
mauisurfer , Nov 5, 2018 1:07:05 PM | link
Alastair Crooke (former UK dip and MI6) knows more about ME than any other white man. He describes how Jared Kushner became Trump's stovepipe of disinformation on behalf of Netanyahu and MBS.
The economic sanctions on Iran will be much tighter, beyond what they were, before the nuclear agreement was signed. "Hit them in their pockets", Netanyahu advised Trump: "if you hit them in their pockets, they will choke; and when they choke, they will throw out the ayatollahs"".
This was another bit of 'stovepiped' advice passed directly to the US President. His officials might have warned him that it was fantasy. There is no example of sanctions alone having toppled a state; and whilst the US can use its claim of judicial hegemony as an enforcement mechanism, the US has effectively isolated itself in sanctioning Iran: Europe wants no further insecurity. It wants no more refugees heading to Europe.
real full article here
https://www.strategic-culture.org/news/2018/11/05/unraveling-netanyahu-project-for-middle-east.html
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Nov 06, 2018 | www.nasdaq.com
Iran Sanctions Unlikely to Boost Oil ETFs in 2019? November 06, 2018, 01:00:00 PM EDT Zacks.comThe United States formally levied tough sanctions on Iran from Nov 5. The United States' sanctions against Iran were first put into place in August. That sanctions were on cars, metals and minerals as well as U.S. and European aircraft.
The second part of the sanctions that bans import of Iranian energy was enacted starting Nov 5. These sanctions are part of President Donald Trump's initiative to put an embargo on Iran's missile and nuclear programs and diminish its influence in the Middle East , per CNBC.
However, Washington has also offered temporary waivers to eight key buyers, China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea, allowing them to continue to import oil from Iran. This in turn kept oil market steady. Iran's oil exports were 1.7 million barrels per day in October , per oilprice.com (read: Oil ETFs: What You Need to Know ).
But Goldman Sachs revealed in a research note that "as more Iranian supply goes offline, the market will continue to tighten. Iran could lose nearly 600,000 bpd of exports by the end of the year, relative to October levels." So, Goldman expects the oil market to record deficit in the fourth quarter of this year, as quoted on oilprice.com.
Against this backdrop, along with many analysts we believe that oil prices may not shoot up in 2019. We'll tell you why.
U.S., Russia & Saudi to Scale Up Supplies
As soon as Iranian output is out of the market, high chances are that key producers like Saudi Arabia and Russia will start pumping more. The United States and Russia have both scaled up production to a record level of about 11.3 million barrels a day, while members of the Organization of the Petroleum Exporting Countries (OPEC) boosted production to the highest levels in two years despite drop-offs in Venezuela and Iran.
The trio - Russia, the United States and Saudi Arabia - increased output above 33 million bpd for the first time in October, up 10 million bpd since 2010 (read: 3 Country ETFs That Are Beneficiary of Higher Oil Prices ).
Iranian Supplies to Phase Out Slower Than Expected?
Investors should note that following the sanctions, there were not much changes in the market sentiments. This was because of the fact that Iranian oil exports plunged to around 1.3 million barrels a day from 2.4 million last spring, as customers resorted to other suppliers in expectation of the sanctions, nytimes.com. Though the sanctions are likely to cut about 2% of global oil supplies, administration's waivers hinted at a patient approach by Washington toward European and Asian customers so that they could find other suppliers.
Dwindling Demand?
Moreover, economic growth in China is slowing down. It recorded the lowest year-over-year growth rate in the third quarter of 2018 since the first quarter of 2009. The situation in the Eurozone in Q3 was the same, marking the feeblest growth rate since the second quarter of 2014 . Such dwindling growth profile points at weaker demand.
What's in Store for 2019?
Goldman expects backwardation in the oil market. It expects Brent to trade around $80 per barrel by the end of the year and slip to $65 per barrel by the end of 2019 as midstream Permian constraints are likely to be relieved .
ETFs in Focus
Against this backdrop, investors should keep a track of oil ETFs in the coming days. These funds include the likes of United States Oil Fund USO , Invesco DB Oil Fund DBO , ProShares Ultra Bloomberg Crude Oil UCO and United States 12 Month Oil Fund USL .
Want key ETF info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
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Nov 06, 2018 | www.moonofalabama.org
karlof1 , Nov 6, 2018 2:54:21 PM | linkIran's Foreign Minister Javad Zarif provides Iran's response to the Outlaw US Empire's unilateral, illegal sanctions that target the Iranian citizenry in an articulate 3 minute video.
Apparently, The Financial Times has published an article, "Europe should work with Iran to counter US unilateralism," but you must be a subscriber to read the item. Looking about for a synopsis, I discovered the item's an op/ed by Iranian President Rouhani, with what seems a good recap here .
Given the number of waivers issued to its sanctions, the sanctions won't destabilize the oil market as prices have trended downward the past several days, although what they do restrict will cause great harm to the Iranian public.
Anton Worter , Nov 6, 2018 3:45:26 PM | link
@6As you certainly know, the oil producers and frackers are technically insolvent, also China filled up a vast strategic oil reserve, USA filled a vast strategic oil reserve, so Trump-Pence's intent is the exact same as Bush-Cheney's with Iraq: destroy oil supply to below demand, and as soon as reserves are depleted this winter heating season, crude prices will spike back up to a break-even for the frackers, Canucks and Venezuelans, whereupon supply will rip again, and prices fall to trade within a range of right around $100 a bbl, ...plus €2 a liter petrol surcharge for your IPCC Carbon Catholic tithe.
Would you like turnips with that?
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Nov 05, 2018 | russia-insider.com
However, the primary problem would not even be the doubtful profitability, but rather logistics. Iran's oil fields are in the south. To reach Russia, the oil would have to make its way to Caspian ports in the north. Iran has no main pipelines connecting its southern oil fields with northern ports. These ports do have the infrastructure for oil, but they were built to receive oil from swap deals with Kazakhstan, Russia and Azerbaijan. They were never meant to export oil.
Consequently, before any exports could begin, Moscow and Tehran would have to invest in creating the necessary storage and loading infrastructure at the Iranian ports. Iran would also need to upgrade its transport infrastructure to deliver oil from the south to the Caspian seashore -- that would also present a challenge.
Finally, Russia and Iran would have to substantially increase their tanker fleets in the landlocked Caspian Sea to exchange large quantities of oil, as the local geography does not allow for the use of large tankers. In this situation, a planned railroad connection between Russia and Iran via Azerbaijan could increase the volume of oil moved from Iran to Russia, but this project has not been completed.
Under these circumstances, Russian officials are demonstrating far greater interest in resuming the so-called oil-for-products program, under which Russia would broker Iranian oil abroad in exchange for Iran buying Russian industrial machinery and providing investment opportunities to Moscow.
Russia and Iran have discussed an oil-for-products initiative for years. Initially, it was supposed to help Tehran evade the oil trade embargo imposed by the United States, European Union (EU) and their partners. When those sanctions were lifted as part of the 2015 nuclear deal, the initiative was expected to compensate for Iran's lack of financial reserves, which kept Tehran from paying for imports of Russian equipment in hard currency. However, after US President Donald Trump withdrew from the deal in 2018 and began reimposing sanctions, the oil-for-products deal again gained importance as a way to evade sanctions.
In November 2017, Moscow received 1 million barrels from Iran as payment for railroad equipment imported from Russia, and arrangements were in the works for Russia to buy an additional 5 million tons of oil in 2018. Indeed, in January and February there were reports of some oil dispatches transferred from Iran to Russian companies. Yet, by March, they stopped . Moscow still plans to revive the deal in 2019, though it might never happen.
On the one hand, Russia has had problems finding buyers for Iranian oil. Concerned about the US sanctions, potential clients refused to purchase it. On the other hand, Iran's main hopes for sanctions relief are more connected to the EU than Russia. There is a strong belief in Tehran that Europeans will be able to offset the negative influence of US economic pressure on Iran. The EU wants to salvage as much of the nuclear deal as possible. Yet the strength of Tehran's belief is hard to explain: Large EU companies have already pulled out of Iran. The EU officials Al-Monitor interviewed openly said that Tehran should not expect a lot from Brussels.
Though Russian and Iranian officials have an on-again, off-again marriage of convenience, Iran's general public and its elite strongly oppose any substantial deals with Moscow. Russia is not trusted or welcomed by Iranians and the countries have a long history of differences . A well-informed and respected Iranian expert on Tehran's foreign policy told Al-Monitor on condition of anonymity that a Russian oil-for-products initiative would be difficult to implement.
"A large part of Iranian society believes that giving our oil to Russia -- especially at the discounted prices -- is no better than agreeing to Trump's demands," he said.
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Nov 05, 2018 | www.zerohedge.com
Authored by Patrick Lawrence via ConsortiumNews.com,
The U.S. is going for the jugular with new Iran sanctions intended to punish those who trade with Teheran. But the U.S. may have a fight on its hands in a possible post- WWII turning-point...
The next step in the Trump administration's "maximum pressure" campaign against Iran has begun, with the most severe sanctions being re-imposed on the Islamic Republic. Crucially, they apply not only to Iran but to anyone who continues to do business with it.
It's not yet clear how disruptive this move will be. While the U.S. intention is to isolate Iran, it is the U.S. that could wind up being more isolated. It depends on the rest of the world's reaction, and especially Europe's.
The issue is so fraught that disputes over how to apply the new sanctions have even divided Trump administration officials.
The administration is going for the jugular this time. It wants to force Iranian exports of oil and petrochemical products down to as close to zero as possible. As the measures are now written, they also exclude Iran from the global interbank system known as SWIFT.
It is hard to say which of these sanctions is more severe. Iran's oil exports have already started falling. They peaked at 2.7 million barrels a day last May -- just before Donald Trump pulled the U.S. out of the six-nation accord governing Iran's nuclear programs. By early September oil exports were averaging a million barrels a day less .
In August the U.S. barred Iran's purchases of U.S.-dollar denominated American and foreign company aircraft and auto parts. Since then the Iranian rial has crashed to record lows and inflation has risen above 30 percent.
Revoking Iran's SWIFT privileges will effectively cut the nation out of the dollar-denominated global economy. But there are moves afoot, especially by China and Russia, to move away from a dollar-based economy.
The SWIFT issue has caused i nfighting in the administration between Treasury Secretary Mnuchin and John Bolton, Trump's national security adviser who is among the most vigorous Iran hawks in the White House. Mnuchin might win a temporary delay or exclusions for a few Iranian financial institutions, but probably not much more.
On Sunday, the second round of sanctions kicked in since Trump withdrew the U.S. from the 2015 Obama administration-backed, nuclear agreement, which lifted sanctions on Iran in exchange for stringent controls on its nuclear program. The International Atomic Energy Agency has repeatedly certified that the deal is working and the other signatories -- Britain, China, France, Germany and Russia have not pulled out and have resumed trading with Iran. China and Russia have already said they will ignore American threats to sanction it for continuing economic relations with Iran. The key question is what will America's European allies do?
Europeans ReactEurope has been unsettled since Trump withdrew in May from the nuclear accord. The European Union is developing a trading mechanism to get around U.S. sanctions. Known as a Special Purpose Vehicle , it would allow European companies to use a barter system similar to how Western Europe traded with the Soviet Union during the Cold War.
Juncker: Wants Euro-denominated trading
EU officials have also been lobbying to preserve Iran's access to global interbank operations by excluding the revocation of SWIFT privileges from Trump's list of sanctions. They count Mnuchin,who is eager to preserve U.S. influence in the global trading system, among their allies. Some European officials, including Jean-Claude Juncker, president of the European Commission, propose making the euro a global trading currency to compete with the dollar.
Except for Charles de Gaulle briefly pulling France out of NATO in 1967 and Germany and France voting on the UN Security Council against the U.S. invading Iraq in 2003, European nations have been subordinate to the U.S. since the end of the Second World War.
The big European oil companies, unwilling to risk the threat of U.S. sanctions, have already signaled they intend to ignore the EU's new trade mechanism. Total SA, the French petroleum company and one of Europe's biggest, pulled out of its Iran operations several months ago.
Earlier this month a U.S. official confidently predicted there would be little demand among European corporations for the proposed barter mechanism.
Whether Europe succeeds in efforts to defy the U.S. on Iran is nearly beside the point from a long-term perspective. Trans-Atlantic damage has already been done. A rift that began to widen during the Obama administration seems about to get wider still.
Asia ReactsAsian nations are also exhibiting resistance to the impending U.S. sanctions. It is unlikely they could absorb all the exports Iran will lose after Nov. 4, but they could make a significant difference. China, India, and South Korea are the first, second, and third-largest importers of Iranian crude; Japan is sixth. Asian nations may also try to work around the U.S. sanctions regime after Nov. 4.
India is considering purchases of Iranian crude via a barter system or denominating transactions in rupees. China, having already said it would ignore the U.S. threat, would like nothing better than to expand yuan-denominated oil trading, and this is not a hard call: It is in a protracted trade war with the U.S., and an oil-futures market launched in Shanghai last spring already claims roughly 14 percent of the global market for "front-month" futures -- contracts covering shipments closest to delivery.
Trump: Unwittingly playing with U.S. long-term future
As with most of the Trump administration's foreign policies, we won't know how the new sanctions will work until they are introduced. There could be waivers for nations such as India; Japan is on record asking for one. The E.U.'s Special Purpose Vehicle could prove at least a modest success at best, but this remains uncertain. Nobody is sure who will win the administration's internal argument over SWIFT.
Long-term Consequences for the U.S.The de-dollarization of the global economy is gradually gathering momentum. The orthodox wisdom in the markets has long been that competition with the dollar from other currencies will eventually prove a reality, but it will not be one to arrive in our lifetimes. But with European and Asian reactions to the imminent sanctions against Iran it could come sooner than previously thought.
The coalescing of emerging powers into a non-Western alliance -- most significantly China, Russia, India, and Iran -- starts to look like another medium-term reality. This is driven by practical rather than ideological considerations, and the U.S. could not do more to encourage this if it tried. When Washington withdrew from the Iran accord, Moscow and Beijing immediately pledged to support Tehran by staying with its terms.If the U.S. meets significant resistance, especially from its allies, it could be a turning-point in post-Word War II U.S. dominance.
Supposedly Intended for New TalksAll this is intended to force Iran back to the negotiating table for a rewrite of what Trump often calls "the worst deal ever." Tehran has made it clear countless times it has no intention of reopening the pact, given that it has consistently adhered to its terms and that the other signatories to the deal are still abiding by it.
The U.S. may be drastically overplaying its hand and could pay the price with additional international isolation that has worsened since Trump took office.
Washington has been on a sanctions binge for years. Those about to take effect seem recklessly broad. This time, the U.S. risks lasting alienation even from those allies that have traditionally been its closest.
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Nov 03, 2018 | community.oilprice.com
+ 45 DR Members + 45 28 posts Posted Wednesday at 03:48 AM
On 10/18/2018 at 11:38 PM, Jan van Eck said: The problem that Qatar faces is one of population and geography. Qatar is dominantly Sunni, but not the really severe branch that envelops KSA. And it sits next door to Bahrain, which is apparently about 70% Shia. Qatar also juts way out into the Gulf, and is thus a convenient sea-land bridge from Iran. Were Iran to go for a land invasion of KSA, then crossing into Qatar with landing craft, or seizing a Qatari airport, is logical. To prevent this, the USA has built a major air base in Qatar, specifically to cut off this route. That big US base is a natural (and juicy) target for Iran should a shooting war break out, and the USA join in against Iran (and that would be logical).Meanwhile Qatar has this bizarre and unfathomable dysfunctional relationship with MbS, and a very difficult relationship with Bahrain, which has cut off diplomatic relations and sent the Qatari diplomats packing, in 2017. Now Iran is under sanctions, which is stressing their cash receipts. Iran pushes back, against their ideological and religious rivals and enemies the Sunnis, by threatening to either invade or to sink tankers with gas coming out of Qatar. The problem for gas LNG tankers is that the stuff is kept docile by bringing the temp down to minus 176 degrees. If you whack an LNG tanker with a torpedo and breach the container spheres, easy enough to do, then that ship is likely to blow up; one little spark and all that gas will be a salient lesson for all the others.
The deterrent effect of this will be that nobody will dare to tempt fate by sending in an LNG tanker. So Iran can shut down LNG traffic without firing a shot, all they have to do is go crazy and start threatening. Iran has these subs that can go sit on the bottom of the Gulf and pop up to launch a torpedo, and everyone knows it. That is one heck of a deterrent.
Meanwhile you have Europe now heavily dependent on gas. Either the Europeans continue to genuflect to the Russians, which some Europeans at least find unpalatable, or they have to find an alternative source. That is likely going to be the USA. I predict that the aggressions of the Russians, and the problems of Qatar in any real ability to fill long-term contracts, and the threat of force-majeure hovering in the background, brings Europe to buy US LNG.
Qatar delivered 80 million tons last year, as number 1 LNG exporter by a long shot. Australia trailed behind at 56 million, followed by Malaysia 26M, Nigeria 21M, Indonesia 16M, USA 13M, Algeria 12M.
Qatar was responsible for 17M tons exported to EU, followed by Algeria at 10.4M. US Liquefaction capacity is estimated to match the whole Middle East by 2025 with Calcasieu, LA at 4 bcf/day, Brownsville, TX at 3.6 bcf/day; Plaquemines at 3.4 bcf/day; and Nikiski Alaska at 2.6 Bcf/day for the Asian market.
BP has its new 'Partnership Fleet', Shell is chartering heavily and owns a large fleet as well. Gaslog has over 25 modern large capacity vessels on the water, and the order book for 2019-2020 deliveries is extensive, and they will be available for US to EU transport (Tellurian and Cheniere have already chartered Gaslog ships for their exclusive use)
The catch here is that Russia is delivering 10.8 million tons per year via Yamal, and their upcoming Arctic 2LNG that will be on the ice in the Arctic circle adding even more to that production. They have a fleet delivering year round of Teekay and Dynagas ice breaker LNG carriers, and their primary clients have been Belgium, France and Spain during their debut ice breaking season. They are centrally located to maximize deliveries to Asia and Europe.
I doubt that Russia will cut off Europe after spending all that money to secure liquefaction and transport capabilities in the Arctic, but who knows. They are geared up to deliver to Asia, but could only do so in the Summer months, or during the Winter months with the assistance of a Nuclear Icebreaker to lead the ships.
Honestly, I hope that Germany completes the Hamburg LNG Terminal quickly and begins buying US LNG so that we can diversify from our usual Mexico, S Korea, Japan, Spain, Portugal, Chile, Egypt, Jordan clientele. Germany consumed over 90 million CBM of natural gas last year (controversial because they stopped 'officially' disclosing the numbers after 2016, these are OECD estimates from the IEA), and are getting close to Japan's 120 million CBM.
Qatar/Iran tensions could be the perfect storm for a US to EU energy boom.
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Nov 01, 2018 | www.unz.com
Miro23 says: October 30, 2018 at 5:45 am GMT 600 Words
The Saudis also support the system of petrodollars, which basically requires nearly all international purchases of petroleum to be paid in dollars. Petrodollars in turn enable the United States to print money for which there is no backing knowing that there will always be international demand for dollars to buy oil.
I would emphasize this aspect, except that MbS doesn't so much support the PetroDollar as the PetroYuan, and this is more than troubling for the US since the PetroDollar is essential to the dollar's world reserve currency status.
Many American economists have expressed alarm at Saudi Arabia's willingness to borrow in Chinese yuan, as Riyadh's decision could cause other oil-exporting countries to abandon the U.S. dollar in favor of the "petro-yuan." A marked decline in the use of the U.S. dollar as the preferred credit-issuing currency by oil-producing countries would greatly weaken the U.S. dollar's long-term viability as a global reserve currency.
As the United States views its alliance with Saudi Arabia as the lynchpin of its Middle East strategy, Washington will likely react strongly if Riyadh uses its influence within OPEC to strengthen the Chinese yuan. As Saudi Arabia remains dependent on U.S. arms sales to pursue its geopolitical objectives in the Middle East and counter Iran, intense U.S. pressure would likely cause Riyadh to distance itself from Beijing, limiting economic integration between the two countries.
https://thediplomat.com/2018/02/the-risks-of-the-china-saudi-arabia-partnership/
It is no coincidence that these statements from the Crown Prince come days after the official launch of China's Petroyuan. As every historical trend indicates, the world's most powerful economy dictates which currency will be used in most international transactions. This continues to be the case with the US in respect of Dollar, but as China gets set to fully overtake the US as the world's leading economy, the Dollar will inevitably be replaced by the Yuan.
China's issuing of oil futures contracts in Petroyuan is the clearest indication yet that China is keen to make its presence as the world's largest energy consumer known and that it would clearly prefer to purchase oil from countries like Saudi Arabia in its own currency in the future, quite possibly in the near future.
Saudi Arabia's Crown Prince appears to understand this trajectory in the global energy markets and furthermore, he realises that in order to be able to leverage the tremendous amount of US pressure that will come down on Riaydh in order to force Saudi Arbia to avoid the Petroyuan, Riyadh will need to embrace other potential partners, including China.
More than anything else, the Petroyuan will have an ability to transform Saudi Arabia by limiting its negative international characteristics that Muhammad bin Salman himself described. As a pseudo-satellite state of the US during the Cold War, Muhammad bin Salman admitted that his country's relationship to the US was that of subservience. China does not make political let alone geopolitical demands of its partners, but China is nevertheless keen to foster de-escalations in tensions among all its partners based on the win-win principles of peace through prosperity as articulated on a regular basis by President Xi Jinping.
Thus one could see China's policies of political non-interference rub off on a potential future Saudi partner, in the inverse way that the US policies of ultra-interventionism are often forced upon its partners. Thus, whatever ideological views Muhammad bin Salman does or does not have, he clearly knows where the wind is blowing: in the direction of China.
If the Khashoggi Affair was planned as a warning to Crown Prince Mohamed bin Salman, then the US knew exactly what was going to happen in the consulate. It was coupled with an immediate and orchestrated MSM reaction that was curiously detailed, and delivered at high volume.
chris , says: October 30, 2018 at 11:02 am GMT
Yeah, the US will never get rid of the Saudi regime but will always be dangling the sword right above their necks, and not just figuratively.virgile , says: Website October 30, 2018 at 12:02 pm GMTBesides the tangible benefits of the 'strategic' control of oil resources, which the US believes it needs to control in order to dominate Western Europe and its Asian allies, the Saudis also function as the CIA's private slush fund for off-the-books operations like Iran-Contra and many others which surface in the news from time to time. Thus, the CIA controls such vast sums through the Saudis as to make their budgets effectively limitless.
During his triumphant tour of the US earlier this year, the Saudi King said something which I found shocking and incredibly revealing in the way the story dropped like a stone making absolutely no ripples anywhere in the MSM, nor in the alternative media for that matter.
When asked about Saudi funding of Wahhabism around the world, he said that 'the allies (presumably US and UK) had 'asked' the Saudis to 'use their resources' to create the Madrassas and Wahhabi centers to prevent prevent inroads in Muslim countries by the Soviets (a premise which is very questionable in the ME context after the fall of Nasser).
Now that seems to be the story of the century because it reveals the operating method of the CIA wrt the Saudis. And even though MBS was trying to only reveal the distant roots of the system they put in place, there is absolutely no logical reason why any part of this system would have been subsequently dismantled; 911 notwithstanding. The continuing US/Israeli support for and generous use of jihadis in Libya, Syria, etc. only reinforces this point.
This is ultimately the greatest impediment to anything changing the status quo.
If the consulate was bugged , the Turks must have known the plan to abduct kashooggi.Miro23 , says: October 30, 2018 at 12:06 pm GMT
They let it happen, and now that the abduction turned into a murder, they are accomplice.@Mark JamesAmanda , says: October 30, 2018 at 1:58 pm GMTUS knew exactly what was going to happen in the consulate.
I doubt the US knew "exactly", but they likely knew something bad (a kidnapping perhaps?) was a strong probability. Alas I wish Khashoggi had been warned. Too it seems very odd he was willing to set foot in a Saudi embassy anywhere? Maybe Director Haspel can explain.
Supposedly Khashoggi's smart phone picked it all up and filmed his own murder ??
More likely the room was prepared, and Khashoggi was following US instructions/assurances in going there. The key point from my POV was the immediate MSM blanket coverage with every detail explained. No investigation, research, doubts or questions.
The US MSM is a propaganda tool and they were pre-prepared, so some US deep state group knew that Bin Salman's bodyguard was heading to the consulate and what they planned to do there (and maybe even set them up to do it).
One question is whether the Halloween show was aimed at removing Bin Salman or just getting him back in line.
Sibel Edmonds has been following this story from Turkey (she speaks Turkish) and posting her thoughts and findings on twitter. She seems to think this is about some kind of soft coup (get rid of MBS b/c getting too cozy with Russia/China, Euroasia). Sibel also says Khashoggi was actually in Istanbul working with some kind of Soros NGO, maybe for future Color Revolution/Arab Spring in the Middle East.AnonFromTN , says: October 30, 2018 at 5:58 pm GMTSibel Edmonds @sibeledmonds As Predicted (OnRecord) One Of 3 Objectives in #Scripted #Khashoggi Case: Get #Trump- Replace BS #RussiaGate with #SaudiGate. (Screenshot Coming In Reply)- – "Khashoggi fiancee hits at Trump response, warns of 'money' influence"
Sibel Edmonds @sibeledmonds Oct 27
Very Important #Khashoggi Continued: #Khashoggi Relocated To #Turkey To Be a Part of a Business-ThinkTank-NGO. He set up a business here. He opened Bank Accounts. He bought a house/expansive Flat. He traveled to #London from #Istanbul paid handsomely by #Neoliberal #DeepStateJamal Khashoggi did not die for nothing. His murder was part of the plot to push current de-facto ruler of the Saudi royal crime family aside.Mike P , says: October 30, 2018 at 5:58 pm GMTOn the moral side, considering who Khashoggi was, one can only say "serves him right". However, all the other players involved, the Saudis, Israel, Turkey, and the US, are by no means morally superior to him. His murder and essential non-reaction by others are useful, as these events unmasked the hypocrites, who are showing their true colors even as we speak.
UK Was Aware of Saudi Plot Against Khashoggi Weeks in Advance: ReportChuckOrloski , says: October 30, 2018 at 7:12 pm GMT@SolontoCroesus Hi again, S2C,JLK , says: October 30, 2018 at 7:41 pm GMTShould have added that the Kashoggi murder & extremely strange aftermath, dulled US political response, smacks of a scene from the film "V for Vendetta."
Thanks!
If I were the Saudis, I'd watch my wallet.Anon [159] Disclaimer , says: October 31, 2018 at 1:46 am GMT"There is every indication that the U.S. is not in fact seeking to punish the Saudis for their alleged role in Khashoggi's apparent murder but instead to punish them for reneging on this $15 billion deal to U.S. weapons giant Lockheed Martin, which manufactures the THAAD system.Miro23 , says: October 31, 2018 at 3:41 am GMTS-400 gamechanger. / Saudi Plan to Purchase Russian S-400:
@Colin Wright Thanks for the link. Now we can see that Empire had previously turned against MbS, and that the scripted Khashoggi affair conveniently arrived on cue – with MbS getting the full MSM treatment.Erebus , says: October 31, 2018 at 5:36 am GMTIn other words the deep state knew exactly what was going to happen in the consulate that day, set it up and recorded it themselves (nothing to do with Khashoggi's smart phone).
Prince Ahmad bin Abdulaziz, the younger brother of King Salman, has returned to Saudi Arabia after a prolonged absence in London, to mount a challenge to Crown Prince Mohammed bin Salman or find someone who can.
The source said that the prince returned "after discussion with US and UK officials", who assured him they would not let him be harmed and encouraged him to play the role of usurper.
Meanwhile, in Washington disquiet grows.
Writing in the New York Times, former national security advisor to the Obama administration and US ambassador to the UN Susan Rice said: "Looking ahead, Washington must act to mitigate the risks to our own interests. We should not rupture our important relationship with the kingdom, but we must make clear it cannot be business as usual so long as Prince Mohammed continues to wield unlimited power.
"It should be United States policy, in conjunction with our allies, to sideline the crown prince in order to increase pressure on the royal family to find a steadier replacement," she added.
@Miro23 The mainstream narrative has had "Psyop" written all over it from the first. It wouldn't surprise me to learn that Khashoggi is still alive and languishing in an undisclosed location with only the Skripals for company.ChuckOrloski , says: October 31, 2018 at 2:44 pm GMT@Bill Jones An interesting bullet-sentence, Bill Jones said to me: "The strange and dulled aftermath in the US is, I believe, because the lesson was not really meant for US audiences."Greetings, Bill!
Lessons on dramatic world events are cunningly spun to insouciant & government-trusting Americans. The weird Jamal Kashoggi murder is an excellent example among hundreds to choose from!
Fyi, along with FDR administration's cooperation, Zionists helped gin-up war fervor in order to get the US into World War 2. Such deception resulted in unnecessarily sending-off another round of American "doughboys" into world war.
Fyr, as recovered from America's Memory Hole Knowledge Disposal / Sewer System," below is a great Pat Buchanan article titled, "Who forged it?"
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Oct 31, 2018 | angrybearblog.com
likbez , October 31, 2018 1:03 am
The key question not addressed by the author is how long the period of "plato oil production" (the last stage of the so called "oil age", which started around 1911) might last -- 10, 20 or 50 years. And the oil age is just a very short blip in Earth history.
Let's assume that this means less the $100 per barrel; in the past, it was $70 per barrel that considered the level that guarantees the recession in the USA, but financial system machinations now probably reached a new level, so that might not be true any longer. The trillion dollars question is "How long this period can be extended?"
It is important to understand the US shale oil is not profitable and never will be for prices under $80 or so. At prices below that level, it actually produces three products, not two – oil, gas and junk bonds.
I view it as a very sophisticated, very innovative gamble to pressure oil prices down and get compensation for the losses due to large amount of imported oil (the USA export mainly lightweight oil which is kind of "subprime oil" often used for dilution of heavy oil in countries such as Canada and Venezuela, but imports quality oil).
If the hypothesis that Saudis and Russians are close to Seneca Cliff (Saudi prince recently said that Russian are just 10-15 years from it) and that best days of the US shale and Gulf of Mexico deep oil is in the past if true, then "Houston we have a problem".
That means that in 20 years, or so the civilization might experience some kind of collapse, and the population of the Earth might start rapidly shrinking.
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Oct 29, 2018 | features.propublica.org
John Mamuscia , Monday, March 26, 2018 3:08 PM
> I was given the choice, retire or get a bad review and get fired, no severance. I retired and have not been employed since because of my age. Got news for these business people, experience trumps inexperience. Recently, I have developed several commercial Web sites using cloud technology. In your face IBM.Stimpy , Friday, March 23, 2018 11:17 PM> This could well have been written about Honeywell. Same tactics exactly. I laid myself off and called it retirement after years of shoddy treatment and phonied up employee evaluations. I took it personally until I realized that this is just American Management in action. I don't know how they look themselves in the mirror in the morning.sukibarnstorm , Thursday, March 22, 2018 6:38 PM> As an HR professional, I get sick when I hear of these tactics. Although this is not the first company to use this strategy to make a "paradigm shift". Where are the geniuses at Harvard, Yale, or the Wharton school of business (where our genius POTUS attended)? Can't they come up with a better model of how to make these changes in an organization without setting up the corp for a major lawsuit or God forbid ......they treat their employees with dignity and respect.DDRLSGC , in reply to"> •> They are not trained at our business schools to think long-term or look for solutions to problems or turn to the workforce for solutions. They are trained to maximizes the profits and let society subsidies their losses and costs.John Kauai , in reply to"> •> Isn't it interesting that you are the first one (here or anywhere else that I've seen) to talk about the complicity of Harvard and Yale in the rise of the Oligarchs.Perhaps we should consider reevaluation of their lofty perch in American Education. Now if we could only think of a way to expose the fraud.
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Oct 29, 2018 | features.propublica.org
Alex , Sunday, April 22, 2018 7:27 AM
My employer outsourced a lot of our IT to IBM and Cognizant in India. The experience has been terrible and 4 years into a 5 year contract, we are finally realizing the error and insourcing rapidly.srichey321 , in reply to"> •Don't worry. A small group of people made some money in the short-term while degrading the long term performance of your employer.Johnny Player , Saturday, April 21, 2018 11:16 AMGreat investigative work.Back in 1999 ATT moved about 4000 of us tech folks working on mainframe computers to IBM. We got pretty screwed on retirement benefits from ATT. After we moved over, IBM started slowly moving all of our workload overseas. Brazil and Argentina mainly.
It started with just tier 1 help desk. Then small IBM accounts started to go over there. They were trained by 'unwilling' US based people. Unwilling in the sense that if you didn't comply, you weren't a team player and it would show on your performance review.
Eventually the overseas units took on more and more of the workload. I ended up leaving in 2012 at the age of 56 for personal reasons.
Our time at ATT was suppose to be bridged to IBM but the only thing bridged was vacation days. A lawsuit ensued and IBM/ATT won. I'm guessing it was some of that 'ingenious' paperwork that we signed that allowed them to rip us off like that. Thanks again for some great investigation.
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Oct 27, 2018 | www.zerohedge.com
Authored by Steve St.Angelo via SRSRoccoReport.com,
While the U.S. Shale Industry produces a record amount of oil, it continues to be plagued by massive oil decline rates and debt. Moreover, even as the companies brag about lowering the break-even cost to produce shale oil, the industry still spends more than it makes. When we add up all the negative factors weighing down the shale oil industry, it should be no surprise that a catastrophic failure lies dead ahead.
Of course, most Americans have no idea that the U.S. Shale Oil Industry is nothing more than a Ponzi Scheme because of the mainstream media's inability to report FACT from FICTION. However, they don't deserve all of the blame as the shale energy industry has done an excellent job hiding the financial distress from the public and investors by the use of highly technical jargon and BS.
For example, Pioneer published this in the recent Q2 2018 Press Release:
Pioneer placed 38 Version 3.0 wells on production during the second quarter of 2018. The Company also placed 29 wells on production during the second quarter of 2018 that utilized higher intensity completions compared to Version 3.0 wells. These are referred to as Version 3.0+ completions. Results from the 65 Version 3.0+ wells completed in 2017 and the first half of 2018 are outperforming production from nearby offset wells with less intense completions. Based on the success of the higher intensity completions to date, the Company is adding approximately 60 Version 3.0+ completions in the second half of 2018.
Now, the information Pioneer published above wasn't all that technical, but it was full of BS. Anytime the industry uses terms like "Version 3.0+ completions" to describe shale wells, this normally means the use of "more technology" equals "more money." As the shale industry goes from 30 to 60 to 70 stage frack wells, this takes one hell of a lot more pipe, water, sand, fracking chemicals and of course, money .
However, the majority of investors and the public are clueless in regards to the staggering costs it takes to produce shale oil because they are enamored by the "wonders of technology." For some odd reason, they tend to overlook the simple premise that
MORE STUFF costs MORE MONEY.
Of course, the shale industry doesn't mind using MORE MONEY, especially if some other poor slob pays the bill.
Shale Oil Industry: Deep The DenialAccording to a recently released article by 40-year oil industry veteran, Mike Shellman, "Deep The Denial," he provided some sobering statistics on the shale industry:
I recently put somebody very smart on the necessary research (SEC K's, press releases regarding private equity to private producers, etc.) to determine what total upstream shale oil debt actually is. We found it to be between $285-$300B (billion), both public and private . Kallanish Energy Consultants recently wrote that there is $240B of long term E&P debt in the US maturing by 2023 and I think we should assume that at least 90 plus percent of that is associated with shale oil. That is maturing debt, not total debt.
By year end 2019 I firmly believe the US LTO industry will then be paying over $20B annually in interest on long term debt.
Using its own self-touted "breakeven" oil price, the shale oil industry must then produce over 1.5 Million BOPD just to pay interest on that debt each year. Those are barrels of oil that cannot be used to deleverage debt, grow reserves, not even replace reserves that are declining at rates of 28% to 15% per year that is just what it will take to service debt.
Using its own "breakeven" prices the US shale oil industry will ultimately have to produce 9G BO of oil, as much as it has already produced in 10 years just to pay its total long term debt back .
Using Mike's figures, I made the following chart below:
For the U.S. Shale Oil Industry just to pay back its debt, it must produce 9 billion barrels of oil. That is one heck of a lot of oil as the industry has produced about 10 billion barrels to date. Again, as Mike states, it would take 9 billion barrels of shale oil to pay back its $285-300 billion of debt (based on the shale industry's very own breakeven prices).
Furthermore, the shale industry may have to sell a quarter of its oil production (1.5 million barrels per day) just to service its debt by the end of 2019. According to the EIA, the U.S. Energy Information Agency, total shale oil (tight oil) production is now 6.2 million barrels per day (mbd):
The majority of shale oil production comes from three fields and regions, the Eagle Ford (Blue), the Bakken (Yellow) and the Permian (light, medium & dark brown). These three fields and regions produce 5.2 mbd of the total 6.2 mbd of shale production.
Unfortunately, the shale industry continues to struggle with mounting debt and negative free cash flow. The EIA recently published this chart showing the cash from operations versus capital expenditures for 48 public domestic oil producers:
You will notice that capital expenditures ( brown line ) are still higher than cash from operations ( blue line ). So, it doesn't seem to matter if the oil price is over $100 (2013-2014) or less than $70 (2017-2018), the shale oil industry continues to spend more money than it's making. The shale energy companies have resorted to selling assets, issuing stock and increasing debt to supplement their inadequate cash flow to fund operations.
A perfect example of this in practice is Pioneer Resources the number one shale oil producer in the mighty Permian. While most companies increased their debt to fund operations, Pioneer decided to take advantage of its high stock price by raising money via share dilution. Pioneer's outstanding shares ballooned from 115 million shares in 2010 to 170 million by 2017. From 2011 to 2016, Pioneer issued a staggering $5.4 billion in new stock :
So, as Pioneer issued over $5 billion in stock to produce unprofitable shale oil and gas, Continental Resources racked up more than $5 billion in debt during the same period. These are both examples of "Ponzi Finance." Thus, the shale energy industry has been quite creative in hoodwinking both the shareholder and capital investor.
Now, there is no coincidence that I have focused my research on Pioneer and Continental Resources. While Continental is the poster child of what's horribly wrong with the shale oil industry in the Bakken, Pioneer is a role model for the same sort of insanity and delusional thinking taking place in the Permian.
Pioneer Spends A Lot More Money With Unsatisfactory Production ResultsTo be able to understand what is going on in the U.S. shale industry, you have to be clever enough to ignore the "Techno-jargon" in the press releases and read between the lines. As mentioned above, Pioneer stated that it was going to add a lot more of its "high-tech" Version 3.0+ completion wells in the second half of 2018 because they were outperforming the older versions.
Well, I hope this is true because Pioneer's first half 2018 production results in the Permian were quite disappointing compared to the previous period. If we compare the increase of Pioneer's shale oil production in the Permian versus its capital expenditures, something must be seriously wrong .
First, let's look at a breakdown of Pioneer's Permian energy production from their September 2018 Investor Presentation:
Pioneer's Permian oil and gas production is broken down between its horizontal shale and vertical convention production. I will only focus on its horizontal shale production as this is where the majority of their capital expenditures are taking place. The highlighted yellow line shows Pioneer's horizontal shale oil production in the Permian Basin.
You will notice that Pioneer's shale oil production increased significantly in Q3 & Q4 2017 versus Q1 & Q2 2018. Furthermore, Pioneer's shale gas production surged in Q2 2018 by nearly 50% (highlighted with a red box) compared to oil production only increasing 5%. That is a serious RED FLAG for natural gas production to jump that much in one quarter.
Secondly, by comparing the increase of Pioneer's quarterly shale oil production in the Permian with its capital expenditures, the results are less than satisfactory:
The RED LINE shows the amount of capital expenditures spent each quarter while the OLIVE colored BARS represent the increase in Permian shale oil production. To simplify the figures in this chart, I made the following graphic below:
Pioneer spent $1.36 billion in the second half of 2017 to increase its Permian shale oil production by 30,232 barrels per day (bopd) compared to $1.7 billion in the first half of 2018 which only resulted in an additional 10,832 bopd . Folks, it seems as if something seriously went wrong for Pioneer in the Permian as the expenditure of $340 million more CAPEX resulted in two-thirds less the production growth versus the previous period.
Third, while Pioneer (stock ticker PXD) proudly lists that they are one of the lowest cost shale producers in the industry, they still suffer from negative free cash flow:
As we can see, Pioneer lists their breakeven oil price at approximately $22, which is downright hilarious when they spent $132 million more on capital expenditures than the made in cash from operations:
The public and investors need to understand that "oil breakeven costs" do not include capital expenditures. And according to Pioneer's Q2 2018 Press Release, the company plans on spending $3.4 billion on capital expenditures in 2018. The majority of the capital expenditures are spent on drilling and completing horizontal shale wells.
For example, Pioneer brought on 130 new wells in the first half of 2018 and spent $1.7 billion on CAPEX (capital expenditures) versus 125 wells and $1.36 billion in 2H 2017. I have seen estimates that it cost approximately $9 million for Pioneer to drill a horizontal shale well in the Permian. Thus, the 130 wells cost nearly $1.2 billion.
However, the interesting thing to take note is that Pioneer brought on 125 wells in 2H 2017 to add 30,000+ barrels of new oil production compared to 130 wells in 1H 2018 that only added 10,000+ barrels. So, how can Pioneer add five more wells (130 vs. 125) in 1H 2018 to see its oil production increase a third of what it was in the previous period?
Regardless, the U.S. shale oil industry continues to spend more money than they make from operations. While energy companies may have enjoyed lower costs when the industry was gutted by super-low oil prices in 2015 and 2016, it seems as if inflation has made its way back into the shale patch. Rising energy prices translate to higher costs for the shale energy industry. Rinse and repeat.
Unfortunately, when the stock markets finally crack, so will energy and commodity prices. Falling oil prices will cause severe damage to the Shale Industry as it struggles to stay afloat by selling assets, issuing stock and increasing debt to continue producing unprofitable oil.
I believe the U.S. Shale Oil Industry will suffer catastrophic failure from the impact of deflationary oil prices along with peaking production. While U.S. Shale Oil production has increased exponentially over the past decade, it will likely come down even faster.
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Oct 27, 2018 | journal-neo.org
It may well be that the unilateral wrecking ball politics of the Trump Administration are bringing about a result just opposite from that intended. Washington's decision to abandon the Iran nuclear agreement and impose severe sanctions on companies trading Iran oil as of 4 November, is creating new channels of cooperation between the EU, Russia, China and Iran and potentially others. The recent declaration by Brussels officials of creation of an unspecified Special Purpose Vehicle (SPV) to legally avoid US dollar oil trade and thereby US sanctions, might potentially spell the beginning of the end of the Dollar System domination of the world economy.
According to reports from the last bilateral German-Iran talks in Teheran on October 17, the mechanisms of a so-called Special Purpose Vehicle that would allow Iran to continue to earn from its oil exports, will begin implementation in the next days. At end of September EU Foreign Policy chief Federica Mogherini confirmed plans to create such an independent trade channel, noting, "no sovereign country or organization can accept that somebody else decides with whom you are allowed to do trade with ."
The SPV plan is reportedly modelled on the Soviet barter system used during the cold war to avert US trade sanctions, where Iran oil would be in some manner exchanged for goods without money. The SPV agreement would reportedly involve the European Union, Iran, China and Russia.
According to various reports out of the EU the new SPV plan involves a sophisticated barter system that can avoid US Treasury sanctions. As an example, Iran could ship crude oil to a French firm, accrue credit via the SPV, much like a bank. That could then be used to pay an Italian manufacturer for goods shipped the other way, without any funds traversing through Iranian hands or the normal banking system.A multinational European state-backed financial intermediary would be set up to handle deals with companies interested in Iran transactions and with Iranian counter-parties. Any transactions would not be transparent to the US, and would involve euros and sterling rather than dollars.
It's an extraordinary response to what Washington has called a policy of all-out financial war against Iran, that includes threats to sanction European central banks and the Brussels-based SWIFT interbank payments network if they maintain ties to Iran after November 4. In the post-1945 relations between Western Europe and Washington such aggressive measures have not been seen before.It's forcing some major rethinking from leading EU policy circles.
New Banking Architecture
The background to the mysterious initiative was presented in June in a report titled, Europe, Iran and Economic Sovereignty: New Banking Architecture in Response to US Sanctions. The report was authored by Iranian economist Esfandyar Batmanghelidj and Axel Hellman, a Policy Fellow at the European Leadership Network (ELN), a London-based policy think tank .
The report proposes its new architecture should have two key elements. First it will be based on "gateway banks" designated to act as intermediaries between Iranian and EU commercial banks tied to the Special Purpose Vehicle. The second element is that it would be overseen by an EU-Office of Foreign Asset Controls or EU-OFAC, modeled on the same at the US Treasury, but used for facilitating legal EU-Iran trade, not for blocking it. Their proposed EU-OFAC among other functions would undertake creating certification mechanisms for due diligence on the companies doing such trade and "strengthen EU legal protections for entities engaged in Iran trade and investment ."
The SPV reportedly is based on this plan using designated Gateway Banks, banks in the EU unaffected by Washington "secondary sanctions," as they do not do business in the US and focus on business with Iran. They might include select state-owned German Landesbanks, certain Swiss private banks such as the Europäisch-Iranische Handelsbank (EIH), a European bank established specifically to engage in trade finance with Iran. In addition, select Iran banks with offices in the EU could be brought in.
Whatever the final result, it is clear that the bellicose actions of the Trump Administration against trade with Iran is forcing major countries into cooperation that ultimately could spell the demise of the dollar hegemony that has allowed a debt-bloated US Government to finance a de facto global tyranny at the expense of others.
EU-Russia-China
During the recent UN General Assembly in New York, Federica Mogherini said the SPV was designed to facilitate payments related to Iran's exports – including oil –so long as the firms involved were carrying out legitimate business under EU law. China and Russia are also involved in the SPV. Potentially Turkey, India and other countries could later join.
Immediately, as expected, Washington has reacted. At the UN US Secretary of State and former CIA head Mike Pompeo declared to an Iran opposition meeting that he was "disturbed and indeed deeply disappointed" by the EU plan. Notably he said ""This is one of the of the most counterproductive measures imaginable for regional and global peace and security." Presumably the Washington plan for economic war against Iranis designed to foster regional and global peace and security?
Non-US SWIFT?
One of the most brutal weapons in the US Treasury financial warfare battery is the ability to force the Brussels-based SWIFT private interbank clearing system to cut Iran off from using it. That was done with devastating effect in 2012 when Washington pressured the EU to get SWIFT compliance, a grave precedent that sent alarm bells off around the world.
The fact that the US dollar remains the overwhelming dominant currency for international trade and financial transactions gives Washington extraordinary power over banks and companies in the rest of the world. That's the financial equivalent of a neutron bomb. That might be about to change, though it's by no means a done deal yet.
In 2015 China unveiled its CIPS or China International Payments System. CIPS was originally viewed as a future China-based alternative to SWIFT. It would offer clearing and settlement services for its participants in cross-border RMB payments and trade. Unfortunately, a Chinese stock market crisis forced Beijing to downscale their plans, though a skeleton of infrastructure is there.
In another area, since late 2017 Russia and China have discussed possible linking their bilateral payments systems bypassing the dollar. China's Unionpay system and Russia's domestic payment system, known as Karta Mir, would be linked directly .
More recently leading EU policy circles have echoed such ideas, unprecedented in the post-1944 era. In August, referring to the unilateral US actions to block oil and other trade with Iran, German Foreign Minister Heiko Maas told Handelsblatt, a leading German business daily, "Europe should not allow the U.S. to act over our heads and at our expense. For that reason, it's essential that we strengthen European autonomy by establishing payment channels that are independent of the US, creating a European Monetary Fund and building up an independent SWIFT system ."
A Crack in the Dollar Edifice
How far the EU is willing to defy Washington on the issue of trade with Iran is not yet clear. Most probably Washington via NSA and other means can uncover the trades of the EU-Iran-Russia-China SPV.
In addition to the recent statements from the German Foreign Minister, France is discussing expanding the Iran SPV to create a means of insulating the EU economies from illegal extraterritorial sanctions like the secondary sanctions that punish EU companies doing business in Iran by preventing them from using the dollar or doing business in the USA. French Foreign Ministry spokeswoman, Agnes Von der Muhll, stated that in addition to enabling companies to continue to trade with Iran, that the SPV would, "create an economic sovereignty tool for the European Union beyond this one case. It is therefore a long-term plan that will protect European companies in the future from the effect of illegal extraterritorial sanctions ."
If this will be the case with the emerging EU Special Purpose Vehicle, it will create a gaping crack in the dollar edifice. Referring to the SPV and its implications, Jarrett Blanc, former Obama State Department official involved in negotiating the Iran nuclear agreement noted that, "The payment mechanism move opens the door to a longer-term degradation of US sanctions power."
At present the EU has displayed effusive rhetoric and loud grumbling against unilateral US economic warfare and extraterritorial imposition of sanctions such as those against Russia. Their resolve to potently move to create a genuine alternative to date has been absent. So too is the case so far in other respects for China and Russia. Will the incredibly crass US sanctions war on Iran finally spell the beginning of the end of the dollar domination of the world economy it has held since Bretton Woods in 1945?
My own feeling is that unless the SPV in whatever form utilizes the remarkable technological advantages of certain of the blockchain or ledger technologies similar to the US-based XRP or Ripple, that would enable routing payments across borders in a secure and almost instantaneous way globally, it won't amount to much. It's not that European IT programmers lack the expertise to develop such, and certainly not the Russians. After all one of the leading blockchain companies was created by a Russian-born Canadian named Vitalik Buterin. The Russian Duma is working on new legislation regarding digital currencies, though the Bank of Russia still seems staunchly opposed. The Peoples' Bank of China is rapidly developing and testing a national cryptocurrency, ChinaCoin. Blockchain technologies are widely misunderstood, even in government circles such as the Russian Central Bank that ought to see it is far more than a new "South Sea bubble." The ability of a state-supervised payments system to move value across borders, totally encrypted and secure is the only plausible short-term answer to unilateral sanctions and financial wars until a more civilized order among nations is possible.
F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine "New Eastern Outlook."
https://journal-neo.org/2018/10/23/the-eu-russia-china-plan-to-avert-iran-oil-sanctions/
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Oct 25, 2018 | www.nakedcapitalism.com
This is Naked Capitalism fundraising week. 1584 donors have already invested in our efforts to combat corruption and predatory conduct, particularly in the financial realm. Please join us and participate via our donation page , which shows how to give via check, credit card, debit card, or PayPal. Read about why we're doing this fundraiser and what we've accomplished in the last year, and our current goal, more original reportingBy Nick Cunningham, freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics based in Pittsburgh, PA. Originally published at OilPrice
Warning signs about the slowing of the global economy continue to crop up, and market jitters are taking the steam out of oil prices.
U.S. corporate earnings are no longer sky-high, with a range of factors starting to cut into margins. The U.S.-China trade war has not made headlines in the same way it did a few weeks and months ago, but the reality is that the impact of tariffs is only growing as costs work their way through supply chains.
"These trade tensions are coming home to roost and they are impacting the fundamentals of the market," Tally Leger, equity strategist at OppenheimerFunds, told Reuters . "Thanks to trade tariffs we are facing the headwinds of a stronger dollar, higher oil prices, and rising interest rates."
This week, a slew of disappointing earnings came in. Caterpillar said that tariffs cost the company $40 million in the third quarter, and its share price fell roughly 7.6 percent after it reported its figures. Poor figures also came from 3M and Harley-Davidson , prompting selloffs in their stocks as well. 3M said that tariffs could cost the company $20 million this year, a figure that will balloon to $100 million next year. The results spooked the markets, dragging down equities more broadly. The S&P machinery index was down more than 4 percent in the last two days.
Evidence of a slowdown in China is also becoming apparent. 3M saw sales dip in China, as did PPG Industries, which makes paint and coatings. "We see other signs of slowing in China; the automotive build rates are down significantly and that has a knock-on effect," Michael Roman, CEO of 3M, said. Sales of cars in China fell 12 percent in September from a year earlier.
A strong dollar is another source of trouble for the global economy. Harley-Davidson said that international sales of its motorcycles were hit by a strong greenback. The Federal Reserve has hiked interest rates multiple times in the last year, and is expected to continue on that course.
The array of problems raise the prospect of peak industrial earnings . Strong GDP figures and a massive corporate tax cut temporarily juiced profits, and earnings could fall to more pedestrian levels, particularly as costs start to creep up. Some analysts think the fears of weaker earnings are overblown , but investors have clearly grown worried about the trajectory of the U.S. economy. And it has been the U.S. that has stood out while much of the rest of the world already began to lose steam. The U.S. cannot defy gravity forever.
The housing market is also starting to flash warning signs. For the week ending on October 12, the volume of mortgage applications fell by 7.1 percent . Higher interest rates are clearly being felt in housing, pushing homes out of reach for some prospective buyers.
President Trump recognizes the political threat he faces if interest rate hikes spoil the party. "Every time we do something great, he raises the interest rates," Trump said of Fed Chairman Jerome Powell in an interview with the Wall Street Journal on Tuesday. He "almost looks like he's happy raising interest rates." Trump added that it was "too early to say, but maybe" he regrets nominating Powell. Trump complained that "Obama had zero interest rates."
The economic headwinds are deflating the oil market, where supply tightness has dominated attention for the past few months. Recently, however, some of the supply fears have eased. Saudi Arabia has vowed to cover any supply gap, should it emerge. Inventories continue to rise. The outages in Iran are seem to be less of a concern to traders.
Now demand is becoming a concern. As the global economy slows, particularly in China, consumption could moderate. Brent crude fell by 4 percent on Tuesday amid a broader market selloff.
"The crude oil price action yesterday was clearly impacted by bearish equity markets, falling ten-year interest rates, rising gold prices and a clear risk adverse sentiment," said Bjarne Schieldrop, chief commodities analyst at SEB.
The next steps are unclear. There will be a tension between the supply losses from Iran, which will serve to tighten the oil market, and the supply gains from U.S. shale and Saudi Arabia. The demand side is decidedly more negative, with economic problems potentially forcing a rethink among forecasters.
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Oct 25, 2018 | www.nakedcapitalism.com
Tvc15 , October 23, 2018 at 2:34 pm
I apologize in advance to Lambert for adding this link to his terrific daily water cooler topics, but since Yves and NC were specifically mentioned I thought it would be interesting to share. The video is titled, "Should we trust MMT?" with Joe Bongiovanni. It is 48 minutes long and I only made it about 20 minutes after becoming too annoyed. Yves/NC are mentioned at 18 minutes and 40 seconds in. Joe says he was part of the NC commentariat for years, but was banned due to his thoughts that MMT proponents are misleading and don't "tell the real truth".
Tvc15 , October 23, 2018 at 3:31 pm
Not being an economist or comfortable enough with my understanding of MMT to know if what he was saying had merit. Plus the style and lack of preparation from the interviewer other than wanting her expert to debunk MMT for her right wing followers.
JohnnyGL , October 23, 2018 at 6:45 pm
I'm 30 min in .skip ahead to that point to get to the meat of his discussion.
He keeps repeating that he wants monetary "reform", so that the money system 'works for the people'. But he doesn't say what that change is or why MMT gets it wrong in its understanding of how the system works.
He says "govt doesn't create money by spending". Except, yes, it does. It then chooses to offset that spending later with bond auctions.
He doesn't make a distinction between public and private debt, doesn't distinguish between currency users and issuers. No distinction between stocks and flows. No discussion of capacity constraints, inflation.
He actually fear-mongers about the debt around the 38-39 min mark. Says there's going to be tough times when we get austerity (in addition to environment collapsing).
He talks a lot about how 'the monetary system works', but it's clear to me he doesn't get how the banking system works. I don't think you can understand one without the other very well.
MMT can offer a clear explanation of why:
1) 30 yr treasury bond yields fell rapidly in the 1980s while deficits were exploding.
2) 30 yr treasury bond yields rose in 2000, hitting 7% on the 30 yr at one point, when the government was running surpluses.
3) Japan has a functional currency and economy with massive debts and deficits for many years.Conventional economics has NO explanation for the above phenomenon.
ChristopherJ , October 23, 2018 at 7:33 pm
Cheers Johnny – he's been here before and took umbrage to the NC crew saying that taxation for revenue is obsolete. Don't make me go there.
Said NC doesn't like criticism and Yves had banned him I'd be banned too if I thought that!!
Got some trolls on Youtube worked up. I'll go and finish them off after I do a little more digging on Joe and his Kettle Pond Institute for Debt Free Money.
He had a go at Bill Mitchell on this post recently:
http://bilbo.economicoutlook.net/blog/?p=39889
IMO, Tvc, if you want some relevant stuff, look at how Jimmy Dore (a comedian turned activist) gets his head around MMT – Stephanie Kelton was good and has been linked here and also Chris Hedges
People like JD are very influential and I can see a heightened awareness out there that we are not going to get anywhere now by being polite and civil.
That's how we got here in the first place
Plenue , October 23, 2018 at 8:18 pm
"he's been here before and took umbrage to the NC crew saying that taxation for revenue is obsolete."
It's not just obsolete as in "we don't need to do this anymore". Instead it literally doesn't happen at the federal level.
Yves Smith , October 23, 2018 at 9:36 pm
I don't remember the details, but he was banned for behavior. The problem that so often happens is that the people on losing sides of arguments here (as in not just the moderators but the commentariat does a good job of debunking their claims) is they don't give up and start going into various forms of bad faith argumentation: broken record, straw manning, or just plain getting abusive. Then they try to claim they were banned due to their position, as opposed to how they started carrying on when they couldn't make their case.
ChrisAtRU , October 23, 2018 at 7:19 pm
Joe B. is part of AMI (American Monetary Institute). This installment from NEP should sort you out.
#MMT v #AMI/#PositiveMoney
Yves Smith , October 23, 2018 at 9:43 pm
The AMI people are a real problem, and the worst is that they use enough lingo that sounds MMT-like that they confuse people about MMT. They are also presumptuous as hell. I was part of an Occupy Wall Street group, Alternative Banking. Every week, a group came and kept trying to hijack the discussion to be about Positive Money. They got air time because that's Occupy but everyone else regarded them as an annoyance.
One Sunday, the president of AMI showed up in a suit, uninvited, and expected to be able to take over the group and lecture. The rules were everyone on stack got only 2 or 3 minutes each (I forget how long) and then had to cede the floor. Since everyone else was too polite, I was the one who had to shut him up by blowing up at him and telling him he was totally out of line and had no business abusing the group's rules. That is the only time in my WASPy life I have carried on like that in a public setting. Broke up the meeting, which reconvened only after he left.
ChrisAtRU , October 24, 2018 at 12:22 pm
#Yikes I learned early on to avoid the #PositiveMoney trap, and this anecdote should convince others of the same.
skippy , October 24, 2018 at 12:41 am
All part of the broader sound money camp, not unlike Mr. Volcker's recent NYT piece.
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Oct 25, 2018 | www.zerohedge.com
Authored by Tim Daiss via Oilprice.com,
Despite the almost unprecedented divisive nature of Donald J. Trump's presidency, he is chalking up some impressive foreign policy victories, including finally bringing Beijing to task over its decades long unfair trade practices, stealing of intellectual property rights, and rampant mercantilism that has given its state-run companies unfair trade advantages and as a result seen Western funds transform China to an emerging world power alongside the U.S.
Now, it looks as if Trump's recent tirade against America's European allies over its geopolitically troubling reliance on Russian gas supply may also be bearing fruit. On Tuesday, The Wall Street Journal reported that earlier this month German Chancellor Angela Merkel offered government support to efforts to open up Germany to U.S. gas, in what the report called "a key concession to President Trump as he tries to loosen Russia's grip on Europe's largest energy market."
German concessionOver breakfast earlier this month, Merkel told a small group of German lawmakers that the government had made a decision to co-finance the construction of a $576 million liquefied natural gas (LNG) terminal in northern Germany, people familiar with the development said.
The project had been postponed for at least a decade due to lack of government support, according to reports, but is now being thrust to the center of European-U.S. geopolitics. Though media outlets will mostly spin the development, this is nonetheless a geopolitical and diplomatic win for Trump who lambasted Germany in June over its Nordstream 2 pipeline deal with Russia.
In a televised meeting with reporters and NATO Secretary-General Jens Stoltenberg before a NATO summit in Brussels, Trump said at the time it was "very inappropriate" that the U.S. was paying for European defense against Russia while Germany, the biggest European economy, was supporting gas deals with Moscow.
Both the tone and openness of Trumps' remarks brought scathing rebukes both at home and among EU allies, including most media outlets. However, at the end of the day, it appears that the president made a fair assessment of the situation. Russia, for its part, vehemently denies any nefarious motives over its gas supply contacts with its European customers, though Moscow's actions in the past dictate otherwise.
Moscow also claims that the Nordstream 2 gas pipeline is a purely commercial venture. The $11 billion gas pipeline will stretch some 759 miles (1,222 km), running on the bed of the Baltic Sea from Russian gas fields to Germany, bypassing existing land routes over Ukraine, Poland and Belarus. It would double the existing Nord Stream pipeline's current annual capacity of 55 bcm and is expected to become operational by the end of next year.
Russia, who stands the most to lose not only in terms of regional hegemony, but economically as well, if Germany pushes through with plans to now build as many as three LNG terminals, always points out that Russian pipeline gas is cheaper and will remain cheaper for decades compared to U.S. LNG imports.
While that assessment is correct, what Moscow is missing, or at least not admitting, is a necessary German acquiescence to Washington. Not only does the EU's largest economy need to stay out of Trump's anti-trade cross hairs, it still needs American leadership in both NATO and in Europe as well.
Russian advantagesWithout U.S. leadership in Europe, a vacuum would open that Moscow would try to fill, most likely by more gas supply agreements. However, Russia's gas monopoly in both Germany and in Europe will largely remain intact for several reasons.
First, Russian energy giant Gazprom, which has control over Russia's network of pipelines to Europe, supplies close to 40 percent of Europe's gas needs.
Second, Russia's gas exports to Europe rose 8.1 percent last year to a record level of 193.9 bcm, even amid concerns over Russia's cyber espionage allegations, and its activities in Syria, the Ukraine and other places.
Moreover, Russian gas is indeed as cheap as the country claims and will remain that way for decades. Using a Henry Hub gas price of $2.85/MMBtu as a base, Gazprom recently estimated that adding processing and transportation costs, the price of U.S.-sourced LNG in Europe would reach $6/MMBtu or higher – a steep markup.
Henry Hub gas prices are currently trading at $3.151/MMBtu. Over the last 52-week period U.S. gas has traded between $2.64/MMBtu and $3.82/MMBtu. Russian gas sells for around $5/MMBtu in European markets and could even trade at lower prices in the future as Gazprom removes the commodity's oil price indexation.
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Oct 24, 2018 | oilprice.com
Oil prices are down a bit, but are still close to multi-year highs. That should leave the shale industry flush with cash. However, a long list of US shale companies are still struggling to turn a profit. A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) and the Sightline Institute detail the "alarming volumes of red ink" within the shale industry.
"Even after two and a half years of rising oil prices and growing expectations for improved financial results, a review of 33 publicly traded oil and gas fracking companies shows the companies posting negative free cash flows through June," the report's authors write. The 33 small and medium-sized drillers posted a combined $3.9 billion in negative cash flow in the first half of 2018.
The glaring problem with the poor financial results is that 2018 was supposed to be the year that the shale industry finally turned a corner. Earlier this year, the International Energy Agency painted a rosy portrait of US shale, arguing in a report that "higher prices and operational improvements are putting the US shale sector on track to achieve positive free cash flow in 2018 for the first time ever."
The improved outlook came after years of mounting debt and negative cash flow. The IEA estimates that the US shale industry generated cumulative negative free cash flow of over $200 billion between 2010 and 2014. The oil market downturn that began in 2014 was supposed to have changed profligate spending, pushing out inefficient companies and leaving the sector as a whole much leaner and healthier.
"Current trends suggest that the shale industry as a whole may finally turn a profit in 2018, although downside risks remain," the IEA wrote in July. " Several companies expect positive free cash flow based on an assumed oil price well below the levels seen so far in 2018 and there are clear indications that bond markets and banks are taking a more positive attitude to the sector, following encouraging financial results for the first quarter."
But the warning signs have been clear for some time. The Wall Street Journal reported in August that the second quarter was a disappointment. The WSJ analyzed 50 companies, finding that they spent a combined $2 billion more than they generated in the second quarter.
Read more on Oilprice.com: What Killed The Oil Price Rally?
The new report from IEEFA and the Sightline Institute add more detail the industry's recent performance. Only seven out of the 33 companies analyzed in the report had positive cash flow in the first half of the year, and the whole group burned through a combined $5 billion in cash reserves over that time period.
Even more remarkable is the fact that the negative financials come amidst a production boom. The US continues to break production records week after week, and at over 11 million barrels per day, the US could soon become the world's largest oil producer. Analysts differ over the trajectory of shale, but they only argue over how fast output will grow.
Yet, even as drillers extract ever greater volumes of oil from the ground, they still are not turning a profit. "To outward appearances, the US oil and gas industry is in the midst of a decade-long boom," IEEFA and the Sightline Institute write in their report. However, "America's fracking boom has been a world-class bust."
The ongoing struggles raises questions about the long-term. If the industry is still not profitable – after a decade of drilling, after major efficiency improvements since 2014, and after a sharp rebound in oil prices – when will it ever be profitable? Is there something fundamentally problematic about the nature of shale drilling, which suffers from steep decline rates over relatively short periods of time and requires constant spending and drilling to maintain?
Read more on Oilprice.com: Oil's $133 Billion Black Market
Third quarter results will start trickling in over the next few days and weeks, which should provide more clues into the shale industry's health. There is even more pressure on drillers to post profits because the third quarter saw much higher oil prices.
"Until the industry as a whole improves, producing both sustained profits and consistently positive cash flows, careful investors would be wise to view fracking companies as speculative investments," the authors of the report concluded.
This article was originally published on Oilprice.com
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Oct 24, 2018 | peakoilbarrel.com
Hickory x Ignored says: 10/22/2018 at 9:49 pm
Any guess what the price of crude would be today if we had no fracking in N. America?ProPoly x Ignored says: 10/23/2018 at 6:36 am
Wild guess is all I've got, but I'm saying $142 (and much lower economic growth over the past 9 yrs- maybe even flat averaged for the whole period).
Any other speculations on this?USA LTO is ~7.5 million bpd. That exceeds global spare capacity over demand as-is today by at least four times. So if the world was still trying to consume what it is today, we would be several million short and would have been short by seven figures for several years.Dennis Coyne x Ignored says: 10/23/2018 at 10:26 amI think we would have found out if there really are any huge but uneconomical fields out there by now as the panic from that set in a few years ago. A shortage on that scale means arbitrary prices pending demand cap/destruction.
US tight oil output was about 6200 kb/d in August 2018 according to the EIA, not that the DPR includes oil from the region of tight oil plays that is conventional oil, also it is a model that is not very good so I ignore the DPR .Energy News x Ignored says: 10/22/2018 at 1:12 pmWAG on oil price with zero LTO output is $120/b in 2017$, plus or minus $20/b.
Canada (offshore), Hebron is expected to produce around 150,000 barrels a day, from about 40,000 barrels a day now.George Kaplan x Ignored says: 10/23/2018 at 1:28 am2018-10-22 (The Globe and Mail) It's been one year since ExxonMobil's long-awaited Hebron platform off the southeast coast of Newfoundland started pumping crude from its first well. It took four years, $14 billion, 132,000 cubic metres of concrete and a few thousand workers to bring it online, and so far, it's churning out about 40,000 barrels a day, with the crude bound for markets in the U.S. Gulf states, Europe and much of eastern North America. Eventually, Hebron will drill 20 to 30 wells, and is expected to produce around 150,000 barrels a day.
With an expected reserve of 700 million barrels of recoverable crude, the Hebron project is expected to operate for 30 years. As Newfoundland's fourth offshore platform, it will play a key role in the province's plan to double overall production to more than 650,000 barrels a day by 2030.
https://www.theglobeandmail.com/business/article-why-hebron-has-a-leg-up-on-albertas-oil-sands/Hebron is already at 70 kbpd and has been for a few months. I thinks its expected annual average for oil only is 135 and it will take a year or so to get there as the coming wells will be less productive that the first ones. In the mean time the three other platforms are in decline (Terra Nova was originally due to be taken off line next year – not sure what the latest thinking is). They dropped about 35 kbpd last year but that may accelerate as Hibernia is coming off a secondary plateau.Energy News x Ignored says: 10/23/2018 at 6:18 amYes a more realistic impression of the situation than just reading the article
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Oct 24, 2018 | peakoilbarrel.com
ProPoly x Ignored says: 10/19/2018 at 9:22 am
OPEC is, for reasons many expected (involuntary declines in Venezuela and elsewhere), having difficulty delivering on their promised output hike.Guym x Ignored says: 10/19/2018 at 11:30 amYeah, that's going to get a lot worse. It's counting Iran production, and not what it can sell. A lot in floating storage, and being stored close to China and elsewhere. US is the only one with an increase, and that increase is on a hiatus until new pipelines come on, regardless of the EIA overstated production numbers. So, we would be short before any demand increase, or non-OPEC declines. But, never worry, as IEA says peak oil is just a figment of our imaginationSurvivalist x Ignored says: 10/21/2018 at 12:40 am"The Saudi government said it would take another month to complete a full investigation, which would be overseen by Mohammed.Watcher x Ignored says: 10/21/2018 at 2:51 am
Mohammad will find that Mohammad had nothing to do with the issue."Perhaps an anti-KSA Boycott, Divestment, Sanctions (BDS) Movement will get started. Consumers and competitors might find the idea appealing.
Nice ideas for new KSA flag designs at this link here (I most like the chainsaw instead of the current sword design- reminds me of Scarface- Mo Bin Clownstick™ is about as legitimate and sophisticated as a coke runner):
https://www.moonofalabama.org/2018/10/saudis-admit-khashoggi-murder.htmlThe Sultan is playing his hand well (drip drip drip Turkish Int. leaks to the news with an intensifying puke factor- one recent read that Khashoggi was dismembered alive and dissolved in acid). Has Mo Bin Clownstick™ met his match?
https://lobelog.com/the-geopolitics-of-the-khashoggi-murder/I can't help but wonder about all those guys he threw into a hotel prison and shook down for billions of dollars. They can afford a lot of media with the money they had remaining.Survivalist x Ignored says: 10/21/2018 at 5:45 pmThe House of Saud appears to be fragmenting quite severely.Energy News x Ignored says: 10/20/2018 at 2:22 pm
Saudi Arabia's missing princes
https://www.bbc.com/news/magazine-40926963The last article he wrote before his deathLightsout x Ignored says: 10/21/2018 at 3:43 amJamal Khashoggi: What the Arab world needs most is free expression
By Jamal Khashoggi – October 17, 2018 – Washington Post
https://www.washingtonpost.com/amphtml/opinions/global-opinions/jamal-khashoggi-what-the-arab-world-needs-most-is-free-expression/2018/10/17/adfc8c44-d21d-11e8-8c22-fa2ef74bd6d6_story.html ?China demand for diesel only appears to be heading in one direction. Should please Watcher!Dennis Coyne x Ignored says: 10/22/2018 at 1:59 pmhttps://mobile.twitter.com/PDChina/status/1053843063003525120?p=v
Shallow Sand,Energy News x Ignored says: 10/22/2018 at 5:27 amNo, not familiar, did you mean article linked below?
http://ieefa.org/ieefa-u-s-more-red-flags-on-fracking-focused-companies/
Link to full report
http://ieefa.org/wp-content/uploads/2018/10/Red-Flags-on-U.S.-Fracking_October-2018.pdf
From the report:
The $3.9 billion in negative cash flows in the first two quarters of 2018 represented an improvement over the first halves of 2016 and 2017, when red ink totaled $11 billion and $7.2 billion, respectively.These 33 companies have had positive net income since 2017Q4 and long term debt reached its peak for these companies in 2018Q1 at 138 billion with a gradual decrease to 126 billion in 2018Q2. As prices continue to rise debt will gradually be paid down,
When I look at that report I see an improving situation for these companies. I would prefer it if they broke the data into two groups, oil focused and natural gas focused companies. There has been a better recovery in oil prices than natural gas prices though it looks like we might see a spike in natural gas prices if we have a colder than normal winter.
India's crude oil imports, the average for the first 9 months of 2018 is up +279 kb/day compared to first 9 months of 2017Energy News x Ignored says: 10/22/2018 at 5:57 am
Seasonal chart: https://pbs.twimg.com/media/DqGtWDoX4AAYDwJ.jpg
India's crude oil refinery processing, the average for the first 9 months of 2018 is up +231 kb/day compared to first 9 months of 2017
Seasonal chart: https://pbs.twimg.com/media/DqGttFOW4AAr0Uy.jpgSaudi Arabia spare capacity, there seems to be a consensus that Saudi Arabia can produce 11 million b/day. I guess that producing above that level would be subject to maintenance, outages and natural decline? (Also I'm guessing that the Khurais field expansion might not be ready until later in 2019?)Energy News x Ignored says: 10/22/2018 at 10:53 am2018-10-22 Saudi Arabia Energy Minister Al Falih speaks to TASS
Saudi Arabia now in October is producing 10.7 million b/day.
And is likely to go up, in the near future, to 11 million b/day on a steady basis.
Our total production capacity is currently 12 million b/day.
And that could be increased to 13 million b/day with an investment of $20 to $30 billion.
Interview with TASS: http://tass.com/economy/1026924Reuters summary of interview
https://www.reuters.com/article/us-oil-opec-saudi/saudi-arabia-has-no-intention-of-1973-oil-embargo-replay-tass-idUSKCN1MW0JUExxon in Brazil holds potential 41 billion barrels based on preliminary studiesGuyM x Ignored says: 10/22/2018 at 12:41 pm2018-10-18 RIO DE JANEIRO and HOUSTON (Bloomberg) -- In a single year, Exxon Mobil has gone from being a tiny bit player in Brazil to the second-largest holder of oil exploration acreage, trailing only state-controlled Petroleo Brasileiro.
The last 24 concessions the U.S. giant bought with its partners may hold 41 billion bbl, based on preliminary studies, according to Eliane Petersohn, a superintendent at Brazil's National Petroleum Agency, or ANP. While the existence of the oil still needs to be confirmed, along with whether its extraction will be cost-effective, it's a huge figure -- almost double Exxon's current reserves.
The Irving, Texas-based company is betting big in particular on Brazil's offshore, where a single block is currently producing more than all of Colombia and profitability compares to the best U.S. tight oil, according to Decio Oddone, the head of ANP.
It should take six to eight years for oil to start flowing if economically viable deposits are discovered, according to ANP.
https://www.worldoil.com/news/2018/10/18/exxon-makes-major-bet-on-brazil-as-petrobras-eases-its-gripOther than the plethora of constraints in the Permian, I think this is going to develop into a bigger obstacle of shale growth for awhile. Especially, for those mostly Permian players for the next four quarters.
https://oilprice.com/Energy/Energy-General/US-Shale-Has-A-Glaring-Problem.htmlAlmost 30% of gross production may go to service debt.
https://www.oilystuffblog.com/single-post/2018/10/19/Deep-The-DenialI think huge shale growth is possible, but only way north of $100 a barrel. At the current price, it is close to max.
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Oct 23, 2018 | community.oilprice.com
Mike Shellman writes again. No need for me to elaborate much on his persistent and very much needed gentle nudgings about debts coming due in the U.S. Shale Oil industry.mthebold , 10/20/2018 04:47 AMIgnoring debt doesn't make it go away < cough > Venezuela < cough >
By year end 2019 I firmly believe the US LTO industry will then be paying over $20B annually in interest on long term debt. ...
In other words, at the moment about 29% of total LTO production in America is used just to pay debt interest.
Using its own "breakeven" prices the US shale oil industry will ultimately have to produce 9G BO of oil, as much as it has already produced in 10 years...just to pay its total long term debt back. Essentially the only chance it has of doing that is if oil prices go to $125 a barrel, and stays there for a very long time.
On 10/20/2018 at 12:45 AM, Dan Warnick said:Dan Warnick Dan Warnick + 640 DWSimple, really simple: OPM (other people's money). And zero % interest rates. Payback is going to be hell.
But whose?
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Oct 23, 2018 | turcopolier.typepad.com
"The Saudis say they are countering Iran, which backs the Houthis. But the Houthis are an indigenous group with legitimate grievances, and the war has only enhanced Iranian influence . As has been obvious for some time, the only solution is a negotiated settlement. But the Saudis have done their best to sabotage a U.N.-led peace process. Talks planned for Geneva in September failed when Saudi leaders would not grant safe travel guarantees to Houthi leaders." Bezos' editorial board at WaPo
---------------
Beneath the largely specious argument that Saudi Arabia has the US by the cojones economically lies the true factor that has caused the two countries to be glued together.
This factor is the Israeli success in convincing the US government, and more importantly, the American people, that Iran is a deadly enemy, a menace to the entire world, a reincarnation of Nazi Germany, and that Saudi Arabia, a country dedicated to medieval methods of operation, is an indispensable ally in a struggle to save the world from Iran. The successful effort to convince us of the reality of the Iranian menace reflects the previous successful campaign to convince us all that Iraq was also Nazi Germany come again.
The Iran information operation was probably conceived at the Moshe Dayan Center or some other Israeli think tank. and then passed on in the form of learned papers and conferences to the Foreign Ministry, the Mossad and the IDF. After adoption as government policy the Foreign ministry and Zionist organizations closely linked to media ownership in the US and Europe were tasked for dissemination of the propaganda themes involved. This has been a brilliantly executed plan. The obvious fact that Iran is not presently a threat to the US has had little effect in countering this propaganda achievement.
Last Saturday morning, the Philadelphia based commentator Michael Smerconish openly asked on his popular talk show why it is that US policy favors the Sunni Muslims over the Shia. i.e., Saudi Arabia over Iran. To hear that was for me a first. This was an obvious defiance of the received wisdom of the age. I can only hope that the man does not lose his show.
It is a great irony that the barbaric murder of a personally rather unpleasant but defiant exiled journalist has caused re-examination of the basis and wisdom of giving strategic protection to a family run dictatorship. pl
Posted at 09:32 AM in Current Affairs , Media , Middle East , Saudi Arabia | Permalink | 3 Comment
Erdogan called the Khashoggi murder brutal and premeditated, but did not reveal any damning audio or video evidence. Elijah Magnier surmises Erdogan extracted a heavy payment from both the Saudis and the Americans in exchange for his relative silence. We shall see if the economic pressure on Turkey dissipates in the coming days and weeks.Onslaw , 5 hours agoIt appears the central pillar of the Borg creed, so eloquently and precisely described here by Colonel Lang, will survive this bout of heretical thinking. Will journalists and other members of the press be able to keep challenging the Borg? With Trump so thoroughly assimilated into the Borg, will the "resistance" keep the issue of Saudi perfidy alive? I have my doubts. The Israeli information operations machine is a juggernaut. Few have the stamina and will to resist it. But it is a fight worth fighting.
Too little, too late to derail this Zioconned merdias campaign. Soon enough kashoggi will be forgotten and the looney toons will be back in force...jnewman , 6 hours agoThere are some interesting threads to chew on in this:
https://off-guardian.org/20...
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Oct 23, 2018 | www.unz.com
Alistair , says: October 20, 2018 at 5:24 pm GMT
The overplayed drama of Mr. Khashoggi assassination is going to be used by the American Oil Cartel to control the Saudis Oil output.jilles dykstra , says: October 21, 2018 at 7:39 am GMTIt's quite unusual to see such unanimous anti-Saudi reactions from the American political class for the assassination of Mr. Khashoggi – who was just a part-time journalist living in U.S – he was not even an American citizen , so, it's quite unusual because the same political class remained muted about the Saudis involvement with ISIS, the bombing and starvation of civilians in Yemen and destruction of Syria, and of course the Saudis involvement in 9/11 terrorist attack in which 3000 American citizens have perished in New York, in the heart of America.
So, we must be a bit skeptical about the motive of the American Political Class, as this again could be just about the OIL Business, but this time around the objective is to help the American Oil producers as opposed to Oil consumers – with 13.8% of the global daily Oil production, the US has lately become the world top producer of Crude Oil, albeit, an expensive Oil which is extracted by Fracking method that requires high Oil price above $70 to remain competitive in the global Oil market – by simultaneously sanctioning Iran, Venezuela, and the potential sanction of Saudi Arabia from exporting its Oil, the Trump Administration not only reduces the Global Oil supply which will certainly lead to the rise of Oil price, but also it lowers demand for the US Dollar-Greenback in the global oil market which could lead to subtle but steady devaluation of the US dollar.
And perhaps that's what Trump Administration was really aiming for all along; a significant decline of the US Dollar Index and the rise of price of Oil which certainly pleases the American Oil Cartel, though at the expense of Iran, Saudi Arabia and Venezuela – all of which are under some form of U.S sanctions.
However gruesome, Mr. Khashoggi's assassination is going to be used by the Trump Administration to help the American Oil Cartel by controlling the Saudi Oil output, hence, to raise the price of Oil and to lower demand for US dollar which is the currency of the global Oil trade.
@Alistair History has its weird twists.Alfred , says: October 21, 2018 at 7:53 am GMT
Early in WWII FDR was reported that USA oil would be depleted in thirty years time.
So FDR sent Harold L Ickes to Saudi Arabia,where at the end of 1944 the country was made the USA's main oil supplier.
FDR entertained the then Saud in early 1945 on the cruiser Quincy, laying in the Bitter Lakes near the Suez Canal.
This Saud and his entourage had never seen a ship before, in any case had never been on board such a ship.In his last speech to Congress, seated, FDR did not follow what had been written for him, but remarked 'that ten minutes with Saud taught him more about zionism than hundreds of letters of USA rabbi's.
These words do not seem to be in the official record, but one of the speech writers, Sherwood, quotes them in his book.
Robert E. Sherwood, 'Roosevelt und Hopkins', 1950, Hamburg (Roosevelt and Hopkins, New York, 1948)
If FDR also said to Congress that he would limit jewish migration to Palestine, do not now remember, but the intention existed.
A few weeks later FDR died, Sherwood comments on on some curious aspects of FDR's death, such as that the body was cremated in or near Warm Springs, and that the USA people were never informed that the coffin going from Warm Springs to Washington just contained an urn with ashes.At present the USA does not seem to need Saudi oil.
If this causes the asserted cooperation between Saudi Arabia and Israel ?@Harris Chandler Now it has made alliances with Israel and between them the tail wags the dogThe Saudi Royal family and the governments of Israel have always been in cahoots. They both despise and fear secular governments that are not under their own control in the Middle East. Witness the fear and dread of both of them of president Nasser in the 1960′s, for example.
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Oct 22, 2018 | www.moonofalabama.org
Sid2 , Oct 22, 2018 3:43:55 PM | linkThe one question that mattersKhashoggi's murder has transcended questions of foreign policy shaped by values of democracy, free speech, and due process. The Khashoggi killing raises questions of cold, unblinking realpolitik.
Three weeks into this affair and with the overwhelming evidence from the Turkish inquiry and intelligence from US and British services, world leaders have only one question to ask themselves: is Saudi Arabia safe in the crown prince's hands?
The kingdom is not Libya under Gaddafi. Nor is it Syria under Bashar al-Assad. It is the world's largest oil producer. It is the region's richest nation.
For better or worse (mainly worse), it is the key Arab state. In the wrong hands, Saudi Arabia has already proved that it can determine the fate of presidents in Egypt, kidnap prime ministers from Lebanon, attempt coups in Qatar and, when that fails, blockade it. It can start wars in Yemen.
The man who runs such a country is therefore a vital strategic Western interest. It is important that he is mentally stable.
https://www.middleeasteye.net/columns/saudi-arabia-safe-mohammed-bin-salmans-hands-1784595453
Note the interesting graph with this piece on MbS's behavior in the short time he's been promoted.
Greece , Oct 22, 2018 3:48:58 PM | link
karlof1 , Oct 22, 2018 4:11:25 PM | linkReuters How the man behind Khashoggi murder ran the killing via SkypeHe ran social media for Saudi Arabia's crown prince. He masterminded the arrest of hundreds of his country's elite. He detained a Lebanese prime minister. And, according to two intelligence sources, he ran journalist Jamal Khashoggi's brutal killing at the Saudi consulate in Istanbul by giving orders over Skype.Posted by: b | Oct 22, 2018 2:45:08 PM | 47
So this guy allegedly working for Public Relations (social media) & security (managing lists with arrests) for Crown Prince MbS was making absolutely sure that everyone would be able to follow his actions (attributed to MbS of course). We (the people) were getting fed minute details of suspects and treatment (during/after the coop in Saudi Arabia) even from the Alex Jones conspiracy show (been publicly ousted as Fake-News and Mossad ops though since he was attributing Las Vegas massacre to either MbS or rivals that tried to allegedly assassinate MbS in Vegas hinting at Iran )
Lo and behold! Las Vegas shooting October 1st 2017. Khassogi murder October 1st 2018! .
Both allegedly MbS involved! Ain't these all suspicious? There is no heaven or hell there is only the.... (let me hear it - The Israeli Intel Services Sing-Along) sing it with me.... (come on)
Obamabots trying to reverse history will find it hard to do. That they're trying is significant. I've seen a few reports musing SKYPE was used during the brief interrogation. If true, then all advanced intel services will know its content.bjd , Oct 22, 2018 4:46:37 PM | linkPeter AU 1 @55--
Yes, I was aware of that. TASS reports : "Deputy Foreign Minister Mikhail Bogdanov told reporters on Monday.
"'Yes, we [had] visits, our interministerial top-level delegation went, there were meetings,' the diplomat said in response to the question about whether Russia still plans to attend the summit in the wake of Khashoggi's murder."
Russian and Saudi cooperation in the energy field trumps other events. China will also attend.
I don't know. I'm having these waves of suspicions. I wouldn't put the current narrative past MbS at all, that's for sure. And he deserves everything he currently gets -- foremost over Yemen. But -- be honest -- this all seems a bit too convenient for Erdogan, and at a too convenient time. Id est, a too in convenient time for his opponent, that was until two weeks ago holding Erdogan's ambitious head in a bucket of water -- Trump. With the midterms only a few weeks away, look who's holding whose head in that bucket, who is holding whose feet to the fire.Anton Worter , Oct 22, 2018 4:50:52 PM | linkIf this is truly a coincidence, I'm beginning to believe Allah is Turkish. But at the moment I cannot believe someone has so much luck like Erdogan has. He stands to gain in the short term, in the long term, tactically and (geo)strategically. From just a stroke of luck, that came to his country. That came to him, for which he didn't even need to get out of his chair?
Maybe we're asking the wrong questions. Are factions within the CIA at work, setting up elaborate plans with the ambitious Erdogan to get rid of Trump and MbS, for the sake of what... strategically increasingly important depleting oil fields? ... a better position to strangle Iran?
@6Scotch Bingeington , Oct 22, 2018 5:00:53 PM | linkErdogan wants to be New Caliph. That's all this is. Caliphate wars. MbS is Erdogan's blood enemy. MbS-IL-US is shading the New Caliphate! Duhh! Erdogan doesn't want a Kurdistan martyr in Khasshogi either. He wants to totally controlled-dissent The Parable of a Man Walked Into an Embassy New Revelations. Erdogan wants to be supplicated by US and IL for His permission to transit Syria and Kurdistan. Erdogan wants to be Putin's go-to guy in Ankara for Assad.
This total psyop, and every piece of 'evidence' in it, is coming from Ankara Intel operatives! Khashoggi could has as easily been re-dressed in a thwab, then frog-marched under the cameras into the waiting Mercedes. His discarded clothes could have been paraded in front of Ankara's street cameras by Turks.
Hey, they had two weeks of preparation. You can make a full length Blair Witchcraft in two weeks.
Cui bono? Erdogan, Iran Oil transit and EU/RU weapons systems dealers. That's why Germany has jumped on the bandwagon, lol. Expect the whole krew to toe the line, and Putin left with a jumbled mess on the chessboard.
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B, amazing work again, thrilling to read. Though this is a yet unfolding story, you manage to write about it in a profound way.karlof1 , Oct 22, 2018 6:02:10 PM | linkRegarding the manner in which MbS operates here and subsequently reacts towards other people's reactions is certainly telling, at least to me. First off, the coercion – "come back or else " – flat out. The ruthlessness vis-à-vis the victim, the complete disregard for that individual's life. The crassness of the methods applied. The carelessness concerning the risks and the half-assed way in which this exercise, by and large, was carried out. Once word got out, being utterly taken by surprise that this murder should draw so much attention and should shock and outrage people – like, at all! Followed by, of course, a sudden switch from ever-so-charming to furious rage.
That's textbook psychopathic behavior. MbS is a psychopath. I don't mean that as an insult, but as the descriptive term and category that it is. It was already palpable in all the other incidents, which was duly pointed out here by people at the Moon. To me, it's also in his eyes. But the thing is, as such, MbS is a befitting representation of his country. The Kingdom of Saudi Arabia, the way that it works, how it's organized, its history, its outlook on the world – it's the equivalent among states of a psychopath. I certainly agree, the sooner MbS gets kicked off the stage, the better for them and for us. But he'll be replaced and SA will still be the equivalent among states of a psychopath – and act accordingly. There's much more to be done than just put an end to MbS' games. In that vein, I'd be appalled if Russia were to seriously consider sucking up to SA should they break away from the US orbit.
On another aspect: I don't really see how this would seriously upset Trump. Sure, it's a huge challenge and a lot of accommodating will have to be done, which is always annoying. But if Congress were to take action, why shouldn't he give in and play along?At long last, Valdai Club questions about Saudi-Russian relations were added to transcript. Here is the relevant passage, which mostly repeats what was posted from news stories:Pft , Oct 22, 2018 6:08:19 PM | linkPutin: "If someone understands it and believes that a murder has been committed, then I hope that some evidence will be presented and we will adopt relevant decisions based on this evidence. This gives me a pretext to say something else.
"From time to time, there are steps taken against Russia and even sanctions are imposed, as I have repeatedly said, on the basis of flimsy excuses and pretexts. They groundlessly claim that we have allegedly used chemical weapons, even though, incidentally, we have destroyed our chemical weapons, while the United States has failed to do so despite the obligation to that effect it assumed.
"So, there is no proof against Russia but steps are being taken. According to claims, the murder was committed in Istanbul, but no steps are being taken.
"Uniform approaches to problems of this kind should be sorted. To reiterate: Our policy towards Saudi Arabia has evolved over a long period of time, over many years. Of course, it is a misfortune that a man has disappeared, but we must understand what has really happened."
The policy investment "over many years" isn't one Russia will suddenly jettison. Yemen is obviously a much greater tragedy but Russian-Saudi relations haven't suffered -- Geopolitics creates strange bed-fellows. Russia's international relations are built upon fundamental principles of International Law of which the sanctity of Sovereignty reigns supreme. As much as we may dislike it, the Khashoggi Affair falls within the realm of an internal Saudi affair although it occurred in Turkey; thus, it's up to Saudis to solve. Putin's pointing to the Double Standards relates to that reality. Would Russia sell weapons for Saudi to use on Yemen? I have no idea, although I'd like to think it wouldn't. It's quite possible some new inroads have opened for Russian diplomacy, but they remain hidden from public.
Khashoggi has ties to Lockheed Martin through his late uncle Adnan Khashoggi, who used to be one of Saudi Arabia's most powerful weapons dealers. MBS is considering buying Russias S-400 instead of Lockheed Martins 15 billion THADD. Interesting fact but unlikely to be important IMOfast freddy , Oct 22, 2018 9:50:02 PM | linkThis Khashoggi story never lasts more than a week in MSM unless there is a psyops operation in place by the Deep State. Media saturation and persistence is the key to any operation. Inconvenient truths are reported and then dropped and forgotten. Lies without evidence are repeated constantly until they are accepted as truths, in some cases inconsequential truths that are convenient serve the same purpose
So regardless of the truth of Khashoggis disappearance there is a Deep State operation in place, the evidence is in the media saturation and persistence and bipartisan support. Its purpose may be as simple as coercing MBS to buy more weapons. Perhaps it may even be that a replacement for MBS even more pro-Israel has been found. Israels influence on the media is not neglible. This saturation coverage does not happen without them supporting it or at least not using their influence to suppress it Another more disturbing possibility should MBS stand his ground , is conditioning the people to accept MBS as the new OBL and Saudis Wahhabis as the new AQ and repeating history.
There simply is no way to know. Just have to watch and see but whatever it is probably wont be good
The Saudi bmobing - with US bmobs - of the Yemeni School Bus Full of Babies was truly and completely horrifying - rotten and utterly detestable by anyone's standards (except for Trump, Hillary, Bill, Bolton, Graham, Biden, All the Bush's, Rick Scott and etc.)m , Oct 22, 2018 10:03:51 PM | linkAnd Newsworthy. But it was, instead, crickets chirping in that deep east Texas nighttime.
Khashoggi is news, because they say its news. They make it news. Why? BC it fits an agenda. Somebody wants MBS out.
The bigger play here is bringing turkey back into the western fold. Lose turkey you lose the whole middle east. also, a secondary play - guardianship of Mecca. SA an unreliable partner under mbs.
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Oct 22, 2018 | www.zerohedge.com
In excerpts from the interview released by CNN , Jones asked Kushner whether it is wise to trust MbS to oversee Saudi Arabia's investigation, given that he's also the prime suspect. Kushner, who, in the absence of a US ambassador to KSA, has been handling the kingdom's relationship with the Trump administration directly via his friendship with MbS, said the US will examine facts from "multiple places."
Jones: Do you trust the Saudis to investigate themselves?
Kushner: We're getting facts in from multiple places. Once those facts come in, the Secretary of State will work with our national security team to help us determine what we want to believe, and what we think is credible, and what we think is not credible.
Jones: Do you see anything that seems deceptive.
Kushner: I see things that seem deceptive every day I see them in the Middle East and in Washington. We have our eyes wide open. The president is looking out for America's strategic interests...the president is fully committed to doing that."
Given their close relationship, media reports have implied that Kushner has been acting as an unofficial liaison of sorts to MbS since the crisis began (it has also been reported that the Crown Prince initially didn't understand why the backlash to Khashoggi's murder had been so intense). In light of this, Jones asked Kushner what advice, if any, he has given the Saudi royal during their conversations (to be sure, MbS has also spoken with President Trump directly on the phone). In a story published over the weekend, the Washington Post reported that Trump has privately expressed doubts about MbS's story, and has also lamented his close ties with Kushner, fearing they could be a liability. But during a phone interview, the president was somewhat more sanguine, pointing out that both Kushner and MbS are relatively young for the amount of power they wield.
"They're two young guys. Jared doesn't know him well or anything. They are just two young people. They are the same age. They like each other, I believe," Trump said.
Kushner's interview followed reports published Sunday night that MbS tried to convince Khashoggi to return to Riyadh during a brief phone call with the journalist after he had been detained at the Saudi consulate Khashoggi refused, reportedly because he feared that he would be killed, and was subsequently killed anyway. Adding another macabre twist to the saga of Khashoggi's murder and dismemberment, Surveillance footage released Monday showed one of the Saudi operatives leaving the consulate wearing Khashoggi's clothes with the suspected intent of serving as a "decoy" to bolster the kingdom's claims that Khashoggi had left after receiving his papers. It was later reported that Turkish investigators had found an abandoned car that once belonged to the Saudi consulate.
We imagine we'll be hearing more about these strange developments on Tuesday, when Turkish President Erdogan is expected to deliver a report on the killings.
ludwigvmises , 2 hours ago link
Yippie21 , 2 hours ago linkKushner is another boarding school educated snobbish little child of rich parents.
ExpatNL , 2 hours ago linkWhy is "everyone" so ******* upset about the Muslim Brothernood, green-card holding journalist being offed? I mean, folks in the M.E. are murdered all the ******* time. Journalists are not immune. Especially ones that are actually agitators that write ****. This whole thing is ********. How do I know? Just look at the reactions. Media everywhere to level 11.. What about Stormy Daniels? The Playboy bunny? Ford? Scandal # 42, 43, 44, 45, 46, 47 , etc??
Saudis murder folks . Turkey murders folks. Turkey crushed a coup a couple years ago and 60K folks disappeared. I don't remember the US media demanding Obama " do something" about Turkey immediately, do you? Seriously.
headless blogger , 2 hours ago linkUSA has killed over 30 million INNOCENT human beings around the globe since 1950.
ExpatNL , 2 hours ago linktrue. And I'm sure the CIA gets in on some very disgusting killings as well. Along with the Mossad and Mi6 (2 groups that get little attention but should).
Byte Me , 2 hours ago linkKushner to Ivanka,.
Your father is a **** for brains,wanker.
Ivanka, I know that but we are part of the chosen now,. and he soon will be dead.
We have chance to rule the USA, Jared,
Bibi told me ./
" Jones: Do you trust the Saudis to investigate themselves?"
johnnycanuck , 2 hours ago link"Kushner: We're getting facts in from multiple places. Once those facts come in, the Secretary of State will work with our national security team to help us determine what we want to believe , and what we think is credible, and what we think is not credible."
Jones: Do you see anything that seems deceptive.
Kushner:
NO
I (bullshitbullshitbullshit) see things that seem deceptive every day I see them in the Middle East and in Washington. We have our eyes wide open (bullshitbullshitbullshit. The president is looking out for America's strategic interests...the president is fully committed to hanging me out to dry . After that - ho noze bubelah ."
(Can I sukie suckie now black master?
FIFT
All will be well when the head honcho sends this YidTwat to be Royal Commissioner in either Greenlnd or Antarctica.
NuYawkFrankie , 3 hours ago linkHave you heard the latest about the Peace Deal of All Times Kushner has been working on? And going to deliver any day now... soon...really soon.
After all this time what it comes down to is a leveraged buyout proposal. The buyout is cash for Palestinians to give in to what Israel's far right wants, give up their land and get the hell out of Dodge if they can't live with the remnants.. The leverage is Trump trying to starve them out and Kushner's friends in the IDF Palace Guard at the ready to pile drive anyone who resists.
" All this nonsense depends on the largesse of Saudi Arabia – whose bungling crown prince appears to be arguing with his kingly father, who does not want to abandon the original Saudi initiative for a Palestinian state with Jerusalem as its capital – "
Some deal, some master planner.
Hope Copy , 3 hours ago linkKUSHNER --->> LOCK HIM UP!!!
Jared Kushner was communicating with Saudi Crown Prince Mohammed bin Salman (MBS) prior to and after the Saudis brutally murdered Washington-based journalist Jamal Khashoggi
http://www.intrepidreport.com/archives/25361
Wayne Madsen - the author of the above - also reckons it was Kushner that supplied the Saudi Prince HIT LIST to MbS a few months back - to clear the deck for "closer co-operation" with ISISrael
rlouis , 3 hours ago linkUnfortunately, the only crime here is that the Turks have no decent respect for the consular as sovereign territory, thus they are revoking Saudi rights and are operating as an act of territorial aggression as the US has done to the Russians. Civility is braking down and one has to ask one's self, for who's benefit.. The Turks are not going to benefit. Khashoggi was going to die one way or another, so he made a show of it.. Spy vs. spy.
The USA has in the past just 'droned' them (as Hilterary was eager to reveal).
DjangoCat , 2 hours ago linkQuestions I would like to hear:
Was Khashoggi a CIA agent?
Did he betray Mbs and Saudi family?
rlouis , 1 hour ago link"Did he betray MBS and Saudi family.."
Perhaps you missed the regime change that happened last year, a globally significant event, by the way.
Khashoggi was on the wrong side of that, and has stayed away from SA ever since, sniping from the sidelines. MBS has lots of reasons not to like him.
However, his power base was removed when MBS hung his mates up by their heels in the Hilton Hotel. He was not worth bothering with. So why was he killed then?
Possibly, he was not killed, only used as a foil to bring down hell fire and damnation on MBS. He probably walked out the back, just as the SA said when this first came out. Now Marketwatch has a story saying a man dressed in Khashogggi's "still warm clothes" was photographed going into the Blue Mosque. Yeah, right:
The really interesting question is why have they walked that back and now admit he was killed? What is that about?
spqrusa , 3 hours ago linkYes! And tying it together with the Las Vegas Mandalay Bay-Harvest Festival shooting, and the video of the LV SWAT team escorting a person who looked like MBS through a casino suggests that there was a 'failed' assassination attempt.
And the fact that Prince Al Talweed, a co-owner of top floors of Manadaly Bay with Bill Gates, had tweeted his loathing of Trump...
It begins to tie a lot of loose ends together.
farflungstar , 3 hours ago linkThe "Crown" (British or SA or many others) is inviolable. They take threats to sovereignty seriously unlike Americans who have outsourced Monetary Sovereignty to their Banks, Military and Economic Sovereignty to their Corporations.
RubberJohnny , 3 hours ago linkThis kid's a ****. A real Chabad Lubavitch **** with a criminal father who I am going to hazard has never worked a hard day in his life. (Both father and son)
Remember Dan Aykroyd from "Trading Places"? Kushner is like that, only not funny. And jewish.
GoingBig , 3 hours ago linkKushner was parachuted into the White House on the sole basis of his being the President's son-in-law.
He quickly ascended to the top rungs of power in our Nation even receiving Top Security Clearance and has been privy to our most tightly guarded secrets ever since.
This little ********** has turned out to be a tremendous thorn in our side facilitated by the President's pleasure.
Is everyone blind? This ******* nobody is practically running the whole show in the Middle East and with what credentials?
He's a power *** with vast connections, having been chosen to be the front man for the destruction of America as we know it.
olibur , 3 hours ago linkExactly, plus his arrogance and stupidity has made the middle east even more fraught with problems.
Just like Trump moving the embassy to Jerusalem; this has caused nothing but problems.
Going in with no background in the middle east, without knowing anything except what was told to him in Hebrew school is a recipe for disaster which is unfolding before our eyes.
DingleBarryObummer , 3 hours ago linkThis Kushner guy doesn't look natural. Kind of like molded silicone ear plug.
Albertarocks , 3 hours ago linkBuilt in the same factory as Zuckerberg, but it's the Twink-Z-9000m Model
DingleBarryObummer , 3 hours ago linkSkinny. Stiff. Plastic. Rather defiant, somewhat snotty. I have no reason to decide whether I like him or not but Kushner comes across to me as somebody I would not trust as far as I could throw him. Mind you that's quite a distance since I think he probably weighs about 109 lb.
Straw Dog , 17 minutes ago linkwith whom Kushner reportedly shares a "special relationship" (the prince reportedly once bragged about having Kushner "in his pocket")
well we know who the pitcher and who the catcher is in that "special friendship."
Wild Bill Steamcock , 43 minutes ago linkThe CNN interviewer is Van Jones.
This is the same Van Jones who was Obama's "Green Jobs Czar" and was forced to resign his position in 2009 because of his radical left wing background.What the hell is Kushner doing in a position of power in the White House, what are his qualifications for whatever post he holds ?
ExpatNL , 1 hour ago linkKushner- "Late into the night, I stroked him. He stroked me. All to completion"
ardent , 2 hours ago linkMemo to **** Kushner
Hire some food tasters.
The world is sick of you KIKES.
headless blogger , 2 hours ago link"The president is looking out for Israhell's strategic interests ...the president is fully committed to doing that."
There, fixed it.
ExpatNL , 2 hours ago linkWhat the hell is anyone doing dealing with these animals who dress up in dresses? They behead people in public squares, mutilate people, oppress woman, kill homos, etc. Real crazy degenerates that got ahold of lots of money via their oil.
headless blogger , 1 hour ago linkSaudis are actually KIKES in drag
boattrash , 31 minutes ago linkBut they look Black.
ludwigvmises , 2 hours ago link" They behead people in public squares, "
You say that like it's a bad thing...I can think of several cases where it would be justified and appropriate.
ExpatNL , 2 hours ago linkKushner is another boarding school educated snobbish little child of rich parents.
Yippie21 , 2 hours ago linkCardinal Rule
Never, EVER trust a ****
If you think jews are nice people you're braindead.
ExpatNL , 2 hours ago linkWhy is "everyone" so ******* upset about the Muslim Brothernood, green-card holding journalist being offed? I mean, folks in the M.E. are murdered all the ******* time. Journalists are not immune. Especially ones that are actually agitators that write ****. This whole thing is ********. How do I know? Just look at the reactions. Media everywhere to level 11.. What about Stormy Daniels? The Playboy bunny? Ford? Scandal # 42, 43, 44, 45, 46, 47 , etc??
Saudis murder folks . Turkey murders folks. Turkey crushed a coup a couple years ago and 60K folks disappeared. I don't remember the US media demanding Obama " do something" about Turkey immediately, do you? Seriously.
negan2 , 2 hours ago linkUSA has killed over 30 million INNOCENT human beings around the globe since 1950.
ExpatNL , 2 hours ago linkInnocent? You prefer Hitler and Stalin.
surroundedbyijits , 2 hours ago linkyes, innocent. I suppose killing 2 million Vietnamese are guilty? of what>? Not kissing your FAT Americunt ***?
Venice Screech , 5 minutes ago linkHe said since 1950. Hitler had been dead for 5 years and Stalin would be dead within 3 years so wtf are you referring to?
headless blogger , 2 hours ago link**** education for some in America.
robertocarlos , 2 hours ago linktrue. And I'm sure the CIA gets in on some very disgusting killings as well. Along with the Mossad and Mi6 (2 groups that get little attention but should).
g3h , 2 hours ago linkMarry a hot shiksa?
ExpatNL , 2 hours ago linkExactly what a brother would do for a brother.
Byte Me , 2 hours ago linkKushner to Ivanka,.
Your father is a **** for brains,wanker.
Ivanka, I know that but we are part of the chosen now,. and he soon will be dead.
We have chance to rule the USA, Jared,
Bibi told me ./
" Jones: Do you trust the Saudis to investigate themselves?"
"Kushner: We're getting facts in from multiple places. Once those facts come in, the Secretary of State will work with our national security team to help us determine what we want to believe , and what we think is credible, and what we think is not credible."
Jones: Do you see anything that seems deceptive.
Kushner:
NO
I (bullshitbullshitbullshit) see things that seem deceptive every day I see them in the Middle East and in Washington. We ha
Saudi Update October 2018
http://crudeoilpeak.info/saudi-update-october-2018