Comments below are from Phil Flynn's Monday morning report.
Reuters reports that, “On the supply side, deadly anti-government unrest has gripped Iraq, the second-largest producer among the Organization of the Petroleum Exporting Countries. Iraq’s oil exports of 3.43 million barrels per day (bpd) from Basra terminals could be disrupted if instability lasts for weeks, Ayham Kamel, Eurasia Group’s practice head for Middle East and North Africa, said in a note. “Any oil production disruption would occur at a time when Saudi Arabia has lost a significant part of its energy system redundancies (spare capacity),” he said. Also, the major Buzzard oil field in the British North Sea was also shut for pipe repair work, China’s CNOOC said on Friday.
Libya’s National Oil Corporation (NOC) said on Sunday it would close the Faregh oil field at Zueitina port for scheduled maintenance from Monday until Oct. 14.
Bloomberg is also reporting that,
“U.S. troops will stand aside when Turkish forces invade northern Syria in the coming days, the White House said. President Erdogan has said the incursion may be imminent. He and Trump spoke yesterday by phone. The comments signal the U.S. will allow Turkey to advance against Kurdish forces.”
The oil market is finding stability as it realizes that last week’s deep slide was overdone. OPEC's slide in oil output along with faltering U.S. production and record U.S. oil exports will more than likely lead to a big draw in U.S. oil inventory. Last week the American Petroleum Institute reported a big draw but the Energy Information Administration did not. The EIA will have to correct that. In the meantime, according to Baker Hughes, the U.S. oil rig count fell yet again by 3 to 710 last week. The rig count has declined in 30 of the last 40 weeks so far this year. We believe that U.S. oil production will start to stagnate as investment dries up. U.S. oil production has stalled.
Bloomberg News reports that, "Newly commissioned Permian basin crude pipelines have yet to boost U.S. crude exports, as the ongoing U.S-China trade war weighs on demand from Asia. The U.S. Census Bureau said exports averaged 2.73 MMbpd in August, up just 40,000 bbl from a month before. That’s despite the start of two widely anticipated crude pipelines from West Texas to the Gulf Coast. Plains All American LP’s began service on its Cactus II crude pipeline in August and loaded cargoes for export that month. EPIC Pipeline Co LP started operations on its oil pipe in August as well. But the lines, with a combined capacity of over 1 MMbpd, may not be in full use.
“A lot of capacity will eventually be online from those pipes, but it would take some time before all of that becomes available. We shouldn’t expect to see all of that show up in one month,”
said John Coleman, an analyst at consultant Wood Mackenzie..
Also, the U.S.-China trade war which has in part weakened global oil prices is affecting demand as well as production. Total U.S. crude production in July fell to the lowest levels since February, according to government data. Chinese buyers reduced their purchases in U.S. crude for August ahead of the start of a 5% tariff on American oil.
When the markets opened:
WTI is up 66c to $53.47/Bbl, and Brent is up 60c to $58.97/Bbl.
Natural gas is down 4.7c to $2.305/MMBtu.
Global Oil Market - Oct 7
Global Oil Market - Oct 7
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Global Oil Market - Oct 7
Uprising grips Iraq, 65 killed in protests against government corruption
Source: Reuters
Police snipers fired at demonstrators in Baghdad on Friday as the death toll rose to 65 people in three days of violent national protests against government corruption.
Prime Minister Adel Abdul Mahdi called for calm as more than 190 people were wounded in the capital on Friday, but protesters scorned his promises of political reform.
Iraq’s most influential cleric pinned the blame for the violence on politicians who had failed to improve the lives of the public, and ordered them to meet the protesters’ demands.
Another politically powerful cleric pulled his opposition faction’s lawmakers out of parliament, a gesture likely to fuel the passions behind the unrest.
On the streets of Baghdad, police appeared to be targeting individual protesters. Reuters reporters saw one fall to the ground after being shot in the head. He was pronounced dead in hospital.
Elsewhere, a Reuters television crew saw a man critically wounded by a gunshot to the neck after snipers on rooftops opened fire at a crowd. Sporadic shooting could be heard in Baghdad into the late evening.
Police shot dead three people trying to storm the provincial government headquarters in the southern city of Diwaniya, police and medics said.
The violence is the worst since Iraq put down an insurgency by Islamic State two years ago. The protests arose in the south, heartland of the Shi’ite majority, but quickly spread, with no formal leadership.
Security and medical sources gave a death toll on Friday of 65 killed and 192 wounded across Iraq in three days, the vast majority of the deaths in the last 24 hours as the violence accelerated.
“It is sorrowful that there have been so many deaths, casualties and destruction,” Iraq’s most influential cleric, Grand Ayatollah Ali al-Sistani, said in a letter read out by his representative during a sermon.
“The government and political sides have not answered the demands of the people to fight corruption or achieved anything on the ground,” said Sistani, who stays out of day-to-day politics but whose word is law for Iraq’s Shi’ites. “Parliament holds the biggest responsibility for what is happening.”
Populist cleric Moqtada al-Sadr, who leads the largest opposition bloc in parliament, ordered his lawmakers to suspend participation in the legislature until the government introduces a program that would serve all Iraqis.
The speaker of Iraq’s parliament called the protests a “revolution” against corruption but urged calm and proposed reforms such as better state housing support for poor people and ensuring Iraqi graduates are included on lucrative foreign projects for energy sector development.
Many government officials and lawmakers are widely accused of siphoning off public money, unfairly awarding contracts in state institutions and other forms of corruption.
‘WE WALK AMONG YOU’
The violence is an unprecedented test for Adel Abdul Mahdi, a mild-mannered veteran politician who came to power last year as a compromise candidate backed by powerful Shi’ite groups that have dominated Iraq since the downfall of Saddam Hussein in 2003.
In his overnight address, Abdul Mahdi pledged reforms but said there was no “magic solution” to Iraq’s problems. He insisted politicians were aware of the suffering of the masses: “We do not live in ivory towers – we walk among you in the streets of Baghdad,” he said.
A young man in a crowd fleeing sniper shots at a central Baghdad square was scornful. “The promises by Adel Abdul Mahdi are to fool the people, and today they are firing live gunshots at us,” he said.
“Today this was a peaceful protest. They set up these barricades, and the sniper is sitting right there since last night.”
Police and medical sources told Reuters the death toll so far included 18 people killed in the southern city of Nassiriya, 16 in Baghdad, four in the southern city of Amara and four in Baquba as unrest spread north of the capital. Deaths were also reported in the southern cities of Hilla and Najaf.
Curfews were imposed in a number of cities. Authorities shut roads into the capital from the north and northeast and were sending reinforcements to Baghdad’s densely populated east. Military convoys were being sent to Nassiriya.
‘REVOLUTION OF HUNGER’
The unrest occurs on the eve of Arbaeen, a Shi’ite pilgrimage which in recent years has drawn 20 million worshippers, trekking for days on foot across southern Iraq in the world’s biggest annual gathering, 10 times the size of the Mecca Hajj.
Some pilgrims were already taking to the roads on Friday, although in smaller numbers than in recent years. Iran has closed one of the border crossings used by millions of pilgrims. Qatar has told its citizens to stay away.
A senior Iranian cleric blamed the unrest on the United States and Israel, saying they aimed to thwart the pilgrimage.
The protests could grow if they receive formal backing from Sadr, who has long denounced corruption and the political elite. Parliament was set to hold a session dedicated to finding a solution, but Sadr’s faction was staying away.
Sadr has not called on his followers to join the protests, but his faction has expressed sympathy with their aims. One senior Sadrist politician, Awad Awadi, described the protests to Reuters as “a revolution of hunger”.
Source: Reuters
Police snipers fired at demonstrators in Baghdad on Friday as the death toll rose to 65 people in three days of violent national protests against government corruption.
Prime Minister Adel Abdul Mahdi called for calm as more than 190 people were wounded in the capital on Friday, but protesters scorned his promises of political reform.
Iraq’s most influential cleric pinned the blame for the violence on politicians who had failed to improve the lives of the public, and ordered them to meet the protesters’ demands.
Another politically powerful cleric pulled his opposition faction’s lawmakers out of parliament, a gesture likely to fuel the passions behind the unrest.
On the streets of Baghdad, police appeared to be targeting individual protesters. Reuters reporters saw one fall to the ground after being shot in the head. He was pronounced dead in hospital.
Elsewhere, a Reuters television crew saw a man critically wounded by a gunshot to the neck after snipers on rooftops opened fire at a crowd. Sporadic shooting could be heard in Baghdad into the late evening.
Police shot dead three people trying to storm the provincial government headquarters in the southern city of Diwaniya, police and medics said.
The violence is the worst since Iraq put down an insurgency by Islamic State two years ago. The protests arose in the south, heartland of the Shi’ite majority, but quickly spread, with no formal leadership.
Security and medical sources gave a death toll on Friday of 65 killed and 192 wounded across Iraq in three days, the vast majority of the deaths in the last 24 hours as the violence accelerated.
“It is sorrowful that there have been so many deaths, casualties and destruction,” Iraq’s most influential cleric, Grand Ayatollah Ali al-Sistani, said in a letter read out by his representative during a sermon.
“The government and political sides have not answered the demands of the people to fight corruption or achieved anything on the ground,” said Sistani, who stays out of day-to-day politics but whose word is law for Iraq’s Shi’ites. “Parliament holds the biggest responsibility for what is happening.”
Populist cleric Moqtada al-Sadr, who leads the largest opposition bloc in parliament, ordered his lawmakers to suspend participation in the legislature until the government introduces a program that would serve all Iraqis.
The speaker of Iraq’s parliament called the protests a “revolution” against corruption but urged calm and proposed reforms such as better state housing support for poor people and ensuring Iraqi graduates are included on lucrative foreign projects for energy sector development.
Many government officials and lawmakers are widely accused of siphoning off public money, unfairly awarding contracts in state institutions and other forms of corruption.
‘WE WALK AMONG YOU’
The violence is an unprecedented test for Adel Abdul Mahdi, a mild-mannered veteran politician who came to power last year as a compromise candidate backed by powerful Shi’ite groups that have dominated Iraq since the downfall of Saddam Hussein in 2003.
In his overnight address, Abdul Mahdi pledged reforms but said there was no “magic solution” to Iraq’s problems. He insisted politicians were aware of the suffering of the masses: “We do not live in ivory towers – we walk among you in the streets of Baghdad,” he said.
A young man in a crowd fleeing sniper shots at a central Baghdad square was scornful. “The promises by Adel Abdul Mahdi are to fool the people, and today they are firing live gunshots at us,” he said.
“Today this was a peaceful protest. They set up these barricades, and the sniper is sitting right there since last night.”
Police and medical sources told Reuters the death toll so far included 18 people killed in the southern city of Nassiriya, 16 in Baghdad, four in the southern city of Amara and four in Baquba as unrest spread north of the capital. Deaths were also reported in the southern cities of Hilla and Najaf.
Curfews were imposed in a number of cities. Authorities shut roads into the capital from the north and northeast and were sending reinforcements to Baghdad’s densely populated east. Military convoys were being sent to Nassiriya.
‘REVOLUTION OF HUNGER’
The unrest occurs on the eve of Arbaeen, a Shi’ite pilgrimage which in recent years has drawn 20 million worshippers, trekking for days on foot across southern Iraq in the world’s biggest annual gathering, 10 times the size of the Mecca Hajj.
Some pilgrims were already taking to the roads on Friday, although in smaller numbers than in recent years. Iran has closed one of the border crossings used by millions of pilgrims. Qatar has told its citizens to stay away.
A senior Iranian cleric blamed the unrest on the United States and Israel, saying they aimed to thwart the pilgrimage.
The protests could grow if they receive formal backing from Sadr, who has long denounced corruption and the political elite. Parliament was set to hold a session dedicated to finding a solution, but Sadr’s faction was staying away.
Sadr has not called on his followers to join the protests, but his faction has expressed sympathy with their aims. One senior Sadrist politician, Awad Awadi, described the protests to Reuters as “a revolution of hunger”.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group