IEA predicts nightmare scenario for OPEC

By ethan / March 9, 2018

The US will supply much of the world’s additional oil for the next few years, according to a new report from the International Energy Agency (IEA).

Over the next three years, the US will cover 80 percent of the world’s demand growth, the IEA says in its newly-released Oil 2018 annual report. Canada, Brazil and Norway will cover the remainder, leaving no room for more OPEC supply.

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The irony is that the substantial gains in output from shale will only be possible because of the OPEC cuts, which has tightened the market and boosted prices. This fact is not lost on OPEC producers. “If you are a shale oil producer, who brought you back? It was OPEC,” the UAE’s oil minister Suhail Al Mazrouei, said at a recent industry conference, according to Bloomberg. “Without OPEC there’d be chaos in the market.”

Indeed, the IEA’s new report paints a pretty gloomy picture for OPEC members, who are hoping to phase out their supply cuts after this year. With non-OPEC supply rising quickly, particularly in the US, OPEC may struggle to figure out a way to increase output without pushing down prices, according to the IEA’s analysis.

That could put pressure on the cartel to keep the production cuts in place for longer than they had wanted, although it seems hard to imagine they maintain the production ceilings for another three or four years. Doing so would mean handicapping themselves and ceding even more market share to US shale and other non-OPEC producers. Still, it is unclear how this plays out – returning to full production, even if phased in gradually, presents its own problems, if the IEA’s forecast is accurate.

The IEA sees demand for OPEC oil actually declining in absolute terms over the next few years as it is edged out of the market by non-OPEC supply. OPEC production only grows by 750,000 bpd through 2023 under the energy agency’s forecast, although that also takes into account a 700,000-bpd decline in Venezuela.

The bottom line is that the IEA sees oil demand rising by 6.9 million barrels per day (mb/d) by 2023, with more than half of those increases coming from China and India. Meanwhile, supply grows by about 6.4 mb/d, with a whopping 3.7 mb/d coming from the US, nearly 60 percent of the total global supply increase.

By sector, petrochemicals starts to take on a larger role in driving oil demand, especially as the transportation sector starts to see a greater adoption of electric vehicles. But it isn’t just EVs – abundant oil and cheap natural gas are fueling a surge in petrochemical investments.

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© Lucy Nicholson

Nevertheless, while the IEA sees an explosion of shale output for the next five years or so, beyond that the story is different. The massive cuts to upstream investment since the collapse of oil prices in 2014 will begin to cause supply problems at the beginning of the next decade. Spending levels are only now starting to pick up, but are still at a fraction of pre-2014 levels, which means that there will be a dearth of new, large-scale conventional oil projects in several years’ time. “This is potentially storing up trouble for the future,” the IEA wrote in its report.

Moreover, natural depletion from existing fields essentially wipes out 3 mb/d of supply every year. That, combined with demand growth, means that the oil industry needs to replace “one North Sea each year,” the IEA says. But the industry is no longer spending enough to cover that gap. In 2017, new oil discoveries fell to another record low, with less than 4 billion barrels of oil equivalent found. The lack of new oil in the works is sowing the seeds of supply problems in the 2020s.

“The United States is set to put its stamp on global oil markets for the next five years,” Fatih Birol, the IEA’s Executive Director, said in a statement. “But as we’ve highlighted repeatedly, the weak global investment picture remains a source of concern. More investments will be needed to make up for declining oil fields – the world needs to replace 3 mb/d of declines each year, the equivalent of the North Sea – while also meeting robust demand growth.”

The IEA report will provide a fascinating backdrop to the start of the annual CERAWeek conference in Houston, where industry titans and oil ministers will gather this week. No doubt the aggressive forecast for US shale will provide a lot of fodder for conversation for both shale boosters and anxious OPEC representatives.

This article was originally published on Oilprice.com

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N. Korea’s Kim regaled South’s delegates with wine & self-deprecating jokes

By ethan / March 9, 2018

North Korean leader Kim Jong-un has revealed an unexpected side of his character to Southern negotiators in Pyongyang. Rolling out snacks and wine for them, he reportedly cracked jokes about himself.

This week’s meeting between Kim and a South Korean delegation in Pyongyang was a first in many ways. It was the first time Southerners met with Kim; it brought about signs that Pyongyang might give up its nukes after all; and it revealed that the North Korean strongman has a sense of humor. Anonymous South Korean officials, cited by Reuters, have shared their impressions of a dinner at Kim’s.

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© Damir Sagolj

According to the officials, Kim knows exactly what kind of gung-ho militarist image he projects, and thinks it’s no big deal. His reaction to his reputation was “relaxed” during the negotiations, and he even made jokes about it from time to time. From the reports of the meeting, Kim appeared to be quite proud of keeping his Southern neighbor Moon Jae-in on his toes.

“President Moon has had a rough time chairing national security meetings at the break of dawn whenever we fired missiles,” he said, adding that Moon can now rest easy at night, since the North has agreed to halt nuclear and missile tests while talks are in progress. And should they stall, things can be sorted out easily, Kim believes.

“If working-level talks ever cease and hostility appears, [President Moon] and I can easily resolve it with a phone call,” he reportedly said, referring to a planned direct hotline between the two leaders – another unprecedented development.

The reception itself appeared to be a hospitable one: The Southerners were served hotpot and traditional cold noodles, as well as plenty of alcohol. “The bottles kept coming,” a source with knowledge of the meeting said. These included wine, ginseng liquor and soju – a Korean beverage with a seven-century history.

The revelations about Kim Jong-un’s approach to hosting could be of particular use to his supposed arch-nemesis, US President Donald Trump, who says he is preparing to meet Kim in person. Kim sent him a personal invite after months of belligerent exchanges that saw the two leaders call each other names and boast about the size of their nuclear buttons. The meeting is being planned for May and will reportedly focus on denuclearizing the North – something Pyongyang had previously ruled out.

READ MORE: Kim Jong-un reaches ‘satisfactory agreement’ with South Korean delegation

Trump welcomed the invitation and praised the North for abstaining from weapons testing, but said economic sanctions against Pyongyang will remain in place until there’s an agreement. The US has been pursuing a “maximum pressure” approach to North Korea, aiming to choke Kim out of his nuclear ambitions with economic sanctions and military exercises just over the border.

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‘Toxic, damaging & shameful’: Fury as UK and Saudi Arabia sign huge arms deal

By ethan / March 9, 2018

To the surprise of no-one, Saudi Arabia and Britain signed a huge new arms deal on Friday. It comes despite repeated calls for the UK to halt arms sales in light of massive civilian casualties and a humanitarian crisis in Yemen.

British firm BAE Systems will sell 48 Typhoon fighter jets to the Saudis after Crown Prince Mohammed bin Salman visited Prime Minister Theresa May for talks. A preliminary deal has been signed, according to reports, for the Kingdom to buy from the UK, as part of a multi-billion-pound deal.

Shares in BAE Systems shot up 2 percent after the announcement. BAE confirmed the news, saying in a statement: “This is a positive step towards agreeing a contract for our valued partner. We are committed to supporting the kingdom as it modernises the Saudi Armed Forces and develops key industrial capabilities critical to the delivery of Vision 2030.”

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However, civil and human rights campaigners are furious. The UK has already licensed £4.6 billion worth of arms to Saudi Arabia since the bombardment of neighboring Yemen began three years ago.

Andrew Smith of Campaign Against Arms Trade said: “This shameful deal will be celebrated in the palaces of Riyadh and by the arms companies who will profit from it, but it will mean even greater destruction for the people of Yemen.

“For decades now, successive UK governments have enjoyed a toxic and damaging relationship with the Saudi regime. By rolling out the red carpet for the Crown Prince, Theresa May has shown how low she will sink to maintain it.

“Yemen has endured three years of bombardment and one of the worst humanitarian crises in the world. UK arms companies have profited every step of the way. If May really cares for the rights of people being repressed in Saudi Arabia, or bombed in Yemen, then she must stop arming and supporting the brutal Saudi dictatorship.”

Both Theresa May and Mohammed bin Salman have said the relationship between the allies is vital. May said in the Commons on Wednesday intelligence sharing between the two has “saved hundreds of lives.”

The deal is expected to be announced by Defence Secretary Gavin Williamson and the Crown Prince later on Friday.

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Winter Olympics hack: Probe into culprits deepens mystery (POLL)

By ethan / March 9, 2018

Hackers who caused a tech meltdown at the PyeongChang Winter Olympic opening ceremony, leaving many spectators unable to print their tickets, have been subjected to an in-depth probe by cyber security ‘experts’.

The unknown group used a unique malware – now aptly named the ‘Olympic Destroyer’ – to target the official Olympic website, the stadium’s WiFi and broadcasters of the event. While the organizing committee quickly recovered their equilibrium and claimed there would be no repercussions for the culprits, ‘experts’ in the field have made it their mission to identify the group (or country) behind the sophisticated attack.

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© Pawel Kopczynski

The Olympic Destroyer moves in the form of a network worm, which worked its way through internal servers via Windows network shares to shut down infected systems. Pyeongchang2018.com, network servers of the ski resorts and servers of Atos, the event’s IT service provider, were all targeted in the attack.

Of course the usual suspects were the first in the firing line. North Korea, Russia and China were all placed under the spotlight by various investigators looking into the hack. Kaspersky pointed out that their team suspected “North Korean cyber criminals” or “more specifically, the Lazarus Group.”

After studying a sample of the malware, Kaspersky researchers found digital fingerprints that “point directly to Lazarus as the author.” A deeper investigation, however, showed the resemblance may have been the result of a deliberate copycat operation.

Furthermore, the malware’s “fingerprints” also allegedly pointed to the work of Russian hacker group Sofacy (aka Fancy Bear and APT28). Meaning neither group can be confirmed nor ruled out. The investigation leaves open the possibility that cyber criminals could have implanted the digital remnants of both group as a cunning decoy, or perhaps a collaboration of all of the above is to blame?

Overall, the investigations appeared to turn up more questions than answers, but we want to know: What do you think?  

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China set to internationalize yuan & open financial markets – head of People’s Bank

By ethan / March 9, 2018

Beijing is set to further internationalize the yuan, including through the opening of the country’s financial markets, according to the Governor of the People’s Bank of China (PBC) Zhou Xiaochuan.

“We have taken sufficient measures in the process of internationalization of the yuan which from now on will allow the yuan to be used in trade and investment,” Xiaochuan said at a press conference on Friday. “Moreover, the yuan has been included in the SDR currency basket. The key procedures have already been carried out.”

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© Jason Lee

The SDR (Special Drawing Rights) is an international asset created by the International Monetary Fund (IMF) in 1969 to supplement the national currencies of its members. The SDR’s valuation is based on a basket of major international currencies reviewed by the IMF every five years. China’s yuan made it to the basket in October 2016 for the very first time. The move was welcomed by the PBC back then, which described it as recognition of the country’s reforms and development.

China is seeking to further open its financial markets in order to strengthen the international position of yuan and to encourage usage of the national currency abroad. While “some restrictions” are still in place, Beijing is set to remove them “gradually,” the official stated.

“Now that we have entered a new stage, we can be bolder about increasing market access and a higher degree of opening to the outside world,” Xiaochuan said. “We cannot force anyone, decisions are made based on their own logic, that is why it is a gradual process. We will continue gradual internationalization of the yuan.”

Beijing has managed to get a grip on the country’s soaring debt levels and has entered a period of stabilization, the official stressed, describing the improvement in China’s financial climate as a “clear trend.” Such progress is expected to further bolster the yuan’s international standing, as well as to loosen the regulatory grip of the government.

“Fast debt growth has stabilized,” Xiaochuan said. “Generally speaking, we have entered a stage of stabilizing and gradual lowering of the leverage ratio.”

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Men clad in black climb onto Iran’s embassy in London, take down flag

By ethan / March 9, 2018

DETAILS TO FOLLOW

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‘Operation Doner Halal’: Spanish authorities seize €150k in raid on money-laundering kebab business

By ethan / March 9, 2018

Spain’s Civil Guard has arrested five people and seized 150,000 euro as part of a probe dubbed ‘Operation Doner Halal.’ The investigation targeted a gang which allegedly ran a money-laundering scheme through a kebab business.

An additional 15 people are being investigated in connection with the kebab business’ alleged dodgy dealings, according to El Periodico. The operation was carried out in Barcelona and Alicante on Thursday, with authorities seizing some 150,000 euro ($ 184,400).

Online footage shows authorities carrying out the operation. The video was released by Spain’s Civil Guard and Europol, which provided the Spanish agency with technical and operational support.

It is believed that the kebab business was being used in a money-laundering network thought to extend from Spain to Germany. The scheme, which reportedly dealt with VAT fraud, saw between 90,000 and 200,000 euro taken via plane from Spain to Dusseldorf every Saturday. On occasion, more than 300,000 euro were transported.

The company is suspected of laundering 36 million euro since 2012. The documents supporting the money transfers were from companies which were apparently involved in the sale of kebab meat. However, it was later determined that those companies had no known addresses and were not engaging in legitimate commercial activity.

In addition to the arrests and seizure of cash, authorities have frozen 36 bank accounts and financial products with a balance totalling 21,000 euro, as well as 35 credit cards. Five properties, with a combined value of 470,000 euro, are also part of the investigation.

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Flyer, beware! Brexit no-flight warning planned on Ryanair tickets

By ethan / March 9, 2018

Ryanair has announced it will start issuing a Brexit caveat on flight tickets to passengers. It is introducing the measure in case Britain and the EU fail to reach a transition deal by next autumn.

If the UK and Brussels fall short of finalizing a transition deal, the company will from September 2018 issue tickets saying: “This flight is subject to the regulatory environment allowing the flight to take place.” The chief marketing officer of the EU’s biggest budget airline, Kenny Jacobs, told the BBC: “Everyone is saying it’ll be alright on the night once we get closer to April 2019. I don’t think you can take that for granted.”

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The announcement comes after Ryanair’s chief executive made the headlines this week for saying plans were being considered to ground planes to make Leavers “rethink” the Brexit vote. Addressing a group of airline leaders in Brussels, outspoken CEO Michael O’Leary said he wanted to take “create an opportunity” to make people come to terms with the fact they are “no longer going to have cheap holidays.”

He said: “I think it’s in our interests, not for a long period of time, that the aircraft are grounded. It’s only when you get to that stage where you’re going to persuade the average British voter that you were lied to in the entire Brexit debate.”

The single market for aviation, created in the 1990s, allows for there to be no commercial restrictions for airlines flying within the EU. O’Leary has repeatedly warned that airlines will be forced to cancel post-Brexit services from March 2019 if no agreement in the Brexit negotiations is reached by September, because schedules are planned six months in advance.

Jacobs said some airlines are being “complacent” about Brexit. He said while a deal that would keep planes flying is expected to be worked out, Ryanair is making contingency plans.

The Brexit clause on tickets would be designed to cover the company if there were no agreement over how to manage air traffic after the UK leaves the EU.

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Au naturel! Paris museum opens doors to art-loving nudists

By ethan / March 9, 2018

If you’re planning to visit the Palais de Tokyo contemporary art museum on May 5, be prepared to do it in the buff. The gallery is opening its doors to naked visitors, and the online demand for the event seems to be huge.

Anyone is invited to the exhibition free of charge, but they have to register in advance – and will probably be asked leave their clothing in the cloakroom.

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© restaurant-onaturel.fr

The event is being organized in conjunction with the Paris Naturists Association (PNA) and is sure to draw a big crowd. In fact, a registration link shared by PNA on Facebook says that all spaces have already been taken. 

The popularity of the event should come as no surprise, as Paris is home to some 2.6 million naturists, according to France 4 Naturism figures cited by The Local. It also comes as the French capital sports its first nudist zone and nudist restaurant.

Nudist waves have also been occurring in other parts of Europe. Last year, a naturist cleaning company in London offered £45 (US$ 62) to women willing to work entirely in the nude. 

Palais de Tokyo is the largest center for contemporary artistic creation in Europe. According to its website, it “invites us to bear witness to the audacities of our time and to live the experience of art in the making, in all its guises,” the gallery wrote on its website.

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Labour’s deputy leader calls out Tories over press freedom as Murdoch scandal emerges (VIDEO)

By ethan / March 9, 2018

Rupert Murdoch’s news outlets were involved in more criminality than the Leveson Inquiry uncovered, it has been claimed. The Tories want to “close the story down,” however, according to Labour’s deputy leader Tom Watson.

Whistleblower and ex-private investigator John Ford has claimed he was used by the Sunday Times to illegally to spy on politicians – including former prime minister Tony Blair – while they were in power. Ford said his spying methods included blagging, a term for tricking sources into revealing information by pretending to be a legitimate authority.

Ford claims he was contracted between 1995 and 2010, and targeted both the Labour government and members of the public. The former PI said he would go on “fishing expeditions often” and there were “hundreds of telephone interceptions, hundreds of bank interceptions. I’ve stolen rubbish. I’m afraid the list is endless,” he added.

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© Stefan Wermuth

Watson said he is furious over claims that people were targeted by the paper. In a video on Twitter, Labour leader Jeremy Corbyn’s right-hand man said the Leveson Inquiry, which delved into the UK press and its relationship with those in power, appears not to have uncovered everything.

The inquiry found that police had been paid for information, while phones were hacked, including that of missing teenager, Milly Dowler. The move could have impacted the investigation, since a voicemail on her phone had been opened – leading officers to believe she may have been alive.

Watson said Labour will fight for “genuine press freedom” and the victims of phone hacking. He said: “A few days ago, the Conservatives announced that they are breaking their promise to the victims of phone hacking, and ditching plans for the next stage of the Leveson Inquiry that was supposed to examine possible press criminality and collusion with the police.

“They said that the Leveson Inquiry was done, that it was comprehensive, that there was nothing more to see. Well, the BBC have just broken a remarkable story that shows that’s not quite accurate.”

A whistleblower has claimed that Murdoch’s Sunday Times was involved in criminal activity for over a decade by blagging the personal finance records of Labour cabinet ministers. And, rather than coming clean about it, they’ve covered it up. It seems far from this story being over, there’s much more to come.

“Yet, the government wants to close the story down. They are capitulating to the press barons and their billionaire backers – protecting them from scrutiny,” said Watson. The Sunday Times said that it “strongly rejects” claims it had hired anyone to act illegally on their behalf. A spokesperson said the paper had “a strong record of investigative journalism over decades and has employed many contributors and researchers to work on stories, or parts of stories.”

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