Tag Archives: OPEC

Retail 101

One of the oldest rules of retail 101 is that you buy cheap and sell as high as possible, that is how you create profit. Add to that the simple rule that you spend less than you earn and that will make you rich on the side. These rules are not new, they were old when the crusades started (ca.1095). 

So when the BBC (at https://www.bbc.co.uk/news/business-61188579) gives us ‘Oil prices have soared. Why won’t Opec bring them down?’ The setting of the American governmental license plate came to mind (Dee-You-Age). We get to see “Opec+ could also lower prices by putting more oil onto the market, which is what major importers like the US and UK want it to do.” Yes, and tarmac is made with liquorice. Opec+ has a good deal, there is a need for oil and they can set the price. The nations relying on oil have done pretty much ABSOLUTELY NOTHING to appease Saudi Arabia. We see the two largest suppliers (Russia and Saudi Arabia) but even though the US is not in that group, how much oil do they produce? 

And then we get “US President Joe Biden has repeatedly appealed to Saudi Arabia to increase its oil output, but to no avail. UK Prime Minister Boris Johnson also asked Saudi Arabia and the United Arab Emirates to increase production. He too was rebuffed.” In this the first part was that the US played a stupid game.

  1. A journalist no one gives a fuck about goes missing and for weeks the gossip and speculations start, even the United Nations get involved with shoddy documentation (as I personally see it). Realism tells us that something happened. Yet no one and I say again no one produced clear evidence. None gave any clear evidence of what had happened and Turkey who was playing the Iranian game made things worse. The United Nation document had issues, several players were not held to account, but that did not matter, they all got to attack the Kingdom of Saudi Arabia.
  2. The Houthi attacks and again the Iranian factor in this was openly ignored by the media. The non Arabic nations were not informed on houthi attacks with Iranian support on Saudi civilian targets. Coalition events were exaggerated, Houthi attacks were trivialised. 
  3. Saudi and SAMI needs were stopped and Saudi defence settings were halted. Now, the west can do that, they are allowed to. Yet in that, the Saudi’s have absolutely no need to increase production, do they? If the west was so clear on their needs, they would have increased non-oil options two decades ago, but that did not really happen, did it?

Three clear events that are now biting the hands of the US and the UK, Saudi Arabia is willing to look after its friends, but these two have not really shown to be friends, have they?

And in all this Russia is enjoying what is happening, because they do not have to do anything else but watch the cost of living in the US, UK and EU to rise to almost impossible levels. A stage we never wanted and perhaps those tea ladies from the CAAT are now in a stage where they can afford the tea, but they can no longer afford the cookies. There is an opposing side to almost everything and the simple truth of protesting without understanding what was going on is now taking its toll. But the CAAT had its limelight shots in the newspapers. It is lovely to see those pictures, just too bad that the price of that limelight ended up costing some people billions and under those conditions the UK can pretty much kiss their cheaper oil goodbye.

In all this, I wonder what the CIA did last month, what they offered the Kingdom of Saudi Arabia, because the current administration has pretty much destroyed whatever options they had. As I see it, by the rules of Retail 101, the US has only one option, to open whatever weapon sales it can get without restrictions and with a full service package. I reckon that alone is required to lower the oil prices by 10%, they need a lot more, but as such the players will have to offer more and they need to realise that the loud words of ‘no oil’ and ‘end petrol needs’ were merely that, words. It will happen, there is no doubt in my mind, but I doubt I will be alive to see those days, I reckon kids who were born after 2000 will have a decent chance to see the end of a petrol based economy whilst they are still alive. I doubt that it will happen before that. In this, the entire stage of the BBC article was to some degree needed, but they should have given the people a slightly better information ring. Like the interactions of OPEC and airlines. You see over the last 15 years we added a total of 41000 additional flights a day, why? There is also a lack of the American numbers, how much oil do they produce and why can they not produce more? Two simple elements in this equation missing, why is that? 

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Soup with sarcasm

There is a setting we all know, we go to a restaurant, we order menu 2 instead of menu 1 and the waiter tries to apologise when we ‘accidentally’ receive menu 1, however menu 2 will be ready in 15 minutes, and with that he hopes that we will accept what we never ordered in the first place. That is the setting I see when we are given ‘Saudis’ Biden snub suggests crown prince still banking on Trump’s return’. The article (at https://www.theguardian.com/us-news/2022/apr/24/saudi-arabia-kushner-trump-biden-mohammed-bin-salman) gives us “Refusal to help US punish Russia and $2bn investment in Kushner fund signal crown prince’s displeasure with Trump’s successor”. You see, President Biden is playing the wrong game, he did so because he never played the right game to begin with. The US has trampled on friendships with the Middle East for too long. Russia is one option and Saudi Arabia is considering any ally that has a positive approach towards them and that puts both China and Russia on the map for Saudi Arabia. We see the news, we see the implications, but the number one setting they all overlook (whether intentional or not) Saudi Arabia must do what is best for Saudi Arabia and that is not what America wants, it is not what President Biden wants. They want ‘vassals’ yet they want them with an empty treasury coffer and at present Saudi Arabia can buy them out. That is what the US fears the most, they have become the paper tiger the feared they one day might be. 

So when we see “Prince Mohammed shows signs of betting on the return to office of Trump in 2024, and the resumption of the Trump administration’s cosy relationship with Riyadh.” We see Saudi reason. The US has not achieved anything regarding the insurrection. It has not exposed the lack of wealth of Donald Trump and as such Trump continues to incite the far right to his causes and with every win he polarises the right further and more of the centre will move to the right. We see all the news that this will never happen, but they also told us that Trump would never become president in the first place. They were wrong then and they might be wrong now. Successful prosecution of Donald Trump was essential for that, but we all forget the stage of “Trump investigations set to accelerate in coming weeks”, yes, and this has been going on for over a year and nothing was achieved and with every delay, every inability to prosecute more and more Americans start wondering if Donald Trump was right all along and that matters for Saudi Arabia, it matters a great deal. So whatever we might think of Saudi Arabia, it did come at the expense of stupid political games by the Democratic party, and Saudi Arabia is hoping for a renewed Republican White House. Will it happen? I have no idea, but the lack of success against Donald Trump implies that Biden is not in a good place and his actions against Saudi Arabia implies that Saudi Arabia has absolutely no intentions of making Russia less of a ‘friend’ Russia is heard by all the 15 OPEC members and alienating them is not in the interest of Saudi Arabia. So yes, Saudi Arabia seems to be banking on the return of Donald Trump, mainly because is serves the interest of Saudi Arabia a lot better. So when we see the view of John Jenkins, a former UK ambassador to Saudi Arabia with “He probably thinks Biden is politically weak and he can therefore afford to spite him. That sends a signal not just to the Dems but also to the Republican party. And – judging by the debate raging in DC policy circles on these matters – it’s working.” Yet I believe that the larger station is that President Biden has not shown himself to be a friend of Saudi Arabia and that is the larger station. You see, we can debate every angle we are shown, but the larger station is missing:

Saudi Arabia does and must do what is best for Saudi Arabia 

And that missing part is where it all revolves around and the media seems to ignore that part, it does not make for good flames. You see that is the other part of any sarcastic view, when it backfires it is merely irony.

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Obsessed with doubt

We all have that at times, doubt comes in and does not leave. Sometimes it does not matter, trivial settings, unimportant settings and settings we do not care about. Then we get the important settings, the ones we care bout, we are passionate about, even if it is in the second degree. In some cases we can program around it if it is our own design (like IP) sometimes we cannot and it gets to us, because we would want to know. If it matters on a larger scale and I have been stumped on a few matters. The circle completed when something passed my eyes that was unrelated. The parts just clicked and for anyone that is a different path and a different way of resolving. We all have our tools and methods to deal with doubt. 

The resolving part
Around 4 hours ago (at https://www.bbc.com/news/world-us-canada-60843262) we are given ‘Evan Neumann: US Capitol riot suspect gets asylum in Belarus’, so one of the man connected to the Trump Tantrum in the US Capitol on January 6th 2021. He got asylum in Belarus, one of Russia’s tools. The man could have gone to China, the Russian Federation, Namibia, the United Arab Emirates, North Korea, Bahrain, Belarus, chunks of the Middle East, chunks of Africa and a few other places. This man went to the place that directly supports Russia and their Campaign, so why is that? The entire BBC article reads like a lie, which is not on the BBC. Yet when I see ““I do not believe that I have committed any crime,” he said. “One of the accusations was very upsetting. It is alleged that I hit a police officer. That is baseless.”” I wonder how stupid this all sounds and how on earth the Republican Party keeps on protecting in what I personally see is a loser who keeps on running to court ‘Trump files appeal against Manhattan judge in latest bid to overturn subpoena’ and the American people do not catch on? How stupid can people get? 

An earlier stage
In the earlier stage we see (at https://www.aljazeera.com/news/2022/1/9/saudi-arabia-may-run-out-of-interceptor-missiles-in-months-ft) a stage weeks ago when we are given “The situation represents the latest test for US-Saudi relations, which President Joe Biden’s administration has sought to reshape in light of the October 2018 murder of Saudi dissident journalist Jamal Khashoggi by Saudi operatives in Istanbul.” The stronger language that followed was an American sign to the Kingdom of Saudi Arabia. Which in light of ‘US sends Patriot interceptors to Saudi to ease tensions’ (at https://www.aljazeera.com/news/2022/3/21/us-sends-patriot-interceptors-to-saudi-to-ease-tensions-reports) 8 weeks later seems odd, well not if you take into consideration oil prices. Which as I mentioned in earlier articles aligns with biting the hand that feeds you. And the mention of “Riyadh has also voiced anger over the Biden administration’s decision to remove the Houthi movement from its list of “international terrorist organisations”, although Washington in recent months has mulled reversing the decision following a series of drone and missile attacks on the United Arab Emirates (UAE)” does not help the US of A, especially as the mention of Iran is slimmer than slim. The absence of simple investigations like How could Houthi forces manufacture these drones is blatantly absent, Iran is deeper involved and denying that any longer is no less than an absolute insult, but the media does not seem to think that matters, the US and the EU do not seem to think that matters. They still believe that a deal is possible all whilst that was never was a deal in the making. Iran is simply watching how the Russia setting plays out to see if there is a weaker deal to be made, and the stage is not done playing. 

Even earlier we saw
It all came after the story (at https://www.aljazeera.com/news/2022/3/21/ukraine-war-exposes-cracks-us-ties-middle-east-allies) giving us ‘Russia-Ukraine war shows cracks in US ties to Middle East allies’, I had issues here. Russia is part of OPEC, as such they have the table in places. The US wants Saudi Arabia and the UAE to take stands, but why should they? It is not THEIR war, it might become so, but for now it is not and if people have an issue with that, talk to Syrians and Yemeni’s who have been waiting for the US and the EU to make moves for years. Inactivity is not so much fun when you need and answer is it? So when we are given ““Al-Assad coming to the UAE, shortly after the Gulf Arab country voted to abstain from a UN Security Council resolution condemning the Russian invasion of Ukraine last month, tells us that the Emiratis are very serious about asserting their autonomy from the United States,” said Giorgio Cafiero, CEO of Gulf State Analytics, a Washington, DC-based geopolitical risk consultancy.” We can accept the line “the Emiratis are very serious about asserting their autonomy from the United States”, I am not convinced that this is the real reason. The plays give us that these nations are making the plays that do not box them in and Syria is a larger player and it makes sense that the UAE will have questions that no one would set to a simple call, a face to face meeting between two heads of state makes sense. I agree that there are cracks, yet that stage was set by the US, and it was done on a collection of moves, all populist actions and they are now biting the current administration and the current administration made several of these moves.

Yet these are the thoughts as I ended up with and they have doubts here, they do and I admit this. Yet the media is no longer a reliable source and I feel uncertain who will give us the truth not the political play and it involves the media and the United Nations. But what do you do when the sources are a source of doubt? It is not a puzzle, it is a question, I have some ideas but for now they are mine to have and you need to find yours. 

For me the situation is simplified. If there is too much doubt in one direction, see what truths another direction can give you and this is not a simple matter, some give credence to sources when others see debatability in those sources. And with me doubt is an obsession, I need to take doubt apart piece by piece and see what cogs are getting hindered, that is how I roll. You might have different methods. We all have our ways.

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Where the grass is greener

It is a question that comes from an expression, which also has the answer. And we will look into that later. It seems that the US is taking larger steps in ending the friendship with Saudi Arabia. Politico reported yesterday ‘U.S. pulls missile defences in Saudi Arabia amid Yemen attacks’ (at https://www.politico.com/news/2021/09/11/missile-defense-saudi-arabia-511320), now we can understand that some are not willing to sell arms, but a defence system that stops terrorists sending drones and missiles on civilian targets? It seems that the actions are a prelude for the US to get into bed with Iran (highly speculative) and that is a concept worthy of laughter, but I am not laughing. 

The setting that is given is “the perception is very clear that the U.S. is not as committed to the Gulf as it used to be in the views of many people in decision-making authority in the region” we get this from Kristian Ulrichsen, a research fellow at the James A. Baker III Institute for Public Policy at Rice University. I think there is more to that, but it lacks evidence. I for one have believed for years that the US (NATO allies too) were playing a one step destabilisation game in the middle east. A game where destabilisation is a mere one step away and that is no longer the case. Until thee is a direct blow between Saudi Arabia and Iran, the larger stage is not maintained and the US is getting out of there. For China it is good news, now that they are looking at another customer for the HQ-9 and a few other options. Yes, we see the western press all shouting on ending arms deals, but in the end Saudi Arabia should be allowed to defend itself and the need to defend against Houthi terrorist attacks is a prime concern for a lot of people there. So is there an alternative? Well, there is the Russian alternative, but they are shipping that to Iran, so to buy those as well is a bit of an issue on a few levels, but those objections work for China. Consider that China now has a direct setting to sell well over $17,000,000,000 in hardware to Saudi Arabia, the same will now be lost to the US in an age where they are absolutely broke. It never made sense to me, it is all nice to have high morals, but in an age where you cannot afford to buy bread and healthcare high morals just leads to more hunger in a day and age where most cannot afford such luxuries. And let’s be clear, this is not some banana republic, this is a well established monarchy. And whilst we see “From the Saudi point of view, they now see Obama, Trump and Biden — three successive presidents — taking decisions that signify to some extent an abandonment.” We merely see more and more options for China and that is merely the beginning, once the stage is set the US will lose more ground and that also leads to a stage where they are completely dependent on Israel to give them intelligence.  A stage that could have been prevented from the start and no matter how they see it and I am accepting that it is their policy, it also comes with the new policy that the OPEC nations might have a new consideration, oil to China and not to the US or Europe (mostly reduced amounts of oil to Europe) And it will not aid Strasbourg to start crying foul here, it is the consequence of closing settings and in all this I personally prefer China and not Russia to get these options, it is a personal matter (NATO related). The larger stage will also hit Egypt, should Saudi Arabia continue with Huawei to set 5G connections in Egypt, the economic footprint of Saudi Arabia will change, all whilst the US ends up with a reduced footprint and that is a stage that is now escalating over the next 12-18 months. 

Will I be right?
That is open to interpretation and it is open to a few factors that are not given, untested and lacking evidence, but there is a larger stage that this could play out and that is really bad news for anyone not relying on Huawei hardware, with the US pulling out of areas that stage will also lose a few more settings, so as Chinese hardware comes in, US consultants will lose more and more traction in larger areas and that is the stage some players (seemingly) overlooked. So when Analysys Mason and Boston Consulting Group start missing deals and getting less appointments you know it will be too late for a few options. There are a few more players there, but they have a much larger stage with more nations and more options, they might end up with a few projects that are China based. 

So why would Saudi Arabia move to Egypt?

It is a fair question and it sets a much larger stage where Neom city will be all 5G and to stretch out towards Egypt makes perfect sense, one large network that stretches from Cairo to Jeddah, to Mecca and via Riyadh to Dammam, a network that also includes Neom, one of the biggest 5G networks in the world and it would be all Saudi, now consider the lack of credibility that the west has in a place like Egypt and now a fellow Islamic nation offers to include Egypt, what do you think Egypt will do? And lets not forget with all the band and embargo’s and collateral damage the US has in its name, Egypt is ready to seek a telecom alliance with Saudi Arabia and their numbers look really good compared to the US, it is partially speculation yet in this the Huawei announcements in 2019 give validity to my train of thought, Now add to that the media rollover I discussed a week or two ago and you see a much larger stage and the promise that Saudi Arabia made on having more than oil as a form of income is now coming to pass with a rollout that could be ready long before that deadline hits in 2030, there is a stage that should see a larger readiness in 2025, long before the US has anywhere near that level of 5G completion. In May of this year we were given “All of the major U.S. wireless carriers say they have nationwide 5G service, but industry analysts say that service is largely indistinguishable from 4G LTE service.” This implies that the Statista numbers we saw last year remains accurate for at least two more years, implying that the Saudi 5G is well over 700% faster than anything the US has and that is just embarrassing. So when we see Telecom and defence falling away from the west, how much more losses do we need to see before someone realises that we are cutting ourselves. Morality is nice but the hungry need food and they do not care how they get it. A stage where the middle east becomes the tech centre is weird, completely unexpected and whilst we see stories on Silicon Valley, I wonder if they have anything left? When the middle east is driving tech innovation the west becomes a mere iterator trying to keep up. I personally see it as the result of concept selling, it is all good and nice but the customer wants a product, it needs to get working and as we see hype after hype on AI all whilst it is merely machine learning and deeper learning, we need to consider how long this can continue until the stage implodes on itself? 

So where is the grass greener? On the other fellows yard! (Billy Jones, 1924)

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When a war is called

The thought started when I saw an article by Yahoo Finance pass by, it was named ‘Why Saudi Arabia May Be Forced To Start Another Oil Price War’, two thing came to mind, it is October, and the northern hemisphere is now going into Winter, it seems trivial, but 700 million Europeans and well over 50% of Americans (and also all Canadians) will need heating and oil is more often than not the essential fuel used. The second part is seen but perhaps missed, as we are given “The threat of European lockdowns is real, hitting global demand again while taking a heavy toll on the economy. Financial easing and subsidies worldwide have kept some demand in place, but the financials of major economies are bleak, which can be seen in the rising level of unemployment” what everyone forget is that in the past most of these people were in offices and shops, places of employment. During the lockdown all these people will stay at home and their houses, places that usually tends to be 5-8 degrees colder because they are at work, these houses will now need heating for all that time. In addition there are in the US over 1,050 power plants operated by oil, all these houses need power, all whilst many shopping centre needs less power, yet the need for power and heating will seem to rise, especially when the cold days come through. Even as some question “Global oil storage levels are still high, while the world is awash with oil and gas. International traders are openly questioning the current OPEC+ move to put extra oil on the market”, I am not convinced. Yes there is less fuel needed for jets, but jetful is only 2% of crude oil production, so I have been told in school (a long time ago), yet power and heating needs oil and there will be a shift, summer is gone, autumn is squarely here and we see a few hundred million places now needing power and heating most of the day, which stands against the needs of a working environment. As such the statement seen here “Saudi Arabia, supported by its main ally UAE, and Russia are both looking at a financial crash of unknown magnitude if oil markets don’t recover soon. Oil prices are currently too low to sustain the government strategy of both nations” becomes one of debate. I cannot counter it, but when we think things through, oil needs are essential during winter, and I see it, these people will not need gas for cars, so where is the tradeoff? Well, mot of these houses still need food, so the car remains used, to a lesser state. Yet heating and power will be needed to a much larger degree, so even as we can assume to some degree that there will be a lesser need, it will at best be a ‘somewhat lesser need’, in light of all this, why is there a call for a war (well, a pricing war)? The article still gives a truth, several in fact. We cannot disagree with “Without higher crude oil prices, not only is the Kingdom’s flagship Saudi Aramco suffering but most government projects too. The world’s largest oil company has already put several major new projects on hold, while at the same time reassessing investment levels of others. High-profile offshore projects” yes there will be an impact, and the impact will optionally continue into 2021, yet the larger stage is not how Saudi Arabia will do, the question becomes when the EU collapses after another lockdown, how will those government foot the bill for essential services (power and heating) when the trough (finance coffers) run dry?

So as we get to “If the threats made by Saudi Arabia’s Minister of Energy Prince Abdulaziz Bin Salman that the Kingdom has had enough of profit takers, short investors, or lack of support of members, are to be taken face value, the market should not be surprised if the OPEC leader decides again to go its own way. A more aggressive move by Riyadh towards market-share or oil prices is not at all unthinkable”, I start to wonder who the writer Cyril Widdershoven is and I see that he is linked to Verocy and that he oversees Mediterranean Energy Political Risk Consultancy. As such, I wonder if he hopes to create a pre-creationary wave, or that there is a stage which in the article is assigned to Prince Abdulaziz Bin Salman. I do not know (I honestly do not know), yet any quick or knee-jerk action required by others, tends to set a different stage in all this and when someone gives me ‘Why Saudi Arabia May Be Forced To Start Another Oil Price War’, I tend to wonder why something like that I needed. Yes from our side a lockdown is not good news, but who considered that they would be warming the house an additional 12-15 hours each day? 

It is well over half a day more, as such heating is required, as well as additional power, because these people will need their TV, their computer, their radio, their console and in many houses they need need close to one of each and with an additional 12 hours a day that drives up the need for power too. So yet there is every indication that there is some level of downturn for Saudi Arabia, I am merely not convinced that it will be as bad as me predict, yet I am willing to admit that I might be wrong. So I will let you do the math on what you need in your house, and consider, will it be more or less than before and when you consider that part, consider the thousands, nay millions of additional homesteads in Europe, the US and Canada. That is what went through my mind, and overall there is an impact for Saudi Arabia, but I am not convinced that it will be as dire as some say. When someone calls for a pricing war, they tend to multiple motives, that I what history taught me, I am merely thinking things through, but as stated, I might be wrong.  

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The tradesman and the deal

Yes, we all have moments where a deal didn’t sound great, but the way it was brought was essential when the deal was there ready to be signed, the deal was accepted, not because of the deal, but the tradesman involved had brought it in such a way that the deal sounded too great to pass up. We have seen several of these events in the past, it is the literal event where the numbers do not add up when the analyst brings the ‘good’ news, but the diplomat was able to swing it to the direct event where all were looking forward to the fringe benefits that this deal brought. That is how I saw the Nuclear Deal, and one day after April 1st, the JCPOA (Joint Comprehensive Plan of Action) was ready for signatures on April 2nd 2015. Now that the deal is up in smoke we look towards the people setting up the deal, but they are no longer there, there is merely the JCPOA and the Iranian party has decided to walk away from it, already in a stage where several parts have been transgressed upon, but diplomats state “be not afraid, we are on top of it, the injunction is minor” (in various publications in the last 3 months), meanwhile Iran has announced (or was that a promise or a threat) that they are about the increase tenfold the Uranium enrichment process. Ali Akbar Salehi, the head of Iran’s atomic energy organisation has made the statement that enrichment is now up to 5kg per day, up from 450g less than 60 days earlier, also , the Guardian (at https://www.theguardian.com/world/2019/nov/04/irans-production-of-enriched-uranium-rises-tenfold-in-two-months) gives us “It is not clear how the European Union will react to the latest step, but so far the EU has not put the whole nuclear agreement into review, which would be the first move towards its suspension and possible collapse“, the diplomats are not home, they are out and about on a golf course, on a sabbatical and on long term travels where they are not to be reached, no one wants to touch the toxic agreement, no one wants their nae connected to this, it is the deal that is bringing direct danger to the State of Israel and to the safety of the Kingdom of Saudi Arabia, so whilst Anna Ahronheim gives us in the Jerusalem Post ‘EU Parliament Members: Support Israel In Fight Against Hezbollah And Iran‘, we seemingly forget that the term ‘EU parliamentary‘ is transient and above all, the 8-person delegation (four MEPs and four European Parliament policy advisers) are close to a joke, 4 MEP doubled by policy advisors are out and about stating (well sort of) ‘We support you against Iran‘, you see 4 out of 751 MEP’s is not much, did they bring the combined voices of 442 coalition members? I do not think so! You see the EU needs to look important, so they keep their options open with Iran and the problem here is that the moment Iran acts with their enriched Uranium, the EU is less than likely to do anything, Iran has oil and the EU needs it, the chance of Iran acting out against Israel is a lot higher than Iran acting out against the Kingdom of Saudi Arabia and the chances of Israel being a first strike victim just went up tenfold. The same can be said for the article by Yonah Jeremy Bob, also in the Jerusalem Post, there we see ‘Iran-Us-Israel’s 40 Years Of Hostility With No End In Sight – Analysis‘, a definite truth, but here too it is all about hostilities. And the quote “One would think the US’s greatest hostility would be for a country that killed 58,000 of its soldiers and that Israel’s greatest hostility would be for a country that killed more than 2,500 of its soldiers in a single war“, but that is not where its at. And he danger is perfectly voiced in one paragraph: “Ironically, 40 years later, it is Iran that is the lasting threat against Israel as many of the moderate Sunni Arab countries are trying to find ways to live a stable coexistence with Israel, even if there is not yet formal peace with some of them” and that is where the danger lies. The two quotes ‘to find ways to live a stable coexistence with Israel‘, as well as ‘even if there is not yet formal peace‘ these two events are the heart of the matter, Iran is not interested in peace with Israel, Rouhani might be president, but he does not represent the Iranian Clergy or the Iranian military, they both merely allow Rouhani to be where he is and they both want to finish off Israel, and remove the power that KSA has, in that order, as such events are required and Iran is on track with it as Uranium enrichment is now allowed by the EU and the US is nowhere to be seen, merely in a stage where they think that more economic sanctions work, in an age where the half time of security is far below the half time of Uranium, and Iran has its targets set. And ever after the first strike on Israel there is EVERY CHANCE that the EU will not harshly react against Iran, they are knowingly selling Israel down the drain to ensure Middle Eastern Oil agreements with ALL OPEC nations, I wonder when the people will figure out that the EU is nothing more than a sheep’s rug that is not being used, it is merely there to give the large corporations the stick they need to deal with individual European nations, it is the result of becoming a corporatocracy.

The corporatocracy wants to find some level of solution, but then we are shown “Europe has made promises to find ways to circumvent the US sanctions“, it was the latest in folly’s, all doomed to fail, corporatocracy on one side, ego on the other, did you actually think that there will be a solution? Even as we see ‘French president Emmanuel Macron’s efforts to set up talks between Iran and the US to break the impasse‘ in the meanwhile the dangers are growing to dangerous levels, because of the Iranian acts, the Kingdom of Saudi Arabia has no options but to find an equal stick to work with and that is where the Russian and Chinese connections become important to the KSA, one of them has to hand over the technology and that will be the beginning of the end of the EU, because the most prevalent of all reasons are ignored, Israel might seem far away, but they are at the Mediterranean, and any explosion there will give particles all over that sea, optionally directly endangering Cyprus meaning that the radiation is already on European soil, in addition to that Turkey will see the impact and the SE of the Mediterranean will optionally become uninhabitable or fishable.

Yes, that is the direct impact we are looking at and the corporatocratic security that the EU relies on will now be a feigned form of apologies and when the Diplomats wake up it will be too late. That is the direct danger we face and at that point the people get to rely on denials from politicians who proclaim to be working for them. Good luck with that!

We can argue about the validity of the JCPOA and hat nuclear deal, but the direct show-able danger is that Iran has increased its nuclear actions by 1000%, whilst there are no power plants requiring this, do you need a road map to figure it out?

If politicians do not hand over a template of actions within the next 48 hours, to time will have come for citizens to act and ensure that some level of quality of life continues, and for those who are in doubt of it, consider looking at your map, at any map that includes the Mediterranean. Israel is in the SE corner, with radiation having no other course to go but west, the tides will change where that radiation ends up, it includes Greece, Crete, Italy, Spain and the most expensive parts of France (Marseille) as well as Monaco, It will take a while for radiation to move through the waters to those parts but once the radiation is in one part, there is no denying it, it will get to those parts as well. So how irradiated will you like your fish to be when you eat it? Perhaps you like your Paella to glow in the dark when you have dinner at 22:00 in Barcelona.

Feel free to think I am merely having a sense of humour, but that first explosion will be the instant that life in Southern Europe will end and the EU parliament is letting it happen, so what are their priorities? Where are their priorities?

As I personally see it the time to be nice to Iran is over, it has been for a while now and the idea to play ‘soft kitten’ games with someone who is rejoicing on their enrichment program to be 1000% of what it was 60 days ago is not the way to go.

 

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The assumption of right

This happens, it happens almost every day and we all (including me) see that happen. My view was that oil prices would go up. It is a logic set to demand and supply, a basic principle. As OPEC cut production by 1.2 million barrels a day, we would have expected a rise, maybe not directly, but overall when you get less of a product, the prices rise. It is the basic foundation of commerce; shortage tends to drive prices up. Yet a Forbes article proves me wrong (at https://www.forbes.com/sites/gauravsharma/2018/12/10/opecs-output-cut-not-enough-to-provide-short-term-70-oil-price-floor/#668312a8d58d).

This is fine, I never proclaimed to have all the answers, yet it does seem odd that less oil still drops the price from $80 to $51 in one month, and the logic is gone at my end of the table, yet I also know that oil prices are a little more complex, so I took this moment to learn a little. Gaurav Sharma gives us: “oil price is not just a story of supply; it is also a story of demand“. That part makes sense, yet this part only gives rise to changes if demand dampens and dampens by a whole lot. We see that with: “It cannot be ignored that Eurozone growth continues to disappoint, global trade is decelerating and China’s slowdown is a visible fact, and not just a forecast. We haven’t even mentioned the words “trade wars” and a prospect of further U.S. interest rate hikes“. Yes, so far I am on board, yet does that dampen the need for oil to THAT degree? This is precisely the setting when we consider: “If anything OPEC’s move provides U.S. drillers with a further incentive to pump more, and they already are, having made America the world’s largest producer of crude oil.” This implies that the need is changing; America needs less as they become self-reliant more. This explains the setting in the short term, yet it also gives rise to other dilemmas. As the US is using its own stock to keep cheap oil, we also see the change in the dynamics. Less money in the treasury through cheap oil, more costs (and optionally more jobs mind you), yet the budget and shortages of America (like $21 trillion debt) now has another not so nice tail. The interest on 21 trillion can no longer be fuelled with fuel. With a downwards economy, the debt will rise a little faster and there will not be anything left for infrastructure. Now, in this case none of this is the fault of the US Administration, or the current administration to be a little more precise. There is a lot wrong as the Clinton administration left the nation with surplus. I am not ignoring that 9/11 changed the game, yet the Obama administration had a clear directive to do something and that was not done. We can argue whether they had the options or not, we know that the war on terror has had a long-lasting impact. And the downward fuel price does not help. Yet cheap fuel is good for all the non-petrochemical industries and the people requiring cheap oil for heating.

The writer also gives us: “As things stand, a sustainable $70 oil price doesn’t look certain at all for 2019“. OK, I can only support that for as long as the US can keep up with the reductions that OPEC and Russia implement, when that stops working prices will go up, just how fast is unknown. It depends on the current storage and demand and I am not certain that this will not bite in 2019. I cannot academically argue with Gaurav Sharma and his 20 years of experience. His point might be valid, yet the Economic Times gives us: “WTI is forming Doji candlestick pattern and also near its long term Fibonacci retracement. Both are positive signs for crude oil prices“, If this happens within the next two weeks, my predicted increase of 15% comes true. Yet how is that chance? Focussing on merely my point of view tends to be delusional, which is why I liked the view by Gaurav Sharma. He gave me something to think about. It is Mike Terwilliger, portfolio manager, at Resource Liquid Alternatives, in New York who gave us (last week): “It’s a stunning market backdrop where everything from the adjectives used by the Fed chairman to whom is appointed head of trade negotiations can roil the markets. While the macro backdrop remains firm, with strong earnings and historically low unemployment, sentiment is unquestionably vulnerable. That would, in my view, fit the definition of an opportunity – a disconnect between the underlying and perception.” (at https://economictimes.indiatimes.com/markets/stocks/news/us-wall-st-tumbles-growth-trade-unnerve-investors/articleshow/66946928.cms)

I have always considered and known about ‘the underlying‘ and or versus ‘perception‘, no mystery there, yet are there factors we see to forget about? Part we get from the Guardian (May 2018) when we were given: “Demand is expected to average 99.2mb/d this year.” I am adding the part where that demand is not going to diminish over at least part of 2019. Even as we see more and more drive towards sustainable energy, most players are still all about presenting and not completely in the realm of achieving, hence oil demand remains stable (as far as stable tends to be), in addition we need to look at the oil futures. S&P global (at https://www.spglobal.com/platts/en/market-insights/latest-news/oil/121018-crude-oil-futures-stable-to-higher-on-opec-production-cuts) gives us: “risk sentiment remained heightened after US Trade Representative Robert Lighthize Sunday said that he considers March 1 to be a hard deadline for a trade deal to be reached with China and that tariffs will be imposed otherwise“. So basically the futures are rolling towards the up side making me correct, yet as long as the US can keep up with demand and as long as we see this continue, oil will remain stable and not push beyond $60 per barrel in the short term. MatketWatch is actually more optimistic towards the consumers of fuel. With: “Oil futures fell Monday to settle at their lowest in about a week on growing concerns surrounding a slowdown in energy demand“.

Why do we care?

We care because the drop in demand as projected and given by several sources is also the economic indicator that not all is well. This is seen in several sources. Goldman Sachs, via CNBC gives us: “We expect the U.S. to slow down to less than 2 percent by the end of next year and as a result of that you could see the market getting quite scared“, yet would be an overly optimistic view. We saw last week that the US Economy gained 43,000 jobs less than last year giving us a much less optimistic view on that part of the equation. Apple is falling down, tension on the Economy (specifically the US economy) is on the rise, some might say sharply on the rise. In addition, the Financial Post gives us: “Wall Street ignored trouble signs for months. Now it sees risks everywhere Markets face stomach-churning swings as economic uncertainty grows“. Even when we stick to the headlines, it was nothing really breathtaking. The US trade deal with China, the growth fears in the EU, they all link into a negative setting of the economy. Not recession, yet a negative impact due to no growth (too little growth is more accurate) and the events in France do not help either. In addition, there is now a realistic chance that Italy is entering recession territory. Even as it is possible to avert it, it will means that the Italian economy will end at a standstill (which is not a recession), yet in all this, with the Two large EU economies at 0 (France and Italy), it falls to Germany to bring home the bacon and sausages, implying that they are all eager and desperate to sink any notion of Brexit as soon as possible. As we see the jesters giving us that the UK can exit Brexit, that whilst they are seemingly unable to get a handle on the ECB and their everlasting lack of transparency, so whilst we see (at https://www.euractiv.com/section/politics/news/ecb-chief-rejects-chance-to-adopt-eus-transparency-register/) the unsettling part “The European Central Bank’s President Mario Draghi has rejected calls from European lawmakers to have financiers who give advice and feedback to the ECB register as lobbyists, saying they merely provide “information”.” I merely see an extended reason to pursue Brexit stronger. I actually am in a state of mind to demand the right for targeted killing these so called ‘informers’, which is a massive overreaction, yet the need to get these information givers listed next to the lobbyists is becoming more and more essential. If any nepotism, or if any under the table deal is found within the EU, their exposure is essential. I believe that this will flush greed out into the open rather fast, but then I am merely one voice in all this.

It connects

You see, the QE is supposed to come to an end this Thursday, or at least the formal announcement to end it at the end of this month. However, when we consider Reuters: “the economy weakening, trade tensions darkening the outlook and headwinds still on the horizon in the shape of Italy and Brexit, financial markets are looking ahead to next year and just how the ECB will protect the bloc from a severe downturn“, not only does the rejection to officially end QE have an impact, it also means that suddenly demand for things like oil will suddenly spike, that means that reserves go down, oil prices go up and there the cost of living will impact harshly on Europe in winter and as such on American soil the need for a price hike will not really be one that people will cherish, and when we add to that the part that Germany also has a depressed economy to look forward to, we see the three great economic players all in a diminished form, implying that the economy will tank on the low side not merely in this year, it will have a depressed form of growth in 2019 as well. There will be all kinds of lessened good news, whilst the good news is not that great to begin with. It gives rise to the point that I might be wrong on the oil price as I expected it to grow by 15%, it might still go up yet not that much and it will come at a really high cost this time around.

Right or Wrong?

It does not matter in this case; the issues seen are openly visible and heralded throughout the net, magazines and newspapers. The issue of ‘the underlying‘ and or versus ‘perception‘ is at the heart of the matter. Even as energy and oil prices show certain paths in all of this, it does not make it a correct view (which is neither right not wrong), what we perceive in opposition to the underlying elements connected, that is the bigger picture of impact. It is also a new stage. As the politicians are fighting over the carcasses of opportunity and bonus structures, we see that Germany has a few other elements in play. It is not merely the manufacturing part of it all, it is infrastructure as well and that is where we get my earlier statement, a statement I gave 3 days ago in ‘Behind the facade‘ (at https://lawlordtobe.com/2018/12/08/behind-the-facade/), if Huawei (minus one arrested exec) shows their value in Germany with the given quote, which came well over a day after my article (at https://foreignpolicy.com/2018/12/09/germany-is-soft-on-chinese-spying/), where we see: “In the terms of reference published last week by the German Federal Network Agency for its 5G auction, security was not even included in the conditions for awarding the contract. In October, the government announced: “A concrete legal basis for the complete or partial exclusion of particular suppliers of 5G infrastructure in Germany does not exist and is not planned.”“, as well as “For Deutsche Telekom and other network operators, the situation is clear: Huawei offers innovative and reliable products at highly competitive prices. Legally, Deutsche Telekom does not bear any liability for the security risks associated with Huawei technology. And the company does not care about the fact that Huawei’s price advantage is the result of a highly skewed playing field in China. In the world’s largest market, domestic providers control 75 percent of the market, giving them unbeatable economies of scale“, we see the hidden trap that some people related to Mr S. Tupid are now in hot waters (optionally with the exception of Alex Younger). Not only have they not given any evidence regarding the security risk that Huawei is supposed to be. Foreign Policy also gives us: “Given the massive cybersecurity and national security risks, the only responsible decision is for Berlin to follow the Australian, New Zealand, and U.S. lead and ban Chinese providers from the German 5G network“, yet there is no evidence, that was always the problem and so far there is more and more indicators (especially in Australia) that the claim “In none of these three countries will domestic suppliers be the primary beneficiaries“, which I regard to be false, on paper it does not impact ‘primary beneficiaries’, but it does harshly (in Australia at least) negatively impacts the competitors of Telstra, which amounts to the same thing (TPG, Vodafone, Vodafail et al). And when we go back to my writing in ‘Behind the facade‘, where I give the reader: “You see, Huawei can afford to wait to some degree, as we see the perpetuated non truths of devices being pushed forward, the replacements better do a whole lot better and they are unlikely to do so. When we see another failure in 5G start and we see transgressions and those screaming that ‘Huawei’ was a danger, the moment they cannot prove it and their ‘friends’ give us a device that is malicious, the blowback will be enormous. There is already cause for concern if we go by CNBC. They give us a few points that show the additional fear that America has on Huawei“, when the intrusions are not proven and Huawei shows to be a strength for consumers and businesses, heads will roll, there will be a demand for blood by the people, which means that politicians will suddenly hide and become ‘on the principle of the matter‘ and transform their perspectives into in all kinds of lethargic versions of denial.

That too is impacting the economy, because those on track to start pushing out new innovations on 5G will have a clear advantage over the other players and that pushes for success even more, will it come to pass? I cannot tell as there are too many elements in motion and the policies now in place are off course under optional revised in the future as Annegret Kramp-Karrenbauer will replace Angela Merkel if her party is re-elected as the biggest one.

We are seeing a few versions in the assumption of right, and we need to realise that the assumption of right and speculative version of what will happen overlaps one another, but they are not the same thing. States of delusion tends to be an impacting factor. Am I delusional to think that big business gives away greed? Am I delusional to consider that Huawei is not a danger? If we go by ‘the underlying‘ and or versus ‘perception‘ I am correct. You see, would China endanger the true power of economy where Huawei would become the biggest brand on internet and 5G requirement, using it for espionage when there are dozens of other methods to get that data (including Facebook policies implemented by Mr S. Tupid and Mrs M. Oronic). As this sifting of data exists on many levels in several ways, not in the least that the overly abundance of TCP/IP layer 8 transgressions happening on a daily basis and at least twice on Sunday), when we realise that, why would any Chinese governmental (namely Chen Wenqing) endanger a Chinese technological powerhouse? The logic is absent in all this. This gives us the light of Alex Younger opposing the others. He gave a policy setting of national need, whilst the others merely voiced all this ‘national security‘ banter on risks that do not even exist yet. Especially when we saw the Australian version of: ”5G will carry communications we “rely on every day, from our health systems … to self-driving cars and through to the operation of our power and water supply.”” Perhaps anyone can tell me how many self-driving cars there are at present or within the next 10 years?

And none of these клоуны (or is that Sarmenti scurrae) considered the step to start with Huawei 5G and replace them at the earliest convenience whilst you work out the bugs of your currently incomplete 5G solutions, the few that are out there for now, a simple business decision that is at the heart of any daily event, including military ones. A nice example there is the ugliest dinghy in US history (aka the Zumwalt class) where we see: “Zumwalt-class destroyers are armed with 80 missiles in vertical-launch tubes and two 155-caliber long-range guns“, which is an awesome replacement from the previous version that was regarded as a Ammo less Gun edition, in the face of continuing budget shortfalls, personnel problems and of course the fact that the previous edition was $1 million per shell, for its smart (GPS) capability. The mere elements that some sources gave out that shooting straight was an ability it naturally acquired as well as the fact that a $440 million ship was not given the budget to get its unique, 155-millimeter-diameter cannon that can shoot GPS-guided shells as far as 60 miles the 600 rounds of ammo at a total cost of $600,000,000. And that is apart from the $10 billion the Navy spent on research and development for the class. So perhaps people still have questions why I considered this monstrosity to be regarded as a ‘sink on the spot‘ project. The fact that The Drive gave us a year ago: “the Navy has steadily hacked away at various requirements, stripping planned systems from the design, in no small part to try and control any further cost overruns and delays. Close-in protection, ballistic and air defense capabilities, and various other associated systems are no longer part of the base design, something The War Zone’s own Tyler Rogoway explained in detail in a past feature, leaving it with limited utility despite its size and cost” (and apart from some minor issue regarding stability and stealthablity which we shall ignore for now) in that light the entire 5G redeployment after the fact and the ability are acquired, tested and evaluated, at that point re-engineering away the advantage that Huawei had built, did that not make sense within 10 seconds?

It is common business practice in IT, and has been for over 2 decades, that is why ASUS and not IBM rules the lay of the desktop land nowadays. so getting even would not have been the dumbest idea either, but no, we see all kinds of unfounded accusations and that is where those people are most likely to lose and out in the sunlight, when they cannot prove that claim, that is when we see on how some elements will soon be disregarded. In this Huawei has a nice advantage in Germany and Saudi Arabia. When they prove the elements there, we will see a large driven technology shift and those making the claims at recent days better have their stories straight.

Yet again, I might be wrong, my assumption of right might get sunk on false premise and nepotism, I do recognise that this has happened before and will happen again.

The assumption of right is at times hindered on delusional thoughts, as well as the need that the other players are straight shooter, and that definitely applies to all politicians, does it not?

 

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Heating at what price?

We all know it; in winter it is about the heating, in summer about the quality of the fan, in addition, we need to make sure that apart from food, and drinks that we have the proper attire. We have known this for almost a lifetime. So even as this is known in the US, President Trump decided to have a conversation with Saudi Arabia to increase production to keep prices down. It seems really nice that Saudi Arabia came forward, yet they had no practical reason to do that did they? Not in an age of bullet points, business cases and maximised profit.

Oil is a commodity, and in the professional world of business, you have to go for the buy low, sell high equation if you want to be in business. So I was surprised to the extent that Saudi Arabia was facilitating towards America.

Yet this is seemingly coming to a halt when Bloomberg treats us to: ‘Putin Says Russia and Saudi Arabia to Extend OPEC+ Oil Pact‘. In itself the title does not give the US the warning that they need to read, the text does however give us: “OPEC, which pumps four-in-ten barrels produced worldwide, will convene in Vienna on Dec. 6 to discuss output cuts after oil prices in November suffered the largest monthly drop since the global financial crisis in 2008” the article also gives us “an advisory group to OPEC told ministers the market is oversupplied, with a need to cut about 1.3 million barrels a day from October levels“, apart from Bloomberg, there were several others showing the news, adding their own political flavour towards facilitation and that will be discussed soon enough. The shape here is not merely that there is oil in the Al Saud family, it is the fact that they are (as any good business does) trying to maximise what they have. People seem to forget that. It might seem a buyers’ market, but that is merely the presentation, once production stops for 12% or more that balance will change really quickly. Let those who want it somewhere else, go somewhere else. The direct impact is that it merely drives prices faster. Even as there is an oversupply, the entire setting seems to be focussed on getting past this winter, the players are in error not to focus on the next winter, for that part will be impacted and it will be a large impact.

As the conversation between Russia and Saudi Arabia continues, whether or not it is some OPEC+ setting, the setting that is evolving is one that I mentioned in ‘Two issues in play‘ (at https://lawlordtobe.com/2018/11/20/two-issues-in-play/). The day after we saw Senator Lindsey Graham (R-SC) giving the statement that Crown Prince Mohammed bin Salman was “unstable and unreliable”. So as we were treated to ‘Putin says Russia, Saudis agree to renew OPEC production cuts‘ mere moments ago. How much reserve is there? How long until the prices are raised, optionally just before Christmas as a speculative Ebenezer Scrooge bonus to your household?

The entire matter was just waiting for an opportunity to happen, as we see this unfold over the next few days, we will see additional parts too. The best example that anyone who served knows is that there are three people you do not mess with. The first is your Supply officer, the second is the payroll officer and the last one is the cook. These three are sacred and you leave them alone. So why push the person who is a supply officer, that impacts your payroll officer (as you end up with a fair amount less) and that in turn unbalances what the cook gives you as you cannot afford a full meal. As the price of food goes up, as we see clear data from several sources (Washington Post and HILDA) that larger groups of workers have been on stalling incomes for years now, have I made a clear enough point? When the total income is the same and food prices go up, what would you surrender to the currents of loss, once you realise that fuel prices will be on the rise as well?

In anticipated opposition, don’t give me that ‘ethics regarding Jamal Khashoggi‘ routine, because the bulk of the US senate and US congress have not made any noise regarding all those journalists (well over 240, with over 140 wanted) in Turkish prisons, several of them for life. Not much noise is there? The fact that Turkey isn’t getting slammed for being an ally of Iran is still a mystery, yet there might be some European need there, especially around some ‘nuclear accord’.

Even as I anticipate some reaction in all this, we must also heed the opposition in this. Here I call for Oilprice dot com. Martin Tillier gives us (at https://oilprice.com/Energy/Crude-Oil/Oil-Output-Cuts-May-Be-Coming-But-Dont-Bet-on-It.html): Crude oil has been in freefall, with both Brent and WTI having lost around a third since hitting highs in early October. There are some demand related worries involved as trade wars threaten to slow global growth, but the biggest reasons for the drop are supply related. A couple of months ago, those highs were achieved in anticipation of a disruption to global supply as the Trump administration’s abandonment of the Iran nuclear deal with Iran and the resulting sanctions took effect. Since then though, a few things have become clear. Firstly, U.S. production has been stepped up by more than imagined. In addition, the Saudis increased their output to help offset the expected loss from Iran but, most importantly in that context, that loss doesn’t look likely to materialize“, he goes on giving us the tough talk part and he is right. Whether we see it as political windbags or perhaps merely a storm in a cup of tea, the impact is not merely some good needed, it is a larger issue that goes beyond supply and demand. Just like the predicted shortage of concrete for the building of Neom city. Those who saw it have been upping their ability for production. Several have doubled it and there is a chance that the UAE will have its own large concrete facility soon enough. As Saudi Arabia could decide to cut production, it could in addition merely seek to seel part of it elsewhere. The end result is the same, yet that trajectory will be much slower. For the current administration it is about getting past this winter, with the next winter being a larger impact on the elections, so it will also impact the cost of living all over the US.

CNBC gives support here (at https://www.cnbc.com/2018/11/28/expect-a-saudi-first-policy-on-oil-production-cuts-regardless-of-trumps-demands-analysts-say.html). It is early days and what we anticipate or expect does not usually happen, yet with “Analysts believe that despite Washington’s geopolitical leverage over the kingdom, after its staunch defense of the Saudi monarchy amid accusations over its alleged role in the murder of Saudi journalist Jamal Khashoggi, Riyadh will still pursue its own economic interests rather than abide by the wishes of President Trump. The pivotal question hanging over oil markets remains that of production cutbacks. Who will tighten their taps, and by how much?” This is the game for now and even as it is all set in common sense, the one part we cannot anticipate is ‘by how much?‘, I predicted a rough 12% a week before this article came out and so far, the fact that it is still likely to happen before the end of the year, optionally before before Christmas, it does remain to be a the speculative part for now. I expect Russia to try and get a consensus with Saudi Arabia to go well over 12%, optionally closer to 20%. It is essential for Russia, it will be good to the super wealthy oil friends that President Putin has and it will also bring joy to the coffers of the Saudi Monarchy. The question is who can pick up that slack and how fast. The US has its own facilities in it, yet could they keep up? Leave it to the US to piss off 3 of the top 5 producers, which leaves Iraq and they do not have the working infrastructure, moreover, volatility is still their middle name for now, as well as the fact that they merely produce 16% of the other three that the US insulted (more than once I might add).

So will oil prices go up? If the US is set on its current policy, the issue of oil prices is a given certainty, the fact that they will go up before winters end seems more and more likely, yet by how much is not to be anticipated. In this Saudi Arabia, merely needs to have a ‘technical glitch’ and the pumps go down twice for 2-3 days, and the damage is done. At that point, Saudi Arabia merely has to drop production for 15%-20% until the technical matter is ‘resolved’ and all the US can do is pray for Saudi Arabia to accept the assistance of their engineers. Although as Saudi engineers go, their knowledge might be (vastly) superior in all this, they have had plenty of time to get ahead of the curve for some time now.

Should this happen, what will the US do? Throw a tantrum; throw a curveball? I am eager to find out, because the entire journalist part is still a matter for discussion. You all seem to know Jamal Khashoggi. Yet how many of you know Mehmet Topaloğlu, killed by the Turkish police, as was Metin Göktepe. Then we see Önder Babat, Serena Shim, Rohat Aktaş and Yaşar Parlak. The Turkish authorities have shown less than 0.5% effort here when comparing it to Jamal Khashoggi and the silence from the US in these deaths (a few of many) have been deafening, we can ignore the European Union in all this as they seemingly do not care. So when I made the claim that Jamal Khashoggi is merely a convenient puppet to hit Saudi Arabia with, I knew what I was talking about. When we see that inaction is the natural state, the entire Jamal Khashoggi was a game of political players, emotions used to drive an audience, an audience giving Google search currently well over 72 million hits when we see for that JK journalist. Try that with one of the other murdered or imprisoned journalists in Turkey, they are not even a blip on the radar. It is my speculative thought that Neom and the future drive by Saudi Arabia scared the US as it did several European players. It is the first time in history that a Middle Eastern nation has the ability to put the US and EU to shame with their lack of technological progress. They claim to have it, yet Saudi Arabia is making a move towards ‘showing to have it‘, changing the game for both the US and Europe.

This is where we see the difference. China and Russia see this as an opportunity, whilst Europe and the US are seeing it as an inconvenience. In Europe it seems that only Salini Impregilo is taking the charge of that future, having scored already well over half a billion in contracts, the rest of the players are either under the surface or not there at all. Is that not odd either? When we see close to a trillion dollars in opportunities in Saudi Arabia, the noise should be deafening but it is not.

How does that matter?

Well, if oil fuels the coffers, the daily input is more than enough to warrant actions, yet I see not activity anywhere, not to the degree it should have. In all this, within a day I found a way to revolutionise information using 5G (designing a new device in the process), and there we see opportunity, a pilot the size of a city that could have global repercussions and no one is there. I cannot be the only player in town, my ego would never be that delusional, yet there is not activity at all. It makes sense that it is not out in the open, yet some people would have to file for concepts, optionally for patents and I see the light of at least 4 of them right there, yet there is no visible action, and believe me, as a Master of Intellectual property law, I do know where to look.

Karma kicks greed’s ass

We have all seen the news when it comes to Huawei and the list of those banning them is growing, there too we see that China has a vested interest in making a local company a true success and there we see the options too. So when we consider the Verizon offer: “As part of a 10-year agreement, Verizon will expand its wireless small cell infrastructure to build out its existing 4G LTE network and prepare for 5G deployment, with streamlined permitting from the City of Boston. TV licensing will also be amended to support an expansion of Verizon’s Fios TV service to more neighborhoods“, it came in 2016. So consider the actual wording ‘as part of a 10-year agreement‘ and ‘prepare for 5G deployment‘, by the letter, it implies that Boston will optionally not have 5G before 2026, in this it could optionally have been in the foundations of Neom by 2021 (depending on then the first buildings are completed). It would be a kick in the nuts for the US to have something operational after Saudi Arabia, does it not?

Karma bites like Piranha if need be.

This all impacts the oil price, because the Saudi Crown Prince is driven to get Neom right, it also impacts the coffers so whatever is done regarding the oil, would optionally not be allowed to endanger Neom. I cannot prove that, yet I am decently certain that this is the case. We can see this as an opportunity, that as the US seeks options, it can make other offers to offset the optional ‘loss’ to Saudi Arabia. If enabling can be done in money or goods, offering goods is still an optional path to take for the US, yet they too need to realise that the overly visible acts of playing the ‘Khashoggi blues’ whilst not making any noise on the ‘Turkey newspaper shuffle’ is going to be a debate soon enough, especially as there is enough evidence that Turkey has been facilitating for Iran.

In the end

In the end it is about the oil prices and I expect them to go up regardless of what happens, yet there is leverage to a small extent, the amount of price increase is one that could be under negotiation. The question is, will we see proper actions by the US and Europe to limit the price increase and the impact on their citizens? I expect to see an answer to that part within the next two weeks.

Have a fun Monday!

 

 

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Round two

Yesterday was a day when I thought it was essential to speak out against the language used in the NY Times. It was part of a larger whole that will be shown to all over time (as I am missing three pieces of evidence). Yet the oil issue was in the centre of it all and so it remains. Now, I had done my homework (for the most), yet there was one element I overlooked and it is an important one. Reuters was awake and gave us (at https://www.reuters.com/article/us-oil-opec-saudi-trump/can-saudi-arabia-pump-much-more-oil-idUSKBN1JR1HI) the part I forgot about. “the kingdom, OPEC’s biggest member, can barely raise output by 1 million bpd to 11 million bpd and even that would be difficult, according to industry analysts who forecast a further oil price rally due to a lack of new supply“, yes we forgot about the engine that drives it all. It has been increasing production again and again, yet at some point; the system that drives the production of crude reaches its maximum and that is where the teller of barrels is now hitting a little issue. I like (yet optionally disagree) with Gary Ross, head of global oil analytics at S&P Global. With “While Saudi Arabia has the capacity in theory, it takes time and money to bring these barrels online, possibly up to 1 year“, we see a ‘stabilising’ comment, but based on what, knowledge of the parts that are driving the crude oil machine forward? Perhaps that is true, yet if that is the case the one year setting is off. Other elements require adjustment, but the one year (yes he did add ‘up to’) implies that engines and perhaps pipes require adjustment, meaning that the system is set to increase beyond the 100% marker might be more dangerous. Pressure can be a bitching issue and the mere fact that even in suburbia water mains still go out (mine went kablooie yesterday evening) implies that there is a setting where pressures do not align. Now with water it is a nuisance, so my evening of pasta went straight out of the window. With crude oil it is another matter entirely. There the blown gasket can optionally make a mess to the environment and more important, it could optionally force Saudi Arabia to turn the dial down to 60%-80% until that mess is fixed. When that happens they go into a freefall where one plugging evokes another part to burst emotionally, that is where the problem starts and that is an important side in all this.

It is not the only part; CNBC gave us (at https://www.cnbc.com/2018/06/30/oil-deal-may-stir-the-pot-in-the-middle-east-and-test-saudi-capacity.html) a few other parts. Even as we might be able to ignore “Iran and Venezuela are both reeling economically, with Tehran feeling the bite of new sanctions“, especially as Iran has a set clientele. Yet the given part of “President Donald Trump surprised the world on Saturday by announcing a new side agreement with the Saudis to compensate for supply shortages from crisis-hit producers“. I found the setting of ‘compensate for supply shortages from crisis-hit producers‘. It is interesting for two reasons. The first is that the US had no application for Iranian oil in the first place and the second is that Venezuela had all kinds of issues; I personally believe that the low price of oil is reasons for some of it. Yet when we take a step back we get three pieces. The first in 2017 when we saw the Business Insider treat us to “Falling output at refineries means that Venezuela needs to import more gasoline, squeezing the national budget even further. Refineries are currently working at less than 30 percent of average 2016 levels. State-run oil company PDVSA is importing between 100 and 150 thousand barrels per day of gasoline”, so why are the refineries down to 30%? In addition, that is the refinery issue, the setting is not the petrochemical part it is merely the availability of crude oil that was the issue. The second was March 2018 where Reuters gave us “Indian imports of oil from Venezuela have fallen to their lowest levels in over half a decade, shipping and industry data showed, as a severe economic and political crisis hits crude output in the South American OPEC member“, so that is a production need, which beckons why India has decided to import less, are there suddenly 275 million cars less? No there are not, just try to blindly cross Saket Metro Station in New Delhi and you will get hit by two dozen cars within a minute, so that part is not happening. Forbes had its own version of the issue in 2017 and even as it sounds acceptable, I belief that there is a larger issue in play. You see We might look at the Financial Times and see ‘A Venezuelan oil embargo would wipe out Maduro & Co‘, yet the setting is larger than that. Consider Chili, Brazil and Argentine, all needing petrochemical products, the fact that refineries have issues is one thing, the fact that there is a shortage of crude oil and that cannot be met is equally an issue, so why is that?

I have no answers, mere speculations, yet whenever I searched for the Venezuelan reserves and beyond the Argentinian president Mauricio Macri advocating of ‘there would be ‘broad support’ across the region for a full oil embargo‘, I see no evidence of shortage (out in the open). All these actions on Venezuela, forcing them into even more hardship, how has that ever led to anything positive?

Yet the story is the crude, would an arm-twisting scenario to send 30% of the crude oil price into a fund that is only to be used for humanitarian and local support. Would that not work? It seems better than an embargo kicking things over. The additional news that China is importing less from that source is making things worse and no resolution will be coming forward making things better. The other party Iran is a given, yet they still export to a few nations.

Oil price dot come is giving numbers that clearly imply that over a year oil production has fallen by close to 50%, with the implied forecast that the International Energy Agency (IEA) states regarding the Venezuelan oil production which could drop to just 800,000 bpd or even lower next year. it seems that most actions against Venezuela is a little too harsh, now nobody is implying that they are saints, yet we can all agree that they are not Iran. In 2017 it was all about censorship (or anti hatred laws as the Venezuelan government puts it). Yet, there is light at the end of the tunnel. Al Jazeera (at https://www.aljazeera.com/indepth/features/2017/04/venezuela-happening-170412114045595.html) gave us a more in depth part. So when I see some of the issues, with items like ‘Health assistance’, ‘Food shortages’ as well as ‘Hyperinflation’, where a deal could be made that 30% of the sale goes into 10% sprockets addressing these three settings, it could be an optional solution to negotiate. It seems to me that an embargo is often the least of all working solutions, even as it enables the US to get basement prices on a million barrels a day, apart from the setting that they have more immediate problems and removing Venezuela form the equation pushes the other pressures more. Even if it means that the Maduro administration would have to swallow its pride, there might be a path to a long term solution that they were part of, at present they have nothing to look forward to but an angry mob of people left with nothing. It should not allow the US to discuss the price of eggs, yet the Maduro government will realise that the price of fish came at a premium and it is not derived from merely sweat and tears.

This setting is important, because when we look back at the Saudi situation with its 10 million barrels a day, when the pressure goes wrong and the US suddenly loses access to two to four million barrels a day. when that happens and that danger is not unrealistic, do you really think that the American economy is ready for a 25% price hike? Do you think that there will be mere frowns? That danger is not merely a speculation. the danger was shown last week when we saw reports on “The shutdown of Syncrude’s oilsands facility last week could lead to a shortage of oil in North America, investment bank Goldman Sachs has warned“, the source was the Huffington Post (at https://www.huffingtonpost.ca/2018/06/26/syncrude-outage-oil-shortage-north-america_a_23468490/), in addition we got “Syncrude’s facility has a capacity of 350,000 barrels of oil per day, but it shut down production on Friday after a transformer blew, the Globe and Mail reported. The company says production could be offline for all of July“, so there was the given part I left for last, merely a ‘transformer’ and without Optimus Oil rolling out the juice, no crude for a month. So do you really want to play a game of Russian Turbines with the Saudi oil setting and pushing the need from them to deep into the red zone of engineering safety? With that given, what are the dangers when the push goes south in a very realistic way when the downfall will be 90-150 days? Do you still think that finding some dialogue with Venezuela is not an optional much better solution? I would tell you the story of the silly politician and that person relying one basket for all his eggs (and his demoted belief that they were golden ones), your parents might have told you the story when you were young. So when Goldman Sachs gives us: “shrink stockpiles at the main U.S. storage hub at Cushing, Oklahoma, putting upward pressure on oil prices“, they are telling you no fibs, what they neglect to mention is that the danger is a lot more realistic then most predict and the impact could end up being an increase in price that is not pennies, but several dollars. to emphasize that, you merely need to consider May 2008 when the crude price went to $148 a barrel, twice the price it is now. You still ready to play that game of chicken with oil producing hardware, because in the end you will always lose that game. These devices adhere to the cold calculations of pressures and power and in the end the Wall Street motto of ‘120% of norm is merely our version of a Monday morning wakeup call‘ will backfire to all those who relied on affordable fuel.

 

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The Iranian funds play

Today is all about Iran, the Washington Post and many others are giving the world the information that the previous president misled congress. Yet the Washington Post phrases it as ‘Obama administration misled Congress on possible Iranian access to U.S. financial system‘, they also mention that it is a Republican investigation. There are two issues, right off the bat, even before you read the article, the question becomes, where were the FBI and the CIA in this?

So when we get the first lines with “The Obama administration went out of its way in early 2016 to help Iran recoup previously sanctioned oil revenue stranded in an overseas account after the nuclear deal went into effect and actively misled Congress regarding those efforts, according to the results of a nearly two-year Republican investigation released early Wednesday“, we need to realise that the setting is wrong from the very start.

Before I go there, let’s follow the trail of crumbs that we get offered. next there is “Iran wanted to convert the money into U.S. dollars and then euros, but top U.S. officials had repeatedly promised Congress that Iran would never gain access to America’s financial system“, which is followed by “the Obama administration secretly issued a license to let Iran sidestep U.S. sanctions for the brief moment required to convert the funds through an American bank, an investigation by Senate Republicans released Wednesday showed. The plan failed when two U.S. banks refused to participate” and finally we get: “the revelation is re-igniting the bitter debate over the nuclear deal and whether former President Barack Obama was too eager to grant concessions to Tehran“. The full story (at https://www.washingtonpost.com/politics/federal_government/obama-era-license-aimed-to-let-iran-convert-money-in-dollars/2018/06/06/60be6d36-6971-11e8-a335-c4503d041eaf_story.html) gives us a lot more, but initially, we get ‘The plan failed‘. So this was seemingly (according to a previous Obama official) about the Iranian money held overseas. The issue seems seen with “No one involved seems certain whether Iran has yet received all of its $5.7 billion“, yet as I see it, that does not seem to be the case. When you think this through, $5.7 billion amounts to 11.2 million barrels based on the average oil price, this amounts to funds equal to 26 hours of oil production in Saudi Arabia, 26 hours! Now we are not debating whether Iran is allowed access to the funds, the fact that we see that this much oil (or so little in Saudi Arabia), whilst in Iranian production it amounts to 4 days of oil production is a Joke. Oil still goes to Asia, so all this fanfare for 4 days of oil production? This is about something else entirely, or it is about a very different amount of money. I let you mull that part over, so when we look at the second article (also Washington Post), we see in the article called ‘Secret Obama-era permit let Iran convert funds to dollars’ where we are ‘treated’ to “Iran had been promised access to its long-frozen overseas reserves, including $5.7 billion stuck in an Omani bank“, which we knew to some extent, yet the full economic value is not given, which is also an issue, you see that stuff makes interest, so at that point who gets that money? Is it locked in the Iranian account, or was it the balancing act to the seesaw that is going up and down on €11 trillion in essential European and American debt guarantees? The second article has pretty much what the first one had, but we also see (slightly more clearly) “And when questioned by lawmakers about the possibility of granting Iran any kind of access to the U.S. financial system, Obama-era officials never volunteered that the specific license for Bank Muscat in Oman had been issued two months earlier. According to the report, Iran is believed to have found other ways to access its money, possibly by exchanging it in smaller quantities through another currency“, this now gives us the part (when going back to the first article: “Lew, according to documents reproduced in the report, had been given Treasury talking points explaining the Omani conundrum, he chose not to mention it in a House hearing in late March“, this reference to former Treasury Secretary Jack Lew, where we wonder that if this is about the question, was the question correctly phrased, or perhaps the better setting is, was he breaking any laws not mentioning the ‘Omani Conundrum’?

I cannot state without the full text and even if we agree that there is an issue, we now get back to the very core of the matter. If it involves US Banks and when we reconsider ‘the plan failed when two U.S. banks refused to participate‘, two out of exactly how many banks? That part is also not revealed here. So now we get to the part where it becomes either the US treasury AND the FBI who seemingly did not act here, the Omani Conundrum implies that the CIA turf was trodden on and the communications (in several levels) give us that the NSA ignored it. So what is going on? Did anything actually happen? Because that question is becomes valid when we reconsider ‘the plan failed‘. If that is true, then why is the Washington Post, one of the most revered newspapers in the USA not giving the correct light on this? In addition, the outstanding questions that we get from the mere substance given becomes an issue when we see the words of President Trump “this disastrous deal gave this [Iranian] regime — and it’s a regime of great terror — many billions of dollars, some of it in actual cash — a great embarrassment to me as a citizen and to all citizens of the United States,”. Yet how much money was actually released, through the deal and from 2015 onwards? None of that data is available through the articles. So what exactly is US congress playing with now, because this all looks like a really loud smokescreen, all emotion and no contributable facts on the matter. How many banks were part of it (and their names), which two banks refused (double plus points for them two) and in light of merely one $5.7 billion source we need to see the scope of the money, especially in light of the setting that Iran is even now shipping oil to Asia. Are those not valid questions? In all this, where were the FBI and CIA when this was going down and more importantly why is there no mention of their part in all this, or were they not part of any of it? That is equally an issue, because if there is evidence that they were in different states of activity and actionable requirements regarding Iran during the two presidencies, the people have an equal right to know, do they not? You see, in the larger scope that matters, because the Yemeni issue is covering two presidencies, so if (a very clear if) the CIA was less vigilant during the previous presidency, it might also explain a few things on how missiles are getting shipped from Iran to Yemen, if the manifest states 1013 barrels of oil for humanitarian aid, it might explain a little more than we bargained for. Now the last part was speculative and knowingly incorrect, yet the question remains valid. This was not some article from the enquirer, or the Canton Cherokee Tribune, it is the Washington Post. In many (global) cases that newspaper is seen as gospel right next to the Financial Times, so when two articles give us so many questions in all this, I need to wrap my head around the option that Martin Baron is either on vacation or perhaps down with the flu. The man who inspired Tom McCarthy to make Spotlight should have a better grasp on the entire Iranian fund issue and how it should be made visible in my Hummer opinion.

Because behind all this is not merely the oil, or the Iranian uranium enrichment plans. It in equal measure gives another light that we get from “The draft involved a general license, a blanket go-ahead that allows all transactions of a certain type, rather than a specific license like the one given to Oman’s Bank Muscat, which only covers specific transactions and institutions“, you see, if that is in play and when we remember the G30 bankers group, the one that got some limelight, for ONE DAY. After that all the media dropped the issues when the people were given the sight of Mario Draghi being a member of this insiders only club, a club that he had to give up and no one (except for me that is) followed up on that. All the media left it alone. So when we see that part from April 18th 2018, where Reuters and the Financial Times give us that he would remain a member, the ECB and others never acted on it and silently wait it to go away, now we see the Omani Conundrum issue and I have to wonder, as bankers will do trade with anyone, what licenses are out there that no one knows about, more important, whoever the owner of the funds are that they get to play with ahead of all other banks, with close to €3 trillion in extra printed money for the game of bonds, in all this, what else are we not seeing and as this optionally directly reflects on Iran’s and all the billions we are left unaware of, how is it that the Washington Post seems to not care (or rather stated, believingly unimportant issues that are therefor not investigated) are out there with two pages set to issues in a setting of ‘the plan failed‘ and ‘at the end of the day, nothing worked‘. Which makes me wonder if any transgression was committed and what it was all about. Time will tell whether we see more revelations tomorrow and more important if it leads to anything actionable, because that will be come the heart of the matter soon enough.

 

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