Tuesday, November 4, 2014

Saudi Arabia, aids the NATO war machine, more oil price cuts- Attack on the BRICS

If you are unaware of the ongoing price war refresh your memory with this post- 
 Oil Wars? US/Saudi Arabia vs Russia/Iran
Think about this: four oil producers - Libya, Iraq, Nigeria and Syria - are in turmoil today, and Iran is hobbled by sanctions.
Oil price wars = economic warfare

 Then onto the latest:  Saudi Arabia cuts oil prices, again!
Futures fell as much as 3.7% to US$75.84 a barrel, the weakest since Oct. 4, 2011. Saudi Arabian Oil Co. reduced December differentials for all grades it ships to the U.S., while supplies to Asia and Europe were priced higher, according to an e-mailed statement Monday. U.S. crude inventories climbed by 1.9 million barrels last week to a four-month high, a Bloomberg News survey shows before government data Wednesday
Saudi Arabia, OPEC’s largest producer, reduced the premium of Arab Light to U.S. Gulf Coast benchmarks by 45 cents a barrel to the lowest level this year. Discounts for Medium and Heavy grades were widened for a fourth month, according to Saudi Aramco, the state oil company.
“Saudi Aramco have once again shown their ability to move the market,” Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by e-mail. “It was the price cut to the U.S. Gulf which sent oil below US$80
 This has nothing to do with the Shale oil industry in the US. Saudi Arabia is not the supplier of vast quantities of oil to the US- Canada is. (See below) Neither is Saudi Arabia trying to price shale oil out of the market- (See below)

Shale Oil is a Pipedream

The study, “Drilling Deeper,” projects that production rates from the two largest shale plays — the Bakken and Eagle Ford fields — will be less than 10 percent of that projected by over optimistic and unrealistic forecasts from the EIA.

“Shale gas production from the top seven plays will also likely peak before 2020,” the study finds.  “Production from shale gas plays other than the top seven will need to be four times that estimated by the EIA in order to meet its reference case forecast.”

The upshot, according to Hughes’ research, is not exactly upbeat.
Shale is just a gift for the crony capitalists from taxpayers via fascist governments
Corporate welfare is crony capitalism.
No matter which party is in office, in any western 'democracy'

Saudi Arabia oil continued- Is there a price war going on?
Saudi Arabia—the world’s largest oil exporter—cut its oil prices to Asia four months in a row between August and November, as it responded to aggressive price discounts from Angola and Libya.
 The U.S. is also a strategic customer for the Kingdom because of their decades-long security alliance.

The US is indeed a "strategic customer of Saudi Oil via their decades long security alliance- But no where does it say the US is a major consumer of Saudi oil?

 The US is a major consumer of Canadian Oil not Saudi Oil

Crude oil imports (Top 15 countries)

(thousand barrels per day)
Country Aug-14 Jul-14 YTD 2014 Aug 13 YTD 2013
CANADA 2,956 2,802 2,774 2,613 2,561
SAUDI ARABIA 894 1,231 1,283 1,332 1,241

Total imports of petroleum (Top 15 countries)

(thousand barrels per day)
Country Aug-14 Jul-14 YTD 2014 Aug 13 YTD 2013
CANADA 3,433 3,281 3,281 3,082 3,121
SAUDI ARABIA 894 1,232 1,293 1,332 1,243

 What’s OPEC going to do about this move by the KSA?
Though OPEC’s secretary general has told the oil market not to panic about the recent slide in prices, many within the organization are uncomfortable about the impact this is having on government revenues. Some non-Gulf OPEC members are pushing for the group to cut its production when it meets later this month. However, Saudi Arabia has made it clear it has no intention of balancing the market alone, raising tensions within the group. And clearly causing division within Saudi Arabia-

Pepe weighs in on the total war against the BRICS

Bottles of Crimean champagne could be bet that the US response to such a process couldn’t be but a sort of total information war - not dissimilar in spirit to the NSA’s deep state Total Information Awareness (TIA), a crucial element of the Pentagon’s Full Spectrum Dominance doctrine.
The BRICS are seen as a major threat – so to counteract them implies domination of the information grid.
Vladimir Davydov, director of the Russian Academy of Sciences' Institute of Latin America, was spot on when he remarked, “The current situation shows that there are attempts to suppress not only Russia but also the BRICS given that the global role of this association has only intensified.”

Russia demonization has quickly escalated in the US from sanctions related to Ukraine to Putin as the “new Hitler” and the resurrection of the time-tested Cold War scare “The Russians are coming”.

In the case of Brazil the information war already started way before the reelection of President Dilma Rousseff. As much as Wall Street and its local comprador elites were doing everything to tank what they define as a “statist” economy, Dilma was also personally demonize

From energy war to currency war

The new Saudi oil shock – which got at a minimum a green light by the Obama administration – totally fits the pattern of a TIA-style offensive against the BRICS, with two of them as key targets: Russia and Brazil.
Over 50% of Russia’s budget comes from revenue from oil and gas. Every $10 drop in the price of a barrel of oil means Russia losing up to $14.6 billion a year. This may be offset somewhat by the weakening of the ruble – more than 25% against the US dollar since early 2014. And Russia of course still has around $450 billion in reserves. Still, Russia’s economy may grow by just 0.5 to 2% in 2015.
With each $1 drop in crude oil prices, Brazil’s number one company, Petrobras, loses more than $900 million. At current oil price levels, Petrobras will be losing around $14 billion a year. So the price drop does undermine Petrobras’ long-term expansion to fund new infrastructure and exploration projects linked to its valuable “pre-salt” oil deposits. Petrobras was a key target linked to the demonization of Rousseff.

Roughly 24 hours - 4 posts, lots of good reading.

3-Ukraine: Poroshenko breaks Minsk ceasefire- Moving troops- Revoking autonomy laws...

2-Psychopaths to run country after Armageddon? Clearly Armageddon has passed.

1-"Freeze" the Syrian Conflict? Here's that truce I mentioned so many months ago


  1. Your picture of the piglets reminds me of what my grand-ma used to say about the nazis when they came to power: Der Trog ist derselbe nur die Schweine sind andere (the trough is the same only the pigs changed).
    Not that it is especially insightful or even in the right subject but it was to remind that it is not specific to democracy.

  2. good morning Gallier! Was thinking about you just the other day and hoping all is going well? Your recovery? Good?

    Your Grandmother is/was wise? Grandmothers always are. It's life lessons that makes them so- My grandmother is gone for 4 years now and it's rare that any time of substance passes without me thinking about her.

    Agreed it is not specific to democracy, however, democracy is always sold as for the people where the people have the power.. which is just another lie

    I always hate picking on pigs anyway- they aren't really as bad as crony capitalists and fascist sycophants

    1. Yes and they are so delicious. I'm fine, recovery is ok. I barely knew my grand-ma, she died when I was five, (yeah my anecdote was second hand) but even if she knew what Adolph and his cohorts were up, she couldn't stop her three sons to eagerly engage in all the patriotic duty of that time. Only one came back, decorated like a christmas tree (goldene Nahkampfspange look iot up, tough stuff) but who always would have preferred still having his 2 little brothers.

    2. They are delicious- true enough- we tried making our own bacon this year, just a little experiment- but- it was easy and turned out very well so we are going to make it again!

      dry cured and smoked it- yummy

      Gallier a question about Linux- is it ok for older computers?
      I had read it could rehab or improve and old computer is this true or correct?
      can you enlighten me at all?
      Hubby was trying it out but I didn't get into it, but want to now, where should I begin?

    3. It's often surprizing how easy and how tasty things are when you do them yourself.

      As for Linux, it depends on what you call old hardware. There are specialized distributions for old hardware, even for museum pieces but then it can happen that the system is stuck on an old kernel. You can check on wikipedia as a start to see what distribution still handle old hardware.

    4. Hi Gallier

      It's windows 7. Not a museum piece but not to new either?

      As for the bacon, true enough- it just took time to cure, but that didn't affect us at all, other then the space in the fridge and turning it
      Next time we are going to spice it a bit differently
      The smokiness was perfect (we have a small smoker) and not salty like much of the stuff from the store

      Actually most stuff tastes vastly better when one does it themselves-
      I do big batch cooking and then freeze in portions and everything tastes better- soup, stew, spaghetti sauce, maple baked beans (slow cooker)
      Plus we have a garden...

  3. Stashing this here in case it goes missing from MOA- because that happens

    "The recent history of "western training" of foreign forces is a history of failures and defeat. It is stupid to assume that this time will be different"

    Are you going to stop promoting blowback now? Finally!
    Because I left a comment yesterday that didn't get through explaining how "blowback" is a logical fallacy

    And a term created by the CIA and suggesting all the blowback promoters should stop making life easier for the CIA.

    "Begging the question, or assuming the answer, is a logical fallacy that occurs when the conclusion of an argument is used as a premise"

    That's blowback and I am quite certain the CIA was aware of that fact when they started using their term.

    Using terms such as blowback over and over only makes clear how well one has been indoctrinated. Not how well one thinks or reasons.

    Sadly, b, you are still promoting the state sanctioned conspiracy of ISIS as an independent group. it's not- It's a western created and backed pretext for NATO intervention- a rebrand of AQ

    Posted by: Penny | Nov 5, 2014 7:55:39 AM | 26

    Reminds me of the CBC. LOL

  4. Saudi internal attack aimed at sectarianism.
    Last week a run on the peg owing to capital flight. Sound familiar. Last time the pegs blew out was 2007 to 2008. Paulson. Condi. Cheney. Gates all flew into the kingdom for a kind of petro pilgrimage.
    Few weeks ago the attack on us contractor.
    Yemen being turned up as us drone strikes on aq NOT houthis who just took red sea choke point towns.
    Days ago saudi revives call for gcc force including none other than algeria which is being lined up for a spring. Saudi called for a naval force too.

    Oh and the saudi attackers inside the kingdom of course called themselves out on their Facebook page. This as the kingdom has moved aggressively against social media. Sound familiar as in russia just like the capital flight and ruble crush.

    Qatar and us not privy to the gcc force? Qatar just did a clearing deal with china after the london paris and frankfurt deals.

    Barrick new ceo and former goldmanite (and china hand at brookings) has just done a deal allegedly to jointly develop largest gold prospect on argentina. Barrick just dumped a legacy project in the kingdom.

    The whole saudi going after putin meme sounds a lot like he russia chatter picked up in norway or he bandar sochi link. Now who could possibly be floating that disinfo?

    Imf re released its 2012 vintage dire forecasts for gcc countries with oil plunging. What is old is new.

    Saudi and us hardly in rowing in same direction. Iran deal will flood oil market. Shiite sectarianism circa iraq being flared inside kingdom. Us Iran talks in oman the host to various bases and listening posts not to mention oman has been the steadfast opponent to gcc monetary unions.

    Saudis find themselves in similar situation to Erdogan.

    Anti bric forces threw everything they had in brazil. Loss. Coincidence that the repeated terror attack threats in india in wake of india signing on china led asia development bank? India intel jut revealed an assasination plot in banglaeesh. Weeks before that leaked out western agencies behind he plan.

    1. Wow, you pack a post full in the comment
      I did put a link into the post noting that Saudi Arabia was divided over this oil scheme- which validates the comments you have been making that there is division in the kingdom....

      "Yemen being turned up as us drone strikes on aq NOT houthis who just took red sea choke point towns"

      Yemen strikes- saw that but on AQ rather then houthis
      Do you have any links handy for this?
      Interesting because some of that info relates to this post


      Regarding Oman? And the US? Carrot or Stick?

      any links or more I can read?

    2. Just breaking two interesting and very related articles:

      attack on Aramco pipeline. Now keep in mind when the Anon hack of Aramco hit a year plus ago it was blamed on Iran immediately. But what was telling was the AA story about KSA warning against Israeli, German and US hardware. Reminiscent of the FBI team finding a special US made munition was employed in the Saleh (Yemen) hit.

      Next, AA reporting now that a French and Algerian killed at Saana checkpoint. it is perhaps only interesting from the standpoint of Algeria as part of the emerging anti terror alliance (given reports of Algeria-Egypt joint efforts in libya). The Frenchman and Algerian killed were allegedly being arrested? For what? Who were they?

      Algerian killed, Frenchman wounded in scuffle at Sanaa Houthi checkpoint AA

      Meanwhile Israel threatening Lebanon yestd in wake of Israeli building permits, Sweden's Palestine recognition (spooky Sweden again) and the Temple Mount shutdown. Today another Hamas van ramming incident.


    3. Yah, what's up with Sweden, it's strange.

      Perhaps it's the locale?

    4. Yesterday the Iranians calling out ISIS, again.

      Now the Russians to match their latest SLBM launch
      Western Security Services May Be Turning IS Militants on Russia: Ex-Intelligence Officer

      Since the Saudis are funding that Egypt-Russian arms deal, you think they bare paying attention?

    5. Staying on the Saudi angle:

    6. Since the Saudis are funding that Egypt-Russian arms deal, you think they bare paying attention?

      I think it's good to pay attention to the Saudis as much as to pay attention to Israel

      what are your thoughts on the Egyptian/Russian arms deal?
      I haven't read enough on it to really comment on it?
      I don't know if arms deals rank as much as oil deals and pipelines....
      but what do you think?
      Why woud Saudi Arabia fund this?
      What about the status of the Egyptian Army- NATO links. Their own private functioning? Doesn't exactly make them loyal to the state other then through the foot soldiers?
      Any thoughts?

  5. re Saudi division WSJ article

    "While international oil prices have plunged this month, Saudi Arabia’s normally talkative oil minister Ali al-Naimi has been on vacation.

    Mr. al-Naimi’s absence from the fray—people familiar with his agenda say he was on vacation from the end of September and only returned to his office in recent days—is one symptom of the unusually high level of dissent within the secretive kingdom"

    Saudi Arabia is by far the biggest oil producer within the Organization of the Petroleum Exporting Countries, pumping some 10 million barrels of crude a day. The 79-year-old Mr. al-Naimi, oil minister since 1995, is usually the kingdom’s key spokesman.

    The benchmark West Texas Intermediate and Brent crude prices have fallen more than 25% since mid-June. Instead of cutting production, some OPEC members—including Saudi Arabia—have cut prices, signaling a price war. Some in the kingdom’s top ranks think it is allowing a revenue decline it can’t afford, Saudi officials and experts say. Others believe Saudi Arabia should accept the recent oil price fall and concentrate on increasing its market share, particularly in Asia.

    “There is an internal debate about whether Saudi Arabia should focus on the short-term impact of the price decline on revenues or on the medium-term advantage of eliminating the competition of other producers,” says Denis Florin, a partner at French energy consultancy Lavoisier Conseil.

    During past oil price shocks, Mr. al-Naimi or the Supreme Council for Petroleum and Minerals, Saudi Arabia’s top decision-making body on oil markets led by King Abdullah bin Abdulaziz, have sent clear signals of the kingdom’s intent.

    In 2012, when oil prices spiked on supply disruptions created by Arab uprisings and Iranian sanctions, the council issued communiqués signaling Saudi Arabia was ready to act to stabilize markets.

    When oil prices started falling this summer, officials in Riyadh initially appeared unfazed.

    “Prices are always fluctuating. This is a normal situation,” Mr. al-Naimi said on the sidelines of a Kuwait oil conference on Sept 11. His long-standing adviser Ibrahim al-Muhanna said on Sept. 30 that U.S. shale production had created a price floor of around $90 a barrel—a level Brent crude fell through in early October.

    Mr. al-Naimi hasn’t spoken publicly on oil prices since the Kuwait conference, while the Supreme Council hasn’t issued any statement on oil prices in recent months.
    “If there is no official statement, that means there is no consensus within the Saudi government,”

    Last week Saudi oil officials leaked that its oil supply to domestic and international markets dropped by 300,000 barrels a day in September, suggesting it may have cut output.

    In fact, overall Saudi production rose in September, but some oil was put into storage. Data from consultancy Oil Movements also showed that Saudi Arabia’s exports were steady month on month.

    A Saudi industry official acknowledged that Oil Movements’ data were roughly accurate and that officials had been instructed to leak the supply figure, but not export data, to test the market.

    “Sorry, it is politics,” he said.

    Other Saudi leaks haven’t been interpreted as intended.

    In early October, delegates led by Nasser al-Dossary, Saudi Arabia’s national representative to OPEC, attended a seminar in New York organized by PIRA Energy Group. Mr. al-Dossary privately communicated to attendees that the kingdom was not alarmed by the price slide and wouldn’t unilaterally cut its output, according to people familiar with the matter.

  6. Attendees saw the remarks as a signal Saudi Arabia would try to undermine North American shale oil production by allowing prices to slip to a point where some shale projects are uneconomic.

    “What got understood about shale was not what the Saudis had in mind,” one person familiar with the meeting said.

    I truly believe the shale oil is a 'red herring' notice the unnamed person, "familiar with the meeting", quoted to bolster this official narrative. Notice this person is not reported as an attendee at the the meeting? Just familiar

    Calls to the Saudi oil ministry were unanswered.

    Others in Saudi Arabia’s oil circles disagree with the views expressed in New York. Mr. Al-Naimi’s own deputy Prince Abdulaziz bin Salman, the assistant minister for petroleum affairs, is concerned the Saudi budget cannot bear oil prices at their current low levels, people familiar with the matter say. The kingdom needs Brent crude to average $93 a barrel to balance its budget this fiscal year, Deutsche Bank estimates.

    No mention of the fact that KSA oil is sold for American dollars(which have increased) offsetting some of that price cut.

    Prince Abdulaziz couldn't be reached for comment.

    Some analysts say that Saudi Arabia is bowing to the reality that U.S. shale oil production is now the most important factor in global oil markets.

    “Cutting production would accommodate the further expansion of U.S. shale, as well as reduce Saudi profits,” Goldman Sachs analysts said in a note Monday. “OPEC will no longer act as the first-mover swing producer…U.S. shale oil output will be called upon to fill this role.”

    Meanwhile, internal criticism of Mr. al-Naimi is growing.

    “Before prices started falling, there were alarming signs in the market that things were going to get tough, but Mr. al-Naimi did not show any sign of worry,” one Saudi industry official said. Another said “he is no longer listening” to oil officials.

    The tensions burst into the open earlier this month when Prince Al-Waleed bin Talal, a prominent member of the royal family, publicly criticized Mr. al-Naimi’s approach to falling prices.

    “When should we feel worried, your excellency?” the prince asked Mr. al-Naimi in an open letter. “Should we wait until things get out of hand so we have to withdraw and deplete the general reserves of the country?”