Tuesday, November 20, 2018

Report: Saudi royals turn on king's favourite son after killing

Crown Prince <span>Mohammed bin Salman</span> is under the spotlight over suspected involvement in journalist's murder [Handout via Reuters] 
Crown Prince Mohammed bin Salman is under the spotlight over suspected involvement in journalist's murder [Handout via Reuters]


Amid outcry over writer's killing, dozens of princes and cousins want to see change in line of succession, report says.

Members of Saudi Arabia's ruling family are agitating to prevent Crown Prince Mohammed bin Salman (MBS) from becoming king after the international uproar over the killing of Saudi journalist Jamal Khashoggi, sources close to the royal court told Reuters news agency.

Senior US officials, meanwhile, have indicated to Saudi advisers in recent weeks they would support Prince Ahmed bin Abdulaziz - who was deputy interior minister for nearly 40 years - as a potential successor to King Salman, according to Saudi sources with direct knowledge of the consultations.

Amid international outrage over Khashoggi's murder, dozens of princes and cousins from powerful branches of the Al Saud family want to see a change in the line of succession, but will not act while King Salman - the crown prince's 82-year-old father - is still alive, sources said.

They recognise the king is unlikely to turn against his favourite son, the report added.

Rather, they are discussing the possibility with other family members that after the king's death, Prince Ahmed, 76, uncle of the crown prince, could take the throne, according to the sources.

Prince Ahmed, King Salman's only surviving full brother, would have the support of family members, the security apparatus, and some Western powers, one of the Saudi sources said.
Prince Ahmed returned to Riyadh in October after two months abroad. 
 
During the trip, he appeared to criticise the Saudi leadership while responding to protesters outside a London residence chanting for the downfall of the Al Saud dynasty. He was one of only three people on the Allegiance Council, made up of the ruling family's senior members, who opposed MBS becoming crown prince in 2017, Saudi sources said at the time.

Neither Prince Ahmed nor his representatives could be reached for comment. Officials in Riyadh did not immediately respond to requests from Reuters for comment on succession issues.

Tribal tradition

The House of Saud is made up of hundreds of princes. Unlike typical European monarchies, there is no automatic succession from father to eldest son. Instead, the kingdom's tribal traditions dictate the king and senior family members from each branch select the heir they consider fittest to lead.

Saudi sources said they were confident Prince Ahmed would not change or reverse any of the social or economic reforms enacted by the crown prince, would honour existing military procurement contracts, and would restore the unity of the family.

However, one senior US official said the White House is in no hurry to distance itself from MBS despite pressure from legislators and the CIA's assessment he ordered Khashoggi's murder, though that could change once Trump gets a definitive report on the killing from the intelligence community.
The official also said the White House saw it as noteworthy that King Salman seemed to stand by his son - also known as MBS - in a speech in Riyadh on Monday and made no direct reference to Khashoggi's killing, except to praise the Saudi public prosecutor.

The Saudi sources said US officials had cooled on MBS not only because of his suspected role in the murder of Khashoggi. They are also unhappy because the crown prince recently urged the Saudi defence ministry to explore alternative weapons supplies from Russia, the sources said.

In a letter dated May 15, seen by Reuters, the crown prince requested the defence ministry "focus on purchasing weapon systems and equipment in the most pressing fields" and get training on them, including the Russian S-400 surface-to-air missile system.

Neither the Russian defence ministry nor officials in Riyadh immediately responded to requests for comment.

'A red line'

The brutal killing of Khashoggi, a prominent critic of the crown prince, in the Saudi consulate in Istanbul last month has drawn global condemnation, including from many politicians and officials in the United States, a key Saudi ally.

Saudi Arabia's foreign minister said on Tuesday claims, including by the CIA, that MBS gave the order to kill Khashoggi were false, according to an Arabic-language newspaper interview.

"We in the kingdom know that such allegations about the crown prince have no basis in truth and we categorically reject them, whether through leaks or not," Foreign Minister Adel al-Jubeir was quoted as saying in Saudi-owned al-Sharq al-Awsat newspaper.

"They are leaks that have not been officially announced, and I have noticed that they are based on an assessment, not conclusive evidence."

Jubeir was also asked about comments by Turkish President Recep Tayyip Erdogan that the kill order came from the highest level of the Saudi leadership but probably not King Salman, which has put the spotlight instead on the 33-year-old crown prince.

"We have already asked the Turkish authorities at the highest level about the meaning of these comments, and they confirmed to us categorically that the crown prince is not meant by these comments," he said.

"The leadership of the kingdom of Saudi Arabia - represented by the Custodian of the Two Holy Mosques [the king] and the crown prince - is a red line and we will not permit attempts to harm or undermine them."

Saudi Arabia's public prosecutor has also said the crown prince knew nothing of Khashoggi's killing.

Consolidated control

Since his ascension, MBS has gained popular support with high-profile social and economic reforms, including ending a ban on women driving and opening cinemas in the conservative kingdom.

However, the reforms have been accompanied by a crackdown on dissent, a purge of top royals and businessmen on corruption charges, and a costly war in Yemen.

He has also marginalised senior members of the royal family and consolidated control over Saudi's security and intelligence agencies. The entire House of Saud has emerged weakened as a result.

According to one well-placed Saudi source, many princes from senior circles in the family believe a change in the line of succession "would not provoke any resistance from the security or intelligence bodies he controls" because of their loyalty to the wider family.

"They [the security apparatus] will follow any consensus reached by the family."

Officials in Riyadh did not respond to a request for comment.

Monday, November 19, 2018

Oil market bull run ends as hedge funds square up positions: Kemp


LONDON (Reuters) - Hedge fund managers have exited from all the bullish positions in crude oil and fuels they accumulated in the second half of 2017 as the bull market has unwound.

Upside price potential from Iran sanctions and prospective production cuts by OPEC is matched by downside risks from rapidly rising U.S. shale production and a deteriorating economic outlook. 

Hedge funds and other money managers cut their combined net long position in the six most important petroleum futures and options contracts by a further 74 million barrels in the week to Nov. 13. 

Portfolio managers have sold the equivalent of 553 million barrels of crude and fuels in the last seven weeks, the largest reduction over a comparable period since at least 2013. 

Funds now hold a net long position of just 547 million barrels, less than half the recent peak of 1.1 billion at the end of September, and down from a record 1.484 billion in January. 

Net length has been reduced to the lowest level since July 2017 essentially unwinding the petroleum bull market of 2017/18 (tmsnrt.rs/2QPSxmw). 

Bullishness towards oil prices has evaporated and hedge funds now have the fewest outright long positions in crude and fuels since January 2016, when oil prices were hitting the bottom of the last slump. 

By contrast, short positions have climbed to 261 million barrels, the highest for a year, and up from a recent low of just 96 million barrels at the end of September. 

In the last five weeks, funds have sold 47 million barrels of U.S. gasoline, 31 million barrels of U.S. heating oil and 29 million barrels of European gasoil. 

But the heaviest selling has been in crude, where fund managers have sold 282 million barrels of Brent in the last seven weeks and 221 million barrels of WTI in the last 10 weeks. 

Fund managers still have a residual net long position of 380 million barrels in Brent and WTI, according to an analysis of exchange and regulatory data. 

But most of the remaining positions appear to be long-term, passive and structural in nature rather than expressing an active view on prices.

SQUARING UP

The money manager category of positions reported by exchanges and regulators includes passive index funds and pension funds as well as more actively managed hedge funds. 

Pension funds and index funds play little role in the short-term price formation process in contrast to the much more active strategies pursued by hedge fund managers. 

Because of the way the data is published, there is no way to identify how many of these positions were active positions held by hedge funds and how many were more passive long-term positions held by a range of players. 

But it may be possible to make a rough division between active/dynamic positions and more structural/permanent positions by a careful inspection of the data. 

There appears to be a structural net long position in crude oil futures and options of around 385 million barrels in the crude oil market (“Hedge funds’ active positioning in crude oil”, Reuters, July 2017). 

Fund managers have never held long positions amounting to less than 450 million barrels in Brent and WTI since 2013, or short positions amounting to less than 65 million barrels. 

By subtracting structural positions from current positions, it is possible to estimate the remaining active positions held by hedge fund managers. 

Following the recent wave of liquidation, fund managers have reduced their actual net long position down almost exactly in line with this long-term structural position. 

Hedge funds’ active positions in crude are close to zero for the first time since July 2017 and before that August 2016 (tmsnrt.rs/2QWcBDG). 

Fund managers now have an essentially neutral position on the outlook for oil prices for the first time in more than a year.

Friday, November 16, 2018

OPEC’s First Female President May Be Extradited Back To Nigeria



Nigeria is looking for the extradition of former oil minister and the first female president of OPEC from the UK to face trial in her home country, because a corruption investigation in Britain is taking too long, the head of Nigeria’s Economic and Financial Crimes Commission (EFCC) said on Monday.

Diezani Alison-Madueke served as petroleum minister of Nigeria between 2010 and early 2015 under then Nigerian president Goodluck Jonathan, until he was defeated in the elections by current president Muhammadu Buhari in 2015. Alison-Madueke was also the first female president of OPEC.
She was arrested in 2015 in London as part of a two-year-long investigation by the UK National Crime Agency (NCA) into global corruption, bribery, and money laundering. Alison-Madueke was released on bail after being questioned. She has been on bail ever since, according to AFP.

Police and investigators suspect that Alison-Madueke was involved in siphoning off billions of U.S. dollars from Nigerian oil deals and state accounts when she was overseeing Nigeria’s oil industry, for personal benefits, including for buying luxury homes in London and in Nigeria’s capital Abuja.

More than two years ago, a Nigerian ad-hoc parliamentary committee revealed that there were no formal contracts between the Nigerian National Petroleum Corporation (NNPC) and trading companies that received $24 billion worth of Nigerian crude oil between 2011 and 2014.

According to the results of the investigation, Alison-Madueke illegally allowed for a swap of Nigerian crude oil for refined products to trading firms Duke Oil and Trafigura.

The former Nigerian oil minister denies wrongdoing. Now Nigeria seeks extradition from the UK to put her on trial at home.

EFCC’s chairman Ibrahim Magu told a news conference in Abuja on Monday that “It is very unreasonable that she is not being tried there,” referring to the UK.

“That’s why I say, if you cannot prosecute her, bring her here. We will prosecute her... We cannot wait endlessly like this. I think three years and above is sufficient to take her to court,” AFP quoted Magu as saying.   

By Tsvetana Paraskova for Oilprice.com

Monday, November 12, 2018

NNPC Considers Crude-for-Product Deals with Shell and ExxonMobil


Nigerian oil company Nigerian National Petroleum (NNPC) is reportedly considering crude-for-product deals with Shell and ExxonMobil.

The potential deal could be similar to NNPC’s agreement with British firm BP last week, Reuters reported citing the former’s upstream chief operating officer Bello Rabiu.

NNPC depends on foreign imports for the country’s fuel needs as it buys 70% of the demand, especially gasoline, through swap deals with overseas companies.

The national oil company signed such contracts with ten consortiums, including Vitol, Trafigura, Mercuria and Total.

Rabiu was quoted by the news agency as saying: “Unfortunately, Shell and ExxonMobil exited the downstream sector in Nigeria a couple of years ago, but they are coming back for this particular arrangement because it’s an opportunity for them to get crude and sell their products to the refineries.

The company extended the existing contracts to June next year, however, several trading sources in the consortiums have reportedly sought new price terms.

Furthermore, Rabiu stated that the company aims to create savings of around $1bn, as achieved in 2016, during next year.

He further added that the existing arrangement of crude-for-product swaps could end once NNPC enhances its refineries.

Rabiu said: “If our refineries are back, which we want in the next 18 months, this thing will stop. So, all these things are just stop-gap measures, but the key issue is that we wanted to import at the least cost before our refineries come back on-stream.”

In a bid to reduce its dependence on fuel imports, the company has been engaged in discussions with consortiums such as traders, energy majors and oil services companies to improve its oil refineries. Talks are said to be in the final stages and the company is expecting to reach a deal by the end of this year.

Railed Refined Products to Mexico Hinge on Storage

https://theodora.com/pipelines/united_states_pipelines_map.jpg

Railed movements of refined products are a small portion of Mexico's total imports, but they will grow once Mexico builds new terminals and storage to handle increased traffic, industry officials said at the Argus Mexican Refined Products Markets conference.

Railed crude shipments from Canada to the US Gulf coast run along more efficient networks and offer better returns for energy companies looking to deploy their fleets of owned or leased railcars, said Jennifer Fussell, assistant vice president of sales and marketing for chemicals and petroleum at Kansas City Southern (KCS). The railway runs unit trains from US Gulf coast refining centers into central Mexico.

"These energy companies are looking at … crude by rail that's getting incredible turn times on equipment that is expensive, and then looking at the current infrastructure limitations for Mexico," Fussell said. "Those railcar turns are not as efficient, but they will be."

Terminals capable of unloading unit trains within 24 hours will be key to boosting railed refined products shipments, Fussell said. To that end, KCS said it expects substantial storage to be built in Mexico, to the tune of about 1.5mn bl each year from 2019-2021.

About 60pc of US refined exports to Mexico move by vessel, followed by pipeline at 20pc, truck at 12pc and rail at 8pc, based on an analysis of US cross-border trade data, said Rangeland Energy vice president of business development Michael Moss.

Rail could boost its share to 15-20pc of US refined products exports by 2020 as more terminals and storage are built, Moss said. Rangeland Energy's Corpus Christi products-by-rail and LPG loading terminal came on stream for manifest carload service in June, and is targeting unit train shipments by late in 2019.

Truck operations have had first-mover advantages in Mexico, with cross-border shipments from Corpus Christi and even Houston moving "deep into Mexico," Moss said. Trucking operations will be increasingly limited to border-area deliveries once rail and port options are built out, Moss said.

New international marine fuel rules set to go into effect in 2020 could create new opportunities for Mexico's rail networks.

Pemex's six refineries produce a large amount of high-sulfur residual fuel, which is mostly sold into the bunkers market from Mexico's ports. Once the marine fuels rules take effect, Pemex will need to find other markets for its high-sulfur material. Both Rangeland and KCS said they were targeting ways to tap additional business to carry fuel oil.

The new marine rules will be a significant challenge for Mexico and its refineries, said Jerry Phillips, global market analysis manager for Phillips 66. Mexico's refineries yield about 30pc high-sulfur residual fuel, versus about 3pc for US Gulf coast refineries, Phillips said.

Railroads could support imports of US light, sweet crude to Mexico, which could help Pemex's refineries decrease their residual fuel output because US crude has less sulfur content than many Mexican grades.

"There is no reason why clean products can't import in and crude import out, or even bringing some light sweet into the country," Fussell said. "We see that as an opportunity for Mexico."

Friday, November 9, 2018

Keystone XL pipeline project blocked by judge in Montana

Crewmen work on TransCanada's Keystone XL project near Winnsboro in Wood County in 2012.

https://www.houstonchronicle.com/business/energy/article/Keystone-XL-Pipeline-Project-Blocked-by-Judge-in-13377532.php

TransCanada Corp.’s long-delayed Keystone XL pipeline project was blocked by a Montana federal judge pending further environmental review.

Thursday night’s ruling is the latest set-back for the Calgary-based pipeline company in its decade-long push to construct a 1,179-mile long conduit to deliver crude from Alberta’s oil sands to a Nebraska junction, en route to refineries near the Gulf of Mexico.

The Indigenous Environmental Network, River Alliance and Northern Plains Resource Council filed a pair of lawsuits against the U.S. in March 2017 shortly after President Donald Trump gave his approval for the project to cross the U.S.-Canada border. TransCanada joined the litigation to defend the permit approval.

U.S. District Judge Brian Morris in Great Falls agreed with the groups’ argument that a 2014 environmental impact assessment fell short of the National Environmental Policy Act and other regulatory standards.

The judge barred both TransCanada and the U.S. from "from engaging in any activity in furtherance of the construction or operation of Keystone and associated facilities" until the U.S. State Department completes a supplemental review.

Morris was appointed in 2013 by then-President Barack Obama, who had refused to grant a cross-border permit for the international project. Morris has ordered it vacated.

Nebraska’s Supreme Court last week heard arguments from attorneys for landowners seeking to overturn that state’s public service commission approval of its route there.

The case is Indigenous Environmental Network v. U.S., 17-cv-00029, U.S. District Court, District of Montana (Great Falls).

©2018 Bloomberg L.P.