Posted by Mike Sweeney on Tue, Sep 07, 2010 @ 04:24 AM
Oil Market Summary for: 08/30/2010 to 09/03/2010
Oil prices continued to move basically sideways as bullish and bearish news buffeted prices up and down in a narrow range. The benchmark West Texas Intermediate futures contract settled Friday at $74.60 a barrel, off its lows for the day, and slightly lower than the $75.17 close a week earlier. While stocks welcomed the new month with four days of gains, oil prices rose and fell depending not only on economic data but also on weather reports and another oil rig fire in the Gulf of Mexico. Hurricane Earl developed into a Category 4 storm before weakening as it hit the U.S. East Coast. As the possible disruption to oil supply waned, crude oil prices fell. However, a fire Thursday on a shallow-water oil drilling platform reawakened concerns that new government measures could restrict offshore drilling, pushing prices up, even though all workers were rescued and there were no immediate signs of an oil spill. But the dominant influence on markets this week was the expected rise in the U.S. unemployment rate amid fears that the economic recovery is running out of steam. When the figures were finally released on Friday, markets reacted positively because the job loss was not as severe as forecast even though the jobless rate did rise to 9.6% from 9.5%. Earlier in the week, the Institute for Supply Management’s index of manufacturing activity showed a rise in August, alleviating concerns that all economic news was showing a downward trend. The positive U.S. news on Wednesday, echoed by a key manufacturing index in China, enabled oil prices to recover from a dive below $72 a barrel at the beginning of the week. Moving into the long holiday weekend, it looked like the main effect of Hurricane Earl would be to dampen demand for gasoline as motorists shunned the rain and wind brought by the storm. Labor Day traditionally marks the end of the driving season and comes this year with unusually high inventories of both oil and gasoline. Analysts surveyed by Bloomberg said that refineries closing for seasonal maintenance in September and October could further dampen demand for oil and weigh on prices starting next week.
By. Darrell Delamaide for Oilprice.com who offer detailed analysis on Oil, alternative Energy, Commodities, Investing and Geopolitics. Visit: http://www.oilprice.com
Posted by Mike Sweeney on Sun, Aug 29, 2010 @ 10:04 PM
Market Summary for 08/23/2010 to 08/27/2010
Oil prices recovered some lost ground Friday after Federal Reserve chairman Ben Bernanke said the Fed stands ready to do whatever it takes to support economic recovery. The benchmark West Texas Intermediate October futures contract gained 2.5% on Friday, settling at $75.17 a barrel and wiping out losses from the beginning of the week. The expiring September contract closed at $73.46 a week ago. In a widely anticipated speech Friday morning, Bernanke stopped short of announcing new measures to inject money into the economy but made it clear that the central bank was monitoring the situation closely and would act if necessary to prevent a deflationary spiral. “The Federal Open Market Committee will strongly resist deviations from price stability in the downward direction,” the Fed chief said in a speech at the annual central bank gathering in Jackson Hole, Wyo. Bernanke’s remarks came just after the Commerce Department revised estimates of GDP growth in the second quarter downwards, to an annual rate of 1.6% from its initial estimate of 2.4%. Bernanke’s comments at first sent markets down further because he was not specific about when or what the Fed would do. But stock and commodity prices began to rise once participants accepted that the takeaway from Bernanke’s speech was that the Fed stands ready to act. In the 2008-09 financial crisis, the Fed doubled the size of its balance sheet, injecting liquidity into the economy as it bought mortgage-backed securities. Earlier this month, as data showed the economy slowing down, the Fed said it would maintain its balance sheet at the current high level by reinvesting in long-dated Treasuries when the other securities matured. Economic news dominated markets during the week. Housing data showed sales both of existing homes and new homes registering significant drops, indicating a further drag on an increasingly sluggish economy. Analysts cautioned that fundamentals for oil prices are still not good even with the promise of some monetary stimulus for the economy if needed. Inventories remain at record highs and will continue to weigh on prices, they said. The U.S. Energy Information Administration reported on Wednesday that crude oil inventories had risen a further 4.1 million barrels, much more than the 1.1 million-barrel consensus forecast.
By Darrell Delamaide for Oilprice.com who offer detailed analysis on Oil, alternative Energy, Commodities, Investing and Geopolitics. Visit: http://www.oilprice.com
Posted by Mike Sweeney on Sun, Aug 29, 2010 @ 08:42 AM
Major new energy issues are about to transform still further the strategic balance of the Horn of Africa and the Red Sea, with foreseeable consequences for the global energy market over the coming decade. Soon-to-be-evident new wealth in the Red Sea/Horn of Africa region will transform the intensity of conflict there, which in turn will affect not only the region, but the world’s most important trading route: the Red Sea/Suez sea line of communication (SLOC).
Much of the anticipated change is developing around the flood of new discoveries and exploitation of natural gas fields in the Indian Ocean region, particularly extending through Ethiopia, Egypt, and other countries of the Red Sea region. Apart from the impending influx of new energy wealth into the region, facilitating new levels of confidence and capability in the security environment, the boom of the “Gas Age” also seems set to promise — within a decade — an oversupply of gas to the world market, almost certainly precipitating a collapse in price for gas and petroleum.
The strategic balance in the Horn of Africa, and reaching through the Red Sea to Egypt and the Mediterranean, is changing rapidly — and in many respects is becoming more unstable — as political, geopolitical, economic, and ideological issues begin to clash. The war over the reunification of Somalia, incorporating both the old Italian Somaliland (now Somalia) and the Republic of Somaliland, has now become indisputable, and nominally-moderate Egypt has come down firmly on the side of reunifying the area under the clear dominance of an Islamist-dominated but anomic — essentially lawless — Somalia.
Egypt — with its unstable political transition underway at the same time as the discovery of increasing quantities of natural gas — has been covertly supporting a wide range of radical actions along the Red Sea littoral and in the Horn with the sole goal of ensuring that Ethiopia does not use its traditional heartland strength to be able to revive its dominance of the Red Sea and the sea lane which links to Egypt’s Suez Canal.
In the process, however, the Egyptian Government has given support to the same radical jihadist groups which fundamentally oppose Egyptian secular governance, which support Iranian expansion into the Red Sea/Africa framework, and which have transformed a strategically benign Ethiopia into one which must now accept confrontation with Egypt and its regional allies.
This situation has been compounded by the recent Islamist/pan-Somalist success in winning power in Somaliland, but of equal importance has been the first quiet stage of the transformation of Ethiopia into an energy exporting power. Ethiopia’s natural gas reserves which the US Energy Information Agency (EIA) in 2009 rated as zero and in early 2010 at one-trillion cubic feet (TCF), now have been demonstrated to be significant, and gas exports will begin within five years.
Malaysian State-owned oil and gas company Petroliam Nasional Bhd (Petronas) has now proven as much as four TCF of gas in its reserves in the Ogaden basin region of Ethiopia. Petronas is one of about 85 companies which have oil and gas exploration licenses in Ethiopia, but the Malaysian company is the first to begin its production phase, which should see a gas treatment plant and a gas pipeline from the Ogaden to Djibouti (at a total cost of $1.9-billion) on-line within five years. Estimated Ethiopian gas reserves, as of 2010 (not “proven reserves”), were reported at 12.46 TCF, but this figure was likely to be expanded frequently as new discoveries are reported.
Significantly, although the externally-supported and -armed Ogaden National Liberation Front (ONLF) has continued to sustain sporadic armed contact with Ethiopian security forces into August 2010, the second week of August saw the senior ONLF leadership in Washington, DC, meeting secretly (under US sponsorship) with representatives of the Ethiopian Government. Just days before that, representatives of the Oromo Liberation Front (OLF) also met in Washington, DC, with senior Ethiopian Government officials. Both the OLF and the ONLF have been receiving extensive logistical support, weapons, training, and funding from Eritrea, supported directly or indirectly by both Egypt and Iran.
It is now apparent to both the ONLF and OLF that their foreign patrons have been waging a losing battle against the Ethiopian Government, and that, with the growing strength and wealth of the Ethiopian Government, now is the time to consider coming to terms with Addis Ababa.
Any thought that the pan-Somalists, who have recently scored a major success in winning the Presidency of the Republic of Somaliland, can effectively make headway in the ethnically-Somali Ogaden region of Ethiopia have been quashed by the effective military action by the Ethiopian Defense Force (EDF) in its combat contacts with the pan-Somalists. The EDF units involved were almost entirely ethnically Somali (officers and men), and yet acted decisively to quash the Somalian forces fighting them.
Fighting around July 12, 2010, in the el-Dibir area of the Somaliland-Ethiopian border was largely credited in the media with being an EDF attack on civilians, but in fact it involved a clash with Islamist forces that were routed by the EDF, which seized 120 of the Islamists’ trucks and took them to the Ethiopian city of Jijiga.
At the core of all of this has been the proxy war waged by Iranian-backed Islamists, supported by the secular governments of Eritrea and Egypt, to keep Ethiopia landlocked. When the Ethiopian Government, some two years ago, began having an inkling that it might soon be in the gas exporting business, it started negotiations to build a pipeline to the Somaliland port of Berbera.
When it became clear that the UDUB Government of Somaliland was not well-prepared to contest the Presidential elections — which resulted in a pan-Somalist Islamist taking power in July 2010 — Ethiopia was forced to turn back to Djibouti as the only available seaport for the export of Ethiopian gas.
This is not an ideal situation for Ethiopia, given that Djibouti has traditionally held Ethiopia to ransom — given that it has, once again, a monopoly on Ethiopian trade imports and exports — but it is nonetheless viable for both countries.
At present, the Petronas plans to be exporting natural gas from the Ethiopian Ogaden basin within five years highlight the reality that Ethiopia will soon be in a position to compete economically against Egypt and Eritrea, which have been struggling to keep Ethiopia landlocked. Egypt’s strategic motive, expressed constantly by Cairo, has been to keep Ethiopia — which is vastly more fertile than Egypt and which controls the headwaters of the Blue Nile, which provides Egypt (and Sudan) with most of its water — from posing a strategic threat to Egypt by, potentially, cutting off the flow of Blue Nile waters. In fact, the policy has only served to make the Egyptian fear a reality.
Egyptian Foreign Minister Ahmed Aboul Gheit and Prime Minister Ahmed Nazif, speaking at the African Union summit in Kampala, Uganda, on July 27, 2010, appeared to strike a conciliatory note on the contentious issue of Nile water usage, but Foreign Minister Ahmed Aboul Gheit slipped into his speech that Egypt sought a “re-unification” of Somalia, bringing Somaliland back into the union with Somalia, something which is clearly tantamount to bringing Somaliland back into civil war and crisis, rather than helping the entire Somali population. Significantly, this was a blow directed directly at Ethiopia and at the West which seeks stability in the Horn of Africa.
Egypt, pointedly, would rather have chaos on the Horn so that it could be the master of the Suez/Red Sea SLOC all the way through the Bab el-Mandeb adjacent to Somaliland, at the entrance to the Indian Ocean. This pointedly, also, meant that Egypt supported constraining Ethiopia from easy access to the Red Sea, which had once been dominated, at its lower reaches, by the Ethiopian Navy. Following the fall of the Dergue control of Ethiopia, Eritrea was encouraged by Ethiopia to declare its independence from Ethiopia in 1993. It did so, taking not only the historical geographic area of Eritrea (the onetime Bar Negus: Kingdom of the North), but also the coastal part of Ethiopia adjacent to Djibouti, and containing the Ethiopian port of Assab, which had never been part of traditional Eritrea, but had been part of the modern administrative zone of Eritrea under the Empire.
The result was that Ethiopia lost its access to the Red Sea, and had anticipated a friendly trading path through “new” Eritrea to the sea, because of the friendly separation of the territories. This was not to be, and Eritrea began making unacceptable demands on Ethiopia, which ultimately led to war, and to the inability of Ethiopia to use the ports of modern Eritrea. The result is that Eritrea is now economically destitute, and Eritrean Pres. Isayas Afawerke is under increasing pressure to see the Ethiopian Government fail.
However, it is also clear that Eritrea can no longer afford to militarily challenge Ethiopia, at least directly. Its military successes against Ethiopia in the 1998-2000 fighting can now not be replicated, given the declining economic fortunes of Eritrea and the rising fortunes of Ethiopia.
Moreover, the prospect of considerable income from gas exports begins to elevate Ethiopia into a new class of military capability. So if Eritrea can no longer directly attack Ethiopia militarily, it must be forced to re-double its proxy warfare, and yet even in this area Ethiopia now seems poised to be able to achieve settlements with the ONLF and OLF, two of the main proxy forces financed by Ethiopia and its allies.
And yet Ethiopia finds itself still restricted in its ability to satisfactorily control its export logistics, other than at the goodwill of Djibouti. Some Ethiopian sources have been saying that should Eritrea again provoke a war, then Ethiopia should sieze back the ports in independent Eritrea which were once Ethiopian ports, particularly Assab, which was never part of “traditional” Eritrea.
Moreover, in the South-Eastern part of modern Eritrea, the area around Assab, there is already great local hostility to being under control of Asmara (the Eritrean capital), and the Eritrean Government of Isayas Afewerke. This hostility takes the form of armed insurrection by ethnic Afars. The Afar Revolutionary Democratic Union (ARDU) has engaged in combat operations since 1993 against the Eritrean Government. They have commanded the attention of brigade-sized Eritrean Government forces, which have unsuccessfully attempted to curb the ARDU. ARDU itself is part of the Alliance of Eritrean National Forces (AENF), an umbrella for opposition groups, mostly Muslim, fighting the Isayas Government.
Ethiopia has, like Eritrea, used proxy forces against its adversarial neighbor. The predominantly Muslim Eritrean Liberation Front (ELF) has been based out of Addis Ababa since Eritrean independence, and continues to fight the Isayas Government in Asmara. But the scale of Ethiopian proxy warfare against Eritrea is nothing like Eritrea’s use of all available proxy resources against Ethiopia. The radical Islamist forces operating in Somalia have long been supported by Eritrea, along with their support from Iran, Egypt, and Libya, as a means of tying down Ethiopian forces and promoting secessionist moves by ethnic Somalis and Oromos in Ethiopia.
Now, unlike a year or two ago, Eritrea recognizes that it can no longer give Ethiopia a pretext to go to war, because it would lose that conflict. On the other hand, Ethiopia’s need for the recovery of its Red Sea access may well have been forced by the combined efforts which recently resulted in, effectively, the loss of access through the Republic of Somaliland, which has succumbed, with broad Eritrean, Iranian, and other aid, to pan-Somalist, Islamist governance. So Ethiopia must bow to whatever demands Djibouti may make on it, in order to use the port of Djibouti, or else Addis Ababa must find a way to take back its territory in the south-eastern, Afar, area of what is the modern Eritrean state.
It would be logical, then, to assume that Addis Ababa would find ways to promote the demands for independence or separation from Eritrea made by ARDU and others. Success, or momentum, by these anti-Isayas forces could eventually trigger Ethiopian military support.
Egypt, however, has been using Eritrea as its own proxy, and such a development might cause Cairo to openly support Eritrea in a military confrontation with Ethiopia, or else face the prospect of a revived Ethiopian naval presence in the Red Sea, and growing Ethiopian wealth and confidence to challenge Egypt and Sudan on the question of the use of Blue Nile waters.
In all of this, the stability of the Red Sea/Suez global SLOC is threatened, and no end is yet to be seen in the anomie — the lawlessness — of Somalia, now being broadened to include Somaliland. As well, the mounting pace of natural gas discovery and exploitation in the region (and more broadly) will — contrary to conventional linear extrapolations of energy market trends — transform global energy markets, and bring about a major shift toward the use of gas, probably to the point of a supply-dominated marketplace causing price falls within a decade.
Analysis by Gregory R. Copley
This article was originally published in the OilPrice.com Intelligence Newsletter, which provides breaking Geopolitical Intelligence, markets, finance and commodities analysis. Visit:
http://www.oilprice.com
Posted by Mike Sweeney on Mon, Aug 23, 2010 @ 04:23 PM
Oil Market Summary for 08/16/2010 to 08/20/2010 Crude oil prices continued their downward spiral during the week as new data confirmed that U.S. economic growth is slowing.
The benchmark West Texas Intermediate contract settled 2.6% lower for the week on Friday, at $73.46 a barrel compared to the $75.39 close a week ago, itself a decline of 7% from the previous week.
News Thursday of an increase in jobless claims and a slowdown in manufacturing activity in the key mid-Atlantic region knocked both stock prices and commodity prices.
The Friday close marked oil’s lowest price since the beginning of July as recurring doubts about the economy take the steam out of any rally in prices. Market participants speak of a malaise in the absence of any breakthrough on the economic front.
Initial claims for jobless insurance in the U.S. rose 12,000 in the week to 500,000, the Labor Department reported on Thursday. Consensus forecasts had predicted a drop in jobless claims. Separately, the Federal Reserve Bank of Philadelphia said on Thursday that its index of manufacturing activity in the region fell to -7.7 points in the month, after registering 5.1 points in July. The Dow Jones Industrial Average fell 1.4% to 10,271 in Thursday trading.
Economists continue to debate the prospects of a double dip recession, with some claiming that the U.S. actually is in the grip of a long recession punctuated by periods of slow growth that don’t really constitute a recovery. Unemployment remains stubbornly high at 9.5%.
Although crude oil inventories declined in the week, according to Wednesday’s report from the Energy Information Administration, the decline was less than expected and overall stockpiles of crude and refined products remained at record levels amid the sluggish demand. Supplies rose to 1.13 billion barrels, the EIA said, the highest level since the introduction of weekly reports in 1990.
Not even the weather cooperated in a dismal week for oil. One low-pressure system over the Atlantic looked like it would turn north, avoiding the Gulf of Mexico and possible disruption of oil supplies. The system, which would be named Danielle, has only a 40% chance of becoming a tropical depression, the National Hurricane Center said.
Source: http://oilprice.com/Energy/Oil-Prices/Oil-Prices-Spiral-Downwards-as-Economic-Gloom-Intensifies.html
By. Darrell Delamaide for Oilprice.com who offer detailed analysis on Oil, alternative Energy, Commodities, and Geopolitics. Visit:
http://www.oilprice.com
Posted by Mike Sweeney on Tue, Aug 10, 2010 @ 04:42 PM
After nearly 40 years, BP is returning to Libya amid widespread controversy about an alleged link to the Lockerbie bomber’s release and fears about a potential oil disaster in the Mediterranean Sea.
Yet despite the oil giant’s enthusiasm, its future in Libya – a country boasting the largest crude oil reserves on the continent -- may end up as murky as competitors that have ventured there.
Three years ago, BP signed a $900-million exploration and production deal with Libya, decades after Muammar Gaddafi’s government nationalized 100 percent of the oil company’s holdings. BP, which has not been involved in the country since 1971, announced in late July that it would begin drilling in the western part of Libya and in the deep waters off the coast in a matter of weeks.
Although BP presumably believes the agreement will be good for business, Libya’s terms of attracting foreign investment is “so convoluted and corrupt, I don’t think anybody gets a real advantage,” said Ronald Bruce St John, an analyst for Foreign Policy in Focus, a Washington-based think tank.
Libya’s oil sector has grown more conservative after years of being run in an apolitical fashion, said St John, who has served on the international advisory board of the Journal of Libyan Studies and the Atlantic Council Working Group on Libya. He is based in Albuquerque, New Mexico.
Last fall, the government created a supreme council for energy affairs to oversee the oil and gas industry that is “packed with conservatives,” he told OilPrice.com, and this rigid treatment of the oil sector may be reflected in a revised petroleum law in the works. A few months ago, the Libyan National Oil Corp. said the new law would make the industry more transparent.
It is not a positive sign that conservative factions are amassing greater control and “doing everything they can to undercut the economic and political reform elsewhere in the country,” St John argued.
On that note, it would be foolish to believe “the Megrahi thing” would give BP a big advantage, St John said, adding that most of the oil majors are already operating in the country.
St John was referring to Abdel Baset al-Megrahi, the man convicted in the 1988 bombing attack on Pan Am Flight 103 off the coast of Lockerbie, Scotland. Speculation has swirled that BP influenced the United Kingdom’s decision to release an ailing Megrahi from jail in return for BP’s resuming business ties with Libya after decades.
The U.K. and Scotland have denied the charges. While BP said that it did not take part in talks about Megrahi’s release, it admitted to lobbying the Scottish government for a prisoner swap. In the end, the bomber was released on compassionate grounds.
Plans for a U.S. congressional hearing reviewing the alleged link between BP’s move into Libya and the bomber’s release were scrapped days ago due to a lack of witnesses.
The oil firm and the Libya Investment Corp. plan to explore about 54,000 square kilometers of the onshore Ghadames and offshore frontier Sirt basins, which is equivalent to more than 10 of BP's operated deepwater blocks in Angola, according to a press release that BP issued May 29, 2007. Successful exploration could lead to the drilling of around 20 appraisal wells, the company stated at the time.
It has taken a while to begin exploration because the Libyans, to some degree, delayed the process or “made it difficult for BP to consummate the deal” in a bid to “get Megrahi out of jail,” St John said. “I can’t document that, but that’s my guess.”
Further complicating the three-year-old agreement, BP is taking heat from critics concerned about another Gulf of Mexico oil crisis in Mediterranean waters. Some European Union members have demanded a moratorium on deep-water drilling in the Mediterranean Sea until an effective strategy is drawn up.
As the British oil firm forges ahead, it will find a Libyan government that has historically taken about a 60 percent stake in oil discoveries and left 40 percent for the producer, said St John. Contract terms have become “even looser as Libya got into economic difficulties in the 1980s,” he noted.
>From 2005 to 2007, Libya awarded 36 companies with either oil or gas exploration blocks that were “extremely stringent,” he said. These were known as EPSA, phase four, contracts (BP’s new deal is not part of these contracts). Instead of a 60-40 split, in one case Libya took 93.2 percent of the oil discovered, leaving only 6.8 percent for the producer, he recalled.
In addition to the generous Libyan cut, these international oil firms were asked to make upfront payments, St John said, adding that Occidental Petroleum had to pay $25.6 million to get its hand on a block.
“So it’s going to be hard, even if you find oil, to make much money out of it,” he predicted.
Libya’s treatment of Verenex Energy Inc. is “just one more indication, in 2009-2010, that the conservative, non-reform faction in Libya is exerting more and more influence on hydrocarbon policy,” he said. Verenex is a small Canadian firm that was the only player to make a sizeable discovery (more than two billion barrels of oil) under EPSA, phase four, contracts awarded after 2005, he noted. Libya’s interference in negotiations between Verenex and the China National Petroleum Co. over the sale of the Canadian firm’s exploration contract drove down Verenex’s share price by 30 percent and forced it to sell the contract to Libya at 70 percent of the original
offer to China, he said.
Family honor has been known to play a role in how Libya does business, too. In 2008, Gaddafi’s son Hannibal and his wife were temporarily arrested in Geneva after the couple’s domestic staff accused them of mistreatment during a hotel stay in the city. Libya then blocked two Swiss businessmen, Rachid Hamdani and Max Goeldi, from leaving Libya.
The heads of European and U.S. oil companies were also warned that their “business interests might be at stake” if the row with Switzerland was not resolved, St John noted. The whole incident illustrates that “whenever something goes wrong with a country,” Tripoli takes it out on individual companies from that particular country, he said.
As BP prepares to start drilling in Libya, what puzzles Libyan expert Omar Turbi is that “not everybody was excited to get in” when Libya opened its investment doors around 2003 with the offer of controversial EPSA contracts. For many months, some firms that won leases did nothing and “the land was just sitting there,” Turbi, chief executive officer of computer firm Orbit Systems in Irvine, Calif., told OilPrice.com.
He has testified before Congress on U.S.-Libyan relations and participated in think-tank discussions in Washington assessing the country.
“So this BP deal to me is ironic,” argued Turbi, adding that it is uncertain whether it will be good for the company in the long run. “From my understanding, Libya needs the oil companies more than the oil companies need Libya.”
By. Fawzia Sheikh for
Oilprice.com who offer detailed analysis on Oil, alternative Energy, Commodities, and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors.
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Posted by Mike Sweeney on Wed, Aug 04, 2010 @ 01:46 PM
The August 3, 2010, armed clash along the Israeli-Lebanese border was a significant strategic incident.
On Thursday, July 29, 2010, Israel notified UNIFIL that a few Israeli soldiers would be crossing the security fence in order to cut a tree and remove a few shrubs in Israeli territory but near the Blue Line (the actual border between Israel and Lebanon). This foliage blocks the view of Israeli security cameras positioned deep inside Israel. Israel also notified UNIFIL that these soldiers would be escorted by a small patrol which would stay south of the security fence.
The Israeli notification was in accordance with UNSC resolution 1701. UNIFIL then informed the nearby positions of the Lebanese Armed Forces about the planned Israeli activities in order to ensure that there was no misunderstanding. The Lebanese Army notified the local HizbAllah force.
Significantly, the Lebanese Army unit deployed along the border with Israel is the 9th Division, whose commanders and troops are Shi’ites and recruited from the same manpower pool as the HizbAllah.
Around 10:30am on August 3, 2010, about 10 Israeli soldiers with saws crossed the gate in the security fence on foot. This detachment was covered by an Israeli patrol which included a few tanks, armored vehicles, and a command vehicle. As UNIFIL had been informed, the patrol stayed 200-300 meters south of the fence.
When the soldiers approached the tree, they were attacked by small arms automatic fire from both the Lebanese Army’s position just across the border and “civilians” (HizbAllah fighters) in the nearby village of Adissyeh.
Immediately, a few Israeli commanders ran from the command vehicle toward the fence to see what was happening. Snipers hiding in the bush adjacent to the Lebanese Army position fired on them, killing the Israeli battalion commander (a lieutenant-colonel) and critically wounding the company commander (a captain). The sniper fire came from a professional ambush that had been organized on the basis of the advance warning provided by UNIFIL.
Meanwhile, the shooting at the Israeli soldiers north of the fence intensified. Israeli forces opened small-arms and mortar fire on the sources of fire in the Lebanese Army position and in a couple of unfinished houses in Adissyeh. Two Israeli tanks and an armored personnel carrier moved forward toward the fence in order to evacuate the stranded soldiers. At this point a UNIFIL patrol arrived on the scene and the UN officers urged both sides to ceasefire. The firing stopped a few minutes later.
Escorted by the UN patrol, the two Israeli tanks and the armored personnel carrier continued to advance toward the gate in the fence in order to evacuate the soldiers. Suddenly an anti-tank missile was fired from either the Lebanese Army position or the bush immediately near it. The missile barely missed the UNIFIL vehicle and the tanks. The Israeli tanks opened fire on the missile launcher.
Major activity followed. Intense fire — small arms, heavy machineguns, mortars, and RPGs — was opened from both several Lebanese Army positions as well as HizbAllah positions in Adissyeh. Israel rushed additional tanks and artillery to the area and started bombarding all Lebanese positions. One or two Katyusha rockets were launched toward Israel, impacted in open space and caused no damage.
A pair of Israeli combat helicopters arrived on the scene. They attacked the main Lebanese Army position near Adissyeh, and subsequently the Lebanese Army battalion headquarters in the village of Al-Taybeh. The helicopters also attacked and destroyed several Lebanese Army armored vehicles which were parked near the headquarters. Three Lebanese soldiers and a journalist (from the pro-HizbAllah newspaper Al-Akhbar) who was with the troops in Al-Taybeh were killed. Another soldier was killed in the position near Adissyeh. A total of five to six soldiers were wounded. There is no reliable information about HizbAllah casualties.
The fire subsided after little over two and a half hours.
This was a very serious incident for two reasons:
1. The incident started as a pre-planned pre-meditated provocation against the Israeli patrol on the basis of information provided via UNIFIL. The mere invitation by the Army of the Al-Akhbar correspondent to cover the clash suggests that this was a pre-planned incident. The incident was conducted jointly by Lebanese Army forces and HizbAllah forces, proving that the close cooperation which HizbAllah leader Hassan Nasrallah had boasted about repeatedly is indeed working (at least with the Army’s Shi’ite units such as the 9th Division).
2. Earlier, on Monday, August 2, 2010, HizbAllah and Iranian media warned that the Israeli cabinet had considered “the prospects of an upcoming war on the Lebanese, Syrian and Gaza fronts in anticipation of tensions on the Lebanese domestic scene” because of the impending indictment of senior HizbAllah officials by the Special Tribunal for Lebanon (STL). The HizbAllah, Syria, and Iran are calling on all Lebanese to ignore the STL and instead rally and close ranks behind the “Resistance” in order to confront the Israeli threat. Under these circumstances, the incident on the Israeli-Lebanese border should be considered a made-to-order “proof” of the HizbAllah and Iranian warnings.
Indeed, Lebanese President Michel Suleiman denounced the fighting and urged the Army and all Lebanese to “stand up to Israel’s violation of Resolution 1701, whatever the price”. According to the Syrian Arab News Agency, Syrian Pres. Bashar al-Assad stated that the “Israeli attack proves once again that Israel is constantly working to destabilize security in Lebanon and the region. Syria stresses that it is standing by its sister Lebanon in the face of the criminal Israeli aggression and calls on the UN to condemn and stop this aggression.”
However, the main event in the aftermath of the clash is an anticipated major speech by Hassan Nasrallah. The speech was scheduled for 20:30 on August 3, 2010 (Lebanon time), but its exact time was being constantly changed. Senior HizbAllah officials predict that Nasrallah’s speech “will mark a turning point” for Lebanon and the entire Middle East. They explained that Nasrallah would “focus on the national and Islamic dimension of the July [2006] war” and its implications for the current situation in the entire region. Nasrallah’s speech, the Senior HizbAllah officials stress, “will mainly be devoted to talk about the meaning of victory against Israel” in both past wars and in the historic confrontation still to come.
Given the above, the August 2, 2010, rocket firing from southern Sinai of Aqaba, Eilat, and a base of the US-led Multinational Force & Observers Organization in Sinai might also be part of this kind of made-to-order “proof” of Israeli aggression. Significantly, the six 122mm GRAD rockets fired from Sinai were made in Iran or North Korea, strongly suggesting that the perpetrators were Iran-sponsored main group rather than a Palestinian fringe entity.
by Yossef Bodansky for
OilPrice.com who offer detailed analysis on Oil, alternative Energy, Commodities, and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors.
Posted by Mike Sweeney on Tue, Aug 03, 2010 @ 04:13 PM
The killing of former Lebanese Prime Minister Rafik Hariri was until recently widely believed to have been perpetrated by the Syrians, or at least on their behalf. It was the assassination of Mr. Hariri that led to the forced departure of Syrian troops from Lebanon as a result of international pressure and wide-ranging opposition from the Lebanese street.
Blame for much of the political dirty games that have taken place in the country, such as the assassination of the former Lebanese prime minister was directed at Syria. Mr. Hariri was known for having stood up to Syrian meddling in Lebanese affairs.
As any Lebanese politician will attest, blaming Syria is not as easy as it sounds and the consequences for implicating Damascus can be deadly, to say the least. Lebanese politicians openly opposed to Damascus tend to face turbulence along their political careers as Damascus has always had its say in Lebanese affairs.
So is it coincidental or reality that more recently accusing fingers have begun pointing at Lebanon’ s other neighbor, Israel?
Indeed, both of Lebanon’s neighbors, Israel to the south and Syria to the east and north, have never shied away from crossing the border into much weaker Lebanon by taking matters into their own hands and resorting to the physical elimination of political opponents, as with the Hariri assassination on February 14, 2005.
It was an Israeli raid in the heart of Beirut in 1971 when a commando team led by Ehud Barak landed in the Lebanese capital and assassinated three prominent Palestinian leaders, Kamal Nasser, Kamal Adwan and Abu Youssef, that laid the groundwork for the civil war that was to erupt four years later. Claiming that the Lebanese state was not able to defend them, the Palestinians began arming in earnest and before too long the Palestine Liberation Organization became a state within a state.
This time, whether real or fictitious, blaming Israel is very convenient for everyone, except Israel, of course. The latest scandal involving Israel’s intervention in Beirut’s politics has emerged with the dismantling of an Israeli spy ring operating in Lebanon in which more than 70 people have been arrested in the last 18 months.
Among those accused of spying for Israel are four top Lebanese Army and internal security officers. Since the beginning of the United Nations-led investigation into the murder of Mr. Hariri much of the evidence centered around cellular telephone calls and communications. Press reports from Beirut now name Charbel Qazzi, the man in charge of transmission and broadcasting at one of the two state-owned cellular phone providers, Alfa.
The Beirut newspaper As-Safir reported that Mr. Qazzi confessed to having installed electronic devices in Alfa equipment that would give Israeli intelligence agents access to data that would allow the Mossad, Israel’s external intelligence agency, to track targets in Lebanon. A few weeks ago a second man at the same cellular phone company was arrested on similar charges. And then a third man was also detained and also accused of spying for Israel.
That the three men working for Alfa confessed to working for Israeli intelligence is not surprising. Under interrogation anyone can admit to what his interrogators want him to admit. The real question is whether Israel is really behind the killing of Hariri and then to what end would such an assassination serve.
In either case, be it true or not, this latest twist in the tale comes at a convenient time to throw a spanner in the travails and the legality of the Special Tribunal for Lebanon, an independent body set up by the U.N to investigate and prosecute those responsible for the assassination of the late prime minister. The Tribunal was expected to publish its findings this coming September but these latest revelations puts everything into question.
Assuming that Israel is indeed the real culprit in the Hariri assassination, as in every crime there must be a motive. What would Israel gain from killing the former prime minster? Does Israel benefit from chaos in Lebanon? Unlikely.
In fact, Israel far prefers that the Syrians remain in Lebanon. Why? When Syrian troops were in control of Lebanon, Israel had a return address should any attack on its northern border emanate from Lebanese territory. With Syrian troops now out of Lebanon the pro-Iranian Lebanese Shiite movement, Hezbollah, has filled the security vacuum left when Damascus pulled out.
For Israel, dealing with Hezbollah is far more precarious than dealing with the Syrians. But then again, nothing is ever clear in the Middle East muddle.
By Claude Salhani for
Oilprice.com who offer detailed analysis on Oil, alternative Energy, Commodities, Finance and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors.
Posted by Mike Sweeney on Mon, Aug 02, 2010 @ 10:22 AM
Oil Market Summary for 07/26/2010 to 07/30/2010 Crude oil futures continued to trade in a very narrow range, unable to cross the $79 a barrel threshold even though they ended 4.4% higher on the month.
The benchmark West Texas Intermediate rallied with the stock market late Friday to finish the week at $78.95 a barrel, virtually unchanged from $78.98 a week ago, after dipping just below $77 a barrel earlier in the week. End-of-month trading might have accounted for some the late gains, analysts said.
Government data on slowing economic growth in the second quarter drove down both oil and stock prices early on Friday. The Department of Commerce said preliminary GDP growth was an annualized 2.4%, compared with an upward-adjusted first-quarter rate of 3.7%.
The second-quarter rate was only slightly below the 2.5% forecast by economists. The figures are subject to strong revision, as indicated by the first-quarter rate, which was initially reported at 2.7%.
But the slower growth further clouded an uncertain economic picture that more positive data on manufacturing and consumer confidence later on Friday only partly dispelled.
The University of Michigan/Reuters index of consumer sentiment was revised upwards to 67.8 for the last part of July, against an initial reading of 66.5 earlier. The index was at 76 in June, however. The Chicago purchasing managers’ index rose to 62.3 in July, up from 59.1 in June, though analysts had expected a decline, indicating a slightly faster expansion of manufacturing in the region.
In a pattern that has been consistent in recent weeks, oil prices reached their low for the week on Wednesday after the Energy Information Administration yet again reported an increase in oil inventories, by 7.3 million barrels, the strongest weekly increase in nearly two years, even though forecasters had predicted a decline.
Two-thirds of 36 analysts surveyed by Bloomberg News expected oil prices either to decline or stay about the same next week, due to increased production by OPEC members in July and an expected increase in U.S. oil inventories. The remaining third expected prices to rise.
By. Darrell Delamaide for
Oilprice.com who offer detailed analysis on Oil, alternative Energy, Commodities, and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors.
Posted by Jeff Ramson on Sun, Jul 25, 2010 @ 07:22 AM
Prices of crude oil futures slumped below $79 a barrel on Friday despite a stock market rally and the rise of Tropical Storm Bonnie in the Gulf of Mexico. The downward turn on Friday followed a sharp gain Thursday amid positive corporate earnings reports that some saw as a signal of economic recovery and the brewing tropical storm. Technical analysts noted that oil prices have encountered resistance as they approach the $80 a barrel threshold. There appears to be little momentum for breaking through that barrier, they said. Other analysts said that market fundamentals were failing to provide any “guidance” for prices.
The reaction of markets Friday to the report from European regulators that only seven out of 91 banks subjected to a “stress test” would need to add capital, and only a modest amount slightly under $5 billion, was mixed. Some participants expressed relief that the exercise was over while others were skeptical that the tests had been stressful enough to be meaningful. The euro regained ground against the dollar after a slight dip when the stress test results came out. The benchmark West Texas Intermediate contract settled at $78.98 a barrel on Friday, after surging to $79.30 on Thursday. It finished last week at $76.01 a barrel. Oil prices had been tracking the stock market fairly consistently the past few weeks, so analysts were surprised that oil futures parted ways with stocks. The Dow Jones Industrial Average closed up 102 points Friday, at 10,424.62 points, gaining 3.2% on the week.
The threat of disruption of production in the Gulf of Mexico from the advent of a new tropical storm, which should have been bullish for oil prices, also failed to halt the decline on Friday. Weather forecasters predicted Bonnie would not reach hurricane force before making landfall on Sunday. Earlier in the week, an unexpected increase in oil inventories and a gloomy economic forecast from Federal Reserve chairman Ben Bernanke cut short an incipient rally, with prices surging above $78 a barrel on Wednesday before closing below $77. “The economic outlook remains unusually uncertain,” Bernanke said in congressional testimony. The Fed is ready to jump either way, he indicated, depending on whether the economy shows signs of a more robust recovery or a renewed slide into negative growth.
By. Darrell Delamaide for OilPrice.com who offer detailed analysis on Oil, alternative Energy, Commodities, Finance and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit: http://www.oilprice.com
Posted by Jeff Ramson on Fri, Jul 23, 2010 @ 04:28 AM
Fed Will Intervene if Hiring Does Not Improve: Bernanke
Interesting article, and I just can't figure out this guy. Is anyone seeing inflation?
"The Federal Reserve will try to push borrowing costs even lower if the job market continues to languish, Fed Chairman Ben Bernanke said Thursday, offering his clearest blueprint yet for possible additional monetary easing. After three quarters of solid growth, the U.S. economy has been losing steam, with firms still reluctant to hire and the housing sector seemingly unable to exit a prolonged rut.
Bernanke's comments accompanied Labor Department data released Thursday showing new claims for state unemployment benefits spiked to 464,000 last week."
Full Article @ CNBC