US targets another Iraqi militia commander
A US drone strike killed a senior Iraqi militia commander in Baghdad today, in retaliation for attacks on US forces in that country.
The strike targeted an unnamed commander of the Kataib Hezbollah group, whom the Pentagon accused of "directly planning and participating in attacks on US forces in the region." The US on 4 January carried out a drone strike that killed leaders of another Iran-backed Iraqi militia group, Harakat al-Nujaba.
Today's strike against the Kataib Hezbollah commander follows air strikes against Iran-linked targets in Iraq and Syria last week, which the Pentagon said were in retaliation to the 28 January deadly attack on a US base in Jordan.
Kataib Hezbollah after the 28 January attack announced a pause in strikes against the US forces in the region, but the Pentagon dismissed the statement as inadequate as other Iran-linked groups continued to target US service members and facilities.
Iraq has witnessed a rise in tensions between US troops deployed in the country and Iran-backed militias since the outbreak of violence between Israel and Gaza-based Hamas in October. The US military has come under attack more than 160 times in Iraq and Syria since the Israel-Hamas conflict in Gaza broke out.
The latest US push to pause Israeli military operations in Gaza and release hostages held by the Hamas militant group in Gaza is not showing much progress. Israel's prime minister Benjamin Netanyahu, following talks with US secretary of state Tony Blinken in Tel Aviv today, blasted Hamas' response as "delusional" and vowed to expand Israel's military operations in southern Gaza.
Blinken told reporters at the conclusion of his visit to Israel that the US still saw a possibility to negotiate a Hamas-Israel agreement despite Netanyahu's comments.
The US is holding Tehran responsible for the attacks on US forces in the region, citing Iran's provision of weapons to the militants accused of carrying them out. But President Joe Biden and his senior military and diplomatic advisers have indicated that the US response will aim to avoid a wider conflict in the Middle East. It remains to be seen whether Tehran will view continued US retaliatory strikes against Iran-linked groups as escalatory.
The US military is in Iraq as part of a coalition of foreign forces formed to defeat the Islamist group Isis. Iraq's prime minister Mohammed Shia al Sudani in December said his government is working to end the presence of foreign troops.
The Biden administration in response said last month that it would hold consultations with the Iraqi government on the future of US military forces in the country. The Pentagon does not want to commit to a specific withdrawal date or an interim target for a specific number of troops. A possible phase down of US military presence will take three factors into account: the threat from Isis, Iraq's overall security situation, and the capability of Iraq's own military to address domestic security risks, the Pentagon says.
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Saudi Aramco cuts official August crude prices for Asia
Saudi Aramco cuts official August crude prices for Asia
London, 4 July (Argus) — Saudi Arabia's state-controlled Saudi Aramco has reduced the official formula prices of August-loading crude exports for buyers in its core Asia-Pacific market, while increasing prices for European customers. For customers in Asia-Pacific, Aramco has cut the August formula prices of its Arab Light and Extra Light grades by 60¢/bl compared with July and reduced the prices of its other grades by 20-70¢/bl. The price cuts for Asia-Pacific are within customers' expectations. Refiners in the region expected a narrower Dubai backwardation to prompt a reduction in Saudi formula prices . The month-on-month change in Dubai intermonth spreads is one factor that producers such as Aramco consider when setting the formula prices for their Asia-bound cargoes. For customers in northwest Europe, Aramco has raised the official August prices of its Extra Light, Arab Light, Arab Medium and Arab Heavy grades by 90¢/bl. For Mediterranean-bound exports of the same grades, it increased prices by 90¢/bl on a fob Ras Tanura basis and by 80¢/bl a fob Sidi Kerir basis. European refiners were anticipating an increase in Saudi formula prices on the back of firm values for rival crudes and tighter global supply. The North Sea's largest crude grade, Norway's medium sour Johan Sverdrup, averaged $1.60/bl above the North Sea Dated benchmark fob Mongstad in June, up from a $0.29/bl premium in May. Values of heavier grades in Europe have recently begun to improve. The Argus Brent Sour Index, which prices northwest Europe's heavier and sourer crudes, has averaged a 35¢/bl premium to Dated so far this week. The index averaged 10¢/bl above Dated in June and 7¢/bl below the benchmark in May. Aramco is expected to export less crude in the summer months when domestic demand peaks. Saudi Arabia announced in early June that it will extend a 1mn b/d "voluntary" additional crude output cut — first implemented in July 2023 — for three months until the end of September. For customers in the US, Aramco has lifted the August formula prices of Extra Light and Arab Light by 10¢/bl compared with July. It has left formula prices of the other grades unchanged. By Edmundo Alfaro and Lina Bulyk Saudi Aramco official formula prices $/bl August July ± United States (vs ASCI) Extra Light 7.10 7.00 0.10 Arab Light 4.85 4.75 0.10 Arab Medium 5.45 5.45 0.00 Arab Heavy 5.10 5.10 0.00 Northwest Europe (vs Ice Brent) Extra Light 5.60 4.70 0.90 Arab Light 4.00 3.10 0.90 Arab Medium 3.20 2.30 0.90 Arab Heavy 0.80 -0.10 0.90 Asia-Pacific (vs Oman/Dubai) Super Light 2.75 2.95 -0.20 Extra Light 1.60 2.20 -0.60 Arab Light 1.80 2.40 -0.60 Arab Medium 1.25 1.95 -0.70 Arab Heavy 0.50 1.20 -0.70 Mediterranean fob Ras Tanura (vs Ice Brent) Extra Light 5.60 4.70 0.90 Arab Light 3.90 3.00 0.90 Arab Medium 3.30 2.40 0.90 Arab Heavy 0.60 -0.30 0.90 Mediterranean fob Sidi Kerir (vs Ice Brent) Extra Light 5.65 4.85 0.80 Arab Light 3.95 3.15 0.80 Arab Medium 3.35 2.55 0.80 Arab Heavy 0.65 -0.15 0.80 Source: Saudi Aramco Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US services contract in June, signal broad weakening
US services contract in June, signal broad weakening
Houston, 3 July (Argus) — Economic activity in the US services sector contracted in June by the most since 2020 while a report earlier this week showed contraction in manufacturing, signaling a broad-based slowdown in the economy as the second quarter came to an end. The Institute for Supply Management's (ISM) services purchasing managers index (PMI) registered 48.8 in June, down from 53.8 in May. Readings above 50 signal expansion, while those below 50 signal contraction for the services economy. The June services PMI "indicates the overall economy is contracting for the first time in 17 months," ISM said. "The decrease in the composite index in June is a result of notably lower business activity, a contraction in new orders for the second time since May 2020 and continued contraction in employment." The business activity/production index fell to 49.6 from 61.2. New orders fell by 6.8 points to 47.3. Employment fell by 1 point to 46.1. Monthly PMI reports can be volatile, but a services PMI above 49 over time generally indicates an expansion of the overall economy. "Survey respondents report that in general, business is flat or lower, and although inflation is easing, some commodities have significantly higher costs," ISM said. The prices index fell by 1.8 points to 56.3, showing slowing but robust price gains. ISM's manufacturing PMI fell to 48.5 in June from 48.7 in May, ISM reported on 1 July. It was the third consecutive month of contraction and marked a 19th month of contraction in the past 20 months. Wednesday's weaker than expected ISM report, together with a Wednesday report showing initial jobless claims last week rose to their highest in two years, slightly increase the odds that the Federal Reserve may lower its target rate later this year after maintaining it at 23-year highs since last year in an effort to stem inflation. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Nigerian Dangote refinery seeks more US WTI crude
Nigerian Dangote refinery seeks more US WTI crude
London, 3 July (Argus) — Nigeria's 650,000 b/d Dangote refinery has issued a tender seeking US crude WTI for delivery in August and September. The company is requesting 1mn bl or 2mn bl cargoes of the light sweet grade to be delivered on 1-10, 11-20 and 21-31 August, as well as 1-10 September. The tender closes on 4 July. It is Dangote's second WTI tender. The first sought 2mn bl/month over a 12-month period starting in July. Some traders said the initial tender was not awarded, but this has not been confirmed. The Dangote refinery started up at the end of 2023 and received its first crude cargo on 6 December. It aims to reach throughput of around 350,000 b/d in its first phase of operations. Argus tracking indicate it is almost at that level, having received close to 350,000 b/d in June , of which 140,000 b/d was WTI. Vortexa data show crude deliveries to the refinery have averaged just over 200,000 b/d so far this year, with WTI accounting for 27pc of the total. Dangote had expected to run mainly on Nigerian crude. But WTI is often more competitively priced despite additional costs to ship the grade. WTI was on average 35¢/bl cheaper on a delivered-Europe basis than Nigeria's flagship Qua Iboe on a fob basis during May-June. By Lina Bulyk Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Venezuela's Maduro open to talks with the US
Venezuela's Maduro open to talks with the US
Caracas, 2 July (Argus) — Venezuelan leader Nicolas Maduro plans to talk with US envoys on Wednesday to discuss allowing the South American country to increase oil exports in exchange for free and fair elections, he said late on Monday. But Maduro's call for dialogue comes less than a month before the 28 July election in which polls show him up to 40 percentage points behind his main challenger. It is also after the US rescinded a six-month reprieve on sanctions in April, accusing Venezuela of violating a commitment to hold a fair vote. Maduro said that the US had sought dialogue with him "for two months in a row", and, "after thinking about it, I have accepted". The head of the pro-Maduro assembly elected in 2020, Jorge Rodriguez, will represent him in the talks, Maduro said. The US State Department declined to directly confirm Maduro's statement but said that the US welcomed "dialogue in good faith, and we support the Venezuelan people's desire for competitive and inclusive elections on July 28." The US ties sanctions relief to Maduro's observing the 2023 Barbados agreement with the Venezuelan opposition, which promised to hold a competitive presidential election. The US in April reimposed sanctions against Venezuela because the Maduro government did not allow the main opposition contender, Maria Corina Machado, to run for president. Former Venezuelan diplomat Edmundo Gonzalez is the sole presidential candidate representing the opposition Unitary Platform. "We are clear-eyed that democratic change will not be easy, and certainly requires a serious commitment," the US State Department said. "This is something that we will continue to focus on when we will engage in dialogue with with a broad range of Venezuelan actors." Venezuela in recent weeks has barred an additional 10 city mayors from running for office for 15 years after they expressed support for Gonzalez, according to the CNE electoral authority and the comptroller general's office. During the first six months of 2024 Maduro has arrested 39 people connected to Gonzalez's campaign, the last one as recently as 30 June, a campaign source told Argus, using figures from Venezuelan non-governmental organizations. Police over the weekend also detained Machado for several hours while leaving a rally for Gonzalez. Venezuela's oil output increased by around 4pc in May to 911,700 b/d from 878,000 b/d in April as drilling campaigns showed results after three months of flat production, according to the oil ministry. But US sanctions are expected to keep a cap on much additional growth. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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