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The Energy Report: Storms, Strikes and War

Published 09/30/2024, 09:13 AM
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Oil prices are in a flux battered by the wind of war and the winds of storms past and storms to come. The devastation from Hurricane Helene is just beginning to be felt and fears that another tropical depression in the Atlantic could follow the same path is heartbreaking and we need to keep those impacted in our prayers. Those across many sites that will want to rebuild may find it more difficult as the nation goes headlong into a potential port strike that will impact US oil exports and imports and potentially supplies to the world.

Fox Business reported:

“The strike by workers at ports from Texas to Maine will reportedly hammer U.S. farmers already dealing with an economic downward spiral. “We don’t need another hit right now. And this is going to have an impact on agriculture,” Kip Tom, former United States ambassador to the United Nations Agencies for Food and Agriculture during the Trump administration, told FOX Business.

“Unionized dockworkers in the International Longshoremen’s Association, which represents 45,000 members at East Coast and Gulf Coast ports, may go on strike beginning Oct. 1 if an agreement isn’t reached by the end of Monday. The two sides to the labor dispute have been at an impasse over issues including wages and automation at ports.

The longshoreman union's demand for a total ban on automation at ports is almost as crazy as asking for the letter E to be stripped from the English language. Yet to show their commitment, the Longshoreman will walk to work instead of driving, or ride horses and buggies and will not use their remote control to change channels on their TV.

Israel attacked oil supplies in Yemen and that gave the market a little bit of a pop but yet Russia believes that all the price risks due to war are priced in. Alexander Novak, the Deputy Prime Minister of the Government of the Russian Federation and the man who oversees Russian Energy interests, says he believes, “Middle East geopolitical risks are already priced in, global oil prices will not fluctuate significantly.”The way the market has acted it seems so far he is correct on that. As far as the recent price drop Novak says, ‘Russia says it can ‘live through any Price’ as pressure on oil market mounts.”

Yet the war rages on and Hezbollah is getting ready for a coming invasion from Israel and Iran is not sending troops to help them. It probably is because they fear they are next. Fox News reported that Iran’s Supreme Leader Ayatollah Ali Khamenei has moved into hiding and remains at a secure location within the country, sources told Reuters. 

Fox News said,

“The decision came in response to Israel’s strikes outside Beirut on Friday that killed the leader and founding member of the Iran-backed terrorist group Hezbollah, Hassan Nasrallah. Two sources also told Reuters that Iran reached out to Hezbollah and other proxy forces in the region to determine what action to take in response to Nasrallah’s killing. In a statement Saturday, Khamenei said, “The fate of this region will be determined by the forces of resistance, with Hezbollah at the forefront.”

We are ready to fight Israel on the ground. As far as the Iran Army Chief Commander, on the likely response to the assassination of Hezbollah leader, he said “Wait [for it].” Iran Foreign Ministry Spokesman Kanaani: We won’t send forces to Lebanon to fight Israel. Iranian Foreign Ministry: The countries of the region are capable of defending themselves against Israeli attacks and there is no need to send Iranian forces.

The Wall Street Journal reported that Israeli special forces launched raids into Lebanon ahead of possible ground incursion. They say that Israel Bombs Yemen and Kills the Hamas Leader in Lebanon as the War Expands. Israel has carried out air strikes on targets in Yemen and has also killed the leader of Hamas in Lebanon.

Yet these concerns seem to not rally the oil market even as we see copper soar on reports of more Chinese stimulus. We also saw a report that Libya’s oil production may come back online today after a political agreement. Stay tuned we’ll see if that actually happens this time.

As Cushing drains, the Gulf Coast shines. Reuters is reporting that “Rising U.S. crude oil exports are boosting the prominence of Gulf Coast price benchmarks and buoying trading volumes on Houston contracts, eroding the significance of the Cushing, Oklahoma, storage hub. Since U.S. WTI Midland crude oil transactions joined the dated Brent price assessment a year ago, U.S. oil exports have overshadowed the role of Cushing as a storage and pricing hub, traders and analysts said.

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