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Iran rejects report on suspension of enrichment works
Iran Sunday rejected reports on suspension of enrichment work for a period of three months. According to IRNA, Iran's Foreign Ministry spokesman Hamid-Reza Asefi said, "As far as I know, the suspension (of uranium enrichment) for three months is not correct."
A morning daily has reported that Iran had accepted to suspend its enrichment activities for a period of three months. Asked about safety system of Iran's Bushehr power plant and concerns expressed in this regard, he said Bushehr power plant is equipped with a highly advanced safety system, with high standards.
"The International Atomic Energy Agency (IAEA), too, has confirmed this issue and there is no room for concerns in this regard."
© 2006 Al Bawaba (www.albawaba.com)
http://www.albawaba.com/en/news/199912
Refinery hiccups push oil prices higher
By MADLEN READ
Associated Press
NEW YORK - Oil prices rose for the second straight day on Thursday as fuel demand appeared to remain strong and U.S. refineries encountered some minor obstacles.
The ongoing tension between the West and Iran has also lent support to the energy markets, which rose a day earlier after the U.S. government reported a smaller-than-expected build in gasoline supplies at a time when refineries are boosting production for the summer driving season.
"We could be peaking in inventories of gasoline," said Tom Bentz, an analyst at BNP Paribas Commodity Futures in New York. "Combine that with any kind of refinery glitches or any kind of weather outages or strike, or you name it — the market is going to be extra sensitive."
He noted that small refinery issues — notably Exxon Mobil's Baytown refinery having problems restarting earlier this week and an oil spill in a Louisiana channel affecting some refinery operations — also encouraged traders to buy.
Those problems, coupled with geopolitical tension and the possibility that imports could slow as other parts of the world see strong fuel demand, have inflated prices.
"It's a lot of ifs, but the stage is set for the inventories to peak, demand to kick in for the summer driving season, and the correction we had in prices could be over," Bentz said.
Light, sweet crude for August delivery rose 51 cents to settle at $70.84 a barrel Thursday on the New York Mercantile Exchange.
Gasoline futures for July rose 5.2 cents to settle at $2.1180 per gallon.
July heating oil futures rose 3.47 cents to settle at $1.9718 a gallon, while natural gas slipped 14.9 cents to settle at $6.439 per 1,000 cubic feet.
Brent crude for August rose 78 cents to settle at $69.95 a barrel in London.
Oil Rises Above $70 , Anticipating Busy July 4th Draws , Gasoline Supply Gains Less Than Expected
June 21 (Bloomberg) -- Crude oil rose above $70 a barrel in New York, pulled higher by gasoline, after an Energy Department report showed that U.S. inventories of the motor fuel increased less than expected.
Gasoline supplies rose 294,000 barrels to 213.4 million last week. An increase of 1.5 million barrels was expected, according to the median of forecasts in a Bloomberg News survey. Refineries try to increase gasoline output during June in preparation for the Independence Day holiday on July 4, when demand increases. Refiners operated at the highest rate since August.
``This is usually when gasoline supplies peak. Traders are already looking ahead and anticipating gasoline draws in the weeks ahead,'' said Tom Bentz, an oil broker with BNP Paribas Commodity Futures Inc. in New York.
Crude oil for August delivery rose 91 cents, or 1.3 percent, to $70.25 a barrel at 1:20 p.m. on the New York Mercantile Exchange. Prices are up 19 percent from a year earlier. Oil reached $75.35 on April 21, the highest since New York trading began in 1983.
Gasoline for July delivery jumped 5.69 cents, or 2.8 percent, to $2.0625 a gallon in New York. Gasoline touched $1.965 on June 19, the lowest since May 18. Futures are up 27 percent from a year ago.
``Gasoline has been beat up pretty good recently, so it was time for a rebound,'' Bentz said.
Peak Demand
U.S. gasoline use peaks between the Memorial Day holiday in May and Labor Day in early September. The U.S. Independence Day holiday is one of the busiest travel days of the year.
``There's going to be a lot of driving over the holiday weekend,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. ``This will probably be the biggest holiday gasoline demand this year. Usually Thanksgiving is bigger but this year July 4 is on a Tuesday so it will be a four-day holiday.''
Crude oil supplies rose 1.39 million barrels to 347.1 million, the report showed. A decline of 500,000 barrel was expected, according to the median response of 15 analysts in the survey. Imports jumped 4.2 percent to an average 11 million barrels a day, the highest since the week ended Aug. 5.
United Allies
President George W. Bush said today the U.S. and the European Union are ``united'' in the conviction that Iran, the fourth-biggest oil producer, shouldn't be able to build nuclear weapons.
``It would be a tragedy if they developed a nuclear weapon,'' Bush said of the Iranians at a news conference in Vienna following a meeting there with EU leaders. While ``it's their choice to make,'' he said, ``I'm convinced that when they look and see we're working very closely together they will see the seriousness of our intent.''
Oil prices jumped 15 percent this year amid concern Iran might cut exports because of efforts by the U.S. and EU to curb its nuclear program. The U.S. has accused Iran of using its nuclear research as cover for the development of weapons. Iran says the research is part of a program to increase electricity output.
Iranian President Mahmoud Ahmadinejad said Iran will wait another two months before replying to a EU offer of incentives aimed at encouraging the Islamic republic to halt its uranium enrichment program.
`Legitimate Right'
``We will review the proposals on the basis of our legitimate right, and, God willing, we will give our opinion regarding the proposals toward the end of Mordad,'' the Iranian month ending on Aug. 22, Ahmadinejad told supporters in Hamedan province today, state television showed in a live session, just minutes before the U.S.-EU press conference began.
Bush, responding to a question, said the August date is an ``awful long time'' to respond to the proposal. ``It shouldn't take the Iranians that long to analyze what is a reasonable deal,'' he said.
The U.S. and Europe want to maintain unity to prevent Iran from moving forward with any plans to develop nuclear weapons. While Iran wasn't given an exact deadline, the delay is likely to raise tensions with the U.S. and the EU, which have accused Iran of buying time in negotiations.
``It's better to agree as soon as possible,'' said Austrian Chancellor Wolfgang Schuessel, speaking on behalf of the 25- nation EU. ``The time is limited. I think we should not play with time. We discussed it for months and months.''
Brent crude oil for August settlement rose $1.02, or 1.5 percent, to $69.10 a barrel on the London-based ICE Futures exchange. Futures touched $74.97 a barrel May 2, the highest since the contract began trading in 1988.
To contact the reporter on this story:
Mark Shenk in New York at mshenk1@bloomberg.net
Undervalued oil stock to go long on is Sonoran Energy (SNRN.0B). Right now they are trading at .38 and have a $30 million market cap. They have growing production and currently are at approximately 1000 boepd. They started the year at 100 boepd. They are targeting 2000 boepd by the end of the year as they are currently reworking some high impact wells in Louisiana the first of which should be going into production shortly. So the market cap should at least double by the end of the year imo. They also have east Texas and West Texas properties which they have yet to begun to drill on as well as a property in Jordan which they believe has 30 million barrels in reserves. They anticipate drilling in Jordan will commence in 2007.
Web Site: http://www.sonoranenergy.com
Here is the business summary from yahoo:
Sonoran Energy, Inc., an independent oil and gas exploration and production company, focuses on building a diversified portfolio of assets in North America, North Africa, the Middle East, and the Caspian region. In the United States, Sonoran owns a 100% Working Interest in 10 production wells covering acreage in the Beauregard, Vernon, Rapides, and Livingston Parishes of Louisiana; 3 east Texas properties located in 3 separate oil fields known as the JRC, Lisa Layne, and Ann McKnight; and the KWB (Strawn) Field located approximately 90 miles southeast of Midland, Texas in Tom Green County containing approximately 3,922 acres. In North Africa, the company is evaluating opportunities in Algeria and Libya. In Middle East region, Sonoran focuses its operations on Jordan and Iraq. In the Caspian region, it has a representation agreement with the CSSI Group to assist the company in identifying acquisition opportunities within Kazakhstan. Additionally, Sonoran has strategic partnerships with AGR Holdings AS, RLG International, and Welltec AS. The company was incorporated as Cerotex Holdings, Inc. in 1995 and changed its name to Showstar Online.com, Inc. Further, it changed its name to Sonoran Energy, Inc. in 2002. Sonoran Energy is based in Chandler, Arizona.
Key Statistics
Oil service and drilling stocks' upcycle is not over, says Calyon
Calyon says oil service and drilling stocks have experienced severe multiple compression since the current upcycle began in early 2003. With the group now trading at 12.1x forward 12-month consensus earnings ests, the valuation is only slightly higher than the prior cycle trough of 10.9x set in late September 2001. Once the mkt realizes the cycle is not over, which the firm expects to occur before 4Q06, they believe the forward P/E multiple to re-expand toward the 15x range. Because of their large Eastern Hemisphere exposure, the firm continues to favor the large capitalization oil service stocks, with their favorites being HAL and WFT. In the mid cap oil service group, they favor the shares of equipment maker CAM. Among drilling stocks, they favor the shares of ESV, GSF, NE and RIG.
Iran will deliver response to International Atomic proposals by August 22-Reuters
Reuters is citing Iran's President.
june 21 Utilities Sector: Coverage initiated on 12 companies@DBAB
DBAB initiated the following companies with a Buy rating: NRG Energy (NRG), $62 target; Edison International (EIX), $48 target; and CMS Energy (CMS), $16 target. DBAB initiated the following companies with a Hold rating: Unisource Energy (UNS), $33 target; Reliant Energy (RRI), $12.50 target; TXU Corp (TXU), $62 target; Sempra Energy (SRE), $47 target; Sierra Pacific Resources (SRP), $14.50 target; CenterPoint Energy (CNP), $13; DTE Energy (DTE), $42; PG & E (PCG), $40; and Pinnacle West (PNW), $41 target.
June 19, 2006
06:21 EDT NRG Electric Utilities: Buyers of deregulated/commodities if natural gas weakens@JPMS
Natural gas prices rallied last week from strong inventory data, but according to JPMorgan there are some predictions calling for a quick rollover in natural gas prices into the summer if favorable weather or storms do not materialize. If Natural gas prices weaken, JPMorgan would be buyers of deregulated/commodity names. They recommend four Overweight rated stocks: Dynegy (DYN), Edison Int'l (EIX), NRG Energy, Inc (NRG) and TXU Corp (TXU).
Analysis: Oil demand to soar 37% by 2030
By Donna Borak Jun 21, 2006, 1:47 GMT
WASHINGTON, DC, United States (UPI) -- Demand for oil by the world market is slated to soar 37 percent from this year`s 86 million barrels per day to 118 million bpd by 2030, the U.S. Department of Energy`s data arm predicted on Tuesday.
Slower growth in this year`s projections was largely due to the substantially higher world oil market prices. Crude oil topped out at $75.35 a barrel on April 21 on the New York Mercantile Exchange, setting record highs amid continued fears of supply disruptions from volatile oil-producing nations like Iran and Nigeria.
Oil prices have been hitting record highs in recent months due to supply worries over fears of a confrontation with Iran, the world`s fourth-largest producer.
Analysts have suggested that rising energy prices have been the result of supply and demand issues, especially with the Organization of Petroleum Exporting Countries refusing to expand production to keep up with demand.
There is now 'virtually no excess capacity,' said Guy Caruso, Energy Information Agency Administrator, in a briefing on the agency`s annual long-term international energy supply and demand forecast. 'We don`t see that changing in the median term, say three to five years. Once spare production capacity gets back up to 3, 4, 5 million barrels a day, we think that will put enough downward pressure on prices.'
Countries outside of the Organization for Economic Cooperation and Development, especially among non-industrialized nations in Asia like China and India, will experience the most rapid growth in energy demand from 2003 to 2030, increasing by an average 3.7 percent per year.
In order to meet projected demand in world oil supply, OPEC nations are expected to provide an additional 14.6 million bpd. Total petroleum supplies that will be needed by 2030 must exceed 118 million barrels - 38 million barrels higher than the 2003 level.
However, higher oil prices caused a substantial increase in non-OPEC oil production by 23.7 million bpd, representing 62 percent of the increase in total world oil supplies. The agency explained that OPEC`s total share of global supply will fall from 39.7 percent or 34 million bpd of world oil demand in 2003 to 38.4 percent or 45.3 million bpd of global oil demand in 2030.
'What`s driving that (oil demand) growth is assumptions about strong economic growth,' Caruso said.
Due to high oil prices, there has been an increasing demand for commodities like natural gas and coal. According to the EIA report, consumption of natural gas is expected to increase by 2.4 percent per year until 2030. The agency also forecast that oil`s share of total world energy use was expected to dip from 38 percent in 2003 to 33 percent in 2030, whereas natural gas and coal are both expected to gain in their share of total energy.
Caruso explained that there was stronger growth in natural gas than oil, mainly from the non-OECD countries that had a desire to have a cleaner burning fuel. Additionally, coal consumption also continued to rise steadily given the growing electricity power demands from countries like China and India.
Higher energy prices resulted in a lack of investment, loss of cuts and lack of skilled workers, Caruso said.
'There`s definitely a significant risk of investment and consumer behavior. If you get the kind of investments that would make it non-oil, or non-conventional liquids, improvements in efficiencies and if we get to the point where spare capacity is closer to 5 million barrels a day, then there is more of chance of a balance,' he said.
The EIA expects long-term oil prices to be 35 percent higher, compared with last year`s forecast, due to blocks to drilling for oil in non-OPEC countries, higher development costs and lack of personnel to manage energy projects.
'We do think we`re in a new era of oil prices (and) higher oil prices do result in lower oil demand growth,' Caruso said.
The benefit in higher oil prices may help to stimulate production of unconventional oil resources like U.S. coal into liquid fuels, heavy oil in Venezuela and oil sands in Canada.
(Comments to energy@upi.com)
Oil holds firm near $69 a barrel
Tue Jun 20, 2006 11:33am ET
(Updates throughout; changes dateline, byline)
By Matthew Robinson
NEW YORK, June 20 (Reuters) - Oil steadied near $69 on Tuesday, holding its own against a commodities rout triggered by the prospect of rising U.S. interest rates and cooling demand in China.
Since the start of 2002, strong demand and supply limitations have catapulted oil $50 higher. The rally gathered pace as pension and hedge funds channeled money into oil in search of higher returns than they find in stocks or bonds.
U.S. crude <CLc1> settled down four cents at $68.94 a barrel while August Brent <LCOc1> crude settled at $68.08, down three cents.
"Our view is that it's not a bad time to buy when you see the price below $70. Fundamental data is really solid," said Mark Mathias, chief executive of hedge fund Dawnay Day Quantum.
Since mid-May, bearish economic data has hit gold, silver, copper and zinc, wiping as much as 25 percent off prices that had soared to all-time or multiyear highs.
But oil has confounded expectations that it would fall substantially from the $75.35 record it set in April -- the highest price in real terms since 1980, the year after the Iranian Revolution.
Also underpinning prices, which have traded in a $68-$73 band for more than six weeks, is the worry that Iran, the second biggest producer in the Organization of Petroleum Exporting Countries, may halt exports if there is an escalation in the dispute over its nuclear program.
Tehran has yet to respond to an offer made by world powers to end the standoff, but it said Sunday a "positive atmosphere" had been created that could help resolve the dispute.
"The Iranian nuclear issue can turn very bullish any time and, therefore ... is flooring the market in the short term," French bank Societe Generale said in a report.
Saudi Arabia's ambassador to the United States said world oil prices could triple, if a military conflict erupted between the west and Iran.
"The idea of somebody firing a missile at an installation somewhere will shoot up the price of oil astronomically," Prince Turki Al-Faisal said at a press conference.
Concerns over the strength of oil demand in the two biggest consumers -- the United States and China -- had knocked almost $1 off the oil price Monday.
China has moved to curb growth by increasing the amount of money banks must keep in reserve. In the United States, rising interest rates may slow economic growth and oil demand.
"The market is caught between the big macro picture of not enough surplus production and refining capacity on the one hand, and faltering demand on the other hand," said Tony Nunan, assistant general manager of risk management at Mitsubishi Corp
U.S. oil stocks data Wednesday may determine market direction in the near term. A Reuters poll forecast a decline of 200,000 barrels in U.S. crude stocks last week, and an increase of 1.2 million barrels in gasoline inventories, their eighth build in a row. [EIA/S]
China's Sinopec signs a deal to develop oil block in Iran - report
06.20.2006, 10:59 PM
BEIJING (AFX) - China Petroleum & Chemical Group Corp (Sinopec) has signed an agreement with Iran's Oil Exploration and Service Company (OESC) to jointly develop the Garmsar oil block, the official Shanghai Securities News reporting, citing a Sinopec official.
The unidentified official was quoted as saying that the Garmsar block, one of 16 oil blocks that Iran offered for international tender in 2003, covers 12,183 square kilometers.
Sinopec was initially bidding for four blocks - Garmsar, Khorramabad, Kuhdasht, and Saveh, the report said.
The report added that Iran's Economic Council has approved the deal.
No further details about the transaction were provided.
China and Iran signed a memorandum of understanding in October 2004 under which Sinopec would develop Iran's Yadavaran oil field in exchange for buying 10 mln tons of Iranian liquefied natural gas annually for 25 years. The formal contract has not been signed.
allan.sun@xinhuafinance.com
Crude Lower on Demand Jitters
http://www.thestreet.com/_yahoo/markets/energy/10292217.html?cm_ven=YAHOO&cm_cat=FREE&am...
By Kristina Shevory
TheStreet.com Staff Reporter
6/16/2006 1:18 PM EDT
Updated from 11:04 a.m. EDT
Oil fell Friday as traders fretted over inflation and the prospect of lower energy demand. A break in the impasse with Iran over its nuclear ambitions was also driving down prices.
Light, sweet crude for July delivery was last off 40 cents at $69.10 a barrel, reversing a two-day increase in commodity futures.
Energy shares were following crude lower, with oil and natural gas drillers and service companies down 1% to 2%. Exxon Mobil (XOM:NYSE - commentary - research - Cramer's Take), the biggest publicly traded oil company, fell 47 cents, or 0.8%, to $58.65.
On Friday, Iran's president, Mahmoud Ahmadinejad, called a package of incentives designed to entice his country to end its nuclear enrichment program "a step forward," and said he would respond to the western proposal in "due time," the Associated Press reported.
"Generally speaking, we're regarding this offer as a step forward and I have instructed my colleagues to carefully consider it," Ahmadinejad told reporters Friday, the AP reported.
There have been conflicting signals from Iranian officials this week regarding the package, with some officials refusing to halt uranium enrichment and shrugging off the threat of economic sanctions, while others have welcomed the deal with some reservations.
Should Iran reject the plan, it sets the stage for the U.N. to pursue economic sanctions against the country. The possibility American-led military strikes against Iranian nuclear sites have also been floated.
Mixed messages from the Federal Reserve have also contributed to the recent selloff in crude futures. On Friday, William Poole, the president of St. Louis Fed, said that high energy prices may have yet to seep into current economic data and that the country may "face more inflation pressure than currently shows up in formal data."
Already, surging energy prices have boosted domestic consumer and producer prices in government reports released this week. The Federal Reserve has raised interest rates 16 times in a bid to rein in inflation without harming the economy. Rates now stand at 5% and may be raised another quarter percentage point when bank officials meet later this month.
But on Thursday, Federal Reserve Chairman Ben Bernanke soothed traders who are worried that soaring energy prices have boosted inflation and slowed the economy. He did caution, however, that the economy could slow if oil prices remain high.
Traders are focused so much on the Federal Reserve's intentions because further rate hikes would mean slower economic growth and lower demand for oil.
Oil prices have skyrocketed 14% this year on global supply problems and the specter of more to come. There are razor-thin margins of inventories and only 2 million barrels to cover any short-term spikes in demand.
Lower production from the Gulf of Mexico, a standoff with Iran and rebel attacks on oil installations in Nigeria and Iraq have boosted energy prices. In April, oil hit $75 a barrel on concerns that an escalating standoff with Iran would slash world crude inventories.
Despite the geopolitical problems, domestic supplies of crude remain high. There is over 4% more oil and nearly 9% more distillates in storage than last year. Gasoline inventories, while 1% below last year, have risen in the past seven weeks straight as refiners increased production and imports soared.
The decline in crude and robust supplies were helping drive down prices of heating oil by 1 cent to $1.91 a gallon and gasoline by 4 cents to $1.99 a gallon. Natural gas was declining 13 cents to $7.07 per million British thermal units.
Oil eases away from $70
Sunday June 18, 10:01 pm ET
By Jonathan Leff
SINGAPORE (Reuters) - Oil eased away from $70 on Monday after shedding 2.4 percent last week, with dealers weighing more positive signals from Iran on its atomic program.
U.S. light, sweet crude (CLc1) fell 28 cents to $69.60 a barrel on Monday, snapping a three-day rising streak. Brent crude dropped 10 cents to $68.70 a barrel.
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Oil slumped to a more than three-week low of $68.10 last Wednesday amid a commodities and equity sell-off sparked by inflation concerns, but later recovered in tandem with other markets after a more dovish message from the Federal Reserve.
While U.S. growth worries may continue to niggle oil market speculators, most traders will be focused on Iran as they await its reaction to a package of incentives from global powers meant to end the months-long standoff over its atomic agenda.
"With the Iran issue hanging around, you can't really take too negative a view of (the market)," said David Thurtell of the Commonwealth Bank of Australia. "I think oil could drop $6 to $7 if Iran gives up its nuclear processing ambitions and I think it will. It's just trying to extract some incentives."
Iranian Foreign Minister Manouchehr Mottaki on Sunday said a "positive atmosphere" may help bridge the gap with world powers over its nuclear program, but did not say when Tehran would respond to the Security Council powers plus Germany.
"The positive atmosphere that has been created ... could create the best opportunity to pave the way to reaching an understanding," Mottaki said on state television. (nL18749244)
Iranian President Mahmoud Ahmadinejad on Friday said the package was "a step forward," but also said Iran would not be concerned by possible sanctions if it rejected the June 6 offer.
The West believes Iran's uranium enrichment could be used to make nuclear weapons. Tehran says it is purely for power generation and civilian use.
Oil now sits in the middle of the $68-$73 range that has contained it since early May, pressured by worries about slowing growth and underpinned by real and threatened supply disruptions that pushed prices above $75 a barrel in April.
China, the world's second-biggest consumer, on Friday moved to curb the rapid credit growth that its leaders fear could cause the red-hot economy to overheat, raising the proportion of money banks must keep in their reserves by half a percentage point.
REFINERY HICCUPS
Refinery upsets may also help keep gasoline prices supported as dealers gauge how record-high U.S. pump rates have affected holiday plans in the world's biggest consumer, where gasoline use accounts for more than one-tenth of world oil demand.
A gasoline-producing fluidic catalytic cracking unit at Exxon Mobil's (NYSE:XOM - News) 563,000 barrel per day (bpd) Baytown, Texas, refinery -- the largest U.S. refinery -- shut down on Friday, according to a regulatory notice on Sunday.
The unit, one of three catalytic crackers at the refinery, had been going through an overhaul that began in May and was expected to end this week with the unit's return to production. It had two malfunctions, including a shutdown, in April.
Gasoline (HUc1) fell 1.32 cents or 0.65 percent lower to $2.0250 a gallon on Monday
Could Iran Defend Itself Against a U.S. Attack?
Patrick Seale Al-Hayat - 16/06/06//
Iran is a formidable military power, second only to Israel in the Middle East. This is the judgement of most Western observers.
Unlike Israel, however, it has been denied access to American weapons, and indeed to most Western weapons, since the overthrow of the Shah by the Islamic Revolution 27 years ago. And, again unlike Israel, Iran has no nuclear bombs - at least not yet. Nevertheless, militarily, it is by no means backward or defenceless.
Largely through its own immense efforts - and with some help from Russia, China, Pakistan and North Korea - Iran has created a powerful military-industrial complex, which employs more than 200,000 engineers, technicians and skilled workers.
According to the London-based International Institute of Strategic Studies (IISS), Iran today produces almost two thousand defence items, from munitions to aircraft, and from missile boats to satellites. It exports military equipment to over 30 countries, including seven in Europe.
How would it fare if it were attacked by the United States alone -- or indeed by the U.S. and Israel together. Could it defend itself? Could it strike back? To what extent has it acquired a capability for strategic deterrence?
These questions are relevant because, although there are now some slender hopes that the crisis over Iran's nuclear programme might be resolved by negotiation, the possibility of war cannot be ruled out. American hawks, including John Bolton, U.S. ambassador to the UN, have made clear that they would prefer 'regime change' in Tehran rather than a negotiation which might result in Iran being allowed to continue some nuclear activities, even on a reduced basis.
In an interview with the Financial Times on 9 June, Bolton declared that 'Our experience has been that when there is a dramatic change in the life of a country, that's the most likely point at which they give up nuclear weapons.' He added that U.S. security guarantees for Iran were 'not on the table.'
There is undoubtedly a strong current of opinion in both the United States and Israel that, for geo-political reasons, would prefer the Islamic regime in Tehran to be destroyed, much as Saddam Hussein's regime in Iraq was destroyed.
Geo-political ambitions are, in fact, fuelling the dispute over Iran's nuclear activities. The U.S. is concerned to control Middle East oil for at least the next decade or two. Israel, in turn -- now that Iraq has been smashed -- wants to consolidate its military dominance over the region, and be in a position to reshape the regional order to suit its interests. To both powers, therefore, Iran poses a strategic challenge.
Iran is at present considering the 'package of incentives' which six leading countries -- the U.S., Britain, France, Germany, China and Russia - have offered it, in a bid to persuade it to abandon its nuclear programme. Iran has not rejected the package outright, although it has said that it contains 'problems and ambiguities'. It is expected to make a counter-proposal within the coming days or weeks.
The most important hurdle would seem to be the pre-condition insisted on by the United States. Washington has said that it will not join in the negotiations unless Iran first suspends its nuclear activities in a verifiable manner. Iran has rejected any such precondition and has declared that its right to enrich uranium is 'inalienable' and 'not negotiable.'
Iran is determined to pursue its nuclear programme for what it claims is the purely peaceful purpose of producing fuel for nuclear power stations. It is fully entitled to do so under the Nuclear Non-Proliferation Treaty. The United States and Israel - with some support from the Europeans, and more ambivalent backing from Russia and China -- are determined to shut down Iran's nuclear industry altogether, because they believe it is a cover for a secret military programme.
Both the U.S. and Israel have, on several occasions, stressed that they would not allow Iran to acquire nuclear weapons. On a visit to London on June 12, Israel's Prime Minister, Ehud Olmert, once again declared that Israel would not allow Iran 'to cross the nuclear threshold.' He warned that, equipped with nuclear weapons, Iran would pose a 'serious danger to the entire world.'
This is consistent with the usual Israeli argument that the problem does not concern Israel alone, but that the whole international community must, in its own interest, join in denying Iran nuclear weapons.
In pressing for the use of force to put an end to Iran's nuclear ambitions, Israel betrays its fear that the U.S. might strike a deal with Iran which would undermine Israel's strategic predominance, as well as its privileged status as America's key Middle East ally.
In the Military Balance 2006, the IISS's annual analysis of the world's armed services, Iran's military capability is described in some detail. Under the Shah, American firms such as Bell, Litton and Northrop, set up assembly lines in Iran for helicopters, aircraft, guided missiles, electronic components and tanks. During the Iran-Iraq war (1980-88) this military-industrial base was enormously expanded under the control of the Islamic Revolutionary Guards Corps and the Ministry of Defence.
Huge investment was poured into the missile industries, so that Iran today has an extensive arsenal of rockets and missiles, with ranges from 45 kms to 2,000 kms. There are today 19 state-owned centres in different parts of Iran involved in aerospace and related activities, employing over 100,000 technicians and engineers.
For example, a complex in Lorestan province is able to produce each year up to 80,000 aircraft tyres of various types, making Iran the first country in the Middle East, and seventh in the world, to acquire such technology.
Iran's helicopter industrial infrastructure supports the third-largest helicopter fleet in the world. The Qods Aviation Industries produce a wide range of unmanned aerial vehicles (UAVs) for reconnaissance, combat and other roles. Iran has developed a diverse arsenal of anti-ship missiles, as well as midget and medium submarines, and fast and manoeuvrable missile boats.
The IISS conclusion is that the years of war with Iraq 'turned the Iranians into military professionals' who proceeded to develop an advanced and innovative defence industry. They were able 'to create an industrial infrastructure which is capable of meeting nearly every requirement of the Iranian armed forces.'
What has been the purpose of this vast Iranian effort? Is it for offensive use or is it purely defensive? Should the Arab Gulf states be concerned at Iran's military power? The IISS believes that Iran's defence structure is based on a foundation of 'strategic deterrent defence.' Iran's strategy, it says, 'is to absorb a first strike and then to initiate immediate retaliation with all means available, but only if such a move serves the political ends, and does not threaten the very existence of the Islamic regime.' 'Iranian leaders believe an effective defensive deterrence can force their enemies to relinquish their threats of pre-emption, believing that such a move would be too costly.'
What does this mean in the current situation? First, it suggests that Iran will not be bullied into abandoning its nuclear activities. Secondly, Iran's considerable military strength is for deterrence purposes, to protect it against any aggression by the U.S. or Israel aimed at regime change.
Thirdly, if Iran is seeking to build an atomic bomb - which it strenuously denies - this could only be to strengthen its deterrent posture. It could not consider using such a weapon without risking national annihilation at the hands of the United States and Israel, both with nuclear arsenals infinitely more powerful than anything Iran could hope to produce.
Nuclear weapons have contributed to stability between the West and the former Soviet Union, and between India and Pakistan. Might they not serve a similar function between Iran and Israel?
Would an Iranian bomb really be such a disaster? History has surely proved that a balance of power creates peace, whereas imbalance causes war, as the more powerful side will inevitably seek to impose its will by force. Is not this the meaning of the current threats against Iran by the U.S. and Israel? End
http://english.daralhayat.com/opinion/commentators/06-2006/Article-20060616-dcfab30e-c0a8-10ed-00c7-...
Iran says talks with US over Iraq "impossible"
Sun Jun 18, 2006
By Parinoosh Arami
TEHRAN (Reuters) - Direct talks on Iraq between Iran and the United States were impossible, a Foreign Ministry official said on Sunday after an influential Iraqi politician encouraged Tehran to take part in discussions.
On Saturday, Abdul Aziz al-Hakim, head of the Supreme Council for the Islamic Revolution in Iraq (SCIRI), a key Shi'ite Muslim party closely allied to Iran, said in Tehran such direct talks could benefit both Tehran and Baghdad.
However, he told reporters he was not an intermediary carrying messages from the United States.
"Talks between Iran and the United States are in Iraq's interests and could be in Iran's interests as well because the United States is present in Iraq and in the region," he said.
But Iran's Foreign Ministry spokesman Hamid Reza Asefi on Sunday told a news conference: "We do not have talks with the United States on the agenda now."
In March it had looked like such talks could go ahead, with Ali Larijani, secretary of Iran's Supreme National Security Council, saying Iran would talk to the United States to help resolve problems in Iraq.
But President Mahmoud Ahmadinejad said in April such talks were not needed since a permanent Iraqi government was in place.
"Because we respected Mr. Hakim's opinion, we accepted his request to talk to the United States but the Americans showed unreasonable and inappropriate behavior that made the talks impossible," Asefi said.
RARE TALKS
He did not specify what the inappropriate behavior was but Iran accuses Washington of putting unfair pressure on Tehran over its nuclear work. It also accuses the United States of using brutal tactics in occupying Iraq and backing Israeli attacks against Palestinians.
Iran's Supreme Leader Ayatollah Ali Khamenei has said talks can only go ahead if the United States stops its "bullying attitude".
Washington accuses Tehran of stirring up anti-U.S. insurgents in Iraq, of funding anti-Israeli militias and of seeking nuclear warheads. Iran denies the charges.
Washington also blames Iran for the 1996 "Khobar Towers" bomb attack in Saudi Arabia that killed 19 U.S. servicemen. Tehran denies involvement.
Although Ahmadinejad's letter to President Bush last month had a rebuking tone, it was seen by many analysts as an attempt to kindle dialogue.
Direct talks and co-operation between the United States and Iran are rare. Most famously, they met in secret during the Iran-Contra scandal in the 1980s in which the United States supplied arms to Iran in return for Tehran's help releasing U.S. hostages held in the Lebanon.
President Akbar Hashemi Rafsanjani tried to break the ice in 1995, offering U.S. firm Conoco a $1 billion natural gas deal in the Gulf. President Bill Clinton rebuffed him.
Iran deeply resents being labeled by Bush as a member of an axis of evil", despite having forged a working co-operation with the United States over Afghanistan in the wake of the September 11, 2001 suicide hijack attacks in the United States.
http://today.reuters.com/news/newsArticle.aspx?type=newsOne&storyID=2006-06-18T163606Z_01_L18728...
Iran's leader: Nuclear fuel more valuable than oil
Iran-USA, Politics, 6/15/2006
Iran's Supreme Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei today said that the honorable move of Iranian youth to access indigenous nuclear technology is a historical move contributing to promotion of civilization and urged that it should expand in various directions.
Speaking at a gathering of the officials of Iran's Atomic Energy Organization (IAEO) and a number of nuclear scientists and experts while touring the exhibition on nuclear achievements of Iranian scientists, the Supreme Leader said that science and technology are the major keys to progress, power and prosperity of every country.
"Any nation determined to build up its own destiny should seek such a key," added Ayatollah Khamenei.
The Supreme Leader said that the self-confidence of gifted Iranian youth and their belief in their potentials should be celebrated by the Iranian nation, adding that this deserves spiritual award unequal to any material one, given that it lays the preliminary cornerstone for maintenance of independence and dignity of the nation.
The IAEO Chief Gholam-Reza Aqazadeh, who attended the gathering, pointed to Iran's access to complete nuclear fuel cycle and presented a report on the latest scientific achievements of Iranian scientists in the field and the country's various potentials in different stages of nuclear fuel cycle.
Ayatollah Khamenei assessed the Iranian scientists' access to the outstanding and complicated nuclear technology as more significant than the exploration and extraction of oil.
Turning to the "hue and cry" raised over the issue in the West, the Supreme Leader said, "Iran will not contend to such pressure. The growing trend of this scientific move is the major goal set by Iran."
http://www.arabicnews.com/ansub/Daily/Day/060615/2006061502.html
Mariner good energy link here , will put in the header
http://www.cera.com/home/
* link provided by the one of the bottomless wells of
knowledge on the internet here on Ihub "langostino".
believe me you would probably have been just too incredulous to have bought that dip on the OIH the way it was looking at the time it hit the OS today ....I've done it a many times and lately might just get up and go brush my teeth or fix a snack ... i've come to trust the charts that much on this one .
That doubletop earlier in the am in the OB , was also the --->good short too, as it bid up from the OS the previous days sell-off .
Almost all traders are keying off these S&Rs in the OS /OB ....this relating to the OIH & the rest of the sector .
look at the previous day's chart i posted, these are 6 to even sometimes 12pt days I've seen on the swings.., traders still know only one hurricane changes everything .
http://www.investorshub.com/boards/read_msg.asp?message_id=11531869
well that's been the pattern , to let things pop a bit , then short the rally for the inevitable sell-off in the afternoon based on the thesis of a global slowdown . Now their looking for the ray of hope that things have sold off enough to be commensurate with this anticipated slowdown ...thjis is all sorted out in the next few weeks with MidQ's & guidance into eanrings season just around the corner. But today seemed to be a small pivotal day , maybe for a bounce in here we'll see.
The market always gets skittish right after the last spring Q1 earnings are over into a slow period , why you sell in may and go away. This was the most golden period for shorting seen in a while but Ihub is not an investment site for people that short I've noticed .
Why has it done that for a few days in a row and why on stocks like AAPL and AMD. They all tanked exactly at the same time today. As though a bunch of hedgies went to lunch then agreed to dump at 10:10 or 1:10 for the east coasters.
that swoon was caused by the inventory numbers, happens every week ....but you still keep buying dips on the OIH off the OS ...50days and 50 charts all the same , alwasy bounces .
Of course some the "learned" lecturers think Oil going back to
$50 a barrel , this i really ...really want to see.
Did you notice that right when the 10 am (PST) swoon on OIH happened the Naz tick went to minus 1025 in a heartbeat? Every ticker I was watching swooned at once. BTU, AAPL, PTEN , OIH were just a few. Though not all Naz stocks they went along for the ride. Happens a lot lately right after 10 am. Even ISRG did a mini swoon. :) The RSI is especially useful right then as the swoon last about 15 minutes until RSI's get under 30 (some as low as 10) then they bounce right back. As soon as I see the exagerated tick drop I know it's seconds away.
today's OIH ($135.90) sell-off doubletop from the OS RSI w/stochs ....and later in the pm the bounce off the OS RSI $3.50+ bounce right back up
DJ ENERGY MATTERS: Oil Demand Strong Despite High Prices
By David Bird, Senior Energy Correspondent
A Dow Jones Newswire Column
NEW YORK (Dow Jones)--If forecasts prove true, global oil demand will average near 85 million barrels a day in 2006, setting a consumption record for the 21st straight year.
That will put worldwide oil demand growth since 2002 at 9.3%, the biggest gain over a four-year span since 1985-1989. Back then, a near-11% demand surge was spurred by a 30% drop in crude oil prices.
The current demand spurt - which shows little sign of abating - comes as crude prices have nearly tripled over the past three years, touching a nominal high above $75 a barrel.
The gravity-defying price rise and rampant demand growth - led by China's growing energy appetite - have oil analysts searching for clues on how high prices can go before demand is seriously impacted. The answer to the riddle seems to equate with how a U.S. Supreme Court justice once described pornography: they can't define it, but they'll know it when the see it.
Seeing a clue, oil traders latched on to comments made June 7 by former Federal Reserve chairman Alan Greenspan that "American households...are struggling with rising gasoline prices" which are near $3 a gallon and up 36% on the year for indications of a slowdown.
Citizen Greenspan told the Senate Foreign Relations Committee that the U.S."has been able to absorb the huge implicit tax of rising oil prices so far," but "recent data indicate we may finally be experiencing some impact."
Greenspan didn't specify what data he was citing, but U.S. figures show first-quarter oil demand fell by 1.2% from a year earlier. But that was largely due to a drop in heating oil demand in an usually warm winter. Data from the Energy Information Administration for the second-quarter, through June 9, show U.S. demand up 1.3% from a year ago.
The most significant points of Greenspan's testimony - signaling a continued tight market - may have been overlooked. The economic guru succinctly summed up the supply crisis at the root of sustained high prices and seemed to suggest that crude is accurately price at near $70 a barrel, given current conditions.
Spare Capacity "Almost Non-Existent"
"Today, world oil production stands at about 85 million barrels a day, and little excess capacity remains," he said. "Just how much excess capacity, and of what quality oil, is a matter of debate. But no matter what the precise answer, the buffer between supply and demand is much too small to absorb shutdowns of even a small part of the world's production."
Greenspan noted that increased market activity by funds and speculators has caused oil prices to move up faster than they would have, but "to date, it is difficult to find serious erosion in world economic activity as a consequence of sharply higher oil prices. Indeed, we have just experienced one of the strongest global economic expansions since the end of World War II."
Greenspan noted that 20 years ago, global spare oil production capacity stood at 10 million barrels a day - enough to negate any temporary supply problems. Today, the level is "almost non-existent," and "returning to such a level of spare capacity appears wholly out of reach for the foreseeable future. Clearly, if the...supply buffer were significantly increased through a step-up in supply or a step down in consumption, oil prices would fall, perhaps sharply."
But "for good reason," oil companies, holding high stocks, "apparently do not foresee a likelihood of change sufficient to alter the current outlook," Greenspan said. "This does not mean that oil prices will necessarily move higher, however. All of the concerns about future contingencies are already discounted in today's spot price. It will require a change in the outlook one way or the other to move crude oil prices. History tells us that will happen - often."
IEA Lifts Demand Forecast
The outlook, according to oil analysts, appears to be for continued strong demand.
The Paris-based International Energy Agency - citing stronger than expected demand in the U.S. and China - the world's top two oil consumers - on Tuesday lifted its projection for global second-quarter oil demand by 160,000 barrels a day. The IEA, the energy watchdog of the major industrialized countries comprising the Organization for Economic Cooperation and Development, now sees second-quarter demand rising by 1.2%, just slightly under the 2005 rate of 1.5%.
The pace of demand growth picks up in the third quarter, to 1.7%, compared with 1.3% in 2005 and fourth-quarter growth is predicted by IEA to surge to 2.6%, compared with zero growth a year ago.
The IEA notes that effective spare capacity among members of the Organization of Petroleum Exporting Countries is about 1.9 million barrels a day and forecasts that oil output growth from non-OPEC countries will be 1.1 million barrels a day in 2006. The non-OPEC level is seen as extremely optimistic, by some. Analysts at Barclays Capital in London expect non-OPEC growth of just 420,000 barrels a day.
The picture makes a strong argument for why crude prices are holding near $70 and creates almost a sense of relief that global oil demand growth isn't running at the 4.3% rate of 2004 - when prices last averaged below $50, which some in OPEC say is a more appropriate price.
Simply put - the world's producers couldn't supply the extra 3.6 million barrels a day of crude that growth rate would require.
Jan Stuart, economist at UBS Securities in New York, said he estimates global oil demand in May grew at a strong 2.5% rate.
"Quite likely, the pace of global oil demand growth would have been significantly higher with lower oil prices, but the latest (May) data once again underscore a more salient point, namely that high oil prices alone are not (yet?) squelching oil-demand growth," he said.
DJ - Iran President In Shanghai To Seek Russia, China Support
TEHRAN (AP)--Flying to Shanghai on Wednesday, Iran's hard-line president is doing more than just attending an Asian security summit: Mahmoud Ahmadinejad also seeks to gain Russian and Chinese support at a critical moment for his country's nuclear program.
He also aims to prove that his country isn't isolated, despite U.S. claims that the world's major powers are lined up to rein in Iran's nuclear program.
Past trips to Asia have been a chance for Ahmadinejad to tap into anti-U.S. sentiment and tout himself as a leader who is standing up to Washington. Last month, he was cheered by Indonesian students and by a crowd shouting "Fight America, fight Israel!" outside a Jakarta mosque where he performed prayers.
His visit to China, where he arrived Wednesday, will likely be more dedicated to intense diplomacy. Ahmadinejad is expected to hold separate meetings with his Chinese and Russian counterparts, Hu Jintao and Vladimir Putin, on the sidelines of a regional summit in Shanghai.
It will be a chance to sound out his two allies on a package of incentives offered by the Big Five Powers at the U.N., plus Germany, seeking to persuade Iran to freeze its uranium enrichment program. If Iran agrees, it would then be able to enter negotiations with the U.S. and Europe over a long-term resolution to the standoff over its nuclear program.
Russia and China have backed the incentives package. But the two countries - longtime allies and trading partners of Iran who hold veto powers at the U.N. - have opposed any move to impose sanctions on Tehran, which Washington seeks if it turns down the offer.
A key question for Iran is likely to be how much change it can seek in thepackage and still keep Moscow and Beijing's implicit protection.
Iran has said it finds parts of the package acceptable, but that other parts should be removed. And it has said the key issue of uranium enrichment remains unclear and needs further explanation. Tehran has outright rejected demands it scrap enrichment and has been highly reluctant to suspend it.
Tehran hasn't yet responded to the offer, given to it a week ago.
"Iran is taking its own time (in responding) to get Russia and China to modify the Western pressures on Tehran," said leading political analyst Davoud Hermidas Bavand.
Ahmadinejad will likely urge Moscow and Beijing to "follow their independent policy and don't go the U.S. way," said analyst Mostafa Kavakebian.
The president will try to push his own ideas, seeking a compromise that will guarantee Iran's right to enrich uranium and at the same time offer guarantees that its nuclear program won't be diverted toward weapons, he said.
In Shanghai, Ahmadinejad will join the leaders of Russia, China and four Central Asian countries who comprise the Shanghai Cooperation Organization, or SCO.
The trip is also a chance to show Iran has friends around the world despite U.S. attempts to isolate it. Iran has made clear it is adjusting its relations with nations based on the nuclear standoff.
"We are redefining our relations with the world," Foreign Minister Manouchehr Mottaki told a television program last week. "We are managing our relations with other countries based on our national interests and the way we are treated(over the nuclear dispute)."
Iran has repeatedly said it will offer giant economic projects to countries that support its nuclear program and punish those who vote against it.
China's state energy company has signed long-term deals for natural gas.Those deals display the growing disregard for Washington policy. In 1996 the U.S. said it would consider sanctions on any company that invests more than $20 million annually in the Iranian oil and gas sectors. The threat was never enforced.
Ahmadinejad's participation in the Shanghai summit, as an observer, is a particular irritant to the U.S., which views the body as an attempted counterweight against Western influence in Central Asia and the presence of American bases there.
The U.S. Defense Secretary Donald H. Rumsfeld last week chided China and Russia for backing Tehran's participation in the summit, saying he found it strange to bring the "leading terrorist nation in the world into an organization that says it's against terror."
But host China dismissed the criticism. "We cannot abide by other countries calling our observer nations sponsors of terror," SCO chief Zhang Deguang said.
(END) Dow Jones Newswires
Energy agency sees higher prices capping demand for oil
Peg Mackey, Reuters 14 June 2006
LONDON — High oil prices are slowing growth in oil consumption in the US, the International Energy Agency (IEA) said yesterday. Demand in China, though strong, is likely to ease next year.
In its latest monthly Oil Market Report, the IEA said growth in global oil demand this year would be 1,24-million barrels a day. This would be marginally less than its forecast of 1,25-million barrels made last month.
The agency, which advises 26 industrialised countries, said in its latest report that output constraints in Nigeria and Iraq had reduced the Organisation of Petroleum Exporting Countries’ (Opec’s) spare capacity to only 1,9-million barrels a day.
It also said that Iran presents a potential threat of supply interruption. Iran has threatened to withhold output because of its dispute with the world’s most powerful states over nuclear technology development.
Supply disruptions to the 85-million barrels a day world market, whether real or threatened, have driven oil to historically high levels above $70/barrel. This is leading some to suggest that record high prices will put a brake on demand expansion.
The agency said a healthy world economy was under- pinning oil demand growth, but that high prices would affect demand.
“Strong economic growth is an important counterbalance but on the whole we’re seeing evidence of high-price effects coming through,” said Lawrence Eagles, head of the agency’s oil industry and markets division.
The Paris-based agency trimmed estimates of last year’s global oil demand growth by 10000 barrels a day to 1,24-million barrels. The US was seen as the most likely candidate for slower consumption growth.
Projected US demand growth of 0,9% for this year was well below what might typically be expected, given forecast economic growth of up to 4%, the agency said.
“High oil product retail prices and comparatively low natural gas prices will act as a drag on demand to the end of the year.”
The US retail petrol price climbed above the $3-a-gallon (3,785 litres) mark this year.
China, the second-biggest oil consumer, offered a more positive outlook. It was expected to post growth in apparent demand of 8,6% before slowing to a still robust 5,9% in the second half of this year, the agency said.
Higher retail fuel prices were likely to encourage refiners in China to increase processing rates in the near term, boosting apparent demand growth. But the rebound in consumption was expected to be temporary. The higher prices will have a dampening effect on demand later.
Opec was doing its utmost to meet robust demand by pumping flat out but its spare capacity was limited to 1,9-million barrels a day because of a combined shortfall of 800000 barrels from Iraq and Nigeria, the analysts said.
Opec produced 29,8-million barrels a day last month, up 215000 from April’s figures.
The world’s top exporter, Saudi Arabia, pumped 9,35- million barrels a day last month, up 100000 from April when a seasonal decline in demand from refiners curbed output.
A senior Opec delegate said yesterday that the kingdom’s production for May ran even lower — at 9,05-million barrels compared with 9,1-million in April.
Non-Opec supply growth for this year was cut by 100000 barrels a day to 1,1 million.
http://www.businessday.co.za/articles/world.aspx?ID=BD4A215806
DJ - Iraq Halts Flow Of Oil To Turkey On Lack Of Stored Crude
AMMAN (Dow Jones)--Iraqi oil shipments to the Turkish port Ceyhan ground to a halt late Tuesday due to a lack of stored crude supplies, an Iraqi oil official said Wednesday.
"Authorities at the North Oil Co. suspended the flow of crude from Kirkuk to Ceyhan last night because they don't have enough crude in storage," the official told Dow Jones Newswires by telephone from Baghdad.
Exports from Kirkuk had restarted Saturday after months of no activity, and Iraq had managed to pump around 250,000 barrels a day of Kirkuk oil to the Turkish port. The shipments were the first in months due to militant attacks on oil facilities.
The volumes exported to Ceyhan in the past days were the biggest in months.
In January, Iraq pumped crude from the northern export pipeline though at much smaller volumes.
The official said the State Oil Marketing Organization, or SOMO, had yet to decide what to do with the crude that has reached Ceyhan, but other Iraqi oil officials said SOMO might sell it to the Turkish Oil Refinery Co. (TUPRS.IS), or announce a new auction to sell it to customers in Europe, as has happened in the past.
Persistent acts of sabotage by insurgents has shut the northern export pipeline for most of this year and last year. Before the U.S.-led invasion the pipeline used to export around 800,000 b/d from the north.
Newly appointed Iraqi Oil Minister Hussein al-Shahristani told Dow Jones Newswires last weekend that Iraq was targeting a sustainable export from the north of 50,000-100,000 b/d.
He said the ministry is planning to increase oil output from the North to 1 million b/d in the next four years. That target is achievable if a second, 26-inch diameter pipeline is repaired and security is boosted, the minister said.
Iraq is currently producing around 250,000 b/d in the North.
Shahristani also said his ministry is laying down a new security plan to protect northern oil installation in cooperation with the ministries of defense and the U.S.-led multinational forces.
DJ MARKET TALK: Strong Tropical Wave Gathers In Caribbean
[Dow Jones] A strong tropical wave is moving into far eastern portions of the Caribbean and is expected to continue on a westerly track into central portions of the Caribbean over the next 24 to 36 hours, senior energy meteorologist Jim Rouiller of Planalytics says in a report. Rouiller writes that warm waters in the Caribbean and low values of high level wind shear will support additional organization of this tropical wave over the next few days.
DJ WSJ(6/14) US Sanctions 4 Chinese Firms For Aiding Iran
(From THE WALL STREET JOURNAL)
By Jay Solomon
WASHINGTON -- In a sign of the Bush administration's focus on constraining Tehran's ability to produce nonconventional weapons, the Treasury Department sanctioned four Chinese companies, saying they had aided Iran's ballistic-missile programs.
The U.S. moves underscore the complexities Washington faces as it seeks to contain Iran. The Bush administration depends on China to support multilateral talks to freeze Tehran's nuclear program and is concerned about Beijing's support of Iran's weapons development.
"The companies targeted today have supplied Iran's military and Iranian proliferators with missile-related and dual-use components," said Stuart Levey, the undersecretary of the Treasury for terrorism and financial intelligence.
The four Chinese state-owned companies are Beijing Alite Technologies Co., LIMMT Economic and Trade Co., China National Precision Machinery Import/Export Corp., and China Great Wall Industry Corp., or CGWIC. The U.S. also cited CGWIC's Torrance, Calif., U.S. subsidiary, G.W. Aerospace Inc. The Treasury froze the companies' U.S. assets, and barred U.S. companies, banks and individuals from doing business with them.
The State Department had sanctioned all four companies for aiding Iran's weapons programs, but the earlier measures had banned only the U.S. government from dealing with the firms. The Treasury said the companies supplied dual-use technologies and financial support to three Iranian companies the U.S. believes are developing missile systems: Shahid Bakeri Industrial Group, Shahid Hemmat Industrial Group and Aerospace Industries Organization, or AIO.
The Treasury described the AIO as a subsidiary of Iran's Ministry of Defense and the overall manager of Iran's missile programs. Many of Iran's missiles are based on designs supplied by North Korea.
Many world powers hold differing interests in its dealings with Iran. China depends on Iran for oil and natural gas. The two countries have developed a close military relationship. Tehran and Beijing are wary of the Bush administration's efforts to promote democracy and free media within their borders. Beijing, concerned about its own domestic standing, is unlikely to support a U.S. policy toward Iran that encourages regime change.
(END) Dow Jones Newswires
COMDX Floor Talk: Commodities -Update-Gold had its biggest drop in fifteen years (off $35 to $576.20) as traders sell-off metals on concerns that global central banks will raise interest rates and slow-down worldwide economies (higher rates may stall demand for metals). Copper has fallen a whopping $450 to $6,590 in London (copper is off 25% from the $8,800 high seen on 5/11). Crude oil is under $69 on concerns that tomorrow's gasoline inventory figure may show there is plenty of gasoline to meet summer driving demand (gasoline is off a nickel to $2.050/gal).
Sorting Through The Ethanol Hype
VeraSun and other producers going public are generating heat, but market analysts say retail investors should tread with caution.
http://money.cnn.com/2006/06/12/markets/ipo/ethanol/
By Grace Wong, CNNMoney.com staff writer
June 12, 2006: 4:43 PM EDT
NEW YORK (CNNMoney.com) – The buzz surrounding ethanol producers is growing as the first of three companies gets set to go public, but analysts say retail investors should beware of the risks associated with getting in on the ethanol game.
Wall Street has taken a shine to ethanol producers as sky-high crude prices, limited refining capacity and concerns over environmental pollution have helped push ethanol prices to record highs. Ethanol, an alternative fuel most often made from corn, is usually blended with gasoline to make it burn more cleanly.
Three ethanol producers are looking to capitalize on those conditions. VeraSun Energy, the nation's No. 2 ethanol producer, is set to list on the New York Stock Exchange under the ticker "VSE" this week. Rivals Hawkeye Holdings and Aventine Renewable Energy have filed to go public as well.
Investors may be itching to take a ride the ethanol wave, but some of the challenges potentially facing the industry - the biggest being forecasts that profits may get squeezed - may give long-term investors reason to pause, analysts said.
"You couldn't find a better time to do an IPO because margins are probably at the highest they'll ever be," said Michael Judd, an ethanol analyst at Greenwich Consultants. "That's great in terms of raising money for the company, but I don't see why that's good for investors," he said.
Investors have expressed unabashed enthusiasm for ethanol companies - even those that aren't producing any supply. Shares of Pacific Ethanol (Research) have more than doubled so far this year, and the firm's first plant isn't even expected to go into operation until the fourth quarter.
It's no surprise then that the ethanol firms on deck, which have strong production capabilities, are generating plenty of attention.
VeraSun, which produces 230 million gallons a year, or about 5 percent of the nation's total production capacity, recently bumped up its estimated price target. The company is set to offer 18.25 million shares at an estimated price of $21 to $22 a share.
Bubble brewing?
Compared to firms like Pacific Ethanol, the estimated price for VeraSun looks favorable, according to Bill Simpson of Trading IPOs.com. But even he cautioned that profit margins in the ethanol industry are likely to contract in the next year as more production comes online.
Demand for ethanol has surged as several states have banned or significantly regulated the use of MTBE, a gasoline additive suspected of causing cancer, and refiners have turned to ethanol as an alternative.
Rising demand, along with problems bringing products to market, have jacked up ethanol prices. New York Harbor spot ethanol prices are as high as $4.25 a gallon, up from about $1.85 at the start of the year, according to Jim Jordan & Associates, a research firm that tracks the ethanol fuel industry.
Consumer prices are likely to fall as these logistical issues are resolved, according to Cristoph Berg, an ethanol analyst with FO Licht, a commodities research firm. "Once these problems are addressed, the exuberance we see at the moment in the ethanol market might become more sober," he said.
Furthermore, production in the United States is brimming. According to the Renewable Fuels Association, a trade association for the nation's ethanol industry, annual production totaled 3.9 billion gallons last year, up 15 percent from 2004. Plants to produce another 1.9 billion gallons a year are under construction.
"There's a lot of capacity coming online, and by the end of 2007, it's going to explode," Simpson from Trading IPOs said. "There's the chance that 2006 could be the peak margin period for ethanol producers."
VeraSun reported net income of $2.7 million for the quarter ended March 31, up 58.8 percent from a year earlier. Hawkeye and Aventine also posted bumper profits in their most recent quarters, according to their IPO filings. But lower margins could cause earnings growth to evaporate, or at least slow down quite a bit, analysts said.
Furthermore, since ethanol is a commodity, managing risk poses an additional challenge to investors, Judd from Greenwich Consultants said. Fuel markets tend to be highly unpredictable, and ethanol usually is made from corn, another volatile commodity.
Still, Berg thinks it's too early to say whether shares in the ethanol market are overvalued.
"This is a new game. It might take another six to nine months to get a better picture of the real opportunities in the market," he said.
Nigeria pumps 2.4 mln bpd, sees 3 mbpd by year-end
Sun Jun 11, 2006 9:17am ET
KUALA LUMPUR, June 11 (Reuters) - Nigeria's oil production stands at 2.4 million barrels per day and will approach 3 million bpd due to increased production from new deepwater fields, senior oil official Edmund Daukoru said on Sunday.
He also said he remained hopeful that the 550,000 bpd of production shut since February by militant attacks would return to service in a month, although he said operator Royal Dutch Shell (RDSa.L: Quote, Profile, Research) feared it would take longer to restore output.
"I hope it will be a month, but Shell says it will take a bit longer than that," Daukoru, Nigeria's minister of state for petroleum, told reporters. Past predictions that production would resume within a matter of weeks have not come to pass.
The Movement for the Emancipation of the Niger Delta launched attacks earlier this year that forced the closure of a quarter of all output from the world's eighth-largest exporter, helping push oil prices <CLc1> above $70 a barrel. Shell said last week it had yet to send teams to its oilfields.
New output from Nigeria's largely untapped deepwater regions is compensating for shut-in output, boosting production to 2.4 million bpd, Daukoru said. This is higher than the 2.29 million bpd figure estimated in a Reuters survey of analysts, consultants and industry sources for May, released on Friday [OPEC/O]
"We're ramping up deepwater production ... Deepwater is making up for conventional territory," he said on the sidelines of the Asia Oil & Gas Conference in Malaysia.
Speaking in Seoul at the start of this week, Daukoru said Nigeria planned to boost its capacity by 1.5 million bpd by the end of 2007, helping meet strong demand growth in Asia and the United States that has fuelled a surge in prices.
DEEPWATER
Over the past year Nigeria, the biggest oil producer in Africa, has begun pumping oil from a host of new deepwater fields including Royal Dutch Shell's 225,000 bpd Bonga development and ExxonMobil's (XOM.N: Quote, Profile, Research) 150,000 bpd Erha field.
More developments led by Total (TOTF.PA: Quote, Profile, Research) and Chevron (CVX.N: Quote, Profile, Research) are expected to follow over the next two years.
The offshore fields have typically been immune to the kind of militant attacks that have shut production in the Niger Delta, but an unprecedented raid on a rig 40 miles offshore two weeks ago heightened fears about the safety of more remote facilities.
Daukoru, who is also OPEC president this year, said it was premature to predict what action, if any, OPEC would take at its next meeting, scheduled for Sept. 11 in Vienna.
The Organization of Petroleum Exporting Countries agreed last week to keep pumping as much oil as their customers want, but at around $70 the price is still in sight of all-time highs.
"The culture now is that volatile world markets means we don't take huge steps. We will take measured steps and then see what the market reaction is," Daukoru said.
APA XTO APC ....As Natural gas prices plummet-Barron's
The price of natural gase is down around $6 from $9.94 earlier this year. While oil, which should sell for $36-$48 is at $70. An unseasonably warm winter has left many natural gas reserves untouched thusly contributing to the drop in price. However analysts specualte that natural gas will reach its natural price of $8.75-$11.67.
This makes it an excellent time to invest in such companies as Apache (APA), trading roughly $12 below its high of $75 just 2 months ago. Another ripe opportunity is XTO Energy (XTO), also down $12 from its 52 week high of 50 earlier this year. Anadarko Petroleum (APC) shares have not fallen at such a rapid pace but they are also well below their expected price of $57.
Iran sees problems in atomic offer from six powers
By Tom Perry
CAIRO (Reuters) - Iran on Sunday gave its most negative assessment of proposals offered by six world powers that aim to persuade Tehran to give up sensitive atomic work and said the key issue of uranium enrichment needed clarification.
http://today.reuters.com/news/newsArticle.aspx?type=worldNews&storyID=2006-06-11T151931Z_01_L134...
Nice entry point indeed Mar, this entire season is going to provide a lot of them I think. Everytime the possible formation of a hurricane has a possibility of entering into the gulf will show spikes, and if one does, will show huge upswings and downturns if downgraded.
There are so many factors affecting the charts, it's hard to keep up with them all.
Going to be an interesting year in the energy sector.
'Not Your Parents' Energy Crisis'
Thomas L. Friedman on his new movie, Big Oil, Zarqawi's death and comparing General Motors to a crack dealer.
http://www.msnbc.msn.com/id/13231593/site/newsweek/
prolly not one you should mess with yet till you get accts really built up good , but check the OB RSI in the 80's friday am for ANDE same as for GOOG ...sold off from there for most of the day . RSI is a good indicator no ?
ANDE does have split coming 28th so will be volitile , but a very interesting study none the less . I sure as hell didn't miss shorting it the 2nd time it visited $124's though , was
totally a complete overbought " blimp " at that point <g
Has been trying to hold this $85 area twice now , and follows oil/OIH pretty much
Went ahead & took a 2 shorts one on OXY and HAL early on as i saw the profitaking and bigger selling begin on the 2nd top on the OIH heading south .... and took HAL as it tried to push past $74 @ $73.90...yet look where the bounce came back in for HAL too
---->right off the dip to the 30RSI ....later in the afternoon sells off again, where ?
http://www.investorshub.com/boards/read_msg.asp?message_id=11531873
Right off the touch to the 70RSI....people need to forget the noise and reading message boards and start paying closer attention to using these indicators , they have worked without fail for months .
GOOG is just one big fat fall from the early morning hover @ the RSI 80/OB ...i'm still kicking myself for not bopping it right off the bat , but there were some rediculously huge bids being filled @ $394's (one 20K) ....GOOG did have one small rally off $387's dip for 2pts cooinciding with the 10am Compx rise and that was again off the RSI 30 on the 5min and then $390 stopped it .
*******and not shorting that AAPL early pop , oh geez louise what was i thinking ???? !!!
Had AAPL right there in my sights too at $61.50 !;((
RSI 12 is waaayyy in the OS , would be a screaming buy then , lol... might check your settings and give quote tracker a call and mention this to them .
Note the sell off in the OIH from the OB right on schedule in the am which was to be expected from that EOD runnup the day before, and there was a nimble trade off the RSI 30 on the 3min for 1 1/2pts early on but INet was still showing more selling on the way . But you can see how for the full day the chart runs from the OB down to the OS and back up again , which for the OIH was the same pattern for last couple of days .
* Also look at the OB in the am for GOOG , same thing , and sold off too .
My RSI on OIH went as low as 12 on the 5 min chart during the 10:30 am swoon (PST. I'm in California). I see it only getting to about 20 on your chart. Still using quotetracker here, wonder what made the difference.
OII ...on that swoon in the market on the morning of the 8th , they sure came flying back into OII for a 10pt bounce altogether , it has been one of the strongest stocks in the OSX since blowing out ests ....and everyone's minds with their guidance back mid-may :
http://www.investorshub.com/boards/read_msg.asp?Message_id=11164331&txt2find=oii
splits next week I think , that was definitely a catch on last weeks swoon ...
(also ITRI just started to come back in play )
Wall St Week Ahead - Clinging to Tame inflation may be stocks' Only knight
Fri Jun 9, 2006 6:09pm ET
By Ellis Mnyandu
NEW YORK, June 9 (Reuters) - With Wall Street sorely in need of a jump-start following a rocky start to June, investors will latch onto next week's inflation data to gauge if the Federal Reserve can be dissuaded from raising interest rates again this month, as many now fear.
The latest reports on May producer and consumer prices take on added significance after a slew of Fed officials, including Chairman Ben Bernanke, inundated investors with tough talk on price pressures this past week.
The upcoming week also features a heavy roster of Fed speakers, who could yet give more warnings on inflation.
Perhaps one of the starkest warnings in recent days came from Federal Reserve Board Governor Susan Bies, who said earlier this past week that core inflation in the last three quarters has been running in the high 2 percent range, "which personally makes me very uncomfortable."
The chances for a 17th consecutive hike in the federal funds rate -- now at 5 percent -- after the Fed's June 28-29 policy-setting meeting currently are seen at around 80 percent, up from about 68 percent before the release of a weaker-than-expected U.S. May jobs report on June 2.
BERNANKE AT CROSSROADS
"Inflation seems to be the watchword right now," said Peter Schofield, managing director with Knott Capital in Exton, Pennsylvania.
"Bernanke is at a crossroads. First he was talking about hitting the pause button and now he seems to want to be more transparent talking about things before" the Fed's meeting, he added
The Labor Department will release May PPI on Tuesday, followed by CPI the next day. Both reports are due out at 8:30 a.m. (1230 GMT) on each of the days.
According to a Reuters poll of economists, headline May producer prices are forecast to edge up by 0.4 percent, compared with a 0.9 percent jump in the prior month. But excluding food and energy, the gauge is expected to tick up by 0.2 percent after rising 0.1 percent in April.
For May CPI, economists expect headline inflation to be 0.4 percent, after coming in at 0.6 percent in April. And stripping out highly volatile food and energy prices, the index is seen up 0.2 percent from a 0.3 percent rise the prior month.
Fanning inflation concerns has been the rise in crude oil prices, which analysts say could stifle consumer spending as higher gasoline prices weigh on household budgets.
CONSUMER SPENDING, PROFIT JITTERS
Consumer spending is a key driver of corporate earnings and accounts for about two thirds of U.S. economic activity, so if it were to falter, analysts say Wall Street would likely have to say goodbye to four years of double-digit earnings growth this year.
"If we get a high number on inflation, people are going to think this 80 percent chance of a rate hike (at the end of this month) will go even higher," said Rick Campagna, portfolio manager, at Provident Investment Council in Pasadena, California.
"The yield curve is inverting and people are going to worry about the Fed raising rates so much they push us into a recession."
After a turbulent May, U.S. stocks have also seen a rocky start to June, which saw the Dow crashing below 11,000 for the first time in three months. On Friday, concerns about higher interest rates took a sharper focus, causing stocks to swing wildly in a volatile session.
INDEXES SWOON
The Dow Jones industrial average <.DJI> fell 46.90 points, or 0.43 percent, to end at 10,891.92. The Standard & Poor's 500 Index <.SPX> dropped 5.65 points, or 0.45 percent, to 1,252.28. The Nasdaq Composite Index <.IXIC> ended down 10.26 points, or 0.48 percent, at 2,135.06.
The Dow capped its worst week in 14 months, ending down 3.2 percent. The S&P ended off 2.8 percent, and the Nasdaq fell 3.8 percent.
All major indexes have now sunk below their 200-day moving averages, closely watched long-term trendlines that measure a security or a stock index's resilience. But it's not only U.S. investors that have been rattled by the prospect of rising rates.
The European Central Bank and central banks in South Africa, India and South Korea all raised their official rates this past week, and markets speculate that the Bank of Japan will join them in the next few months.
The upcoming week will be thin on the corporate earnings front, with only a handful of companies on tap to post results, including consumer electronics chain Best Buy Co. Inc. (BBY.N: Quote, Profile, Research), investment banks Lehman Brothers Holdings Inc. (LEH.N: Quote, Profile, Research) and Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research) and home builder KB Home (KBH.N: Quote, Profile, Research).
MORE FED TOUGH TALK AHEAD?
On the Fed front, there will be another heavy roster of Fed speakers, including Chairman Bernanke, who will speak before an audience of students of the American Bankers Association on Monday.
Cleveland Fed President Sandra Pianalto is scheduled to speak on the economy and monetary policy at a function in Florida, also on Monday.
Dallas Fed President Richard Fisher will speak on U.S. global policy on Monday in Texas and on the economy on Wednesday. On Friday, St. Louis Fed President William Poole participates in a panel discussion on monetary and fiscal policy in South Korea, while Fed governor Donald Kohn speaks about globalization and monetary policy at a Boston Fed event in Chatham, Massachusetts.
A number of other Fed officials are scheduled to speech on topics not directly related to monetary policy.
"The principal question the markets will face (next week) is will the Fed continue to raise interest rates, and if so how high? That is the question," said Hugh Johnson, chief investment officer of Johnson Illington Advisors, in Albany, New York.
ISI Director Mahmood Ahmed and COMPLICITY
Complete 911 Timeline
ISI Director Mahmood Ahmed
http://www.cooperativeresearch.org/timeline.jsp?timeline=
complete_911_timeline&the_isi:_a_more_detailed_look=mahmoodAhmed
Project: Complete 911 Timeline
Open-Content project managed by Paul Thompson
October 12, 1999: General Musharraf Takes Control of Pakistan; Ousted ISI Leader Has Curious Finances
Pakistani President Pervez Musharraf. [Source: Government of Pakistan]Pakistani President Pervez Musharraf.
Gen. Pervez Musharraf becomes leader of Pakistan in a coup. One major reason for the coup is the ISI felt the previous ruler had to go “out of fear that he might buckle to American pressure and reverse Pakistan’s policy [of supporting] the Taliban.” [New York Times, 12/8/2001] Shortly thereafter Musharraf replaces the leader of the ISI, Brig Imtiaz, because of his close ties to the previous leader. Imtiaz is arrested and convicted of “having assets disproportionate to his known sources of income.” It comes out that he was keeping tens of millions of dollars earned from heroin smuggling in a Deutsche Bank account. This is interesting because insider trading just prior to 9/11 will later connect to a branch of Deutsche Bank recently run by “Buzzy” Krongard, now executive director of the CIA. [Financial Times, 8/10/2001] The new director of the ISI is Lt. Gen. Mahmood Ahmed, a close ally of Musharraf who is instrumental in the success of the coup. [Guardian, 10/9/2001]
People and organizations involved: Deutsche Bank, Taliban, Pakistan Directorate for Inter-Services Intelligence, Brig Imtiaz, Mahmood Ahmed, Pervez Musharraf
April 4, 2000: ISI Director Visits Washington and Is Told to Give Warning to Taliban
ISI Director and “leading Taliban supporter” Lt. Gen. Mahmood Ahmed visits Washington. He meets officials at the CIA and the White House. In a message meant for both Pakistan and the Taliban, US officials tell him that al-Qaeda has killed Americans and “people who support those people will be treated as our enemies.” However, no actual action, military or otherwise, is taken against either the Taliban or Pakistan. [Washington Post, 12/19/2001; Coll, 2004, pp. 513-514]
People and organizations involved: al-Qaeda, Pakistan, Mahmood Ahmed, Taliban
Summer 2000: Saeed Sheikh Frequently Calls the ISI Director
In 2002, French author Bernard-Henri Levy is presented evidence by government officials in New Delhi, India, that Saeed Sheikh makes repeated calls to ISI Director Lt. Gen. Mahmood Ahmed during the summer of 2000. Later, Levy gets unofficial confirmation from sources in Washington regarding these calls that the information he was given in India is correct. He notes that someone in the United Arab Emirates using a variety of aliases sends Mohamed Atta slightly over $100,000 between June and September of this year (see June 29, 2000-September 18, 2000), and the timing of these phone calls and the money transfers may have been the source of news reports that Mahmood Ahmed ordered Saeed Sheikh to send $100,000 to Mohamed Atta (see October 7, 2001). However, he also notes that there is evidence of Sheikh sending Atta $100,000 in August 2001 (see Early August 2001), so the reports could refer to that, or both $100,000 transfers could involve Mahmood Ahmed, Saeed Sheikh, and Mohamed Atta. [Levy, 2003, pp. 320-324]
People and organizations involved: Saeed Sheikh, Mahmood Ahmed, Mohamed Atta, United Arab Emirates
June 29, 2000-September 18, 2000: Hijackers Receive $100,000 in Funding from United Arab Emirates Location
Someone using the aliases “Isam Mansour,” “Mustafa Ahmed al-Hisawi,” “Mr. Ali,” and “Hani (Fawaz Trdng)” sends a total of $109,910 to the 9/11 hijackers in a series of transfers between these dates. [MSNBC, 12/11/2001; Newsweek, 12/2/2001; New York Times, 12/10/2001; Financial Times, 11/29/2001; US Congress, 9/26/2002] The money is sent from Sharjah, an emirate in the United Arab Emirates that is allegedly a center for al-Qaeda’s illegal financial dealings. The identity of this moneyman “Mustafa Ahmed al-Hisawi” is in dispute. It has been claimed that the name “Mustafa Ahmed” is an alias used by Saeed Sheikh, a known ISI and al-Qaeda agent who sends the hijackers money in August 2001. [CNN, 10/6/2001] India claims that Pakistani ISI Director Lt. Gen. Mahmood Ahmed orders Saeed to send the hijackers the money at this time. [Frontline, 10/6/2001; Daily Excelsior (Jammu), 10/18/2001] French author Bernard-Henri Levy claims to have evidence from sources inside both Indian and US governments of phone calls between Sheikh and Mahmood during this same time period, and he sees a connection between the timing of the calls and the money transfers (see Summer 2000). [Levy, 2003, pp. 320-324] FBI Director Mueller’s theory is that this money is sent by “Ali Abdul Aziz Ali.” However, of the four aliases used in the different transactions, Mueller connects this man only to three, and not to the alias “Mustafa Ahmed al-Hisawi.” [New York Times, 12/10/2001; US Congress, 9/26/2002; Associated Press, 9/26/2002] It appears that most of the money is sent to an account shared by Marwan Alshehhi and Mohamed Atta, who would obtain money orders and distribute the money to the other hijackers. [CNN, 10/1/2001; MSNBC, 12/11/2001; US Congress, 9/26/2002] The New York Times later suggests that the amount passed from “Mustafa Ahmed” to the Florida bank accounts right up until the day before the attack is around $325,000. The rest of the $500,000-$600,000 they receive for US expenses comes from another, still unknown source. [New York Times, 7/10/2002]
People and organizations involved: Pakistan Directorate for Inter-Services Intelligence, Robert S. Mueller III, Saeed Sheikh, Ali Abdul Aziz Ali, Mohamed Atta, Isam Mansour, Fawaz Trdng, Mustafa Ahmed al-Hisawi, al-Qaeda, Marwan Alshehhi, 9/11 Congressional Inquiry, Mahmood Ahmed, Federal Bureau of Investigation, United Arab Emirates
May 2001: Tenet Visits Pakistan; Armitage Calls on India
Richard Armitage. [Source: NATO]Richard Armitage.
Deputy Secretary of State Richard Armitage, a former covert operative and Navy Seal, travels to India on a publicized tour while CIA Director Tenet makes a quiet visit to Pakistan to meet with President Pervez Musharraf. Armitage has long and deep Pakistani intelligence connections (as well as a role in the Iran-Contra affair). It would be reasonable to assume that while in Islamabad, Tenet, in what was described as “an unusually long meeting,” also meets with his Pakistani counterpart, ISI Director Lt. Gen. Mahmood Ahmed. [SAPRA (New Delhi), 5/22/2001]
People and organizations involved: George J. Tenet, Richard Armitage, Pervez Musharraf, Pakistan Directorate for Inter-Services Intelligence, Mahmood Ahmed, Central Intelligence Agency
September 4-11, 2001: ISI Director Visits Washington for Mysterious Meetings
ISI Director Lt. Gen. Mahmood Ahmed visits Washington for the second time. On September 10, a Pakistani newspaper reports on his trip so far. It says his visit has “triggered speculation about the agenda of his mysterious meetings at the Pentagon and National Security Council” as well as meetings with CIA Director Tenet, unspecified officials at the White House and the Pentagon, and his “most important meeting” with Marc Grossman, US Under Secretary of State for Political Affairs. The article suggests, “[O]f course, Osama bin Laden” could be the focus of some discussions. Prophetically, the article adds, “What added interest to his visit is the history of such visits. Last time [his] predecessor was [in Washington], the domestic [Pakistani] politics turned topsy-turvy within days.” [News (Islamabad), 9/10/2001] This is a reference to the Musharraf coup just after an ISI Director’s visit on October 12, 1999 (see October 12, 1999).
People and organizations involved: Mahmood Ahmed, US Department of Defense, National Security Council, Osama bin Laden, George J. Tenet, Marc Grossman
September 11, 2001: Intelligence Committee Chairs Meet with ISI Head and Possible 9/11 Attack Funder as the Attack Occurs
From left to right: Senator Bob Graham (D), Senator Jon Kyl (R), and Representative Porter Goss (R). [Source: US Senate, National Park Service, US House of Representatives]From left to right: Senator Bob Graham (D), Senator Jon Kyl (R), and Representative Porter Goss (R).
At the time of the attacks, ISI Director Lt. Gen. Mahmood Ahmed is at a breakfast meeting at the Capitol with the chairmen of the House and Senate Intelligence Committees, Senator Bob Graham (D) and Representative Porter Goss (R) (Goss is a 10-year veteran of the CIA’s clandestine operations wing). The meeting is said to last at least until the second plane hits the WTC. [Washington Post, 5/18/2002] Graham and Goss later co-head the joint House-Senate investigation into the 9/11 attacks, which has made headlines for saying there was no “smoking gun” of Bush knowledge before 9/11. [Washington Post, 7/11/2002] Note that Senator Graham should have been aware of a report made to his staff the previous month (see Early August 2001) that one of Mahmood’s subordinates had told a US undercover agent that the WTC would be destroyed. Evidence suggests that attendee Mahmood ordered that $100,000 be sent to hijacker Mohamed Atta. Also present at the meeting were Senator Jon Kyl (R) and the Pakistani ambassador to the US, Maleeha Lodhi. (All or virtually all of the people in this meeting had previously met in Pakistan just a few weeks earlier.) Senator Graham says of the meeting: “We were talking about terrorism, specifically terrorism generated from Afghanistan.” The New York Times reports that bin Laden was specifically discussed. [Vero Beach Press Journal, 9/12/2001; Salon, 9/14/2001; New York Times, 6/3/2002]
People and organizations involved: Mohamed Atta, Jon Kyl, Mahmood Ahmed, Maleeha Lodhi, Osama bin Laden, Bob Graham, Porter J. Goss
September 11-16, 2001: Pakistan Threatened; Promises to Support US
ISI Director Lt. Gen. Mahmood Ahmed, extending his Washington visit because of the 9/11 attacks [Japan Economic Newswire, 9/17/2001] , meets with US officials and negotiates Pakistan’s cooperation with the US against al-Qaeda. It is rumored that later in the day of 9/11 and again the next day, Deputy Secretary of State Richard Armitage visits Mahmood and offers him the choice: “Help us and breathe in the 21st century along with the international community or be prepared to live in the Stone Age.” [Deutsche Presse-Agentur (Hamburg), 9/12/2001; LA Weekly, 11/9/2001] Secretary of State Powell presents Mahmood seven demands as an ultimatum and Pakistan supposedly agrees to all seven. [Washington Post, 1/29/2002] Mahmood also has meetings with Senator Joseph Biden (D), Chairman of the Senate Foreign Relations Committee, and Secretary of State Powell, regarding Pakistan’s position. [Miami Herald, 9/16/2001; New York Times, 9/13/2001 pdf file; Reuters, 9/13/2001; Associated Press, 9/13/2001] On September 13, the airport in Islamabad, the capital of Pakistan, is shut down for the day. A government official later says the airport had been closed because of threats made against Pakistan’s “strategic assets,” but does not elaborate. The next day, Pakistan declares “unstinting” support for the US, and the airport is reopened. It is later suggested that Israel and India threatened to attack Pakistan and take control of its nuclear weapons if Pakistan did not side with the US. [LA Weekly, 11/9/2001] It is later reported that Mahmood’s presence in Washington was a lucky blessing; one Western diplomat saying it “must have helped in a crisis situation when the US was clearly very, very angry.” [Financial Times, 9/18/2001]
People and organizations involved: Richard Armitage, Pakistan, Mahmood Ahmed, Colin Powell, Joseph Biden, al-Qaeda
Mid-September 2001: Pakistani Leaders Side with Taliban
The Guardian later claims that Pakistani President Pervez Musharraf has a meeting with his 12 or 13 most senior officers. Musharraf proposes to support the US in the imminent war against the Taliban and al-Qaeda. Supposedly, four of his most senior generals oppose him outright in “a stunning display of disloyalty.” The four are ISI Director Lt. Gen. Mahmood Ahmed, Lt. Gen. Muzaffar Usmani, Lt. Gen. Jamshaid Gulzar Kiani, and Lt. Gen. Mohammed Aziz Khan. All four are removed from power over the next month. If this meeting took place, it is hard to see when it could have happened, since the article states it happened “within days” of 9/11, but Mahmood was in the US until late September 16, then flew to Afghanistan for two days, then possibly to Saudi Arabia. [Guardian, 5/25/2002]
People and organizations involved: Muzaffar Usmani, Mohammed Aziz Khan, Mahmood Ahmed, Pervez Musharraf, Jamshaid Gulzar Kiani, al-Qaeda, Taliban
September 17-18 and 28, 2001: Taliban Refuses to Extradite bin Laden
On September 17, ISI Director Lt. Gen. Mahmood Ahmed heads a six-man delegation that visits Mullah Omar in Kandahar, Afghanistan. It is reported he is trying to convince Omar to extradite bin Laden or face an immediate US attack. [Press Trust of India, 9/17/2001; Financial Times, 9/18/2001; London Times, 9/18/2001] Also in the delegation is Lt. Gen. Mohammed Aziz Khan, an ex-ISI official who appears to be one of Saeed Sheikh’s contacts in the ISI. [Press Trust of India, 9/17/2001] On September 28, Mahmood returns to Afghanistan with a group of about ten religious leaders. He talks with Omar, who again says he will not hand over bin Laden. [Agence France-Presse, 9/28/2001] A senior Taliban official later claims that on these trips Mahmood in fact urges Omar not to extradite bin Laden, but instead urges him to resist the US. [Associated Press, 2/21/2002; Time, 5/6/2002] Another account claims Mahmood does “nothing as the visitors [pour] praise on Omar and [fails] to raise the issue” of bin Laden’s extradition. [Knight Ridder, 11/3/2001] Two Pakistani brigadier generals connected to the ISI also accompany Mahmood, and advise al-Qaeda to counter the coming US attack on Afghanistan by resorting to mountain guerrilla war. The advice is not followed. [Asia Times, 9/11/2002] Other ISI officers also stay in Afghanistan to advise the Taliban.
People and organizations involved: al-Qaeda, Mohammed Aziz Khan, Mullah Omar, Saeed Sheikh, Osama bin Laden, Taliban, Mahmood Ahmed
September 19, 2001: Rumored Meeting Between Saudi Fundamentalists and ISI
According to the private intelligence service Intelligence Online, a secret meeting between fundamentalist supporters in Saudi Arabia and the ISI takes place in Riyadh, Saudi Arabia, on this day. Crown Prince Abdullah, the de facto ruler of Saudi Arabia, and Nawaf bin Abdul Aziz, the new head of Saudi intelligence, meet with Gen. Mohamed Youssef, head of the ISI’s Afghanistan Section, and ISI Director Lt. Gen. Mahmood Ahmed (just returning from discussions in Afghanistan). They agree “to the principle of trying to neutralize Osama bin Laden in order to spare the Taliban regime and allow it to keep its hold on Afghanistan.” There has been no confirmation that this meeting in fact took place, but if it did, its goals were unsuccessful. [Intelligence Online, 10/4/2001] There may have been a similar meeting before 9/11 in the summer of 2001.
People and organizations involved: Nawaf bin Abdul Aziz, Mahmood Ahmed, Pakistan Directorate for Inter-Services Intelligence, Abdullah bin Abdulaziz al-Saud, Mohamed Youssef, Taliban, Osama bin Laden
October 7, 2001: ISI Director Replaced at US Urging; Role in Funding 9/11 Plot Is One Explanation
ISI Director Lt. Gen. Mahmood Ahmed is replaced in the face of US pressure after links are discovered between him, Saeed Sheikh, and the funding of the 9/11 attacks. Mahmood instructed Saeed to transfer $100,000 into hijacker Mohamed Atta’s bank account prior to 9/11. This is according to Indian intelligence, which claims the FBI has privately confirmed the story. [Press Trust of India, 10/8/2001; Times of India, 10/9/2001; India Today, 10/15/2001; Daily Excelsior (Jammu), 10/18/2001] The story is not widely reported in Western countries, though it makes the Wall Street Journal. [Australian, 10/10/2001; Agence France-Presse, 10/10/2001; Wall Street Journal, 10/10/2001] It is reported in Pakistan as well. [Dawn (Karachi), 10/8/2001] The Northern Alliance also repeats the claim in late October. [Federal News Service, 10/31/2001] In Western countries, the usual explanation is that Mahmood is fired for being too close to the Taliban. [London Times, 10/9/2001; Guardian, 10/9/2001] The Times of India reports that Indian intelligence helped the FBI discover the link, and says, “A direct link between the ISI and the WTC attack could have enormous repercussions. The US cannot but suspect whether or not there were other senior Pakistani Army commanders who were in the know of things. Evidence of a larger conspiracy could shake US confidence in Pakistan’s ability to participate in the anti-terrorism coalition.” [Times of India, 10/9/2001] There is evidence some ISI officers may have known of a plan to destroy the WTC as early as July 1999. Two other ISI leaders, Lt. Gen. Mohammed Aziz Khan and Lt. Gen. Muzaffar Usmani, are sidelined on the same day as Mahmood. [Fox News, 10/8/2001] Saeed had been working under Khan. The firings are said to have purged the ISI of its fundamentalists. However, according to one diplomat, “To remove the top two or three doesn’t matter at all. The philosophy remains. ... [The ISI is] a parallel government of its own. If you go through the officer list, almost all of the ISI regulars would say, of the Taliban, ‘They are my boys.’” [New Yorker, 10/29/2001] It is believed Mahmood has been living under virtual house arrest in Pakistan (which would seem to imply more than just a difference of opinion over the Taliban), but no charges have been brought against him, and there is no evidence the US has asked to question him. [Asia Times, 1/5/2002] He also has refused to speak to reporters since being fired [Associated Press, 2/21/2002] , and outside India and Pakistan, the story has only been mentioned infrequently in the media since. [Sunday Herald (Glasgow), 2/24/2002; London Times, 4/21/2002] He will reemerge as a businessman in 2003, but still will not speak to the media (see July 2003).
People and organizations involved: Mahmood Ahmed, Saeed Sheikh, Mohammed Aziz Khan, Muzaffar Usmani, Mohamed Atta, Federal Bureau of Investigation, India, Northern Alliance, Pakistan Directorate for Inter-Services Intelligence, World Trade Center, Taliban
July 2003: Fired ISI Director Resurfaces as Businessman
Lt. Gen. Mahmood Ahmed, who lost his position as ISI Director one month after 9/11 (see October 7, 2001), resurfaces in Pakistan as the head of a subsidiary of a prominent business consortium. The New Yorker notes that it is “a position that require[s] government backing.” Ahmed was considered close to the Taliban, and according to some media accounts, ordered money to hijacker Mohamed Atta. He still apparently has not given any media interviews or been interviewed by US intelligence since his firing. [New Yorker, 7/28/2003]
People and organizations involved: Taliban, Mahmood Ahmed
September 18, 2003: Questions of ISI Leader’s Ties to 9/11 Resurface
A Wall Street Journal review of Bernard-Henri Levy’s book “Who Killed Daniel Pearl?” notes, “It is a fact that Gen. Mahmood Ahmed, then head of the ISI, wired $100,000 to Mohamed Atta before 9/11 through an intermediary. (This was reported in the Journal on Oct. 10, 2001.) So what have we done about it?” The article notes that few are willing to look into this issue or take action against Pakistan since Pakistani President Pervez Musharraf is considered a close ally and cooperative in the fight against terrorism. [Wall Street Journal, 9/18/2003] Other reviews of the book raise similar points, and even the conservative columnist George Will notes in the Washington Post, “It is not fantasy that there have been many reports that the then-head of Pakistani intelligence was responsible for $100,000 being wired to Mohamed Atta, the lead 9/11 hijacker.” [Washington Post, 10/5/2003]
People and organizations involved: Daniel Pearl, Pervez Musharraf, Mohamed Atta, Mahmood Ahmed
July 22, 2004: Prominent Figures See Ties Between the ISI, 9/11, and Even the CIA
Michael Meacher, a British member of Parliament, and a cabinet minister in Tony Blair’s government until 2003, writes in the Guardian, “Significantly, [Saeed] Sheikh is ... the man who, on the instructions of General Mahmood Ahmed, the then head of Pakistan’s Inter-Services Intelligence (ISI), wired $100,000 before the 9/11 attacks to Mohamed Atta, the lead hijacker. It is extraordinary that neither Ahmed nor Sheikh have been charged and brought to trial on this count. Why not?” Daniel Ellsberg, the “Pentagon Papers” whistleblower during the Nixon presidency, states in the same article, “It seems to me quite plausible that Pakistan was quite involved in [9/11] ... To say Pakistan is, to me, to say CIA because ... it’s hard to say that the ISI knew something that the CIA had no knowledge of.” [Guardian, 7/22/2004]
People and organizations involved: Saeed Sheikh, Mohamed Atta, Michael Meacher, Mahmood Ahmed, Pakistan Directorate for Inter-Services Intelligence, Daniel Ellsberg, Central Intelligence Agency
US outflanked in Eurasia energy politics
By guest writer, F William Engdahl, Asia Times Online
The United States' global energy-control strategy, it's now clear to most, was the actual reason for the highly costly regime change in Iraq, euphemistically dubbed "democracy" by Washington. But while it is preoccupied with implanting democracy in the Middle East, the United States is quietly being outflanked in the rush to secure and control major energy sources of the Persian Gulf, the Central Asian Caspian Basin, Africa and beyond.
The quest for energy control has informed Washington's support for high-risk "color revolutions" in Georgia, Ukraine, Uzbekistan, Belarus and Kyrgyzstan in recent months. It lies behind US activity in West Africa, as well as in Sudan, source of 7% of China's oil imports. It lies behind US policy vis-a-vis President Hugo Chavez' Venezuela and President Evo Morales' Bolivia.
In recent months, however, this strategy of global energy dominance has shown signs of producing just the opposite: a kind of "coalition of the unwilling", states that increasingly see no other prospect, despite traditional animosities, but to cooperate to oppose what they see as a US push to control the future security of their energy.
If the trend of recent events continues, it won't be US-style democracy that is spreading, but rather Russian and Chinese influence over major oil and gas supplies.
Some in Washington are beginning to realize that important figures might have been too clumsy in recent public statements about both China and Russia, two nations whose cooperation in some form is essential to the success of the global US energy project.
Ripping into China and Russia
Contrary to advice from older China hands, including former secretary of state Henry Kissinger, architect of president Richard Nixon's 1972 opening to China, the White House denied visiting Chinese President Hu Jintao the honor of a full state dinner when he visited in April, serving instead a short "state lunch". Hu was publicly humiliated by a well-known Falungong heckler at the White House press conference.
A few weeks later, Vice President Dick Cheney slapped Russian President Vladimir Putin with the most open attack on Russia's internal human-rights policy as well as its energy policy in a speech in the Baltic state of Lithuania. There, Cheney declared of Russia, "The government has unfairly and improperly restricted the rights of her people." He accused Russia of energy "intimidation and blackmail". Some days later, Secretary of State Condoleezza Rice reiterated that Russia should be "pressed" on democratic reforms. Rice also slapped China in the face in March during a trip to Southeast Asia, calling China a "negative force" in Asia.
Curiously, Washington has repeatedly accused China of "not playing by the rules", in terms of its oil politics, declaring that China is guilty of "seeking to control energy at the source", as though that had not been US energy policy for the past century.
The significance of taking aim simultaneously at both Russia and China, the two Eurasian giants, the one the largest investor in US Treasury bonds, the other the world's second-most-developed military nuclear power, reflects the realization in Washington that all may not be as seamless in the quest for global domination as originally promised by various strategists in and around the administration of President George W Bush.
Next Thursday, member nations of the Shanghai Cooperation Organization (SCO), led by China and Russia, will reportedly invite Iran, currently an observer, into full membership. Even if full membership is postponed, as has been mooted, the fact remains that Russia and China both want to seal closer cooperation with Iran in Eurasian energy cooperation.
The SCO was founded in June 2001 by China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Its stated goal was to facilitate "cooperation in political affairs, economy and trade, scientific-technical, cultural, and educational spheres as well as in energy, transportation, tourism, and environment protection fields". Recently, however, the SCO is beginning to look like an energy-financial bloc in Central Asia consciously being developed to serve as a counter-pole to US hegemony.
Russia's energy geopolitics
In recent months SCO members have taken several potentially strategic steps to distance themselves from energy and monetary dependence on the US. In his recent State of the Union speech, President Putin announced that Russia is planning to make the ruble convertible into other major currencies and to use it in its oil and gas transactions.
A convertible ruble is to be introduced, according to latest Russian statements, on July 1, six months earlier than originally planned. Russia also has stated it plans to shift a share of its now considerable dollar reserves away from the US currency and that it will use 40 billion US dollars to purchase gold reserves.
Russia's state-owned natural-gas transport company, Transneft, has consolidated its pipeline control to become the sole exporter of Russian natural gas. Russia has by far the world's largest natural-gas reserves and Iran the second-largest. With Iran inside, the SCO would control the vast majority of the world's natural-gas reserves, as well as a significant portion of its oil reserves, not to mention the Strait of Hormuz, the narrow corridor for a majority of Persian Gulf oil-tanker shipment to Japan and the West.
Late last month Russia and Algeria, the two largest gas suppliers to Europe, agreed to increase energy cooperation. Algeria has given Russian companies exclusive access to Algerian oil and gas fields, and Gazprom and Sonatrach will cooperate in delivery to France. Putin has canceled Algeria's US$4.7 billion debt to Russia and, for its part, Algeria will buy $7.5 billion worth of Russian advanced jet fighters, air defense systems and other weapons.
On May 26 Russian Defense Minister Sergei Ivanov also announced that his country would definitely supply Iran with sophisticated Tor-M1 anti-aircraft missiles, reportedly as a prelude to supplying even more sophisticated weapons.
Then, in one of the more fascinating examples of geopolitical chutzpah, the Kremlin-controlled Gazprom gas monopoly entered quiet negotiations with Israeli Prime Minister Ehud Olmert through his billionaire friend, Benny Steinmetz, to secure Russian natural-gas supplies to Israel via an undersea pipeline from Turkey to Israel.
According to the Israeli paper Yediot Ahronot, Olmert's office has said it will support the Gazprom proposal. In several years Israel faces a shortage of gas from Tethys Sea drilling and soon from Egypt. Tethys Sea gas is projected to run dry in a few years. British Gas is in talks to supply gas from Gaza but Israel disputes BG's right to drill.
But even with Egypt and Gaza, gas shortages are expected by 2010 unless Israel is able to find new sources. Enter Gazprom and Putin. The gas would be diverted from the under-used Russia-Turkey Bluestream Pipeline, which Russia built to increase its influence over Turkey two years ago. Putin clearly seeks to gain a lever inside Israel over the one-sided US influence on Israeli policy.
China energy geopolitics also in high gear
For its part, Beijing is also moving to "secure energy at the sources". China's booming economy, with 10% growth, requires massive natural resources. China became a net importer of oil in 1993. By 2045, China will depend on imported oil for 45% of its energy needs.
On May 26, crude oil began to flow into China through a newly completed pipeline from Atasu, Kazakhstan, to the Alataw Pass in China's far-western region of Xinjiang, a 1,000-kilometer route announced only last year. It marked the first time oil is being pumped directly into China. Kazakhstan is also a member of the SCO, but had been regarded by Washington since the collapse of the Soviet Union as in its sphere of influence, with ChevronTexaco, Rice's former oil company, the major oil developer.
By 2011 the pipeline with extend some 3,000km to Dushanzi, where the Chinese are building their largest oil refinery, due to completed by 2008. China financed the entire $700 million pipeline and will buy the oil. Last year the China National Petroleum Corp bought PetroKazakhstan for $4.2 billion and will use it to develop oilfields in Kazakhstan.
China is also in negotiations with Russia for a pipeline to deliver Siberian oil to northeastern China, a project that could be completed by 2008, and a natural-gas pipeline from Russia to Heilongjiang province in China's northeast. China just passed Japan to rank as world's second-largest oil importer behind the United States.
Beijing and Moscow are also integrating their electricity grids. Late last month the China State Grid Corp announced plans to increase imports of Russian electricity fivefold by 2010.
In its relentless quest to secure future oil supplies "at the source", China has also moved into traditional US, British and French oil domains in Africa. In addition to being the major developer of Sudan's oil pipeline, which ships some 7% of total China oil imports, Beijing has been more than active in West Africa, the source of vast fields of highly prized low-sulfur oil.
Since the creation of the China-Africa Forum in 2000, China has scrapped tariffs on 190 imported goods from 28 of the least developed African countries, and canceled $1.2 billion in debt.
Indicative of the way China is doing an end-run around the Western-controlled International Monetary Fund among African states, China's Export-Import Bank recently gave a $2 billion soft loan to Angola. In return, the Luanda government gave China a stake in oil exploration in shallow waters off the coast. The loan is to be used for infrastructure projects. In contrast, US interest in war-torn Angola has rarely gone beyond the well-fortified oil enclave of Cabinda, which ExxonMobil along with Shell Oil have dominated until recently. That is apparently about to change with the growing Chinese interest.
Chinese infrastructure projects under way in Angola include railways, roads, a fiber-optic network, schools, hospitals, offices and 5,000 units of housing developments. A new airport with direct flights from Luanda to Beijing is also planned.
Indirectly, through its support of the Sudanese government, China is also a contender in a high-stakes game of potential regime change in neighboring, oil-rich Chad. This year, World Bank president Paul Wolfowitz was forced to back down from plans to cut off World Bank aid because of the threat of an oil-export cutoff by Chad. ExxonMobil is currently the major oil company active in Chad. But Sudan backs Chadian rebels, who were only prevented from toppling the notoriously corrupt and unpopular regime of President Idriss Deby by the 1,500 French soldiers propping up the regime. Washington has joined with Paris in backing Deby.
Sudan has involved Chinese, rather than Western, corporations in exploiting its oilfields, largely as a result of misconceived US sanctions imposed in 1997, which blocked US oil companies from doing business in Sudan. A new Sudan-backed regime in Chad would jeopardize the Chad-Cameroon pipeline and Western oil firms. One can imagine China just might be willing to step into such a vacuum and help Chad develop its oil, especially if the lion's share went to China.
Immediately after his humiliating diplomatic visit to Washington in April, President Hu went on to Nigeria, Africa's largest oil producer and long regarded by Washington as in its "oil sphere of interest". In Nigeria, Hu signed a deal whereby the African country will give China four oil-drilling licenses in exchange for a commitment to invest $4 billion in infrastructure.
China will buy a controlling stake in Nigeria's 110,000-barrel-per-day Kaduna oil refinery and build railway and power stations, as well as take a 45% stake in developing Nigeria's OML-130 offshore oil and gas field, referred to by the chairman of China National Overseas Oil Corp as "an oil and gas field of huge interest ... located in one of the world's largest oil and gas basins".
Almost all of Nigeria's current oil production is controlled by Western multinationals. But the situation there will also soon change in China's favor. Similar soft infrastructure loans or energy investment offers are being made to Gabon, Ivory Coast, Liberia and Equatorial Guinea. The curious charge against China of "not playing by the rules" and "trying to secure energy at the source" begins to assume real dimension when these and Russia's recent energy moves are taken as a totality.
Whither Washington?
It's little wonder that some Washington hawks are getting alarmed. Suddenly, the world of potential "enemies" is no longer restricted to the Islam-centered "war on terror". Leading neo-conservative ideologue Robert Kagan wrote a prominent opinion article recently in the Washington Post. Kagan is privy to pretty high-level thinking in Washington, presumably. His wife, Victoria Nuland, worked as Vice President Richard Cheney's deputy national security adviser until being named US ambassador to the North Atlantic Treaty Organization.
Kagan declared, in reference to Russia and China, "Until now the liberal West's strategy has been to try to integrate these two powers into the international liberal order, to tame them and make them safe for liberalism. If, instead, China and Russia are going to be sturdy pillars of autocracy over the coming decades, enduring and perhaps even prospering, then they cannot be expected to embrace the West's vision of humanity's inexorable evolution toward democracy and the end of autocratic rule."
Kagan charged that China and Russia have emerged as the protectors of "an informal league of dictators" that, according to Kagan, currently includes the leaders of Belarus, Uzbekistan, Myanmar, Zimbabwe, Sudan, Venezuela, Iran and Angola, among others around the world, who, like the leaders of Russia and China themselves, resist any efforts by the West to interfere in their domestic affairs, either through sanctions or other means. "The question is what the United States and Europe decide to do in response," wrote Kagan.
The mainstream US foreign-policy organization, the New York-based Council on Foreign Relations, has also recently weighed in on the question of Chinese energy pursuits. In a recent report, the CFR accuses the Bush administration of lacking any comprehensive long-term strategy for Africa. It criticizes US focus on humanitarian issues such as in Darfur southern Sudan, demanding instead that the US "act on its rising national interests on the continent". Those interests? The CFR lists oil and gas as No 1; growing competition with China (closely related to No 1) as No 2.
F William Engdahl is author of the book A Century of War: Anglo-American Oil Politics and the New World Order (Pluto Press Ltd). He has a soon-to-be published book on genetically modified organisms titled Seeds of Destruction: The Hidden Political Agenda Behind GMO. He may be contacted through his website, http://www.engdahl.oilgeopolitics.net.
Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing.
http://atimes.com/atimes/Global_Economy/HF10Dj01.html
Rebels blow up oil pipelines in Assam
Sat Jun 10, 2006
GUWAHATI, India (Reuters) - Suspected separatist guerrillas in India's northeastern state of Assam triggered four explosions, blowing up oil and gas pipelines, hours after a market-place bomb killed five people, police said on Saturday.
The militants blew up a pipeline carrying crude oil from a drilling site in the state's Duliajan area, and a gas pipeline in the town of Digboi, 400 km (250 miles) east of Guwahati, the state's main city.
They also hurled a grenade at a house of a local politician, hurting six people, including two children, officers said.
On Friday, five people were killed and more than 16 wounded when a bomb exploded in a crowded market in Guwahati.
Police blamed the outlawed United Liberation Front of Asom (ULFA), the most powerful rebel group among the northeast's many insurgencies, for the market bombing and for a series of grenade attacks on Thursday that wounded at least 20 people.
No group has claimed responsibility for the explosions.
The attacks followed shortly after an announcement that a third round of talks between New Delhi and representatives of the ULFA would be held on June 22.
"We are very much sure the ULFA militants are carrying out these attacks. We have enough evidence to prove it," said Khagen Sharma, a senior police officer in Guwahati.
"Perhaps the ULFA wants to prove it is still a force to reckon with ahead of the talks," Sharma said.
The group has fought a war for the secession of Assam from India for more than 25 years, accusing New Delhi of neglecting the state's economy and taking its rich natural resources. The region is primarily known for its tea and oil industries.
Officials of state-run Oil India Limited (OIL) said engineers had been sent to repair the damaged pipelines and that supplies had not been hit.
http://today.reuters.com/news/newsArticle.aspx?type=worldNews&storyID=2006-06-10T065935Z_01_DEL7...
Iran says may deliver own atomic incentives package
(Reuters) By Christian Oliver - 10 June 2006
TEHERAN - Iran may send its own nuclear package in response to proposed incentives agreed by six world powers that seek to persuade Teheran to stop its atomic fuel work, Foreign Minister Manouchehr Mottaki said on Saturday.
Mottaki did not specify what changes to the package Iran might seek, but Teheran has repeatedly rejected the crux of the proposal -- that it should give up enriching uranium.
“We hope that shuttle diplomacy will lead to a genuine proposal from the Islamic Republic that could possibly be sent to European counterparts as an amendment or a counter-package and that will be assessed carefully by the Europeans,” Mottaki was quoted as saying by the official IRNA news agency.
Iran’s chief nuclear negotiator Ali Larijani has complained about the incentives’ “ambiguities”.
Iran has been referred to the UN Security Council where it could face sanctions, after failing to convince the international community that its atomic scientists are seeking to build power stations, not weapons.
The United States, France, Germany, Britain, Russia and China have agreed a set of incentives for Iran on the condition that it stops making nuclear fuel, something Teheran has said it will never do.
Among the incentives, which Western diplomats say include offers of a light-water reactor and a facility for storing atomic fuel, is a US offer to join the European Union’s direct talks with Iran.
Analysts see the proposals as a way of giving Iran a last chance before Western powers lobby for tough action against Iran at the UN Security Council.
US President George W. Bush on Friday said Iran had “weeks not months” to respond to the proposals and Austrian Chancellor Wolfgang Schuessel has said Iran has until next month’s Group of Eight (G8) summit to consider the offer.
But Mottaki told the Mehr news agency: “We have not defined a deadline for assessing the proposal”.
Although Mottaki’s remarks on a counter-offer are an indication of Iranian dissatisfaction with the deal, the last word on nuclear matters does not lie with the foreign ministry.
Supreme Leader Ayatollah Ali Khamenei has entrusted nuclear matters to the Supreme National Security Council and appointed Larijani as chief negotiator.
Larijani arrived in Egypt on Saturday to hold atomic talks with Egypt’s foreign minister and meet Arab League Secretary-General Amr Moussa. Iran has long been striving to try to persuade nervous Arab neighbours that its ambitions are peaceful.
http://today.reuters.com/news/newsArticle.aspx?type=worldNews&storyID=2006-06-10T113710Z_01_L134....
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