08/28/15
Pro UN Coverage

Paying the Media for Pro-U.N. Coverage

By: Cliff Kincaid
Accuracy in Media

A CNN story blared, “The American stock market has surrendered a stunning $2.1 trillion of value in just the last six days of market chaos.” The ups and downs of the stock market have been seized upon by those leading a global campaign to steal trillions of dollars from the American people in the name of “sustainable development.”

One aspect of the campaign is a so-called “financial transaction tax,” endorsed by socialist and presidential candidate Bernie Sanders (I-VT), which would even affect the stock trades of small investors. The proposal has a global component.

However, the odds are that you will only be treated to positive coverage of this unfolding scheme to “redistribute the wealth” on a global basis. George Russell of Fox News broke the story of how a branch of media giant Thomson Reuters and the United Nations Foundation are training journalists and paying for stories to “popularize” the U.N.-sponsored Sustainable Development Goals and make them attractive to news consumers.

The Sustainable Development Goals (SDGs) are outlined in the U.N. report, “Transforming our world: the 2030 Agenda for Sustainable Development,” a manifesto to be adopted by the nations meeting at the United Nations Headquarters in New York from September 25 to 27, as the global organization celebrates its 70th anniversary.

The SDGs, such as “End poverty in all its forms everywhere,” sound positive. However, in reality, the concept of “sustainable development” is a Marxist scheme that researcher Michael Hichborn of the Lepanto Institute calls “a United Nations plan for the creation of a global socialist utopia thinly disguised as a poverty reduction program.”

Thomson-Reuters says, “The intensive training program aims to provide professionals from 33 countries with information, tools and strategies to understand the complex issues surrounding the next set of UN global development goals. The program will enable reporters, editors and spokespeople to better understand, report and communicate around some of the issues related to two crucial upcoming UN conferences: the UN Summit in New York in September that will see the adoption of the new Global Goals, and the UN Climate Change Conference in December in Paris, which is aimed at reaching a universal climate agreement.”

Marta Machado, who’s in charge of the Thomson-Reuters initiative, has worked for the Muslim Brotherhood channel, Al Jazeera, and CNN.

The United Nations Foundation, started by CNN founder Ted Turner, claims the effort is designed to “increase, enhance and influence global communications and media reporting” on the campaign.

However, in a press release that carried the subheadline, “Why communications matter in 2015,” the United Nations Foundation said the campaign will include media training, financial grants and “a sustained surge in targeted digital media,” designed to “help increase the volume and animate a global public conversation about the new goals, creating the environment to help us achieve success by 2030” (emphasis added).

Hence, the coverage will be slanted in favor of the United Nations.

Another “partner” in the global media campaign on behalf of the U.N. is the Jynwel Foundation, described as the philanthropic initiative of Jynwel Capital, an international investment and advisory firm based in Hong Kong.

As this campaign unfolds, it is a virtual certainty that the real purpose of the SDGs—to punish Americans and other “rich” people—will be carefully concealed.

As amazing as it seems, a report on foreign aid from the World Bank and the International Monetary Fund (IMF) is actually titled, “From Billions to Trillions: Transforming Development Finance.” A United Nations General Assembly report, dated August 14, 2015, calls for “several trillion dollars per year” to be spent to implement “sustainable development” on a global level.

But don’t call it theft; call it “sharing.” Indeed, a report titled, “Financing the Global Sharing Economy,” proposes global taxes on financial transactions, energy and other measures to bring in over $2.8 trillion. The founder of Share the World’s Resources (STWR), Mohammed Mesbahi, has outlined a “strategy for world transformation” that condemns “the materialistic and self-seeking idea of the American Dream.”

In order to acquire these resources, new taxes on the national and global level are being pushed in the name of stabilizing the stock market.

After the Dow Jones Industrial Average plummeted more than 1,000 points at the open on Monday, the “progressives” in favor of financial transaction taxes went into action. James Henry, senior fellow at the Columbia University Center for Sustainable International Investment, was quoted as saying the stock turbulence is “a great example of why we need a Financial Transaction Tax,” a proposal that he says would raise hundreds of billions of dollars.

Almost on cue, socialist Senator Bernie Sanders (I-VT) endorsed the idea. Sanders, who backs a 90 percent top marginal tax rate, says his proposed financial transaction tax will reduce “risky and unproductive high-speed trading and other forms of Wall Street speculation…” In order to make it attractive, he says the proceeds “would be used to provide debt-free public college education.”

Jared Bernstein, the economic adviser to Vice President Joseph R. Biden Jr. from 2009 to 2011, says in a New York Times column that Sanders is right. “A financial transaction tax is a smart, fair way to raise urgently needed revenues while reducing unnecessary trading that makes our markets more volatile,” he wrote.

The council of the Socialist International convened on July 6 and 7 at the United Nations Headquarters in New York, and endorsed the Millennium Development Goals and the “post-2015 development agenda.”

Sanders is reported to be a member of the Democratic Socialists of America, the U.S. affiliate of the SI.

Such a tax could be applied on a global basis as well. Steven Solomon, a former staff reporter at Forbes, says in his book, The Confidence Game, that a global financial transactions tax “might net some $13 trillion a year…”

Calls for global taxes and more foreign aid are not new. The difference this time around is that the Vatican has endorsed the SDGs. Archbishop Bernardito Auza, Apostolic Nuncio and Permanent Observer of the Holy See to the United Nations, gave a formal statement to the world body endorsing the “sustainable development” agenda.

Pope Francis will formally address the United Nations General Assembly in New York City on Thursday, September 25.

08/27/15
Illegal Aliens

The Invaders: A Parable

By: Lloyd Marcus

Illegal Aliens

Pulling into our driveway after a relaxing month long cruise, my wife Mary yelled, “What the?” Mexican flags, shirtless heavily tattooed men, barefoot children, women (many pregnant) old cars, discarded beer cans and trash were all over our property. I recruited my Spanish speaking neighbor. He yelled over the blaring Mexican music expressing my outrage to the group’s leader. The leader told me to go “f” myself. He said they have a right to a better life.

The invaders had an insane tangle of extension cords plugged into my electrical outlets. Sinking into the mud of my once beautiful lawn, I called the police. Sheriff Bob showed up to inform me that the mayor decreed ours a sanctuary community. He also conveyed the mayor’s zero tolerance for my hateful racist attitude.

Code enforcement cited me for various violations. I was ordered to clean up my property, add bathroom facilities and upgrade my electrical power to accommodate the daily influx of new residents.

Mary yelled from our bedroom, “Oh, my gosh!” Her jewelry including her 30th wedding anniversary diamond earrings, was gone.

A neighbor updated me on our community’s crisis. Beloved elderly, Mr Ben, was beaten and murdered, eight students were raped, numerous neighbors were assaulted and several homes were burglarized. Remarkably, not a word of the crime-wave was mentioned in our newspaper. Clearly, the mayor was behind the media blackout.

As a matter of fact, Community Times reporters flooded us with articles praising the invaders and our loving mayor for welcoming these saintly souls seeking a better life. Me and fellow neighbors who opposed the invasion and complained about the cost were branded haters, selfish and racists. The mayor made us owners responsible for providing food, health-care and education for the invaders occupying our properties.

Widowed Miss Shirley, the community gossip, gave Mary the scoop. She reported to Mary that many of the invaders worked for wealthy contributors to the mayor’s reelection campaign. The invaders were paid peanuts to work as domestics, janitors, laborers and maintaining properties.

My feisty Irish wife said, “One thing for sure, the mayor and his rich pals don’t have to worry about their estates being invaded. Their homes are protected behind 12 foot fences armed with barbwire, electric and cameras. Meanwhile, we’re forced to be their invader’s welcome wagon!”

Folks, the above tale is fiction; a parable I wrote years ago illustrating illegal immigration. I was stunned that so many readers thought my outrageous tale was true; a sad commentary on the insanity we have come to expect from government.

Both political parties have a vested interest in supporting the invasion. Big business gets cheap labor. Democrats have blacks on the path to aborting themselves into extinction. http://bit.ly/1DBeZ9E Illegals offer Democrats’ a fresh crop of future voters http://bit.ly/1U6Cw5w; an underclass unskilled, uneducated and dependent on government.

Insidiously, both parties and the mainstream media prey upon the goodness of the American people. Anyone opposing the invasion is branded racist, heartless and mean.

GOP presidential contender Jeb Bush calls embracing illegal aliens an “act of love.” http://bit.ly/1KxONuA Rush Limbaugh says this is not immigration. We are being invaded. http://bit.ly/1EFg2Bp

For several years, I was honored to sing my original, “Celebrate America” at U.S. Naturalization Ceremonies in Maryland. I took pride knowing my song was the first thousands heard as new Americans after taking their oath of allegiance. Every ceremony was electric, the hall radiating with emotion and excitement; tears flowing down countless faces. Unbelievably, Obama decreed that new applicants will no longer be required to pledge their allegiance. http://bit.ly/1h3olBy

A moving memorable scene. In his 80’s or 90s, family members raised the gentlemen from his wheelchair to his feet. A grandchild held up his right hand. His entire family was tearful as he recited the oath. Folks, these people truly wanted to be Americans. They studied, passed the test and were anxious to assimilate and contribute. After reciting their oath and hearing the emcee say, “Congratulations”, the hall always erupted in applause and cheers of elation.

Obama refuses to obey federal immigration law. http://bit.ly/1I2qkf0 Ordered to break the law, border security allows everyone to enter, including gang members, rapists and murderers. http://bit.ly/1LqIqPE

Obama is endangering and devastating American families, loved ones raped and murdered by invaders. http://bit.ly/1h3WqRX Then, Obama showers the invaders with welfare and government checks. Yes, government checks. http://washex.am/1NMcdQ3

Under-reported (hidden) is the epidemic of strange diseases infecting our kids because Obama forced public schools to take-in invader’s children. http://bit.ly/1EbK853

Obama rolling out the red carpet welcome-mat to invaders is a huge slap in the face to legal new American citizens and those respecting our laws following the legal immigration process.

As practically every Obama policy, his amnesty for illegals is another self-serving evil anti-American agenda item disguised as love. Thank God a few GOP presidential contenders have the backbone to firmly saying, “No!”

Lloyd Marcus, The Unhyphenated American
Chairman, Conservative Campaign Committee

08/27/15
Obamaphone

The Email Issue Goes Beyond Just Hillary Clinton

By Frank Salvato

As scandal surrounding Hillary Clinton’s illegal use of unsecured email servers to access classified information during her time as US Secretary of State continues to unravel her presidential aspirations, a more comprehensive overview of the many email issues related to the Obama Administration presents a more sinister possibility. From the State Department to the Internal Revenue Service, the Environmental Protection Agency to the White House Office of Science & Technology Policy to the White House itself, everywhere you turn in the Obama Administration there has been an issue with high-ranking personnel using alternative email accounts and/or servers for government business and then refusing access to those communications to oversight authority.

In 2010, President Barack Obama, speaking in Elyria, Ohio, bragged,

“We have put in place the toughest ethics laws and toughest transparency rules of any administration in history…in history! And by the way, this is the first administration since the founding of the country where all of you can find out who visits the White House. First time in history! And that’s just one example.”

In fact, Mr. Obama’s claim to open visitor’s logs was first trumpeted in 2009. It sounded good, like his claim that his was the most transparent administration in history. Alas, as usual, what sounds good during his “speechifying” never quite pans out to be the truth. The Obama Administration actually vetted which visitors to include on those “transparent” visitor’s logs and in 2013 pulled the logs from public access completely during its budget battle with Congress saying, “Due to Congress’s failure to pass legislation to fund the government, the information on this web site may not be up to date,” the placeholder on the visitor’s log page reading, “This dataset is currently private.”

But the visitor’s log duplicity pales in comparison to the administration’s use of alternative email accounts and servers for official communication where the claim of being the most transparent administration in American history is concerned. In fact, if you examine the many instances of the abuse of email communications protocol a pattern is evidenced; a pattern that serves plausible deniability and political opportunity, while denying transparency, accountability and oversight.

The instance most in the public eye is the use of – and subsequently the cleansing of – Hillary Clinton’s personal email server during her time as Secretary of State. This attention is only awarded by the media because she is a candidate for the presidency. Many in media didn’t give much attention to the fact she was using a private email server when she was corresponding with aides, States Department personnel and the White House before, during and after the assassination of a sitting US ambassador and his security team in Benghazi, Libya.

I won’t even get into the disingenuous manipulation of talking points memos that circulated from White House Communications Adviser Ben Rhodes about the cause of the Benghazi attacks.

But Mrs. Clinton isn’t the only high-ranking State Department official who has used a personal email account to perform official US government business. Caroline Kennedy, US ambassador to Japan, has been cited by the State Department’s Inspector General – as has the entirety of her staff at that embassy location – for using personal email accounts to receive and transmit communications regarding official business.

CNN reported:

“Senior embassy staff, including the ambassador, used personal email accounts to send and receive messages containing official business…In addition, (investigators) identified instances where emails labeled sensitive but unclassified were sent from, or received by, personal email accounts…The watchdog report said that Kennedy’s practices were against State Department policy and put the agency at risk.”

Then there is the issue of Environmental Protection Agency senior staff – both during Lisa Jackson’s tenure and Gina McCarthy’s – using email aliases and emails from those alias accounts being destroyed in direct violation of federal records preservation policies. Breitbart.com describes the EPA’s goal thusly:

“The point of this scheme was to evade public accountability, to conduct official government business under the table, outside of the public eye. When Congress and others asked for [senior officials’] EPA correspondence and email, the [alias] e-mails would fall outside that request and, eventually, be destroyed allowing official EPA business to be conducted secretly. That falls well short of conducting business in the open and in a transparent fashion. It also falls well short of the standards required by federal law.”

Dovetailing on the EPA email malfeasance is the refusal of John Holdren to honor a FOIA request relating to policy emails he maintained on the private servers of his former employer, the high-pressure eco-zealot group Woods Hole Research Center, as he sits as the director of the White House Office of Science & Technology Policy. Holdren, you may recall, is a man-made “global warming” believer with a penchant for smearing scientists who disagree with him. About the OSTP emails, the Competitive Enterprise Institute’s senior attorney, Hans Bader, writes:

“The use of such non-official accounts for agency business frustrates federal open-government laws, and undermines government accountability, since such accounts are generally not searched in response to FOIA or congressional oversight requests seeking work-related communications or agency records. Moreover, the use of email accounts at a former employer that lobbies the federal government gives such pressure groups direct access to and control over public records, including highly sensitive information.”

But the most damning instance of unethical and criminal abuse of email correspondence lies with Lois Lerner, the former director of the Exempt Organizations Unit of the Internal Revenue Service. Not only did Ms. Lerner conspire with other IRS operatives to marginalize the First Amendment free speech rights – as well as the guaranteed right to redress of government – of TEA Party and other Conservative organization members, she attempted to conceal and destroy any and all email evidence that proved her criminal acts. More recent revelations indicate that Ms. Lerner not only had contact with White House policy adviser Jeanne Lambrew that served to collude about Conservative targets, but that she, too, like her counterparts at the EPA, used alias emails to avoid detection by oversight authorities.

So, while the country remains rightfully obsessed with the Hillary Clinton email scandal (I prefer to call her actions “crimes”), there appears, to any honest broker, to be evidence pointing to a systemic issue with alternative communications and transparency in the Obama Administration. This evidence – a chronicle of criminal and unethical acts from the State Department to the Environmental Protection Agency to the White House Office of Science & Technology Policy to the Internal Revenue Service and the White House itself – must serve as proof of a pattern establishing an early effort by the Obama Administration to circumvent the legislated communications and information sharing protocol in federal government in an effort to control the informational narrative for political and ideological reasons. The evidence is overwhelming and, by virtue of the pattern’s existence, proves a conscious mandate from the highest levels.

What we have here, if you look at the evidence before you, is proof of a concerted conspiracy to deceive entities that execute governmental oversight, from the Inspector Generals of affected agencies all the way to the hall of Congress. What we have here is a direct attack by the Executive Branch of the United States on the authorities, rights and privileges of the co-equal branches of government. What we have here is a direct attack on the sovereign rights of the American people.

Yes, the emails scandals being exposed today are bigger than Watergate. Now, what are we going to do about it?

Frank Salvato is the Executive Director of BasicsProject.org a grassroots, non-partisan, research and education initiative focusing on Constitutional Literacy, and internal and external threats facing Western Civilization. His writing has been recognized by the US House International Relations Committee and the Japan Center for Conflict Prevention. His opinion and analysis have been published by The American Enterprise Institute, The Washington Times, The Jewish World Review, Accuracy in Media, Human Events, Townhall.com and are syndicated nationally. Mr. Salvato has appeared on The O’Reilly Factor on FOX News Channel, and is the author of six books examining Islamofascism and Progressivism, including “Understanding the Threat of Radical Islam”. Mr. Salvato’s personal writing can be found at FrankJSalvato.com.

08/27/15
ISIS

Officials Distorting Islamic State Analysis?

Hat Tip: BB

08/27/15
Weasel Statuette of Shame

Our Weasel Of The Week! – 08/27/15

The Watcher’s Council

Yes, once again, It’s time to present this week’s statuette of shame, The Golden Weasel!!

Every Tuesday, the Council nominates some of the slimiest, most despicable characters in public life for some deed of evil, cowardice or corruption they’ve performed. Then we vote to single out one particular Weasel for special mention, to whom we award the statuette of shame, our special, 100% plastic Golden Weasel. This week’s nominees were particularly slimy and despicable, but the votes are in and we have our winner… the envelope please…


NFL Hall Of Famer And Criminal Behavior Adviser Cris Carter!

Puma By Design: My WOTW nomination this week goes to NFL Hall of Famer Cris Carter for remarks made during a 2014 speech t the NFL Rookie Symposium. Carter along with Warren Sapp imparted a little friendly advice to rookies on how “to get around” getting in trouble.

“Y’all not gonna all do the right stuff. I gotta teach yall how to get around all this stuff too. If you gonna have a crew, one of them fools got to know he going to jail…I let my own boys know … y’all want to keep rolling like this, Then I need to know who’s going to be the fall guy, who’s going to be driving. Y’all not going to do all the right stuff now. I got to teach y’all how to get around all this stuff.“

Beating the message like a drum, Carter repeats “find a fall guy” “fool” Translation: Sucker.

One year later, the cat is out of the bag and the NFL in a statement is distancing itself from Carter’s remarks:

“This was an unfortunate and inappropriate comment made by Cris Carter during the 2014 NFC rookie symposium,” the NFL said. “The comment was not representative of the message of the symposium or any other league program. The league’s player engagement staff immediately expressed concern about the comment to Cris. The comment was not repeated in the 2014 AFC session or this year’s symposium.”

“Unfortunate” “inappropriate” “not representative of the message or the symposium.” Whom are they kidding? At a time when NFL players are getting into trouble for everything from drugs to rape to domestic violence to murder, Carter’s advice speaks volume as to the mentality of the NFL, from the top down to the players.

NFL players are a commodity and their brand must be protected at all costs so instead of demanding that the players straighten up and fly right, they tell them not to get caught and if it gets too hot in the kitchen, to find a fall guy amongst their leeches.

On Sunday, Carter walked his advice back to rookies on twitter (@criscarter80):

“Seeing that video has made me realize how wrong I was. I was brought there to educate young people and instead I gave them very bad advice. Every person should take responsibility for his own actions. I’m sorry and I truly regret what I said that day.”

Getting caught out there dead to right tends to have that effect.


Remember when athletes we3re actually admired and held up to young people as role models and examples of good character? Of course, even back then a lot of stuff went on behind the scenes, but they were careful to take steps to keep it that way and were very conscious that young America’s eyes were on them.

Today, many of them could simply care less. But that’s part of what being a weasel is all about. Here’s a little something for your trophy room, Cris…

Well, there it is.

Check back next Tuesday to see who next week’s nominees for Weasel of the Week are!

Make sure to tune in every Monday for the Watcher’s Forum, and remember, every Wednesday, the Council has its weekly contest with the members nominating two posts each, one written by themselves and one written by someone from outside the group for consideration by the whole Council. The votes are cast by the Council and the results are posted on Friday morning.

It’s a weekly magazine of some of the best stuff written in the blogosphere and you won’t want to miss it… or any of the other fantabulous Watcher’s Council content.

And don’t forget to like us on Facebook and follow us on Twitter… ’cause we’re cool like that, y’know?

08/26/15
Ted Cruz

Ted Cruz On Changing The Policy Of Birthright Citizenship

Ted Cruz Not Happy With Question From Megyn Kelly, Says It’s What ‘Liberal Journalist’ Would Ask

08/26/15
Rush Limbaugh

RUSH: WE’RE BEING INVADED! This Is Not Immigration… These Are Refugees

08/26/15
Advisory System

EXCLUSIVE: RNC Trump-Cruz Advisory System

Doug Ross @ Journal

Incredibly informative illustration by our summer intern over, lo, these last seven years. I refer, of course, to @BiffSpackle.

If the Beltway establishment is freaking out, you know good things are happening.

08/26/15
Allen West

Allen West Blasts The Terms Of The Iran Nuclear Agreement

08/26/15
OilPrice.com

Saudis Could Face An Open Revolt At Next OPEC Meeting

OPEC next gathers December 4 in Vienna, just over a year since Saudi Oil Minister Ali Al-Naimi announced at the previous OPEC winter meeting the Saudi decision to let the oil market determine oil prices rather than to continue Saudi Arabia’s role of guarantor of $100+/bbl oil.

Despite the intense financial and economic pain this decision has inflicted on Saudi Arabia, its fellow OPEC members, and other oil producers, the Saudis have given no indication they plan to alter course. In fact, Saudis have downplayed the impact of lower prices on their country, asserting that the kingdom has the financial wherewithal to withstand lower oil prices.

Presumably swayed by Saudi equanimity, financial markets do not see the Saudis abandoning their current policy before, during, or after the upcoming OPEC meeting. CME Brent oil futures project continuity: as of August 18, 2015, CME Brent futures projected the price remaining below $60/bbl until June 2017. A CNBC poll of oil traders, analysts, and major fund investors, aired on CNBC August 17, showed 95 percent believing the Saudis will not alter course.

Are the futures market, CNBC’s oil traders, analysts, and major fund investors, and others, being lulled into an unjustified consensus?

The damage the Saudi decision has inflicted on Saudi Arabia itself provides reasons for the Saudis to change course.

Saudi Policy: OPEC-centric or Self-Serving?

Stresses within OPEC should add to the pressure on the Saudis to rethink their strategy. The Saudis sold their change to their fellow OPEC members as being in OPEC’s general interest. They asserted that the their traditional method of stabilizing the oil market, production cuts, would not work since non-OPEC producers would increase output; second, that “market” forces would reduce investment and therefore increase prices in the medium and longer term and ultimately benefit all OPEC members; and third, that any Saudi increase in output was aimed at defending its market share, not reducing theirs.

As the first anniversary of the Saudi decision approaches, it would be reasonable for OPEC outsiders–OPEC members, other than the Saudis and their Gulf Arab allies, Kuwait, UAE, and Qatar—to interpret Saudi policy shift as designed to serve Saudi interests and those of its Gulf Arab allies rather than their interests and those of OPEC in general.

“Market” forces include many components. A key component—perhaps the key component—is a country’s capability, at a minimum, to maintain output, and better yet, to increase output. Financial wherewithal is the foundation of this component. Saudi and Gulf Arab OPEC members’ foreign currency reserves and sovereign wealth funds (SWF) comprise approximately 78 percent of total OPEC member holdings, $2.73 trillion of $3.05 trillion.

As the following table shows, their advantage is particularly large on a per capita basis. Of the non-Saudi, non-Gulf Arab ally OPEC members, only Libyan per capita resources exceed the average. (The UAE includes data for three SWF funds only: Abu Dhabi Investment Authority ($773 billion), Abu Dhabi Investment Council ($110 billion), and Investment Corporation of Dubai ($183 billion)).


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Given the other budgetary demands on their oil revenues, $50/bbl or $60/bbl oil leaves these OPEC outsiders with little to invest in maintaining oil output, much less expanding output. Budgetary pressures and limited financial resources, for example, have forced the Iraqi government to request its foreign partners, BP in the Rumaila field and Exxon in the West Gurna-1 field, to reduce spending to cut 2015 investment by $500 million ($1.1 billion vs. $1.6 billion) and $1 billion ($2.5 billion to $3.5) respectively.

While all OPEC members, including Saudi Arabia, have suffered from the Saudi decision, they have not shared the pain equally. Saudi Arabia and its Gulf Arab allies, except Qatar, have increased output, while the output of other OPEC members, other than Iraq and Angola, has either flat-lined or decreased, compared to 2014:


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Given Saudi determination to defend its export markets, it is interesting that the percentage gain in their crude exports exceeded the percentage gain in crude output in 1H 2015, by 2.7 percentage points. For Iran, the only other OPEC country for which the IEA provides domestic demand data, the increase in exports, 0.7 percent, matched the increased domestic output.


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Interestingly, also, the Saudis increased their share of OPEC average daily output in the first half of 2015 over 2014 average daily volume—and their share of average daily global output. Their share of OPEC output increased to 26.6 percent in 1H 2015, from 26 percent on average in 2014, while their share of world output increased to 10.4 percent from 10.2 percent.

For the OPEC outsiders, this should be particularly distressing, since the increase in output likely deepened the decline in prices the Saudi decision to abandon its role as guarantor precipitated.

Both results continue trends seen since 2010. Saudi share of OPEC output increased three percentage points, from 23.6 percent in 2010 to 26.6 percent in 1H 2015. At the same time, the Saudi share of world output increased 1.1 percentage points, from 9.3 percent to 10.4 percent, during the same period; during the same period, OPEC output as a share of global output declined slightly, from 39.5 percent to 39.2 percent.


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In fact, over this period, Saudi Arabia and its Gulf Arab allies increased their total output 18.1 percent while the output from the other OPEC members decreased 5.4 percent. During this period, the Saudi and Gulf Arab share of global output was flat, declining only 0.1 percentage point, while the share of the other members declined 1.5 percentage points, from 16.7 percent to 15.2 percent.


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Impact on Non-OPEC Producers as Advertised?

In defense of their policy, the Saudis could point to IEA projections that show the rate of growth in output from major non-OPEC producers slowing substantially in 2016, particularly in North America, a major Saudi target, and Brazil:


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However, it is reasonable for the OPEC outsiders to question the actual efficacy of Saudi policy on non-OPEC producers and the benefit it will bring them. In both the United States and Russia, each of which produces roughly as much as Saudi Arabia, output increased in 2015 rather than decreasing, and will continue to increase in 2016 in the U.S.

The IEA projects Brazil’s output, despite Brazilian political turmoil, growing 6.45 percent in 2016. Moreover, Saudi policy, combined with the impact of U.S. and EU sanctions on Russia, led to the undesirable result for OPEC (and other oil exporters) that Russian exports have increased, from 7.21 million barrels/day in 2014 to 7.55 million barrels per day in 1H 2015, in part because as Russia’s economy contracted, reducing domestic crude demand to 3.47 MMbbls/day in 1H 2015 from 3.65 MMbbls/day, while crude output increased to 11.025 MMbbls/day from 10.86 MMbbls/day.

Moreover, any comfort the OPEC outsiders gain at best may be cold comfort. While the IEA projects surplus production will begin to recede in 2H 2016, they are suffering now (and in any case, it is a projection). As we have pointed out, RBC Capital’s fragile five, Algeria, Libya, Nigeria, Iraq and Venezuela, the pain is intense. Also, it is wealthy Saudi Arabia and its Gulf Arab allies and non-OPEC members, in particular the U.S., Canada, Mexico (foreign investment), and also Russia (Chinese investment), that will have the financial wherewithal to grow output to satisfy the 18 million barrel per day increase in demand that OPEC sees by 2040.

The December 2015 OPEC Meeting

Given the Saudi decision’s positive impact on their and their Gulf Arab allies’ relative position within OPEC and its negative impact on OPEC outsiders, it is possible, perhaps even likely, the Saudis will face an OPEC outsider revolt at the December 4 OPEC meeting.

The Saudis and their Gulf Arab allies would seem to have three possible approaches, should a revolt occur:

Reconciliation, as Saudi Arabia acquiesces in the wishes of OPEC’s weaker members to bring price increases forward through OPEC production cuts, Saudi Arabia bearing the brunt;

Separation, as the Saudis and their Gulf Arab allies ignore their fellow members’ entreaties and force them to wait for “market” forces to balance supply and demand; or

Divorce, as the Saudis and their Gulf Arab allies decide to exploit their financial wealth and go their own way, therefore forcing their fellow OPEC members, unable to finance their domestic oil industries, unwillingly to bear the brunt of global production cuts.

In October 2014, the Saudis began signaling their intention to abandon their role as guarantor. It is unlikely however, that whatever Saudi decision makers are now considering, they will show their hand in advance of the December meeting, since this would reduce pressure on the non-OPEC producers that the Saudis claim to be targeting, before necessary.

Source: http://oilprice.com/Energy/Crude-Oil/Saudis-Could-Face-An-Open-Revolt-At-Next-OPEC-Meeting.html

By Dalan McEndree for Oilprice.com