IEA: Oil Outlook

IEA recently came out with their oil outlook. They provide two scenarios. One is the New Policies Scenario and the other is the Sustainable Development Scenario. The New Policies Scenario "reflects all government policies that are already in place as well as those that have been announced." The Sustainable Development Scenario "is fully aligned with the Paris Agreement's goal."

It should be noted that IEA states that these scenarios are not forecasts. They also appear to differ from what they just wrote in early October (IEA and Reuters) where they seem to imply that demand growth will continue until 2050. Calling them scenarios makes sense as they're based on governments enforcing current policies as well as implementing new policies. Considering the current protests in France around rising fuel prices, the IEA is probably correct in going with the word scenarios.

Libya: various sides playing nice?

Just a high level introduction to Libya:

Libyan National Army (LNA) controls Eastern Libya. They are in Benghazi and are led by General Khalifa Haftar. They are backed by Egypt, France and Russia.

Government of National Accord (GNA) controls Western Libya and is based out of Tripoli. The Prime Minister is Fayez al-Serraj. That government is backed by the UN.

Okay:

In early October, I wrote this:

Voice of America looks into this difference between France and Italy. Why are there conflicts?

1. Italy believes that Libya is in their "sphere of influence" and are not pleased that France both started the war to over throw Gaddafi and is also attempting to come to a peaceful resolution without consulting Italy.

2. France believes that Italy's backing of certain militias was not the correct policy (a militia that the article doesn't name, but is located in the city of Misrata, which is east of Tripoli).

Interestingly, there was a recent conference in Palmero, Italy. The main goal of this conference was to get discussions going between the LNA and GNA, but perhaps this conference was also an olive branch attempt between Italy and France? Though written prior to the conference, Arab News wrote:

German Chancellor Angela Merkel is among foreign leaders slated to attend, while the US, Russia and France have also promised to send high-level representatives, Moavero said. 

BlackRock: Big Oil Investments

Reuters has an article based on research from Alastair Bishop who is the director and portfolio manager in BlackRock's natural resources team.

One interesting quote from the article:

Oil and gas giants such as Royal Dutch Shell (RDSa.AS), Chevron (CVX.N) and BP (BP.L) are generating as much cash at today’s oil prices of around $70 a barrel as they did in 2014, before crude spiraled down from over $100 a barrel to lows of below $30 a barrel.

Oil, at the time of this article, was at least $30 cheaper, but cash flow was coming in like it used to be $100 plus. That's some significant cost cutting.

Sweden Election Update: Failed First Attempt of a Potential Four Tries

As a quick repeat of events: Sweden is currently attempting to form a government due to an inconclusive election. To form a government, a party (or group of parties) needs 175 votes. A minority government can form if other parties allow it. As mentioned in prior blogs, there are 2 main blocks of parties: the centre-left and the Alliance. There is also the far-right Sweden Democrats.

There have been a couple informal attempts to form a government.

And just to list out the major players/facts:

Swedish parliament speaker: Andreas Norlén
Leader of the centre-right Alliance (Moderate party): Ulf Kristersson
Past prime minister though still caretaker of the government (centre-left bloc): Stefan Löfven
Sweden Democrats leader (far right political group): Jimmie Åkesson
Centre Party leader: Annie Lööf

Centre-left bloc parties (144 total seats):

Social Democrats (100 seats)
Left Party (28)
Green Party (16)

Alliance parties (143 total seats):

Moderates (70)
Centre Party (31)
Christian Democrats (22)
Liberals (20)

Sweden Democrats (62)

Okay . . .

The centre-right Alliance, led by Ulf Kristersson of the Moderate party, was given the first official attempt to form a government. They failed to form a government last week (Wednesday, Nov 7th). This was the first attempt out of a possible four attempts before a new election is required.

Goldman Sachs: Oil Shortage in the 2020s

The International Energy Agency (IEA) and Wood Mackenzie have both warned that the 2020s might see dramatic oil shortages due to a lack of investments in exploration. Now it is Goldman Sachs' turn to raise the alarm.

The general argument was that oil majors simply weren't investing enough money in oil exploration. Wood Mackenzie argued that there is plenty of free cash flow out there, $160 bn p.a. They argued that the money is instead being returned to investors.

Sweden Election Update

As a quick repeat of events: Sweden is currently attempting to form a government due to an inconclusive election. To form a government, a party (or group of parties) needs 175 votes. A minority government can form if other parties allow it. As mentioned in prior blogs, there are 2 main blocks of parties: the centre-left and the Alliance. There is also the far-right Sweden Democrats. There was already one attempt to form a government via the Alliance. The centre-left was then given the opportunity to form a government, which also failed.

And just to list out the major players/facts:

Swedish parliament speaker: Andreas Norlén

Leader of the centre-right Alliance (Moderate party): Ulf Kristersson

Past prime minister though still caretaker of the government (centre-left bloc): Stefan Löfven

Sweden Democrats leader (far right political group): Jimmie Åkesson


Centre-left bloc parties (144 total seats):

Social Democrats (100 seats)
Left Party (28)
Green Party (16)

Alliance parties (143 total seats):

Moderates (70)
Centre Party (31)
Christian Democrats (22)
Liberals (20)

Sweden Democrats (62)

Okay . . .

Part 2: Mosul, Iraq and ISIS, Sunni, Shiite

It's been awhile since I last wrote about Mosul/Iraq. I was curious what might come across the news in terms of Sunni and Shiite relations (Mosul is largely Sunni while Baghdad is Shiite). In Part 1 of this 2 part blog series, I did find an interesting article from Foreign Policy on ex-ISIS members joining the Shiite militia group, PMF.   

Though some ex-ISIS have joined up with the PMF. There are still ISIS attacks around Mosul. This Part 2 looks at some of the articles that discuss recent ISIS events around Mosul.

Al Jazeera had this snippet of news:

At least six people have been killed and 30 others wounded in a car bomb blast south of Mosul, police and medical sources said. A vehicle packed with explosives was parked near a restaurant and a crowded market area in the northern Iraqi town of Qayyara, police said on Tuesday.

Sweden: Social Democrats fail to form a government

As a quick repeat of events: Sweden is currently attempting to form a government. To form a government, a party (or group of parties) needs 175 votes. A minority government can form if other parties allow it. As mentioned in prior blogs, there are 2 main blocks of parties: the centre-left and the Alliance. There is also the far-right Sweden Democrats. There was already one attempt to form a government via the Alliance. The centre-left was then given the opportunity to form a government.

 Via Politico (Oct 29) we learn this attempt also failed:

Swedish Social Democrat leader Stefan Löfven said Monday he has failed to form a new government, leaving no clear candidate for prime minister nearly two months after an inconclusive election . . . Löfven told reporters that conversations with other party leaders have been constructive, but had not led to anything concrete, according to Dagens Nyheter.

The Express UK (Oct 30) reported:

Parliament speaker Mr Norlén has now invited all four parties - the Social Democrats, Moderates, Sweden Democrats led by Jimmie Åkesson and Centre led by Annie Lööf - for joint talks to look at which alternatives can be explored further or excluded completely.

The Express UK (Oct 31) reported:

Mr Löfven said: “If the Social Democrats are going to a part of the new government it will be with me as Prime Minister.”

Yesterday, Parliamentary Speaker Andreas Norlén met with the centre-right bloc’s parties as well as the Social Democrats and the Green Party to discuss four government alternatives.

New Europe had these tidbits:

The leader of the Sweden Democrats, Jimmie Akesson, responded positively to the news that the country was likely headed back to the polls, claiming it would bolster support for his party. 

The current standoff is the longest Sweden has ever had to wait to form a government.

Essentially, Stefan Löfven and his centre-left coalition failed to form a government. The Express UK mentioned that the Parliament speaker would invite the 4 parties that won the most seats in Parliament, which would included the far-right Sweden Democrats. The Express UK later reported that the discussion occurred between the speaker and the two major blocks, which excluded the Sweden Democrats. Either the Express UK didn't have their facts straight or there was pressure put on the speaker to exclude the Sweden Democrats. 

The Sweden Democrats, at least publicly, wants another vote to help increase their vote tally. I wonder if Swedes (tired of this being the longer standoff ever to form a government) might actually switch away from the Sweden Democrats in order to give one of the two major blocks a majority. 

The Social Democrats is also showing some confidence in public when Stefan Löfven declared that his party would only join a coalition if he was made the Prime Minister. 

Both probably have polls that indicate how the next election might go. One or both is faking confidence.   

As of Oct 31st, I did not read anything where the speaker gave another party (the Centre or Green Party) the opportunity to attempt to form a government.

Part 1: Mosul, Iraq and ISIS, Sunni, Shiite

It's been awhile since I last wrote about Mosul/Iraq. I was curious what might come across the news in terms of Sunni and Shiite relations (Mosul is largely Sunni while Baghdad is Shiite). I didn't necessarily find a lot in a quick sweep of headlines.

However, I did find this one article via Foreign Policy that deals with the ISIS, Sunni and Shiite situation. The analysis deals with the Popular Mobilization Forces (PMF). The PMF is a group of Shiite militias that did a lot of the fighting to free Mosul from ISIS. They also have some Iranian ties.

Today, it is in charge of security in some of the towns the Islamic State used to command, and it constitutes a major political force in the country. In the most recent national election, for example, a conglomeration of PMF groups called the Fatah Alliance won 48 seats in the 329-seat Iraqi parliament.