Drones, sanctions, contamination: supply surprises leave oil unfazed

By Ahmad Ghaddar and Noah Browning

LONDON (Reuters) – They should have started a bull run, but supply shocks that have rocked the oil industry this year have failed to deliver a sustained rise in crude prices.

Drone attacks crippled Saudi Aramco’s oil plants, U.S. oil sanctions knocked out exports from Iran and Venezuela, and massive contamination tainted Russian oil flows.

Yet, instead of sky-high prices, the market has been kept in check by a flood of oil from the U.S. fracking boom and worries about a global recession weighing on the demand outlook.

And there is unlikely to be a spike anytime soon, analysts and data indicate because high-tech industry understands better than ever just how replete their market is with oil.

“Between fears of peak oil demand, unlimited shale growth, a looming global recession and the possibility that millions of barrels of OPEC barrels (sanctioned or otherwise) could return to the market fairly quickly, there is no faith in the future,” said Amrita Sen, chief oil analyst at Energy Aspect.

The Organization of the Petroleum Exporting Countries, which includes Iran, Venezuela and its de facto leader Saudi Arabia, has continued to rein in supply this year but the group’s efforts have not delivered the hoped-for price surge.

Oil futures markets indicate that supply outages have not dealt a boost to prices as investors see the unexpected shocks to oil output will not massively dent overall supply.


The Sept. 14 attacks on Aramco sites knocked out around 5.7 million bpd of capacity from the world’s biggest oil exporter, nearly 6% of global oil supplies.

Despite the unprecedented damage, Saudi Arabia has swiftly restored its production capacity to 11.3 million barrels per day, just shy of its regular output, sources briefed on Aramco’s operations told Reuters.

Brent oil prices surged 15% in the wake of the attacks but have since lost most of their gains and are trading at around $62 a barrel.


While U.S. oil output continues to surge along with the productivity of existing wells, the increasingly sparse number of operating wells could eventually drag on output and provide a boost to prices.

“We think the outlook for U.S. supply growth is far too optimistic,” Mark Hume, portfolio manager at investment giant BlackRock’s Energy and Resources Income Trust.

“There’s a real chance of U.S. growth going to the downside and I think balances will be tighter than one might anticipate right now,” he added.


Another aspect that has softened the impact of supply shocks on oil prices is the wide availability of data which gives investors a much clearer view on the operations of the market.

BP chief executive Bob Dudley said this week that the reaction to the Saudi attacks was “sensible”.

“It says something about the market – there’s instantaneous data on storage levels which didn’t exist in the past,” he said.

Technology firms increasingly offer real-time data pinpointing storage levels in oil tanks, detecting if a refinery unit is operating using heat cameras and tracking ships.

“The data availability is a bit of a game-changer,” said Norbert Ruecker, head of economics at Swiss bank Julius Baer. “This speeds up what financial markets are all about.”

(Reporting by Ahmad Ghaddar and Noah Browning; Additional reporting by Dmitry Zhdannikov and Ron Bousso in London and Jessica Resnick-Ault in New York; Editing by Edmund Blair)

Suspected cholera cases in Yemen hit 1 million: Red Cross

A health worker reviews a list of patients admitted to a cholera treatment center in Sanaa, Yemen

DUBAI (Reuters) – The number of suspected cholera cases in Yemen has hit 1 million, the International Committee of the Red Cross said on Thursday, as war has left more than 80 percent of the population short of food, fuel, clean water and access to healthcare.

Yemen, one of the Arab world’s poorest countries, is in a proxy war between the Houthi armed movement, allied with Iran, and a U.S.-backed military coalition headed by Saudi Arabia.

The United Nations says it is suffering the world’s worst humanitarian crisis. The World Health Organization has recorded 2,219 deaths since the cholera epidemic began in April, with children accounting for nearly a third of infections.

Cholera, spread by food or water contaminated with human faeces, causes acute diarrhea and dehydration and can kill within hours if untreated. Yemen’s health system has virtually collapsed, with most health workers unpaid for months.

On Dec 3, the WHO said another wave of cholera could strike within months after the Saudi-led coalition closed air, land and sea access, cutting off fuel for hospitals and water pumps and aid supplies for starving children.

The ports were closed in retaliation for a missile fired from Yemen by the Houthis. On Wednesday, despite a fresh missile attack on Riyadh, Saudi Arabia said it would allow the Houthi-controled port of Hodeidah, vital for aid, to stay open for a month.

(Reporting by Sylvia Westall; Editing by Kevin Liffey)

FDA warns former Sun Pharma U.S. drug factory over quality concerns

The corporate logo of the U.S. Food and Drug Administration (FDA)

MUMBAI (Reuters) – The U.S. Food and Drug Administration has pulled up a former Sun Pharmaceutical drug factory for “knowingly” releasing 27 lots of the hypertension drug clonidine last year, despite proof that the raw materials used may have been contaminated.

This is one of a series of quality concerns tied to the Philadelphia, Pennsylvania factory that the FDA highlighted in an Aug. 15 “warning letter” issued to the site’s current owner, U.S. firm Frontida BioPharm Inc.

The plant was sold to Frontida in June by Sun, India’s No. 1 drugmaker, which said the move was “a part of its manufacturing consolidation in the U.S.”

Sun did not mention at the time that the FDA had inspected the plant a year earlier, between June 15 and July 17, 2015, or that it expressed serious concerns with its quality standards.

Details of the inspection were released in the warning letter posted on the FDA site this week. http://bit.ly/2bl9djf

Sun declined to comment on the FDA letter, while Frontida was not immediately reachable for comment on Friday.

India supplies more than 30 percent of the drugs sold in the United States, and Sun is one of several Indian companies that are under the FDA’s scanner for quality issues, after the agency increased the frequency of foreign inspections over the past two years.

At least five of Sun’s plants are barred from U.S. exports due to quality issues, and the company has said it is working on improving its quality systems to get back U.S. approval to supply from them.

The FDA letter is addressed to Frontida Chief Executive Sung Li, and does not mention Sun or any of its executives.

In the letter, the U.S. regulator also outlined “multiple discrepancies” that it said cast doubt on the accuracy of the quality-related records maintained at the factory.

In another observation, the FDA said that factory staff was aware by April 2015 that the chemical benzophenone had leached into some tablets of the hypertension drug felodipine from the ink and varnish on the container label, but the lots were not recalled until the FDA inspection in July 2015.

(Reporting by Zeba Siddiqui in Mumbai; Editing by Euan Rocha and Sunil Nair)

Oregon to release soil test results in pollution scare this week

PORTLAND, Ore. (Reuters) – Oregon officials this week will release test results on soil from neighborhoods near two Portland glass factories accused of spewing toxic metals into the air for years, a revelation that has led to a class-action suit and demands for more oversight.

The results of the testing could heighten suspicions from residents and environmental advocates that emissions of arsenic and cadmium from the two plants exposed residents to much higher levels of the heavy metals than have been told.

Miriam Rotkin-Ellman, a public health scientist with the Natural Resources Defense Council, said the scare demonstrates the need for closer federal oversight.

“Communities are left testing their soil, testing their children, testing their homes and saying, well, how come I see these contaminations?” she said. “That’s not how it should be.”

There is already ample evidence from tests conducted by the U.S. Forest Service of airborne contamination near the factories, as well as signs that the metals may have settled into the soil.

The Forest Service tests, conducted on moss growing on trees near one of the factories, found levels of arsenic 150 times higher and cadmium 50 times higher than Oregon safety benchmarks. Near the second factory, cadmium levels were found to be similarly elevated.

Long-term arsenic exposure is linked to skin cancer and cancers of the lung, bladder, and liver as well as skin color changes and nerve damage, according to information posted on the Oregon Health Authority website. Long-term cadmium exposure is linked to lung and prostate cancer, as well as kidney disease and fragile bones, according to the site.

The state has not received any reports of people being treated or hospitalized as a result of exposure to the metals released in emissions by the glass companies, according to Jonathan Modie, a spokesman for the Oregon Health Authority.

U.S. Senator Ron Wyden of Oregon, who lives near one of the hot spots, describes the situation in the state’s largest city as a public health emergency. He told Reuters on Friday that he had asked the Centers for Disease Control and the Environmental Protection Agency to provide “experts on the ground” when the soil tests are released to “help us get at the core facts.”

This comes after revelations in Flint, Michigan, that a switch in the city’s water source to save money corroded its aging pipes and released lead and other toxins into its drinking water. That crisis has emerged as a rallying point for Democrats as the U.S. presidential election approaches.

Even if the soil tests in Portland show low levels of the heavy metals, residents who live near the factories fear the exposure may be more widespread, extending beyond the hot spots that are being tested.

“This is just the tip of the iceberg,” said Kerry Ryan, a Portland resident who lives five blocks from one of the factories.

Ryan, who now has an 11-month-old daughter whom she is breastfeeding, said she is arranging to have herself tested for exposure to the metals.

According to the Oregon Health Authority’s website Q&A, arsenic and cadmium can be found in breast milk and may contribute to low birth weight.

Bullseye Glass Co officials did not return a call seeking comment. Officials with Uroboros Glass Studio declined to comment.

Last month, Oregon public health officials advised residents to stop eating vegetables grown in gardens within a half mile of the so-called pollution “hot spots,” or areas where the pollution appears to be concentrated.

On Thursday, about 50 residents mounted a protest in downtown Portland, chanting “clean air now” and delivering boxes of rotting produce harvested from their gardens to the state’s environmental quality offices.

Arsenic and cadmium contamination, confirmed by the Oregon Department of Environmental Quality, occurred near Bullseye Glass, located in a middle-class neighborhood near public schools and a city park.

Cadmium contamination was confirmed near Uroboros Glass, located in an industrial section of a residential neighborhood near the Willamette River.

Both plants have voluntarily halted the use of the metals, used to create color for stained glass, according to the state’s Department of Environmental Quality, which is conducting the soil tests that are set for release this week at the request of Gov. Kate Brown

Last week attorneys for seven residents filed a class action lawsuit against Bullseye, alleging the company was negligent and reckless in burning heavy metals without adequate pollution controls.

Bullseye was in compliance with state regulations under a loophole that Wyden called “the size of a lunar crater” during a press conference in February.

According to the Portland Oregonian newspaper, the firm Weitz & Luxenberg is also meeting with area residents. The firm is currently working with environmental activist Erin Brockovich to seek redress for residents whose health may have been harmed by a massive natural gas leak in Southern California.

(Additional reporting by Eric Johnson; Editing by Sara Catania, Steve Gorman and Diane Craft)

Flint Mayor Declares State of Emergency As Lead Seeps Into Water Supply

The new mayor of Flint, Michigan, declared a state of emergency earlier this week, the latest development in the embattled city’s ongoing battle with elevated levels of lead in its water.

Karen Weaver, who became mayor in November, said in a statement on the city’s website that she made the declaration to raise awareness that the water still isn’t safe to drink, almost two months after the city stopped taking problematic water from the Flint River and reverted to its old supplier, the city of Detroit. Weaver said Flint was experiencing “a man-made disaster.”

“It’s been going on for over a year now,” Weaver said in a televised interview on The Rachel Maddow Show. “We have problems with our infrastructure. We have children that have been damaged by this lead. They have permanent brain damage. We know that Flint is not in a position to bear this burden alone, and we are asking and looking for state and federal assistance. The only way we were going to have this happen was to declare a state of emergency.”

According to MLive.com, which covers news in Michigan, the problem started in April 2014. That’s when the city stopped taking water from Detroit and started taking water from the Flint River as it awaited the construction of a new pipeline to Lake Huron. City officials decided not to ink a short-term contract with Detroit, which gets water from the lake, and use the river instead.

But in her interview with Rachel Maddow, Weaver said that the river water was corrosive and damaged a protective part of the city’s pipes, allowing lead to leach out into the water supply. Michigan Radio reported that city and state officials continued to insist the water was safe, even as scientists from Virginia Tech found higher levels of lead in the city’s tap water. MLive.com reported the city finally issued a lead advisory in September 2015, 17 months after the switch.

The city reverted to Detroit’s water system in October, but the danger of lead exposure is still very much real. The problem is no longer with the water source, but Flint’s damaged pipes.

“We don’t want people to feel that because we’ve made the switch back to Detroit water that everything is fine now, because it’s not,” Weaver said in her interview with Maddow.

The World Health Organization, an arm of the United Nations, says that lead poisoning is particularly harmful to children. It’s known to damage nervous and reproductive systems, as well as cause high blood pressure and anemia. If enough lead gets into the blood of children, it can lead to irreversible consequences like learning disabilities, retardation and even death.

In September 2015, the day before the city issued the lead advisory, doctors from the Hurley Medical Center released a study that found that more of Flint’s children were displaying elevated levels of lead in their blood since the switch. The percentage of children with elevated lead levels went from 2.1 percent to 4 percent citywide, though it was as high as 6.3 percent in some areas.

Speaking to British newspaper The Guardian on Thursday, one of the doctors responsible for that study, Mona Hanna-Attisha, said up to 15 percent of children in certain parts of the city now have high levels of lead in their blood. Hanna-Attisha called the water situation “an emergency” and said it was “a disaster right here in Flint that is alarming and absolutely gut-wrenching.”

“We are assuming that the entire population of the city of Flint has been exposed, if you drank the water or cooked with the water,” Hanna-Attisha told the newspaper, noting that cooking with the water would actually concentrate the levels of lead. According to Flint’s website, the levels of lead “remain well above” federal safety standards for drinking water “in many homes.”

In her interview with Maddow, Weaver said some kids under the age of six have neurological damage, and the city would have to attempt to provide services to them and their families.

The city encourages residents to keep using water filters while it works on a long-term solution.

Study Finds Uranium Seeps into Two Major U.S. Aquifers

Researchers have found that about 2 million Americans in the Great Plains and central California are living close to sites that far exceed federal safety guidelines for uranium levels.

A recent study conducted by the University of Nebraska-Lincoln found uranium levels in the High Plains and Central Valley aquifers, two of the country’s most significant sources of drinking water and irrigation, are far above thresholds set forth by the Environmental Protection Agency.

The research showed that water in the High Plains aquifer, the largest in the United States, had uranium levels as high as 89 times the EPA-established standards. The water in California’s Central Valley aquifer, a source of irrigation for one of the country’s most important agricultural hubs, showed some uranium levels that were 180 times the guidelines set forth by the EPA.

Uranium is an element whose isotopes were famously used in the production of atomic bombs. Past studies have shown long-term exposure to water tainted by uranium can lead to high blood pressure and kidney damage, according to a news release accompanying the Nebraska study.

The researchers found the uranium contamination in most of the 275,000 water samples they collected was directly tied to nitrate, a more common water polluter that is found in chemical fertilizers and animal waste. The scientists say that nitrate interacts with the uranium that’s naturally present in the ground in a way that makes the material dissolve in groundwater.

About 78 percent of the contaminated sites had nitrates present, the study indicated. The researchers said the data indicated that the uranium levels weren’t predominantly the result of mining or any kind of nuclear fuel, but rather the reactions between nitrate and the element.

“It needs to be recognized that uranium is a widespread contaminant,” one of the Nebraska study’s researchers, Karrie Weber, said in a statement accompanying the research. “And we are creating this problem by producing a primary contaminant that leads to a secondary one.”

The researchers said that facilities to treat water can cost seven figures, which makes it hard for some smaller municipalities to buy them. And there are some people who receive their water from private wells and don’t tap into any kind of regulated municipal water system.

The Associated Press reported Monday that the uranium contamination has been so widely underreported that some people living in the affected areas didn’t even know it was an issue.

The news agency said it conducted its own tests on the private wells of five homes near Modesto, California, where officials spent $500,000 on upgrades to its water system that were designed to bring down uranium levels. The report indicated none of the homeowners knew uranium even had the potential to be a water pollutant, yet two of the five wells showed dangerous levels of it.

The High Plains aquifer supplies drinking and irrigation water to eight states from South Dakota to Texas, according to the Nebraska study. The Central Valley aquifer is a major water source for California and the state’s vital agriculture industry, which the state Department of Food and Agriculture said produces half of America’s domestically-grown fruits, nuts and vegetables. In all, the department said California growers and ranchers got $54 billion for last year’s products.

“When you start thinking about how much water is drawn from these aquifers, it’s substantial relative to anywhere else in the world,” Weber said in a statement. “These two aquifers are economically important — they play a significant role in feeding the nation — but they’re also important for health. What’s the point of having water if you can’t drink it or use it for irrigation?”

Lake Erie Water To Be Examined

In the aftermath of Toledo, Ohio and its 400,000 residents having to go without water for almost three days because of toxins created by algae in Lake Erie, officials are now investigating to see what they can do to help keep the water supply safe.

“This is not just one community issue, this is the whole lake,” said state Rep. Dave Hall.

Intensive chemical treatments had to be made to the Toledo water system and in Lake Erie to reduce the level of algae-created toxin in the water level.  While the toxin was not completely removed from the water, it was reduced to a level that is safe to drink.

Governor John Kasich, who had declared a state of emergency for three counties around Toledo as many communities had pulled water from the Toledo system, said that he would launch an investigation to see if the problem was really the algae blooms or if there were significant problems within the Toledo water system itself.

Some residents said they’re waiting to use the tap.

“I’m waiting for two or three days,” Aretha Howard, of Toledo, told FoxNews. “I have a pregnant daughter at home. She can’t drink this water.”

Water Ban Slowly Being Lifted In West Virginia

West Virginia officials announced late Monday they were going to start lifting the water ban for communities impacted by a massive chemical spill.

Governor Earl Ray Tomblin said that a “rolling lift” of the ban would take place to avoid having the water system overtaxed by everyone returning to the system at one time.  A mass return would also cause more water quality problems.

Up to 10,000 residents were allowed to use the water system Monday with an additional 25,000 on Tuesday.  Officials with West Virginia American Water said it could be a few more days before all customers could return to the system.

Customers were warned that while the water may continue to have an odd odor, it is safe for use in bathing, cooking and cleaning.

Health officials say only 14 people have been admitted to hospitals because of exposure to the tainted water and none are in serious condition.  In addition, the river has not seen a fish kill or animal deaths from the contamination.

West Virginians Frustrated As Chemical Contamination Issues Continue

It was a very long, hard weekend for hundreds of thousands of West Virginians still dealing with the massive chemical spill in the Elk River.

Residents say they have been taking bottled water and food to elderly neighbors and shut-ins as emergency services aren’t meeting the needs of their communities.

“They can’t get out,” Chris Laws, 42, of Marmet, a coal miner, told the Associated Press. “I’m keeping an eye on them. You got to watch out for your neighbors. They’re the ones who are going to watch out for you.”

State officials said Saturday that they now estimate 7,500 gallons of chemicals leaked from a tank at Freedom Industries.  They had previously told media sources that only 5,000 gallons had leaked from the tank.  They could not say how many gallons made it into the Elk River.

Residents of the capital city Charleston and surrounding towns are still being told not to use tap water for any purpose.

Chemical Leak Puts 300,000 West Virginians At Risk

A chemical spill in West Virginia’s Elk River has put 300,000 area residents at risk.

Federal officials are descending into the Charleston area to investigate the leak.   The chemical release has poisoned the water supplies for nine counties.

Schools and restaurants were forced to close and residents ordered by Governor Earl Ray Tomblin to not drink, bathe, cook or wash clothes using tap water because of the chemicals in the water.

The extent of the damage has not been able to be determined.

The chemical is a foaming agent used in the preparation of coal.  The leak at Freedom Industries somehow broke through a containment area and rushed into the river.  A spokesman for the West Virginia Department of Environmental Protection said that no more than 5,000 gallons of the chemical escaped into the water.

Officials could not say how long the advisory against using the water will be in effect.