natural gas prices crash, oil slips below $50, inventories down again as imports stay low, etal

we're going to start today by explaining what natural gas prices did this week, and to that avail we have a couple graphs that will illustrate what happened...as you should recall, we've picked up natural gas coverage over the past few weeks as prices started rising out of the depressed range they'd been in for nearly 2 years, as they rose more than 10% to a 21 month high three weeks ago, then added 5% more to that to hit a 22 month high the week after that, before falling 10% from their highs last week...prices the front month November contract continued to fall this week, dropping another 9%, until that contract expired on Wednesday afternoon...then, with the December contract price now being quoted as "the price of natural gas", that price then inched back up about 1% in each of the last two days of the week...to show how this transpired, we'll start with a graph of the expiring November contract for natural gas, as of Wednesday, October 26th:

the above graph shows the November contract price up til Wednesday for a million British thermal units (mmBTU) of natural gas at or contracted to be delivered to the Louisiana interstate natural gas pipeline interconnection known as the Henry Hub, which is the benchmark location for setting natural gas prices across the US...here we can see how the price of gas broke out of the prior range below $3 per mmBTU earlier this month, as it ran up to $3.341 per mmBTU on Thursday October 14th, as forecasts indicated above normal temperatures for the next two weeks and natural gas analysts wrote that there'd be a spike in natural gas power generation to meet the needs of above normal air conditioning use...however, by last week that story changed, as analysts advised that warmer weather would reduce consumption of gas for heating, and gas prices subsequently fell to $2.993 mmBTU by Friday of last week...as you see above, the price for that November contract then fell every day this week, dropping to $2.831 per mmBTU on Monday, to $2.774 on Tuesday, and finally to $2.731 per mmBTU on Wednesday, when exchange trading in gas for delivery in November expired...and judging by the pickup in volume on the last two days, we'd have to guess that a lot of those traders who bought gas at the top expecting a fall surge in air conditioning to soak up surplus gas supplies had to sell out of their positions at some fairly steep losses before the November contract went off the boards...

next we have a graph of natural gas prices at the close of trading on Thursday, October 27th, as the price now being quoted is for the December contract; the November gas contract is gone...notice the ticker symbol above the graph is NGZ16, representing trading for the December 2016 contract...note also that the labeling on the first graph above was NGX16, representing prices for the November 2016 contract...(for anyone interested, info and symbols for dozens of other natural gas futures contracts are here)

this Thursday graph now shows the December contract price for a million British thermal units (mmBTU) of natural gas at or contracted to be delivered to the Henry Hub in Louisiana...you'll notice the prior day's $2.731 per mmBTU price is now gone, as December natural gas closed Wednesday trading more than 30 cents higher at $3.046 per mmBtu, before increasing 3.2 cents on Thursday to finish at $3.068 per mmBtu, as the above graph shows...you'll also notice that the high for this December contract approached $3.54 per mmBtu on October 14th, roughly 20 cents higher than the highest price seen for natural gas in November...that prices are higher in the winter months is typical for natural gas, as that's when most utility users want to take delivery, so other things being equal, there's clearly money to be made by middlemen who store gas until winter...as of the end of trading on Friday, natural gas for January was trading at $3.287 per mmBtu, 18.2 cents higher than the $3.105 per mmBTU that natural gas for December closed the week at..

meanwhile, oil prices were also lower this week, dropping every day except Thursday, falling below $50 a barrel on Tuesday for the first time since October 4th, and generally trending lower from there for the rest of the week...after closing lower last week at $50.85 a barrel, U.S. crude prices briefly dipped below $50 per barrel on Monday afternoon, on news of the impending restart of Britain's North Sea Buzzard oilfield and word that Iraq wanted to be exempted from OPEC production cuts, but recovered to close Monday at $50.52 a barrel...prices then edged up early on Tuesday ahead of the release of American Petroleum Institute crude inventory data, but then fell more than 1% in the afternoon to close at a three week low of $49.96 a barrel as Iraq argued that their war against ISIS was a justification for their exclusion from the coordinated OPEC production cuts...oil prices then jumped more than $1 after noon on Wednesday, after the EIA reported a surprise draw from US crude stocks, but gave back most of those gains in the next three hours and as traders focused on the unraveling OPEC deal and an increase in US oil production, and ultimately closed lower at $49.18 a barrel...oil prices then rose on Thursday after it was reported that the Saudis and their Gulf allies told the Russians that they were willing to reduce their peak oil output by up to 4%, with prices ending the day at $49.72 a barrel...selling then reintensified on Friday after word came out that Iraq & Iran were both refusing to freeze their output, and oil went on to close at $48.70 a barrel, down nearly 4.3% for the week, the largest weekly loss since mid-September…

The Latest Oil Stats from the EIA

this week's oil data for the week ending October 21st from the US Energy Information Administration indicated that our oil imports remained near the depressed level of the prior week, when Hurricane Matthew was still active, while refinery utilization increased modestly from last week's 43 month lows, hence resulting in another small draw down of our oil supplies...however, we once again saw a large swing in the crude oil fudge factor that was needed to make the weekly U.S. Petroleum Balance Sheet (line 13) balance, as it swung to +368,000 barrels per day, from last week's -312,000 barrels per day, which means that 368,000 more barrels of oil per day showed up in our final consumption and inventory figures this week than were accounted for by our crude production or import figures...that of course means that one or several of this week's metrics were off by that amount, and once again the total 680,000 barrel per day difference from last week makes the comparison of last week’s metric to this week’s virtually meaningless..however, it is that data and those distorted comparisons which move oil prices and hence drilling activity, so we'll continue to review them for whatever insights they provide into what the oil traders are thinking...

with that thought in mind, then, the EIA reported that our imports of crude oil increase by an average of 109,000 barrels per day to an average of 7,016,000 barrels per day during the week ending October 21st, which except for last week, was still the least oil we've imported in any other week this year...that left this week's oil imports down fractionally from the 7,032,000 barrels of oil per day we imported during the corresponding week a year ago, and hence this was only the second week this year that our imports fell below year ago totals ...as a result, the 4 week average of our oil imports reported by the EIA's weekly Petroleum Status Report (62 pp pdf) fell to an average of 7.4 million barrels per day and was just 2.1% higher than the same four-week period last year...at the same time, our exports of crude oil were slightly lower, falling by an average of 24,000 barrels per day to an average of 415,000 barrels per day for the week, in data that is not directly comparable to last year's exports of 504,000 barrels per day for the same week, since the EIA has recently switched to reporting Custom's export data, rather than use estimates based on untimely export stats from the Census Bureau..

meanwhile, the EIA reported that production of crude oil from US wells rose by 40,000 barrels per day to an average of 8,504,000 barrels per day during the week ending October 21st, as output from Alaskan fields rose by 12,000 barrels per day while production from the lower 48 states was 28,000 barrels per day higher....that still left the week's domestic oil production 6.7% lower than the 9,112,000 barrels we produced during the week ending October 23rd of last year, and 11.5% below the record 9,610,000 barrels per day of oil production that we saw during the week ending June 5th last year...our oil production for the week ending October 21st was also 715,000 barrels per day, or 7.8% lower, than what we were producing at the beginning of this year, which we're citing as an interim benchmark, since our otherwise declining production had also been rising in the last few months of 2015...

for the same week, the amount of crude oil used by US refineries rose by an average of 182,000 barrels per day to an average of 15,552,000 barrels of crude per day, the first refining increase in 7 weeks, as our refinery utilization rate rose to 85.6% during the week, up from last week's 43 month utilization low of 85.0%, but down from the refinery utilization rate of 87.6% seen during the week ending October 23rd last year...US oil refining is still down by 11,376,000 barrels per day, or by 8.1%, in the 7 weeks since Labor Day, as the refinery utilization rate has tumbled from 93.7% over that span .. the crude refined this week nationally was also below the 15,616,000 barrels of crude per day US refineries used during the week ending October 23rd last year, while it was still 2.8% more than 15,129,000 barrels per day that were refined during the equivalent week in 2014...

with the pickup in refining, the EIA reported that refineries’ production of gasoline increased by 339,000 barrels per day to 9,837,000 barrels per day during the week ending October 21st, which meant our gasoline output for this week was 1.4% higher than the gasoline output of 9,703,000 barrels per day during the week ending October 23rd last year, and 8.4% higher than the gasoline production during the equivalent week of 2014....however, at the same time refinery output of distillate fuels (diesel fuel and heat oil) fell by 63,000 barrels per day to 4,536,000 barrels per day during the week ending October 21st, which left the week's distillates output 7.0% lower than the 4,877,000 barrels per day that was being produced during the same week last year, while it was still; 1.5% more than than the 4,471,000 barrels per day of distillates we produced during the equivalent week of 2014...   

however, even with the big increase in gasoline production, our gasoline supplies fell by 1,956,000 barrels to 227,967,000 barrels as of October 21st, as our domestic consumption of gasoline rose by 320,000 barrels per day to 9,118,000 barrels per day and as our gasoline imports fell by 37,000 barrels per day to 834,000 barrels per day....even with this week's drop in supplies, however, the end of the week gasoline inventories were still 3.4% higher than the 218,647,000 barrels of gasoline that we had stored on October 23rd of last year, and 11.3% higher than the 203,138,000 barrels of gasoline we had stored on October 24th of 2014....at the same time, our distillate fuel inventories fell by 3,354,000 barrels to 152,378,000 barrels by October 21st, the 5th consecutive large drop in our distillate supplies....however, even after the withdrawal of 16.4 million barrels of distillates from storage over those 5 weeks, our distillate inventories were still 7.3% higher than the distillate inventories of 142,057,000 barrels of October 23rd last year, and 26.6% above the distillate inventories of 120,377,000 barrels of October 24th, 2014....

lastly, with ongoing low oil imports, our inventories of crude oil fell by 553,000 barrels to 468,158,000 barrels by October 21st, the 7th drop in our oil supplies in 8 weeks...with two hurricanes disrupting imports over that span, our oil supplies have thus fallen more than 27 million barrels, or 5.5% over 8 weeks, at a time of year when oil supplies are usually rising, and are now down 8.6% below their April 29th peak of 512,095,000 barrels...nonetheless, we still ended the week with 4.5% more crude oil in storage than the 447,994,000 barrels we had stored as of the same weekend a year earlier, and 34.3% more crude oil than the 348,475,000 barrels we had stored on October 24th of 2014...  

This Week's Rig Count

while total drilling activity increased for the 6th week in a row during the week ending October 28th, drilling for oil fell for the first time in 18 weeks...Baker Hughes reported that the total count of active rotary rigs running in the US rose by 4 rigs to 553 rigs by Friday, the most active rigs we've seen since February 5th, as drilling has now increased 18 out of the last 21 weeks...nonetheless, that total was still down from the 775 rigs that were deployed as of the October 30th report last year, and down from the recent high of 1929 drilling rigs that were in use on November 21st of 2014...

the number of rigs drilling for oil fell by 2 rigs to 441 rigs this week, as oil rig activity remains down from the 578 oil directed rigs that were working a year ago, and down from the recent high of 1609 oil rigs that were drilling on October 10, 2014...at the same time, the count of drilling rigs targeting natural gas formations increased by 6 rigs to 114 rigs, which still left active gas rigs down from the 197 natural gas rigs that were drilling a year ago, and down from the recent natural gas rig high of 1,606 natural rigs that were deployed on August 29th, 2008...two working rigs also remain that are classified as miscellaneous, in contrast to a year ago, when no such miscellaneous rigs were active...

the number of working horizontal drilling rigs increased by 5 rigs to 450 rigs this week, which was still down from the 577 horizontal rigs that were in use on October 30th of last year, and down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...at the same time, three directional drilling rigs were also added, bringing the directional rig count up to 54, which was nonetheless down from the 86 directional rigs that were deployed during the same week last year...meanwhile, the vertical rig count was cut by 4 rigs to 53 rigs this week, which was also down from the 110 vertical rigs that were drilling in the US during the same week last year...also included in this week's variances, one of the rigs that had been working on a drilling platform offshore from Louisiana was shut down this week, which reduced the Gulf of Mexico rig count to 21, and also reduced the total US offshore count to 22 rigs, as we still have a rig working offshore from Alaska.... those numbers are down from the 32 rigs that were working in the Gulf of Mexico last year at this time, and down from the total of 33 offshore rigs active a year ago…

the details on this week's changes in drilling activity by state and by shale basin are included in our screenshot below of that part of the rig count summary from Baker Hughes which shows those changes...the first table below shows weekly and year over year rig count changes for the major producing states, and the second table shows weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of October 28th, the second column shows the change in the number of working rigs between last week (October 21st) and this week (October 28th), the third column shows last week's October 21st active rig count, the 4th column shows the change in the number of rigs running this Friday from the equivalent Friday a year ago, and the 5th column shows the number of rigs that were drilling at the end of that week a year ago, which in this week's case was for October 30th of 2015... 

what's probably most notable this week is the addition of 5 oil drilling rigs in the Williston basin of North Dakota, better known as the Bakken....this comes despite the aggregate decrease in oil rigs this week, and marks the first time the Bakken has seen an increase of more than two rigs in any one week since September of 2014, maybe indicating that oil prices over $50 for the prior three weeks was enough to move Bakken drillers to the field...on the other hand, those prices did not encourage drillers in Colorado, who pulled out three rigs, including 2 in the Niobrara, their biggest pullback since January...we can also easily account for 5 of the 6 gas directed rigs that were added this week, with the increase of 3 rigs in the Haynesville of northwestern Louisiana and northeastern Texas, and the 2 rigs that were added in the Marcellus in Pennsylvania...we might expect to see those pulled out soon if natural gas prices continue their recent decline...we should also note that among the states not shown above, Indiana also had a rig pulled out this week, leaving them with just one rig active..that's still one rig more than they had a year ago, however, as the state went through the second half of 2015 without any drilling at all...

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Next U.S. offshore wind farm set to emerge from Lake Erie -- The next U.S. offshore wind farm in the U.S. will probably be almost 500 miles (800 kilometers) from the nearest ocean. The Lake Erie Energy Development Corp. expects to finalize a deal by yearend with Fred Olsen Renewables AS to build a 20.7 megawatt wind project in Lake Erie, off the Ohio coast, the president of the Cleveland-based non-profit group said in an interview. LeedCo is developing the $127 million Icebreaker project to demonstrate that offshore turbines are viable in the Great Lakes, a region with the potential to generate 1,000 megawatts of wind energy by 2020. Construction may start in early 2018. The only U.S. offshore wind farm was completed this year near Block Island, by Deepwater Wind LLC. “Building offshore wind on the Great Lakes is our best opportunity to generate clean energy locally,” LeedCo President Lorry Wagner said in an interview Wednesday at the American Wind Energy Association Offshore Windpower conference in Warwick, Rhode Island. The project received a $40 million grant in May from the U.S. Energy Department. Norway-based Fred. Olsen will build, maintain and eventually own the project. Cleveland Public Power has agreed to buy two-thirds of the electricity and LeedCo is negotiating to sell the remainder to other companies.

Corporate leaders urge GOP to reinstate renewable energy  -- Some of the world's largest corporations employing more than 25,000 in Ohio oppose plans by state GOP lawmakers to get rid of state standards requiring utilities to sell increasing percentages of power generated by wind, solar and other renewables. Nine corporations, including manufacturers Whirlpool and Owens Corning and food giants Nestle and Campbell Soup, released statements Tuesday urging state lawmakers to bring back rules requiring power companies to provide annually increasing amounts of electricity generated by wind, solar and other renewable technologies. The nine, many of which have also worked with the Ohio Manufacturers' Association to oppose changes in Ohio's renewable energy standards, this time organized with Ceres, a non-profit group that works with global corporations and investors around the world to encourage corporate sustainability."Now is the time for lawmakers to strengthen Ohio's energy efficiency and renewable energy standards," said Alli Gold Roberts, policy manager at Ceres. "These standards are good for business, and failing to reinstate them will send the wrong signal to companies and investors throughout the state." Republican majorities "froze" the rules for two years in 2014 after months of bitter hearings about renewable mandates and parallel rules requiring utilities to help customers use less electricity. Lawmakers froze that law as well, saying they wanted time to study the issue.

Murray Energy sells Utica shale land in eastern Ohio for $63.6M - Columbus Business First - Ohio coal company Murray Energy Corp. has sold 5,900 acres in the state's Utica shale oil and gas play. Murray sold the land to an undisclosed buyer for $63.6 million. The acreage is in Belmont and Monroe counties, two of the most active natural-gas production counties in the state. Murray is based in St. Clairsville in Belmont County. In a statement, CEO Bob Murray said the sale allows the company to focus on its core business – which is coal, not oil and gas. We've asked how much land the company still owns and will update if the company discloses it. Murray will get $48.6 million upfront and $7.5 million in 2017 and again in 2018. It'll use some of the funds to lessen its debt. Murray Energy is the largest privately owned coal mining company in the country, led by Murray, an outspoken advocate for the industry who is equally outspoken against regulatory policies he sees as threatening coal. “Obama is the greatest destroyer America has ever had,” Murray told me late last year. “There’s no question about it. That’ll be his legacy. Jimmy Carter was bad; this guy is horrible. So I don’t know who’s gonna come out of this but it's vital to the survival of the United States.”

Prices, Oil Rig Numbers Up in Ohio and West Virginia — Southwestern Energy Co. lost $2.5 billion in the first nine months of 2016, a reflection of the global oil and natural gas price collapse that could be felt throughout the Marcellus and Utica shale region this year. However, commodity prices on the New York Mercantile Exchange are steadily recovering, so Southwestern and other drillers should be able to place more rigs and fracking crews back in service across Ohio and West Virginia — all the while recovering from a year of monetary losses. Amid those profit losses, some landowners are seeing companies offer them far less to renew the leases originally signed five years ago when prices boomed into the $5,000-per-acre range and beyond. “When rigs are running, that is a great sign,” said Tim Greene, owner of Land & Mineral Management of Appalachia and a former West Virginia Department of Environmental Protection inspector. “Any uptick in price certainly helps.” In April, a 1,000-cubic-foot unit of natural gas (Mcf) was worth about $1.97 on the NYMEX, but on Friday, this price hovered around $3. A barrel of oil, meanwhile, sold for about $39 on the exchange in April, but the price is now over $50. “Any little bit helps,” said Shawn Bennett, executive vice president of the Ohio Oil and Gas Association. “As long as gas prices are at least around $3, you’ll have some drilling in Belmont County and Monroe County.” Oilfield services giant Baker Hughes tracks active drilling rig counts across the globe. There are now 14 rigs running in Ohio compared to only 11 in April, a small but steady increase. The numbers in West Virginia, however, dropped to 10 as of last week. “It’s really just supply and demand, like anything else,” Greene said. “As long as the price goes up, the number of rigs will follow.”

Enterprise close to committing to US NGL project -  Enterprise Products Partners is close finalizing initial plans that call for building out a system to transport 60,000 b/d of propane from the Marcellus and Utica shale gas-producing plays to Mont Belvieu, Texas, in part by repurposing and reversing the flow on the 795-mile Centennial Pipeline, a pipe that carries refined products from Texas to Illinois that has been virtually unused since mid-2011. "We're on the one-yard line of getting this project committed to and taking off," Danika Yeager, vice president regulated business, said on the sidelines of the Platts Appalachian Oil & Gas Conference on Tuesday. Enterprise is a 50% partner in Centennial with Marathon Petroleum, which operates the line. Marathon was not immediately available to comment Tuesday. "If we can get construction started by the end of this year, we expect to have this in service by third quarter 2018," Yeager said.She said future plans call for expanding the project to where it also will be able to carry ethane, with a capacity of delivering 100,000 b/d of NGLs from the Marcellus and Utica plays to the Gulf Coast after 2018. Yeager said the project developers are counting on seeing a strong NGL demand pull from the Gulf Coast region in coming years. "We're forecasting that the demand is not is going to be met with western US supply alone and that Appalachia is going to be critical to providing the supply to meet that demand down in the Gulf Coast," she said.

Sunoco Logistics pipeline spills gasoline in Pennsylvania: media | Reuters: A Sunoco Logistics Partners LP pipeline spilled about 1,300 barrels of gasoline into the Susquehanna River in Lancaster County, Pennsylvania, on Friday, according to local media. The pipeline breach was caused by heavy flooding in Lycoming County, which lies in the north-central region of Pennsylvania, LancasterOnline reported. The 8-inch (20-cm) pipeline began leaking in Gamble Township, Lycoming County, at about 3 a.m. on Friday, LancasterOnline reported, citing a statement from Sunoco Logistics. The line was reportedly shut down after detecting a drop in pressure. Sunoco Logistics and the Pennsylvania Emergency Management Agency did not respond to requests for comment. The report of the leak comes as the Standing Rock Sioux tribe and environmental activists have been protesting construction of the 1,100-mile (1,886-km) pipeline in North Dakota for several months saying it threatens water supply and sacred sites.

55,000 gallons of gasoline spills into Susquehanna, effect on Lancaster County drinking water unclear - A broken pipeline in Lycoming County on Friday dumped 55,000 gallons of gasoline into the Susquehanna River. As the river, swollen with 6 to 8 inches of rain that fell overnight Thursday, rushes south, Lancaster County officials are gearing up to prevent contamination of the local water supply. “With the amount that spilled, we certainly could see some impact on our intake along the Susquehanna River,” Charlotte Katzenmoyer, director of public works for Lancaster, said Friday afternoon. “We’ll continue to monitor it.”The 8-inch pipeline was breached in Gamble Township, Lycoming County, at about 3 a.m. Friday, according to a statement from Sunoco Logistics, which shut down the line after detecting a drop in pressure. The bureau said their “best guess” is that 1,300 barrels of product — approximately 55,000 gallons — spilled into Wallis Run, a tributary that flows into the Susquehanna. A response team from the Department of Environmental Protection is on site with local emergency responders, the bureau reported. “Personnel are still having trouble accessing the break site to put eyes on it and get a better idea of the extent and volume due to flooding in the area,” according to the alert. “Please inform local water authorities of the potential contamination if they use the Susquehanna River as a water source.” “Certainly it’s something to be concerned about,” added Randy Gockley, director of the Lancaster Emergency Management Agency. “We don’t know yet the speed it will travel down the river.” State officials said Friday the gasoline could reach the Lancaster area early Tuesday morning.

Demonstrations Planned at Schumer's Offices in Fight Against Gas Pipeline - As a Nov. 1 target date for the opening of the Algonquin Incremental Market expansion project (A.I.M.) approaches, project developer Spectra Energy and community and environmental activists united against it are each rushing to their own emergency measures. The activists are organizing statewide demonstrations on Oct. 26 at the offices of Sen. Chuck Schumer of New York, demanding that he come out from behind his desk and take a "now or never" stand against the natural gas pipeline project. Meanwhile, Spectra subsidiarity Algonquin is rushing to get the gas running through the just completed network—or nearly completed to be most accurate. The company has failed to get a drill bore across the Hudson to connect the pipeline segment in Rockland to the next segment in Westchester county. According to activists, Federal Energy Regulatory Commission filings indicate Spectra is now seeking permission to use the old pipeline that A.I.M. was supposed to replace to move gas across the Hudson to the new section already laid alongside the Indian Point nuclear power plant. That emergency mix-and-match approach has only heightened concerns among community members already alarmed by the project itself, its hurry-up construction schedule and its route through beloved parkland and among middle-class homes throughout northern Westchester. A.I.M. has been criticized by just about all the local residents directly affected by its construction and by the local politicians and municipal officials who represent the communities that will play host to it.    But proximity is a relative notion in this case, Paola Dalle Carbonare points out. Should the worst occur and a pipeline explosion damage critical structures at Indian Point, millions of people in the tri-state area will discover how truly small the Indian Point neighborhood actually is. “We are all involved,” she says. “There are 20 million people involved here. This is a national security issue.

Breaking: 15 Arrested Protesting Spectra Pipeline Scheduled to Go Online Nov. 1 -  Fifteen people were arrested today at a rally this morning outside the Manhattan office of New York Sen. Charles Schumer, where they have maintained a presence for the past 60 days. With the Algonquin Incremental Market (AIM) expansion of the Spectra Energy pipeline in Westchester County, New York set to go online by Nov. 1, opponents are asking Schumer to intervene and use his influence to put a halt to the project. Schumer's office did not respond to a request for comment by EcoWatch.  Members of Resist Spectra and their supporters showed up on Third Avenue, chanting "We will not let you build this pipeline." Many sat along 780 Third Avenue, the building housing Schumer's New York City office.  The AIM project is set to carry Marcellus Shale fracked gas to New England, passing through New York State and crossing the Hudson River at scenic Stony Point. The pipeline runs close to the aging Indian Point nuclear power plant in Buchanan. The oldest of the three reactors on site began operations in 1962, but has since been shut down. The other two operating reactors date to 1974 and 1976. One of the opponents' main concerns is the proximity of the pipeline to the nuclear facility. The 42-inch pipeline passes within 105 feet of an electrical substation and 1,320 feet from the reactors. While it's not California, Westchester County does have a history of earthquakes and the Ramapo Fault runs near the Indian Point nuclear plant. In 1783 , a magnitude 5.0 quake struck the area, and in the early morning hours of Oct. 19, 1985, a 3.6-magnitude earthquake on the Ramapo Fault system caused the plant to declare "an unusual event" but no damage was reported. The probability of a 5.0 or greater earthquake in the county in the next 50 years is estimated at 3.36 percent.  That's enough to rattle residents from Westchester to Brooklyn . Pipeline opponents point out that 20 million people live within a 50-mile radius of Indian Point. An elementary school sits just 400 feet from the pipeline.

Fracking Linked to Cancer-Causing Chemicals, Yale Study Finds --- Yet another study has determined that hydraulic fracturing, or fracking , might be a major public health threat . In one of the most exhaustive reviews to date, researchers from the Yale School of Public Health have confirmed that many of the chemicals involved and released by the controversial drilling process can be linked to cancer . "Previous studies have examined the carcinogenicity of more selective lists of chemicals," lead author Nicole Deziel, Ph.D., assistant professor explained to the school . "To our knowledge, our analysis represents the most expansive review of carcinogenicity of hydraulic fracturing-related chemicals in the published literature." For the study, published in Science of the Total Environment, the researchers assessed the carcinogenicity of 1,177 water pollutants and 143 air pollutants released by the fracking process and from fracking wastewater . They found that 55 unique chemicals could be classified as known, probable or possible human carcinogens. They also specifically identified 20 compounds that had evidence of leukemia/lymphoma risk. One of the scarier parts from this study is that the researchers could not completely unpack the health hazards of fracking's entire chemical cocktail. More than 80 percent of the chemicals lacked sufficient data on cancer-causing potential, "highlighting an important knowledge gap," the school noted.  The unconventional drilling rush in the U.S. has expanded to as many as 30 states, spelling major consequences to the air we breathe and the water we drink. The Wall Street Journal reported in 2013 that more than 15 million Americans lived within a mile of a well.  The biggest concern is for people and especially children with fracking operations right in their backyards. In fact, Environment America found that more than 650,000 kindergarten through 12th grade children in nine states attend school within one mile of a fracked oil or gas well.

Report: Children and the elderly at risk from "dangerous and close" fracking - – More than 650,000 kindergarten through twelfth grade children in nine states attend school within one mile of a fracked oil or gas well, putting them at increased risk of health impacts from dangerous chemicals and air pollution. The finding comes from a new study (see PDF) by Environment America Research & Policy Center that exposes the proximity of fracking near schools, hospitals, day care centers and nursing homes, risking the health of our children and other vulnerable populations.  “Schools and day care centers should be safe places for kids to play and learn,” said Rachel Richardson, director of Environment America’s Stop Drilling program and co-author of the report. “Unfortunately our research shows far too many kids may be exposed to dirty air and toxic chemicals from fracking right next door.”  Using data provided by the oil and gas industry and state regulators, Dangerous and Close – Fracking Puts the Nation’s Most Vulnerable People at Risk found that:
* 1,947 child care facilities, 1,376 schools, 236 nursing care providers and 103 hospitals are within a one-mile radius of fracked wells in the nine states examined.
* More than 650,000 kindergarten through twelfth grade children attend school within one mile of a fracked well.
* The highest percentage of children attending school close to fracked wells is in West Virginia, where 8 percent of children spend their school days within one mile of a fracked well.
* Texas has the largest number of children attending school close to a well, with 437,000 kindergarten through twelfth grade students attending public or private school within one mile of a fracked well.
The report included data from nine states total including Arkansas, California, Colorado, New Mexico, North Dakota, Ohio, Pennsylvania, Texas and West Virginia. “American society aspires to protect children, the sick and the elderly," said Elizabeth Ridlington, policy analyst with Frontier Group and co-author of the report. "This report shows that we’re violating that ideal because of our overwhelming dependence on fossil fuels. We’ve sunk to putting vulnerable populations at risk instead of making the wholesale shift to conservation and renewable energy."

Is the shale honeymoon over for PADD1 (East Coast) refineries? -- The shale boom breathed new life into East Coast refineries that were under threat of closure by their owners between 2009 and 2012. Now some of those same refineries are under threat again, this time due to poor margins as well as the high cost of compliance with environmental regulations. After enjoying three years of improved margins through access to advantaged domestic crude delivered by rail from North Dakota, five East Coast refineries are now paying international prices for imported crude again in 2016 after differentials between domestic benchmark WTI and international equivalent Brent narrowed to less than $1/bbl in the wake of the crude price crash and an end to the federal ban on most crude exports. Today we discuss PADD 1 refinery prospects.

Energy Producers Edge Closer to Tapping ‘Drilled but Uncompleted’ Wells -- U.S. oil and gas companies have drilled thousands of wells they have yet to tap, creating a ready reserve of fuel that could surge onto the market when energy prices recover. As producers report quarterly earnings during the next few weeks, a question looms: When will they start exploiting these “drilled but uncompleted” wells? While the industry often has an inventory of drilled wells awaiting completion, the backlog has grown significantly during the past two years as companies such as Continental Resources Inc. and EOG Resources Inc. deliberately delayed tapping wells to wait for higher energy prices.Federal estimates show the number of such wells in the nation’s seven most prolific drilling regions stood at 5,069 in September, up from 3,768 in January 2014, before oil prices began falling. Because companies have already spent the money to drill the wells, known in the industry as DUCs, bringing on the supply they hold is cheaper than drilling and fracking a new well. That means DUCs are an economic proposition for many companies, especially with U.S. crude now trading at around $50 a barrel. Ryan Duman, a senior analyst at energy-consulting firm Wood Mackenzie, said he expects to see companies completing many of the delayed wells in the next 18 months. “You’re at a point where pretty much every DUC that’s sitting out there is in the money,” Mr. Duman said.

Environmental groups raise concerns over Texas oil find near Balmorhea (AP) — Some environmental organizations have raised concerns about a reported big oil and gas discovery in West Texas. The Houston Chronicle (http://bit.ly/2eDvvgQ) reports several environmental groups are scrutinizing plans to drill around Balmorhea (BAL’-muh-ray) State Park and its famous spring-fed pool. Houston-based Apache Corp. last month announced plans for drilling after projecting up to 3 billion barrels of oil and 75 trillion cubic feet of natural gas in an area it calls Alpine High. The group called Earthworks has commissioned an assessment of the potential risks to the local waters. The Nature Conservancy plans to begin testing water quality on several sites it owns in the area. Apache says it’s taking environmental responsibility very serious and will work with University of Texas at Arlington scientists to study the area’s water quality.

New Oil Discoveries Largely Unaffected by Paris Pact | Climate Central: Large crude oil discoveries in 2016 face uncertain prospects of development for many reasons, but climate change isn’t one of them, at least for the moment. Climate policies that help countries meet their obligations under the Paris Agreement are likely to have little effect on newly discovered oil fields because the Paris pact all but ignores crude oil consumption and production, experts say. The fate of new oil discoveries hinges mainly on volatile crude oil markets, the availability of oil in existing fields and evolving electric vehicle technology.Energy companies in the U.S. have announced major crude oil discoveries that could significantly contribute to greenhouse gas pollution even as U.S. carbon-cutting policies like the Clean Power Plan are contested in court.Apache Corp. announced in September that it has discovered 3 billion barrels of oil in West Texas and Caelus Energy said in October that it found 6 billion barrels of crude beneath the Arctic Ocean off of Alaska’s North Slope. If all of the oil in those discoveries is consumed, its carbon dioxide emissions may be roughly equivalent to 70 percent of the U.S.’s total annual carbon dioxide pollution, according to U.S. Department of Energy data. Every billion barrels of oil that are consumed emit roughly the equivalent of about 8 percent of U.S. annual carbon emissions, Energy Information Administration analyst Perry Lindstrom said.

USGS: Oklahoma earthquake likely caused by wastewater disposal (AP) — The third-largest earthquake in Oklahoma was likely triggered by underground disposal of wastewater from oil and natural gas production, the U.S. Geological Survey found in a report issued Monday. The magnitude 5.1 quake that struck northwest of Fairview in February was likely induced by distant disposal wells, the agency said. The USGS report indicated that in the area around where the Fairview quake occurred, the volume of fluid injected had increased sevenfold over three years. The Fairview temblor had been the largest in the central and eastern U.S. since a magnitude 5.7 quake hit near Prague in 2011. In September, the largest earthquake in the state struck near Pawnee with a magnitude 5.8. The relationship between that quake and wastewater injection is still being studied. A study by the U.S. Geological Survey last year suggested that the sharp rise in earthquakes in Oklahoma in the past 100 years had likely been the result of industrial activities in the energy-rich state, such as oil and natural gas production.In response to research suggesting a wastewater disposal-earthquake link, state regulators have ordered the shutdown of some disposal wells and asked producers to reduce disposal volumes in earthquake-prone regions of the state.

Federal agency levies $732,100 in fines against ONEOK (AP) — The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration has announced fines totaling $732,000 against Tulsa-based ONEOK following a fire at a ONEOK facility in Bushton, Kansas. The PHMSA says 15 safety violations of pipeline safety regulations were found during an investigation following the fire. The fines are against ONEOK NGL Pipeline, L.P., ONEOK NGL Pipeline, L.L.C., and ONEOK Underground Storage Company, L.L.C. PHMSA says ONEOK operates 11,500 miles of pipeline transporting natural gas liquids in Oklahoma, Kansas and several other states. Officials with ONEOK and the PHMSA did not immediately respond to requests for comment.

Oil spill reported at key U.S. storage depot (UPI) -- Local media in Oklahoma reported Monday a company was working to contain a release of crude oil from near the main U.S. oil storage hub in Cushing. News9, a CBS-affiliated television station in Cushing, Okla., reported a release from a pipeline controlled by the Seaway Pipeline Co. The release was reported Monday morning, though no spill volume was available. "As emergency responders work on clean up, law enforcement says the spill is not a threat to residents and no evacuations have been ordered," the report read.  There was no statement available from Seaway. The pipeline is run by a joint venture between Enbridge and Enterprise Products Partners, which operates the 400,000 barrel per day artery. The Seaway pipeline runs from the Cushing storage hub to the southern U.S. coast. The direction of the pipeline was reversed in 2012 in order to reduce transportation costs and accelerate development of crude oil reserves in North America. The capacity was expanded from 150,000 bpd before the reversal. The release from the Seaway pipeline is the second associated with the Cushing storage hub in less than a month. Plains All American Pipeline reported problems with infrastructure from Colorado City to Cushing earlier this month. Deliveries to and from Cushing could impact data on crude oil storage later in the week and skew market perceptions. An increase in storage is indicative of supply-side pressures, while a draw would support a market characterized by strong demand.

Enterprise's Seaway Crude pipeline system shut after Cushing, Oklahoma spill | Reuters: A leak late on Sunday prompted Enterprise Products Partners to shut its Seaway Crude Pipeline system, the largest conduit for moving oil from the major storage hub in Cushing, Oklahoma to Gulf coast refineries. News of the leak dragged U.S. crude prices lower on Monday on worries that shutting down the 850,000 barrel-per-day (bpd) Seaway system would bottle up barrels in storage in Cushing, the delivery point for the benchmark West Texas Intermediate (WTI) futures contract. U.S. crude futures slipped 1.3 percent in afternoon trading, while international benchmark Brent crude futures fell about 1.2 percent. Enterprise said on Monday it had shut down the 400,000-bpd pipeline, which it calls its legacy line, but did not provide an estimate of the volume spilled. The total amount released would not be determined until recovery efforts were complete, the company said. The company on Monday afternoon said it had restarted its 450,000 bpd Seaway Twin, which was shut as a precaution. Most of the oil released was contained in a retention pond at a facility belonging to Enbridge Inc, a joint owner of the Seaway Crude Pipeline Company with Enterprise. Enterprise said there was no threat to the public and no evacuations were ordered following the spill, located near the intersection of Linwood Avenue and Texaco Road in Cushing. The company was working with emergency responders and law enforcement to address the situation.

Seaway Restarts One of Two Pipelines Shut After Spill -- 2nd Update - NASDAQ.com: Enterprise Products Partners LP ( EPD ) resumed pumping Monday on one of two major north-south oil pipelines that were shut down after an oil spill in Oklahoma. The Seaway Crude Pipeline Co., a 50/50 joint venture between Enterprise and Enbridge Inc. ( ENB ), said the 400,000- barrel-a-day Legacy pipeline remains closed after the Sunday night spill while investigators try to figure out the cause and quantity of oil released. It said in the statement the adjacent, 450,000-barrel-a-day Loop pipeline, which was also shut as a precaution, "has resumed service." The spill happened in an industrial area of Cushing, Okla., the small town that is the U.S. hub for crude oil. About 60 million barrels of crude oil are stored in Cushing in massive tanks and pipelines. Seaway said the section where the oil spilled has a capacity to hold 50,000 barrels of oil but said "the actual amount of crude oil released will be significantly less." It said all of the crude oil spilled was contained in a retention pond at Enbridge's facility, adding that workers with trucks are collecting the spilled oil to put it back into storage tanks onsite. It said there were no injuries or fire related to the incident and that there was never a threat to the public. The oil-pipeline spill and shutdown comes one month after a major gasoline pipeline run by Colonial Pipeline Co. had to halt pumping for a couple of weeks due to a spill in Alabama.

Seaway pipeline operating at half capacity - The roadway to Seaway Crude Pipeline System is closed but just beyond it is where 850,000 barrels of crude oil per day are produced. Right now its operating at just about half of its capacity. The Seaway Crude Pipeline is comprised of two pipelines, the legacy pipeline and the twin pipeline. The company tells Fox 25 when they learned that just before midnight on Sunday that they legacy pipeline was releasing crude oil they shut down both pipelines. "The line that was not impacted that was shut down as a precautionary measure was returned to service earlier this morning." Seaway Spokesperson Rick Rainey said. "As far as the line that had the release on it we are still early in the process, our main concern right now is making sure that we continue to clean up and it's safe for our people to go in and and take a look at the pipeline." The Seaway Crude Pipeline is one the largest pipeline systems feeding crude oil from Cushing, Oklahoma to the Gulf Coast Coast Refineries. News of the oil leak also made national headlines. However, things appear to be under control and there was never a threat to residents since the pipeline is located an industrial area on Linwood Avenue in Cushing. "The crude oil was actually contained within a reservoir on the site of a third party operator and we now have seven vacuum trucks there on site and we are in the process of returning the crude oil to the on site tank," Rainey said.

Oklahoma, Pennsylvania recovering after weekend oil spills - An oil spill in Oklahoma forced the shutdown of a major, 850,000-barrel per day pipeline system that supplies crude oil to Texas refineries. The incident follows another pipeline rupture in Pennsylvania, where 55,000 gallons of gasoline poured into a river. As of Monday, the Seaway Crude Pipeline Co. has resumed pumping at its 450,000-barrel-a-day (bpd) Loop (twin) pipeline, which was shut down “as a safety precaution” following the spill at a parallel pipeline. “Vacuum trucks are being used to recover the crude oil and return it to storage tanks onsite,” the company said in a statement Monday, as clean-up operations continued. The 400,000-bpd “legacy line” remained closed in the meantime, but Seaway hopes to bring it back “as soon as possible.” “The impacted segment of the legacy pipeline has a capacity of 50,000 barrels,” the company said without providing the actual amount of the crude oil that spilled. The company says that the total won’t be assessed until recovery efforts are complete, but expects that amount of released oil will be “significantly less” than the pipeline’s capacity. The spill in Oklahoma came less than two days after an incident in Pennsylvania, which resulted in 55 gallons (or 1,300 barrels) of gasoline seeping into the Susquehanna River in Lancaster County on Friday. The 8-inch (20-cm) Sunoco pipeline began leaking in Gamble Township, Lycoming County, at about 3:00am on Friday. Pennsylvania American Water warned customers to reduce water use as the leak threatened drinking water. The “conservation notice” was lifted on Sunday. “The company started to resume normal operations Saturday afternoon after testing of source water along the Susquehanna River found no detection of gasoline near the Milton Treatment Plant’s raw water intake,” Pennsylvania American Water said in a statement, warning that water could be “discolored or cloudy” in some areas.

220 'Significant' Pipeline Spills Already This Year Exposes Troubling Safety Record - Three major U.S. pipeline spills within the last month are just a small part of the 220 significant incidents reported so far this year—and 3,032 since 2006—that provide a stark reminder of the environmental hazards of an aging pipeline infrastructure carrying fossil fuels. The costs of these leaks since 2006 has amounted to $4.7 billion.

• 1. Oklahoma: On Oct. 24, the 30-inch S-1 pipeline carrying crude oil from the critical Cushing, Oklahoma hub to refineries and chemical plants on the Gulf Coast began to leak and was shut down overnight. It was the second release connected with the Cushing storage facility in less than a month.
• 2. Pennsylvania: On Oct. 21, 55,000 gallons of gasoline gushed from a ruptured Sunoco Logistics pipeline in Williamsport, Pennsylvania, just upstream from the Susquehanna River. Carol Parenzan, Middle Susquehanna Riverkeeper , said that witnesses who contacted her office reported that the "smell of petroleum is so thick you can taste it." The 80-year old pipeline was damaged by a heavy storm that dumped seven inches of rain on the area.
• 3. Alabama: Last month, the Colonial Pipeline in Alabama leaked an estimated 336,000 gallons of gasoline and triggered concerns about gas shortages for drivers in the East. That spill was Colonial's fifth in the state this year and occurred on a 43-year old section of the pipeline.

Based on data from the Pipeline and Hazardous Materials Safety Administration (PHMSA), an arm of the U.S. Department of Transportation, the number of significant pipeline incidents grew 26.8 percent from 2006 to 2015. A significant incident is defined as one that results in serious injury or fatality, costs more than $50,000, releases more than five barrels of volatile fluids such as gasoline or 50 barrels of other liquids, or results in a fire or explosion. In 2015, there were 326 such incidents—almost one per day.  Some 55 percent of the U.S. network of 135,000 miles of pipeline is more than 45 years old. Technology designed to detect pipeline leaks is highly unreliable, even though companies like Colonial Pipeline tout their use as a way "to insure safe operations." But a recent Reuters report found that these technologies are "about as successful as a random member of the public" finding a leak. Of 466 incidents studied by Reuters, only 22 percent, or 105, were detected by advanced detection systems. The others were found in different ways, with the public finding 99 of the leaks.

Is Nevada Sitting On One Of The Biggest Undiscovered Oil Fields? - Most of the giant oil fields on earth, ''elephants'' are deposited in passive margin shelves like the Paleozoic passive margin shelf of the Great Basin of western Utah and eastern Nevada. These shelf Paleozoic sediments thicken from several thousand feet east of the Utah Hingeline in central Utah to more than forty-two thousand feet in central Nevada (Figure 1). Many of the age-equivalent shales of North America were deposited in this stratigraphic wedge. However, the Great Basin shales are not just as organically rich as the other shales but they are many times thicker. The eastern Great Basin, covering 71 million acres, is the last underexplored basin in North America that likely contains giant oil and gas fields.  Bakken age-equivalent Mississippian-Devonian Pilot oil shale is up to 900 feet thick in the Great Basin in contrast with the Bakken shale that is only 150 feet thick or less in North Dakota. Oil bleeds out of some outcrops of tight sandstone interbedded in the Pilot when it is freshly broken. Oil seeps occur in organic rich Marcellus age-equivalent Middle Devonian shales in Nevada outcrops. One well, with gas shows, cut eight thousand feet of Utica age-equivalent Ordovician Vinini shale and was still in Vinini at total depth. These Ordovician shales are so organic rich that they have been retorted for oil. Organic rich Great Basin Mississippian Antler foreland basin oil shales are measured in thousands of feet in contrast to the age-equivalent Barnett shale that is measured in only hundreds of feet in Texas. Analyses of shale samples combined with the shale thickness indicate that the shales potentially have enough organic content to literally generate trillions of barrels of oil (Figure 2).

Bakken Update: Contributing To The Oil Glut -- 31% Production Increase, EURs of Almost 1 Million BOE -- Unconventional well results continue to improve. This has been the theme in the Bakken, Permian, Eagle Ford and all other US plays. Core well economics have improved enough to grow US oil production at $60/bbl. Some areas saw production increases at just $40/bbl. When I was in elementary school (it was a long time ago), we were told oil prices wouldn't be high enough to support Bakken production in our lifetime. Estimates in the late seventies were a breakeven at a $500/bbl oil price. That obviously changed, but most things do. Ten years ago, peak oil theorists believed we would soon reach a period of time where demand outpaced supply. The current glut, caused by unconventional production, has slowed this talk. Summary:

• US unconventional wells continue to improve with production increases seen across all plays.
• Increased production per foot continues to stress oil prices as new wells are completed in the best core areas.
• The Bakken core has seen consistent production increases per well regardless of interval.
• Bakken/Three Forks core wells model to an EUR of 875 MBOE.

'They Always Break!' Latest Pipeline Leak Underscores Dangers of DAPL --Underscoring once again the dangers of America's unreliable fossil fuel infrastructure, a significant U.S. oil pipeline has been shut down after a leak was reported Monday morning.Enterprise Products Partners said Monday it had shut its Seaway Crude Pipeline, a 400,000-barrel per day conduit that transports crude oil from Cushing, Oklahoma to Gulf coast refineries. The leak occurred Sunday night in an industrial area of Cushing.    "Seaway personnel continue to make progress in cleaning up the spill, substantially all of which has been contained in a retention pond at Enbridge's facility," the company said in a news release (pdf), explaining that the pipeline is a "50/50 joint venture" between Enterprise and Enbridge Inc. "Vacuum trucks are being used to recover the crude oil and return it to storage tanks on-site."."The incident comes after another pipeline rupture in Pennsylvania early on Friday, where 55,000 gallons of gasoline poured into the Susquehanna River, and about one month after a major gasoline pipeline run by Colonial Pipeline Co. had to halt pumping for a couple of weeks due to a spill in Alabama.Meanwhile, UPI reports that "[t]he release from the Seaway pipeline is the second associated with the Cushing storage hub in less than a month. Plains All American Pipeline reported problems with infrastructure from Colorado City [Texas] to Cushing earlier this month."Environmentalists, Indigenous people, and energy companies are in the midst of a heated debate over pipeline safety. Water protectors and their allies along the proposed route of the Dakota Access Pipeline (DAPL) have been saying for months that the project threatens their right to safe drinking water. "Oil pipelines break, spill, and leak—it's not a question of if, it's a question of where and when," 13-year-old Anna Lee Rain YellowHammer, a member of the Standing Rock Sioux Tribe, wrote in a recent appeal.

83 Arrested at Dakota Pipeline Protest, Frontline Camp Erected on Unceded Territory -- More than 80 people were arrested in North Dakota Saturday, as police armed with pepper spray descended on a protest near the Dakota Access Pipeline (DAPL) construction site.  The 83 water protectors were hit with charges ranging from rioting to criminal trespass, according to the Morton County sheriff's department. The Bismarck Tribune reported :  Kellie Berns, a protester who hung back behind a fence at the scene, said she received reports of people being pepper-sprayed and thrown to the ground and described law enforcement as being more aggressive than in past incidents. She said protesters were encircled by police as they walked onto the site.  "People came back very distressed," she said of those who returned to the fence following the demonstration. "The pipeline is getting a lot closer, so the stakes are getting higher."   Protests against DAPL have been ongoing for months, as the Standing Rock Sioux, along with other tribes and environmental activists, say the $3.8 billion, 1,100-mile pipeline threatens their access to clean water and violates Native American treaty rights.  Last week, riot charges against Democracy Now! host Amy Goodman were dismissed after she turned herself in to North Dakota police.  Meanwhile, documentary filmmaker Deia Schlosberg faces up to 45 years in prison for reporting on the protests.

125 Arrested As Dakota Pipeline Protests Grow Hostile; Media Drones Shot Down By Police - Protests over the construction of the Dakota Access Pipeline (DAPL) in North Dakota grew increasingly hostile over the weekend as police arrested 127 activists who setup multiple highway blockades claiming “unceded territory” in the direct path of the pipeline's construction.  According to a report by RT, police were forced to make arrests as the blockades directly threatened the ability of local officials to provide emergency services. The Morton County Sheriff's Department posted the following update to their Facebook page claiming that the 127 arrests from the weekend brought the total since August 10th to 269.  "Today’s situation clearly illustrates what we have been saying for weeks, that this protest is not peaceful or lawful," said Sheriff Kyle Kirchmeier. "It was obvious to our officers who responded that the protesters engaged in escalated unlawful tactics and behavior during this event. This protest was intentionally coordinated and planned by agitators with the specific intent to engage in illegal activities." Law enforcement officials also fired on media drones after reports surfaced of drones flying too close to surveillance helicopters "in a threatening manner."  The Sheriff's office reported that a deputy aboard the helicopter as well as the pilot and other passengers were"in fear of their lives." "The drones being operated near the local protests and the camps south of Mandan generally are not being operated within the regulations," Sheriff Kirchmeier said. "Reports of drones not being operated within the FAA guidelines or in a reckless and unsafe manner are being investigated and forwarded to the Morton County States Attorney’s office."

Video: Police Viciously Attacked Peaceful Protesters at the Dakota Access Pipeline - On October 22, just before dawn, hundreds of people, including many families, gathered and prepared to march toward the Dakota Access pipeline construction site near Standing Rock, North Dakota. Native American organizers lit sage and prayed for protection from police brutality before setting off on the 8-mile trek. Many in the crowd were emotional as they stood over what was once their ancestral burial grounds. Just last month, construction workers and contractors destroyed the site in preparation for installing the pipeline. But the marchers never made it to their destination. Instead, they were attacked by police forces who used pepper spray and beat protesters with batons. Dozens of officers, backed by military trucks, police vans, machine guns, and nonlethal weapons, violently approached the group without warning. “Don’t move, everyone is under arrest,” said a voice from the loudspeaker of the military vehicle. As the protesters attempted to leave, the police began beating and detaining them. Several Native American women leading the march were targeted, dragged out of the crowd, and arrested. One man was body-slammed to the ground, while another woman broke her ankle running from the police. The military and police trucks followed the protesters as nearly a hundred officers corralled the protesters into a circle. Among the arrested were journalists, a 17-year-old pregnant girl, and a 78-year-old woman. In total, more than 140 people were detained in half an hour. It was the largest roundup of protesters since the movement against the pipelines intensified two months ago. A majority of those arrested were charged with rioting and criminal trespass. Overall, close to 300 people have been arrested since protests against the pipeline kicked off over the summer.When we arrived in Mandan, the jail was so overwhelmed with people that we had to sit on the floor in the jail’s common area. Two Native American men were thrown into solitary confinement. A number of women faced humiliating strip searches, which included spreading their body parts and jumping up and down while coughing. We were refused phone calls and received no food or water for eight hours after being arrested. Two women fainted from low blood sugar and another had her medication taken away, causing her to shake and sweat profusely.

Guards for North Dakota pipeline could be charged for using dogs on activists -- Private security guards who deployed dogs on protesters at a North Dakota oil pipeline demonstration were not properly licensed and could face criminal charges, according to a local investigation. The Native American-led protests of the Dakota access pipeline received national attention in September when officers allegedly pepper-sprayed activists while guard dogs attacked protesters in a confrontation that was caught on video by the news program Democracy Now! On Wednesday, the Morton County sheriff’s office, which has been leading the police response to the demonstration and conducted mass arrests over the weekend, announced that it had investigated private guards working for the pipeline and determined that “dog handlers were not properly licensed to do security work in the state of North Dakota”. The disclosure is significant at the continuing pipeline protest, where members of the Standing Rock Sioux tribe and their supporters say law enforcement officers have become increasingly aggressive and militarized, using excessive force against peaceful, unarmed activists and targeting journalists for arrest. Security officials told the Morton County sheriff’s office that “there were no intentions of using the dogs or handlers for security work”, the office said in its investigation report. “However, because of the protest events, the dogs were deployed as a method of trying to keep the protesters under control.” The sheriff’s department said there were seven handlers and dogs but that police could only identify two people. Frost Kennels, from Ohio, provided employees and dogs, but police said the company had not been cooperative in the investigation and that it was not a registered security company.

Press Freedom? Dakota Access Pipeline Documentarian Faces 45 Years In Prison For Filming Activists - A couple of days ago we noted that protests in North Dakota, over the Dakota Access Pipeline, were growing increasingly hostile with police arresting over 125 people just last weekend alone.  Another startling discovery from the weekend was reports of police efforts to shoot down multiple media drones which some thought indicated an increasing hostility toward press seeking to cover the protests.   Certainly, Deia Schlosberg, a documentarian who was recently charged with three felonies for filming activists shutting off oil pipelines, would tend to agree.  According to Schlosberg, she was charged with conspiracy to theft of property, conspiracy to theft of services and conspiracy to tampering with or damaging a public service, all of which carry a combined 45-year maximum sentence.  According to RT, the actions filmed by Schlosberg were part of a multi-state protest by “Climate Direct Action” which vandalized five pipeline valve stations in multiple states to protest the movement of tar-sands oil from Canada into the US, and to show solidarity with ongoing protests in North Dakota.  That said, Schlosberg claims she never participated in the illegal activities and filmed from public land. (video)"From the beginning, I was just dumbfounded by the charges," Schlosberg told RT America's Ed Schultz. "They seem to come from out of nowhere."She said she understood the "unprecedented nature of this action and knew that it wasn't likely to be covered by mainstream media.""I was doing my job," she added. "I was documenting a climate action."What precipitated her arrest is difficult to discern, she said."I was there. I was documenting and they didn't know what my involvement was. I told them I was a filmmaker and that I was filming from public property, and they still put me in jail for 53 hours and (charged) me with three counts of conspiracy, which are all felonies."

Native American leaders decry increasingly harsh treatment of Dakota Access protesters -- The tribe at the heart of the contested Dakota Access oil pipeline asked the Department of Justice to step in after law enforcement arrested 127 activists using what the tribe's chairman called "military tactics." "Thousands of persons from around the country, and the world, have come to express their opposition to the pipeline in a peaceful way," said Dave Archambault II, chairman of the Standing Rock Sioux Tribe, in an Oct 24 letter addressed to U.S. Attorney General Loretta Lynch. "But state and local law enforcement have increasingly taken steps to militarize their presence, to intimidate participants who are lawfully expressing their views, and to escalate tensions and promote fear." Archambault's letter cites the use of aerial surveillance, roadblocks and checkpoints, military vehicles and "strong-arm tactics" such as the "invasive and unlawful strip searches of men and women who have been arrested for misdemeanors." He urges the Justice Department to "investigate these matters promptly, to address civil rights violations by state and local law enforcement, and to protect the right to free speech and free exercise of religion." The letter was released on the same day that more than 100 protesters—who call themselves water protectors—set up camp on private ranchland along the pipeline route near Cannon Ball, N.D in Morton County. Energy Transfer Partners, the Dallas-based company behind the pipeline, has not responded to requests for comment. Neither has the Department of Justice or the Morton County sheriff's office.Energy Transfer Partners bought the land in September, but the activists now say the land still belongs to the tribe under the Fort Laramie Treaty of 1851 and was never ceded to the U.S. government.

Protesters set up camp in project’s path for the 1st time (AP) — American Indians and others who oppose the construction of the Dakota Access oil pipeline have set up a new camp on private land in North Dakota, moving their long-running protest directly in the project’s path for the first time. Many of those gathered at the encampment Monday vowed they would stay put until the four-state pipeline is scrapped. The group erected tents and teepees over the weekend, arguing that the land, which was recently purchased by the pipeline development company, rightfully belongs to Native Americans under a more than century-old treaty. “We never ceded this land,” Joye Braun, a protest organizer, said. But the local sheriff’s office called it trespassing. A spokeswoman said the office wouldn’t immediately remove the more than 100 people because it didn’t have the manpower. Morton County Sheriff Kyle Kirchmeier said at a news conference Monday that authorities put out a call for help earlier this month and six states are sending officers. He would not say if the goal was to remove the protesters. Safety remains the No. 1 priority, and authorities are attempting to negotiate with camp leaders, he said. The development company, Texas-based Energy Transfer Partners, didn’t return a request for comment Monday. The $3.8 billion pipeline, most of which has been completed, crosses through North Dakota, South Dakota, Iowa and Illinois. Opponents worry about potential effects on drinking water on the Standing Rock Sioux Tribe’s reservation and farther downstream on the Missouri River, as well as destruction of cultural artifacts, including burial sites.

141 Arrested During Police Raid of Camp Halting Construction of the Dakota Access Pipeline -- According to Reuters: "Police arrested 141 Native Americans and other protesters in North Dakota in a tense standoff that spilled into Friday morning between law enforcement and demonstrators seeking to halt construction of a disputed oil pipeline. Police in riot gear used pepper spray and armored vehicles in an effort to disperse an estimated 330 protesters and clear a camp on private property, according to photos and statements released by the Morton County Sheriff's Department. "  In Cannonball, North Dakota, more than 100 police with military equipment are advancing on a resistance camp established by Native American water protectors in the path of the proposed $3.8 billion Dakota Access pipeline . Photos and multiple videos posted to Facebook Live depict more than 100 officers in riot gear lined up across North Dakota's Highway 1806, flanked by multiple mine-resistant ambush protected military vehicles, a sound cannon, an armored truck and a bulldozer. There have also been reports from water protectors that the police presence includes multiple snipers. Police appear to be evicting the camp in order to clear the way for the Dakota Access pipeline company to continue construction—which was active at times on Thursday just behind the police line. Cody Hall of Red Warrior Camp told Democracy Now! that behind the line of police, the Dakota Access pipeline company is carrying out construction with cranes and bulldozers on the sacred tribal burial site where on Sept. 3, unlicensed Dakota Access security guards unleashed dogs and pepper spray against Native Americans . Water protectors have set up a blockade of the highway using cars, tires and fire. Elders are also leading prayer ceremonies. Dallas Goldtooth of the Indigenous Environmental Network reported in a Facebook Live video posted Thursday just before 2 p.m. local time that police have begun arresting water protectors in the ongoing standoff. Sacheen Seitcham of the West Coast Women Warrior Media Cooperative told Democracy Now! police have used tasers against water protectors and that she was hit with a concussion grenade.   The frontline camp sits directly in the proposed path of the Dakota Access pipeline on private property purchased recently by the Dakota Access pipeline company for $18 million. In establishing this frontline camp, water protectors cited an 1851 treaty, which they say makes the entire area unceded sovereign land under the control of the Sioux. Over the weekend, police arrested more than 120 people in a peaceful march to this site during which police deployed tear gas and used rubber bullets to shoot down drones the water protectors were using to document police activity.

Tension Between Police and Standing Rock Protesters Reaches Boiling Point.— For months, tensions had mounted between protesters and law enforcement officials over the fate of an oil pipeline not far from the Standing Rock Sioux Reservation. Late this week, the strained relations boiled over as officers tried to force the protesters out of an area where they had been camping.Scores of officers dressed in riot gear walked in a wide line, sweeping protesters out of the area as face-to-face yelling matches broke out. Several vehicles, including at least one truck, were set ablaze. A standoff unfolded beside a bridge known as the Backwater Bridge, where protesters set fire to wooden boards and signs and held off the line of officers over many hours. By Friday evening, officers said they had arrested at least 142 protesters on charges including engaging in a riot and conspiracy to endanger by fire and explosion. Protesters gathered near the bridge were refusing to leave, the authorities said.  Each side complained vehemently about violent tactics by the other. Officers said that protesters had attacked them with firebombs, logs, feces and debris. They acknowledged using pepper spray and beanbag rounds against the protesters, as well as a high-pitched sound device meant to disperse crowds.In one case, the officers said, they used a Taser gun after a protester threw pepper in officers’ faces. One woman who was being arrested, the authorities said, had pulled a gun out and fired at a police line. No one was hit by those shots, they said, though two officers had minor injuries after being hit by debris.

Police from 5 States Escalate Violence, Shoot Horses to Clear 1851 Treaty Camp (photos) Over 300 police officers in riot gear, 8 ATVs, 5 armored vehicles, 2 helicopters, and numerous military-grade humvees showed up north of the newly formed frontline camp just east of Highway 1806. The 1851 Treaty Camp was set up this past Sunday directly in the path of the pipeline, on land recently purchased by DAPL. Today this camp, a reclamation of unceded Dakota territory affirmed as part of the Standing Rock Reservation in the Ft. Laramie Treaty of 1851, was violently cleared. Both blockades established this past weekend to enable that occupation were also cleared. In addition to pepper spray and percussion grenades, shotguns were fired into the crowd with less lethal ammunition and a sound cannon was used (see images below). At least one person was tased and the barbed hook lodged in his face, just outside his eye. Another was hit in the face by a rubber bullet. A prayer circle of elders, including several women, was interrupted and all were arrested for standing peacefully on the public road. A tipi was erected in the road and was recklessly dismantled, despite promises from law enforcement that they would merely mark the tipi with a yellow ribbon and ask its owners to retrieve it. A group of water protectors was also dragged out of a ceremony in a sweat lodge erected in the path of the pipeline, wearing minimal clothing, thrown to the ground, and arrested. Photo by Jonathon Klett A member of the International Indigenous Youth Council (IIYC) that had her wrist broken during a mass-arrest on October 22nd was hurt again after an officer gripped her visibly injured wrist and twisted it during an attempted arrest. At least six other members of the youth council verified that they had been maced up to five times and were also shot and hit with bean bags. In addition to being assaulted, an altar item and sacred staff was wrenched from the hands of an IIYC member by police. Several other sacred items were reported stolen, including a canupa (sacred tobacco pipe). Two medics giving aid at front line were hit with batons and thrown off the car they were sitting on. Then police grabbed another medic, who was driving the car, out of the driver side while it was still in motion. Another water protector had to jump into the car to stop it from hitting other people.

30 Powerful Photos Show Standoff Between Militarized Police and Dakota Access Pipeline Protestors -- The 2,000 water protectors who have gathered to oppose the pipeline's construction were met today by the Morton County Sheriff Department , who removed people and their camping gear.   Heavily armed authorities pushed through a supply area for the Water Protectors blockade Thursday. The public witnessed a new level of escalation that day in the Native struggle at Standing Rock, as police swept through an encampment in the direct path of the Dakota Access pipeline. The resulting standoff with the National Guard, and police officers from various states, led to 141 arrests . Advancing authorities attacked Water Protectors with flash grenades, bean bag launchers, pepper spray and Long Range Acoustic Devices. It is crucial that people recognize that Standing Rock is part of an ongoing struggle against colonial violence. The Dakota Access pipeline is a front of struggle in a long-erased war against Native peoples—a war that has been active since first contact, and waged without interruption.

Thousands of Wild Buffalo Appear Out of Nowhere at Standing Rock (VIDEO) Native Americans attempting to stop a pipeline from being built on their land and water just got assistance from a large herd of wild buffalo. Indigenous culture honors American bison (known as Tatanka Oyate, or Buffalo Nation) as a symbol of sacrifice, as the bison give their lives to provide food, shelter, and clothing through the use of their meat and their hides. Native Americans maintain a spiritual tradition with bison, believing that as long as buffalo — a gift from the Great Spirit — roam free and as long as the herds are bountiful, the sovereignty of indigenous people would remain strong. And in the midst of mass arrests, mace attacks, and beatings from batons, a stampede of bison suddenly appeared near the Standing Rock protest camp. A cry of joy reportedly erupted from the Standing Rock Sioux, as they had been praying for assistance from the Tatanka Oyate during their standoff with riot police and national guardsmen.

Sioux Protest that Inspired the World - Activists and law enforcement clashed this weekend in North Dakota over construction of the Dakota Access Pipeline, leading to dozens of arrests and a temporary road closure as protesters set up camp near the pipeline’s proposed path.  The peoples of Standing Rock is getting ready for the winter. Winters are hard and merciless in the Great Plains of the United States, with temperatures below -20ºC (-4 ºF). They transport blankets, water, food, jackets and timber to their camps at the riverside of the Missouri River, North Dakota. Although the construction of the “Dakota Access” oil pipe has been temporarily been suspended, the indigenous peoples are not leaving. Their fight intends to definitively cancel the terrible project.  The issue is much more than opposing the oil pipe that would go directly through indigenous territories and small farms in that forgotten regions of the US. Multiple indigenous peoples from all around the country have decided to fight alongside the Lakota, Dakota and Sioux people because they see in that battle a second clash of worlds, as terrible as the conquest or the genocide of the 16th to 19th centuries in the North.  According to calculations, during that period of time, the indigenous population of the U.S. was decimated by massacres and diseases brought by Europeans, from 10 million to less than 250,000 people in 1900. The U.S. government, which was in a full-fledged territorial expansion, used a policy of constant betrayal, signing treaties that were violated sooner than it took the ink to dry. Peoples from Latin America have sent representatives to Standing Rock. Nina Gualinga, representative of the Kichwa people of Ecuador, points out that indigenous peoples are only 4% of the world population but they are guardians of 80% of the biodiversity which they have protected for millennia. Mario Luna, one of the leaders of the movement in defense of water of the yaqui tribe in northern Mexico and former political prisoner was there because the traditional authorities of his people see Standing Rock as part of the same struggle they are carrying out against the Independence aqueduct.

Hundreds in Los Angeles protest climate change, North Dakota pipeline | Reuters: Hundreds of people gathered in Los Angeles on Sunday to protest against climate change and show support for activists demonstrating against the construction of an oil pipeline in North Dakota. Several Hollywood stars, including Mark Ruffalo and Susan Sarandon, were among the more than 800 people who attended the climate rally in MacArthur Park. Rallygoers carried signs urging to "shut it all down now" and chanted slogans like "water is life." "Not only is it an environmental, but it's a problem in terms of social justice," Sarandon told the rally. "We can do it. We can stop fracking. We can stop the pipeline. But really it's only because of great numbers of people." Also among celebrity attendees was actress Shailene Woodley, who earlier this month was arrested in North Dakota while protesting the planned pipeline in an incident that was live-streamed on Facebook. In North Dakota, more than 80 protesters were arrested on Saturday after clashing with police near a pipeline construction site, according to the local sheriff's department, which pepper sprayed demonstrators. The Standing Rock Sioux tribe and environmental activists have been protesting construction of the 1,100-mile (1,886-km) pipeline in North Dakota for several months, saying it threatens the water supply and sacred sites. The pipeline, being built by a group of companies led by Energy Transfer Partners LP, would be the first to bring Bakken shale from North Dakota directly to refineries on the U.S. Gulf Coast. Supporters say the pipeline would provide a safer and more cost-effective way to transport Bakken shale to the U.S. Gulf than by road or rail.

Why Are California Farmers Irrigating Crops With Oil Wastewater? - In the last three years, farmers in parts of California's Central Valley irrigated nearly 100,000 acres of food crops with billions of gallons of oil field wastewater possibly tainted with toxic chemicals, including chemicals that can cause cancer and reproductive harm, according to an Environmental Working Group (EWG) analysis of state data.  Since 2014, oil companies reported that they used more than 20 million pounds and 2 million gallons of chemicals in their operations, including at least 16 chemicals the state of California classifies as carcinogens or reproductive toxicants under the state's Proposition 65 law. That recycled wastewater was then sold to irrigation districts largely in Kern County. The Central Valley Regional Water Quality Control Board has allowed the practice for at least four decades and only recently required the oil companies and water districts to disclose the details.  EWG detailed its findings in a report released Wednesday, two days before a public meeting of an expert panel convened to study the practice's safety. Although scientists don't know whether using oil field wastewater to grow crops poses a health risk to people who eat the food, the water board has refused to halt the practice until the expert panel releases its findings. "No one should stop eating produce from California," said Tasha Stoiber, an EWG senior scientist and author of the report. "But there are too many unanswered questions about whether crops could take up the chemicals in the wastewater and whether that could harm people's health. The only way to know for sure if this practice is safe for consumers, farm workers and the environment is to conduct a thorough and independent study."

Aboriginal, environmental groups to sue Canada over Petronas LNG project | Reuters: Aboriginal and environmental groups plan to file lawsuits on Thursday against the government of Canada to overturn the permit for a controversial $27 billion liquefied natural gas (LNG) project in British Columbia, representatives of the groups said. The planned lawsuits will name Malaysian state oil firm Petroliam Nasional Berhad (Petronas) [PETR.UL], which owns a majority stake in the project, as an associated party, the groups told Reuters this week. In September, Canada gave the green light for the Pacific NorthWest LNG project in northern British Columbia with 190 conditions, despite concerns it would destroy a critical salmon habitat and produce a large amount of greenhouse gases. The decision was a major test for Canada's Liberal Party, juggling the needs of an energy industry sustaining job losses and the concerns of environmentalists, who were courted by Prime Minister Justin Trudeau in last year's election campaign. A statement from the groups on Wednesday said they would be launching "multiple legal actions" against the project on Thursday at the Federal Court in Vancouver. A legal challenge puts the future of the project at risk after it has already been hit with a three-year delay in getting its environmental permit and as Asian LNG prices have dropped by about two-thirds since 2014.

Canada's Trans Mountain crude pipeline oversubscribed by 18% in Nov: Kinder Morgan -  Kinder Morgan Canada will limit crude nominations on its Trans Mountain pipeline system by 18% in November, meaning the line will only carry 82% of nominated volumes, up from 76% of nominations in October, the company said Monday. November volumes on the Trans Mountain mainline system are expected to average 303,700 b/d, up from 281,675 b/d in October, Kinder Morgan said. Exports from the Westridge Dock near Vancouver are expected to average 79,809 b/d in November, compared with 78,091 b/d in October. Vessel loadings are expected to consist of two barges and five tankers, the same amount as in October, Kinder Morgan said. Throughput on the Puget Sound pipeline is expected to average 142,138 b/d in November, up from 128,926 b/d in October.The Trans Mountain pipeline ships Canadian crude from Edmonton, Alberta, to the Westridge export terminal in Burnaby, British Columbia, and on to the connected 180,000 b/d Puget Sound pipeline to Seattle-area refineries.

Natural Gas Prices Down Nearly 20% In Two Weeks -- Two weeks ago, with the front month contract of natural gas trading at $3.34 per million British thermal units (MMBtu), I urged caution in Time To Get Cautious On Natural Gas. This followed months of me arguing that natural gas was undervalued. In response to that article, I had some comments and several emails from readers arguing that I was dead wrong, and that it was time to get bullish, not cautious. Given the action in natural gas prices since then, I thought an update was in order. That article urging caution was published on October 13th. Here is what happened to the front month contract since then: The front month contract for natural gas has fallen by 17% since the previous update . The winter contracts have also taken a dive. Now, admittedly sometimes you just get particularly lucky with a call. While I felt like natural gas prices had advanced too quickly and the downside risk was growing, the fact that the drop began the day after I published that article was luck. That leads into the points I want to make.  I invest only when I believe the risks are fairly well-characterized and manageable. In this case, the very high seasonal inventory levels for natural gas are a risk as we head into the winter heating season. This was the inventory graphic I posted in the previous story:

Natural Gas Prices Shake Off Inventory Build -- Natural-gas prices ended higher Thursday after swinging between gains and losses, as a continued build in inventory failed to outweigh hopes for higher demand in the winter. Futures for November delivery settled up 3.3 cents, or 1.2%, at $2.764 a million British thermal units on the New York Mercantile Exchange, and traded as low as $2.684/mmBtu earlier in the session. The November contract expires Thursday, and the more active December contract settled up 3.2 cents, or 1.1%, to $3.068/mmBtu. On Thursday, the U.S. Energy Information Administration reported storage levels grew by 73 billion cubic feet, slightly higher than the 72 billion average forecast of 14 analysts, brokers and traders surveyed by The Wall Street Journal. Although natural gas dipped following the report, prices quickly bounced back as traders turned to focus on the potential for a colder winter and increased consumption. “There’s a number of other issues that the market is currently focused on,” said Teri Viswanath, managing director of natural gas at PIRA Energy Group. The recent drop in natural gas has sparked buying interest as the commodity has become oversold, according to some analysts. While there are expectations for record storage levels this year, Ms. Viswanath said investors are currently more focused on weather forecasts in the coming months. Thursday’s move is “more the markets sizing up the fundamentals and wondering if they should really throw in the towel for the winter,” she said. Natural-gas prices are influenced by weather forecasts, since half of U.S. homes use it for winter heating.

NYMEX November gas settles at $2.764/MMBtu, up 3.3 cents - In the final day of trading before expiration, the NYMEX November natural gas futures contract fluctuated around Wednesday's settlement before ultimately rising 3.3 cents to close at $2.764/MMBtu Thursday following the release of the US Energy Information Administration's storage report. The latest US EIA weekly storage gas data, for the week ending October 21, showed a 73-Bcf injection into storage, bringing total stocks to 3.909 Tcf, closer to the 4 Tcf level last surpassed in mid-November 2015, according to EIA data. While this build falls near the 75 Bcf expected from a consensus of analysts S&P Global Platts surveyed, which limited the data's market impact, this is the first injection since April 1 to break above the previous year's build. Before moving to the prompt month, the December contract stabilized after falling 28.3 cents from Monday to Wednesday, increasing 3.2 cents to trade at $3.068/MMBtu Thursday. According to Phil Flynn, senior market analyst at Price Futures Group, the December contract run up can be attributed to a combination of November expiration and the prospects for more seasonal weather for the second half of November. For the first half, the National Weather Service predicts above-average temperatures over much of the continental US, placing much of the country in a temperature zone that may limit heating and cooling demand through November 9. Platts Analytics' Bentek Energy projects demand to hover around 67.8 Bcf/d, almost 2.88 Bcf/d below the comparable year-ago period, with much of the decrease from a 3.26 Bcf/d drop in power burn, while residential/commercial demand remains largely stable.

Supplying Mexico's growing natural gas demand, part 2. - Mexico’s power sector is one of three major demand centers U.S. natural gas producers and pipeline projects are targeting, the other two being the U.S. power sector and LNG exports. U.S. natural gas exports to Mexico are up 20% year-on-year in 2016 to date to nearly 3.5 Bcf/d––more than double the export volume five years ago––and are poised to soar past 6 Bcf/d by the end of the decade. Mexico’s energy operators are on a tear adding new natural gas-fired power generation capacity and building a sprawling network of natural gas transportation capacity. But delivering increasing volumes of U.S. natural gas to Mexico will require substantial changes on the U.S. side as well, particularly in Texas. Today, we continue our look at plans for adding pipeline export capacity along the Texas-Mexico border. In Part 1 of this blog, we detailed the veritable natural gas renaissance taking place south of the U.S.-Mexico border. The state-owned Comisión Federal de Electricidad (CFE) is investing heavily in expanding and modernizing its power generation fleet with thousands of megawatts of new, natural gas-fired combined-cycle power plants. And, Mexico’s Energy Secretariat (SENER) has appointed a dedicated steward—Centro Nacional de Control del Gas Natural (CENAGAS)—to oversee an aggressive five-year plan to develop the kind of expansive network of natural gas pipelines that would facilitate Mexico’s conversion to natural gas.

Merger of Oil and Gas Infrastructure Companies Would Be the Larges Ever - While the bold resistance to the Dakota Access Pipeline continues in North Dakota, a backroom deal has been brokered to make Big Oil and Gas even stronger. Enbridge — a major backer of the pipeline — and Spectra are set to merge, creating the largest oil and gas infrastructure company in North America. We’ve taken a deeper look at who’s behind the Dakota Access Pipeline and who would profit heavily from this terrible project. Take a look at the graphic below to see whose pocket books will be lined by this pipeline that would endanger major water sources and would cut right through sacred indigenous lands. Enbridge, along with Phillips 66, Energy Transfer Partners, Sunco Logistics and Marathon, are behind-the-scenes of the Bakken Pipeline — which includes the Dakota Access Pipeline — and are banking on a massive payoff at the community’s expense. At $1.5 billion, Enbridge acquired the largest ownership stake.¹ An Enbridge-Spectra merger not only creates a mega-corporation, but also increases the power of Big Oil and Gas and emboldens them to continue to build the Dakota Access Pipeline over the objections of Native American water protectors. Beyond this project, they will continue to build out other pipeline and oil and gas export projects to maximize production, all at the expense of targeted communities and our climate. Send a message to block the oil and gas industry from consolidating and running rampant in our communities. Dirty fossil fuel projects endanger our communities, and we have to look no further than Enbridge and Spectra to see how these corporations are harming us and destroying our environment. In 2010, Enbridge sent thousands of barrels of oil into the Kalamazoo River in Michigan, and it was Spectra’s pipeline that exploded in Pennsylvania earlier this year, severely burning a person. A merger of these companies would increase Big Oil and Gas’ power to control the energy market, grow their ability to influence government regulations and allow them to build more projects like the Dakota Access Pipeline. The Department of Justice (DOJ) and Attorney General Loretta Lynch have the power to block this merger from going forward, but they need to hear from us.

Bankruptcy Bust: How Zombie Companies Are Killing the Oil Rally - WSJ: Their owners may be bankrupt, but the sprawling mines of Wyoming’s Powder River Basin are still churning out coal. It is the same story in oil fields along the Gulf Coast and with shale-gas wells in the Rocky Mountains. Energy investors have long hoped that falling prices would solve themselves by driving producers into bankruptcy and stanching the flood of excess supply. It turns out that while bankruptcy filings are up, they have barely impacted fossil-fuel markets. About 70 U.S. oil and gas companies filed for bankruptcy in 2015 and 2016. They now produce the equivalent of about 1 million barrels a day, about the same as before they declared bankruptcy, according to Wood Mackenzie. That represents about 5% of U.S. oil-and-gas output. That resilience has kept energy inventories flush and prices capped. Oil shot to $50 a barrel this summer, but has had trouble making much progress beyond that mark. On Friday, oil futures in New York rose 0.4% to $50.85 a barrel. The theory that bankruptcies would help balance the market “was misguided to begin with,” says Roy Martin, a research analyst at energy consultancy Wood Mackenzie. “And people are starting to come around to that now.” This is exactly the way chapter 11 was meant to work. The process is designed to save companies that can be saved, and many energy companies are using it to lighten their heavy debt loads, adapt to lean times and keep producing.Peabody Energy Corp., Arch Coal Inc. ARCH 1.97 % and Alpha Natural Resources Inc. CNTE 1.42 % —three of the five largest U.S. coal miners—all filed for bankruptcy in the past 18 months. They accounted for about 36% of U.S. coal supply in the first half of 2015. This year, production declined only in line with the rest of the sector, and their share for the first six months was nearly unchanged at about 33%, according to IHS Global Energy. Arch Coal and Alpha Natural Resources recently emerged from bankruptcy. “A lot of those companies just operate similarly to how they were prior to entering bankruptcy. It definitely doesn’t help.”

Oil Companies Shift Exploration Tactics, Curb Spending - WSJ: —In June, oil giant BP BP 0.82 % PLC announced what it deemed an “important” new discovery in Egypt. It turned out to be a modest natural-gas find that didn’t even rank in the top 50 discoveries since 2012. The fact that BP and its partner Eni SpA hailed it as a major success is a sign of the times for the oil industry. For years, big oil and gas companies committed ballooning sums to seeking mammoth reserves in difficult locations. But their record was spotty, and a dearth of major finds was followed by the oil-price slump that began in 2014. It prompted companies to cut costs and shift away from expensive, high-risk exploration. World-wide, oil-exploration spending last year was the lowest since 2007. There has been less conventional oil and gas (as opposed to resources contained in shale or oil sands) discovered in the past 2½ years than in 2012 alone, according to Edinburgh-based consultancy Wood Mackenzie. And oil companies will likely show continued pressure on exploration budgets when they report their third-quarter earnings over the coming week, say analysts. Oil prices were down Wednesday and hovering around a three-week low over worries that U.S. oil stockpiles would rise this week and that the Organization of the Petroleum Exporting Countries won’t follow through on promised production cuts. Brent crude, the international benchmark, fell 2%, dropping below $50 a barrel for the first time in nearly a month. Some in the industry say the decline in exploration spending will eventually contribute to an oil drought—and spiking crude prices. Saudi Arabia’s energy minister, Khalid al-Falih, told an oil conference in London this month that the underinvestment caused by weak oil prices over the past two years will result in “a period of shortage of supply.”Others say it is the new normal, in which giants like BP and Royal Dutch Shell PLC will increasingly focus their exploration on less risky and more easily accessible reserves—and spend some of the money they used to commit to exploration to buy already discovered resources from smaller companies.

Exxon Mobil Could Be On The Brink Of 'Irreversible Decline’ - Exxon Mobil Corp. may be facing “irreversible decline” as the oil giant fails to cope with low oil prices and mounting debt, a report released Wednesday found. The Texas-based company, scheduled to report its third-quarter earnings on Friday, has suffered a 45 percent drop in revenue over the past five years as it bet big on drilling in oil sands, the Arctic and deep-sea sites ― decisions that proved expensive, environmentally risky and politically controversial.  Combined with a two-year plunge in oil prices, ballooning long-term debt to cover dividend payments to shareholders and an evaporating pool of cash, Exxon Mobil’s finances show “signs of significant deterioration,” according to new research from the Institute for Energy Economics and Financial Analysis, a nonprofit based in Cleveland. “Investors right now are getting less cash from Exxon than they have historically, and are likely to get less cash in the future,” Tom Sanzillo, director of finance at the IEEFA, told The Huffington Post on Wednesday. “This is going to be a much smaller company in the future, and the oil industry is going to be much smaller in the future.” In April, Exxon Mobil was stripped of Standard & Poor’s top credit rating for the first time since the 1930s. The rating agency said it worried Exxon took on billions in debt to fund new drilling projects at a time when oil prices were high. Now, with the price of crude below $50 per barrel, that debt looks risky. Despite S&P specifically citing such payments in its downgrade, Exxon Mobil actually increased its dividend by 2 cents the next day.  Usually, dividends go up as a company’s stock price thrives. But shares of Exxon have trailed the S&P 500 for 10 quarters in a row, the report noted, and that’s before factoring in the risks of climate change.

Total beats third-quarter forecast helped by cost cuts, new projects and renewables | Reuters: France's Total battled lower refining margins to beat third-quarter profit expectations on Friday helped by cost cuts, output from new projects and a strong contribution from its renewable energy ventures. Total reported a 25 percent fall in third-quarter adjusted net income to $2.1 billion, beating the $1.9 billion expected by analysts polled by Reuters. Revenue fell 8 percent to $37.4 billion. "Total's Q3 results look resilient. Total continues to post solid earnings and there's a lot to like about the direction of travel," analysts at Jefferies who maintain a 'hold' rating on the stock said in a note. The energy company said the sale of a solar farm by U.S. subsidiary SunPower had provided a significant boost to its results, and New Energies businesses added $100 million in the quarter's $545 million adjusted net operating income. Italian peer Eni (ENI.MI) reported a worse-than-expected adjusted net loss for the quarter hurt by a shutdown at a key Italian field. Total said increased oil and gas production and an aggressive saving drive put it on track to organically cover spending and dividends in a low oil environment of $55 a barrel next year. Total's oil production in the quarter was up 4.3 percent thanks to five new fields. That, and a ramp-up at nine fields which started last year drove output growth and bolstered cash flow in the upstream segment.

After Lean Years, Big Oil May Emerge Stronger Than Ever - Big Oil is clawing its way back. After a heart-stopping plunge in the price of crude over the last two years, along with slashed dividends and the elimination of tens of thousands of jobs, the biggest oil companies are proving surprisingly adept at again pumping profits, as well as oil, out of the ground. Indeed, with oil trading in a range of $40 to $50 barrel for most of the 2016, experts say the biggest energy producers are poised to rebound if prices remain stable. “It’s a hunger games environment, but they are learning how to be more efficient,” said Evan Calio, an equity analyst with Morgan Stanley. “Two years ago, nobody thought costs could drop as quickly as they did. It’s staggering, and there’s no doubt this has surprised people.” Not that it has been easy. Over the last 12 months, drillers have eliminated nearly 20,000 jobs in the United States, according to the Labor Department, and Morgan Stanley expects domestic oil production to finish 2016 half a million barrels below where it started. Deepwater drilling has been curtailed in places like the Gulf of Mexico, as have multibillion dollar projects around the world. In the continental United States, once red-hot regions like North Dakota, where the fracking boom transformed the economy, have abruptly cooled. Individual companies that were especially aggressive about seeking new finds have been humbled. Besides being forced to cut its dividend, ConocoPhillips reduced its capital budget for exploration and production by more than $10 billion — or roughly two-thirds. Since late 2014, its shares have fallen from over $70 to around $40 recently. But if crude prices can stay above $40 a barrel, the dividends, and stock prices, of the big American oil companies should be secure. And if oil stays above $50, or even hits $60 in the coming months or years, Big Oil may well emerge from the recent lean years stronger than ever. “Whoever survives this is going to win,” “They’re going to come out smelling like roses.”

Tier 3 sulfur requirements closing in on refiners -- New “Tier 3” requirements to limit sulfur content in gasoline are set to take effect in just over two months — on January 2017. In March 2013, the Environmental Protection Agency (EPA) proposed to limit the sulfur content of gasoline produced or imported into the U.S. to no more than 10 parts per million (ppm) from the current “Tier 2” 30 ppm standard by January 1, 2017.   With these upcoming “Tier 3” requirements, refiners have been developing their strategies to meet the regulations and in some cases have already invested hundreds of millions of dollars in their facilities. Today, we look at the various approaches refiners can take for compliance and their impacts on the industry. The RBN blogosphere last covered Tier 3 regs in June 2013, a couple of months after the EPA released the proposed requirements but prior to the full approval of the regulations (see The Tears of a Refiner – New Gasoline Sulfur Regulations).  In that blog, we recapped the history of EPA’s “Tier” program and considered the potential impact of Tier 3.  In summary, this program was kicked off by the Clean Air Act of 1990.  The regulations were introduced in stages (the Tiers) to progressively lower all sorts of emissions, including carbon monoxide (CO), nitrogen oxides (NOx), particulate matter (PM), formaldehyde (HCHO), and non-methane hydrocarbons (NMHC).  Tier 1 was implemented progressively between 1994 and 1997.  The Tier 2 program was a refinement proposed in 2000 and phased in by 2006 that included sulfur in the program.   The Tier 2 program treated both vehicles and fuels as a combined system, recognizing that reducing vehicle emissions of toxins required changes to fuel specifications as well as vehicle emission systems. More specifically, the fuel part of the Tier 2 program reduced the average sulfur content in gasoline by 90 percent from 300 ppm down to 30 ppm.   Now it is time for Tier 3, which cuts the permitted sulfur content in gasoline even further.

Big Oil Companies Reap Windfall From Ethanol Rules - WSJ: Environmental regulations designed to boost the amount of ethanol blended into the U.S. gasoline supply have inadvertently become a multibillion-dollar windfall for some of the world’s biggest oil companies. Companies including Chevron, Royal Dutch Shell, and BP could reap a total of more than $1 billion this year by selling the renewable fuel credits associated with the ethanol program, according to an analysis commissioned by CVR Energy, a refinery operator controlled by billionaire Carl Icahn, a vocal critic of the rules. For other companies, especially smaller refiners, the rules have had the opposite effect, forcing them to spend hundreds of millions to buy credits to comply. Some large oil companies acknowledge they are reaping revenue from the regulations, but say their advantage stems from large investments they made to comply with it, and stress that not all of the money translates into profit. “Because a few other companies made different business decisions and are now living with the consequences is not a reason to suddenly change the rules,” said Geoff Morrell, a senior vice president for BP. Spokesmen for Chevron and Shell said they couldn’t immediately comment. A spokesman for Citgo, the U.S. arm of state-owned Petróleos de Venezuela SA, disputed it was profiting from the credits as the analysis claims, saying that it buys more than it sells annually to comply with its obligations. The ethanol and biodiesel program, created during President George W. Bush’s administration, was aimed in part at reducing U.S. dependence on foreign oil. But those concerns have waned as a result of the abundant new U.S. oil and gas supplies unlocked by shale drilling. The rules require refiners to either blend ethanol with the gasoline they produce or buy credits.

A “New Normal” for the Oil Market – iMFdirect -- While oil prices have stabilized somewhat in recent months, there are good reasons to believe they won’t return to the high levels that preceded their historic collapse two years ago. For one thing, shale oil production has permanently added to supply at lower prices. For another, demand will be curtailed by slower growth in emerging markets and global efforts to cut down on carbon emissions. It all adds up to a “new normal” for oil.mShale has been a game changer. Unexpectedly strong shale-oil production of 5 million barrels per day contributed to the global supply glut. That, along with the surprising decision by the Organization of the Petroleum Exporting Countries (OPEC) to keep production unchanged, contributed to the oil price collapse that started in June 2014.Although the price collapse led to a massive cut in oil investment, production was slow to respond, keeping supply in excess. What’s more, the resilience of shale production to lower prices again surprised market participants, leading to even lower prices in 2015. Shale drillers significantly cut costs by improving efficiency, allowing major players to avoid bankruptcy. While reduced investment is expected to result in lower production by non-OPEC countries in 2016, production still exceeds consumption. Many experts expect oil markets to balance in 2017, albeit with high level of inventory (Chart 1). That said, there is uncertainty regarding supply, especially regarding the cost associated with extraction as well as production from so-called shale “fracklog”—drilled but uncompleted wells. The latter can add to production flows in a matter of weeks and hence considerably change the dynamics of production compared to conventional oil—that features long lead times between investment and production.  Falling prices spurred oil-demand growth, which rose to a record high of about 1.8 million barrels per day in 2015. That’s expected to slow to the trend level of 1.2 million barrels per day in 2016 and 2017. Using basic estimates for demand elasticity with respect to price suggests the “price effect” accounts for a 0.8 million-barrel per day increase in demand. A sizable share of oil demand growth is attributable to the price drop rather than income gains. With limited scope for further declines in prices in dollar terms, increases in oil demand will depend largely on prospects for global economic growth.

US will remain major gasoline exporter with oil below $60/b: analyst - Global gasoline demand will rise as long as crude stays below $60/b, and a shortage of Asian gasoline refining capacity will drive US exports higher, Fereidun Fesharaki, chairman of Facts Global Energy consultancy, said Thursday. "Any way that we look at the future refineries under construction [in Asia], they cannot produce enough gasoline," Fesharaki said at the Center for Strategic and International Studies in Washington. Fesharaki expects US net exports of refined products to keep rising. In a decade, the US has made a dramatic swing from 3.9 million b/d of net imports in October 2005 to 2.3 million b/d in net exports in July, according to US Energy Information Administration data."As time goes by, there is a gasoline shortage worldwide that only US refiners can supply," he said. "We expect huge amounts of exports of US gasoline to all over Asia, without which Asia cannot balance its system." Fesharaki said another dramatic shift in refining economics will come as a result of the International Maritime Organization's announcement Thursday to impose a 0.5% global sulfur limit starting in 2020, rather than delaying it for five years. "Today we have 4 million b/d of bunkering, which is using 3.5%-4% [sulfur] fuel oil," he said, with most of that demand in Asia, Africa, Latin America and the Middle East. "If God almighty comes from the heavens, he cannot make 0.5% fuel oil by 2020," he said.

Mid-$50s/b oil is catalyst for sustained N American recovery: Baker Hughes CEO -  Oilfield services provider Baker Hughes sees WTI oil prices in the mid-to-upper $50s/b as the catalyst for recovery in North America, including the Gulf of Mexico, where the company was hit hard hard in the third quarter of 2016, its CEO said Tuesday. The North American market has continued to "grind slowly upwards" as the rig count, particularly in the US, ticks ahead from troughs seen six months ago, Martin Craighead said during a quarterly conference call with analysts. But "customers need to be more confident of the durability of those prices before making any significant change to their spending patterns," Craighead said. The mid-$50s/b price is about 10% above where front-month WTI has teetered most of the past month, and Craighead's suggestions about this level echo comments made by peers at Halliburton and Schlumberger in separate conference calls during the past week. But for Baker Hughes, a stagnant Gulf of Mexico hit its balance sheet hard in Q3 and nearly canceled out rising North American land activity and seasonal Canadian uplift. As a result, its North American revenue of $674 million in Q3 represented an increase of just 1% sequentially.

Would the US ever attend an OPEC meeting? -  The recent invitation by OPEC for US officials to join in production freeze talks is clearly a nod to the production powerhouse Americas has become as a result of the shale revolution. But it wasn’t always that way. Just ask former US Energy Secretary Bill Richardson, who, 16 years ago, was the point person in talks with Saudi Arabia to boost production, which would keep US gasoline prices stable. Richardson’s tenure from 1998 through 2000 came at a much different time for both the US’ relations with OPEC and its role in the world oil market. For one, the US was producing only about 5.9 million b/d and was in the midst of a historic supply decline that would crater at about 3.9 million b/d by October 2005. In the spring of 2000, Richardson was urging Saudi Arabia through phone calls and what he called “quiet diplomacy” to orchestrate an OPEC production increase as the Clinton administration was worried about a crude oil price spike. That price spike had brought prices to over $34/b, a level which roughly 15 years later would create a crisis for producers and a boon for consumers. And OPEC has also changed significantly, Richardson said. “It’s a different OPEC,” Richardson said in an interview with S&P Global Platts. “Today, they’re not unified, there are more players and while the Saudis are still the leaders, they’re no longer as friendly to us as they used to be nor can they totally dictate [prices].”

Oil drilling underway beneath Ecuador's Yasuní national park - Ecuador has confirmed that oil drilling has begun under the country’s Yasuní national park, one of the world’s biodiversity hotspots. But the government claims that there has been only minimal disturbance to the Unesco biosphere reserve in the Amazon rainforest since extraction of 23,000 barrels of oil a day began last month. Ecologists, environmentalists and political groups in Ecuador and elsewhere condemned president Rafael Correa when in August 2013 he scrapped a pioneering conservation planto leave oil under the Ishpingo-Tambococha-Tiputini (ITT) area of the park, in return for $3.6bn (3bn) compensation. Nobel prizewinners, Hollywood stars such as Leonardo DiCaprio, UN general secretary Ban Ki-moon and conservationists had backed the ambitious plan when Correa first proposed it in 2007, but when after six years only $200m had been pledged by the international community, Correa said he had no option but to allow drilling to pay for poverty relief. Critics feared that oil would destroy Yasuní in the same way it had led to widespread deforestation and pollution across much of Ecuador and the western Amazon. Not only could oil workings fatally contaminate water and soils, but new oil roads would be constructed deep into the forest allowing hunting, deforestation and colonisation by people seeking land. In addition, said critics, it was likely that an army of oil workers would clash with the two semi-nomadic tribes of Waorani Indians known to be living within the national park.

Venezuelan Oil Is Largely Staying in Ground or Going Up in Smoke - WSJ: —This fading oil town has an eerie glow at night, illuminated by dozens of oil wells burning off precious oil and gas for lack of functioning equipment to process it.Every month, Punta de Mata’s smoke columns grow higher, a staggering waste at a time when Venezuela, the holder of the world’s largest oil reserves, desperately needs cash from every barrel to import scarce food and medicine. The wells are, quite literally, burning money.Making matters worse, for every barrel of light crude burned off at Punta de Mata’s wells, Venezuela needs to spend dollars importing a barrel of diluent to mix with the very heavy oil produced in the country’s south.“This is pure mismanagement,” said Carlos Bellorin, an oil analyst at IHS Inc. in London. “There’s no other rational explanation for such waste.”The decrepid state of aging fields like Punta de Mata, which provide the bulk of Venezuela’s revenues, is a crucial reason why the country’s oil output is falling faster than that of any other major oil producer bar insurgency-riven Nigeria. Venezuelan crude production shrank 11% to 2.3 million barrels a day in a year to September, according to government figures, and the consulting firm Medley & Associates expects the fall to accelerate in the next 12 months. Barring a spike in oil prices, falling production will plunge Venezuela ever deeper into economic crisis. The decline in output deepens Venezuela’s economic pain at a time when the economy is already forecast to contract by 10% this year. The government is struggling to earn enough dollars to import food and medicine and pay almost $16 billion due to foreign creditors between now and the end of next year. In the oil fields that dot the country’s eastern savanna, pump jacks sit idle because of parts shortages, abandoned oil barges rust onshore and drillers earning $9 a week often skip shifts. Overall, the number of working oil rigs in Venezuela declined by a quarter in the 12 months to September, according to Houston-based oil-field-service company Baker Hughes Inc. There are now more rigs drilling in Oman, where proven reserves are just 1.7% of Venezuela’s.

US said to be closing in on PDVSA-linked seizures, charges.  (Bloomberg) -- Federal prosecutors are preparing to charge several individuals and confiscate their property over the alleged looting of Venezuela’s state oil company in what may amount to one of the biggest asset seizures in U.S. history. Three people familiar with the case say the government has been investigating at least a dozen Venezuelans and is expected to file charges in Houston against a few of them as soon as next month. Those on the list, including former executives of Petroleos de Venezuela SA, known as PDVSA, are suspected of having taken bribes from middlemen to award contracts at inflated prices, helping to siphon more than $11 billion out of the country. All three people spoke on condition of anonymity because the investigation is ongoing and sensitive due to its impact on U.S. foreign policy. The government has set its sights on a number of U.S. assets, including about 20 residential properties, some in West Palm Beach and the Houston suburbs. Switzerland has seized $118 million in assets from Swiss banks related to the matter and sent $51 million to U.S. authorities, Bloomberg reported on Tuesday. Venezuela’s opposition-run congress is separately seeking to recover $11.3 billion that went missing from PDVSA between 2004 and 2014 while Rafael Ramirez, currently Venezuela’s ambassador to the United Nations, was company president. It seeks to hold him politically responsible. Ramirez has rejected the congressional accusations as lies. Investigators are also looking at the dealings involving PDVSA and a number of companies, including Pratt & Whitney, General Electric Co. and Rolls Royce Holdings Plc, as well as ProEnergy Services, a Missouri-based firm, two of the people said. The prosecutors have been tracking money that flowed through Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co., they added.

India set to strike oil barter deal with Venezuela - India will strike a barter deal with Venezuela to settle past dues of $530-$600 million payable for its oil equity in the Latin American nation, a senior official at state-owned Oil and Natural Gas Corp said Thursday. ONGC Videsh Limited, the overseas arm of upstream major ONGC, has a 40% stake in the San Cristobal oil field in Venezuela. The dues included its accumulated share of oil sales. "They [Venezuela's PDVSA] would be giving us crude every month," ONGC chairman and managing director D K Sarraf, who is also chairman of OVL, said after releasing ONGC's results for the second fiscal quarter (July-September). In July, Indian oil minister Dharmendra Pradhan raised the issue of barter deal with his Venezuelan counterpart Eulogio del Pino during his visit to the Indian capital.India set to strike oil barter deal with Venezuela - Oil | Platts News Article & Story: "Based on the discussions three months ago with the Venezuelan team, an agreement is being finalized," Sarraf said, and hoped that the barter deal would be finalized "very soon." In 2008, OVL invested around $190 million in the project where PDVSA holds a 60% stake. Sarraf declined to give specific details related to the monthly quantity of Venezuelan crude to be imported as part of the deal and the timeline to square off the outstanding dues by saying minute details were still being worked out. "By utilizing those quantity [to be finalized], we would be able to recover the debts," Sarraf said, adding the squaring off the dues would take couple of years. In fiscal year 2015-16 (April-March), India imported 23.6 million mt of crude from Venezuela, accounting for 12% of the country's crude imports.

Analysis: India's oil demand seen rebounding after sluggish September -  After posting double-digit growth in August, India's oil products demand in September declined as widespead rains and regional unrest took toll on transport, but analysts expect a rebound in October on the back of firm fundamentals and following the end of the monsoons. The sharp growth in consumption of LPG and jet fuel in September was not enough to offset a drop on demand for diesel and gasoline, pulling down overall oil products demand 0.8% year on year to 14.6 million mt, or 3.82 million b/d, latest provisional data from the Petroleum Planning and Analysis Cell showed. "The conclusion of seasonal rainfalls, the onset of winter, and improving industrial demand amid festive season should propel growth in coming months, notwithstanding any increases in crude prices," said Sri Paravaikkarasu, senior consultant and Asia downstream specialist at Facts Global Energy. The negative growth recorded in September was a steep decline from the double-digit demand growth of 11% year on year to 15.81 million mt, or 4 million b/d, posted in August.Analysts attributed the fall in demand to heavy rains towards the end of the June-September monsoon season and water sharing disputes between two southern states -- Karnataka and Tamil Nadu -- and political unrest in the northern state of Jammu and Kashmir.

Pakistan's OGDC Q3 crude output up 2.8% on year to 40,230 b/d, natural gas slips -  Pakistan's largest exploration and production company, Oil & Gas Development Company Limited, produced 40,230 b/d of crude in the July-September quarter, up 2.8% from corresponding period a year ago, the company said Thursday. Output increased on higher production from the Kunnar, Rajian and Sinjhoro fields as well as increases in the company's production share from non-operated joint venture fields, it said in a filing to the Pakistan Stock Exchange. Gas production dipped to 1.050 Bcf/day in the quarter compared to 1.086 Bcf/day a year earlier, primarily due to lower output from the Qadirpur field due to annual maintenance, the statement said. Output at the Dakhni and Nashpa fields was also hit by maintenance. LPG output increased by 28% to 342 mt/day on a rise in production from the Sinjhoro field and shares in non-operated joint venture fields, statement said. OGDC's average realized price for crude oil sales in the quarter ended September 30 fell to $44.37/b from $52.46/b a year earlier. The price of gas sold during the period averaged Pakistan Rupees 242.17/Mcf ($2.29/Mcf), down from Rupees 264.20/Mcf, the company said. OGDC's exploration expenditure rose sharply to Rupees 4.321 billion from Rupees 1.807 billion while July-September net profit declined 19.8% to Rupees 14.362 billion from Rupees 18.26 billion a year earlier.

Asian gasoline cash premium hits one-year high on tight supplies - The Asian gasoline cash premium, the spread between FOB Singapore 92 RON physical cargo and MOPS Strip, hit a one-year high Tuesday as spot physical cargo offerings in the region became much less abundant over the course of October while buying interest soared. The premium reached $1.16/b Tuesday, the highest since hitting $1.35/b on October 26, 2015. Traders pointed to a much tighter balance for November, with export supplies in the Middle East and India expected to dry up. Saudi Arabia, the biggest gasoline exporter in the Middle East, will see two major refineries going into turnaround in November and December. Saudi Aramco plans to shut units at the 400,000 b/d Yasref refinery for a month from early November. The joint-venture refinery, co-owned with Sinopec, produces up to 90,000 b/d of gasoline. Aramco also plans to shut units at the 550,000 b/d Ras Tanura refinery for 45 days from early December. The wholly owned refinery produces up to 120,000 b/d of gasoline.There will be an even bigger production loss in India, with Asia's biggest gasoline exporter, Reliance Industries, planning a five-week shutdown of its 200,000 b/d fluid catalytic cracker at the 660,000 b/d DTA plant starting the second week of November. Gasoline production during the period will decrease by at least 400,000 mt, according to Platts calculations. Although the DTA plant is focused on the domestic market, Reliance is expected to cut export volumes significantly, hence reducing supplies to the Middle East, its biggest export destination.

The Beginning Of The End For Europe’s Natural Gas War - Russia’s Gazprom is on the verge of striking a deal with EU regulators to settle a half-decade old dispute over natural gas pricing, and the resolution could change the way Gazprom does business and lead to lower gas prices for much of Eastern Europe. The conflict began back in 2011 when EU antitrust regulators began investigating Gazprom for anticompetitive behavior, citing Gazprom’s practice of pricing natural gas differently to different countries depending on how compliant they were to Moscow. The EU Commission launched a formal investigation that ultimately led to negotiations, which were temporarily put on ice after Russia’s takeover of Crimea. The details are arcane, but Gazprom is about to offer concessions to the EU in order to avoid potentially having to pay billions of dollars in fines. These include allowing recipients of Russian gas to resell that gas. Gazprom has opposed that practice because it undercuts their ability to demand certain prices from individual customers and countries. Gazprom and Russia were much happier under the old system, in which they could sign an array of bilateral deals on an individual basis, rather than negotiating with European countries collectively. That allowed the company to tie gas contracts to political aims – should a European country lend its support to a Russian cause, such as a pipeline, they would receive better terms. That leads to the second concession that Gazprom will have to grant Europe: they will have to charge customers similar rates for natural gas. But the agreement stops short of entirely breaking Gazprom’s practice of linking gas prices to oil prices.  The deal is not yet secured – it still needs to be reviewed by European countries – but if it is, Gazprom will avoid having to pay billions of dollars in fines. However, the agreement could then become legally binding, subjecting Gazprom to European law, something it has objected to up until now. Gazprom would have to pay fines if it violates the terms of the agreement.

Far East Russian crudes rally as China shifts focus to low sulfur sweet grades - Oil | Platts News Article & Story: Cash differentials for Far East Russian crudes rallied to multi-month highs Tuesday morning in Asia, as regional refiners showed strong preference for short-haul crude cargoes amid rising freight rates, while China's tougher rules on pollution stoked strong demand from Chinese end-users for low sulfur crude grades such as ESPO Blend and Sokol. S&P Global Platts pegged second-month, December, ESPO notionals at a premium of $3.40/b to front-month Dubai crude assessments at 11 am (0300 GMT) Tuesday, the highest level since March 28 when it was assessed at $3.70/b. Light sweet Sokol crude notionals at 11 am were at a premium of $4.20/b to the December average of first-line Dubai and Oman assessments, its highest level since September 16. Regional traders said a combination of upside factors contributed to the latest bull run in the Far East Russian crude complex, including tighter supply of Sokol crude for December.Market sources noted that a total of 11 Sokol cargoes, each 700,000 barrels, are expected to load over December, with Russia's Rosneft, Japanese consortium Sodeco and oil major ExxonMobil each holding three cargoes, while India's ONGC Videsh Limited has the remaining two cargoes. In November, a total of 12 cargoes of Sokol crude of a similar size are scheduled to be exported out of DeKastri terminal at Sakhalin-1.

The Niger Delta Oil Wars Are Unlikely To End Soon - The Nigerian government announced in August that it had resumed amnesty payments to former militants in the Niger Delta, many of them members of the Movement for the Emancipation of the Niger Delta (MEND) (Naija Headlines, August 4). It had significantly reduced the amount of money available for such payments in late 2015 and claimed to have suffered a technical hiccup delaying payments in early 2016, resulting in accusations from the militants that Abuja was failing to abide by the arrangements agreed upon in the 2009 Presidential Amnesty Program (PAP) (Information Nigeria, August 2; The Leadership, November 29, 2015; Punch, February 24). The decision to resume payments to the insurgents was indicative of an increasing desperation on the part of the government to reduce the level of violence in the Niger Delta and enable oil production to return to pre-conflict levels. Violence in the region since the start of 2016 has cut oil production to a near-30-year low, a serious concern for the government, which relies on oil for two-thirds of government revenue and nearly all of its export earnings. About 30,000 former fighters are now receiving amnesty payments of $206 per month, on the condition that they end their attacks on pipelines in the Niger Delta (Information Nigeria, August 2). However, it remains uncertain whether this will lead to a genuine decrease in violence in the Niger Delta and unlikely that the reintroduction of amnesty payments will change the dynamics of the conflict in the Delta.   The main difficulty with attempts to end conflict in the Delta through the resumption of amnesty payments is that numerous militant factions in the region never received amnesty payments in the first place and were excluded from the PAP. This was one of the main contentions of the Niger Delta Avengers (NDA), who distanced themselves from MEND when they first emerged in early 2016. The NDA claimed that MEND commanders had never cared about the Niger Delta and had grown rich from the amnesty payments without redistributing the money to the foot soldiers of the rebellion (Niger Delta Avengers, May 3). It claimed to be different, although there are several indications that the NDA is composed of many former MEND fighters – not least that NDA attacks escalated significantly after the government halted amnesty payments and began arresting those linked to corruption within the program (The Paradigm, January 16).

Nigeria's oil production climbs up to 1.9 million b/d: oil ministry - Nigeria's oil production has risen to 1.9 million b/d, the oil ministry said Tuesday, even as the government has begun moves for all-inclusive talks with Niger Delta leaders to end militancy in the region and bolster oil production. "We have built capacity of up to 2.4 million b/d, but [we are] currently producing about 1.9 million b/d," Omar Farouk, the special adviser on international energy relations to Nigeria's oil minister of state, said on the ministry's twitter handle. Farouk said Nigeria was in urgent need of new investments to increase its reserve base and output. "Nigeria has produced over 10 billion barrels of oil since the year 2000. However, we have not discovered this much in the same period," he said.Nigerian oil output plummeted to near 30-year lows of around 1.5 million-1.6 million b/d in August, according to government estimates, from 2.2 million b/d earlier in the year as attacks on oil facilities in the Niger Delta rose at an alarming pace amid resurgent militancy. The sharp drop in oil production has severely hurt Nigeria's economy, already exacerbated by the slump in global oil prices. Militant group Niger Delta Avengers, responsible for most of the attacks on oil facilities that cut Nigerian production by more than 700,000 b/d, said late in September it was abandoning its ceasefire announced September 2 over what it said was the Nigerian government's failure to respond to its peace overtures. Some other militant groups, including the self-styled Greenland Justice Mandate, have been carrying out pockets of attacks on pipelines operated by state-owned Nigerian National Petroleum Corp.

Why the Energy Crisis is Coming Sooner Than Most Experts Forecast - Ilargi: We have written little on the topic of energy lately, other than related to oil prices going up and down, empty OPEC ‘promises’ to cut oil production, and the incredible debt load threatening to crush US -and Canadian- unconventional oil and gas. It’s a logical outcome of focusing more on finance than energy, because we feel the former has a shorter timeline than the latter. Something that harks back to our Oil Drum days. But that doesn’t mean that the idea and/or principle of peak oil has disappeared, or that we have completely forgotten it. It has just been snowed under by the financial crisis (and by unconventinal oil and gas). And while we continue to find that the financial world will dump us into a bigger crisis sooner than energy will, it’s useful to look at oil et al from time to time. Please note: we don’t wish to deny that oil depletion has its own dynamics, but in our view those dynamics will be hugely affected by the financial crisis that is looming big and will strike first. A crisis that, by the way, will affect not just oil and gas, but solar and wind just as much. You can get only as much ‘alternative’ energy as you can pay for, and that is before we even mention solar and wind’s EROEI (Energy Return On Energy Investment). What the world needs to do, but we very much doubt it will voluntarily, is not to look for other forms of energy to replace oil and gas, but to look for ways to use much less energy (90% or so) while still maintaining societies that function as best they can. We doubt this because man is no more made to volunteer for downsizing than any other species. The interview below with Louis Arnoux by the SRSrocco Report, combined with an article Louis wrote in July on the site of our old friend Ugo Bardi is an excellent opportunity to catch up on energy issues. The discussion of energy relative to finance will no doubt continue, and Louis doesn’t seem to have the exact same view as us, but that’s fine, or at least it shouldn’t deter us from listening. This graph from his work, for instance, contains a great depiction of what EROEI really means, and how it works out, and that is important to know. First, here’s the SRSrocco Report interview, below it you’ll find the article.

Thermodynamic Oil Collapse: Why The Global Economy Will Disintegrate Rapidly -- The world is heading towards a rapid disintegration of its economic and financial system due to a "Thermodynamic oil collapse."  I spoke with Dr. Louis Arnoux of nGeni, about the details of the thermodynamics of oil depletion and its impact on the global economy.Unfortunately, the world is completely in the dark about this energy information and its dire implications to global economic trade and finance, in a relatively short period of time.  During the interview, Louis Arnoux discusses the dynamics of the "Thermodynamic oil decline" using six slides, including one on his nGeni technology towards the end of the interview.  The information in this interview is so important, Louis needed to take the extra time to explain these concepts in detail.In the beginning of the interview, Louis describes the significance of the first chart showing how the world's fuel gauge is now "Running On Empty."Dr. Louis Arnoux presents his views concerning the depletion of oil reserves, that is, how to best assess depletion, what stage the depletion is at and what this means in financial and economic terms. This is based on his own research and on that of Bedford Hill and his Hill's Group team that he has scrutinised in depth. Dr Arnoux is now part of a team of researchers who have recently refined the Hill's Group work.They are presently preparing a paper to  be published in a peer reviewed scientific journal that will present their thermodynamic analysis of the oil industry, the Hill's Group Etp model, how this model enables assessing the depletion status of the global oil reserves, and the high fit of their analysis with empirical data. In the present interview Dr Arnoux is not at liberty to discuss this work as it is not published yet. Instead he explains in lay terms the general dynamics of depletion and focuses on the economic and financial implications for the globalised industrial world of the advanced depletion status of oil reserves. In addition, Louis also provides a chart during the interview showing just how disconnected the financial markets are compared to the reality... or the real physical economy.  He developed this chart to show how inflated the U.S. GDP (Gross Domestic Product) is compared to gold and oil:

Why There's No Economically Sustainable Price For Oil Anymore (podcast) Actuary Gail Tverberg returns to provide an update on where we are in the global energy story. Her outlook is not rosy: she doesn't not see a path for society to transition to an affordable, plentiful substitute to petroleum as a transportation fuel. The physics as well as the funding do not pencil out, at least with today's known technologies.Without such a solution in hand, the world finds itself now mired in a scenario where there really is no long-term workable range for the price of oil. It's either "too high" and demand suffers, or "too low" and producers can't afford to extract it. The acceptable middle ground has disappeared:When on the rising side of the Hubbert curve, everybody has good wage level and everybody can feed themselves. You can build new oil wells and everything works out fine. But what happens as you get past the 50% mark is that you no longer have enough oil coming out for the economy to keep growing. It starts going down. And what happens then is that the economy doesn’t function in the same way. You start getting the prices to spike as you try to get higher-cost oil out. And this is what we saw in the 2007-2008 period.The price of oil spikes and you get recession. Then the price of oil comes back down. But wages don't recover and you get the very low price problem that we have right now. So it doesn’t work right. You can’t keep getting the same amount of oil out, essentially because the wages of the people don’t stay up high enough in order to afford the output of the economy.At this point, it has gotten bad enough that there is no price that works. The price that producers need is higher than what the market will bear.If we go to a place like Saudi Arabia, you'd say: They can get it out of the ground for $20 a barrel. But then when you look at it, you discover that they really need a much higher price if you include in all of the taxes and all of the funding they need to keep social order, import lots of wheat and the many other things that their economy needs, and build a desalination plant. So they really can’t get along on $20 a barrel. They learned how they can get along on $100 or $120 a barrel, but they can’t get along on $50 a barrel  -- even in Saudi Arabia.So you end up with a situation where there isn’t any kind price that really will work.

LHS crude market falls to multi-month lows as barrels come out of tanks - The Light Houston Sweet crude market saw a late-week decline in value relative to cash WTI, which market sources attributed to a number of factors including a disappearing contango structure in the Brent-WTI spread. The sweet crude grade ended the week at a 95 cents/b premium to November cash WTI, down 15 cents/b from Thursday and 25 cents/b less than one week ago. It is also the weakest premium for LHS over cash WTI since July 19, when it was at 90 cents/b over cash WTI, S&P Global Platts data showed. "It's the usual cash period mess," a Houston crude trader said, referring to the period of time between when front-month NYMEX WTI expires and the cash market rolls a little less than one week later. A second trader said the Gulf Coast market was a "bloodbath" Friday and added grades were "completely collapsing.""The market is flooded with everything coming out of tanks," a crude trader said Friday. "That will help push crude down." The front-month Platts WTI-Brent Houston swap ended the week at minus $1.71/b, compared with minus $1.63/b for month 12 -- a difference of about 8 cents/b contango. That compares with a front-month to month-12 spread of 3 cents/b backward one week ago, Platts data showed.

Oil dips on Buzzard restart, Iraq; U.S. crude tests below $50 | Reuters: Oil prices dipped on Monday, with U.S. crude briefly falling below $50 per barrel, on news of the impending restart of Britain's Buzzard oilfield and Iraq's wish to be exempted from OPEC production cuts. Buzzard, the North Sea field that contributes to the Forties crude stream and which pumps about 180,000 barrels per day (bpd), will restart on Tuesday or Wednesday, from a month-long planned maintenance, an industry source said. Iraq's oil minister Jabar Ali al-Luaibi said the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC) wanted to be exempt from output curbs as it needed more money to fight Islamic State militants. OPEC hopes to remove about 700,000 bpd from an estimated global supply of 1.0-1.5 million bpd. Details of how much each member should cut have been left to its meeting in Vienna on Nov. 30. Brent, the international benchmark for crude, settled down 32 cents, or 0.6 percent, at $51.46 a barrel. Its session low was $50.50. U.S. West Texas Intermediate (WTI) crude fell 33 cents, or 0.7 percent, to settle at $50.52. WTI slid below $50 for the first time since Oct. 18, hitting a session low of $49.62, as some players locked in profits from oil's climb of more than $5 a barrel, or about 13 percent, over the past month.

Oil edges up ahead of US data, OPEC squabbles cap gains: Oil edged up on Tuesday ahead of the release of U.S. crude inventory data, which in recent weeks has provided bullish surprises, but a flurry of top-level comments from OPEC members regarding chances of an output cut kept a lid on prices. International Brent crude oil futures rose 13 cents to $51.59 per barrel at 7:10 a.m. ET (1110 GMT) from their last close.U.S. West Texas Intermediate (WTI) crude futures turned positive, gaining 21 cents to $50.73 a barrel, after being negative throughout much of Asia trading. The private American Petroleum Institute is due to publish its weekly crude stocks estimates on Tuesday at 2030 GMT, followed by the official Energy Information Administration data due on Wednesday. "Crude oil does not want to drop the support until it sees if it can use the weekly U.S. statistics for another test of an upside break-out," analysts at Petromatrix said in a note. A Reuters poll showed that U.S. crude inventories were forecast to have risen last week by a likely 800,000 barrels to 469.5 million barrels. That came after a fall of more than 5 million barrels in the week to Oct. 14. Analysts said a leak in a pipeline leading out of the huge Cushing, Oklahoma, storage hub should lead to more build up of stocks in the coming weeks.

Iraq Threatens To Sink OPEC Deal - Oil prices dropped more than 1 percent on Tuesday as waning expectations of an OPEC deal weighed on the market.  Iraq insisted on Sunday that it be allowed to be exempt from production cuts should OPEC reach a deal in a month’s time in Vienna. Iraqi officials said that it needs every possible resource to fight against the Islamic State, and the costly battle is a justification for allowing Iraq to be excluded from the coordinated production cuts."We are fighting a vicious war against IS," Iraq’s oil minister Jabar al-Luaibi told reporters. The head of Iraq’s state-owned oil marketing company, SOMO, went further. "We should be producing 9 million if it wasn't for the wars,” Falah al-Amiri said, according to Reuters. "Some countries took our market share.” Fellow OPEC members like Saudi Arabia, and especially Iran, have ratcheted up output over this past year. Iran, for one, will be exempt from the November cuts, a fact that is not lost on Iraqi officials. Iraq makes a strong argument for its special treatment, but every exemption granted by OPEC to member countries pokes holes in the efficacy of a final deal. With Iran, Libya and Nigeria already not included in the planned cuts, the significance of any result is already in doubt. But if Iraq, too, is excluded, then any cut of substance will really need to come from Saudi Arabia. OPEC members agreed to a collective cut of a relatively small 200,000 to 700,000 barrels per day. Much of that could be achieved through the usual seasonal adjustments in Saudi Arabia – as summer ends and cooler temperatures arrive, Saudi demand falls and as a result production is throttled back. Saudi Arabia might have cut several hundred thousand barrels per day because of the end of summer demand, and so it gains a lot and loses little by calling it a “production cut” as part of an OPEC deal, than to quietly lower output as it typically might at this time of year anyway.

Oil Slides Below $50; Hits Two Week Lows As Concerns Over Iraq Break From OPEC Agreement Mount - Having flirted with the key psychological level of $50/bbl ever since the first week of October as a result of an ongoing short squeeze due to concerns that OPEC just may pull of the production cut it agreed on in Algiers in late September, moments ago the active WTI contract dipped below $50 without any notable news. Furthermore, as Reuters' Amanda Cooper points out, the 1M/2M contango has now blown out to the wide level in almost a year. As there was no immediate catalyst, traders attributed to slide to the delayed reaction from this weekend's news that Iraq has effectively split from the Algiers agreement, and now demands to be granted the same exemption from oil production cut rights as were granted to Iran, Libya and Nigeria.  As a reminder, and as we reported yesterday, Iraq's Oil Minister Jabber Al-Luaibi said Sunday at a news conference in Baghdad that his country should be exempted from output restrictions as it was fighting a war with Islamic State. "We are fighting a vicious war against IS," Luaibi said in e briefing for reporters, adding that Iraq should get the same exemption as Nigeria and Libya.“We are with OPEC policy and OPEC unity,” Al-Luaibi said. “But this should not be at our expense.” Instead, it is looking like a cut, if any, will be entirely at the expense of Saudi production, which may be forced to cut 1mmbpd or more, should OPEC continue to see rising record monthly production.Cited by Reuters, Falah al-Amiri, head of Iraq state oil marketer SOMO, said Iraq's market share was compromised by the various wars it fought since the eighties.Even more fascinating was Iraq's stated expectations of what its true output should be: a whopping 9 million barrels per day, roughly double from where it is now! "We should be producing 9 million if it wasn't for the wars." He added that Iraq has "passed 4.7 million barrels a day" and made it quite clear that Iraq would certainly not cut production: “We are not going back. It’s a question of sovereignty.”

Oil Tumbles To 3 Week Lows After Unexpectedly Large Inventory Build - Having closed below $50 for the first time in 3 weeks, WTI Crude extended its losses to 3 week lows after API reported crude inventories rose by a bigger than expected 4.8mm barrels (more than double the 2mm expectation). API

• Crude +4.8mm (+2mm exp)
• Cushing -2.3mm (-500k exp)
• Gasoline +1.7mm (-1mm exp)
• Distillates -940k

Crude inventories have drawn down for 6 of the last 7 weeks but rose notably this last week. Cushing inventories drewdown by the most since Feb 2014 (we suspect the spillage was the driver) and distillates inventories drew down for the 5th straight week). Gasoline inventories built notably despite expectaions of a sizable draw.

Oil Prices Plunge After API Reports Significant Build To U.S. Crude Stocks - American crude oil supplies surged upwards by 4.8 million barrels this week, almost completely offsetting last week’s 5.2-million-barrel draw, according to the American Petroleum Institute (API) report released on Tuesday. This week’s inventory build will likely press further down on oil prices, which were already trading down on the market’s increasing uneasiness over the OPEC drama, including Iraq’s OPEC rebellion, Russia’s vague and vacillating comments as to whether they’ll join in a freeze or a cut, and Venezuela’s pleas to get non-OPEC members to cut in proportion to the bloc’s to-be-determined limits.The West Texas Intermediate (WTI) price settled to three-week lows once the report went public Tuesday afternoon. At the time of the report’s writing, WTI stood at $49.30 – down 2.41 percent from the day’s start, while Brent fell to $50.29, or 2.27 percent from the open.Experts had predicted an inventory build of two million barrels of crude, according to Zero Hedge.Gasoline inventories rose by 1.7 million barrels, against an anticipated draw of one million barrels.Tomorrow’s official inventory report from the Energy Information Administration (EIA) will add to the volatility, particularly if the numbers stray far from API’s data.Supplies at the Cushing storage facility in Oklahoma decreased by 2.3 million barrels, instead of the modest 500,000-barrel draw that analysts expected, the report said.  Six of the past seven weeks have seen notable crude supply draws, with the current build breaking the streak.“You’ve gone from a very optimistic sentiment immediately following the Algiers announcement to a sentiment that’s more skeptical of the ability of OPEC to pull off a meaningful cut,” Paul Crovo of the Philadelphia-based consulting company by PNC Capital, told Zero Hedge.

Iraq opens up on oil output but remains firm on OPEC stance (video) S&P Global Platts senior editor Eklavya Gupte, following his visit to Baghdad, recounts some of the revelations by Iraq's oil ministry on its oil output and its position ahead of OPEC's crucial meeting on November 30.

WTI Crude Spikes Above $50 After Unexpected Inventory Draws Across Crude Complex -- Following API's reportedly large crude build last night, DOE reports a very divergent draw of 553k barrels (2mm bbl build exp). In fact the entire crude complex saw major drawdowns, sending WTI Crude back above $50. DOE

• Crude -553k (+2mm exp)
• Cushing -1.337mm (-500k exp)
• Gasoline -1.956mm (-1mm exp)
• Distillates -3.354mm

Forget OPEC The Oil Market Is Rebalancing (Video) - We keep getting surprise Oil Inventory reports each week for the last 6 weeks, it seems we are in slight deficit right now, which is unusual for this time of year. We are headed to $60 a barrel regardless of OPEC nonsense.

Oil futures decline despite surprise draw in US crude stocks -  Oil futures fell Wednesday even though Energy Information Administration data showed across-the-board inventory draws, as doubts over an OPEC-led production agreement pressured prices. NYMEX December crude settled down 78 cents at $49.18/b. ICE December Brent settled 81 cents lower at $49.98/b. NYMEX November ULSD settled 1.2 cents lower at $1.5511/gal. NYMEX November RBOB settled down 1.74 cents at $1.4831/gal. Oil futures initially jumped after EIA data was released. Crude stocks fell 553,000 barrels last week to 468.158 million barrels, which seemed to catch the market off-guard. Analysts S&P Global Platts surveyed Monday were looking for a build of 400,000 barrels. The size of the expected build ratcheted even higher after the American Petroleum Institute reported late Tuesday a build of 4.8 million barrels. NYMEX December crude hit an intraday high of $50.10/b, but the relief rally was short-lived and the oil complex drifted lower. "Fundamentally the report was pretty solid," ION Energy consultant Kyle Cooper said. "The one thing is that crude production edged back over 8.5 million barrels per day." US crude production increased 40,000 b/d last week to 8.504 million b/d, according to EIA estimates. Output fell to 8.428 million b/d the week ended July 1, ranging since then between 8.445 million b/d and 8.597 million b/d. Greater refinery activity outweighed upticks in imports and domestic production, pulling crude stocks slightly lower last week. Crude runs increased 182,000 b/d last week to 15.552 million b/d. Refinery utilization increased 0.6 percentage point to 85.6% of capacity. Imports rose 109,000 b/d last week to 7.016 million b/d, but that was still well below the year-to-date average of nearly 7.9 million b/d.

OPEC May Need Help to End the Global Oil Glut -- Even if OPEC defies a skeptical market by implementing output cuts in full, it still won’t drain the ocean of surplus oil already pumped from the ground. The Organization of Petroleum Exporting Countries aims to shrink the world’s bloated oil inventories with its first production cut in eight years, according to Secretary-General Mohammed Barkindo. Yet the bloc’s own data show that even the maximum reduction under consideration would barely dent record stockpiles next year. That makes securing help from competitors -- chiefly Russia -- critical to ending the glut.  Global supplies have exceeded demand for three years straight, resulting in the accumulation of an oil-inventory surplus big enough to fill about 160 supertankers. While cutting output to the lower end of the range adopted last month would stop a further expansion, it would curb the existing excess by just 11 percent next year, the group’s data show. If the organization can’t make a deal with Russia, there’s a risk of another price collapse, according to Commerzbank AG. The Algiers accord is “primarily geared” toward bringing down “the high, unsustainable level of inventories that have built up over the last two years or so,” OPEC’s Barkindo said on Oct. 18. Saudi Arabian Energy and Industry Minister Khalid Al-Falih, who represents OPEC’s most powerful member, said the following day he’s confident the organization will succeed. Many analysts agree, with International Energy Agency Executive Director Fatih Birol predicting the deal will hasten the re-balancing of supply and demand in 2017. World oil inventories will decline by 270,000 barrels a day next year if the cuts are implemented, or stay roughly unchanged if OPEC keeps output steady, according to Harold “Skip” York, vice president of integrated energy at consulting firm Wood Mackenzie Ltd. in Houston. Still, OPEC’s own data indicate that cutting production to the bottom of the proposed range would only have a superficial impact on stockpiles.

OilPrice Intelligence Report: Oil Prices Falter on OPEC Uncertainty: Oil prices faltered in the second half of this week, on deteriorating expectations of an OPEC deal. Prices regained some ground on Thursday following EIA data showing a surprise drawdown in crude oil stocks after the market predicted an increase. Gasoline stocks also fell by more than expected. Adding a bit more buoyancy to the market were comments from OPEC officials suggesting that the cartel would be willing to cut production by 4 percent. The markets initially took the announcement as positive news, but in what has become a familiar script from the oil cartel, the lack of details or hard commitments ultimately meant the price impact wore off. OPEC is meeting today and tomorrow to discuss the technical details of the Algiers accord, ahead of its official meeting at the end of November. Investors should take every OPEC utterance with a giant grain of salt, and wait to see what happens in a month’s time. WTI hovered slightly below $50 per barrel in early trading on Friday. Third quarter earnings start coming in. The quarterly earnings reports started this week, with Statoil posting a hugely negative result. The Norwegian firm lost $432 million in the third quarter, worse than the $307 million it lost a year earlier. The figure was also much worse than expectations, and Statoil said that it would cut spending by an additional $1 billion. ConocoPhillips did not fare much better, reporting a $1 billion loss for the three months ending in September, although those figures beat estimates. The company lowered its full-year spending forecast from $5.5 billion to $5.2 billion. ExxonMobil reported earnings of $2.7 billion, or $0.63 per diluted share, down 35 percent from a year earlier. Eni lost 484 million euros in the third quarter, compared to a 317 million euro loss in the third quarter of 2015.

Let Crude Crash: US Oil Producers Are Hedging At Levels Not Seen Since 2007 - As warned here one month ago after the farcical OPEC meeting in Algiers, the cartel's latest jawboning ploy to keep prices artificially higher - if only for one more month - is fast falling apart. Just a few hours ago, Bloomberg reporter Daniel Kruger penned the following assessment of the situation: Production-Cut Talk Is as Good as It Gets for Oil. Some OPEC members are talking about cutting production again, and so prices are rising. Saudi Arabia and other producers both in and out of the cartel have done a good job fostering the storyline that there are terms under which parties can agree to pump less crude. Continuing signs of concord among producer nations have boosted oil prices to an average of $50 a barrel this month in New York. Yet several obstacles make it difficult for countries to commit to signing on to a deal. One obstacle is that sacrifices are needed for the agreements to succeed. Another is that those sacrifices aren’t shared equally. Having successfully raised $18 billion in the bond market, Saudi Arabia is better positioned to withstand the loss of some revenue. Iraq, OPEC’s second-biggest producer, was the latest to plead for an exemption from a cut, citing its fight against Islamic State as a cause of hardship. Ultimately, no one wants to pump less because the upside is so limited. Saudi Arabia’s 2014 decision to double down on production in a drive for market share succeeded in making it more difficult for higher-cost producers to thrive as they once had. But having committed to that goal, they also locked themselves into a fight to keep what they’d won. And while ConocoPhillips’ announcement this week that it plans to cut spending on major projects demonstrates the partial success of the Saudi plan to drive out rivals, it also shows producers see  diminishing chances for crude to climb much above $60, said Wells Fargo Fund Management’s James Kochan. The big reason, of course, is latent U.S. supply. Baker Hughes data shows the most rigs at work in the Permian Basin since January. Sanford C. Bernstein analyst Bob Brackett suggests the per-acre price of drilling lease land will rise to $100,000 from about $60,000 now.  But an even more amusing twist is that a plunge in oil prices may be just what US shale producers are waiting for. The reason for that is that while OPEC has been busy desperately jawboning oil higher, US producers have been thinking of the inevitable next step, oil's upcoming reacquaintance with gravity. As a result, as the EIA reports, the amount of WTI short positions held be producers and merchants is just shy of a decade high.

U.S. Oil Rig Count Falls For The First Time In 4 Months - This week’s Baker Hughes report shows a small two-rig decline in the United States oil count, ending what was 17 straight weeks of no-decline in the active rig figure, providing a possible small reprieve for oil prices which have been wallowing today in the extremely sensitive market. Prior to the release of the Baker Hughes data, today’s oil prices were on the decline, reaching losses not seen for six weeks on the market’s lack of enthusiasm over the latest round of OPEC chatter and meeting with non-OPEC producers, which unsuccessfully sought to prop up markets ahead of the Nov 30 OPEC meeting that some believe will result in a freeze or cut of some type. Supply glut or not, the increase in overall rig count over the last four-plus months— despite this week’s small loss—still suggests that US oil is ready to take advantage of any opportunity brought by even marginally higher oil prices—no matter how volatile the day-to-day market, and no matter what the inventory numbers show—just so long as a price increase of some kind exists. This week’s dip in prices may, however, have an effect on next week’s count, as the number of active rigs usually trails pricing data. While the oil rig count is down slightly this week, the year-on-year numbers have improved since last week. The oil rig count now sits 137 rigs below the 578-rig figure reported during the same period last year. The gas count saw a six-rig increase to 108 rigs, and now stands at 83 rigs fewer than the count the same time last year. The biggest losers were Colorado, which lost three sites, and New Mexico, which lost two. By basin, the Williston basin added the most rigs, for a five-site gain to bring the total for that basin to 35. At 12:30pm EST, a half hour before Baker Hughes released the rig count data, West Texas Intermediate was trading down 1.03 percent at $49.21, with Brent trading down at 0.89 percent at $50.02. Within minutes of Baker Hughes releasing the data, WTI was trading down even further at $49.16, with Brent at $49.96.

BHI: Overall US rig count up 4 despite drop in oil units -The tally of US oil-directed rigs ended 17 straight weeks without a decline during the week ended Oct. 28. But the overall rig count was again bolstered by a recent surge in rigs targeting natural gas, with increases in the Haynesville and Marcellus regions. The overall US count has now risen in 19 of the last 22 weeks, gaining 4 units to 557, up 153 since the week ended May 27, according to the latest data from Baker Hughes Inc.  Compared with the count for the week ended Dec. 5, 2014, just before the drilling dive commenced after the initial plunge in crude-oil prices, the overall tally is down 1,363 units. Oil-directed rigs were down by 2 to 441, still up 125 since May 27. Gas-directed rigs rose 6 units to 114, up 33 units since a decades-long bottom in BHI data that was twice touched in August. Gas-directed units were up 11 two weeks ago, while oil-directed units added 11 last week (OGJ Online, Oct. 21, 2016). During an event this week at the Center for Strategic & International Studies in Washington, DC, Laszlo Varro, chief economist at the International Energy Agency, said US tight-oil production “could restart in a dynamic fashion if and when global oil prices improve,” and that US firms “are ready to go.” An IEA annual report on global energy investments explained that the impact of low oil prices on cash flow tested the debt-financed investment model used by US shale producers, resulting in a 52% drop in spending over the past 2 years (OGJ Online, Oct. 26, 2016).“The shorter investment cycle of shale projects and the widespread use of futures hedging [have] enabled independent shale producers to rely on a highly leveraged business model in contrast to major oil and gas companies that rely predominantly on internal cash flow for investment,” the report explained. “Access to bond markets for US shale companies and the cost of capital are directly influenced by oil prices,” it said. “While financial pressures in the shale industry remain widespread despite a recent partial recovery in oil prices, the operators that have filed for bankruptcy represent only a minor proportion of total US unconventional production.”

WTI Tumbles To $48 Handle After Iraq, Iran "Deadlock": OPEC Admits "It's Getting Complicated" -- "It is getting complicated...every day there is a new issue coming up," one OPEC delegate said this morning as it is clearly becoming harder to keep the smoke and mirrors jawboning of a possible cut/freeze alive in the face of a reality that is very clearly enunciated by Russia's energy minister, "any output freeze could be offset by a quick recovery in US shale oil output." In other words, why bother with a freeze at all.. which is exactly what Iran and Iraq just said... Iran, Iraq refuse to freeze output -

Saudi Bond Sale Spurs Gulf Borrowing to Record With More to Come - Gulf borrowers have raised a record amount in the public debt markets in 2016, and they’re not finished yet.  Saudi Arabia’s $17.5 billion international bond sale, the largest ever from an emerging market, boosted the amount raised through loans and bonds in the six-nation Gulf Cooperation Council to $151 billion, according to data compiled by Bloomberg, eclipsing the full-year record of $142 billion set in 2007. That’s before Equate Petrochemical Co.’s planned sale of five- and 10-year bonds this week, an offering that may raise as much as $3 billion, according to two people familiar with the deal.  A halving of oil prices since mid-2014 has hurt public finances across a region that produces about a fifth of the world’s oil, pushing Saudi Arabia, Qatar, Abu Dhabi, Oman and Bahrain to sell bonds to bridge budget shortfalls. The surge in new sovereign debt means governments are poised to overtake financial institutions as the region’s biggest borrowers for the first time since 2009. “As long as the oil price stays at current levels, I expect GCC sovereigns will continue to rely on the capital markets to meet budget deficits,” said Andy Cairns, the global head of debt origination and distribution at National Bank of Abu Dhabi PJSC, the United Arab Emirates’ second-biggest bank by assets. “Next year we’ll see a further increase in GCC bond issuance with growth coming not only from sovereigns but also more supply from regional corporates and financial institutions.”

Saudi central bank asks banks to reschedule property loans as austerity bites | Reuters: Saudi Arabia's central bank said on Tuesday it had asked local banks to reschedule the property loans of citizens whose incomes had been reduced by government austerity measures. Last month the government said it was cutting the allowances of employees in the public sector, where about two thirds of Saudis work, to save money as low oil prices strain state finances. Economists estimated the cuts might reduce the income of many people by about 20 percent, making it harder for them to service their property and consumer loans. At the end of last month, the central bank asked local banks to reschedule consumer loans to help cash-strapped borrowers service them; it is now doing the same with real estate loans.

"No Going Back": Iraq Demands Exemption From Oil Production Cut, As Rosneft Slams Saudis -- With just one month left until the OPEC Vienna meeting in which by some miracle, the cartel of oil producing countries (as well as non-OPEC countries) are expected to agree on production cut quotas, things are not looking good. The latest complication emerged on Sunday when Iraq, which one month ago tipped its hand that it would not comply by the Algiers agreement, said it would maintain oil production at current levels after exceeding 4.7 million barrels a day in September, even as other OPEC members discuss limits on output. As Bloomberg reports, and as we predicted in September, Iraq joined Libya, Iran and Nigeriain asking OPEC for an exemption from its participation in any cuts, Oil Minister Jabber Al-Luaibi said Sunday at a news conference in Baghdad. Ali al-Luaibi said on Sunday his country should be exempted from output restrictions as it was fighting a war with Islamic State. "We are fighting a vicious war against IS," Luaibi said in e briefing for reporters, adding that Iraq should get the same exemption as Nigeria and Libya. “We are with OPEC policy and OPEC unity,” Al-Luaibi said. “But this should not be at our expense.” Instead, it is looking like a cut, if any, will be entirely at the expense of Saudi production, which may be forced to cut 1mmbpd or more, should OPEC continue to see rising record monthly production. Cited by Reuters, Falah al-Amiri, head of Iraq state oil marketer SOMO, said Iraq's market share was compromised by the various wars it fought since the eighties. Even more fascinating was Iraq's stated expectations of what its true output should be: a whopping 9 million barrels per day, roughly double from where it is now! "We should be producing 9 million if it wasn't for the wars." He added that Iraq has "passed 4.7 million barrels a day" and made it quite clear that Iraq would certainly not cut production: “We are not going back. It’s a question of sovereignty.”

Kremlin Slams Demands For Assad's Ouster As ISIS Kills Hundreds Of "Human Shields" In Mosul - While the recently unveiled Iraqi assault on Mosul (with US support) continues, in what some have speculated is an election stunt meant to liberate Mosul just ahead of the November 8 vote and provide a boost for the Hillary campaign, while others see even more ulterior motives, namely to "grant" ISIS fighters free passage out of Iraq and into Syria to fight Assad, there may be some complications. According to press reports citing Iraqi intelligence sources, today the Islamic State rounded up and killed 284 men and boys as Iraqi-led coalition forces closed in on Mosul, the terror group's last major stronghold in Iraq. Those killed Thursday and Friday were used as human shields against attacks forcing ISIS out of southern parts of Mosul, the source said. ISIS dumped the corpses in a mass grave at the defunct College of Agriculture in northern Mosul, the intelligence source said. The victims, including children, were all shot, said the source, who asked for anonymity because he is not authorized to speak to the media. CNN could not independently confirm the killings. Separately, according to Reuters, roughly 1,000 people had been treated for breathing problems linked to toxic gases from a sulphur plant which ISIS militants are suspected to have set on fire near the city of Mosul. No deaths were reported in connection with the incident, said the sources at the hospital in Qayyara, a town south of Mosul.

Sunni Arabs forced to leave Kirkuk after Islamic State attack, residents say | Reuters: Hundreds of displaced Sunni Arab families have had to leave Kirkuk after an Islamic State attack on the Kurdish-controlled city which authorities suspect was helped by Sunni sleeper cells, humanitarian workers and residents said on Tuesday. The Sunni families, who had been sheltering in Kurdish-controlled Kirkuk province from the conflict with Islamic State, began moving out after authorities told them on Sunday to leave or face being forcibly expelled, the sources said. About 330,000 Sunni Arabs have taken refuge in the oil-rich Kirkuk province in the last two years, after Islamic State swept through northern, central and western Iraq in 2014. Some had fled because of the fighting and others because of the hardline Sunni group's harsh rules and the difficult living conditions in their villages and towns. Islamic State fighters stormed police stations and buildings in Kirkuk on Friday, killing about 100 security force members and civilians. Sixty-three militants also died in the heavy fighting that lasted until Sunday, when authorities restored control. The jihadists carried out the operation to relieve pressure on Mosul, the last major city stronghold of Islamic State in Iraq, where the group is fighting off an offensive by Iraqi army units and Kurdish forces backed by a U.S.-led coalition.

The Oil-Gas War Over Syria (In 4 Maps) -- Turkey’s Anadolu News Agency, though government-run, is providing remarkably clear and reliable diagrammatic descriptions of the current status of the U.S - and - fundamentalist - Sunni, versus Russia - and - Shia - and - NON - fundamentalist - Sunni, sides, in the current oil-and-gas war in the Middle East, for control over territory in Syria, for construction of oil-and-gas pipelines through Syria supplying fuel into the world’s largest energy-market: Europe. Russia is now the dominant supplier of both oil and gas, but its ally Iran is a Shiite gas-powerhouse that wants to share the market there, and Russia has no objection. Qatar is a Sunni gas-powerhouse and wants to become the main supplier of gas there, and Saudi Arabia is a Sunni oil-powerhouse, which wants to become the major supplier of oil, but Saudi oil and Qatari gas would be pipelined through secular-controlled (Assad's) Syria, and this is why the U.S. and its fundamentalist-Sunni allies, the Sauds, and Qataris, are using Al Qaeda and other jihadists to conquer enough of a strip through Syria so that U.S. companies such as Halliburton will be able safely to place pipelines there, to be marketed in Europe by U.S. firms such as Exxon. Iran also wants to pipeline its gas through Syria, and this is one reason why Iran is defending Syria’s government, against the U.S.-Saudi-Qatari-jihadist invasion, which is trying to overthrow and replace Assad. Here are the most-informative of Anadolu’s war-maps: The first presents the effort by many countries to eliminate ISIS control over the large Iraqi city of Mosul. A remarkably frank remark made in this map is "An escape corridor into Syria will be left for Daesh [ISIS] so they can vacate Mosul" - an admission that the U.S. - Saudi - Qatari team want the ISIS jihadists who are in Mosul to relocate into Syria to assist the U.S. - Saudi - Qatari effort there to overthrow and replace the Assad government: The second is about the Egyptian government's trying to assist the Syrian government's defense against the Saudi - U.S. - Qatari invasion of Syria, at Aleppo, where Syria's Al Qaeda branch is trying to retain its current control over part of that large city. The Saud family are punishing the Egyptian government for that: Here is Russia's proposed gas-pipeline, which would enable Russia to reduce its dependence upon Ukraine (through which Russia currently pipes its gas into Europe). Obama conquered and took over Ukraine in February 2014 via his coup that overthrew the democratically elected neutralist Ukrainian President there: In addition, there is the following map from oil-price.com:

Syria Is Another Pipeline War - Gaius Publius: Proposed pipeline routes through the Middle East to gas markets in Europe. The purple line is the Western-supported Qatar-Turkey pipeline. All of the nations it passes through — Saudi Arabia, Jordan, Turkey (all highlighted in red) — have agreed to it … except Syria. The red line is the “Islamic Pipeline” from Iran through Iraq into Syria. See text below for further explanation. (Source: MintPress News; click to enlarge) I’m not sure most Americans have figured out what’s happening in Syria, because so much of what we hear is confusing to us, and really, we know so little of the context for it. Is it an insurgency against a brutal ruler? Is it a group of insurgencies struggling for power in a nearly failed state? Is it a proxy war expressing the territorial and ideological interests of the U.S., Russia, Turkey and Iran? Or something else? According to Robert F. Kennedy Jr. it is something else — a war between competing national interests to build, or not build, a pipeline to the Mediterranean so natural gas can be exported to Europe. Inconveniently for Syria, that nation lies along an obvious pipeline route. Which makes it another war between interests for money — something not very hard to understand at all. Here’s Kennedy’s argument via EcoWatch. This is a long piece, well worth a full read, but I’ll try to present just the relevant sections here.

‘There Are No More Panes of Glass Left in Aleppo’ - WSJ:   When the bodies of 16 members of the Qasim family were pulled from the rubble of their home last month, there was no space left in one of Aleppo’s largest cemeteries to bury them.  Gravediggers unearthed seven graves of relatives and divided the newly dead among them. “We pushed the old bones to one side and then lowered the new body in,” The challenge of where to bury the dead is just one of the daily miseries afflicting the people living under a choking siege in Aleppo. Some 300,000 people in the rebel-held, eastern side of the divided city are struggling under a blockade by the Assad regime imposed in July that has kept them from getting food, fuel and medicine. Heavy bombing by the regime and its ally Russia has brought the city to a breaking point after more than five grinding years of civil war.“The city of eastern Aleppo, at this rate, may be totally destroyed,” said United Nations Special Envoy for Syria Staffan de Mistura earlier this month. Aleppo at the outset of the war had five times the population of Dresden, which was flattened by Allied raids during World War II. The destruction is akin to when Atlanta burned ahead of Sherman’s March to the Sea. Secretary of State John Kerry has compared it to Carthage, which was razed by the Romans in 146 B.C. Satellite imagery earlier this year showed Aleppo is Syria’s most damaged city, with the rate of destruction doubling in the past two years, according to a World Bank report released earlier this year. Out of six Syrian cities assessed, Aleppo accounted for 58% of the destruction in the housing, health, education, water and energy sectors. As of March 2016, 29% of the residential buildings have been estimated to be either damaged or destroyed, according to the World Bank.  Since then, damage has accelerated as a result of the renewed offensive using increasingly destructive weapons. Imagery since September reveals that in one week 90 locations were damaged or destroyed in an area about the size of Manhattan, according to Amnesty International.. Flying shards have injured and killed so many people that they have been replaced by opaque fiberglass or tarps. “There are no more panes of glass left in Aleppo.”

Putin Tried To Warn Us About Syria Three Years Ago, But Nobody Listened - As Russia and the United States approach arguably the most dangerous crossroads in history — and as Western media continues to crucify Russia for its actions within Syria — a closer look at the rationale Putin used for intervening in the Syrian war paints a sane explanation of how we ended up at this juncture of a global conflict. Unsurprisingly, the explanation comes from the Russian president himself and was actually offered over 3 years ago. As expected, the Western corporate media and the Obama administration chose to ignore Vladimir Putin’s explanation for Russia’s stance on Syria and continued a number of policies that have completely exacerbated the conflict. In a live interview with RT in June 2013, Putin was asked for an explanation regarding Russia’s support for Bashar al-Assad in Syria, even though this support has made some people very angry at Russia. Putin’s response was that Russia does not support the Assad government or Assad himself, but before defining Russia’s official position, he explained what Russia doesnot want to do within Syria or across the Middle East: “We do not want to interfere into the internal schism of Islam, between Shias and Sunnis. These are internal issues of the Islamic world. We have very good relations with much of the Arabic world, Iran for example, and others.” However, according to Putin, what worries Russia can be identified by having a look “at what is going on in the Middle East in general.” “Egypt is not calm. Iraq is not calm – and it is not assured in its continued existence as one state.  Yemen is not calm; Tunisia is not calm. Libya is witnessing inter-ethnic, inter-tribal conflict. So the entire region has been engulfed, at a minimum, into a state of conflict and undecidedness. And now Syria, down the same path.” In Putin’s eyes, these events are no accident. As he puts it, these events happened for a reason: “Some people, from the outside, think that if they can ‘comb’ the region to how they see fit – some of them call this ‘democracy’ – then the region will come into calmness and order. That’s not how it is.  Without taking into account the history, the traditions, religious particularities, you must not do anything in the Middle East, especially as an outsider.”

NATO Pushing For "Biggest Military Build-Up On Russia's Borders" Since The Cold War - As Russia pushes on with the biggest naval deployment since the cold war as Russia's only carrier group slowly headed toward Syria in a show of force along Europe's shores, NATO defense ministers are focusing on a ground expansion and aim to make good on a July promise by NATO leaders to send forces to the Baltic states and eastern Poland from early next year. As a result, NATO will press its member allies on Wednesday to "contribute to its biggest military build-up on Russia's borders since the Cold War " as the alliance prepares for a protracted quarrel with Moscow. According to Reuters, the US hopes for binding commitments from Europe to fill four battle groups of some 4,000 troops, part of NATO's response to Russia's 2014 annexation of Crimea and concern it could try a similar tactic in Europe's ex-Soviet states.  France, Denmark, Italy and other allies are among the nations expected to join the four battle groups led by the United States, Germany, Britain and Canada to go to Poland, Lithuania, Estonia and Latvia, with forces ranging from armored infantry to drones. Jens Stoltenberg, the NATO Secretary-General, said the commitments would be "a clear demonstration of our transatlantic bond." They will also send a clear message to Russia that its concerns about NATO build up on its borders were correct. Diplomats added that it would also send a message to Donald Trump, who has complained that European allies do not pay their way in the alliance. The battle groups will be backed by NATO's 40,000-strong rapid-reaction force, and if need be, further follow-on forces, for any potential conflict, which could move into Baltic states and Poland on rotation.

Britain to send hundreds more troops to Russia border as Cold War tension escalates across Europe: Britain will send hundreds more troops close to Russia’s border, the Government has said, as the Prime Minister also called for “pressure” on Moscow over the Syria crisis. Around 800 soldiers along with tanks, armoured vehicles and drones will now head to Estonia in the spring in a Nato effort to reassure the Baltic states over Russian aggression. The boosted mission, up from 500 announced earlier this year, will be Britain’s largest long-term deployment to one of Russia’s neighbours since the end of the Cold War. Defence sources said the six-month deployment to Tapa army base, around 100 miles from the border, was the start of a persistent UK presence in the country. The British troops will form one of four Nato battalions being deployed in response to a perceived threat from Russia to the alliance's eastern allies. The announcement came as Russia abandoned plans to refuel and provision warships headed for the war in Syria at a Spanish port following international pressure on Madrid. Russia’s embassy in Spain said on Wednesday that vessels from a squadron led by the Admiral Kuznetsov, Russia’s only aircraft carrier, would not stop as planned for refuelling in Ceuta, a Spanish port on the North African coast. Theresa May said "What we have seen, sadly, is that the Russians are already able to unleash attacks on innocent civilians in Syria. "What matters is that we put pressure on Russia to do what everybody agrees is the only way that we are going to resolve this issue, which is to ensure that we have a political transition in Syria, and that's where we should focus our attention."

NATO Continues To Prepare For War With Russia - NATO uses any pretext to accuse Russia of harboring aggressive intentions. It has raised ballyhoo over the recent deployment of Iskander short-range surface-to-surface ballistic missiles to the Kaliningrad region.Time and time again, the alliance reaffirms its bogus Russia narrative. “We see more assertive and stronger Russia that is willing to use force,” concluded NATO General Secretary Jens Stoltenberg speaking at the round table in Passau, Bavaria on October 10.At the same time, NATO is pushing ahead with its military "Schengen zone" in Europe."We are working to ensure that each individual soldier will not require a decision at the political level to cross the border," said Estonian Defense Minister Hannes Hanso.The idea is to do away with travel restrictions on the movement of NATO forces troops and equipment across Europe. There will be no need to ask for permissions to move forces across national borders. It will undermine the sovereignty of member states but facilitate the cross-continent operations instead. The Baltic States and Poland are especially active in promoting the plan. The restrictions in place hinder rapid movement of the 5,000 strong “Very High Readiness Joint Task Force”.Besides being the first response tool, it could be used for preventing Article 4 situations, such as subterfuge, civil unrest or border infractions, from escalating into armed conflict. The troops can move freely in time of war, but introducing a NATO Schengen zone is needed for concentrating forces in forward areas in preparation for an attack across the Russian border. The formation of the much larger 40 thousand strong NATO Response Force (NRF) is on the way.

Is the US Headed Towards War in Syria? - Real News Network video interview and transcript - The Obama administration is currently considering a proposal to send more arms to CIA backed anti Assad forces in Syria. According to the Washington Post, Obama has not made a decision yet and could leave it up to whoever wins the election in November. This of course raises questions of what would a President Hillary Clinton or President Donald Trump do in Syria? This has also been the topic at the presidential debates, recently. Joining us to discuss the Clinton’s’ and Trump’’s approach as to foreign policy is Larry Wilkerson. Larry is a retired United States army soldier and former Chief of Staff to the United States Secretary of State Colin Powell. He’s also just published an article in National Interest, written together with Gordon Adams about this topic. Larry thank you so much for joining us today.

Why won’t anyone admit that America is fighting 5 wars? - In an election flush with conspiracy theories, here's one that's real: Both major party nominees, as well as the journalists who cover the election and moderate the debates, are actively conspiring to avoid talking about the fact that the United States is waging war in at least five countries simultaneously: Iraq, Syria, Yemen, Libya, and Somalia. In the first two presidential debates, our involvement in the Syrian civil war was briefly discussed, as was ISIS in vague terms, and the Iran nuclear deal, and Russia's mischief-making in Eastern Europe and the Middle East, and Libya, though mostly in the past tense, focused on our 2011 intervention to depose Moammar Gadhafi and the subsequent attack on American government facilities in Benghazi a year later. But our role in "advising" the Iraqi army "a few miles behind the front lines" as it works to take back territory from ISIS? Our "secret war" against Shabab militants in Somalia? Our support for Saudi Arabia's bloody assault on Houthi rebels in Yemen? Our air strikes pounding positions in and around the city of Sirte on the Libyan coast?   Nada. Zip. Nothing.

Idlib school attack could be deadliest since Syrian war began, says UN -Airstrikes in rebel-held Idlib province on Wednesday were possibly the deadliest attack on a school since the Syria war began, a top UN official has said, describing the incident as an “outrage” and a possible war crime.The strikes by Syrian or Russian warplanes killed at least 35 people, most of them schoolchildren, rescue workers and a monitoring group have said. “This is a tragedy. It is an outrage. And if deliberate, it is a war crime,” said Unicef’s executive director, Anthony Lake. “This latest atrocity may be the deadliest attack on a school since the war began more than five years ago,” he added. “Children lost forever to their families … teachers lost forever to their students … one more scar on Syria’s future. When will the world’s revulsion at such barbarity be matched by insistence that this must stop?”Wednesday’s raids hit a residential area and a school in Hass village, the Syrian civil defence rescue workers’ network said on its Facebook account.  Syria’s civil war pits the president, Bashar al-Assad – backed by Russia, Iran and Shia Muslim militias from Lebanon, Iraq and Afghanistan – against an array of mostly Sunni Muslim rebel groups, including some backed by Turkey, Gulf monarchies and the US.

Gas helps to warm Russia, Turkey relations after tumultuous 12 months - Moving toward the brink of war is about as serious as a geopolitical relationship can get — and that is where Moscow and Ankara found themselves after NATO member Turkey shot down a Russian fighter jet on the border with Syria on November 24 last year. Diplomatic efforts succeeded in calming the immediate tensions, but nonetheless Moscow’s reaction was a pledge to “seriously reevaluate” its relationship with Ankara. As well as a raft of economic sanctions, part of the geopolitical rhetoric was a move by the Kremlin to halt all talks around the already complex negotiation process on the planned TurkStream gas pipeline from Russia to Turkey under the Black Sea. The link — originally intended as a 63 Bcm/year South Stream replacement — had already been downgraded to a two-line 31.5 Bcm/year project, and talks were becoming increasingly protracted as Ankara insisted the pipeline’s realization be linked to a gas discount on Russian gas imports. But Moscow drew a line under TurkStream after the fighter jet incident (which Turkey initially refused to apologize for), suspending talks on further progress on the pipeline. The result was speculation about what could replace it — Bulgaria looked to capitalize on the Russia-Turkey standoff by quietly promoting the idea of a new version of South Stream to Bulgarian shores. But as quickly as TurkStream was written off, it rose again in September like a phoenix from the ashes of the downed jet following a July apology from Turkish President Recep Tayyip Erdogan. And then in October, Moscow and Ankara signed an intergovernmental agreement on the construction of two 15.75 Bcm/year lines to Turkey, one for the domestic market and one to the Greek border for onward transit to southeast Europe.

The Turks want Mosul and Aleppo “back.” - "Speaking during an opening ceremony for an educational institution in Bursa on Saturday, Turkish President Recep Tayyip Erdogan compared the way that Syrians and Iraqis have been driven away from homes because of the self-proclaimed Islamic State (IS; ISIS/ISIL), to how Turkish people were once forced out from the same cities.  Erdogan added that the cities of Mosul and Aleppo belong to the Turkish people."  If you know anything about the history of the Ottoman Empire you should not be surprised by this.  These two cosmopolitan ME cities were among the most important in the empire.  Baghdad was another but there was always a large Arab majority there,  Mosul and Aleppo were much more diverse.   It was only in the Kemalist consolidation of the Turkish Republic in the 1920s that Turkish sovereignty over these places was surrendered officially.  This statement makes clear what Erdogan's ultimate ambition is and ensures that no Iraqi government will ever acquiesce in the participation of Turkish troops in the liberation of Mosul or Kirkuk.  Only an ignorant neocon fool like Ashton Carter would think differently.   Perhaps the Clinton Administration's foreign policy team, Wolfowitz, Bolan, Petraeus, Keane et al  will be able to bully the Iraqis into accepting this.  I think not. 

Fighting Rages on Yemen-Saudi Border Despite Truce: Fighting in Yemen, with government forces and their Saudi-led allies battling Houthi rebels backed by Iran, raged from Friday into Saturday on the Saudi-Yemen border, despite a 72-hour cease-fire that ended late Saturday. Witnesses reported Saudi-led coalition airstrikes on Houthi missile launchers east of the capital, Sana'a. All parties had agreed to honor the U.N.-backed truce as a means to allow critically needed supplies to reach civilians cut off from outside help. U.N. special envoy Ismail Ould Cheikh Ahmed had described the truce as "largely holding" on Saturday and was seeking to extend it, but there was no information available on whether combatants would agree to such a move. Ahmed described the cease-fire as an opportunity to establish a foundation for talks to end nearly two years of civil war in Yemen, which borders Saudi Arabia on the south. Monitors say nearly 7,000 people, at least half of them civilians, have died since the uprising began. Late Friday, Ahmed met in the Saudi capital with exiled Yemen Vice President Ali Mohsen al-Ahmar, and said afterward that Yemeni government forces were "exercising restraint" in the face of what he said were more than 400 truce violations by Shi'ite rebel fighters. The cease-fire was the sixth formal attempt to end the fighting since the Saudi-led Sunni coalition of Gulf states intervened early last year to support the internationally recognized Sunni government of President Abd Rabu Mansour Hadi.

China's SPR push, India's insatiable demand crucial for oil: IEA's Birol -  China's thirst for crude imports will continue to grow as Beijing steps up efforts to bolster strategic stocks, but India will witness structural growth in demand as disposable incomes rise, Fatih Birol, executive director of the International Energy Agency, said Tuesday. "India is moving to the centerstage of global energy affairs as a major consumer. With growing income levels in India, we will see oil demand growth increasing, which will boost oil imports by India," Birol told a news conference on the sidelines of the Singapore International Energy Week. India's oil products demand grew 8.5% year on year in 2015 to 177 million mt, or 3.81 million b/d. Over January-August this year, products demand was up 10% at 128.39 million mt, or 4.13 million b/d, according to India's Petroleum Planning and Analysis Cell. The IEA expects India's oil demand to average 4.3 million b/d in 2016. The government's clear policies, strong and sustained GDP growth, and a huge push towards making India a manufacturing hub were not only helping to accelerate oil consumption but was also whetting the appetite of leading multinationals to set up shop in the nation. Commenting on China, Birol said that crude oil imports would grow in the coming years despite weak domestic demand because of declining domestic production and increased efforts to maintain higher levels of crude stocks for energy security. "China is one of those countries whose oil security measures are of crucial importance for China and also for the rest of the world. I am very happy to see the Chinese government taking oil security as a serious issue. This is a very good policy to follow," he added.

Angola Becomes China's Largest Oil Supplier As Beijing Stockpiles Record Amounts Of Crude - Overnight China's customs data revealed that with imports from both Russia and Saudi Arabia posting modest declines in the past month, Angola once again became China's largest crude supplier for the second time in September, taking the top position from Russia. China imported 4.19 million tonnes of oil from the southern African nation last month, up 45.8% from a year ago. That meant Angolan shipments stood at 1.02 million barrels per day, below 1.11 million bpd seen in August, the last time the country was the top exporter to China. according to Reuters, China imported record volumes of crude oil last month, eclipsing the United States as the world's top buyer of foreign oil as Beijing's state reserves shipped in cheap crude to fill new storage tanks. China's Pivate "teapot" refiners boosted runs to a record 55.98% as of Sept. 29.The amount of crude oil heading east from ports on Africa's west coast is expected to reach a five-month high in September, partly driven by trading houses such as Trafigura and Gunvor, according to a Reuters survey.Furthermore, it seems that as Saudi Arabia and Russia continue to posture for market share, the west African nation will be the winner for the foreseeable future: Chinese demand for Angolan oil, which is cheaper and deemed to offer stable supply, is set to accelerate in October as the refinery maintenance season comes to an end.  In the first nine months of 2016, Angola was also China's third-largest supplier. Imports jumped 17.7 percent on-year to 34.39 million tonnes (916,229 bpd) in the period, data showed.