Sunday, August 26, 2018

another sub par natural gas build, US oil production back at record high, refinery utilization rate highest in 17 years

oil prices rose this week for the first time in eight weeks, even as the front month contract shifted to October oil midweek, which was, at the time, priced $1.51 a barrel less than the expiring September contract...after falling $1.72 or 2.6% to $65.91 a barrel last week on concerns about falling global demand, US light sweet crude for September delivery rose 52 cents to $66.43 a barrel on Monday as trade war worries eased and oil traders turned to concerns about the impact of U.S. sanctions on Iran...the Iran sanctions rally then picked up steam on Tuesday, with September oil logging a fourth straight gain before expiring 92 cents higher at $67.35 a barrel, while at the same time oil for October delivery became the quoted contract and rose 42 cents to close Tuesday at $65.84 a barrel...October oil contract prices then jumped $2.02, or more than 3% from that level on Wednesday to a 2 week high of $67.86 a barrel, after the weekly EIA report indicated that U.S. crude supplies fell much more than traders had anticipated...oil prices then steadied on Thursday, as trade talks between the US and China collapsed, offsetting the impact of lower crude inventories, with October US crude ending 3 cents lower at $67.83 a barrel...the rally resumed on Friday, however, amid reports that Iranian tanker loading were already down by 700,000 barrels per day during the first half of August, 3 months before the sanctions were to kick in, as U.S. crude went on to finish the day 89 cents or 1.3% higher at $68.72 a barrel...thus for the week, the widely quoted price of oil rose $2.81 a barrel, or more than 4%, after seven consecutive weekly declines, while the contract for October oil ended $3.51 a barrel or 5.4% higher, having closed the prior week at $65.21 barrel..

meanwhile, prices for natural gas for September delivery continued in the same narrow price range they've been in since Spring, even as the seasonal storage deficit has become critical...after ending last week at $2.946 per mmBTU, natural gas prices rose to as high as $2.993 per mmBTU in early trading Wednesday, before sliding to a 4.7 cent loss on Friday and ending the week at $2.917 per mmBTU....this week's EIA natural gas storage report for week ending August 17th indicated that natural gas in storage in the US rose by 48 billion cubic feet to 2,435 billion cubic feet during the cited week, which still left our gas supplies 684 billion cubic feet, or 21.9% below the 3,119 billion cubic feet that were in storage on August 18th of last year, and 599 billion cubic feet, or 19.7% below the five-year average of 3,034 billion cubic feet of natural gas that are typically in storage heading into the third weekend of August....the 48 billion cubic feet increase in natural gas supplies was close to the expectations of most market participant surveys and thus had little impact on natural gas prices, but it was still below the 52 billion cubic foot average of natural gas that has typically been added to storage during the second full week of August in recent years, thus making for the 7th consecutive below average inventory build...with that in mind, we'll again take a look at the graph from the natural gas storage report to see the effect of this string of below average additions..

August 25 2018 natural gas supplies as of August 17th

the above graph comes from this week's Natural Gas Storage Report, and it shows the quantity of natural gas in storage in the lower 48 states over the period from August 2016 up to the week ending August 17th 2018 as a blue line, the average of natural gas in storage over the 5 years preceding the same dates shown as a heavy grey line, while the grey shaded background represents the range of the amount of natural gas in storage for any given time of year for the 5 years prior to the two years shown by the graph…thus the grey area also shows us the normal range of natural gas in storage as it fluctuates from season to season, with natural gas in storage underground normally building to a maximum by the end of October, falling through the winter, and usually bottoming out at the end of March, depending of course on the spring heating requirements for any given year...what we want to point out on that graph this week is the divergence between the 5 year average amount of natural gas in storage for any given date of the year, which is shown as a dark grey graph, and that of current supplies of natural gas, shown in blue...notice that the blue line shows that the quantity gas we had stored throughout the summer and fall of 2016 was at a record high for each week during the year, up until October, and then dropped to near normal going into 2017, despite a much milder than normal winter...nonetheless, we can see that our natural gas supplies stayed above the average level through most of 2017, and didn't fall to below normal until the 2017-2018 heating season began...notice that since then, however, the gap separating the grey "normal" line and the blue current supply line has gotten increasingly wider, up until this summer, when the blue line representing current supplies has failed to keep up with the normal level of increase for 7 weeks straight....hence, instead of rebuilding our natural gas supplies back to a normal level before winter, each week we have been getting progressively farther away from what we should have stored before the heating season begins at the beginning of November...

The Latest US Oil Data from the EIA

this week's US oil data from the US Energy Information Administration, covering the week ending August 17th, indicated that because of a large drop in our oil imports, we had to withdraw oil from our commercial crude supplies to meet the needs of our refineries for the fifteenth time in the past thirty weeks... our imports  of crude oil fell by an average of 1,496,000 barrels per day to an average of 7,518,000 barrels per day, after rising by an average of 1,083,000 barrels per day the prior week, while our exports of crude oil fell by an average of 437,000 barrels per day to an average of 1,155,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 6,363,000 barrels of per day during the week ending August 17th, 1,059,000 fewer barrels per day than the net of our imports minus exports during the prior week...over the same period, field production of crude oil from US wells was reported to be 100,000 barrels per day higher at a record 11,000,000 barrels per day, which means that our daily supply of oil from the net of our trade in oil and from wells totaled an average of 17,363,000 barrels per day during the reporting week... 

meanwhile, US oil refineries were using 17,892,000 barrels of crude per day during the week ending August 17th, 89,000 barrels per day less than the record amount they used during the prior week, while over the same period 834,000 barrels of oil per day were reportedly being pulled out of the oil that's in storage in the US....hence, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 305,000 barrels per day more than what refineries reported they used during the week....to account for that disparity between the supply of oil and the disposition of it, the EIA needed to insert a (-305,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the data for the supply of oil and the consumption of it balance out, essentially a fudge factor that is labeled in their footnotes as "unaccounted for crude oil"...since that "unaccounted for crude" figure was at +631,000 barrels per day during the prior week, we know that the week over week changes for one or more of this week's EIA oil metrics must be in error by a statistically significant amount...(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer).... 

further details from the weekly Petroleum Status Report (pdf) show that the 4 week average of our oil imports fell to an average of 8,053,000 barrels per day, now 2.2% less than the 8,233,000 barrel per day average that we were importing over the same four-week period last year....the 834,000 barrel per day decrease in our total crude inventories was all withdrawn from our commercially available stocks of crude oil, as the amount of oil in our Strategic Petroleum Reserve remained unchanged, even as a new sale of 11 million barrels from those reserves was announced this week....this week's crude oil production was reported being 100,000 barrels per day higher at a record 11,000,000 barrels per day because the output from wells in the lower 48 states increased by a rounded 100,000 barrels per day to 10,600,000 barrels per day while oil output from Alaska rose by 34,000 barrels per day, and hence the national total, which is now being rounded to the nearest 100,000 barrels per day to reflect the EIA's inability to accurately model oil output from all the wells in the lower 48 states, was thus also up by 100,000 barrels per day.....US crude oil production for the week ending August 18th 2017 was reportedly at 9,528,000 barrels per day, so this week's rounded oil production figure was roughly 15.4% above that of a year ago, and 30.5% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...

meanwhile, US oil refineries were operating at 98.1% of their capacity in using 17,892,000 barrels of crude per day during the week ending August 17th, unchanged the prior week, again the highest refinery utilization rates seen in 17 years....the 17,892,000 barrels per day of oil that were refined this week were also at a seasonal high, now for the 12th week in a row, as compared to any previous 3rd week of August....this week's refinery throughput was 2.5% higher than the 17,461,000 barrels of crude per day that were being processed during the week ending August 18th 2017, when US refineries were operating at 95.4% of capacity....

with the modest reduction in the amount of oil being refined this week, gasoline output from our refineries was likewise modestly lower, decreasing by 83,000 barrels per day to 10,151,000 barrels per day during the week ending August 17th, after our refineries' gasoline output had increased by 321,000 barrels per day during the week ending August 10th...with this week's decrease, however, our gasoline production during the week was 3.9% lower than what had been a record 10,566,000 barrels of gasoline that were produced daily during the same week of last year...meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) rose by 89,000 barrels per day to a seasonal high of 5,426,000 barrels per day, after rising by 100,000 barrels per day over the prior week...that meant this week's distillates production was 6.6% higher than the 5,091,000 barrels of distillates per day that were being produced during the week ending August 18th, 2017...

even with the modest decrease in our gasoline production, our supply of gasoline in storage at the end of the week still rose by 1,200,000 barrels to a seasonal high of 234,328,000 barrels by August 17th, the 11th increase in 26 weeks, and the 25th increase in 41 weeks, as gasoline inventories, as usual, were being built up over the winter months....our supplies of gasoline rose this week because our imports of gasoline rose by 154,000 barrels per day to 817,000 barrels per day, while our exports of gasoline fell by 291,000 barrels per day to 644,000 barrels per day, and because the amount of gasoline supplied to US markets fell by 59,000 barrels per day to 9,453,000 barrels per day, after rising by 166,000 barrels per day the prior week...after this week's increase, our gasoline inventories were 1.9% higher than last August 18th's level of 229,902,000 barrels, and roughly 9.8% above the 10 year average of our gasoline supplies for this time of the year...     

meanwhile, with the increase in our distillates production, our supplies of distillate fuels increased by 1,849,000 barrels to 130,838,000 barrels during the week ending August 17th, the 10th increase in 13 weeks...our supplies increased even though the amount of distillates supplied to US markets, a proxy for our domestic consumption, rose by 106,000 barrels per day to 4,065,000 barrels per day, after decreasing by 43,000 barrels per day the prior week, and even though our exports of distillates rose by 185,000 barrels per day to 1,043,000 barrels per day, while our imports of distillates fell by 29,000 barrels per day to 145,000 barrels per day....however, since our distillate supplies are still coming off the 14 year seasonal low that they hit 4 weeks ago, because they had been falling during the spring, when distillates supplies are usually increasing, this week's inventory increase still leaves our distillates supplies 11.8% below the 148,415,000 barrels that we had stored on August 18th, 2017, and roughly 12.1% lower than the 10 year average of distillates stocks for this time of the year...  

finally, with our oil imports down by nearly 1.5 million barrels per day, our commercial supplies of crude oil decreased for the 17th time in 2018 and for the 30th  time in the past year, falling by 5,836,000 barrels during the week, from 414,194,000 barrels on August 10th to 408,358,000 barrels on August 17th ...but even with that decrease, our crude oil inventories are still a bit above the five year average of crude oil supplies for this time of year, and roughly 15.5% above the 10 year average of crude oil stocks for the 3rd week of August...but since our crude oil inventories had been falling through most of the past year and a half, our oil supplies as of August 17th were 11.8% below the 463,165,000 barrels of oil we had stored on August 18th of 2017, 17.2% below the 492,962,000 barrels of oil that we had in storage on August 19th of 2016, and 2.5% below the 418,990,000 barrels of oil we had in storage on August 21st of 2015, when US supplies of oil had already risen above the nearly stable levels of under 400 million barrels that we'd seen during the prior years...  

This Week's Rig Count

US drilling activity decreased for the sixth time in eleven weeks during the week ending August 24th, following 11 consecutive weeks of increases, as the steady increases in drilling for oil we saw with higher oil prices during the first half of this year have stalled since oil futures' prices have shifted into deep backwardation.... Baker Hughes reported that the total count of rotary rigs running in the US fell by 13 rigs to 1044 rigs over the week ending on Friday, which was still 104 more rigs than the 940 rigs that were in use as of the August 25th report of 2017, but was still down from the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began their attempt to flood the global oil market...    

the count of rigs drilling for oil was down by nine rigs at 860 rigs this week, which was still 101 more oil rigs than were running a year ago, while it was still well below the recent high of 1609 rigs that were drilling for oil on October 10, 2014...at the same time, the number of drilling rigs targeting natural gas formations fell by 4 rigs to 182 rigs this week, which was only 2 more rigs than the 184 natural gas rigs that were drilling a year ago, and way down from the modern high of 1,606 natural gas rigs that were deployed on August 29th, 2008...meawhile, two rigs drilling exploratory wells considered to be "miscellaneous" continued operating this week, up from just one such "miscellaneous" rig a year ago...

three of the rigs that were shut down this week had been drilling from platforms in the Gulf of Mexico, cutting the Gulf of Mexico rig count down to 16 rigs, down from the 17 rigs that were drilling in the Gulf last year at this time...however, two rigs continued drilling offshore from Alaska this week, so the total national offshore count is at 18 rigs, which is thus up from last year's total of 17 offshore rigs, as a year ago there was no offshore drilling other than in the Gulf...in addition to Gulf rigs, one of the rigs that had been drilling through an inland body of water in southern Louisiana was also shut down this week, leaving the 'inland waters' rig count at 1, down from the 3 rigs that were drilling on inland waters a year ago...

the count of active horizontal drilling rigs was down by 3 rigs to 919  horizontal rigs this week, which was still 123 more horizontal rigs than the 796 horizontal rigs that were in use in the US on August 25th of last year, but down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...at the same time, the vertical rig count decreased by 2 rigs to 63 vertical rigs this week, which was thus down from the 64 vertical rigs that were in use during the same week of last year...moreover, the directional rig count decreased by 8 rigs to 62 directional rigs this week, which was also down from the 80 directional rigs that were operating on August 25th of 2017... 

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 pdf from Baker Hughes that 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 the 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 August 24th, the second column shows the change in the number of working rigs between last week's count (August 17th) and this week's (August 24th) count, the third column shows last week's August 17th active rig count, the 4th column shows the change between the number of rigs running on Friday and those of the equivalent weekend report of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was on Friday the 25th of August, 2017...  

August 24 2018 rig count summary

as you can see, most of this week's drilling pullback was in two states; Louisiana, which shed a total of 7 rigs, and North Dakota, which was down by 4 Williston oil rigs...the Louisiana count includes the 3 newly idled offshore rigs that were in the state's waters in the Gulf of Mexico, the inland waters rig that was shut down, and three rigs in the northern part of the state, with some of those in the Haynesville shale, which saw a 3 rig increase on the Texas side of the state line, thus accounting for the Texas rig increase, even as other rigs were shifted elsewhere around Texas at the same time...note that the count in the major basins was down by 6 rigs, while the total horizontal count was down by just three; that would mean that 3 horizontal rigs began drilling elsewhere, in a basin not tracked separately by Baker Hughes...where that might be is not immediately evident, so one would have to dig through the individual well logs in the Baker Hughes pivot table to ascertain where...meanwhile, there are no changes hidden in the basin counts above, such as a switch of a rig from oil to gas drilling or vice-versa; what we see above are actually the only basin changes that occurred...thus, natural gas rigs were shut down in Ohio's Utica and Pennsylvania's Marcellus, while an additional gas directed rig was added in the Haynesville...the other 3 natural gas rigs that were shut down would have thus had to have been among the rigs other than those we've already accounted for, with even the three Louisiana offshore rigs among the likely possibilities....

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Six Permits Issued for Ohio Utica Wells – The Ohio Department of Natural Resources issued six new permits for horizontal wells in Ohio’s Utica shale during the week ended Aug. 18, according to the latest data provided by the agency. Ascent Resources LLC, based in Oklahoma City, secured four permits for new wells in Harrison County, while EM Energy Ohio, based in Rockville, Md., received two permits to drill new wells in Monroe County, according to ODNR. The number of rigs operating in the Utica – which generally encompasses the eastern portion of Ohio – stood at 19 for the week, ODNR said. As of Aug. 18, ODNR has issued 2,865 permits for the Utica. Since 2010, energy companies have drilled 2,392 horizontal wells, of which 1,957 are producing. Much of the exploration and production has been concentrated in the southern tier of the oil and gas play and not in the northern portion, which encompasses Mahoning, Trumbull and Columbiana counties. There were no permits issued for the northern tier last week. Nor were there new permits issued in the neighboring Utica region of Lawrence and Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.

Columbus Council To Place Anti-Fracking Measure On Fall Ballot -   Columbus City Council is expected to vote this coming Monday to place a measure on the fall ballot banning fracking activity within city limits.   Local anti-fracking activists have been trying for years without success to place the so-called "Columbus Community Bill of Rights" before the voters. The Franklin County Board of Elections recently validated enough of the 18 thousand petition signatures gathered by activists to get the measure on the ballot. This past Monday, Council approved legislation stating the city finds the measure legally sufficient. Council president Shannon Hardin: In 2015, the Ohio Supreme Court upheld a 2004 state law giving the state sole jurisdiction over oil and gas drilling. But co-organizer Carolyn Harding says backers are ready for a legal fight because it should be up to citizens to decide if they want oil and gas drilling in their communities. She says fracking poses a threat to the Columbus water supply. Voters in other Ohio cities, including Broadview Heights and Mansfield, have approved similar bans.

Franklin County Board Of Elections Rejects Fracking Ban Proposal – WOSU -- The Franklin County Board of Elections has rejected the "Columbus Community Bill of Rights," a ballot issue that would have banned fracking within city limits.   Supporters of the initiative erupted with chants of “let us vote” and “not another Flint” after county election officials voted Friday to keep their measure off the ballot. The issue was approved by Columbus City Council in July. Board members explained the ballot issue seemingly violates Ohio law, which gives a state agency the right to regulate gas and oil extraction.  Board member Brad Sinnott turned to a statute governing election boards’ responsibility in certifying initiatives which orders them to determine whether an initiative “falls within the scope” of a municipality’s authority.  But attorney Terry Lodge argues that isn't the boardmembers' role. “The parsing of legality and illegality, preserving those portions that might be legal, vetoing things that aren’t legal, is reserved to the courts who have been doing it for a very long time in Ohio,” Lodge says.  And to an extent, Sinnott is sympathetic to that argument—noting he’d vote against the directives as a legislator and he’d rule against them as a judge. “The instruction given to us by the General Assembly is one that a board of elections is ill-equipped to follow," Sinnott says. "It’s an instruction to perform a highly technical and legal analysis relative to, among other things, the home-rule provisions of Ohio’s constitution.”Supporters raised a formal protest motion, but Sinnott and the other board members voted to reaffirm their rejection of the issue for November’s election. This is the third time backers have tried to pass a fracking prohibition at the ballot box.

Rover Pipeline receives federal approval for full service -- The Rover Pipeline has received the green light from federal authorities to become fully operational. Texas-based Energy Transfer Partners announced in a news release late Wednesday that its supply lines connecting to the pipeline from Burgettstown, Pa., and Majorsville, W.Va., have been approved for service by the Federal Energy Regulatory Commission. The actions allow for the pipeline to begin serving all of its long-haul contractual commitments starting Sept. 1. The main portion of the 713-mile Rover route, consisting of two 42-inch pipelines, crosses the southern portions of Wayne and Stark counties. It transports gas processed from the Marcellus and Utica Shale areas of West Virginia, eastern Ohio and western Pennsylvania to a hub near Defiance. From there, the pipeline turns northward and ends in southeastern Michigan, where it connects to the Vector Pipeline.

Caucus members urge DEP to reconsider steep fee increase - A letter signed by several local lawmakers and others in the state House Oil and Gas Caucus asks state Department of Environment Protection Secretary and Environmental Quality Board Chairman Patrick McDonnell to reconsider a proposed increase from $5,000 to $12,500 in the application fee for an unconventional well permit. “Unconventional” wells draw oil or gas through such means as fracking. “Conventional” wells tap traditional sedimentary formations and do not require the volume of fluids used in unconventional drilling. Caucus members contend that the proposed fee, a 150 percent increase, “will be the highest in the nation, yet another distinction that signifies Pennsylvania is not open for business.” The 31 caucus members include chairwoman Rep. Donna Oberlander, R-Clarion, whose district includes Dayton, Rural Valley and Elderton in Armstrong County; Rep. Cris Dush, R-Brookville; Rep. Jeff Pyle, R-Ford City; and House Majority Leader Dave Reed, R-Indiana. But a department spokesman said the proposed fee increases are needed to ensure that DEP can continue to both issue permits for and oversee the environmental health and safety of the oil and gas industry. “Over the past 10 years, Pennsylvania has gone from producing negligible amounts of natural gas to second in the nation in production and it is critical that the (DEP) Oil and Gas Management Program have sufficient resources to ensure that the industry can continue to grow responsibly,” DEP Press Secretary Neil Shader said Friday. “The current revenue generated by fees is insufficient to cover the program’s costs, and DEP has been running a roughly $400,000-a-month deficit.”

Fracking is on the rise in Pennsylvania. So are radon levels. Are the two connected? A recent research project from Johns Hopkins University surprised Pennsylvania state experts when it found a correlation between the natural gas fracking boom and an increase in radon levels — but not everyone agrees with its conclusions.  Radon, which cannot be seen or smelled, is the second-biggest cause of lung cancer in the US. It starts out as uranium, found naturally in soil and rocks, but becomes a gas as it decays. When wells are drilled for water, oil or natural gas, the gas can be released and migrate into buildings. Today some of the highest radon levels can be found indoors in Pennsylvania, so it’s no surprise there’s also radon in the Marcellus Shale, the rock formation that sits under much of the state. “The Marcellus is considered to be a fairly radioactive rock,” says Elizabeth Casman, a researcher in environmental engineering at Carnegie Mellon University. Casman has seen the numbers: The Environmental Protection Agency estimates that indoor radon causes or contributes to 21,000 lung cancer deaths each year. So when fracking in the Marcellus took off in Pennsylvania, Casman became concerned. “The more I was reading about the formation and the potential for radon in the natural gas, the more nervous I got,” she says. Casman bought an electric kettle and stopped cooking on her gas stove. Other experts in the state who have been aware of Pennsylvania’s radon levels for many years had a different view. Dave Allard, who is currently director of the Bureau of Radiation Protection at the Pennsylvania Department of Environmental Protection, says the state has known since the mid-1980s why Pennsylvania has high radon levels.  Some homes have levels 250 times higher than is actionable by the EPA — higher than would be allowed in an occupational setting or a uranium mine. For the DEP, the issue was taken care of: Pennsylvanians are already advised to test for radon in their homes and Marcellus Shale gas wasn’t adding to the problem. But then the state’s radon experts got kind of blindsided by the Johns Hopkins study.

Fracking, the Water Cycle, and Sacrifice Zones -- naked capitalism by Lambert Strether - I was struck by two recently released studies on fracking and water, and the connections I saw between them:

First, for those who came in late, I’ll define fracking, and briefly look at the politics and business of fracking. Then I’ll look at the water cycle and compare it to the fracking cycle. After that, I’ll look at fracking and groundwater. Finally, I’ll look at fracking “sacrifice zones,” and conclude. The Environmental Protection Agency (EPA) defines fracking as follows (PDF). “Frack” from “fracture”: Hydraulic fracturing involves the pressurized injection of fluids commonly made up of water and chemical additives into a geologic formation. The pressure exceeds the rock strength and the fluid opens or enlarges fractures in the rock. As the formation is fractured, a “propping agent,” such as sand or ceramic beads, is pumped into the fractures to keep them from closing as the pumping pressure is released. The fracturing fluids (water and chemical additives) are then returned back to the surface. Natural gas will flow from pores and fractures in the rock into the well for subsequent extraction. As you can see, water is involved at every stage of the process, which is why they call it “hydraulic fracking”.  Here’s a diagram of the water cycle from the United States Geological Survey (USGS):And here is a diagram of “the fracking cycle” from the EPA: You’ll notice that the fracking cycle is not a cycle; it is a linear movement from “water acquistion” to “wastewater disposal,” with no involvement of groundwater whatever.  Our first study, “Endocrine-Disrupting Activities and Organic Contaminants Associated with Oil and Gas Operations in Wyoming Groundwater,” provides the answer. The Casper Star Tribune summarizes the study’s conclusion: Groundwater from near a fracked field disrupts human cells in ways that adversely affect the critical endocrine hormone messaging system, and to a more serious degree than polluted groundwater near a conventional oil and gas operation.

Generators, electric utilities spar over pipeline funding in FERC fuel security docket -  New England power generators filed comments at the Federal Energy Regulatory Commission Thursday, asking regulators to reject a request from electric utilities to allow them to charge consumers for pipeline development as part of a larger proceeding on regional fuel security.  Early this month, a group of electric utilities filed with FERC, asking that it clarify that the "central issue" in its ongoing proceeding on fuel security is to allow electricity customers to pay for new natural gas pipelines. The utilities proposed that the ISO establish a tariff through which the grid operator "would pay for, and recover in its rates, the costs of adding new natural gas pipeline capacity." The generators said the utilities' request would undermine FERC's market-based approach to pipeline siting and argued their proposal is an attempt to circumvent decisions from New England states to not allow rate recovery for pipeline construction.

N.J. agency seeks review of FERC orders on PennEast pipeline - A New Jersey agency in charge of protecting state ratepayers asked a federal appeals court to review the US Federal Energy Regulatory Commission approval of PennEast Pipeline's 1.1-Bcf/d natural gas pipeline project. The New Jersey Division of Rate Counsel in a Monday letter asked the US Court of Appeals for the 3rd Circuit to review a FERC order that issued a Natural Gas Act certificate to the project and another order that turned down a request that the commission reconsider that approval. The state agency said it was "aggrieved" by the FERC rulings. The New Jersey agency has disagreed with the federal commission's conclusion that the project was needed. During the pipeline's federal review, the state agency submitted evidence that it said demonstrated a lack of gas demand from New Jersey gas utilities (US Court of Appeals for the 3rd Circuit docket 18-2853). FERC recently issued a number of orders that shut down challenges to its approvals of major interstate gas pipeline projects. One of these orders rejected a rehearing request by the Delaware Riverkeeper Network related to the FERC approval of PennEast. The environmental group has asked the US Court of Appeals for the District of Columbia Circuit to review the FERC approval and rehearing orders on PennEast. The PennEast pipeline would run from Pennsylvania to New Jersey to deliver gas from the Marcellus Shale. Shippers for the project, including local distribution companies and electric power generators, have subscribed to about 1 Bcf/d of the project's firm transportation capacity in binding precedent agreements. The project would consists of a 36-inch-diameter pipeline running 120 miles from Luzerne County, Pennsylvania, to an interconnection with Transcontinental Gas Pipe Line in Mercer County, New Jersey .

How one West Virginia Supreme Court justice gave natural gas a big victory and shortchanged residents The Republican-led West Virginia House of Delegates received national attention last week for impeaching all four of the state’s sitting Supreme Court justices. Lawmakers cited a swirling scandal over court spending that ranged from using state cars for personal business to extravagant office renovations that included a $32,000 couch.Among the targets was Beth Walker, who was impeached over allegations of irresponsible spending and poorly managing the court’s administrative affairs. But left unmentioned in the impeachment and the debate around it has been a peculiar vote by Walker that benefited the natural gas industry. In one of her earliest votes, Walker made a highly unusual decision to reopen a case and then reverse a Supreme Court ruling that would have forced drillers to pay more in profits to residents. Walker voted to reopen the case around the time her husband owned stock in a variety of energy companies, including those participating in West Virginia’s growing gas boom.The case focused on whether natural gas companies are allowed to deduct a variety of expenses — for the transportation and processing of gas, for example — when they calculate payments for West Virginia residents or companies that lease them drilling rights to their gas. Millions of dollars in gas royalty payments, the riches from the industry’s dramatic growth in West Virginia over the past decade, were at stake.  In November 2016, the court — before Walker joined it — voted in favor of the residents, ruling that producers weren’t allowed to take such deductions. Two months later, just weeks into her term, Walker provided the pivotal vote to have the court reconsider the ruling. The court then overturned it, siding with the industry and against the residents.

Half of Mountain Valley Pipeline workers released - The Mountain Valley Pipeline project says it has released as much as 50% of its construction workforce. This comes as a response to Wednesday's stop work order.  Here's what the project had to say in its statement in part:   “Despite the construction activities authorized under the modified work order and the FERC-approved stabilization plan, MVP was forced to take immediate measures to address an idled workforce and protect the integrity of the project. MVP is working to mitigate any additional job loss; and we believe we are making progress to receive authorization to resume full construction activities and return the currently released workers back to their jobs. Constructing the Mountain Valley Pipeline in the safest manner possible; minimizing impacts to sensitive species and environmental, cultural, and historic resources; and ensuring the highest levels of environmental protection remain our top priorities. As we continue working closely with the agencies to clarify and resolve the issues related to the stop work order, we appreciate the FERC’s responsible review and consideration of the modified work order and look forward to continuing the safe construction of this important infrastructure project.” You can read the whole statement here:

Alamance commissioners to vote on Mountain Valley Pipeline — A lot of people will be paying attention to Monday’s vote, even though the Alamance County Board of Commissioners has no legal authority over whether or not the Mountain Valley Pipeline comes through Alamance County. The proposed Mountain Valley Pipeline Southgate would be a 72-mile, 24-inch diameter line connecting to the existing MVP in Pittsylvania County, Va., and carrying Marcellus Shale gas to the PSNC distribution system south of Graham near Cherry Lane, according to documents submitted to the county. The company claims the pipeline will bring cheaper natural gas to the area, which has a growing population and growing demand for energy, 1,260 jobs, $106 million in local spending and $1.3 million per year in county taxes all with less pollution than coal. Opponents, represented by the Haw River Assembly, say the company significantly exaggerates the tax revenue and the potential demand for natural gas, points out most of those jobs will be temporary, charges many will be taken by out-of-state workers, says the company is unfair to the property owners from whom it buys land, that there are environmental dangers in constructing and maintaining the pipeline and compression stations, and the pipeline deepens the dependence on polluting fossil fuels and fracking. Other property owners making public comments at the commissioners’ Aug. 6 meeting said the pipeline companies were aggressive in trying to get access to their land, and, though a private company, had the right to take land by eminent domain from those who refused to sell. Emily Sutton, the Haw River Keeper, told the board Alamance County municipalities were waiting to see what they did before deciding whether or not to vote on the resolution opposing the pipeline.

The Baptists and the yogis join to fight a pipeline -  “Turning points!” the Rev. Paul Wilson shouted. Like the biblical Paul on the road to Damascus, he said. Like his church community was facing now.  Just down the road, across the rolling fields and woodlands where most of his congregation grew up, the most powerful corporation in Virginia plans to build a natural gas compressor station. Dominion Energy’s facility is integral to the 600-mile Atlantic Coast Pipeline, which will tunnel under the nearby James River and march across the county. The pipeline has drawn protests along its planned path from West Virginia, through Virginia and into North Carolina. But the Union Hill community in Buckingham County, founded after the Civil War by freed slaves and near the geographic center of the state, is the only place in Virginia that faces the additional issue of a compressor station. Federal documents say such stations — which keep the gas flowing — emit toxic chemicals that can harm health. They can be noisy, and they light up at night. Once in a great while, such facilities explode — causing damages and fatalities for a significant distance all around. The easiest path for local residents would be to shrug and accept it. But Wilson, who preaches on alternating Sundays at two Baptist churches in Union Hill, is leading his community down the harder path. “They’ve approached us in the historical manner that big business and government approach communities such as ours,” Wilson said, “and that manner has always been that ‘we’re going to do what we want to do.’ ” The choice to resist has put Wilson and his congregation in step with an unlikely group of allies. As he neared the end of his sermon last Sunday at Union Grove Baptist, Wilson noticed a figure in orange just inside the entrance to the church. “Swami Dayananda!” Wilson exclaimed at a diminutive woman with short gray hair and the robes of a Hindu monk. She had stopped by from the nearby ashram at Yogaville, bearing diet books to help Wilson in his quest to lose weight, and looking to plan their road trip the next day to meet with civil rights leaders and environmentalists at a conference in North Carolina. If nothing else, the looming threat of the pipeline and compressor station has wrought one small miracle in Union Hill: The Baptists and the yogis have come together.

Despite stop work order, ACP, MVP get permission to continue building - Even after the Federal Energy Regulatory Commission ordered a stop to construction of two major pipeline projects, the projects have sought and received permission from the same agency to keep going. The Mountain Valley Pipeline and Atlantic Coast Pipeline were ordered to halt construction after the 4th Circuit Court of Appeals ruled that federal agencies had skirted environmental rules when they approved both projects. In stop orders dated Aug. 3 and 10, respectively, the pipelines were told to stop construction and submit a work stabilization plan. In ACP’s and MVP’s stop-work orders, FERC directed the projects to cease construction, except for any measures deemed necessary by the federal agencies or FERC staff.In response, a lawyer for Mountain Valley Pipeline wrote to FERC requesting that the stop-work order be modified and limited to areas only affected by decisions of the U.S. Forest Service and Bureau of Land Management, both of which were remanded by the 4th Circuit Court. Instead, FERC should allow construction to continue for the first 77 miles of the 303-mile-long pipeline in Northern West Virginia, the lawyer, Matthew Eggerding, wrote Aug. 14. The next day, FERC’s director of energy projects, Terry Turpin, wrote back: “After careful consideration, and with the goal of protecting the environment to the maximum extent possible while the relevant agencies determine how best to comply with the orders” of the 4th Circuit, Mountain Valley Pipeline could continue with work on the first 77 miles, with the exception of a 7-mile stretch near the Weston Gauley Bridge Turnpike Trail, plus work on the three compressor stations. After the Atlantic Coast Pipeline received its order to stop work last Friday, the project’s developers asked for permission to continue construction on road bores in Upshur County and Bridgeport, and construction at a Wetzel County compressor station. One day later, FERC granted the permission to continue. The project still has an end-of-2019 goal, a spokeswoman said. It’s not the first time authorities have bent rules to green-light the major pipeline projects. A review last week by the Charleston Gazette-Mail, in collaboration with ProPublica, showed federal and state agencies often cleared roadblocks to expedite construction on the pipelines.

Atlantic Coast Pipeline foes file their broadest legal challenge yet -  Citizen groups filed another lawsuit against the Atlantic Coast Pipeline Thursday, this time taking direct aim at the federal certificate that undergirds all other permits for the complex interstate gas project. Pipeline foes have long contended the project isn’t needed to meet demand in Virginia and North Carolina, and that it will cause unmitigated harm to the region’s forests, endangered animals, and waterways.They’ve filed numerous suits focused on the pipeline’s environmental impacts, winning temporary victories last week that have stalled construction. Thursday’s court challenge with the 4th U.S. Circuit Court of Appeals is the first to focus on whether the gas project is necessary, and success in this case would more likely be permanent.“This is really the central permit for the entire project,” said Greg Buppert, a senior attorney with the Southern Environmental Law Center, which with Appalachian Mountain Advocates filed the suit on behalf of 13 conservation groups. “This the permit where the need for ratepayers to finance the project is squarely at issue.” The 600-mile pipeline from West Virginia to North Carolina is a massive undertaking by any measure. It will bore under or through the Blue Ridge Parkway, two national forests, and hundreds of rivers and streams, including habitat for rare and endangered animals. Its 100-foot wide construction berth will require felling large swaths of forests, crossing the land of thousands of individual property owners. In many cases, the census tracts in the pipeline’s path contain more American Indians and people of color than the surrounding county as a whole.The agency with ultimate authority over the immense project is the Federal Energy Regulatory Commission, or FERC. The five-member panel determines whether the pipeline is necessary — and if it is, how to balance it against property rights, civil rights, and the need to protect the environment.

Environmentalists Sue FERC to Stop the ACP - There's a new effort to block construction of the Atlantic Coast Pipeline -- environmental groups suing the Federal Energy Regulatory Commission for approving the project.  FERC recently ordered Dominion to stop work on the ACP and this new legal action could put a permanent end to the pipeline. To build a pipeline from West Virginia, through Virginia to North Carolina, Dominion must take private property through a legal process called eminent domain – and in order for the government to approve that process, it must first certify that there’s a public need for the project.  At the Southern Environmental Law Center attorney Greg Buppert says the federal agency that was supposed to do that made a mistake when it concluded a new pipeline was needed.  “Signals from the market don’t support a new Interstate natural gas pipeline," he said. "Frankly it’s the most costly way to bring gas to Virginia. Ratepayers will be on the hook over the next 25 years for $1.5 to $3 billion in costs.” Dominion disputes that claim, saying new supplies of cheap natural gas will actually mean lower rates for customers, and it points to purchase agreements it has with its own electric company as proof of demand.  Buppert is not convinced. “These are agreements between Dominion affiliates that don’t reflect what’s going on in the market.  FERC refused to look behind those contracts, and we think that’s a problem.”    And in their lawsuit, environmentalists argue there better ways to get fracked gas to market. “The Transco pipeline, which is the major pipeline passing through Virginia and North Carolina, has a pipeline artery with capacity and enough pipeline in the ground to meet demand in the Southeast,” Buppert explained. The Federal Energy Regulatory Commission has already issued a stop work order, canceling permits issued by the federal government to allow drilling under the Blue Ridge Parkway and construction that will   harm endangered species. The SELC will also be at a state hearing of the Water Control Board Tuesday in support of its claim that the Atlantic Coast Pipeline cannot be built without harming Virginia’s rivers and streams.

Construction pause gives momentum to Atlantic Coast Pipeline legal challenges -  Opponents of the $6 billion, 600-mile Atlantic Coast Pipeline (ACP) have filed a broad challenge attacking the underlying need for the additional gas it would bring. The embattled project planned by Dominion Energy, Duke Energy and Southern Co. is already facing a potential re-routing. The Federal Energy Regulatory Commission (FERC) halted construction following a federal appeals court decision this month to reject construction certificates that had been approved, but declined to reconsider its certificate approval.While federal regulators said the pipeline route may need to be altered, the Southern Environmental Law Center (SELC) and Appalachian Mountain Advocates (AMA) filed a broad lawsuit in the U.S. Court of Appeals for the Fourth Circuit, which they believe could sink the project. The new lawsuit, filed on behalf of a baker's dozen of conservation groups, targets what SELC and AMA called "Dominion's inflated claims that the pipeline is needed in Virginia and North Carolina." Whether the pipeline is necessary has become a key point of contention, as the battle between developers and opponents has so far been over specific permits and environmental findings. In her October dissent to the order approving the Atlantic Coast project, Commissioner Cheryl LaFleur said both ACP and the Mountain Valley Pipeline, which FERC approved the same day, "appear to be receiving gas from the same location, and both deliver gas that can reach some common destination markets." According to SELC, gas-fired power plants in Virginia and North Carolina are already connected to the existing pipeline system and "will have few direct connections to the ACP," undercutting developers' arguments the new supply is necessary for electric generation. And they say the gas delivered by the Atlantic Coast pipeline, which will be produced through hydraulic fracturing, "will be more expensive than the gas that is currently available in Virginia through existing infrastructure." "From the day this dirty, dangerous pipeline was proposed, communities, experts and the builders themselves have known that it had nothing to do with need and everything to do with greed," Joan Walker, senior representative for the Sierra Club's Beyond Dirty Fuels Campaign, said in a statement.  She added that "clean, renewable energy is affordable and abundant" in Virginia and North Carolina.

Virginia regulators consider revoking permits for two major gas pipelines, but settle for stricter enforcement — Pictures of mud-choked mountain streams pushed Virginia regulators to consider revoking permits for two major natural gas pipelines during a hearing Tuesday, but in the end the State Water Control Board simply pushed for stricter enforcement of state regulations.  About 150 pipeline opponents from across the state were outraged that the board pulled back after coming so close — some in tears, others yelling at board members as they left the hearing room. Capitol Police officers formed a line across the front of the chamber in a state office building to keep the angry crowd away from staff members.  “We hoped that we were close. I thought that we should be closer because of the body of comments and evidence that people submitted,” said David Sligh, a retired state environmental engineer who now works with the Wild Virginia conservation group.Members of the board had approved erosion and sediment control permits for one of the projects, the Mountain Valley Pipeline, in December, but agreed to reexamine the issue in light of reports that construction was causing extensive damage to the rugged mountain terrain. That pipeline is the shorter of the two projects, designed to carry gas 300 miles from West Virginia through Virginia’s southwest. The other project, the Atlantic Coast Pipeline, will cut a 600-mile path from West Virginia through the center of Virginia and into North Carolina.  State regulators have yet to give final approval to the erosion and sediment control permits for the Atlantic Coast Pipeline, and work there is not as far along. Both projects have faced setbacks this summer. Federal judges have ruled that federal agencies granted several permits without full review, and regulators have stopped all work on both pipelines until those issues are resolved. Tuesday’s hearing was aimed at examining whether Virginia erred in accepting blanket federal water quality certification for the two pipelines rather than conducting a separate review of every point at which the projects will cross a stream or river. 

Va. agency lets water permits stand for two pipelines -- A Virginia regulatory agency has voted to allow work to proceed on the Mountain Valley and Atlantic Coast natural gas pipelines. The Virginia Water Control Board decision allows the pipelines to proceed with what critics call current inadequate water permits. Other issues must still be resolved before construction can resume on the two under-construction pipelines, Kallanish Energy reports. More than 150 people attended the Tuesday meeting in Richmond, Virginia. The state agency took no action on water permitting, allowing the previous certification from the U.S. Army Corps of Engineers’ Nationwide Permit 12 blanket permit to stand. Critics said the Nationwide Permit 12 requires fewer protections for Virginia waterways than state water quality standards could under Section 401 of the federal Clean Water Act. Under that law, Virginia has the authority to require compliance with stricter water standards. Virginia said the federal permitting echoes the state system and that’s why it followed the federal permitting. The state agency pledged to provide stricter enforcement on the two pipelines and to share pipeline concerns with federal regulators. Critics called on Gov. Ralph Northam and the Virginia Department of Environmental Quality to analyze the pipelines' impacts on every stream crossing individually. 

Northeast gas pulled south by Florida power plants and Sabal trail  - Florida’s increasing demand for natural gas for power generation isn’t new, but like a young alligator in the Everglades, its appetite is voracious and growing. More and more gas-fired power plants have been coming online, increasing gas demand and spurring the development of new gas pipeline capacity into the state. And, because of big shifts in where gas is being produced and where it’s flowing, the Sunshine State will soon be receiving an increasing share of its gas needs from the Marcellus region. Today, we begin a two-part look at how rising generation-sector demand for gas and a new pipeline are changing gas-flow dynamics in the U.S. Southeast.. Florida has been an occasional topic in the RBN blogosphere, mostly because it is a leading generator of electricity — second only to Texas, in fact — and because gas in recent years has become far-and-away the preferred generation fuel in the state. Florida’s electric utilities have been particularly aggressive in their shift from coal (and nuclear) generation to gas, and that spurred the development of the state’s third major gas pipeline (we’ll get to the other two in a moment): the 1.1-Bcf/d Sabal Trail Pipeline, which runs more than 500 miles from an interconnect with Williams’s Transcontinental Gas Pipeline (Transco; orange line in Figure 1) in west-central Alabama to the Orlando area

Recent Arrests Under New Anti-Protest Law Spotlight Risks That Off-Duty Cops Pose to Pipeline Opponents - Over the weekend, four opponents of the Bayou Bridge pipeline and an independent journalist covering their activities were arrested and charged under Louisiana House Bill 727, which makes trespassing on “critical infrastructure” facilities — a category that explicitly includes oil pipelines — a felony punishable by up to five years in prison, a fine of $1,000, or both. A total of eight people have now been charged under the law since it took effect on August 1.HB 727 is one of numerous anti-protest laws that states have considered or enacted in the wake of the mass mobilization against the Dakota Access pipeline, which drew tens of thousands of people to gather near the Standing Rock Sioux reservation in 2016 and 2017. The arrests also expose the blurred line between private security and public law enforcement that has become typical in the policing of anti-pipeline struggles.  On August 9, the first three arrests under the law were carried out by probation and parole officers with Louisiana’s Department of Public Safety and Corrections moonlighting as security guards for Bayou Bridge pipeline parent company Energy Transfer Partners. Ken Pastorick, communications director for the Louisiana Department of Public Safety and Corrections, told The Intercept that the department’s director authorized the officers to work on behalf of the Bayou Bridge pipeline as a form of “extra-duty employment.” “They have the ability to enforce the law in Louisiana even when off-duty and working extra-duty security details,” he said. “ETP tells these Pinkerton men of the Bayou what to do, and what they are in fact doing is criminalizing water protectors,” said Cherri Foytlin, a Louisiana resident and member of the Indigenous women’s advisory council for the anti-Bayou Bridge camp known as L’eau Est La Vie (Water Is Life). “They are using the cops as a tool in that process.”

Agencies play tug of war over pipeline protection -  Natural gas pipeline companies are being pulled in three different directions as federal agencies mull how to handle new security threats to an increasingly vital resource. Should the U.S. government bail out competitors to natural gas to ease the power grid's reliance on the fuel, as called for by a leaked plan from the Department of Energy? Should policymakers preserve the status quo, counting on voluntary cooperation from the sector and a slim staff of specialists to gain a window into pipeline security, as the Department of Homeland Security favors? Or should U.S. lawmakers consider beefing up gas security oversight and moving it out of DHS's hands, an idea raised in the halls of the Federal Energy Regulatory Commission? Shared among all three agencies — and the energy firms lobbying them — is a sense that cyberthreats to the gas pipeline networks are only set to rise as companies digitize operations and hackers backed by foreign intelligence services grow more intrusive. "We now are dealing with nation states," said Dave McCurdy, CEO of the American Gas Association (AGA), at a July 31 cybersecurity conference in New York City. "The government isn't necessarily organized for this 21st-century paradigm ... you've got some challenges with the federal agencies, if you're in industry." The path chosen will inevitably reverberate in the bulk power grid, which in recent years has grown to rely on natural gas more than any other fuel source for generating electricity. "There's more concern about what is the impact of what would happen if there is an interruption in the gas supply," McCurdy said 

Sen. Gary Peters demands action on Great Lakes safety -- Michigan Democratic Sen. Gary Peters yesterday told Enbridge Inc., the owner of the Line 5 pipeline under the Straits of Mackinac, that it is not doing enough to gain the trust of Michiganders."We know that an oil spill in the Great Lakes would be absolutely catastrophic for our environment and for our economy," Peters said at a Senate Commerce, Science and Transportation Committee field hearing in Traverse City, Mich. Peters pointed to an April incident in which a ship's anchor gouged the pipeline and electric transmission lines, spilling about 600 gallons of mineral oils into the straits (Greenwire, April 12).Briefly after the incident, strong storms brought more challenges for the 65-year-old pipeline. Michigan and Enbridge have an agreement to shut down the line when waves reach 8 feet tall to avoid problems.Peters asked Skip Elliott, administrator of the Pipeline and Hazardous Materials Safety Administration, whether there was reluctance on Enbridge's part to shut the pipeline down. "It took a discussion to get them to shut down the line until the storm had passed, yes," Elliott said. David Bryson, Enbridge's senior vice president of operations for liquid pipelines, said the company did not push back on shutting Line 5 down. He said the pipeline was shut down before the worst day of storms. "Don't give us words. Give us action," Peters said.

Trump Keeps Trying to Kill the Agency That Investigates Chemical Plant Disasters - Workers at a Wisconsin oil refinery were conducting a routine shutdown for maintenance. Suddenly, a gasoline cracking unit exploded, and the workers watched in horror as a huge fireball ripped through the plant.  Debris from the explosion ruptured a tank, which spilled more than half a million gallons of hot asphalt that burst into flames and burned for nine hours. Black smoke spread over the port town of Superior. Eleven workers were injured, and about 40,000 people were evacuated from nearby homes and schools. Earlier this month, after a three-month probe, the investigators from the US Chemical Safety and Hazard Investigation Board concluded that a faulty valve at the plant caused the explosion. The board plans to issue recommendations that aim to prevent such an accident from happening again at a refinery. But despite the wide recognition of its expertise in chemical plant disasters—this small, independent federal agency is teetering on the brink of elimination. The Trump administration has twice in its budgets attempted to shut down the Chemical Safety Board; so far, Congress has rejected the attempts. For the 2019 fiscal year, both the House and Senate have proposed restoring full funding.But the assaults appear to be taking a toll. Hostility from the Trump administration and disarray from its efforts to eliminate the agency follow years of leadership turmoil and high turnover that started during the Obama administration. In 2015, its chairman, who was embroiled in a congressional investigation into poor management, resigned under pressure—yet leadership problems remain.Combined, these problems threaten to cripple the agency’s investigations of chemical plant disasters, according to interviews and reports obtained byReveal from the Center for Investigative Reporting. A report from the US Environmental Protection Agency’s inspector general says the turmoil “if not addressed, may seriously impede the agency’s ability to achieve its mission efficiently and effectively.”

Standing Rock Veterans Lead Fight to Shut Down Enbridge Line 5 Pipeline - A group of Standing Rock veterans and their allies have set up camp in Northern Michigan to stop another pipeline: Enbridge's Line 5 pipeline that passes under the Straits of Mackinac between Lakes Huron and Michigan as it carries oil from Western Canada to Ontario, Michigan Radio reported Sunday. The protesters, about 15 in total, are concerned about the possible damage an oil spill from the pipeline could do to the Great Lakes and have vowed not to leave their camps until the pipeline is removed."As long as it takes 'til it's shut," Nancy Shomin, who helped start the camp, told UpNorthLive Monday.The protest camps follow growing concern about the aging pipeline after it was dented by an anchor in April. In July, an independent report found a spill from the pipeline could damage 400 miles of shoreline in Michigan, Wisconsin and Ontario and cost Michigan around $2 billion, Michigan Radio reported.At a Senate Commerce Committee field hearing Monday, Senator Gary Peters (D-MI) criticized Enbridge for dragging its feet to shut down operations during a storm shortly after the anchor strike."Can you see why that is something that people look at and say, Enbridge is not really focused on going the extra measure of safety, when they had a damaged pipe and severe weather and they pushed back on shutting down to make sure nothing happened?" he said to applause, addressing Enbridge senior vice president of operations for liquid pipelines David Bryson, according to Michigan Radio.The protesters say the only safe move is to shut the pipeline down permanently. "It's one of those things where it's not if, it's when," Clint Cayou, who joined the protest from Mason, Nebraska, told UpNorthLive. "The pipeline is dangerously close to being a real hazard to a lot of people and it needs to be shut down."

US EIA says US Gulf Coast gasoline stocks build as refining holds above historic norms — Stocks of gasoline on the US Gulf Coast rose in the week ended August 17 amid weaker national demand and strong regional refinery runs, US Energy Information Administration data showed Wednesday. USGC gasoline inventories rose 1.338 million barrels to reach 81.493 million barrels, their highest level since the week ended July 6. Implied US gasoline demand, measured as product supplied, fell last week, supporting the build in stocks. US gasoline supplied fell 59,000 b/d to reach 9.453 million b/d. At the same time, the USGC refining complex, which is home to more than half of US throughput capacity, remained elevated above seasonally typical levels last week. After hitting an all-time high in the week ended August 10, gross inputs into USGC refineries were reported at 9.708 million b/d for the week ended August 17, the second-highest level since the EIA started publishing this figure in January 1990. By this measure, USGC refining activity last week was more than 44% above levels from the year-ago week in 2017. Earlier in the summer, the EIA said the entire US refining complex was likely to break records for output in 2018, in part because of strong USGC production. In the week ended August 17, USGC production of finished motor gasoline was reported at 2.181 million b/d, down 90,000 b/d from the prior week. US production totaled 10.059 million b/d, down 217,000 b/d week on week. In Wednesday's data, the four-week moving average for USGC refinery input was reported at 9.543 million b/d, which is the highest that figure has ever been since the data was first recorded in 1990.

U.S. gasoline consumption flat, growth switches to diesel: Kemp (Reuters) - Rising fuel costs have dampened gasoline demand from private motorists in the United States, leaving the market relying on continued economic and freight expansion to boost oil use.  U.S. traffic volumes were up by just 0.3 percent on a seasonally adjusted basis in the three months from April to June compared with the same period a year earlier, according to the Federal Highway Administration.Traffic growth has slowed from an annual rate of between 2 percent and 3 percent through most of 2015 and 2016, when gasoline prices were low and falling (“Traffic Volume Trends,” FHA, August 2018).Traffic growth has been correlated with changes in gasoline prices for the past quarter century and recent fuel price increases have resulted in a predictable slowdown (https://tmsnrt.rs/2nRQtxk).Retail gasoline prices are up by more than 55 percent from their cyclical low in February 2016, according to the U.S. Energy Information Administration.Traffic volumes have levelled out despite continued strong growth in economic output, incomes and employment, indicating that motoring demand has been hit by rising fuel prices.Slower traffic growth has been mirrored in flattening gasoline consumption, with sales to domestic customers at or slightly below prior-year levels for most months so far this year.Between March and May, the most recent three-month period for which data are available, gasoline supplied to the domestic market was marginally down from the same period in 2017. The Energy Information Administration is now forecasting gasoline consumption will be essentially unchanged in 2018, down from predicted growth of around 30,000 barrels per day (bpd) at the start of the year (“Short-Term Energy Outlook”, EIA, August 2018).

Freight fuel market moves back towards balance: Kemp (Reuters) - The market for freight fuels is moving close to balance, after tightening significantly in 2017 and the first quarter of 2018, contributing to the recent stabilisation in crude oil prices. OECD stocks of middle distillate fuels, including road diesel, marine gasoil and jet fuel, totalled 513 million barrels at the end of June, according to the International Energy Agency (“Oil Market Report”, August 2018).Stocks have fallen compared with the slump years of 2015-2017 (when they ranged from 554 million to 611 million barrels) but are higher than in the pre-slump years of 2012-2014 (496-505 million barrels).Fuel availability appears to have improved since the middle of the second quarter, with U.S. distillate stocks rising to almost 131 million barrels last week, up from just 115 million in mid-May.U.S. stocks are now 18 million barrels below the ten-year seasonal average, compared with a deficit of 23 million in May, and the gap is closing.Confirming that stocks are still tight, but only marginally so, the calendar spread for European gasoil futures is close to level (https://tmsnrt.rs/2MsjcaJ).  The one-year spread has been trading in an average backwardation of roughly $2.50 per tonne (just 32 cents per barrel) over the last 30 days.The spread is currently in the 55th percentile for the distribution since 1994, implying traders see gasoil availability close to average levels. Slower growth in global trade since the start of the year, and especially since the second quarter, is likely to be contributing to improved availability of distillates by moderating the increase in fuel consumption. On the production side, refining margins for making gasoil remain healthy, averaging just over $15 per barrel in the last month, putting them in the 67th percentile since 2008. Soft crude prices coupled with firm gasoil margins are giving refineries a strong incentive to maximise production of distillates.U.S. refiners produced more than 5.4 million barrels per day of distillate fuel last week, a seasonal record, and more than 600,000 bpd above the ten-year average. If refinery runs remain strong throughout the remainder of August and September, which seems likely in the absence of a hurricane strike on the Texas-Louisiana coast, distillate availability should improve significantly.

One of the biggest changes in oil market history could spark a diesel ‘resurgence,' analysts say - A much-anticipated shipping revolution could spark a dramatic upswing in diesel fuel demand over the coming months, energy analysts have told CNBC.New rules coming into force in less than 18 months time are seen as a source of great concern for some of the world's biggest oil producers. That's because the global shipping industry is widely thought to be ill-prepared for the looming sea change.On January 1, 2020, the International Maritime Organization (IMO) will enforce new emissions standards designed to significantly curb pollution produced by the world's ships.Amid a broader push towards cleaner energy markets, the IMO is set to ban shipping vessels using fuel with a sulfur content higher than 0.5 percent, compared to levels of 3.5 percent at present. The most commonly used marine fuel is thought to have a sulfur content of around 2.7 percent."The demise of diesel has been well documented over recent years, as global efforts to curb greenhouse gas emissions continue to power the rise of hybrid and electric vehicles," Richard Robinson, manager of the Ashburton Global Energy Fund, told CNBC via email."However, far from a diesel death knell, we expect to see a resurgence in the use of the fuel," he added.The forthcoming measures are widely expected to create an oversupply of high-sulfur fuel oil while sparking demand for IMO-compliant products — thus ratcheting up the pressure on the refining industry to produce substantially more of the latter fuels.This is especially important, energy analyst say, because Middle Eastern oil producers — such as OPECkingpin Saudi Arabia — are likely to lose out given their over-reliance on crude with a high sulfur content.

Integrated majors breathe new life into the Haynesville-Texas gas play. - Natural gas production volumes from the Haynesville Shale have raced up over the past 18 months or so, from about 5.3 Bcf/d in December 2016 to more than 8 Bcf/d now. In fact, volumes are now just 1 Bcf/d or so shy of the all-time peak of 9.5 Bcf/d in January 2012. Despite the gains, there’s been a cloud of skepticism hanging over the play’s longer-term growth prospects — most of the recent gains have come from a relatively small footprint in the play’s western Louisiana sweet spot, and many of the surrounding areas are fraught with geological challenges, such as high water and clay content. But now the Haynesville story is changing once again, with a shift in rigs to the Texas side. How does this shift affect Haynesville’s growth prospects? Today, we provide an update of our view of the Haynesville Shale.

Analysis: Haynesville, Permian producers revive Texas output— Texas natural gas production has found new momentum in August, breaking above 20 Bcf/d last weekend for the first time since November 2015. Not registered? Receive daily email alerts, subscriber notes & personalize your experience. Register Now Producers in the Lone Star State are forecast to increase output by another 0.7 Bcf/d by the end of this year, boosting the monthly average to 20.2 Bcf/d by December, according to S&P Global Platts Analytics. Looking ahead to the winter months, that incremental supply will not only help offset a looming storage deficit in the South, but should allow Texas storage levels to reach a surplus by next summer. Recent gains in Texas production have come largely from the Haynesville and the Permian. From mid to late August, the East Texas Haynesville region has seen sample production receipts rise by 130 MMcf/d or nearly 7%. Over the past year, the sample has grown by roughly 32%. Platts Analytics often references sample data as a barometer for production activity since the daily measure offers the earliest indication of an increase or slowdown in output. In the Haynesville, total production coming from fields spread across portions of Texas, Louisiana and Arkansas is now estimated in the high 9 Bcf/d range, but could soon reach 10 Bcf/d, thanks to growing activity in the Texas portion of the play. Texas' Permian Delaware has also shown spectacular growth this summer. In August, sample receipts in the basin have averaged 1.7 Bcf/d and are up by over 30% compared to the second-quarter average. Over the past 12 months, the Platts Analytics sample has grown by roughly 97% as associated gas production in basin continues to soar. Basin wide, the Permian is producing over 7.4 Bcf/d in August, according modeled estimates.

Water used for fracking increases 767 percent in Permian -- A new report shows that water use in hydraulic fracturing for oil and gas extraction in West Texas' Permian Basin oil field increased nearly nine times  between 2011 and 2016.The report, titled "The Intensification of the Water Footprint of Hydraulic Fracturing," said  all six of the shale oil and gas fields studied saw increases in water use, but the Permian Basin had the largest increase, growing from 4,900 cubic meters of water per well in 2011 up to 42,500 cubic meters of water per well in 2016, an increase of 767 percent. The report was compiled by researchers at Duke University's Nicholas School of the Environment and was published by science journal Science Advances.Water is one of the main ingredients in hydraulic fracturing or fracking used to extract shale deposits that contain oil and gas. Other ingredients that flow with the water include sand to prop open cracks in the rock and chemicals used to make extraction easier. The researchers note controversy around the semiarid nature of many areas that hold oil and gas reserves. A map in the report shows that much of the land involved in U.S. oil and gas plays are in regions that exhibit medium to high levels of water stress.

The port district of Houston-Galveston became a net exporter of crude oil in April - The U.S. port district of Houston-Galveston in Texas recently began exporting more crude oil than it imported for the first time on record. Crude oil exports from the Houston-Galveston port district have increased since the restrictions on U.S. crude oil exports were lifted at the end of 2015. In April 2018, crude oil exports from Houston-Galveston surpassed crude oil imports by 15,000 barrels per day (b/d). In May 2018, the difference between crude oil exports and imports increased substantially to 470,000 b/d. Total U.S. crude oil exports rose to a record high of 2 million b/d in May. On average since mid-2017, the U.S. port district of Houston-Galveston has accounted for slightly more than half of the crude oil exported from the United States, and the share increased to a record 70% in May. A port district is a geographic region defined by U.S. Customs and encompasses several individual U.S. ports of entry. The Houston-Galveston port district includes the port of Houston as well as several other ports along the Texas Gulf Coast, from Galveston to Corpus Christi.Ongoing efforts to expand crude oil export infrastructure at the ports of Houston and Corpus Christi have allowed for increased export flows. The only other port district that has seen significant crude oil export volumes recently is the U.S. port district of Port Arthur, which includes the Texas ports of Port Arthur, Sabine, Beaumont, and Orange. This district has on average accounted for close to a quarter of all U.S. crude oil exports since mid-2017. Despite infrastructure improvements, however, crude oil export capacity is still limited on the U.S. Gulf Coast, because most ports are unable to load larger crude oil vessels.  Crude oil is imported into many locations in the United States, but most of the oil goes through the U.S. Midwest or the U.S. Gulf Coast. The U.S. port district of Houston-Galveston accounted for 12% of total U.S. crude oil imports as of May, second only to the U.S. port district of Chicago, Illinois, at 19%.

Texas Oil Companies Want Federal Dollars to Protect Them From Climate Change -  The burning of fossil fuels is the driving force behind climate change, and now the companies responsible want the government to help pay to protect them from the consequences.Texas is seeking at least $12 billion to build a network of seawalls, levees, gates and earthen structures that would protect a stretch of the Gulf Coast from Louisiana to the area south of Houston that houses 30 percent of U.S. oil refining capacity, The Associated Press reported Wednesday.The Army Corps of Engineers approved $3.9 billion for smaller projects that would protect oil facilities in Port Arthur and Freeport in July, The Associated Press and The Houston Chronicle reported."The oil and gas industry is getting a free ride," Sierra Club Houston executive committee member Brandt Mannchen told The Associated Press. "You don't hear the industry making a peep about paying for any of this and why should they? There's all this push like, 'Please Senator Cornyn, Please Senator Cruz, we need money for this and that.'"Texas Republican politicians like Senators John Cormyn and Ted Cruz, who signed a letter urging PresidentDonald Trump to withdraw from the Paris agreement and are generally hostile to public spending, support federal funding for the project. Many see it as a priority after Hurricane Harvey flooded Houston and took out 25 percent of the area's refining capacity for a time."Our overall economy, not only in Texas but in the entire country, is so much at risk from a high storm surge," Gulf Coast-area Republican Judge Matt Sebesta told The Associated Press. The idea for the "Ike Dike," as the 60-mile network of barriers is called, took off after Hurricane Ike battered Texas in 2008 and caused half-a-million gallons of crude oil to be released into Texas waters, Climate Liability News reported.  Most local environmental groups supported the general need to protect the coast from storm surges, and prevent storm-caused oil spills, but were worried a plan would be rushed through after Harvey that would bypass environmental reviews assessing its potential impact on wildlife and the salinity of Galveston Bay. "You may prevent the bay from being ruined by a release of petrochemicals, but you may ruin it by changing the hydrology," Galveston Bay Foundation spokesperson Scott Jones told Climate Liability News.

Plains, Magellan sell 50 percent stake in Permian pipeline for $1.4B  --Houston-based Plains All American Pipeline and Oklahoma-based Magellan Midstream Partners are selling half of BridgeTex Pipeline Company LLC for nearly $1.44 billion, according to an Aug. 21 press release.The buyer is certain subsidiaries of both the Ontario Municipal Employees Retirement System, known as OMERS, and OMERS Infrastructure Management Inc., the infrastructure investment manager of OMERS, per the release.Plains will sell a 30 percent stake, and Magellan will sell 20 percent. The deal is expected to close in the fourth quarter of 2018, leaving Plains with a 20 percent interest in BridgeTex and Magellan with 30 percent. BridgeTex is a 400,000 barrel-per-day crude oil pipeline system connecting the Permian Basin to the Texas Gulf Coast. It runs from Colorado City in West Texas to Magellan’s East Houston terminal and its Houston crude oil distribution system. In January 2017, Plains and Magellan announced the pipeline's capacity would expand from 300,000 barrels per day to about 400,000 barrels per day. Currently, plans are underway to expand it to 440,000 barrels per day by early 2019, per the Aug. 21 release.Michael Ryder, senior managing director of the Americas for OMERS Infrastructure, noted in the release that the deal marks the firm's re-entry into the U.S. midstream sector. Several pipelines from the Permian to the Gulf Coast have been announced in recent years as takeaway capacity from the basin is filling up, limiting the room producers have to grow. The CEOs of major Houston-based oil field services companies discussed pipeline constraints on Permian activity in their recent second-quarter conference calls, the Houston Business Journal reported late last month.

Electricity use soars in booming Permian -- A report from Texas' grid operator shows that power use in the booming Permian Basin oil field of West Texas is growing exponentially faster than the rest of the state.As oil and gas activity has expanded in the region its power use grew by 8 percent a year between 2012 and 2017, compared to 1 percent for the overall system overseen by the Electric Reliability Council of Texas, or ERCOT. The increased use led ERCOT to endorse nearly $600 million of transmission projects in 2016 and 2017 to serve the area and reduce congestion in the existing power lines, which can cause stress to the grid. At the beginning of 2012 there were 477 oil and gas rigs operating in the Permian Basin, growing to a peak of 566 by the end of Nov. 2014, right before the industry suffered the worst downturn in 30 years. The rig count fell drastically through May 2016 to 134 drilling rigs but by the end of 2017 it had recovered to 398 rigs. There are  486 drilling rigs active in the Permian Basin, according to the Houston oil services company Baker Hughes. ERCOT said in a report released in July that power use in West Texas increased by nearly 250 megawatts over the previous year due to increased oil and gas activity. The grid operator, which covers 90 percent of Texas' load and 25 million customers, said that on May 10 power use in West Texas broke 3,400 megawatts for the first time ever. A megawatt can power 200 homes during peak demand.

Panama, US To Sign Pact To Expand Regional Access to LNG   (Reuters) - Panama on Friday will sign an agreement with the U.S. Treasury and Energy departments aimed at paving the way for more private investment to expand the importation and distribution of U.S. liquefied natural gas in Latin America. David Malpass, Treasury undersecretary for international affairs, said he hopes the "framework agreement" is the first of several with countries in the region to encourage investment to increase access to cheaper, cleaner energy. The agreement is part of a Treasury-led initiative called America Crece, incorporating the Spanish word for growth, aimed at boosting U.S. LNG exports, developing Latin American energy resources and downstream demand. Malpass is in Panama for the signing and the inauguration of a major new LNG terminal and 381-megawatt gas-fired power plant in Colon, Panama, run by U.S. power company AES Corp. He said in an interview that new investments encouraged by the agreement will help turn the AES Colon project into an LNG distribution hub, with cargoes imported from the United States sent to other countries in the region, including Guatemala, Honduras, Nicaragua. These countries and many Caribbean islands now rely largely on oil to generate electricity, with Venezuela a major supplier. In 2017, French utility Engie and AES established a joint venture to market and sell LNG to third parties in Central America using the Panama terminal as a distribution hub. The $1.15 billion AES facility on Panama's Caribbean coast, which is expected to begin commercial generating operations on Sept 1, and LNG tank distribution operations in 2019, took in its first U.S. LNG cargo in June. The Panama agreement allows for the U.S. agencies to help address regulatory and other barriers to investment, Malpass said, which can create opportunities for downstream demand and distribution.

U.S. natural gas pipeline exports increase with commissioning of new pipelines in Mexico -- U.S. natural gas pipeline exports to Mexico have been increasing following expansions of cross-border pipeline capacity. These exports averaged 4.2 billion cubic feet per day (Bcf/d) in 2017 and 4.4 Bcf/d through the first five months of 2018. Based on data compiled by Genscape, natural gas exports to Mexico by pipeline exceeded 5 billion cubic feet per day (Bcf/d) for the first time in July 2018, after the commissioning of several key pipelines in Mexico. By the end of 2018, an additional four of six major pipelines identified as strategic in Mexico’s five-year natural gas infrastructure expansion plan are scheduled to begin commercial operations.  These newly commissioned pipelines will transport U.S. natural gas farther into Mexico’s central and southern regions and provide an additional outlet for constrained Permian production in western Texas. Natural gas exports from the United States will help meet growing demand from Mexico’s natural gas-fired power generation and industrial sectors, offsetting declines in Mexico’s domestic production.  Currently, about three-quarters of U.S. natural gas pipeline exports to Mexico flow from southern Texas. Exports from southern Texas averaged 3.2 Bcf/d in 2017 and 3.3 Bcf/d through the first five months of 2018. This natural gas is sourced primarily from the Eagle Ford Basin in Texas and transported on an existing pipeline network to serve industrial and power sector customers in northeastern Mexico.  Exports from western Texas, however, have been limited, despite a significant increase in cross-border pipeline capacity from 2015 to 2017. Exports from western Texas averaged only 0.4 Bcf/d in 2017 and 0.5 Bcf/d in January–May 2018. Significant delays in construction of the connecting pipelines on the Mexican side of the border have led to relatively low utilization of cross-border pipeline capacity from western Texas. Some pipelines in Mexico have been delayed by more than a year from their original expected in-service dates, in part because of disputes contesting pipeline routes.  Several key pipelines in Mexico were placed in service earlier in 2018. La Laguna-Aguascalientes (1.2 Bcf/d) and Villa de Reyes-Aguascalientes-Guadalajara (0.9 Bcf/d) are scheduled to begin commercial operations in November 2018 after the interconnect at El Encino-La Laguna is completed in October. These pipelines will transport natural gas from western Texas into central and western Mexico through the Ojinaga-El Encino and Tarahumara pipelines.

Mexico gasoline, diesel imports set new records for July: SENER data — Mexico's gasoline imports reached 653,000 b/d, a new record for July, Energy Secretariat data showed. Not registered? Receive daily email alerts, subscriber notes & personalize your experience. Register Now July imports were 110,420 b/d above year-ago levels, but 21,200 b/d under the all-time high that was recorded in December, according to the data set shows. Diesel imports also set a new record for July, bringing in 316,100 b/d, 71,300 b/d higher than a year ago, but 15,000 b/d below the all-time high set in November. Gonzalo Monroy, director of energy consulting firm GMEC, told S&P Global Platts Tuesday that the sudden increase in imports also is related to the entrance of new private terminals.

Midcoast Energy proposes new natural gas pipeline to serve US Gulf Coast — Private equity backed Midcoast Energy began soliciting shippers Monday for a new natural gas pipeline that will boost its ability to move supplies to the Houston Ship Channel and US Gulf Coast markets. The midstream operator, which was sold by Canada's Enbridge to ArcLight Capital Partners in May, said it has been seeing substantial volume growth with increased gas production from drillers in East Texas and Louisiana's Haynesville shale. Midcoast operates a large network of gathering, processing and pipeline assets that comprise its East Texas system. The new CJ Express pipeline, which is expected to start up in mid-2020, will consist of up to 150 miles of 36-inch or larger diameter pipeline, commencing near Carthage in Panola County, Texas and extending south to Midcoast's Clarity Pipeline in Hardin County, Texas. It will interconnect with several existing pipelines operated by Kinder Morgan, Williams and other companies. The shipper solicitiation and a statement from Midcoast did not specify CJ Express' total expected capacity. The non-binding open season that began Monday lasts until September 14. Under Enbridge's fold, Midcoast conducted the company's US natural gas and natural gas liquids gathering, processing, transportation and marketing operations, serving established basins in Texas, Oklahoma and Louisiana.In its solicitation for the new pipeline, Midcoast said its network's connectivity in the region will help serve a demand pull being driven by growing downstream and end-user markets on the Texas and Louisiana Gulf Coast, as well as in Mexico, which is heavily reliant on US supplies of gas. 

August 23 Natural Gas Storage Report: Weather Is Bullish, But This Is Not News To Anyone -- This Thursday, we expect EIA to report 2,440 bcf of working gas in storage for the week ending August 17.  We anticipate to see an injection of 53 bcf, which is 8 bcf larger than a year ago and 1 bcf larger vs. 5-year average. Weather forecast first turned bullish in the afternoon on August 16, but more recent changes have been relatively neutral. Last week, the number of total degree-days (TDDs) dropped by 12% w-o-w, as cooling demand weakened – particularly, in the Northeast and Western parts of the country. However, we estimate that total energy demand was no less than 14% above last year’s level. Please note that during this time of the year, heating degree-days (HDDs) have almost no effect on natural gas consumption. Cooling degree-days (CDDs) continue to have a disproportionately stronger effect on consumption, and traders should be paying attention to changes in CDDs. Seasonal trend, however, calls for high, but declining number of CDDs and for a rising but low number of HDDs. This week, the weather conditions continued to cool down. We estimate that the number of CDDs will drop by 13.0% w-o-w in the week ending August 24. Indeed, we estimate that cooling demand would be about 1% lower than over the same week last year. Next week, however, the heat is going to return. The number of CDDs is currently projected to rise by a whopping 20% w-o-w in the week ending August 31 (see the chart below). The latest numerical weather prediction models are returning some bullish results (in absolute terms):

  • ECMWF extended-range model (issued on August 20) projected above-normal CDDs in all five forecast weeks (August 31 – September 28); The model also showed more CDDs compared to the previous update issued on August 16.
  • The latest CFSv2 long-range model is projecting above normal CDDs in August and just normal CDDs in September.
  • The latest ECMWF 00z Ensemble and GFS 00z Ensemble mid-range models are both projecting above-normal CDDs over the next 15 days (August 21 – September 5).

Analysis: Winter gas prices hit 2-month high as storage deficit grows— Winter-season gas prices at the Henry Hub climbed to their highest since mid-June this week as a growing storage deficit now appears to be capturing the attention of forwards traders. On Wednesday, winter-strip pricing for the December, January and February calendar-month contracts climbed to an average $3.13/MMBtu after trading below $3/MMBtu through much of July. Rising prices accompany an increasingly bullish outlook for winter inventory levels. On Thursday, the US Energy Information Administration is expected to announce a 52 Bcf to 55 Bcf injection, boosting underground storage stocks to roughly 2.44 Tcf. The average build would keep US inventories at nearly a 600 Bcf deficit to the five-year average. For the two remaining weeks of August, S&P Global Platts Analytics is forecasting 62 Bcf and 55 Bcf injections, which would actually underperform the five-year average by a total of 7 Bcf. Even assuming average builds in September and October, US gas inventories are on target to end the injection season at 3.249 Tcf, or their lowest in 15 years, according to data from the EIA. During the approaching winter, low inventory could contribute to an increase in price volatility. Last winter, unusually cold temperatures saw NYMEX month-ahead futures prices climb as high as $3.63/MMBtu, even with comfortably high inventory, which neared 3.8 Tcf last November. Spot-market prices in the Northeast saw the biggest impact from last winter's cold weather, with New York's Transco Zone 6 and Boston's Algonquin city-gates surging to single-day record-high settlements at $140/MMBtu and $79/MMBtu, respectively. If record-cold temperatures return this year and the region's sizeable storage deficit remains intact, spot-market prices could push higher and potentially endure for a more extended period.

EIA Reports On-Target 48 Bcf Injection; September Natural Gas Holds Steady - The Energy Information Administration (EIA) reported a 48 Bcf build into storage inventories for the week ending Aug. 17, right on target with some market participant surveys, although several estimates clustered in the 50 Bcf range as well.Nymex September natural gas futures had a muted reaction to the EIA report, with the prompt month nudging one-tenth of a cent higher as the EIA print hit the screen. From there, the September contract continued to gain modest ground but then retreated again, trading less than a penny lower at $2.952 at 11 a.m. ET.The net of the last two weeks yielded a difference of only 2 Bcf from expectations, indicating a strong reading of balance, according to Bespoke Weather Services, which had projected a 52 Bcf build. Today’s print, however, may ease some of the bearish fundamental pressure that the weather forecaster expected to see on prices into the weekend.“The print was not quite as loose as expected with a solid draw across the South still, even with less impressive heat. However, we see in-week loosening that is likely to make next week’s print looser and keep resistance fairly firm,” Bespoke chief meteorologist Jacob Meisel said.Genscape Inc., which had estimated a 49 Bcf build, said its daily supply and demand (S&D) model had last week’s total supply posting a notable increase from the prior week, with production having averaged 81.1 Bcf/d, up 0.7 Bcf/d from the prior week. Some of the supply-side gains from production were very slightly diminished by a 0.1 Bcf/d week/week decline in imports from Canada, “paced by sizeable reductions in weekly imports to the Pacific Northwest and New York,” Genscape senior natural gas analyst Rick Margolin said. On the demand side, power burns retreated from the previous week and were estimated to have averaged 36.8 Bcf/d, but some of that decline was made up for by a 0.3 Bcf/d week/week increase in liquefied natural gas sendout and a 0.2 Bcf/d increase in exports to Mexico, he said.

Halliburton Envisions Robo-Fracking - Bots already are used to vacuum floors, build cars and do heart surgery. Now, Halliburton Co. wants to add fracking to the to-do list.The world's biggest provider of the technique that unlocks oil and natural gas from shale rock has a vision of push-button fracking that's still years in the making. But for now, the Houston-based contractor unveiled a new service that will help move in that direction.  Tested in fields globally including the Permian Basin of West Texas and New Mexico, Halliburton's Prodigi AB service uses data and computer coding to automatically crank up the pumps to the necessary level in order to blast water, sand and chemicals underground to released trapped hydrocarbons. "This is new territory for the industry," Scott Gale, who oversees the new fracking service at Halliburton, said in an interview on the sidelines of Halliburton's annual technology conference in Houston. "We recognize that digital technologies are descending on our industry, so expectations are high." Typically, workers have to rev up the pumps manually, which can lead to inefficiency and delays, Gale said. Before wells are fracked, automated rigs are already being used to drill them.

How Energy Companies and Allies Are Turning the Law Against Protesters - The activists were ready for a fight. An oil pipeline was slated to cross tribal lands in eastern Oklahoma, and Native American leaders would resist. The Sierra Club and Black Lives Matter pledged support.The groups announced their plans at a press conference in January 2017 at the State Capitol. Ashley McCray, a member of a local Shawnee tribe, stood in front of a blue "Water is Life" banner, her hair tied back with an ornate clip, and told reporters that organizers were forming a coalition to protect native lands.They would establish a rural encampment, like the one that had drawn thousands of people to Standing Rock in North Dakota the previous year to resist the Dakota Access Pipeline.The following week, an Oklahoma state lawmaker introduced a bill to stiffen penalties for interfering with pipelines and other "critical infrastructure." It would impose punishments of up to 10 years in prison and $100,000 in fines—and up to $1 million in penalties for any organization "found to be a conspirator" in violating the new law. Republican Rep. Scott Biggs, the bill's sponsor, said he was responding to those same Dakota Access Pipeline protests. The activists established the camp in March, and within weeks the federal Department of Homeland Security and state law enforcement wrote a field analysis identifying "environmental rights extremists" as the top domestic terrorist threat to the Diamond Pipeline, planned to run from Oklahoma to Tennessee. The analysis said protesters could spark "criminal trespassing events resulting in violence." It told authorities to watch for people dressed in black.An FBI team arrived to train local police on how to handle the protest camp.  McCray recalls a surveillance plane and helicopters whirring above the Oka Lawa camp. Demonstrators were pulled over and questioned on their way in or out, though the local sheriff said people were only pulled over for violating traffic laws.In May the governor signed the bill to protect critical infrastructure. Merely stepping onto a pipeline easement suddenly risked as much as a year in prison. "That was really pretty successful in thwarting a lot of our efforts to continue any activism after that," McCray said.

Can earthquakes from injected wastewater be predicted? - To gain an understanding of how brine injection causes earthquakes, Arizona State University scientist Manoochehr Shirzaei has received a $1 million grant (over three years) from the U.S. Department of Energy to model the injection process and its subsequent effects."Our goal is to find a physics-driven mathematical relationship between the amount of brine injected, its depth, and any effects at the surface," said Shirzaei, an assistant professor in ASU's School of Earth and Space Exploration."These effects can include earthquakes and also deformation — uplift — of the ground surface," he said. Initially the study will focus on Oklahoma, a state that has been a center for brine injection activities and which has logged a detailed record of seismic events. These include a magnitude 5.8 earthquake in September 2016."We will also consider expanding the research to include brine injection sites in Texas, California, Ohio, Kansas, and Colorado," Shirzaei said. Seismic records are readily accessible for the study from the U.S. Geological Survey, and quantities of injected brines are, by law, made publically available by the companies involved.  A third element in the modeling is to include any deformation of the ground level. This is usually hard to measure because the effects are small and spread over a wide area. However, the use of interferometric synthetic-aperture radar (InSAR) data from orbit allows precise measurement of millimeter-scale uplifts over areas that are miles across."We are looking to correlate injected wastewater quantities, measured deformation, and previous seismic activity to develop a model that can predict the likely effects of brine injection activity in a given area."

The US has turned into a major oil power again - The US has gone from a big-time net importer of oil to a small-time one. The latest base-case forecast from the EIA is that it will be a “modest net exporter” from 2029 through 2045. Neither the EIA nor anyone else (that I know of, at least) foresaw a huge increase in US oil production over the past decade, though, so let’s leave the forecasts aside. What has already happened is momentous enough. Here, for example, is the long view (going back to 1870) on US crude oil exports:  Oil’s role in the US economy has changed so much and so fast thanks to hydraulic fracturing and other new methods of getting oil out of shale that it’s worth pausing from time to time to consider what this entails. I’ve written before about the oil and gas boom’s role in keeping the trade deficit from exploding, and in making it harder for this country “to take the leading role in shaping the post-fossil-fuel energy landscape.” Now let us consider the domestic oil boom’s impact on the business cycle.  The standard story about oil and the US economy, as University of California at San Diego economist James D. Hamilton laid out in a 1983 paper, a 1996 follow-up and a paywall-free 2005 summing-up, is that sharp oil-price increases have a habit of causing recessions. “The key mechanism whereby oil shocks affect the economy,” Hamilton wrote in 2005, “is through a disruption in spending by consumers and firms on other goods.” Because the US produced far less oil than it used, past oil-price increases not only took money out of Americans’ pockets, but also shipped much of it overseas. Booming US oil production and a shrinking trade deficit in oil ought to change that equation, at least a little. Since early 2016, oil prices have recovered somewhat, but not rapidly enough to put a big crimp in consumer or business spending. Real investment in the US oil and gas sector, meanwhile, bottomed out in the fourth quarter of 2016 and, while it’s still not back to the levels of 2012 through 2014, appears to have been a major driver in the pick-up in economic growth last year and so far this year. CNBC’s Steve Liesman talked to several economists in May who had concluded that rising oil prices were now a “wash” for the US economy; I wouldn’t be surprised if, as long as the increase is gradual enough, they’re actually a net positive. After all, the energy intensity of the US economy — “the amount of energy consumed per dollar of real gross domestic product” — has been declining steadily since the early 1970s. On aggregate, at least, we can afford somewhat higher energy prices.

US Offers 11 Million Barrels Of Oil For Sale From Strategic Reserve (Reuters) - The U.S. Department of Energy (DOE) is offering 11 million barrels of oil for sale from the nation's Strategic Petroleum Reserve (SPR) ahead of sanctions on Iran that are expected to reduce global supplies of crude. The delivery period for the proposed sale of sour crudes will be from Oct. 1 through Nov. 30, according to Monday's notice. The U.S. government has introduced financial sanctions against Iran which, beginning in November, also target the petroleum sector of OPEC's third-largest producer. The sale appears to be designed to show the Trump administration is taking measures to restrain energy price increases ahead of the sanctions, one crude trader told Reuters. U.S. crude was up by 45 cents at $66.36 a barrel in afternoon trading on Monday. As a shale boom helped domestic oil production hit an all-time record this year, U.S. lawmakers increasingly have viewed oil-reserve sales as a way to reduce deficits and fund government operations. U.S. President Donald Trump complained this year that oil prices are "artificially very high" and a potential release from the SPR, ahead of the U.S. midterm elections in November, was widely seen as a way to bring relief to motorists who have seen gasoline prices jump in the past year. However, American drivers are unlikely to see prices at the pump fall by crude releases from the SPR because U.S. oil production already is sky high, analysts have said. Still, prices could temporarily dip thanks to seasonal factors. "The well-timed release may, optically help Trump achieve his goal of lowering domestic gasoline prices ahead of midterm elections given that the fall shoulder season is typically when retail prices fall and refiners head into turnarounds," 

Ryan Zinke Would ‘Sell His Grandkids For Big Oil,’ Says Washington Governor -  Washington Gov. Jay Inslee slammed Ryan Zinke’s record on the environment Thursday, saying the interior secretary would “sell his grandchildren for big oil,” the Seattle Post-Intelligencer reported. The Democratic governor’s office told HuffPost that he hasn’t yet received any response to his comments from Zinke — or from the White House. A frustrated Inslee criticized Zinke during a visit to a Seattle elementary school, where he talked about protecting Washington’s environment, climate change, and the air pollution being triggered by ongoing wildfires, the Seattle newspaper reported. He upbraided Zinke for downplaying the role of climate change and blaming “extreme environmentalists” for the ever-worsening fire seasons in the West. “With climate change, you have a hotter, drier climate, Mr. Zinke. You have fires,” Inslee said. “What is there about this that you cannot comprehend?” He added: “This man works for us. We do not pay him to give us false information. We get enough of that from the president.” Inslee, surrounded by schoolchildren, scoffed that Zinke would “flunk any science test that these kids take,” the news outlet reported. Inslee expanded on his comments about Zinke and his grandchildren to HuffPost on Friday. “Given the damage being done to our grandchildren’s future and his refusal to act against climate change, I call for Secretary Zinke to resign,” the governor said in a statement. 

US says conserving oil is no longer an economic imperative -   Conserving oil is no longer an economic imperative for the U.S., the Trump administration declares in a major new policy statement that threatens to undermine decades of government campaigns for gas-thrifty cars and other conservation programs. The position was outlined in a memo released last month in support of the administration’s proposal to relax fuel mileage standards. The government released the memo online this month without fanfare. Growth of natural gas and other alternatives to petroleum has reduced the need for imported oil, which “in turn affects the need of the nation to conserve energy,” the Energy Department said. It also cites the now decade-old hydraulic fracturing, known as fracking, revolution that has unlocked U.S. shale oil reserves, giving “the United States more flexibility than in the past to use our oil resources with less concern.” With the memo, the administration is formally challenging old justifications for conservation — even congressionally prescribed ones, as with the mileage standards. The memo made no mention of climate change. Transportation is the single largest source of climate-changing emissions. President Donald Trump has questioned the existence of climate change, embraced the notion of “energy dominance” as a national goal, and called for easing what he calls burdensome regulation of oil, gas and coal, including repealing the Obama Clean Power Plan. Despite the increased oil supplies, the administration continues to believe in the need to “use energy wisely,” the Energy Department said, without elaboration. Department spokesmen did not respond Friday to questions about that statement. Reaction was quick. “It’s like saying, ‘I’m a big old fat guy, and food prices have dropped — it’s time to start eating again,’ ” said Tom Kloza, longtime oil analyst with the Maryland-based Oil Price Information Service. “If you look at it from the other end, if you do believe that fossil fuels do some sort of damage to the atmosphere … you come up with a different viewpoint,” Kloza said. “There’s a downside to living large.”

Gas guzzling is okay again, says Trump administration – Conserving oil is no longer an economic imperative for the U.S., the Trump administration declares in a major new policy statement that threatens to undermine decades of government campaigns for gas-thrifty cars and other conservation programs.The position was outlined in a memo released last month in support of the administration’s proposal to relax fuel mileage standards. The government released the memo online this month without fanfare.Growth of natural gas and other alternatives to petroleum has reduced the need for imported oil, which “in turn affects the need of the nation to conserve energy,” the Energy Department said. It also cites the now decade-old fracking revolution that has unlocked U.S. shale oil reserves, giving “the United States more flexibility than in the past to use our oil resources with less concern.”With the memo, the administration is formally challenging old justifications for conservation – even congressionally prescribed ones, as with the mileage standards. The memo made no mention of climate change. Transportation is the single largest source of climate-changing emissions.  President Donald Trump has questioned the existence of climate change, embraced the notion of “energy dominance” as a national goal, and called for easing what he calls burdensome regulation of oil, gas and coal, including repealing the Obama Clean Power Plan. Despite the increased oil supplies, the administration continues to believe in the need to “use energy wisely,” the Energy Department said, without elaboration. Department spokesmen did not respond to questions about that statement.

Trump team phasing out oil field enforcement initiative - Trump administration officials at EPA are phasing out the agency's enforcement focus on animal waste pollution and the oil and gas industry. Enforcement chief Susan Bodine said she wants to shift the focus away from oil and gas as a sector deserving of extra scrutiny and toward prioritizing broad environmental problems, such as air pollution. "This initiative historically focused on one industrial sector, implying that the EPA considers all problems in this sector — large or small — to be a priority," Bodine wrote in a letter this week to regional administrators. On animal agriculture, the reasoning is the same. An agency statement forwarded by a spokesperson said the agency wants to focus on pollution problems, rather than an industry. "Under this approach, an animal feeding operation that contributes to water quality impairment or an oil and gas facility that contributes to non-attainment with air quality standards or that creates exposures to air toxics would be a priority because of those impacts, not because of the industry sector," the agency email said. But the agency plans to continue initiatives on "industrial and chemical facilities," along with "hazardous waste facilities." Farmers and rural voters were a key constituency for Trump in his 2016 election bid. Oil companies have become key backers since he took office and began promoting an "energy dominance" agenda. Both groups complained bitterly about regulatory overreach by the Obama administration. 

Highlands Natural Resources kicks off fracking work at East Denver play  - Highlands Natural Resources said fracking operations had commenced on six new wells at its East Denver project in Colorado. Fracking was expected to be completed by November, by which time the total number of producing wells at East Denver would increase to eight. 'This, together with the construction of a gas pipeline, which is expected to commence in September, will substantially increase our revenues from this scalable project which is being entirely funded by our partners,' chief executive Robert price said. The company had also increased its acreage position at the West Denver project to 3,617 acres and has entered into a surface access agreement. 'We have already identified the potential to drill at least 48 horizontal wells,' Price said. 'As previously highlighted, discussions are underway with potential joint venture partners to finance this project.'

Lawmakers Are Rallying To Protect Fracking From Environmentalists In Colorado - A group of bipartisan lawmakers denounced an initiative brought by environmentalists in Colorado that could effectively ban oil and gas production in the state. Colorado Rising, backed by the Sierra Club, Greenpeace and Frack Free Colorado among others, is leading a grassroots effort to introduce a statewide ballot measure that would ban oil and gas development within 2,500 feet of “vulnerable areas.” The group collected 171,000 signatures in support of putting the proposal, called Initiative 97, on a ballot, the oil-and-gas industry backed media group Western Wire reports. The Colorado Oil and Gas Association invited a panel of a dozen bipartisan lawmakers — four Democrats and eight Republicans — to speak at its annual energy conference. All but one lawmaker publicly rejected the measure, and the one that did not reject it is far from supportive of it. “I’m in the unique position in that I’m a Democrat who represents Broomfield, who has not endorsed Initiative 97, and whose Republican opponent has,” state Democratic Rep. Matt Gray, the one lawmaker that did not outright reject the measure, told Western Wire. “I didn’t [reject the measure], I have not endorsed 97. Both of those statements are true at the same time,” Gray said. “My biggest concern about 97 is that it doesn’t treat rural operations and voluntary operations — people who want the drilling to occur — differently than people that don’t want it to occur.” Gray went on to call the measure “inflexible.” Initiative 97 would outright ban oil and gas development near “vulnerable areas” broadly defined as “playgrounds, permanent sports fields, amphitheaters, public parks, public open space, public and community drinking water sources, irrigation canals, reservoirs, lakes, rivers, perennial or intermittent streams, and creeks, and any additional vulnerable areas designated by the state or a local government,” according to the ballot measure. If passed, the law could lock away $180 billion worth of fuels underground and cost mineral rights owners roughly $26 billion. Between 85 percent and 99.6 percent of the surface area in Colorado’s top five most productive oil and gas counties would be rendered inaccessible for future oil and gas development.

Agency pushes FERC on tribal consultation, cultural sites - Government officials in charge of protecting the nation's cultural resources are calling on the Federal Energy Regulatory Commission to improve its review process for natural gas pipelines near those sites.The Advisory Council on Historic Preservation sent a laundry list of recommendations last month for how FERC can approach its obligations under the National Historic Preservation Act — a law that requires federal agencies to consult with American Indian tribes, state officials and others on projects' potential effects on historical areas.Among the suggestions: Start consultation early; give pipeline companies guidance on coordinating with state and tribal officials; invite local governments along pipeline routes to formally consult on impacts; and, critically, remember that consulting parties are more than everyday commenters."They are more than stakeholders or members of the public and participate actively in consultation with the federal agency and its applicant to address how an undertaking may affect historic properties," ACHP Executive Director John Fowler said in a July letter to FERC. The council's comments align with a longtime campaign by preservationists and tribal advocates to make FERC's process more collaborative. The ACHP submitted the letter in response to an effort by FERC to review its natural gas pipeline program.

Betting Utah sands will be the next great oil source  — Utah is a yawn amid the drilling frenzy that has upended the energy picture in recent years. It accounts for just one of every 100 barrels of oil produced nationwide.But a couple of executives who have spent decades hunting for oil across the Middle East, South America and Canada are betting that the next energy patch will be near here, in a remote stretch of craggy desert known as Asphalt Ridge.They are trying something that has repeatedly failed in Utah: mining the state’s enormous deposits of oil sands, an arduous process of extracting oil from hard rock.The two oversee Petroteq Energy, a Canadian company that aims to have the first commercially viable oil sands production in the United States underway here by early September. Petroteq’s claims challenge the notion that oil sands mining is in eclipse. The heavy oil produced from oil sands is among the most carbon-intensive fuels, a drawback as concerns about climate change grow. Even in Canada, where oil sands production dominates the energy industry, some major oil companies have written off or withdrawn their investments. The Keystone XL pipeline designed to carry the fuel to American refineries has been stalled by environmentalists with protests and lawsuits. They typically call oil sands “a carbon bomb.”David Sealock, Petroteq’s chief executive, is undeterred. He likens his tiny operation — with its modular mixing vessels, rock crushers and conveyor belt — to a humble Lego set. But when he picks up a canister of newly processed oil, he smiles at the acrid odor. “That’s the smell of money,” he said. “We have a very disruptive technology,” said Mr. Sealock, who has worked for Chevron in several countries and managed two oil sands companies in Canada. “There was a treasure chest here that didn’t have a key, and this technology is the key.”

Salting the earth: North Dakota farmers struggle with a toxic byproduct of the oil boom  --For the past two decades, Daryl Peterson and his wife Christine have been dealing with the spillage of saltwater — a byproduct of oil production — on their land, which grows peas, soybeans and various types of grain. A  In 1997, two spillscovered dozens of acres with more than 50,000 gallons of saltwater. A decade later, another 21,000 gallons of saltwater spilled. And since then, the Petersons say they have seen another 10 spills. They claim these spills were never properly cleaned up.  Over the past decade, the biggest in a series of oil booms has transformed North Dakota, reinvigorating an economy that was largely known for its agricultural output. With an influx of new workers and jobs, North Dakota has consistently had one of the lowest unemployment and highest labor force participation rates in the country. But this prosperity has not come without consequence. Oil production has brought with it an ecological problem that threatens farms that have been in the same families for generations. A thousand miles from the nearest ocean, the fertile black earth of North Dakota is being destroyed by saltwater, which is brought from beneath the surface by oil and gas drilling. Landowners, like the Petersons, have to deal with the mess.North Dakota landowners who spoke with NBC raised concerns about the reporting and cleanup of saltwater or "brine" spills. They cited late reporting or nonexistent reporting of spills, a failure to return their land to the original condition, as the state requires, and a lack of compensation for lost farming revenue.

Property along Big Hole, Beaverhead rivers eyed for oil drilling, fracking– The Bureau of Land Management is considering opening thousands of acres of land for potential leasing for gas and oil drilling and hydraulic fracking along the Big Hole and Beaverhead watersheds. The BLM has opened up more than 12,000 acres of property along the Big Hole and Beaverhead rivers. Some of it in Madison County and much of it in Beaverhead County. It’s an issue of much concern since the Big Hole River is considered a blue ribbon trout river. One owner of a flyshop along the Big Hole River said this is a complicated issue that runs a delicate balance between jobs and protecting the environment. “Everybody’s trying to live here together and there’s a lot of different industries competing for the same natural resources and I think the only thing we can do is study it and have some regulations and be careful,” said Craig Jones, owner of Great Divide Outfitters.Some of the land being considered for leasing is an area south of Glen along the Big Hole River.“Obviously I’d been concerned if it affects the quality of the river and my livelihood, of course just looking at it from my viewpoint. But I can also understand the other side of the argument which is more energy for the country and potential revenues for the community,” said Great Waters Inn owner Mark Lane. However, if anyone seriously considers oil and gas exploration along this river, some people say they hope they make the environmental impact a priority.

Big Hole, Beaverhead no place for oil and gas development - This July the Bureau of Land Management (BLM) posted an obscure notice on its website that it will lease more than 12,000 acres of public land in the Beaverhead and Big Hole watersheds for oil and gas development. Many of the parcels up for potential eBay-style auction are located on public lands near important headwaters, such as areas outside the small community of Glen, or the parcels upstream from the city of Dillon directly off Rattlesnake Creek. These public lands would be auctioned off this December. Let’s be clear what proposed oil and gas leases on public lands mean for the Big Hole and Beaverhead watersheds:The BLM, under Interior Secretary Ryan Zinke’s leadership, wants to allow fracking and oil derricks, wastewater ponds and who knows what other type of industrial machinery and operations nearly adjacent to the treasured Big Hole River and its world-class blue-ribbon fishery, alongside Rattlesnake Creek and the City of Dillon’s drinking water supply, and even in prime deer and elk habitat on the backside of the Ruby Mountain Range.Oil and gas leasing, allowed under antiquated mineral laws nearly a hundred years old, means that while federal authority over public lands is not transferred to industrial interests, the power of public oversight — that which puts the “public” in public lands — is. Limiting public participation on public lands decisions is one of several key leadership failures of Secretary Zinke. Through a series of smarmy moves by this administration, public comment on oil and gas leases has been slashed to only 10 days, while efforts to offset potential degradation and impacts through mitigation have been reduced from mandatory, to voluntary, letting fat cat industry off the hook by being allowed to choose whether or not to clean up their wastes.

Rally: Pipeline not wanted here -  Opponents of a proposed natural gas pipeline and export facility rallied in Medford Thursday to urge the Oregon Department of Environmental Quality to deny state permits for the project. Canadian energy company Pembina wants to build a 229-mile, 3-foot-diameter underground pipeline that would cut through several southwest Oregon counties on its way to a proposed export facility near Coos Bay. The Pacific Connector pipeline project and the accompanying Jordan Cove export facility are under review by the Federal Energy Regulatory Commission and state agencies, including DEQ. FERC previously denied the project, saying potential benefits didn’t outweigh potential harms. But backers refiled their application after the election of President Donald Trump, who is seen as more friendly to traditional energy companies than his predecessor, Barack Obama. At the DEQ office in Medford, project opponents turned in boxes that symbolically represented the more than 25,000 comments already submitted to the state agency about the natural gas project. The boxes contained hundreds of additional comments for DEQ, which is accepting public input through Monday. Maya Jarrad of the No LNG Exports Campaign said the thousands of comments already received set a new record for the number of comments received by DEQ for a project of this type. She said officials have told opponents the vast majority of comments are against the pipeline and export facility. “It shows the massive opposition to this project,” she said. 

California moving to block federal off-shore oil leases at the pipeline -- The California Legislature is considering a bill that would bar new pipelines for new federal off-shore oil leases. (Los Angeles Times)The Trump administration’s decision to open nearly all federal waters for oil and gas drilling left California and other states scrambling to find ways to stop expanded drilling off their coasts. One tool, California officials noted at the time, is that the California controls the first three miles of ocean, and regulates the pipelines that bring the oil to shore.In fact, the State Lands Commission and the California Coastal Commission sent letters to the federal Bureau of Ocean Energy Management warning that neither body would approve new pipelines to service new wells, and would “not allow use of existing pipelines to transport oil from new leases onshore.”Now there’s a move in the Legislature to make that refusal law. AB 1775 would bar the state from authorizing new oil and gas infrastructure within state waters and tidal areas for leases issued after the start of this year. The law would not affect efforts to “repair or maintain any pipeline or other infrastructure used to convey oil or natural gas or any other activity necessary to ensure the safe operation of infrastructure used in the exploration, development, or production of oil or natural gas.”

Enbridge to buy Spectra Energy Partners in a $3.3 billion stock deal - Enbridge Inc. said Friday it will buy the pipeline master limited partnership Spectra Energy Partners in a stock deal valued at $3.3 billion. Under terms of the deal, Enbridge will exchange 1.111 of its common shares for each Spectra share. Based on Thursday's stock closing prices, that values Spectra shares at $40.00 each, or a 5.6% premium. The deal is expected to close in the fourth quarter of 2018. "Significant weakening of the US Master Limited Partnership (MLP) capital markets has adversely affected the growth opportunities for MLPs, including [Spectra]," the companies said in a statement. "If [Spectra] were to continue as a stand-alone entity in such an environment, it would be required to transition to a self-funding model using internally generated cash flow." Spectra shares were still inactive in premarket trade, while Enbridge's stock slipped 0.7%. Year to date, Spectra shares have lost 4.3% and Enbridge's stock has dropped 8.0%

This Super Basin Is About To Make An Epic Comeback --Alaska’s North Slope is a “Super Basin” awaiting a “resurgence” in oil production, according to a new report. Over the next eight years, oil production could rise by 40 percent.  The North Slope has been a significant source of oil and gas production for decades, even though output has been in decline for a long time. Aging fields, such as the Prudhoe Bay field run by BP since the late 1970s, were once prolific sources of production, but have been gradually losing output year after year. Prudhoe Bay can claim to be the most productive oil field in U.S. history, having produced 12.5 billion barrels of oil as of last year. But it also peaked in the 1980s and has been losing output ever since.  But the decline is not because Alaska is running out of oil. Output fell for a variety of reasons, including high costs of production, lack of infrastructure, federal regulations keeping reserves off limits, boom and bust price cycles, among other factors. More recently, the downturn in prices combined with skyrocketing shale production made risky plays like Alaska not worth the effort. However, Alaska’s North Slope may still have a lot of life left in it. A new report from IHS Markit concludes that the North Slope is “poised to re-emerge as a major source of U.S. energy production, with crude oil output potentially increasing as much as 40 percent during the next eight years.” Based on recent discoveries, IHS estimates that the North Slope Basin holds 38 billion barrels of oil equivalent (boe) in remaining recoverable resources. That figure includes 50 trillion cubic feet of natural gas and 28 billion barrels of oil. IHS says that the estimated ultimate recovery (EUR) of the North Slope is 54.8 billion boe – the 38 billion boe yet to be produced, combined with the 16.8 billion boe that has already been extracted. Those numbers are worth emphasizing: IHS is saying that there is twice as much oil yet to be produced than all of the oil produced from the North Slope to date.

Petroleum Resources Act in Quebec coming into force --- Questerre Energy Corporation ("Questerre" or the "Company") (TSX,OSE:QEC) reported today that the Government of Quebec announced its plans to officially implement or put into practice the Petroleum Resources Act (the "Act"). The Act will govern the development of hydrocarbons in the province of Quebec. The Act was passed as law in December 2016 by the Liberal government as a result of the adoption of Bill 106, "An Act to Implement the 2030 Energy Policy and to Amend Various Legislative Provisions in December 2016." The industry recognized in 2009 when the Quebec Utica discovery was confirmed that a modern hydrocarbon law was a critical prerequisite to successful development. "Years ago, we said that a new hydrocarbon law was a key pre-condition for development. After over 100 independent studies and dozens of public consultations we now have a fundamental achievement that was made with bipartisan support in Quebec. I can't exaggerate how important this step is for our project."The Quebec Government also announced that it will proceed with the enactment of regulations that include last minute restrictions on oil and gas activities and hydraulic fracturing. As detailed in the brief Questerre filed with the Government and available online, these specific restrictions in the regulations are ultra vires, or beyond the legal power and authority of the government, contrary to the independent scientific studies, and moreover they do not meet the consultation requirements detailed in the Quebec government's green book for social acceptability.

Canadian oil exports by rail nearly double from last year - Canadian crude oil exports by rail surged 87% in June from a year ago to more than 204.5K bbl/day, according to the National Energy Board; June was the last full month for which the NEB has relevant data.Constraints on Canadian takeaway capacity has suppressed the price for the Canadian crude oil benchmark by as much as $30/bbl relative to the U.S. WTI benchmark, says Kevin Birn, director for regional energy projects at consultant group IHS Markit."With western Canadian pipelines full, greater volumes crude by rail volumes will continue to grow into the fall," Birn says, expecting movement to average between 200K-300K bbl/day for the full year. TransCanada is trying to expand that network to southern U.S. export terminals through the Keystone XL pipeline, although environmental challenges have delayed the project, and Kinder Morgan has tried to triple the capacity of its Trans Mountain network to British Columbia ports amid intense regional opposition.

These Giant Portraits Will Stand in the Path of Trans Mountain Pipeline - To put forth a "hopeful vision for the future" that includes bold climate action, a new installation project is to be erected along the controversial Trans Mountain pipeline expansion route to harnesses art's ability to be a force for social change and highlight the fossil fuel project's increased threats to indigenous rights and a safe climate.Called "People on the Path" and launched Sunday, the project organized by Climate Justice Edmonton features larger-than-life portraits of numerous Albertans from varying walks of life, with their bodies displaying messages such as "No justice on stolen land" and "For my daughter 100% renewable energy."Part of the goal, organizers explained at the launch at Whitemud Park in Edmonton, is also to "dismantle the myth that everyone in this province is pro-oil."The Edmonton Journal reported that the full series, which will include 25 portraits, will go up this fall. CBC added that it "will be exhibited around the city and then placed along the route of the proposed Trans Mountain pipeline expansion—through Edmonton, under the river, and west to Jasper."

Top Canadian court quashes city's challenge of Trans Mountain pipeline (Reuters) - Canada’s Supreme Court on Thursday dismissed an application by the City of Burnaby, British Columbia to appeal a regulatory decision that allowed expansion work on the Trans Mountain oil pipeline to skirt some bylaws. Burnaby sought to overturn a December ruling by Canada’s National Energy Board that allowed pipeline owner Kinder Morgan Canada to sidestep some municipal permits while building the project. The board found that Burnaby’s bylaw review process caused unreasonable delay. Burnaby is the end point of the Trans Mountain pipeline system on the Pacific Coast. The city had claimed that Trans Mountain’s applications were incomplete. The Supreme Court decision removes some legal uncertainty about whether the Trans Mountain expansion can be built. The project still faces other legal challenges - particularly a federal court case on whether there was adequate public consultation. The project has faced formidable environmental and political opposition, including concerns raised by British Columbia’s left-leaning government, and in May Kinder Morgan announced a sale of the existing pipeline and expansion to the Canadian government. Canadian Natural Resources Minister Amarjeet Sohi told reporters outside a Cabinet meeting in British Columbia that the ruling underlines that municipalities cannot unduly withhold permits on such projects. On Wednesday, he said that construction was delayed, but did not give a new timeline. 

Canada's Pipeline Crisis Is A Boon For Russia -- The controversy of the Trans Mountain pipeline expansion projects has so far focused more on the implications of the project’s delay for Albertan crude oil producers. Yet, the developments around the pipeline also have reverberations for the U.S. refining industry and more specifically that part of it, which operates in the Pacific Northwest, a region without the luxury of many and different sources of crude to turn into fuel and other products for the local industries and households. Canadian crude and crude from Alaska have been the traditional feedstock for Pacific Northwest refineries. Now that production is growing and so are refining rates, local operators are buying oil from Russia, which, in the political context between the U.S. and Canada, and Russia, makes for an interesting ironic twist. Yet these are the realities of life, as Stewart Muir, executive director of Canadian think tank Resource Works, writes in a recent story. If you can’t get a commodity you need from one place, you’ll have to get it from another. Last month, Muir writes, a tanker under a Portuguese flag delivered between 600,000 bpd and 650,000 bpd of Russian crude to a refinery in Washington State, one of the two that produce fuel and oil products for Washington and Oregon. This might become a more frequent occurrence as crude oil production in Alaska steadily declines and Albertan oil sands miners cannot get their growing output to refineries because of pipeline constraints. An alternative—railway deliveries of Bakken crude—was rejected by the Washington governor who, unlike most Trans Mountain protesters, has obviously familiarized himself with the safety statistics of various crude oil delivery methods. When market logic trumps politics, this is what happens. Refineries need feedstock. They do not deal with politics. They deal with demand and supply. And because of this, the United States has been importing Russian oil for years, as strange as this may seem in the current political situation. Here are the facts: The U.S. began importing Russian crude in 1995. Since then, monthly deliveries have peaked at 25.083 million barrels in May 2009, with the latest monthly figure, for May this year, coming in at 15.216 million barrels, according to EIA data. This means that a little over half a million barrels daily of Russia oil were coming into U.S. refineries in May. Meanwhile, a round of sanctions that is being discussed in Congress could suspend all Russian oil and oil product exports to the United States, which may aggravate the situation of the two Washington refineries, one operated by Shell and the other by Andeavor. If Russian imports into the Pacific Northwest are indeed essential, the next round of sanctions will certainly aggravate this situation.

UK fracking push could fuel global plastics crisis, say campaigners - The push for a large-scale fracking operation in England will fuel the global plastic crisis and undermines the government’s claims that it is tackling the issue, according to a leading charity.The Campaign to Protect Rural England (CPRE) says fracking will not only destroy large areas of the countryside, it will exacerbate the global plastic binge which is already causing widespread damage to oceans, habitats and the human food chain.Daniel Carey-Dawes, campaigner at the CPRE, said the government “risks shooting itself in the foot in its fight against plastic” with its continued support for fracking. “Not only will fracking industrialise our countryside, cause enormous amounts of landscape damage, air and water pollution, and pose grave risks to human health, it will also contribute to the production of new plastics,” he said. “By opening the floodgates to fracking, the government will be fuelling the plastic plague that is already putting our countryside, cities and oceans at risk of irreversible harm.”Campaigners warn that plans outlined by the business secretary, Greg Clark, earlier this year will mean that many of the democratic planning controls that are preventing the drilling of shale wells in England would be removed.Carey-Dawes said that such removals would have dire consequences for the fight against plastic pollution: “The government must drop its proposals to simplify fracking exploration immediately if it intends its environmental ‘promises’ to be taken seriously.” A spokesperson for the government reiterated its determination to reduce plastic pollution and added there was “no correlation between shale gas exploration and increased plastics production”. However, last year the Guardian revealed that a huge boom in the US shale gas industry has resulted in a £180bn investment in plastic production facilities by fossil fuel giants such as ExxonMobil Chemical and Shell Chemical – contributing to a 40% rise in global plastic production over the next decade.

Analysts Say No End In Sight for Europe's Natural Gas Rally -- Europe’s natural gas prices have risen to their strongest level for this time of year, lifting the cost of electricity for factories and utilities. Shaking off gloom depressing broader commodity markets, the U.K. benchmark for gas is nearing levels last seen in December when a key supply line exploded, and seven traders and analysts expect further gains. The move bucks the normal seasonal pattern of weaker prices in the summer when heating demand dwindles and contrasts with slumps in everything from oil to gold, sugar and zinc. China’s energy demand is drawing in cargoes of liquefied natural gas that might otherwise have stayed in Europe, firming the gas market at a time when power generators are demanding the fuel to meet rules from governments to lower pollution from coal. Those trends along with carbon emission prices at a 10-year high is increasing the cost of electricity in Britain to Germany and France. “You have a perfect storm,” said Wayne Bryan, a senior European energy and commodity analyst at Alfa Energy Ltd. “I don’t see any significant downside in the very near future.” There’s no real end in sight for the rally, with a Bloomberg News survey of traders and analysts indicating that the U.K. front-month contract could reach levels last seen in December, when an explosion at an Austrian gas hub and outages at North Sea facilities crippled supplies and caused the biggest one-day price jump for the contract in eight years. The market has picked up pace since the summer season started in April. The coldest winter since 2012 lifted demand for heating and drained storage tanks. Then, a heatwave across much of the northern hemisphere along with maintenance on pipelines and facilities feeding northwest Europe further tightened the market. Very little LNG was imported for consumption in the region, with most leaving for higher-demand markets in Asia and South America. Gas held in European storage tanks fell below 20 percent full for the first time by the end of the winter, and even if levels have since increased, they are still near the lowest ever for the time of year with just five weeks to go before the official heating season starts in October.

ConocoPhillips and Venezuela's PDVSA reach $2 billion settlement (Reuters) - U.S. producer ConocoPhillips and Venezuela’s PDVSA have reached a payment agreement over a $2 billion arbitration, the companies said on Monday, suspending a dispute that blocked the state-run company from exporting oil from most of its key Caribbean facilities. The case relates to the nationalization of Conoco assets dating back over a decade in Venezuela. An international court ruled in favor of Conoco in April and ordered PDVSA to pay. But no payment has been forthcoming, leading Conoco to seize most of PDVSA’s Caribbean assets as it sought to enforce its claim. The settlement means that Conoco will suspend the legal enforcement, as long as PDVSA makes regular payments, spokesman Daren Beaudo said. He declined to say if payments would be made in cash or crude oil, adding that details of the agreement were confidential. PDVSA confirmed the agreement in a statement, adding that the deal “once again shows PDVSA’s firm will to reach commercial solutions with its creditors.” The state oil company has also made progress on similar payment agreements with Exxon Mobil Corp (XOM.N) and NuStar Energy LP (NS.N), the two confirmed. Venezuela’s crude production, a major source of revenue, has fallen to a six-decade low this year as lack of investment, recession and hyperinflation have pushed the OPEC-member country’s economy to near collapse. The settlement could restore a portion of lost exports by resuming shipping from the Caribbean. 

ConocoPhillips, Venezuela's PDVSA reach $2 billion settlement over seized oil projects in the Caribbean — More than a decade ago, Venezuela seized several oil projects from the American oil company ConocoPhillips without compensation. Now, under pressure after ConocoPhillips carried out its own seizures, the Venezuelans are going to make amends.ConocoPhillips announced on Monday that the state oil company, Petr├│leos de Venezuela, or Pdvsa, had agreed to a $2 billion judgment handed down by an International Chamber of Commerce tribunal that arbitrated the dispute. Pdvsa will be allowed to pay over nearly five years, but as it is nearly bankrupt, even those terms may be hard to meet.After winning the arbitration ruling in April, ConocoPhillips seized Pdvsa oil inventories, cargoes and terminals on several Dutch Caribbean islands. The move seriously hampered Venezuela's efforts to export oil to the United States and Asia, and emboldened other creditors to seek financial retribution.  "What they did was choke the exports and made it clear to Pdvsa that the cost of not coming to an agreement would be higher than actually settling on a payment schedule," said Francisco J. Monaldi, a Venezuelan oil expert at Rice University.As its oil production has plummeted to the lowest levels in decades, Venezuela has fallen behind on more than $6 billion in bond payments. Pdvsa has already defaulted on more than $2 billion in bonds after failing to make interest payments over the last year, and owes billions of dollars more to service companies.Adding to Venezuela's woes, the Trump administration has imposed sanctions that prohibit the purchase and sale of Venezuelan government debt, including bonds issued by the state oil company. Mr. Monaldi said Pdvsa would be forced to pay ConocoPhillips with money it would have paid other creditors and would probably delay some oil shipments to China it owes in separate loan agreements. He added that "there is not a negligible probability" that at some point it will discontinue payments for lack of money.

Exclusive: Trump takes aim at Venezuela lifeline, which could raise prices at the pump - The White House is once again considering sanctions that could choke Venezuela’s oil production as the Trump administration weighs its next “strong and swift” action to take against Venezuelan President Nicol├ís Maduro, two senior administration officials told McClatchy..While a full embargo on purchasing Venezuelan oil — the so-called “nuclear option” —is being actively discussed, the administration is zeroing in on more surgical sanctions that block the sale of oil and oil processing products by U.S. companies to Venezuela and hinder Caracas’s oil industry without directly impacting the Venezuelan people.“It’s very real,” a senior administration official told McClatchy. “It’s a matter of considering when doing the next sanction or the next round of sanctions will maximize the pressure.”Specifically,the government is looking at prohibiting the sale by U.S. companies of about 3.5 million barrels of oil and other refined oil products to Venezuela, such as the diluent naphtha, which is used to thin the tar-like heavy oil so that it can flow through more than 60 miles of pipelines from the Orinoco oil belt to the nation’s coast, where it can be either upgraded or exported.. It’s been months since the United States imposed its last significant set of sanctions against the Caracas government leading to concerns among Venezuelans in Miami and elsewhere in the United States that the Trump administration has eased up on the Maduro government. But administration officials say the Maduro government continues to find excuses to abuse and consolidate its power, such as the arrests of opposition leaders without real evidence for a foiled drone attack against the president.

India to step up use of biofuels to cut oil import bill (Reuters) - India aims to increase the use of biofuels to cut its oil import bill by 120 billion rupees ($1.7 billion) by 2022 and reduce carbon emissions, Prime Minister Narendra Modi said on Friday. India is the world's third-biggest oil importer and consumer and ships in about 80 percent of its crude needs, but is gradually building capacity to increase its output of biofuels. The South Asian nation plans to build 12 bio-refineries costing 100 billion rupees to produce fuel from items including crop stubble, plant waste and municipal solid waste, Modi said. "Biofuels can help reduce import dependency on crude oil. They can contribute to a cleaner environment, generate additional income for farmers and rural employment," he said at an event in New Delhi to celebrate World Biofuel Day. Modi, who faces elections next year, said building the bio-fuel refineries would create 150,000 new jobs, but did not give a timeframe for when they would all be up and running. India, a signatory to the Paris Climate deal, plans to reduce its carbon footprint by increasing ethanol content, a sugar byproduct, in its gasoline to 10 percent by 2022 and to 20 percent by 2030, Modi said. Supplies of ethanol to fuel retailers have jumped to about 1.41 billion litres in the current sugar year, which ends in September, from about 380 million litres in 2013/14, helping the nation cut energy imports by 40 billion rupees, he said. India aims to ramp up ethanol production to 4.5 billion litres in the next four years, a move that could cut the country's gasoline consumption. Use of gasoline in India has been growing rapidly as millions more households buy motor cars and motor cycles due to rising income levels and cheaper credit. ($1 = 68.9575 Indian rupees) 

Thailand's EGAT seeks up to 1.5 mil mt/year LNG for 4-8 years - Thailand's EGAT seeks up to 1.5 mil mt/year LNG for 4-8 years — State-owned power utility Electricity Generating Authority of Thailand, or EGAT, has issued a Request for Expression of Interest for importing 800,000-1.5 million mt/year of LNG for four to eight years starting March 2019, according to documents reviewed by S&P Global Platts. The REOI will be followed by a tender in end-September to early October, making it the power producer's first LNG purchase tender that signals the opening up of the country's gas markets, which have been controlled by state-run oil and gas company PTT. Thailand has been working to liberalize its natural gas markets and allow third parties to supply gas to end-users through PTT's import infrastructure. This was driven by the need to boost competition and energy security, as domestic gas production has been unable to keep up with demand growth. EGAT, Thailand's largest power producer, will import the gas at PTT's Map Ta Phut LNG receiving terminal where the utility has acquired access to 1.5 million mt/year of regasification capacity from PTT LNG for a 38-year period from 2019-2056. EGAT expects to sign the terminal user agreement for third-party access of the 10 million mt/year Map Ta Phut LNG terminal by December 2018, finalize a sale and purchase agreement by February 2019 and receive its first cargo by March 2019. The power producer, which has an installed generation capacity of over 15 GW as of March 2018, will use the imported gas to feed its gas-fired power plants including 1,220 MW of capacity at South Bangkok, 710 MW at Bang Pakong and 750 MW at Wang Noi. EGAT expects a significant portion of its gas demand to be met through direct LNG imports instead of having to rely on PTT. However, PTT will have rights to participate in any LNG import tenders issued by EGAT.

South Korea data: Iranian crude imports drop 46% on year in Jul, Kazakhstan crude intake soars - South Korea's crude oil imports from Iran dropped 45.8% year on year in July in the wake of the re-imposition of US sanctions, while intakes from Kazakhstan, the US and Mexico jumped as alternative sources. The Northeast Asian country imported 6.2 million barrels of crude from Iran last month, compared with 11.44 million barrels a year ago, data released late Thursday by the Korea National Oil Corp. showed. This marks the ninth consecutive decline since November last year when imports from Iran fell 26.8% year on year to 10.37 million barrels. The July imports, however, were up 12.8% from 5.49 million barrels in June. For the first seven months of this year, Iranian imports fell 36% year on year to 56.2 million barrels, compared with 87.81 million barrels in the year-ago period.In 2017, Iranian crude oil imports increased 32.1% to 147.87 million barrels. The country's monthly imports of Iranian crude had increased since January 2016 when the US and EU lifted sanctions on Iran. The sharp decline in crude imports from Iran was largely attributable to fewer condensate purchases following the startup of new condensate splitters in the Persian Gulf nation. The decline is also due to South Korea trying to pare back crude shipments from Iran in a bid to secure an exemption from the US' decision to re-impose sanctions on Tehran over its nuclear program, according to a KNOC official.  South Korea has called for a US sanctions waiver to keep buying Iranian condensate saying it is hard to find alternative sources of condensate due to limited suppliers. About 70% of Iranian crude brought into South Korea is condensate, and more than half of the condensate which South Korea imports are from Iran. In order to fill the loss of Iranian barrels, South Korean importers have increased intakes from Kazakhstan, the US, Mexico and other non-OPEC suppliers. The country's imports of Kazakhstan's light CPC Blend soared more than seven times to 7.68 million barrels in July, from 1.07 million barrels a year ago. This made Kazakhstan the fourth-biggest crude supplier to South Korea in July, overtaking traditional Middle East suppliers such as the UAE, Iran and Qatar. Over January-July, intakes from Kazakhstan jumped nearly four times to 31.15 million barrels, from 7.32 million barrels a year ago. South Korea imported 5.37 million barrels of crude from the US, compared with no purchases a year ago. For the first seven months, South Korea's intakes of US crude jumped more than six times to 19.7 million barrels, from 3.08 million barrels a year earlier. South Korea's imports of Mexican crude also doubled to 3.98 million barrels in July, from 1.95 million barrels a year earlier. The country's imports of Mexican crude are expected to further increase as Hyundai Oilbank said it would purchase more Mexican Maya, and other sour and heavy grades thanks to its expanded refining capacity and improved heavy oil upgraders.

Oil giant Total has pulled out of Iran and giant gas project, reports say -- French oil giant Total has officially left Iran and abandoned its deal to develop a giant natural gas field in the country, Iran's oil minister reportedly told state television Monday, leaving the isolated republic to look for a replacement.  "Total Iran has officially left the contract to develop the South Pars Gas project's phase 11... the process to replace with another company is underway," Bijan Namdar Zanganeh was quoted as saying, Reuters reported. Total had already signaled that it could pull out of the Islamic republic, and its intention to develop part of the world's largest gas field at South Pars, after the U.S. said it would reimpose sanctions on the country after pulling out of the 2015 nuclear deal in May.The first series of sanctions were reinstated in early August and target the country's automotive sector, issuance of debt and metals trade. But more are to come in November; these will hit Iran's crucial oil sector, shipping industry and financial institutions. Foreign companies like Total that have business dealings with Iran were told they could face secondary sanctions for doing business in the country, prompting a number to pull out. Maersk, Peugeot, GE, Boeing and Siemens have all cut ties with Iran in a bid to avoid U.S. sanctions, while Russian oil company Lukoil has also said it would put plans to pursue joint ventures with Iran on hold. The collapse of the deal with Total to develop the South Pars gas project is a blow for major OPEC oil producer Iran. Total had signaled in May that it could pull out once it had assessed the ramifications of President Donald Trump's decision to reimpose sanctions and if it was not granted a sanctions waiver.Total CEO Patrick Pouyanne told CNBC in June that U.S. sanctions mean that "there's not a single international company like Total who can work in any country with secondary sanctions. I don't have the right. It's just the reality of the world." Iranian officials had earlier suggested that China's state-owned CNPC, which also has a stake in the South Pars project, could take over Total's stake, lifting its interest to from 30 percent to more than 80 percent, Reuters reported Monday.

Iran Oil Exports Fall By More Than 500,000 Bpd -- Iran’s oil customers may have started to drastically wind down purchases of Iranian crude ahead of the U.S. sanctions, with Platts preliminary tanker tracking data showing that in the first half of August, Iran’s exports plunged by 600,000 bpd compared to July loadings, due to plummeting flows to India, Tehran’s second-largest oil customer.Between August 1 and 16, Iranian oil exports averaged 1.68 million bpd, Platts tracking data showed. This compares to average exports of 2.32 million bpd in the whole month of July, and to 2.10 million bpd in the first 16 days in July, according to S&P Global Platts estimates.In the first half of August, Iran’s biggest customer, China, scaled back loadings to 615,688 bpd from 722,100 bpd in July. But the second-biggest importer of Iranian oil in the world, India, saw crude flows from Iran plummet to 203,938 bpd in the period August 1-16, compared to 706,452 bpd in July, according to Platts trade flow data.Demand from Japan remained steady, but South Korea is not importing Iranian condensate for a second consecutive month in August. Demand in Europe was up strongly, especially from Italy, during August 1-16, according to Platts data. Iran’s oil exports in July were already lower, having dropped by 7 percent to 2.32 million bpd—their lowest level in four months. Analysts expect Iranian exports to drop even more noticeably next month, the rate of decline expected to accelerate as the United States looks to have Iran’s current customers reduce oil imports to ‘zero’.

Europe must ‘pay price’ to save nuclear deal: Iran FM (AFP) - Iran's Foreign Minister Mohammad Javad Zarif said Sunday that Europe had not yet shown it was willing to "pay the price" of defying Washington in order to save the nuclear deal. Zarif said European governments had put forward proposals to maintain oil and banking ties with Iran after the second phase of US sanctions return in November. But he told Iran's Young Journalist Club website that these measures were more "a statement of their position than practical measures". "Although they have moved forward, we believe that Europe is not yet ready to pay the price (of truly defying the US)," Zarif said. US President Donald Trump pulled out of the 2015 nuclear deal in May, and began reimposing sanctions earlier this month that block other countries from trading with Iran. A second phase of sanctions targeting Iran's crucial oil industry and banking relations will return on November 5. Europe has vowed to keep providing Iran with the economic benefits it received from the nuclear deal, but many of its bigger companies have already pulled out of the country for fear of US penalties. "Iran can respond to Europe's political will when it is accompanied by practical measures," said Zarif. "Europeans say the JCPOA (nuclear deal) is a security achievement for them. Naturally each country must invest and pay the price for its security. We must see them paying this price in the coming months." 

China defies U.S. pressure as EU parts ways with Iranian oil (Reuters) - China, seeking to skirt U.S. sanctions, will use oil tankers from Iran for its purchases of that country’s crude, throwing Tehran a lifeline while European companies such as France’s Total are walking away due to fear of reprisals from Washington. The United States is trying to halt Iranian oil exports in an effort to force Tehran to negotiate a new nuclear agreement and to curb its influence in the Middle East. China, which has cut imports of U.S. crude amid a trade war with Washington, has said it opposes unilateral sanctions and defended its commercial ties with Iran. On Monday, sources told Reuters Chinese buyers of Iranian oil were beginning to shift their cargoes to vessels owned by National Iranian Tanker Co (NITC) for nearly all their imports. The shift demonstrates that China, Iran’s biggest oil customer, wants to keep buying Iranian crude despite the sanctions, which were reimposed after the United States withdrew in May from a 2015 agreement to halt Iran’s nuclear program. “The shift started very recently, and it was almost a simultaneous call from both sides,” said one source, a senior Beijing-based oil executive, who asked not to be identified as he is not allowed to speak publicly about commercial deals. Tehran used a similar system between 2012 and 2016 to circumvent Western-led sanctions, which had curtailed exports by making it virtually impossible to obtain shipping insurance for business with Iran. Iran, OPEC’s third-largest oil producer, relies on sales of crude to China, Japan, South Korea, India and the EU to generate the lion’s share of budget revenues and keep its economy afloat. The United States has asked buyers of Iranian oil to cut imports to zero starting in November. Japan, South Korea, India and most European countries have already slashed operations. 

Chinese Oil Imports From Iran Surge As Beijing Shifts To Iran Tankers To Bypass Sanctions -  One month ago, when discussing the shift in Iran's oil customer base as a result of Trump's withdrawal from the 2015 Nuclear treaty and the potential blowback from China, we noted that in a harbinger of what's to come, an executive from China's Dongming Petrochemical Group, an independent refiner from Shandong province, said his refinery had already cancelled U.S. crude orders. "We expect the Chinese government to impose tariffs on (U.S.) crude," the unnamed executive said. "We will switch to either Middle East or West African supplies," he said. We also said that China may even replace most if not all American oil with crude from Iran: "Chinese importers are not going to be intimidated, or swayed by U.S. sanctions."And sure enough, today Reuters reported that Chinese buyers of Iranian oil are starting to shift their cargoes to vessels owned by National Iranian Tanker Co (NITC) for nearly all of their imports to keep supply flowing amid the re-imposition of economic sanctions by the United States.To safeguard their supplies, state oil trader Zhuhai Zhenrong Corp and Sinopec Group, Asia’s biggest refiner, have activated a clause in its long-term supply agreements with National Iranian Oil Corp (NIOC) that allows them to use NITC-operated tankers, according to four sources with direct knowledge of the matter. The expected shift demonstrates that China - Iran’s biggest oil customer with India and the EU in 2nd and 3rd spot -  will keep buying Iranian crude despite the US sanctions .

Exclusive: China's Unipec to resume U.S. oil purchases after tariff policy change – sources (Reuters) - China’s Unipec will resume purchases of U.S. crude oil in October after a two-month halt due to the trade dispute between the world’s two largest economies, three sources with knowledge of the matter said.  The decision to start buying crude oil again from the United States comes after Beijing earlier in August excluded it from its import tariff list. A source with knowledge of the matter said Unipec will “buy some U.S. crude, loading in October, following the change in Beijing’s policy.” “Unipec’s imports shrunk when China retaliated by putting crude oil on the tariff list but now it is coming back to normal business with import volumes recovering,” a second source said. The sources spoke on condition of anonymity as they were not authorized to discuss commercial deals with media. Unipec did not respond to a request for comment. For a graphic on U.S. crude oil exports to China, click tmsnrt.rs/2P4zVOn

Bullish oil bets fall to 11-month low: Kemp (Reuters) - Hedge funds have cut their bullish position in crude oil and refined fuels to the lowest level for almost a year, as fund managers continued to close out former long positions.Hedge funds and other money managers cut their net long position in the six most important petroleum futures and options contracts by 69 million barrels in the week to Aug. 14.Net length has been cut in 12 out of the last 17 weeks with a total reduction of almost 460 million barrels since April 17.Portfolio managers now hold a net position of just 952 million barrels, down from a peak of 1.484 billion in January, and the lowest since September 2017.Fund managers are becoming less bullish on the outlook for prices but few have dared to bet on substantial price falls (https://tmsnrt.rs/2OQQrkO).Gross long positions across the six major contracts have fallen by 464 million barrels since late April, while short positions have also fallen by 10 million barrels over the same period.Last week, as in most previous weeks, the reduction in net length was led by crude, with Brent down by 17 million and WTI by 41 million.By contrast, U.S. gasoline positions were down by 14 million barrels, but U.S. heating oil was unchanged and European gasoil rose by 4 million. And as in previous weeks, the reduction in net length was driven by the liquidation of former long positions (-67 million barrels) rather than the creation of new short ones (+2 million).

What Caused Oil's Longest Losing Streak In Years? -- Oil prices seemed to have leveled off after seven consecutive weeks of weekly declines, the longest streak in years. But the next steps are unclear. In the battle over the market narrative, concerns about the health of the global economy are up against the potential for serious supply outages in Iran. A lot could change by the end of this year, but as the summer draws to a close, it isn’t clear which narrative will win out. The fears about the global economy have moved to the front burner in recent weeks. The trade war between the U.S. and China still threatens to drag down global growth, although the news that the U.S. and China will resume talks this week for the first time since June seemed to buoy the markets. But the talks will be conducted at a lower level – the U.S. point person is an undersecretary at the Department of Treasury, not Secretary Steven Mnuchin, which raises questions about the authority to ink a deal.More importantly, Treasury isn’t even the agency that leads on trade. That adds up to U.S. and China essentially keeping their lines of communication open, but not actively seeking a resolution in any big way, at least not from this venue.But the talks at least increase the odds, however slightly, that the proposed $200 billion in U.S. tariffs on Chinese goods do not go forward. The U.S. Trade Representative is holding a six-day process beginning this week to look at those tariffs. Meanwhile, the meltdown in Turkey’s currency, the lira, has set off a different source of trouble. The turmoil spread to other emerging markets, dragging down a whole host of currencies. Weaker emerging market currencies threaten to seriously slow down demand – not just for oil, but for a range of commodities. The Bloomberg Commodities Index has declined by 3 percent this month and by more than 9 percent in the last three months. Oil prices are down by more than 10 percent since May.

Oil faces pressure on concerns of slowing economic growth  --Oil prices dipped on Monday as concerns over slowing economic growth weighed on markets.International Brent crude oil futures were at $71.78 per barrel at 0019 GMT, down 5 cents from their last close.U.S. West Texas Intermediate (WTI) crude futures were down 4 cents, at $65.87 per barrel."Disappointing industrial data out of China along with concerns over emerging market economies centered on Turkey weighed on commodities," Edward Bell of Emirates NBD bank said in a note on Sunday.In the United States, U.S. energy companies last week kept the oil rig count unchanged at 869, according to Baker Hughes energy services firm on Friday."The recent softening in benchmark prices should temper the pace of growth in U.S. exploration and production activity and lead to slower overall output growth," Bell said.Outside the United States, traders said U.S. sanctions against Iran could soon impact prices.The U.S. government has introduced financial sanctions against Iran which, from November, will also target the country's petroleum sector. Iran produced around 3.65 million barrels per day of crude in July, according to a Reuters survey, making it the third biggest producer within the Organization of the Petroleum Exporting Countries (OPEC), behind Saudi Arabia and Iraq.

Oil's uptrend remains intact - A little over a month ago I wrote about NYMEX oil and suggested that the pullback was a buying opportunity. Investors watch for the opportunity to add to long positions as the price rebounds from any of the three support features on the oil price chart.To date, the price has not rebounded. Does that analysis still hold as oil falls towards $65?The short answer is "yes," but with the repeated caveat that traders need to wait for evidence of a rebound before taking a long position. The analysis holds because the technical structure of the NYMEX oil market remains the same.The fall below the long-term uptrend line is potentially bearish, but other features suggest the bear is not in command of the market. The future importance of the uptrend line is the way this will now act as a resistance level for future rallies. Extending the line into the future suggests that it may be early 2019 before there is a serious challenge to the $76 price level. The extended line acts as a resistance level. That time frame changes if oil is able to move above the trend line and again use it as a support level.

Oil prices rise on easing trade war concerns, sanctions on Iran - (Reuters) - Oil futures rose on Monday after weeks of declines, as investors grew more concerned about an expected fall in supply from Iran due to U.S. sanctions and worried less that a trade war between the United States and China would hurt economic growth. Brent crude futures rose 38 cents to settle at $72.21 a barrel, a 0.5 percent gain. U.S. West Texas Intermediate (WTI) crude rose 52 cents, or 0.8 percent, to end at $66.43 a barrel. Last week, Brent declined for a third consecutive week, while WTI fell for a seventh week due to concerns that economic growth would slow because of U.S.-Chinese trade tensions and weakness in emerging economies. China and the United States will hold trade talks this month, the two governments said last week, hoping to resolve an escalating tariff war between the world’s two largest economies. Still, White House economic adviser Larry Kudlow said Beijing should not underestimate President Donald Trump’s resolve. “Part of the weakness we’ve seen in crude oil has largely been due to trade as people are concerned that increasing tariffs and tensions on trade are going to increase the level of uncertainty and potentially reduce global GDP demand,” s “Anything that reduces those tensions, you can see oil generally move back the other way.” Traders said U.S. sanctions against Iran were supporting prices. The U.S. government has introduced financial sanctions against Iran which, from November, will also target the petroleum sector of OPEC’s third largest producer. On Monday, Iran asked the European Union to speed up efforts to save a 2015 nuclear deal between Tehran and major powers, which Trump abandoned in May. Most EU companies have pulled out of Iran for fear of U.S. sanctions and Tehran said France’s Total had officially exited Iran’s South Pars gas project. “The Iranian sanctions will likely remain as a latent bullish force for another month or so until more definition is provided with regard to the impact on the country’s oil exports,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. China signaled it wanted to continue buying large volumes of Iranian oil despite U.S. pressure and was now switching to Iranian tankers to skirt U.S. sanctions on ship insurers.

Oil Edges Higher On Iran Fears -- Oil prices edged up Monday and at the start of trading on Tuesday. “Prices are being supported by the prospect of lower oil supply from Iran,” Commerzbank said in a note. Also, the sharp fall over the past few weeks may have run its course, taking some steam out of the market, which reduces some of the downside risk. Still, concerns about the health of the global economy, and the recent rout in emerging market currencies, raises the threat of lower-than-expected demand.  In order to get around U.S. sanctions, China is reportedly seeking to use oil tankers from Iran for its purchases. “Chinese buyers of Iranian oil were beginning to shift their cargoes to vessels owned by National Iranian Tanker Co (NITC) for nearly all their imports,” Reuters reported. The move could keep Iran’s oil exports from falling more than they otherwise would.  According to Bloomberg and JPMorgan Chase, Saudi Arabia is set to see $65 billion in capital flee the country this year, or about 8.4 percent of GDP. The figure is down from the $80 billion that was withdrawn last year, but is still significant. Analysts attribute the political risk of the whims of the Saudi monarchy, and the “dimming of optimism surrounding Crown Prince Mohammed bin Salman’s Vision 2030 economic plan,” Bloomberg writes.

Oil nods up on U.S. sanctions against Iran, but America's trade dispute with China weighs -- Oil prices were mixed on Tuesday, with U.S. fuel markets seen to be tightening while the Sino-U.S. trade dispute dragged on international crude contracts.U.S. West Texas Intermediate (WTI) crude futures for September delivery were up 27 cents, or 0.4 percent, at 0306 GMT, at $66.70 per barrel. The contract expires on Tuesday.The more active October futures were up 7 cents, or 0.1 percent, to $65.49 a barrel.Traders said U.S. markets were lifted by a tightening outlook for fuel markets in the coming months.Inventories in the United States for refined products such as diesel and heating oil for this time of year are at their lowest in four years.This is occurring just ahead of the peak demand period for these fuels, with diesel needed for tractors to harvest crops and the arrival of colder weather during the Northern Hemisphere autumn raising consumption of heating oil.Outside the United States, Brent crude oil futures were somewhat weaker, trading at $72.18 per barrel, down 3 cents from their last close.This followed the United States offering on Monday 11 million barrels of crude from its Strategic Petroleum Reserve (SPR) for delivery from Oct. 1 to Nov. 30.The released oil could offset expected supply shortfalls from U.S. sanctions against Iran, which will target its oil industry from November.Because of the sanctions, French bank BNP Paribas said it expected oil production from the Organization of the Petroleum Exporting Countries (OPEC), of which Iran is a member, to fall from an average of 32.1 million barrels per day (bpd) in 2018 to 31.7 million bpd in 2019.Still, traders said overall market sentiment was cautious because of concerns over the demand outlook amid the trade dispute between the United States and China. A Chinese trade delegation is due in Washington this week to resolve the dispute, but U.S. President Donald Trump told Reuters in an interview on Monday he does not expect much progress, and that resolving the trade dispute with China will "take time."

Oil Prices Mixed On News Of Strategic Reserve Release: Oil prices were mixed on Tuesday after the U.S. Department of Energy said it would offer 11 million barrels of crude for sale from the nation's Strategic Petroleum Reserve ahead of financial sanctions against Iran, beginning in November. The delivery period for the proposed sale of sour crudes will be from Oct. 1 through Nov. 30 as renewed U.S. sanctions against Iran take full effect in early November. Traders also remained concerned about the demand outlook amid ongoing trade dispute between the United States and China. Ahead of crucial talks in Washington, U.S. President Donald Trump on Monday said in an interview that he doesn't expect much progress in the talks for ending the dispute with China. Benchmark Brent oil was up 7 cents at $72.28 per barrel while U.S. West Texas Intermediate (WTI) crude futures for October delivery were down 3 cents at $65.39 a barrel.

Early SPR Release Could 'At Least Optically' Help Trump Achieve Goal -- The U.S. sale of 11 million barrels of oil from its emergency stockpile will likely do little to offset the impact of sanctions on Iran. That timing of the sale -- with the barrels set to hit the market in October and November -- may reflect the White House's concern over tight supplies amid the renewal of U.S. sanctions, according to analysts at ClearView Energy Partners LLC. The Trump administration has asked allies to halt all imports of Iranian oil by Nov. 4, stoking global supply fears. Yet an 11-million-barrel sale over two months likely won't do much to offset the impact of sanctions, which the administration estimates will remove 700,000 to 1 million barrels a day of Iranian crude from the global market by early November. Analysts have also speculated about whether President Donald Trump will announce an emergency release from the Strategic Petroleum Reserve to lower U.S. pump prices in the run-up to November's mid-term elections. The release will "at least optically" help Trump appear to achieve his goal of lowering gasoline costs, according to Michael Tran, commodity strategist at RBC Capital Markets LLC. "The truth is that retail gasoline prices always trend lower during the fall shoulder season, which also coincides with when domestic refiners head into seasonal maintenance," he wrote in a note. The October sale of sour, high-sulfur crude, which was announced on Monday, is part of a regular draw-down schedule to raise money for government programs. The Energy Department will draw crude from three sites that are part of the Strategic Petroleum Reserve: Bryan Mound and Big Hill in Texas, and West Hackberry in Louisiana. Any further action by the president, who can release as much as 30 million barrels in an emergency, is unlikely before the Nov. 4 deadline, ClearView said. Trump has proposed the sale of half of the stockpile -- which currently totals 660 million barrels -- to cut the budget deficit. Congress has so far authorized the sale of around 240 million barrels between 2017 and 2027. 

Oil prices increase amid decline in US crude inventories - Brent crude oil hit a two-week high above $74 a barrel on Wednesday after an industry report showed a drop in U.S. crude inventories ahead of official government data. The American Petroleum Institute reported U.S. crude stocks fell last week by 5.2 million barrels, more than three times the drop analysts expected. The government's official figures are due at 10:30 a.m. ET (1430 GMT)."The API inventory data published after the close of trading yesterday are lending buoyancy to prices," Commerzbank analyst Carsten Fritsch said."Thus the official inventory data this afternoon are also likely to show a more marked inventory reduction."Brent crude, the international benchmark, rose $1.22, or 1.7 percent, to $73.85 a barrel by 8:19 a.m. ET (1219 GMT). U.S. crudegained $1.14, or 1.7 percent, to $66.98.Oil also found support from a weak dollar, which has slipped this week in response to U.S. President Donald Trump's comment that he was "not thrilled" by the Federal Reserve's interest rate increases.A weaker dollar makes oil less expensive for buyers using other currencies.The prospect of a drop in oil exports from Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries, in response to new U.S. sanctions is also supporting the market.European oil companies have started to cut back on Iranian purchases, although Chinese buyers are shifting their cargoes to Iranian-owned vessels to keep supplies flowing."The Iran issue continues to occupy traders' minds," said Greg McKenna, chief market strategist at futures brokerage AxiTrader. OPEC has started to boost supplies following a deal with Russia and other allies in June, although producers have been cautious so far. Saudi Arabia told OPEC it cut supply in July, rather than increasing output as expected. Signs of tighter supply countered concern about slowing oil demand stemming partly from the trade dispute between the United States and China, the world's two largest economies. U.S. and Chinese officials were set to resume talks on Wednesday, but Trump has predicted there will be no real progress.

WTI Dips'n'Rips As Algos Panic Over Inventory Report - WTI has soared since last night's API-reported surprisingly-large crude draw (Oct above $67), but is falling back after DOE reported bigger than expected inventory builds at Cushing and in Gasoline and Distillates (despite a crude draw). Bloomberg Intelligence Energy Analyst Fernando Valle notes that peak summer driving season may be shrinking in the rear-view mirror, but U.S. refineries are running like it's the Fourth of July as the availability of cheap crude and wide margins encourages them to keep pumping out petroleum products. Export markets will have to absorb that output to keep margins wide. Gasoline looks particularly vulnerable, with the upcoming switch to winter grades likely to force a sell-off.“The API inventory data published after close of trading yesterday are lending buoyancy to prices this morning,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “Thus the official inventory data this afternoon are also likely to show a more marked inventory reduction.” DOE:

  • Crude -5.84mm (-2mm exp)
  • Cushing +772k (+900k exp), Genscape +519k
  • Gasoline +1.20mm (-1.05mm exp)
  • Distillates +1.849mm (+1.5mm exp)
Having flip-flopped between draws and builds for the last six weeks, crude inventories were expected to draw this week and did moire than expected and more than AP reported. However, Cushing stocks increased for the second week in a row and distillates and gasoline saw bigger than expected inventory builds.

Crude Oil Prices Settle at 2-Week Highs on Falling U.S. Crude Supplies - WTI crude oil prices settled sharply higher Wednesday as traders cheered a government inventory report showing U.S. crude supplies fell by more-than-expected last week. On the New York Mercantile Exchange crude futures for October delivery rose 3.1% to settle at $67.86 a barrel, while on London's Intercontinental Exchange, Brent rose 2.85% to trade at $74.70 barrel. Inventories of U.S. crude fell by 5.836 million barrels for the week ended Aug. 17, well above expectations for a draw of 1.497 million barrels, according to data from the Energy Information Administration (EIA). The large draw in crude supplies emerged as imports fell by about 1.059 million barrels a day (bpd), while exports fell by 2.58 million bpd, data from EIA showed. Gasoline inventories rose by 1.200 million barrels, confounding expectations for a draw of 0.488 million barrels, while supplies of distillate -- the class of fuels that includes diesel and heating oil -- rose by 1.849 million barrels, against expectations for a build of 1.463 million barrels. The build in products came as refinery activity was unchanged at 98.1% of their capacity last week compared with the prior week, with inputs averaging about 17.89 million barrels per day during, down 89,000 barrels from the prior week, the EIA said. U.S. oil production rose for the second-straight week to match record highs of 11.0 million bpd. Rising U.S. output did little to dent oil prices as investors continued to expect that global supplies will come under pressure when sanctions on Iran, targeting the country's energy exports, go into effect in early November. Some have said that the loss of Iranian crude from global market could be as much as 1 million barrels a day. 

US oil continues move upward as domestic inventories fall -- Oil prices steadied on Thursday as an escalating trade dispute between the United States and China offset news of a decline in U.S. commercial crude inventories. Benchmark Brent crude oil was down 4 cents a barrel at $74.74 by 8:22 a.m. ET (1222 GMT). U.S. light crude was 6 cents higher at $67.92. Both contracts rose by more than $2 a barrel in the previous session after the government reported a bigger-than-anticipated drop in crude stockpiles. "The bullish afterglow of yesterday's drop in U.S. oil stocks is fading as concerns over the U.S.-China trade spat return to the fore,"  . "Fears are rife that economic headwinds stemming from an escalation in their trade war will ultimately hurt global oil demand." The trade dispute between the United States and China deepened on Thursday with the imposition of 25 percent tariffs on $16 billion worth of each other's goods. The world's two largest economies have now imposed tariffs on a combined $100 billion of products since early July, with more in the pipeline, adding to risks to global economic growth. Washington is holding hearings this week on a proposed list of another $200 billion worth of Chinese imports to face duties, to which China is almost certain to respond. "These (overall) measures are expected to shave up to 0.3-0.5 percentage points from China's real GDP growth in 2019," said rating agency Moody's Investor Service. "For the U.S. ... trade restrictions will trim off about one quarter of a percentage point from real GDP growth to 2.3 percent in 2019." Oil demand is closely linked to economic activity and the trade dispute has already led analysts to trim their forecasts for future energy consumption. But while the outlook for oil demand growth may be moderating, some markets are tight. U.S. commercial crude oil inventories fell by 5.8 million barrels in the week to Aug. 17 to 408.36 million barrels, the Energy Information Administration (EIA) said in its weekly report. That was nearly four times the drop forecast by analysts in a Reuters survey.

WTI Clears $68 on Iran Sanctions Outlook  | Rigzone -- The WTI crude oil futures contract for September surged to $68.10 a barrel Thursday amid ongoing expectations that the United States will impose economic sanctions on Iran.“Today’s upward movement in crude is based on the continued belief – some would say hope – that Iran sanctions will take some oil off the market, even with the (U.S.) Strategic Petroleum Reserve release announced yesterday,” said Bruce Bullock, director of the Maguire Energy Institute with Southern Methodist University’s Cox School of Business. “That’s been the predominant theme in the rally since late last week.”Despite crossing the $68 mark, the WTI ended the day at $67.35 – still a 92-cent gain from Monday. The October Brent benchmark rose 42 cents to settle at $72.63 a barrel.Also ending the day higher was the September Henry Hub natural gas price, which gained nearly four cents to settle at $2.98. Tuesday’s trading may have set in motion a transition for natural gas, observed Bullock.“We saw a nice bump in natural gas prices today but whether or not it continues is debatable,” Bullock explained. “At some point, the natural gas market will change its focus from summer usage and demand to winter storage and we should see a rally as storage numbers are low compared to the last few years. Time will tell if that started today or if it will start later in the summer.”The price of a gallon of reformulated gasoline settled at just under $2.02

Crude Oil Prices Settle Marginally Lower on Trade Worries - WTI crude oil prices settled marginally lower Thursday as traders weighed falling U.S. crude supplies against an escalating U.S.-China trade war that some fear could stifle global growth and reduce oil demand. On the New York Mercantile Exchange crude futures for October delivery fell 3 cents to settle at $67.83 a barrel, while on London's Intercontinental Exchange, Brent fell 0.07% to trade at $74.73 barrel. The United States imposed 25% tariffs on an additional $16 billion of Chinese goods just after midnight ET Thursday, prompting China to respond with in-kind measures against U.S. goods. That renewed fears of a full-blown U.S. and China trade war, which could not only dent global growth but likely lead to a slowdown in oil demand. The IEA recently warned "trade tensions might escalate and lead to slower economic growth, and in turn lower oil demand." This could dent oil prices, the IEA said, as it would alleviate the pressure on already low spare oil capacity amid expectations that U.S. sanctions on Iran will pressure global oil supplies. President Donald Trump pulled the United States out of the Iran nuclear agreement in May, allowing sanctions against Iran to snap back into place.   Analysts have estimated that as much as one million barrels of crude a day could be wiped out from the global market. Crude oil prices are on track to snap a three-week losing streak after rising 3% Wednesday on the back a government data showing a larger-than-expected fall in U.S. crude supplies last week. Inventories of U.S. crude fell by 5.836 million barrels for the week ended Aug. 17, well above expectations for a draw of 1.497 million barrels, according to data from the EIA. The large draw in crude supplies emerged as imports fell by about 1.059 million barrels a day (bpd), while exports fell by 2.58 million bpd, data from EIA showed.

Oil prices rise on Iran sanctions; trade row mutes activity -- Oil prices rose on Friday, putting futures on pace to snap several weeks of declines, supported by signs that U.S. sanctions on Iran are already reducing global crude supply. Benchmark Brent crude oil was up $1.25, or 1.7 percent, at $75.98 a barrel by 9:41 a.m. ET (1341 GMT). Brent was on track for a gain of nearly 6 percent this week, following three consecutive weekly losses. U.S. West Texas Intermediate crude rose $1.18, or 1.7 percent, to $69.01, heading for a gain of more than 4.5 percent this week. WTI has fallen for seven straight weeks."Both crude markers are on track to end a steady run of weekly declines. This is largely due to a tightening fundamental outlook on the back of looming Iranian supply shortages," said Stephen Brennock analyst at London brokerage PVM Oil Associates.The U.S. government re-imposed sanctions on Iran this month after withdrawing from a 2015 international nuclear deal, which Washington saw as inadequate for curbing Tehran's activities in the Middle East and denying it the means to make an atomic bomb. Tehran says it has no ambitions to make such a bomb.Iran is the third-biggest producer in the Organization of the Petroleum Exporting Countries, supplying around 2.5 million barrels per day (bpd) of crude and condensate to markets this year, equivalent to around 2.5 percent of global consumption."Third-party reports indicate that Iranian tanker loadings are already down by around 700,000 bpd in the first half of August relative to July, which if it holds will exceed most expectations," U.S. investment bank Jefferies said on Friday. "We expect that by Q4 the market will be dealing with either undersupply, dwindling spare capacity - or both," it added.

Bullishness Is Back In The Oil Market - Oil prices are on track to close out the week with strong gains, after several weeks of declines. The EIA data showing a steep decline in crude stocks helped push prices up on Wednesday and return a sense of bullishness to the market. “Both crude markers are on track to end a steady run of weekly declines. This is largely due to a tightening fundamental outlook on the back of looming Iranian supply shortages,” U.S. sanctions on Iran’s oil take effect in November, but already countries around the world have been slashing purchases, which are affecting Iran’s exports. “Third-party reports indicate that Iranian tanker loadings are already down by around 700,000 bpd in the first half of August relative to July, which if it holds will exceed most expectations,” investment bank Jefferies said on Friday. “We expect that by Q4 the market will be dealing with either undersupply, dwindling spare capacity - or both.” Lower level trade talks between the U.S. and China ended on Thursday with no major breakthrough. Meanwhile, the $16 billion in tariffs, from both sides, went into effect this week. China’s slate of tariffs targeted U.S. energy products, including butane, propane, naptha, jet fuel and coal, among other items. But because China has declined to include crude oil on the list of tariffs, for now at least, state-owned Unipec may resume buying U.S. crude in October, according to ReutersThe cost of handling and disposing of “produced” water that comes out of an oil well is rising in the Permian, just another in a long line of stretched services. Companies typically truck the water away for disposal, but more recently have been building pipelines, according to the Wall Street Journal. In some parts of the Permian wells produce ten times as much water as they do oil and gas, according to WoodMac. Costs are rising, and water management can add as much as $6 per barrel to the cost of producing a barrel of oil. As a result, water costs alone could shave off 400,000 bpd of supply from the Permian by 2025.

Oil Prices Rise As Rig Count Slips  -- Baker Hughes reported a 13-rig decrease to the number of active oil and gas rigs in the United States on Friday. Oil and gas rigs fell to 1,044, according to the report, with the number of active oil rigs falling by 9 ad the number of gas rigs falling by 4.The oil and gas rig count is now 104 up from this time last year.At 09:58 a.m. EDT on Friday, WTI Crude was up 1.74 percent at $69.01, while Brent Crude traded up 1.73 percent at $76.39, on signs that Iran’s oil exports have started to drop off, although overall market sentiment was cautious as the U.S.-China trade dispute drags on. Both benchmarks were up significantly from this time last week.Earlier on Friday, an International Business Times/Newsweek poll suggested oil prices would rise on anticipated supply disruptions from Iran, although respondents felt that the slowing oil demand growth, combined with a weaker dollar, would curtail price increases.  Canada’s oil and gas rigs for the week rose by 17, bringing its total oil and gas rig count to 229, which is 12 more than this time last year, with a 12-rig gain for oil and a 5-rig gain for gas for the week. The price of Western Canada Select (WCS) was trading down on Friday, trading at $36.58 as of 11:50 am, just a hair higher than this time last week. EIA estimates for US production were up 100,000 barrels per day for the week ending August 17, averaging 11 million bpd. again, after dipping down to 10.8 million bpd as of August 03.  By 1:18pm EDT, WTI and Brent were trading up. WTI was trading up 1.72% (+$1.17) at $69.00. Brent crude was trading up 1.69% (+$1.27) at $76.36 per barrel.

Crude Oil Prices Settle Higher to Snap 7-Week Losing Streak  -  WTI crude oil prices settled higher Friday, as signs of falling Iranian output and tightening domestic output lifted sentiment.On the New York Mercantile Exchange crude futures for October delivery gained 1.3% to settle at $68.72 a barrel, while on London's Intercontinental Exchange, Brent rose 1.34% to trade at $75.74 a barrel.Oilfield services firm Baker Hughes reported on Friday that the number of U.S. oil drilling rigs in operation fell by 9 to 860.The drop in rig counts, pointing to signs of tighter output, comes against data, released earlier this week, showing U.S. output rose for second-straight week to 11.0 million barrels a day."The data is likely seen to be as slightly positive for WTI oil prices as the oil rig count trend was down considerably after being flat the week before, which may signal that activity levels are finally slowing into the fourth quarter of the year," National Alliance said.The upbeat day for oil prices comes even as a meeting between the U.S.-China failed to deliver any material progress. China's economy has been pressured by tariffs, stoking fears that the world's biggest oil consumer appetite for oil may start to wane, which would stifle oil prices.Also helping sentiment on oil were signs of falling Iranian crude output ahead of U.S. sanctions on the Islamic Republic's crude exports, expected to take effect in November.Jefferies, citing third-party reports, said Iranian tanker loadings are already down by around 700,000 barrels a day in the first half of August from the prior month.Analysts have said the loss of Iranian crude from the market could rise to as much as 1 million barrels per day.The first weekly rise in for U.S. oil prices in eight weeks was also supported by a 3% gain on Wednesday after domestic supplies fell more than expected. Inventories of U.S. crude fell by 5.836 million barrels for the week ended Aug. 17, confounding expectations for a draw of 1.497 million barrels, according to data, released Wednesday, from the Energy Information Administration (EIA).

Saudi Arabia reportedly calls off Aramco IPO and disbands advisers ---Saudi Arabia has scrapped its plans to list shares of state-owned energy giant Aramco on stock exchanges, Reuters reports.However, the kingdom's powerful crown prince still wants to take Aramco public at some point in the future, sources familiar with the process told CNBC's David Faber. The IPO is now less urgent because oil prices have rebounded above $70 a barrel, relieving pressure on Saudi finances, the sources said.The initial public offering was poised to be the largest ever and was at the center of Crown Prince Mohammed bin Salman's ambitious plan to overhaul the Saudi economy. The Saudis had hoped to attract a $2 trillion valuation for Aramco, the world's largest oil company, though some outside analysts have pegged its value at half that amount.Doubt has been swirling around the IPO for months as the kingdom deferred making decisions on key parts of the stock market debut, including where to list shares overseas. Skepticism only grew deeper earlier this year when sources familiar with the process said Aramco would first list on its domestic exchange, the Tadawul, and put off an international listing. Now, the kingdom will no longer seek to publicly list shares at home or abroad and Saudi Aramco has dismissed advisers working on the deal, several sources told Reuters. One source said the decision to cancel the IPO had been made "some time ago."

Saudi Arabia insists it is 'committed' to Aramco float despite reports - Saudi Arabia has denied reports that it cancelled its plans to sell shares in state oil giant Aramco. Reuters earlier reported that a group of financial advisers had abandoned a plan to sell 5% of the firm. The news agency quoted a source suggesting the decision was taken some time ago but was not being announced. Saudi Arabia's energy minister said the government would proceed with the flotation - which has been billed as the largest ever. "The government remains committed to the IPO [initial public offering] of Saudi Aramco at a time of its own choosing when conditions are optimum," Khalid al-Falih said in a statement. Mohammed bin Salman, Saudi Arabia's Crown Prince, first proposed the share sale early in 2016 as part of his economic reform agenda, to bring Western regulation and scrutiny to the company, as well as raising cash to reduce the country's large budget deficit. At the time he predicted the sale would value Aramco at around $2 trillion (£1.55 tn). The plan would see shares float on both the local stock market in Riyadh and one of the world's leading international financial centres.  Reuters earlier said it had spoken to four senior industry sources about the plans being scrapped. "The decision to call off the IPO was taken some time ago, but no-one can disclose this, so statements are gradually going that way - first delay then calling off," Reuters quoted one as saying. The wire service said financial advisers who had been working on the listing were now focusing on the proposed acquisition of a "strategic stake" in local petrochemicals maker Saudi Basic Industries, according to two of its sources.

Saudi Arabia’s Problem Isn’t the Canada Fight, It’s Capital Flight - As Saudi Arabia raises the stakes in its dispute with Canada, the economic fallout could worsen an already serious issue for the kingdom: capital flight. Trade between the two countries is small, valued at roughly $4 billion, but the diplomatic dust-up has heightened the sense of risk in the Saudi investment climate, and is certain to scare even more capital away. According to research by JPMorgan, capital outflows of residents in Saudi Arabia are projected at $65 billion in 2018, or 8.4 percent of GDP. This is less than the $80 billion lost in 2017, but a sign of a continued bleed. Significantly, the projection was made before the contretemps with Canada. According to research by Standard Chartered, the first quarter of 2018 saw $14.4 billion in outward portfolio investment into foreign equities, the largest surge since 2008. There are concerns that the government is leaning on banks and asset managers to discourage outflows, a kind of informal capital-control regime.  This flight signals the dimming of the optimism surrounding Crown Prince Mohammed bin Salman’s Vision 2030 economic plan. Many of the institutional reforms outlined in the plan — designed to diversify the Saudi economy, attract foreign investment and create jobs — are needed to liberalize the state-led, resource-dependent economy. Investors had hoped Riyadh would follow through on economic reforms, but have been disheartened by such high-profile actions as the arrest of prominent businessmen last year, and a recent campaign to silence critics, especiallywomen activists. These measures — add to them now the spat with Canada — indicate that the state favors regime stability and consolidation over the rule of law, and the creation of institutions and regulations that can check the state. Whatever the political compulsions behind these actions, they have done little to address the fundamental problem of the Saudi economy — that it is captive to, and reliant on, the state. For private-sector growth to take place, capital needs to feel safe, and investors need legal guarantees to protect them. But this has not happened. Instead, the business cycle continues to be fueled by government project-spending tied to oil revenues: Government deposits appear in local banks, then loans go out to favored private-sector contractors. It is striking that the capital flight is taking place despite a recent recovery in global oil prices. The Saudi current account will be supported by $224 billion in hydrocarbon exports in 2018, a massive jump from $170 billion last year. But this is apparently insufficient to reassure investors, who have noted the absence of a corresponding jump in foreign reserve assets. Nor has it escaped their attention that the new revenue stream is not cushioning the expansionary fiscal policy, which continues to run a deficit.

Rights groups warn Saudi female activist may face beheading -- Rights groups are warning that a female Shiite activist detained in Saudi Arabia since December 2015 may be beheaded along with other activists. Amnesty International, Human Rights Watch and other groups have said that Israa al-Ghomgham and at least four other activists face execution for participating in 2011 Arab Spring protests in eastern Saudi Arabia's Shiite heartland. Human Rights Watch says al-Ghomgham is the "first female activist to possibly face the death penalty for her human rights-related work, which sets a dangerous precedent for other women activists currently behind bars." The U.S. State Department said Wednesday it was aware of al-Ghomgham's case and remains "deeply concerned by the detention of activists in Saudi Arabia."   Saudi officials didn't respond to a request for comment on Thursday amid the Eid al-Adha holiday.

Yemen war: More than eight million on verge of starvation - Aljazeera video-- The United Nations has described the conflict in Yemen as one of "the worst humanitarian disasters in modern times". The civil war has left millions struggling to afford basic goods.It is estimated that 8.4 million Yemenis are on the verge of starvation, with many more eating just one small meal a day. Al Jazeera's Alan Fisher reports from neighbouring Djibouti.

Houthis: Saudi-UAE air raids kill dozens, including 22 children -- Yemen's Houthi rebels say air raids by the Saudi-UAE military alliance have killed dozens of civilians, most of them children, in a reported incident two weeks after a coalition air attack on a school bus killed 40 boys.According to the Houthi movement's Al Massira TV, 22 children and four women died on Thursday as fighter jets targeted a camp for internally displaced people in Ad Durayhimi, which lies about 20km from the Red Sea city of Hodeidah.Backed by the United States, Saudi Arabia and the United Arab Emirates (UAE) have carried out attacks in Yemen since March 2015 as part of a military campaign to reinstate the internationally recognised government of President Abu-Rabbu Mansour Hadi. In 2014, Hadi and his forces were overrun by the Houthi rebels who currently control much of northern Yemen, including the capital, Sanaa. Yemeni government forces - backed by Saudi Arabia and the UAE - launched a major operation to retake Hodeidah and its strategic seaport from Houthi rebels in June.Hussein al-Bukhaiti, a Yemeni journalist in Sanaa, said the death toll in Thursday's air raids stood at 31, citing a medical source."The Saudi strikes at first targeted a village in the Ad Durayhimi area south of Hodeidah, killing five people and injuring another two," he told Al Jazeera.Al-Bukhaiti said that 26 women and children had come under attack before boarding a bus in an attempt to flee, but a "second Saudi-UAE strike targeted that bus, killing everyone".

UN condemnation after 22 children killed in Yemen strike - BBC A senior UN official has condemned another deadly Saudi-led coalition air strike in Yemen, which has killed at least 22 children and four women.The victims were fleeing fighting in the al-Durayhimi district, south of the port city of Hudaydah, when their vehicle was hit on Thursday.A separate air strike the same day killed four children, according to the UN's humanitarian chief Mark Lowcock.It comes just weeks after a strike on a bus killed over 40 children.The Saudi-led coalition, which is backing Yemen's government in a war with the Houthi rebels, has yet to comment on the latest deaths. However, it responded to the news of the deadly bus attack in the northern province of Saada earlier this month by saying that its actions were "legitimate".It insists it never deliberately targets civilians, but human rights groups have accused it of bombing markets, schools, hospitals and residential areas. The first reports of the strike emerged in Houthi rebel media, which broadcast graphic footage of what it said were victims and aftermath of the strike late on Thursday.Mr Lowcock's statement on Friday confirmed that the victims had been fleeing violence around the rebel-held port city Hudaydah. He renewed calls for an impartial and independent investigation into air strikes. A report by Human Rights Watch the same day accused the Saudi-led coalition of failing to hold "credible" investigations into such incidents. The reported attack was condemned by Unicef, Save the Children and other international organisations.

Iran says no OPEC member should be able to take over its share of oil exports  --Iran told OPEC on Sunday that no member country should be allowed to take over another member's share of oil exports, expressing Tehran's concern about Saudi Arabia's offer to pump more oil amid US sanctions on Iranian oil sales. In a meeting with OPEC Secretary-General Mohammad Barkindo, a senior Iranian diplomat urged him to keep the group out of politics, Reuters reported. "No country is allowed to take over the share of other members for production and exports of oil under any circumstance, and the OPEC Ministerial Conference has not issued any licence for such actions," Iran's oil ministry news agency SHANA quoted Kazem Gharibabadi, permanent envoy to Vienna-based international organisations, as saying. In May, US President Donald Trump pulled out of an international nuclear deal with Iran, OPEC’s third-biggest producer, and announced the sanctions. Washington is pushing allies to cut imports of Iranian oil to zero and will impose a new round of sanctions on Iranian oil sales in November. According to OPEC’s latest monthly report on 13 August, oil production in Iran was about 3.737 million barrels per day (bpd) in July, declining 56,300 bpd from 3.793 million bpd in June, based on secondary sources, Albawaba Business reported. Still, Bloomberg reported that OPEC’s output increased in July, averaging 32.32 million bpd, up by 41,000 bpd from June, in spite of sliding output in Iran, Libya and Saudi Arabia.Trump has called on OPEC to pump more oil to bring down prices. Energy ministers of Saudi Arabia, a US ally, and Russia said in May they were prepared to ease output cuts to calm consumer worries about supply. "Iran believes that OPEC should strongly support its members at this stage and stop the plots of countries trying to politicise this organisation," Gharibabadi said.

A Saudi-Iran Oil War Could Break Up OPEC - When OPEC and Russia shook on increasing crude oil production by a million barrels daily to stop the oil price climb that had begun getting uncomfortable for consumers from Asia to the United States, there was no sign of what was to come just two months later: slowing demand in Asia, ample supply, and a brewing price war between Saudi Arabia and Iran.Saudi Arabia, Iran’s arch-rival in the Middle East, has been a passionate supporter of President Trump’s intention to pull out of the nuclear deal with Iran and reimpose sanctions. This support is not simply on ideological or religious grounds, it also has a purely economic motive: the less Iran crude there is for sale, the more consumers will buy from Saudi Arabia.Iran, however, is not giving up so easily. It has more to lose, after all, with the harshest sanctions yet coming into effect in the coming months. The first shots in this war were already fired: Saudi Arabia cut its selling price for oil shipped to all its clients except the United States, S&P Global Platts reports in a recent analysis of OPEC. Iran did the same and has indicated that it is prepared to do a lot more if any other producer threatens its market share. In fact, statements from senior government and military officials suggest that Iran is ready to go all the way to closing off the Strait of Hormuz. While analysts argue whether Iran’s threats have any teeth, oil demand news from Asia is giving OPEC another cause for worry. Slowing economic growth is dampening oil demand growth and both the Chinese yuan and the Indian rupee are falling against the dollar as a result of the economic developments in both Asia and the United States, whose economy is growing so fast that some are beginning to worry that it will soon run out of steam.  So, OPEC’s internal fractures are deepening and likely to deepen further because Saudi Arabia and Iran are highly unlikely to put down their arms, even if it means cutting prices to uncomfortably low levels. Saudi Arabia could boost its production. According to Platts, it has the biggest portion of OPEC’s combined spare capacity. Iran is not really in a position to do so, what with exports already falling and expected to fall further as the November 4 start of the sanctions approaches. Yet Iran has made clear that it will not stop exporting oil and China, for one, has made clear it will not stop buying it.

Iran Again Threatens Strike On US, Israel After Bolton Warns "Maximum Pressure" Coming - In what now seems like a weekly occurrence, Iran on Wednesday warned its military wouldn't hesitate to strike American and Israeli targets should it be attacked by the United States after previous words from the US national security advisor warning that "maximum pressure" will be brought to bear against Tehran. The words were issued during a public speech in Tehran by a senior cleric who works closely with Supreme Leader Ayatollah Ali Khamenei named Ahmad Khatami. He told a congregation during Eid praryers in Tehran, "The price of a war with Iran is very high for America."  Khatami said, "They know if they harm this country and this state in the slightest way the United States and its main ally in the region, the Zionist regime (Israel), would be targeted.”  The fiery speech was in response to statements given earlier by US National Security Advisor John Bolton and Israeli Prime Minister Benjamin Netanyahu. On Wednesday while speaking at a press conference in Jerusalem where he was meeting with Israeli officials, Bolton said, "Every time that Iran has brought missiles or other threatening weapons into Syria in recent months Israel has struck those targets," and added, "I think that's a legitimate act of self-defense on the part of Israel." Bolton seemed to boast about Israeli's capability to act against Iran and its allies in Syria during a speech wherein he also warned Syrian President Bashar al-Assad that if he "uses chemical weapons we will respond very strongly and they really ought to think about this a long time." Bolton was referencing the impending major Syrian and Russian military offensive against al-Qaeda held Idlib province in the country's northwest.  And during a joint press conference Monday wherein Bolton and Netanyahu stood side by side, the two blasted the Iran nuclear deal and those international signatories still clinging to it even after the US pulled out last May. "It's a question of the highest importance for the U.S. that Iran never get a deliverable nuclear weapons capability," Bolton said during Monday's remarks, adding: "It's why we've worked with our friends in Europe to convince them of the need to take stronger steps against the Iranian nuclear weapons and ballistic missile programs." Monday's statements slamming the Iran nuclear deal and calling for continued "maximum pressure" on Tehran...

Israel Urges U.S. to Recognize Claim to Golan Heights- Prime Minister Benjamin Netanyahu hoped on Thursday that the United States will recognition Israel’s claim to the Syrian Golan Heights, which it has been occupying for decades. Netanyahu made his remarks after US National Security Adviser John Bolton said the issue is not currently under consideration by Washington. Israel captured much of the Golan from Syria in a 1967 war and annexed it, in a move not endorsed internationally. In May, a senior Israeli official said that US recognition could be forthcoming within months. But in a Reuters interview during a visit to Israel this week, Bolton said “there’s no discussion of it, no decision within the US government”. Netanyahu was asked whether Israel, in light of Bolton’s remarks, had dropped expectations of US recognition of Israel’s Golan claim. He replied: “Would I give up on such a thing? No way.”

Israel closes north Gaza border crossing --The Defense Ministry confirmed Sunday morning that the Erez Crossing on the Gaza Strip’s northern border was closed in response to Friday’s violent border clashes. The decision was made by Defense Minister Avigdor Liberman after an assessment of the situation on Saturday evening. There was no mention of how long the closure would last.  The move was first reported by Palestinian media sources in Gaza and the West Bank, who said that Israel told the Hamas terror group controlling the Gaza Strip that it would close the border crossing on Sunday morning. The border crossing, which acts as the only pedestrian crossing between the Gaza Strip and Israel, will still be open for medical emergencies requiring the transfer of Gazans to Israeli hospitals, according to Palestinian media reports.The majority of pedestrians who pass through the crossing are seeking medical treatment. On Friday thousands of Gazans demonstrated along the Israeli border near the Erez Crossing in weekly Hamas-backed “March of Return” demonstrations. Hamas leaders had urged the public to participate in Friday’s protests.

Palestinians sort tons of mail withheld by Israel for 8 years - — Palestinian postal workers in the West Bank are sifting through eight years’ worth of undelivered mail held by Israel. In recent days the Palestinian postal staff in Jericho has been sorting through tons of undelivered mail in a room packed with letters, boxes and even a wheelchair. The Palestinians say Israel has withheld delivery of post shipments to the Palestinian territories through its national postal service since 2010. According to Palestinian postage official Ramadan Ghazawi, Israel did not honor a 2008 agreement with the Palestinians to send and receive mail directly through Jordan. Mail was indeed delivered through Jordan but was denied entry by Israel, causing a years-long backlog. “It was blocked because each time (Israel) used to give us a reason and an excuse. Once they said the terminal, the building that the post was supposed to arrive to is not ready and once (they said) to wait, they’re expecting a larger checking machine (security scanner),” he said. Israel says the sides came to an understanding about a year ago on postage delivery but that it has not yet resulted in a “direct transfer,” according to Cogat, the Israeli defense body responsible for Palestinian civilian affairs in the West Bank.

Basra water contamination sends hundreds to the hospital --Health authorities in the southern Iraqi city of Basra have closed down at least 100 unlicensed water desalination stations after an outbreak of diarrhea and other symptoms among local residents. Zaki Abdulsadda, head of the department of inspections at Basra health told reporters in a press conference that the province had experienced a serious case of water contamination in recent days leading to diarrhea and severe stomachache among people. "The province of Basra has suffered a number of cases of diarrhea due to water contamination and our inspections department has launched a campaign to combat this," Abdulasadda said. At least 500 people have been hospitalized as a result of the water contamination. "As a result a number of desalination stations have been shut down that weren't suitable to operate," he added. "Apart from bad quality work they did not have any license to work either," he maintained. Meanwhile, health officials advised local residents to strictly follow health instructions and boil their water before consumption. This news comes just weeks after people in Basra and other southern cities took to the streets to protest lack of clean drinking water and other public services.

Merkel and Putin talk Syria, Ukraine and Nord Stream 2 – but meeting ends with no agreementsGerman chancellor Angela Merkel and Russian president Vladimir Putin discussed the conflicts in Syria and Ukraine as well as the controversial Nord Stream 2 gas pipeline during talks on Saturday. But the meeting, held just outside Berlin, ended with no agreements being signed off and no obvious progress made. Ties between the two countries have been strained since Russia’s annexation of the Crimea region of Ukraine in 2014 – and the summit had only been intended to “check the watches”, a Kremlin spokesperson said.High on the agenda had been Syria after Mr Putin had, hours before the pair met, urged Europe to help rebuild the war-torn country. “We need to strengthen the humanitarian effort,” he said. “By that, I mean above all, humanitarian aid to the Syrian people, and help the regions where refugees living abroad can return to.” Standing together ahead of the talks at the 18th-century Meseberg Palace, Ms Merkel said she and Mr Putin had already discussed the issue of constitutional reforms and possible elections when they last met in the Russian resort of Sochi in May. “Germany, but especially Russia, as a member of the UN security council, has a responsibility to find solutions,” she told reporters. The two leaders both said the Nord Stream 2 pipeline – which will supply Germany with vast amounts of Russian gas – would not be derailed by American ire over the project. US president Donald Trump has repeatedly said the deal makes Germany too reliant on Russian resources, and has appeared to insist Berlin should buy American instead. “That’s why it is necessary to take measures against possible non-competitive and illegal attacks from third countries in order to complete this project,” said Mr Putin’s spokesperson Dmitry Peskov, although without explaining what such measures might entail. Speaking on the same subject, Ms Merkel also underlined her expectation that the pipeline would not be used to squeeze the Ukrainian economy or lever political concessions. Nord Stream 2 will bypass the central European country by going directly under the Baltic sea, meaning Ukraine – which is the historical transit route for such gas – would lose out on millions of pounds worth of transit rents.

This Vital Oil And Gas Choke Point Could Be At Risk - Beijing is taking to task a Pentagon report, ”Military and Security Developments Involving the People’s Republic of China 2018” released last Thursday on China’s military activities. The annual report issued by the Pentagon and presented to Congress, highlights growing Chinese naval capability, all the while underscoring the narrowing gap between China’s maritime forces and he U.S. Navy as well as China’s increased naval activity in the Western Pacific Ocean. The report states that China’s People’s Liberation Army Navy (PLAN) has global ambitions far beyond the traditional perimeters of its land-based defense systems, a claim that Beijing has always cleverly downplayed. “The PLAN continues to develop into a global force, gradually extending its operational reach beyond East Asia and the Indo-Pacific into a sustained ability to operate at increasingly longer ranges,” the Pentagon report said, “The PLAN’s latest naval platforms enable combat operations beyond the reach of China’s land-based defenses.” “China’s aircraft carrier and planned follow-on carriers, once operational, will extend air defense coverage beyond the range of coastal and shipboard missile systems, and enable task group operations at increasingly longer ranges,” the report states. It adds that Chinese bombers are also likely training for “strikes" on U.S. targets. Experts agree, claiming that decades of increased investment in new technology by China’s military means it will soon have the capabilities to strike U.S. military installations in the Pacific by air.