what happens to US natural gas supplies if this winter is as cold as 2014 was?

oil prices were lower for a third consecutive week as ​tumbling ​global financial markets overwhelmed concerns about the impact of US sanctions on Iran...after falling 3.1% to $69.12 a barrel on higher than expected oil supplies midst retreating markets last week, US crude oil contracts for November delivery rose 5 cents to finish trading at $69.17 a barrel on Monday, as oil traders weighed the impact of tightening global supplies due to Iran sanctions against increasing chances of a global economic slowdown; at the same time, oil contracts for December delivery, which became the quoted price of oil with the Monday​ ​expiration of the November contract, rose 8 cents to close at $69.36 a barrel....​now ​quoting December oil​​, crude prices crashed with global equity markets ​on Tuesday ​to as low as $65.74 a barrel, a two-month low, as traders worried about slackening demand while Saudi Arabia said it could supply more crude quickly, before prices steadied to end Tuesday's session down $2.93, or 4.2 percent, at $66.43 a barrel...prices then rebounded modestly on Wednesday, rising 39 cents to $66.82 a barrel, as larger than expected drawdowns of gasoline and diesel fuel inventories offset the impact of a larger than expected increase in US crude oil supplies....bouncing back from an early sell-off, oil prices were up another 51 cents to $67.33 a barrel on Thursday, as the U.S. stock market rebounded from its biggest drop since 2011 and crude prices followed...prices moved up for a third day on Friday, rising 26 cents $67.59 a barrel, supported by expectations that sanctions on Iran would tighten global supplies, but still ended the week with a loss of ​$1.69, or more than 2.4%​ on December oil​...

natural gas prices also ended the week lower as surging gas production and forecasts for warmer weather more than offset concerns about winter supplies...natural gas for November delivery initially fell 11.2 cents to $3.138 per mmBTU on Monday, as forecasts indicated heating demand would fall far below average across the eastern third of the country two to three week​s​ out, weeks in November that usually see the first significant draw from supplies...prices then rebounded 7.4 cents on Tuesday before falling 4.6 cents on Wednesday, as forecasts for mid-November warming continued to weigh on prices...prices then ​rose 3.6 cents to $3.202 per mmBTU with the release of the storage report on Thursday, before falling back 1.7 cents on Friday to end the week at $3.185 per mmBTU, a decrease of 6.5 cents, or 2% on the week...

this week's natural gas storage report from the EIA for the week ending October 19th indicated that natural gas in storage in the US rose by 58 billion cubic feet to 3,095 billion cubic feet during that week, which left our gas supplies 606 billion cubic feet, or 16.4% below the 3,701 billion cubic feet that were in storage on October 20th of last year, and 624 billion cubic feet, or 16.8% below the five-year average of 3,719 billion cubic feet of natural gas that are typically in storage after the third week of October....this week's 58 billion cubic feet increase in natural gas supplies was above analysts' prediction of an 52 billion cubic foot increase, but it was a below the average of 77 billion cubic feet of natural gas that have been added to storage during the third week of October in recent years, the 12th average or below average inventory increase over the past sixteen weeks...natural gas storage facilities in the Midwest saw a 26 billion cubic feet increase over the week, reducing their supply deficit to 11.7% below normal, while supplies in the East increased by 13 billion cubic feet ​but saw their deficit rise to 8.6% below normal for this time of year...the South Central region saw a 19 billion cubic feet increase in their supplies, as their natural gas storage deficit increased to 25.1% below their five-year average for the 3rd week in October...meanwhile, a natural gas pipeline rupture in Canada continues to affect imports into the Pacific and Mountain regions; as a result, the Mountain region supplies were unchanged and their deficit from normal rose to 17.7%, while there was a 2 billion cubic feet withdrawal from storage in the Pacific region, where the natural gas supply deficit rose to 24.3% below normal for this time of year.... 

according to most tellings, the natural gas injection season traditionally ends with the first weekend of November, after which natural gas inventories typically begin to fall, as increasing amounts of natural gas are pulled from storage for heating as temperatures ​fall ​heading into winter...in fact, however, we find that the recent history of natural gas storage (xls) shows that there have actually been increases in natural gas supplies during the first full week of November in 4 out of the last 8 years, so we have to consider that might be possible again this year...either way, we can only expect a few more weeks of increases before natural gas supplies peak before winter and start downhill...to assess where we now stand as compared to other years when prewinter supplies were low, we're going to include a graph from RBN energy that shows US natural gas storage history for a few of those key years as compared to last year and the five year history..

the above graph comes from the RBN Energy analytical post titled "Colder Weather - Gas Storage Inventories Are Near Historic Lows. What If This Winter Turns Frigid?" and as published it shows the natural gas storage history​ ​for 2005 in billions of cubic feet in yellow, for 2014 in orange, for 2017 in green, and natural gas storage​ ​for 2018 year to date in blue..it also shows as blue dots what is presumably the EIA forecast for what appears to be the last 4 weeks of the injection season, which would include a forecast for this week's report​ that we just covered​, since the cited RBN post was published on October 24, the day before this weeks natural gas storage report ​was released...also shown in ​a ​grey​ shaded area above​ is the 5 year range of natural gas in storage for any given date during the year, and then the average amount of natural gas in storage for any given date during th​ose 5​​ year​s​ is shown by a grey dotted line...​finally, ​as an addition to the original graph, in red​ ​i have ​penciled in the amount of natural gas storage for the last 11 weeks of 2013, reasons for which i'll explain shortly...

so to begin with the obvious, this year's natural gas storage ​levels ​in blue ha​ve been well below 2017's gas in storage in green and the 5 year average in grey dots; over recent weeks it has also been below the 5 year range, and below the amount of gas stored during 2014, ​which was ​prior to this year the lowest level in over a decade...but as you can also see, this year's natural gas in storage has tracked pretty close to the level of 2005​ (yellow)​, the lowest in 13 years...so with that, we'll look at the actual amounts of gas in storage from the historical natural gas storage archive files (xls)..

as we mentioned earlier, our natural gas supplies had risen to 3,095 billion cubic feet by October 19th of this year; that would compare with the 3,139 billion cubic feet of natural gas that were in storage on October 21st of 2005, so we are pretty close to that level... however, after rising to 3,229 billion cubic feet on November 4th, 2005, the EIA's presumable end of season comparison, natural gas supplies went on to peak at 3,282 billion cubic feet on November 11th, 2005, a 57 billion cubic feet increase during the 2nd week of November, which is one of the largest if not the largest increase that late in the year...so while we may match 2005 storage levels on November 2nd of this year, it seems highly unlikely that we'd match 2005's November 11th high after that...

now, the last thing i want to note on that graph is the 2014 natural gas storage levels...that's the winter we were hit with repeated outbreaks of "the polar vortex", and as a result our natural gas supplies fell to a low of 824 billion cubic feet by March 28th of that year, the lowest in the modern records, and stayed at 5 year lows ​throughout the summer ​until December of that year...so to compare supplies going into this coming winter to that of 2014, we'd have to go back to the fall of 2013, which is why i penciled in those dots and red line on this graph...on October 18th, 2013, US natural gas supplies were at 3,741 billion cubic feet, and they rose to a high of 3,834 billion cubic feet 3 weeks later on November 8th....with our recent October 19th supplies at 3,095 billion cubic feet, that means that if our natural gas usage this winter is similar to that of 2014, our natural gas supplies would fall to just 178 billion cubic feet by the end of the heating season...that would certainly imply widespread natural gas shortages, and answer the question that the RBN post didn't, ie, What If This Winter Turns Frigid?

The Latest US Oil Data from the EIA

this week's US oil data from the US Energy Information Administration for the week ending October 19th indicated a large addition to our commercial crude supplies for a fifth week in a row, despite a ​sizable increase in our oil exports, ​thus ​resulting in a similar increase in our unaccounted for crude​ oil​...our imports of crude oil rose by an average of 63,000 barrels per day to an average of 7,678,000 barrels per day, after rising an average of 218,000 barrels per day the prior week, while our exports of crude oil rose by an average of 398,000 barrels per day to an average of 2,180,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 5,498,000 barrels of per day during the week ending October 19th, 335,000 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 reportedly unchanged at 10,900,000 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 16,398,000 barrels per day during this reporting week... 

meanwhile, US oil refineries were using 16,268,000 barrels of crude per day during the week ending October 19th, 48,000 barrels per day less than the amount of oil they used during the prior week, while over the same period 741,000 barrels of oil per day were reportedly being added to the oil that's in storage in the US....hence, this week's crude oil figures from the EIA would seem to indicate that our total working supply of oil from net imports and from oilfield production was 611,000 fewer barrels per day than what refineries reported they used during the week plus what oil was added to storage....to account for that disparity between the supply of oil and the consumption or new storage of it, the EIA inserted a (+611,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily 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"...suffice it to say that with an "unaccounted for crude" figure that large, one or more of this week's oil metrics is off 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) indicate that the 4 week average of our oil imports slipped to an average of 7,664,000 barrels per day, now just 0.7% more than the 7,609,000 barrel per day average that we were importing over the same four-week period last year....the net 741,000 barrel per day increase in our total crude inventories ​included a 907,000 barrel per day increase in our commercially available stocks of crude oil, which was partially offset by a 165,000 barrel per day decrease in the amount of oil in our Strategic Petroleum Reserve, likely part of a sale of 11 million barrels from those reserves to Exxon et al that closed seven weeks ago....this week's crude oil production was reported as unchanged at 10,900,000 barrels per day because the rounded 10,400,000 barrels per day output from wells in the lower 48 states changed by less than 100,000 barrels per day, while a 26,000 barrels per day decrease to 473,000 barrels per day in oil output from Alaska was not enough to impact the reported national total, which is now being rounded to the nearest 100,000 barrels per day....last year's US crude oil production for the week ending October 20th was at 9,507,000 barrels per day, so this week's rounded oil production figure was 14.7% above that of a year ago, and 29.3% 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, even as this year's production is still recovering from Hurricane Michael...

meanwhile, US oil refineries were operating at 89.2% of their capacity in using 16,268,000 barrels of crude per day during the week ending October 19th, up from 88.8% of capacity the prior week, still a ​fairly normal utilization rate for the fall refinery maintenance season....and even with this week's throughput decrease, the 16,268,000 barrels per day of oil that were refined this week were once again at a seasonal high, for the 19th out of the past 21 weeks, 1.5% higher than the 16,025,000 barrels of crude per day that were processed during the week ending October 20th, 2017, when US refineries were operating at 87.8% of capacity...

with the decrease in the amount of oil being refined this week, gasoline output from our refineries was much lower, decreasing by 402,000 barrels per day to 10,028,000 barrels per day during the week ending October 19th, after our refineries' gasoline output had increased by 719,000 barrels per day during the week ending October 12th...but even with that drop in gasoline output, our gasoline production during the week was almost 1% higher than the 9,936,000 barrels of gasoline that were being produced daily during the same week last year...meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 145,000 barrels per day to 4,960,000 barrels per day, after that output had decreased by 213,000 barrels per day the prior week....hence, this week's distillates production was the highest ever for mid-October, 3.4% higher than the 4,795,000 barrels of distillates per day that were being produced during the week ending October 20th 2017.... 

with the drop in our gasoline production, our supply of gasoline in storage at the end of the week fell by 4,826,000 barrels to 229,330,000 barrels by October 19th, the 20th decrease in the past 35 weeks, and the largest ​weekly ​drop in gasoline supplies since March 9th....our gasoline supplies also fell this week because the amount of gasoline supplied to US markets rose by 142,000 barrels per day to 9,324,000 barrels per day, and because our imports of gasoline fell by 63,000 barrels per day to 331,000 barrels per day, while our exports of gasoline fell by 195,000 barrels per day from last week's high to 969,000 barrels per day...but even after this week's big decrease, our gasoline inventories are still at a seasonal high, 5.7% higher than last October 20th's level of 216,869,000 barrels, and roughly 8.5% above the 10 year average of our gasoline supplies for this time of the year...

meanwhile, even with our distillates production somewhat higher, our supplies of distillate fuels still fell again, decreasing by 2,262,000 barrels to 130,376,000 barrels during the week ending October 19th, their fifth straight decrease after 8 straight weeks of increases...our distillates supplies ​fell ​by much more than last week​'s​ d​​ecrease because the amount of distillates supplied to US markets, a proxy for our domestic demand, increased by 213,000 barrels per day to 4,006,000 barrels per day, and because our exports of distillates rose by 135,000 barrels per day to 1,440,000 barrels per day, while our imports of distillates fell by 2,000 barrels per day to 163,000 barrels per day....but even after this week's decrease, our distillate supplies ended the week fractionally above the 129,241,000 barrels that we had stored on October 20th, 2017, while they remained roughly 4.4% below the 10 year average of distillates stocks for this time of the year...     

finally, despite higher oil exports, our commercial supplies of crude oil increased for the 5th week in a row and for the 21st time in 2018, as they rose by 6,349,000 barrels during the week, from 416,441,000 barrels on October 12th to 422,787,000 barrels on October 19th...that increase means that our crude oil inventories are now more than 2% above the five-year average of crude oil supplies for this time of year, and roughly 22% above the 10 year average of crude oil stocks for the 3rd weekend in October, with the disparity between those figures arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...however, since our crude oil inventories had been falling through most of the past year and a half until just recently, our oil supplies as of October 19th were still 7.6% below the 457,341,000 barrels of oil we had stored on October 20th of 2017, 9.7% below the 468,158,000 barrels of oil that we had in storage on October 21st of 2016, and 5.6% below the 447,994,000 barrels of oil we had in storage on October 23rd of 2015...     

This Week's Rig Count

US​​ drilling rig activity increased a bit for the fourth time in 5 weeks during the week ending October 26th, and thus is again at another 41 month high....Baker Hughes reported that the total count of rotary rigs running in the US increased by 1 rig to 1065 rigs over the week ending on Friday, which was also 159 more rigs than the 909 rigs that were in use as of the October 27th 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 increased by 2 rigs to 875 rigs this week, which was also 138 more oil rigs than were running a year ago, while it was 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 1 rig to 193 rigs, which was still 21 more than the 172 natural gas rigs that were drilling a year ago, but way down from the modern high of 1,606 natural gas rigs that were deployed on August 29th, 2008...in addition, a year ago we had a rig categorized as "miscellaneous" deployed, ​while there are none such drilling at this time this year...

offshore drilling in the Gulf of Mexico was down by 1 rig to 18 rigs this week, which was also down from the 20 Gulf of Mexico rigs active a year ago...however, a single rig continued to drill offshore from Alaska this week, so the total national offshore count is at 19 rigs, compared to 20 a year ago, when there was no offshore drilling other than in the Gulf.....

the count of active horizontal drilling rigs was up by 1 rig to 927 horizontal rigs this week, which was also 158 more horizontal rigs than the 769 horizontal rigs that were in use in the US on October 27th of last year, but down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...in addition, the directional rig count was up by 1 rig to 73 directional rigs this week, which was still down by 1 from the 74 directional rigs that were in use during the same week of last year....on the other hand, the vertical rig count was down by 1 rig to 68 vertical rigs this week, which was still up from the 66 vertical rigs that were operating on October 27th 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 October 26th, the second column shows the change in the number of working rigs between last week's count (October 19th) and this week's (October 26th) count, the third column shows last week's October 19th active rig count, the 4th column shows the change between the number of rigs running on Friday and those ​running ​on the equivalent weekend 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 27th of October, 2017...       

as you can see, this week's horizontal rig increase was underpinned by the 4 rig increase in North Dakota's Williston basin; however, North Dakota only shows a two rig increase because two of those new rigs were set up on the Montana side of the border, the first drilling activity in Montana since June 8th and the only time other than last November that Montana has seen two rigs active in the past 3 and a half years...in the Permian basin, meanwhile, two rigs were shut down in Texas Oil District 8A, while a rig was started up on the New Mexico side of the border...Louisiana's 3 rig decrease included the Gulf of Mexico platform that was shut down, and two land based rigs in the southern part of the state...since the rig count in northern Louisiana was unchanged, we can probably assume that the rig addition in the Haynesville was ​on the Texas​ side of the Louisiana border...meanwhile, the natural gas rig count was down this week despite the rig additions in the Haynesville and the West Virginia Marcellus because the rig that was shut down in the Dallas area Barnett shale was a natural gas rig, as were two other rigs shut down in basins not tracked separately by Baker Hughes..

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State Says NE Ohio Well Linked to Quakes Has Way to Reopen (AP) — The state has suggested that a shuttered injection well linked to two small earthquakes in northeast Ohio could resume operations if the owner submits an acceptable plan. The Ohio Division of Oil & Gas Resources Management urged the Ohio Supreme Court in an Oct. 11 filing not to hear American Water Management Services' appeal of a lower court decision regarding the company's Weathersfield Township Well No. 2, near Youngstown, The Vindicator in Youngstown reports. The well pumped brine wastewater from hydraulic fracturing operations into the earth. Earthquakes were detected below ground in July and August of 2014. On the day of the well's first earthquake in July 2014, the company had started injecting about 2,000 barrels per day, and then increased the volume to 5,500 barrels. The division, a part of the Ohio Department of Natural Resources, suspended well operations. The company owned by Howland-based Avalon Holdings has argued the state abused its discretion in shutting down the well. The case led to appeals to a state oil and gas commission, a Franklin County Common Pleas Court judge, and eventually the 10th District Court of Appeals in Columbus, which affirmed the state's position. The division told the Supreme Court justices in its Oct. 11 filing that the case is "routine" and doesn't present issues of statewide interest. Regulators said a process exists for re-opening the well if the company submits a comprehensive plan for safely restarting it. The filing also said Ohio no longer plans to develop statewide injection well guidelines but will use a "case by case approach." The state's filing said the well's operations were "likely responsible for two earthquakes of increasing severity in an urban area populated by schools, residences, businesses and a fire department." 

Reject eighth try for ban on fracking - Youngstown Vindicator Editorial -  October 27, 2018 - What part of “no” – multiplied tens of thousands of times over in votes over five years – do the self-appointed do-gooder backers of the Youngstown Drinking Water Protection Bill of Rights don’t understand?  Apparently not much, given their foolish and unrelenting pursuit of their misguided and foolhardy proposal. After all, responsible and civic-minded Youngstown residents have convincingly and resoundingly said no to the jobs-killing initiative seven times over now – from 2013 to the 2018 primary election.We therefore urge the city’s 43,874 voters registered for next month’s general election to do likewise at the polls on or before Nov. 6.Various versions of the amendment to ban hydraulic fracturing and other related gas and oil exploration activities in the city have been on the ballot in those five years. Each time voters said no by credible margins. They said no to the illogical premise of the initiative. The anti-frackers’ bill of goods would remain unenforceable and unconstitutional as the Ohio Constitution clearly gives the state Department of Natural Resources exclusive authority to oversee and regulate all oil and gas drilling activity in every nook and cranny of the Buckeye State, including its cities.Just as illogical is the fact that no fracking activity is taking place or is planned in Youngstown proper.Those same voters – including 3,590 of them in last May’s failed attempt alone – also said no to the potential adverse economic impact the charter amendment would invite. Even though no fracking activities are taking place in the city, hundreds of jobs here are directly tied to the health and well-being of drilling for oil and natural gas. Most notably among them in Youngs-town is Vallourec Star, which is currently in the midst of a major hiring boom.

Kinder Morgan Cancels Fracked Liquids Pipeline Plan, and Pursues Another - After years of battling local opposition and volatile economics, pipeline giant Kinder Morgan has abandoned a plan to send natural gas liquids from Ohio across six states to Texas via a repurposed 75-year-old pipeline.Kinder Morgan's line, the Utica Marcellus Texas Pipeline, has been carrying natural gas the other way, from the Gulf Coast to gas-rich Ohio, like carrying coal to Newcastle. After the fracking boom of the past decade the company wanted to reverse the 964-mile long line's direction, extend it, and change its cargo from gas to liquid byproducts.The drilling frenzy has created a glut of these liquids that are used in petrochemical production. Kinder Morgan was hoping to give its old pipeline a new economic lifeline by carrying them to markets in the Gulf region.The proposal was approved by federal regulators, but challenged in court after stirring intense opposition in Kentucky, where the pipeline passes.Pipeline safety advocates consider natural gas liquids more dangerous than natural gas because they not only carry an explosion risk, but also an asphyxiation risk, and can pollute ground or surface water supplies.  The company shifted course this week in a quarterly earnings report. Its chief executive officer, Steven Kean, told analysts on Wednesday that Kinder Morgan had not signed up a single customer to pay for shipments of the liquid byproducts through its line.Plan B, the company said, is to use the same reversal, but continue shipping natural gas, drawing from wells in Appalachia and taking the gas south, Kean said. One thing that's changed since Kinder Morgan's original proposal is that exports of natural gas are expanding, including to Mexico.

New gas-fired generation to boost Appalachia gas demand - — With about 21,000 MW of new gas-fired power generation planned in the Appalachian Basin, demand for gas is expected to rise as it overtakes coal in power generation market share. Twenty-six combined-cycle gas-turbine power plant projects are likely to be built in the states of Pennsylvania, West Virginia and Ohio over the next several years, according to S&P Global Market Intelligence data. The majority of the generation projects are slated to be built in Pennsylvania, where 15 projects, contributing 14,730 MW of capacity, are likely. In Ohio, the eight projects listed as planned would add 7,695 MW of capacity, according to Market Intelligence. Three gas-fired power projects have been proposed for West Virginia, representing more than 2,000 MW of capacity. But all three are opposed by interests thought to be allied with the state's coal lobby and have been delayed in the state permitting process. The proposed projects range in size from the large -- such as Apex Power Group's Guernsey Power Station in Ohio, with a projected capacity of 1,650 MW -- to the small -- an Ohio State University Cogeneration Plant, owned by Axium Infrastructure, with a 60 MW capacity. Proposed power generation in the three states that is expected to come on line in the 2018-2020 time frame is expected to add about 1.16 Bcf/d of gas demand, assuming a 70% capacity factor and 6,500/Btu/kWh heat rate, according to S&P Global Platts Analytics data. This increased demand for gas is likely to be met with gas produced from the Marcellus and Utica shales, which currently produce about 29 Bcf/d, according to the US Energy Information Administration. Construction of new gas-fired generation in the Appalachian region reflects a trend for gas to eventually overtake coal as the top fuel for power generation in the PJM Interconnection, despite attempts by the Trump administration to retain coal-fired plants slated for retirement.

Fracking conference and opposing tribal rally highlight competing visions for Western Pennsylvania's future - —As acting EPA administrator Andrew Wheeler and natural gas industry representatives descend on Pittsburgh for the annual Shale Insight Convention this week, tribal leaders are rallying against the continued expansion of fracking operations and a proposed ethane cracker that would reshape the local economy and landscape.Wheeler will deliver the keynote address at the Shale Insight Convention, which kicks off on Tuesday. The three-day convention, hosted by the Marcellus Shale Coalition, is a meeting between policymakers, researchers, and major players in the fracking industry: High-level executives from Shell, Chevron, ExxonMobil, EQT Corporation, Dominion Resources, and People's Natural Gas, among others, are usually in attendance.Meanwhile, on Wednesday morning, more than 50 Native American tribal and community leaders will gather at downtown Pittsburgh's Point State Park fountain, which marks the place where the Monongahela, Ohio, and Allegheny Rivers converge. The opposing gatherings epitomize an ongoing national struggle between indigenous groups, environmentalists and the oil and gas industry. As the Appalachian region is set to transform into a petrochemical hub through the proposed development of a vast network of plastics plants, local resistance to that shift mirrors a broader national movement questioning the safety of running pipelines through residential areas, fracking's impact on air and drinking water, and the lack of consideration given to indigenous communities when development gets underway."There's a lot of information and statistics about all the devastation these pipelines can cause to the environment," Guy Jones, an Ohio resident and member of the Standing Rock Sioux who will participate in Wednesday's ceremony and rally, told EHN, "but we also need to be thinking about the spiritual and cultural importance of water to Native people."While the Shale Insight Convention-goers are checking into their hotels and picking up their name badges, Native Americans representing tribes from across the country will gather at the Point to perform a ritual water ceremony, during which they'll sing and pray over the three rivers and commingle their waters with small containers of water brought from the rivers near their homes.

Water ceremony kicks off protest against shale gas and petrochemical industries - Pittsburgh Post-Gazette  Environmental activists and Native American leaders from across the nation marched through Downtown Pittsburgh Wednesday morning to highlight threats to area waterways and the climate posed by expanding shale gas drilling, pipelines and petrochemical facilities. About 100 joined the “Defend Our Water -- Day of Action” event, which began in Point State Park with a tribal water ceremony at the headwaters of the Ohio River. Members of the Seneca Nation, Ojibwe, and Standing Rock Sioux tribes participated in the ceremony, march and rally. After hiking up Liberty Avenue, the group gathered along the Allegheny River next to the David L. Lawrence Convention Center where U.S. Environmental Protection Agency Acting Administrator Andrew Wheeler had just finished telling industry leaders at the “Shale Insight 2018” conference that the Trump administration will continue deregulating their industry. “The insight I have,” Terrie Baumgartner, an Aliquippa resident, said addressing the rally outside, “is that this shale gas madness must end.” Ms. Baumgartner, who lives six miles from the petrochemical complex that Shell is building in Potter, Beaver County, and 2 ½ miles from where Energy Transfer’s Revolution pipeline exploded last month, said area residents could expect a proliferation of facility construction problems and health impacts if the petrochemical industry is allowed to continue its buildout. “It’s not about energy independence. It’s about making stuff we don’t need,” said Ms. Baumgartner, a member of the Clean Air Council, an environmental organization. “We’re already drowning in a sea of plastic trash. And microplastics are in our blood, our urine, our embryonic fluid and breast milk.”Guy Jones, a tribal leader of the Standing Rock Sioux who has been fighting pipelines on native land since the 1980s, said the world has a need for “spiritual ecology.” “We are gathered here today because they (the shale gas conference goers) are gathered here. . .and as caretakers of the land, we must uplift them,” Mr. Jones said. “At one time they were leaders, but those leaders have gone away because of corporate greed. But we haven’t gone away. We are still here.”

This is what indigenous resistance to fracking looks like in Pennsylvania - —Just after 10 a.m. today, Degawenodas, a water protector of the Wolf Clan of the Seneca Nation stood facing the place where the Ohio, Monongahela, and Allegheny rivers converge, and let out three sharp cries as a coal barge drifted beneath one of the city's iconic bridges. The October sky was a clear, bright blue, and a cold wind blew fluffy clouds by overhead. A crowd of about 70, bundled up in coats and hats, gathered behind Degawenodas, surrounding the fountain in downtown Pittsburgh's Point State Park. Despite its size, the crowd remained silent—aside from from the water protector's cries, the only other sounds were the rushing of the waters and the shriek of distant train whistles.Degawenodas was one of two indigenous tribal faith leaders who traveled to Pittsburgh to lead a water ceremony aimed at protecting the three rivers. The event, which was followed by a rally, was planned to coincide with a massive fracking convention taking place in downtown Pittsburgh at the same time. Both the ceremony and the rally, which were coordinated in collaboration with at least 15 local and national environmental groups, were in opposition to the profusion of new fracking wells, pipelines, and petrochemical industry infrastructure currently under development in Southwestern Pennsylvania, and the threats they pose to waterways in the region and beyond.The opposing events epitomize an ongoing national struggle between indigenous groups, environmentalists, and the oil and gas industry."The extractive relationship we have with this water and this land is like that of an addict to a drug," Sharon Day, an Ojibwe "Water Walker" from Minnesota who co-lead the ritual, told the crowd. "That boom and bust—we always tell ourselves that this time it will be different, but deep down we know that it won't."During the hour-long water ceremony (which the leaders requested not to be photographed or recorded), incense was burned and sacred herbs were strewn on the ground and into the rivers. Day led the crowd in the singing of an Ojibwe water song with lyrics that translate to, "Water, we love you, we thank you, we respect you."

Fracking wastewater accumulation found in freshwater mussels' shells - Elevated concentrations of strontium, an element associated with oil and gas wastewaters, have accumulated in the shells of freshwater mussels downstream from fracking wastewater disposal sites, according to researchers from Penn State and Union College. "Freshwater mussels filter water and when they grow a hard shell, the shell material records some of the water quality with time," said Nathaniel Warner, assistant professor of environmental engineering at Penn State. "Like tree rings, you can count back the seasons and the years in their shell and get a good idea of the quality and chemical composition of the water during specific periods of time." In 2011, it was discovered that despite treatment, water and sediment downstream from fracking wastewater disposal sites still contained fracking chemicals and had become radioactive. In turn, drinking water was contaminated and aquatic life, such as the freshwater mussel, was dying. In response, Pennsylvania requested that wastewater treatment plants not treat and release water from unconventional oil and gas drilling, such as the Marcellus shale. As a result, the industry turned to recycling most of its wastewater. However, researchers are still uncovering the long-lasting effects, especially during the three-year boom between 2008 and 2011, when more than 2.9 billion liters of wastewater were released into Pennsylvania's waterways. "Freshwater pollution is a major concern for both ecological and human health," said David Gillikin, professor of geology at Union College and co-author on the study. "Developing ways to retroactively document this pollution is important to shed light on what's happening in our streams." 

High levels of toxic fracking chemicals are found in shellfish near former disposal sites - YEARS after companies were forced to recycle waste -- Shellfish are showing long-term signs of contamination from toxic chemicals linked to fracking.   Academics at Pennsylvania State University found strontium in the crustaceans' outer layers -seven years after authorities first banned the dumping of toxic wastewater into local rivers.The discovery is being touted as proof that the well-stimulation technique - which sources oil and gas by injecting liquid at high pressure into subterranean rocks - has a negative, long-term impact on the environment.   Moreover, researchers believe the freshwater animals could be used to further monitor pollution levels caused by fracking.This is because shellfish naturally feed by filtering water, leaving a residue of pollutants in their hard shells.  This is because shellfish naturally feed by filtering water, leaving a residue of pollutants in their hard shells. This, in turn, acts as proof of contaminants in the surrounds - which may also affect fish and various mammals that feed on them, including humans.'Freshwater pollution is a major concern for both ecological and human health,' said Professor David Gillikin, co-author on the study.  'Developing ways to retroactively document this pollution is important to shed light on what’s happening in our streams.' Before 2011, when local fracking companies were forced to recycle their waste, a whopping 2.9 billion litres of contaminated water were dumped into Pennsylvania’s rivers.  The findings were published in the journal Environmental Science and Technology, last month.  It comes after a 2014 study suggested that people living near fracking sites are twice as likely to suffer from respiratory and skin problems.

Gas pipeline limits create potential crisis in New England - The National Weather Service may be predicting a mild winter for New England and the rest of the country. Based on that prediction, you might expect the organization that manages the regional power grid might be in for a stress-free season. However, ISO realizes that it’s only one severe cold snap away from a crisis situation, like the one that occurred last winter. The arctic air that blanketed the region couldn’t have occurred at a more inopportune time — during the Christmas and New Year’s holidays — when electricity consumption registers above normal usage. During that period, due to the region’s insufficient natural gas pipeline infrastructure, gas, also used to fuel power plants, had to be diverted to provide heat for homes. That forced the power plants to resort to oil and coal. The lack of natural gas supplies forced New England power providers to use twice the yearly average amount of oil in just weeks — 2 million barrels. In fact, ISO indicated that during this cold spell it was just one power supply disruption away from instituting rolling blackouts.

Analysis: Winter temps to lift New England gas demand, prices — An early winter chill in the US Northeast will see temperatures in Boston and New York approach freezing by later this week, potentially lifting gas demand and prices to their highest since last April. According to a US National Weather Service forecast, conditions should reach their coldest from Thursday to Friday, before more seasonal autumn-like temperatures return by next weekend. Although short-lived, the cold spell is expected to lift residential-commercial gas demand in the Northeast to over 12.7 Bcf/d, or its highest since early spring, according to S&P Global Platts Analytics. Including a modest uptick in gas demand from the region's power generators, total Northeast consumption is forecast to hit 22.1 Bcf/d, potentially lifting gas prices at market-area hubs. In Monday trading, the cash market at Boston's Algonquin city-gates was unchanged from Friday's settlement at $3.33/MMBtu. At New York's Transco Zone 6, prices were up about 11 cents/MMBtu to $3.22/MMBtu, according to preliminary settlement data from Intercontinental Exchange. Last winter, Northeast demand levels significantly above 20 Bcf/d were typically correlated with prices above $4/MMBtu at Algonquin, suggesting that the hub could see upward pressure by mid-week. At Transco Zone 6, the regional demand threshold for $4/MMBtu gas was significantly higher -- closer to about 30 Bcf/d. Following the recent increase in Zone 6 gas supply on Transcontinental Gas Pipe Line, though, that threshold is likely to move higher this winter compared to last. The recent startup of Transco's 1.7 Bcf/d Atlantic Sunrise expansion has significantly boosted gas supply in the Zone 6 market area, thanks to a disproportionate expansion in capacity down the pipe's mainline. In the 10 days immediately following its startup, Platts Analytics estimated that the gas balance in Zone 6, which includes delivery points north of the Maryland-Virginia border, grew by an average 700 MMcf/d compared with 30 days prior. While that surplus has since declined by about 150 MMcf/d, the expansion is likely to have an enduring impact on prices in Zone 6 this winter, mostly notably at Transco's non-New York hub. The longer-term increase in Zone 6 supply comes as a consequence of the Atlantic Sunrise project's design. At the terminus of the greenfield pipeline, modifications to Transco's mainline allow 1.2 Bcf/d from the project to flow southbound, with 850 MMcf/d of that volume contracted to station 85 in Alabama and another 350 MMcf/d contracted to the Cove Point Pipeline in Maryland. But with a total capacity of 1.7 Bcf/d, the project now leaves an incremental volume of up to 500 MMcf/d in the Zone 6 market area, which is likely to keep prices there lower this winter.

New Deadline For Merrimack Valley Gas Restoration Is Now December 2-16 – Columbia Gas will miss the November 19 deadline for complete gas restoration in the Merrimack Valley, Governor Charlie Baker said Friday. The new deadline has been set for sometime between December 2 and December 16. At a news conference in Lawrence, Baker said 1,400 more people will be brought in to move the gas restoration along. Those jobs will included plumbers, electricians and contractors. Joe Albanese, who has been in charge of the restoration project, said the main pipeline repair is two-and-a-half weeks ahead of schedule, but the “house ready repairs” process is taking longer than expected, so they will not make the original Nov. 19 deadline. As a result, it’s been moved past Thanksgiving into the first half of December, although Albanese predicted that most impacted residents will have heat and hot water before then. “As the temperatures drop, we recognize there’s an incredible sense of urgency to get people back in their homes with heat and hot water as soon as possible. We are racing against the winter,” Albanese said. Columbia Gas is saying all 45 miles of gas pipeline will be replaced by next week. The problem is relighting all the customers, house to house. So Columbia Gas is employing what it is calling a “rapid relight strategy,” making temporary repairs to boilers and houses that are gas ready, to get the heat and hot water going. Restoration crews then plan to come back after the winter to replace those appliances as they have pledged. To do this, they’re tripling the personnel to get the work done.

Gas storage inventories are near historic lows. What if this winter turns frigid? - U.S. natural gas supply continues to set all-time records, and strong production growth is expected to continue. Most of these supply gains will come from the Northeast, where another round of pipeline capacity additions are being completed. But despite all this incremental gas output, a combination of cold weather last winter and hot weather this summer means that U.S. gas storage inventories are likely to end the fall season at their lowest levels since 2005. And even this comparison understates how low inventories are — gas consumption has grown dramatically in the past 10 years, and storage inventories are at all-time lows when considered in terms of the number of days of average consumption. Today, we begin a series on the implications of historically low gas storage inventories, including what the gas market might look like if this winter turns out to be colder than normal. Thirteen years is a lifetime in energy markets — and especially the last 13 years in the U.S. But U.S. gas storage inventories are going to enter the winter at their lowest levels since 2005. During this period, the national expectations for long-term domestic gas production flipped from one of gradual decline to one of everlasting abundance. With the supply situation so night-and-day, how do you go about comparing the significance of unusually low gas storage inventories in 2018 and 2005? The fall hurricane season is as good a barometer as any for understanding how the gas market has changed in the intervening years. In last week’s LNG Voyager, we discussed the impact of Hurricane Michael on offshore gas production in the Gulf of Mexico: the Category 4 storm took about 10% of offshore production out of the market, equivalent to a few hundred million cubic feet per day. Back in 2005, though, hurricanes Katrina and Rita — each a weaker storm than Michael — combined to reduce federal Offshore Gulf of Mexico production from an average of 10.2 Bcf/d in the April-July period in 2005, to just 4.3 Bcf/d for October of that year. So it’s hardly a surprise that post-Katrina/Rita prices skyrocketed to more than $10/MMBtu and late-summer storage injections slowed to a crawl.  This fall’s low storage inventories (blue line), though, aren’t catching anybody by surprise. Sure, summer weather meant more gas was used in domestic power generation than would have been the case if temperatures had been normal. But all summer long, weather-normalized injections were lagging the five-year average, despite coming into injection season with low inventory levels after a cold winter. And our latest NATGAS Billboard points to an end-of-October inventory level of just 3,187 Bcf. If we restrict our time horizon to just the past 10 years — the Shale Era — this inventory is the lowest by a remarkable 400 Bcf.

After tax changes, shippers pick apart some pipeline filings at FERC— The first batch of interstate natural gas pipeline filings to comply with the US Federal Energy Regulatory Commission's altered tax policies is also attracting an early round of protests from shippers who say returns would still be too high. The shippers want FERC to begin Natural Gas Act Section 5 probes to rein in rates for some of the pipelines. FERC in July issued a final rule that could have a major effect on pipeline rates for years to come. It set out steps for carrying out both corporate income tax cuts enacted in 2017 and a more restrictive policy on tax allowances for master limited partnerships. Protests and motions to intervene are flowing in now -- after a first set of 20 pipeline companies earlier this month were required to submit Form 501-G, a one-time informational filing meant to help FERC decide whether rates are unjust and unreasonable in light of the tax changes. The Process Gas Consumers Group and American Forest and Paper Association objected to Algonquin Gas Transmission's October 11 filing (RP19-57) showing a 15.4% rate of return on equity. The customers offered a "corrected" form that would put the ROE at 21.1% instead, and asked FERC for a Section 5 probe into the justness and reasonableness of the existing rates. Among other things, they contended Algonquin improperly eliminated a regulatory liability related to excess accumulated deferred income taxes (ADIT) which if not eliminated would have increased the ROE. New Jersey Natural Gas similarly argued that FERC should compel Algonquin through a rate probe to pass along substantial rate savings to customers. El Paso Natural Gas' filing also drew a protest from the PGCG/AFGA group. A coalition of industrial and commercial gas end users who are customers of Northern Natural Gas asked FERC to toss that company's finding that a rate adjustment is not needed. The customers contended the filing was missing capital structure information, and argued the proposal to use excess ADIT to fund capital improvements would deprive shippers of benefits of the tax cuts and contravene FERC policy. Shippers calling themselves the Tennessee Customer Group also said a filing by Bear Creek Storage (RP19-51) showed that company was "substantially over-recovering its costs" and in need of a Section 5 rate probe. NJR Energy Services said "it is vital that the commission press forward quickly," because of FERC's limited refund authority.

Key Permit for Mountain Valley Pipeline Suspended – — Late Friday, at the request of a coalition of clean water advocates including the Sierra Club and Appalachian Mountain Advocates, the Pittsburgh District of the Army Corps of Engineers suspended a third permit that the fracked gas Mountain Valley Pipeline (MVP) must have in order to build through waterways in Wetzel and Harrison Counties in West Virginia. This action follows MVP’s loss of a stream crossing permit in southern West Virginia in a federal court decision, and the Army Corps’ suspension of MVP’s Virginia stream crossing permit. MVP is required to have Nationwide Permit 12 authorizations from three Army Corps of Engineer districts in order to continue construction; it now has zero. As a result, MVP is now prohibited from any construction in any stream or wetland in its path.The clean water advocates who brought this challenge are now calling on Federal Energy Regulatory Commission (FERC) to halt all work on the pipeline, as FERC’s order approving the project requires that all permits be in place for construction to take place anywhere along its 303-mile route. The action is the result of an October 11, 2018 request to the Corps by attorneys from Appalachian Mountain Advocates on behalf of the Sierra Club, West Virginia Rivers Coalition, West Virginia Highlands Conservancy, Indian Creek Watershed Association, New River Conservancy, Appalachian Voices, and Chesapeake Climate Action Network. In response, Sierra Club Beyond Dirty Fuels Campaign Representative Joan Walker released the following statement: “No matter the area, there is no way to build fracked gas pipelines that doesn’t endanger or water, our communities, or our climate. We’re pleased to see today’s suspension, and demand that FERC immediately halt all construction on the dirty and dangerous Mountain Valley Pipeline. We cannot allow corporate polluters to lock us in to decades more of fossil fuels when clean, renewable energy is available and ready to use now.”

Mountain Valley Pipeline loses another water-crossing permit - Federal regulators have pulled another permit for the Mountain Valley Pipeline construction project, which now lacks authority to build through streams and wetlands along the project’s entire 303-mile route. The U.S. Army Corps of Engineers suspended its authorization of water body crossings for the first 32 miles of the natural gas pipeline, starting where it originates in Wetzel County, West Virginia. In a letter Friday to Mountain Valley officials, Jon Coleman of the Corps’ regulatory division in Pittsburgh cited an Oct. 2 federal appeals court decision that vacates a similar permit issued by a different division for the rest of the pipeline’s route through West Virginia. A third such approval, which covers more than 500 streams and wetlands in Southwest Virginia, was suspended earlier for the same reason. Pipeline opponents pointed to the most recent suspension in calling anew for the Federal Energy Regulatory Commission to order a stop to all other work on the pipeline, which continues at a brisk pace on land between the streams. “Frankly, it is astounding that the Commission has not yet issued a stop work order in response to Mountain Valley’s loss of its Clean Water Act authorizations,” attorneys Ben Luckett and Derek Teaney of Appalachian Mountain Advocates wrote Monday in a letter to FERC. FERC’s approval for the massive pipeline a year ago was conditioned on Mountain Valley having all of its required permits from other federal agencies, including the Army Corps, the attorneys wrote. The 4th U.S. Circuit Court of Appeals “has stated that a natural gas company violates its FERC certificate when it continues construction in the absence of all federal approvals,” the letter states. FERC spokeswoman Tamara Young-Allen said Tuesday that the agency is considering requests for a stop-work order made by Appalachian Mountain Advocates and several other organizations and individuals. She declined to elaborate.

Following Permit Suspension, Mountain Valley Pipeline Barred from All Water Crossings - A major natural gas pipeline under construction in West Virginia and Virginia cannot continue construction under streams, rivers and wetlands across its entire 303-mile route, following the decision late last week by a federal agency.In a letter sent Friday, the U.S. Army Corps of Engineers' Pittsburgh District told Mountain Valley Pipeline officials they were suspending the project's water crossings permit, also known as the Nationwide Permit 12, for Wetzel and Harrison counties.  The decision marks the third suspension or invalidation of the project's water crossings permits. Earlier this month, a federal court threw out the Mountain Valley Pipeline’s water crossings permit issued by the Army Corps of Engineers’ Huntington District, which covered pipeline construction through much of West Virginia.Three days later, the Army Corps’ Norfolk District in Virginia suspended all water crossings there."Friday’s suspension makes clear yet again that the permits hastily given to the fracked-gas Mountain Valley Pipeline don’t stand up to scrutiny," said Anne Havemann, general counsel at Chesapeake Climate Action Network, in a statement. "Key permits for the Mountain Valley Pipeline have been thrown out again and again, confirming that this pipeline — and the similarly destructive Atlantic Coast Pipeline — is too dangerous to ever be built."A coalition of environmental groups that oppose the pipeline have asked federal regulators at the Federal Energy Regulatory Commission to issue a full stop-work order for all pipeline construction. They argue the invalidation of the Army Corps' water crossings permit means the project lacks full approvals and should be temporarily stopped.Mountain Valley Pipeline spokeswoman Natalie Cox said in a statement the project expects to receive a new or resissued water crossings permit in early 2019. After that happens, she said the pipeline expects the two suspended permits in West Virginia and Virginia to be reinstated.Until then, Cox said the pipeline will continue other construction and does not expect the lack of water crossings to affect the pipeline's projected in-service date of late 2019. The Army Corps estimates the Mountain Valley Pipeline will be constructed under streams, rivers or wetlands 1,146 times, inclduing 59 stream crossings and 62 wetland crossings in Wetzel and Harrison counties.

Atlantic Coast Pipeline receives key approval from VA agency - — Dominion Energy’s Atlantic Coast Pipeline received a key regulatory approval from a Virginia agency Friday.The Virginia Department of Environmental Quality approved the pipeline’s erosion and sediment control plans and stormwater management plan, according to ACP spokesman Aaron Ruby.The approval was the project’s final one needed in Virginia, and Dominion has requested a notice to proceed with full construction in Virginia from the Federal Energy Regulatory Commission, Ruby said.The pipeline will cross more than 600 miles between Harrison County and Greensville County, Virginia, to transport natural gas produced in West Virginia to energy users in Virginia and North Carolina.The agency’s process was the most sweeping and rigorous regulatory review of any energy infrastructure project in Virginia history, according to Ruby. “The agency spent more than a year reviewing site-specific environmental controls for every inch of the pipeline’s path in Virginia,” he said. “No other project in the state’s history has received as much regulatory scrutiny or been developed with greater attention to public safety and the environment. We’ve put in place some of the strongest environmental protections ever used by the industry to keep soil and sediment out of our streams and rivers during construction. These protections have proven effective in West Virginia and North Carolina, where construction has been underway for several months.”

Virginia regulators grant key approvals to Atlantic Coast pipeline, clearing the way for construction— Virginia regulators say they have cleared the controversial Atlantic Coast Pipeline to begin construction on its 300-mile track across the state with the approval of three crucial environmental protection plans. The state Department of Environmental Quality said late Friday that it had signed off on plans to control erosion and sediment, manage water runoff from storms and limit damage to the fragile “karst” geography of certain mountainous areas as blasting and digging for the natural gas pipeline gets underway. Dominion Energy, which is leading a consortium of companies in building the $6 billion project, said that it will now seek final approval from the Federal Energy Regulatory Commission to get work started. The Atlantic Coast Pipeline will run about 600 miles from West Virginia, into Virginia’s Highland County, across the Shenandoah region and through central Virginia into North Carolina. Construction has already begun in the other two states, and some tree-cutting took place in Virginia early this year.But the state DEQ had held up on final approval of the key environmental-protection plans as regulators wrestled with the unusual demands of a gigantic, 42-inch-diameter pipeline that would run through steep terrain and make thousands of waterway crossings.Another major project, the Mountain Valley Pipeline, got similar approval a year ago and is further along in construction. That project, which is being built by a consortium led by EQT Midstream Partners of Pittsburgh, follows a 300-mile route from West Virginia through the far southwest of Virginia and into North Carolina.Environmentalists vehemently oppose both projects, as do many landowners whose property is being taken against their wishes through eminent domain. Several legal challenges have led federal judges to delay the projects at various points this year.

Some West Virginia work OK'd for Dominion's Atlantic Coast pipeline - Dominion Energy's request to proceed with construction in parts of West Virginia on the Atlantic Coast natural gas pipeline is approved by the Federal Energy Regulatory Commission.But FERC says the authorization does not include construction on National Forest Service lands, which is the subject of a legal dispute, or in some areas where the endangered Indiana Bat lives; the company would need to obtain confirmation from the U.S. Fish and Wildlife Service that its activities would not harm the bats’ habitat. Atlantic Coast is a partnership between units of operator Dominion, Duke Energy and Southern Co.   Earlier: Atlantic Coast pipeline construction gets OK from final state (Oct. 22)

ACP & MVP Pipelines are Struggling Forward in Virginia - The Virginia Department of Environmental Quality has cleared the way for Dominion Energy’s 600-mile, deeply divisive Atlantic Coast Pipeline to begin construction here in Virginia. The agency has signed off on plans for how workers will manage erosion, sediment and stormwater along the route, which will cross hundreds of waterways and some of Virginia’s steepest terrain, the final approval the project needs before beginning to blast, trench and lay the pipe. The Federal Energy Regulatory Commission will issue the actual go-ahead for this work to start. The DEQ announced the decision just after 5 p.m. Friday.  The approval came with a report to the State Water Control Board, a condition of the water quality certification the board issued for the project in December under section 401 of the federal Clean Water Act. “DEQ’s erosion sediment and stormwater regulations, and our extensive 401 certification gives the agency several enforcement tools to protect water quality and ensure compliance with Virginia’s rigorous requirements,” said DEQ Director David Paylor. “Our engineers and staff spent 15 months reviewing ACP’s site plans to further ensure water quality protections were accurately incorporated.” The Virginia League of Conservation Voters wasn’t impressed, saying there’s little reason to think the failures to contain mud and stormwater that have plagued the separate Mountain Valley Pipeline, which is being built in Virginia now, won’t befall the ACP, though on a much wider scale because of its bigger footprint here. “The certification comes even as evidence mounts in Southwest Virginia that state regulations did little to keep communities safe from the Mountain Valley Pipeline, which has clogged some of our state’s cleanest waters with mud and sediment as crews trenched across steep, rugged, flashflood-prone terrain,” the group said. Two sitting FERC commissioners have said the massive gas project, which relies on subsidiaries of the companies building it to justify the need for the gas and comes with a 14 percent rate of return for the developers, isn’t in the public interest. “We simply don’t need hundreds of miles of costly and environmentally destructive gas infrastructure to keep the lights on in Virginia, but sadly, this approval is a step toward marrying Virginia to a future of higher energy costs and volatile fossil fuels for years to come while Dominion Energy profits handsomely at our expense,” Francis said.

The con at the heart of the Atlantic Coast Pipeline - It can’t be said enough, and it’s something that’s easy to lose sight of amid the labyrinthine legal and permitting debates around the Atlantic Coast Pipeline, which could be getting federal approval to start full construction in Virginia any minute now. The need for Dominion Energy’s 600-mile Atlantic Coast Pipeline is far from proven — certainly not in Virginia — despite the  propaganda piece extolling the virtues of the project that company CEO, president and CEO Thomas Farrell got published Sunday in the Richmond Times-Dispatch. Your case should be ironclad before a federal agency gives your company the authority to blast, trench and tunnel your way across 600 miles in three states, trampling on private property rights, national forests and parks, sensitive habitats and waterways and through aquifers remote communities rely on for drinking water. In fact, the preponderance of evidence points to Dominion being well on its way to foisting a massive con on its 2.5 million ratepayers here, as opponents of the pipeline have warned all along. Another newspaper editorial page, The Virginian-Pilot, also recently parroted the company line on the project, that the hundreds of landowners and communities along its 600-mile path are the unfortunate eggs that must be broken to cook a reliable, affordable energy omelet for the rest of us. The only way you can still believe that is if you steadfastly refuse to look behind the curtain. Dominion will point you to the voluminous work done as part of the Federal Energy Regulatory Commission’s certification process for natural gas projects, but what they won’t tell you is the agency’s review of actual public need is stunningly cursory. “The shippers on the ACP project supply gas to end users and electric generators, and those shippers have determined that natural gas will be needed and the ACP project is the preferred means of obtaining that gas.” the commission wrote in its certificate authorizing the project last year. Who are those shippers? They’re almost all subsidiaries of the energy companies developing the project, which comes with a 14 percent rate of return they’ll try to recoup from their ratepayers.

Editorial: Pipeline giant wisely drops dangerous refit plan - Morehead News -- We’re glad that Kinder Morgan decided to abandon a pipeline project that would have endangered tens of thousands of residents in Kentucky – including Rowan County – and five other states from Texas to Ohio. The news was celebrated by environmental activists, state and local governments and individual property owners who have battled the company’s proposal to push hazardous gas liquids through a 75-year-old natural gas pipeline. In Kentucky, the pipeline extends 254 miles, including 20.4 miles across Rowan County, 19.6 miles in Greenup County and 12.4 miles in Carter County.  But the company still wants to continue using the pipeline for fracked natural gas by reversing the flow from north to south. Kinder Morgan's line, the Utica Marcellus Texas Pipeline, has been carrying natural gas from the Gulf Coast to gas-rich Ohio since 1943. Pipeline safety experts claim natural gas liquids are more dangerous than natural gas itself because they carry explosion and asphyxiation risks, and can pollute ground or surface water. The liquids include propane and butane and other highly toxic byproducts. In a surprising report to investors last week, Kinder Morgan said it had not found any customers to buy the liquids on the Gulf Coast. Instead, Kinder Morgan’s now wants to use the old pipeline to ship natural gas from Appalachia to new customers like Mexico. We don’t know for sure what motivated Kinder Morgan to change its plans but it was great decision for those living near that pipeline. And lots of anxious folks will be watching for what happens next.

Enbridge and Michigan's long-awaited deal on Line 5. - For 65 years, Enbridge’s Line 5 has been a critically important conduit for moving Western Canadian and Bakken crude oil and NGLs east across Michigan’s upper and lower peninsulas and into Ontario, where the now-540-Mb/d pipeline feeds Sarnia refineries and petrochemical plants. Some crude from Line 5 also can flow east from Sarnia to Montreal refineries on Line 9. But Enbridge has been under increasing pressure to shut down Line 5 over concern that a rupture under the Straits of Mackinac might cause major environmental damage. At long last, the state of Michigan and Enbridge have reached an agreement to replace the section of Line 5 under the straits by the mid-2020s, and to take steps in the interim to enhance the existing pipeline’s safety. In today’s blog, we consider the significance of the Enbridge pipeline and of the newly reached accord. Enbridge’s Line 5 (purple line in Figure 1) is a 645-mile pipeline that is part of the company’s much larger Canadian Mainline and Lakehead systems. Line 5 originates at the company’s terminal in Superior, WI, and runs east/southeast through Michigan to Sarnia, ON. The Superior terminal is the end point for five elements of the Mainline/Lakehead systems ­— Line 1, Line 3 and Line 4 from Edmonton, AB; Line 67 from Hardisty, AB; and Line 2B from Cromer, MB — and has the capacity to handle 2.8 MMb/d of incoming and outgoing liquid hydrocarbons (most of them light, medium or heavy crudes). Line 5 is one of five pipelines out of Superior; it transports “batches” of either light crude, light synthetic crude or NGLs that are sourced primarily in Western Canada (and also in the Bakken) and bound for either Michigan, Sarnia or Montreal (see Refined, Piped, Delivered – They’re Yours for an explanation of how batching works.) At the Straits of Mackinac (dashed red oval) — the four-mile-wide water passage between Michigan’s upper and lower peninsulas (and Lake Michigan and Lake Superior) — the 30-inch-diameter, single-pipe Line 5 splits into two 20-inch-diameter, parallel pipes that are anchored along the strait’s lakebed.

An oil spill you've never heard of could become one of the biggest environmental disasters in the US  - In 2010, the Deepwater Horizon oil tragedy commanded the nation's attention for months. Eleven lives were lost and communities around the Gulf of Mexico ground to a halt under hundreds of millions of gallons of oil. Yet, lurking underneath the fresh disaster, an older spill was spewing ever faithfully forth: A leak that began when another oil platform was damaged six years earlier. The Taylor oil spill is still surging after all this time; dumping what's believed to be tens of thousands of gallons into the Gulf per day since 2004. By some estimates, the chronic leak could soon be larger, cumulatively, than the Deepwater disaster, which dumped up to 176.4 million gallons (or 4.2 million barrels) of oil into the Gulf. That would also make the Taylor spill one of the largest offshore environmental disasters in US history. In September, the Department of Justice submitted an independent study into the nature and volume of the spill that claims previous evaluations of the damage, submitted by the platform's owner Taylor Energy Co. and compiled by the Coast Guard, significantly underestimated the amount of oil being let loose. According to the filing, the Taylor spill is spewing anywhere from 10,000 to 30,000 gallons of oil a day.   As for how much oil has been leaked since the beginning of the spill, it's hard to say. An estimate from SkyTruth, a satellite watchdog organization, put the total at 855,000 to 4 million gallons by the end of 2017. If you do the math from the DOJ's filing, the number comes out astronomically higher: More than 153 million gallons over 14 years.  Dr. Oscar Garcia-Pineda, who authored the DOJ's commissioned analysis, declined to comment to CNN, citing ongoing litigation.

A 14-year-long oil spill in the Gulf of Mexico verges on becoming the worst in US history - — An oil spill that has been quietly leaking millions of barrels into the Gulf of Mexico has gone unplugged for so long that it now verges on becoming one of the worst offshore disasters in U.S. history.  Between 300 and 700 barrels of oil per day have been spewing from a site 12 miles off the Louisiana coast since 2004, when an oil-production platform owned by Taylor Energy sank in a mudslide triggered by Hurricane Ivan. Many of the wells have not been capped, and federal officials estimate that the spill could continue through this century. With no fix in sight, the Taylor offshore spill is threatening to overtake BP’s Deepwater Horizon disaster as the largest ever.As oil continues to spoil the Gulf, the Trump administration is proposing the largest expansion of leases for the oil and gas industry, with the potential to open nearly the entire outer continental shelf to offshore drilling. That includes the Atlantic coast, where drilling hasn’t happened in more than a half century and where hurricanes hit with double the regularity of the Gulf.Expansion plans come despite fears that the offshore oil industry is poorly regulated and that the planet needs to decrease fossil fuels to combat climate change, as well as the knowledge that 14 years after Ivan took down Taylor’s platform, the broken wells are releasing so much oil that researchers needed respirators to study the damage. The Taylor Energy spill is largely unknown outside Louisiana because of the company’s effort to keep it secret in the hopes of protecting its reputation and proprietary information about its operations, according to a lawsuit that eventually forced the company to reveal its cleanup plan. The spill was hidden for six years before environmental watchdog groups stumbled on oil slicks while monitoring the BP Deepwater Horizon disaster a few miles north of the Taylor site in 2010.

Frackers Bet on New Terminals to Boost Oil Exports – WSJ - As pipeline bottlenecks crimp the U.S. shale boom, some companies are racing to address the next potential constraint on American oil output: the terminals to export crude to foreign markets. Oil exports have been a key release valve for U.S. producers in the three years since Congress lifted a longtime ban on overseas crude sales. Exports topped 2.1 million barrels daily in September and are projected to approach four million barrels within two years, according to S&P Global Platts Analytics. .Yet a surge of crude from prolific West Texas wells, which has already pushed regional pipeline networks to capacity and made it more expensive for some companies to move their oil to market, could next challenge port infrastructure. Existing U.S. shipping terminals are already ill-equipped to handle the growing load, because only one can fully accommodate the giant tankers used to ship oil to Asia and Europe. That has at least four companies, including commodities trader Trafigura Group Pte. Ltd. and pipeline builder Enterprise Products Partners L.P., planning new or expanded terminals to load up the big ships. “You need more efficient ways of loading oil out of the Gulf Coast,” said Kevin Jebbitt, head of crude oil trading for Trafigura, which has requested permits to build a deepwater port near Corpus Christi, Texas. The terminals can cost more than a billion dollars to build, and some experts believe there won’t be sufficient long-term demand for all of the facilities being proposed. So companies interested in constructing these terminals are racing to complete their projects quickly to ensure success. The Permian basin of West Texas and New Mexico has been the primary engine behind soaring U.S. crude production, which recently topped 11 million barrels daily. Inadequate pipeline capacity has reduced prices of oil in the area and forced some companies to curtail drilling. Crude in Midland sold for $23 a barrel below the Houston price in August, reflecting the added costs companies have to shoulder to move crude to market without pipelines, though that differential has since contracted to about $10, according to S&P Global Platts Analytics. The firm estimates that by the end of this year, Permian drillers will be producing about 400,000 barrels of oil a day less than they would have without pipeline constraints. 

Crews working to clean up oil spill in McClain County - Officials have responded to an oil spill in McClain County late Sunday afternoon. According to McClain County Emergency Management, the spill is near Turkey Creek, just south of 180th between Sooner Ave. and Ladd Ave. Officials say a storage tank leaked out 150 barrels of oil along the creek and some oil leaked into the water. The Oklahoma Corporation Commission is on scene as crews clean up. 

In Colorado, a Bitter Battle Over Oil, Gas and the Environment Comes to a Head – NYT — On stage at the Adams County fairgrounds, the M.C. wore cowgirl boots and a pink T-shirt that read “Mothers in Love With Fracking.” In the audience, more than a thousand oil and gas workers looked on as local leaders issued dire warnings about the effects of a Colorado ballot measure that, if passed, could drastically reduce oil and gas drilling in the state.Thousands of jobs: gone. Millions of dollars: lost. Conservative families: driven out.“The wolves are at the front door,” insisted one speaker.After years of bitter fights over oil and gas development, Colorado voters have managed to get a statewide anti-fracking measure on the November ballot. The initiative is unprecedented in its scope — potentially barring new wells on 95 percent of land in top-producing counties — and industry executives are watching with concern, fearful that it could encourage similar measures across the nation.So far, only New York, Maryland and Vermont have banned fracking altogether. But none of those states have anything close to the reserves of Colorado, which is among the top six states in both oil and gas production.Not surprisingly, the initiative has deepened political fissures in a purple state whose economy counts on oil, but whose lifestyle hinges on access to pristine wilderness. As Colorado’s population has climbed, driven by the cost of living, a growing technology sector and the appeal of the outdoors, the state’s new and old industries have collided. At the same time, environmentally-oriented companies like Patagonia are pressing to become bigger political players in the region, often putting them at odds with the oil and gas lobby. If passed, the measure — Proposition 112 — would require companies to place new wells at least 2,500 feet from homes, schools, waterways and other areas designated as “vulnerable,” two-and-a-half to five times the current state regulation. Even as the measure faces fierce resistance, industry leaders and environmentalists alike acknowledge that it could succeed. One recent industry poll obtained by The New York Times showed 43 percent of voters in favor, with 41 percent opposed.

Study finds Proposition 112 passing could eliminate access to 58% of Colorado's subsurface minerals  — If passed, Colorado's Proposition 112 ballot initiative might not completely destroy the oil and natural gas industry in the state as producers could employ longer laterals to reach molecules while still complying with increased setback rules, according to a study released by the Colorado School of Mines. Proposition 112, which will appear on the November 6 ballot, would increase new oil and gas drilling setbacks from 500 feet to 2,500 feet from occupied structures, parks and waterways. It would eliminate 85% of all non-federal surface land from use for drilling, according to separate analysis by the Colorado Oil and Gas Conservation Commission. But Peter Maniloff, a professor at the Colorado School of Mines, determined more than 15% of subsurface minerals could be reached through modern drilling techniques. "With the recent advent of horizontal drilling, some subsurface resources beneath the 2,500 foot buffer may be reachable from within the 15% available surface area," he said. "I calculated what area of the subsurface is within 1 mile of a surface location, which would remain accessible under Prop 112. That is, how much of the subsurface would be available, assuming that firms could drill horizontally for 1 mile from any accessible surface location. I find that 42% of the non-federal subsurface would be accessible, or nearly three times the available surface area." However, he noted that restricting oil and gas operations to such a small portion of surface space would "impose substantial operational difficulties." This includes limiting the placement of wellbores in order to achieve the highest production rates as well as the difficulty of adding new surface infrastructure, such as roads. Also, Maniloff's analysis did not consider the varying quality of rock. Most of the core areas of the Denver-Julesburg Basin are located in densely populated areas along Colorado's Front Range, which would become basically inaccessible under Proposition 112. Research by S&P Global Platts Analytics finds Proposition 112 would curtail gas production by 45% and oil production by 54% within five years. It would render 78% of Weld County, Colorado's surface land off-limits to new oil and gas development. The county currently accounts for more than 95% of all Denver-Julesburg Basin production. Since Colorado's approved drilling permits are valid for two years, the analysis assumes drilling will continue as is for the next two years and 2021 would start to show the impact as 78% of the surface land would be off limits due to the setback restriction. The number of new wells drilled in the Denver-Julesburg Basin would be reduced by 78% starting in 2021, and oil production would decrease by 54% to 275,000 b/d by the end of 2023, according to Platts Analytics. Applying the same analysis to gas, if the number of new wells drilled is reduced by 78%, the impact on production would be a decrease of 45% to 1.9 Bcf/d by the end of 2023.

Taxpayers could have to pay for oil and gas made inaccessible by Prop 112 - Complete Colorado - One of the issues surrounding Proposition 112, the ballot measure to increase the setback for oil and gas drilling to 2,500 feet, is the potential that Colorado taxpayers could be on the hook for billions of dollars worth of claims that the state has unconstitutionally taken away the property rights of mineral owners and lessees.Speaking of the fiscal impact to the industry not including impacts to schools, infrastructure and tax revenues, Craig Kaiser, President of PetroValues, an oil and gas tech company that specializes in the valuation of minerals said, “We came up with a dollar amount of $470 billion dollars that will be lost. We calculated what each one of those [potential] individual wells would look like if they were taken away.” “I think it’s very clear that a mineral estate or a mineral lease is a property right that is capable of being taken under the Colorado or U.S. Constitutions, so I think to the extent that Prop 112 deprives a mineral estate owner or a lessee of its right to access minerals, then yes, I think that could constitute a taking,” said oil and gas attorney Wayne F. Forman of the law firm  Brownstein Hyatt Farber Schreck.  University of Denver Associate Professor of Law Kevin Lynch disagrees, saying, “The industry, although they claim otherwise, have never put this issue to the test and in fact they have taken a lot of actions such as supporting Amendment 74 and supporting a number of takings bills in recent years at the state legislature that would have explicitly made restrictions on oil and gas a taking, which to me indicates that under existing law they agree with me that it wouldn’t be a taking.”

White House backed drillers over EPA on plugging methane leaks -  White House officials pushed the EPA to maximize savings for the oil industry despite the agency’s concern that weakening regulations would allow more methane to escape into the atmosphere, according to newly released documents.The White House pressure campaign came as the Environmental Protection Agency honed a proposal to relax Obama-era requirements governing how frequently oil companies have to check for and repair leaks of methane, an intense greenhouse gas that warms the atmosphere 84 times more than carbon dioxide. Every move to dial back required inspections and reduce industry costs triggered a corresponding climb in projected methane emissions, a jump that appeared to trouble some EPA officials, according to internal documents filed in a government docket Tuesday. The documents show EPA officials also repeatedly resisted White House pressure to dramatically decrease the frequency of required inspections at oil wells and compressor stations in the name of saving money. In one case, officials with the White House Office of Information and Regulatory Affairs argued that less-frequent inspections would provide “the highest net benefits.” But the EPA rejected that argument in May, countering that less-frequent inspections also would allow more methane to escape. The behind-the-scenes debate, revealed in hundreds of pages of correspondence, analysis and drafts from a White House-led review of the plan, offers a rare look at how the Trump administration is pursuing a deregulatory agenda it says is saving the U.S. $1.6 billion annually.  First the Trump administration overstates the costs to industry of environmental safeguards, then it ignores the costs to society of dismantling them, Hayes said. The result is “one-sided,” with claims of deregulatory cost savings from not requiring industry to protect human health and the environment -- while ignoring the cost to everybody else. The entire process was driven by an attempt to maximize corporate profits at the expense of public health and the environment.”

Pemex awards tender for 1.4mn bl of Bakken (Argus) — Mexico's state-owned Pemex has awarded a tender to import four 350,000 bl cargoes of US Bakken light crude, the first such crude import in around a decade. The cargoes will be delivered in November and will mainly serve the Salina Cruz refinery in Oaxaca state, Pemex said today. Traditionally a crude exporter, Pemex announced earlier this year that its downstream company, Pemex Transformacion Industrial, would start importing up to 100,000 b/d of light crude in an effort to boost flagging refining rates at its six refineries, particularly at its Salina Cruz refinery. Refining rates have declined in recent years due to aging infrastructure, accidents and declining domestic crude production. Refineries have run at below 50pc capacity on average in 2018. Pemex produced 1.82mn b/d of crude in August, down by 1.2pc from July and down by 6pc from August last year, according to the latest information from Pemex. This is Pemex's second attempt this month to tender crude imports, following a failed tender launched on 1 October for a 350,000 bl cargo of US Light Louisiana Sweet crude. The tender did not attract any bids due to "pricing issues," Pemex chief executive Carlos Trevino said at a press conference earlier this month. Pemex will reveal the name of the tender winner once contracts have been signed, it said. Incoming president Andres Manuel Lopez Obrador has pledged to re-boot Mexico's refinery system with a $2.5bn investment in maintenance of existing refineries as well as an $8bn new refinery project.

Dakota Access expansion takes step forward - A potential expansion of the Dakota Access Pipeline took a step forward Friday.Energy Transfer Partners announced it is seeking commitments from shippers to transport more Bakken crude to the Gulf Coast.The proposed expansion would increase the pipeline’s capacity to 570,000 barrels per day, said company spokeswoman Vicki Granado.Energy Transfer Partners CEO Kelcy Warren discussed the possibility of an expansion in August during a roundtable discussion in Bismarck with U.S. Energy Secretary Rick Perry. At that time, the pipeline was transporting about 500,000 barrels per day, according to the company.Granado said the expansion would require “minimal asset modifications” within the existing pipeline right-of-way. Justin Kringstad, director of the North Dakota Pipeline Authority, said companies can increase the capacity of a pipeline by adding a chemical to the oil that makes it flow easier in the pipeline system. Another option is to add additional horsepower or pumping stations, Kringstad said. Dakota Access connects with the Energy Transfer Crude Oil Pipeline, which transports oil from Illinois to Nederland, Texas.

The Lessons We Didn’t Learn From the Largest Gas Leak in U.S. History - Almost 15,000 residents of Los Angeles' Porter Ranch neighborhood evacuated their homes in the fall of 2015, many of them suffering from headaches, breathing problems and nosebleeds. The culprit: a massive leak of carcinogenic chemicals at SoCalGas's nearby Aliso Canyon underground gas storage facility. From October 2015 until February 2016, the facility expelled more than 100,000 metric tons of methane into the atmosphere.Three years later, community residents continue to suffer severe health effects. In a lawsuit filed on Oct. 15, Los Angeles firefighters who responded to the leak stated that they also continue to experience "nosebleeds, migraine headaches, dizziness, skin rashes, sleeping difficulties, and breathing difficulties. Some now battle cancer."And yet, agencies and underground gas storage operators continue to show a shocking lack of initiative to regulate and share information about the toxic pollutants in stored gas. No regulatory agency has tried to force operators to reveal the gas' chemical composition. Without this information, scientists cannot determine the leak's risks to human health.  "The public health department consistently delivered messages to the community that are misleading," one Porter Ranch resident told the Los Angeles Daily News this week. "They showed no justice and had unexplained delays and inactions." This problem isn't limited to Aliso Canyon. California has 12 underground gas storage facilities: four in southern California, seven in northern California, and one in central California with a total capacity to store just under 400 billion cubic feet of gas. California's underground gas storage facilities are in depleted gas or oil fields. These were not originally designed for high-pressure gas storage.

Responders monitoring oil spill on Columbia River — State and federal officials are responding to an oil spill on the Columbia River between Oregon and Washington. Coast Guard officials said the oily sheen was estimated at about 3 miles long Wednesday afternoon and appeared to be dissipating since it was first reported that morning. Officials said the source of the spill was no longer actively discharging into the river and pollution responders also determined that the oil was too thin to recover. The spill was first reported near Kalama and was moving downriver. Responders with the state Department of Ecology also went out on the water to collect samples to find the spill's source. Officials said there have been no signs of animals in distress.

Arctic Oil Drilling Project Approved by Trump Administration - The Trump administration's unrelenting quest for Arctic oil and gas took a major step on Wednesday as it approved an energy company's controversial production plan.Hilcorp Alaska received the green light to build the Liberty Project, a nine-acre artificial drilling island and 5.6-mile underwater pipeline, which environmentalists warn could risk oil spills in the sensitive Beaufort Sea and threaten polar bears and Arctic communities.Once built, it will be the first oil and gas production facility in federal waters off Alaska, Interior Secretary Ryan Zinke boasted Wednesday in a press release."American energy dominance is good for the economy, the environment, and our national security," Zinke said. "Responsibly developing our resources, in Alaska especially, will allow us to use our energy diplomatically to aid our allies and check our adversaries. That makes America stronger and more influential around the globe."Environmental worries about the Liberty Project are emphasized by Hilcorp's struggle last year to fix a natural gas leak from its underwater pipeline in Alaska's Cook Inlet. For nearly four months, the ruptured pipeline released roughly 200,000 cubic feet of methane a day into the inlet. "If this company can't prevent or stop a gas leak in the Cook Inlet, it has no business in the Beaufort Sea," Miyoko Sakashita, the oceans program director at the Center for Biological Diversity, wrote last year in aMedium post.

The Trump administration just approved a plan to drill for oil in Alaska’s federal waters--it’s a major first - Interior Department officials announced their approval Wednesday of a company’s plan to drill for oil six miles off the Alaskan coast in the shallow waters of the Beaufort Sea. If the development by Hilcorp Energy moves forward, it would be the first oil and gas production facility in federal waters in Alaska, Interior Secretary Ryan Zinke said in the announcement, a major victory for the oil industry and a blow to conservation groups that fought it, fearing a possible leak in a sensitive and pristine natural environment. Zinke said the approval was a step forward for President Trump’s “American energy dominance” agenda that promotes the widespread development and production of fossil fuels such as coal and oil. “American energy dominance is good for the economy, the environment, and our national security,” Zinke said. “Responsibly developing our resources, in Alaska especially, will allow us to use our energy diplomatically to aid our allies and check our adversaries. That makes America stronger and more influential around the globe.” Contrary to Zinke’s pitch, the vast majority of scientists say the use of fossil fuels contributes to carbon pollution that fuels climate change, a driver of sea-level rise, warmer oceans and hurricanes that rely on warm water to grow in size and ferocity. Hilcorp, based in Houston, plans to build a nine-acre gravel island about 20 miles east of Prudhoe Bay, not far from the Arctic National Wildlife Refuge. The Liberty Project proposes to tap into a reservoir of oil on the state’s North Slope, containing as much as 150 million barrels. The project is expected to take two years to complete, produce up to 70,000 barrels a day at peak production about two years after it begins, with “a life expectancy of 15 to 20 years,” according to the project’s website. Hilcorp, a major player in Alaska, has had a few environmental mishaps. In December 2017, Hilcorp Alaska discovered crude oil leaking from a subsea pipeline that connected a pair of oil production platforms in the Cook Inlet. Nine months before that discovery, the Coast Guard was dispatched to investigate a Hilcorp oil leak from an abandoned well head in the Gulf of Mexico. A news release by the Coast Guard reported “an estimated 840 gallons of crude oil in the water,” according to an article in the New Orleans Times Picayune.

Why Is Canadian Crude Selling For $20?  --  Oil prices in Canada plunged late last month, with the losses continuing throughout much of October. Canadian oil producers exposed to the low prices are now fetching around $40 to 50 per barrel less than their counterparts in the United States.Western Canada Select (WCS), which tracks heavy oil from Canada, typically trades at a discount relative to WTI. The lower price reflects quality issues, as well as the cost of transport from Alberta to refineries in the U.S.In early 2018, the discount started to grow significantly, the result of Canadian pipelines filled to the brim. The inability of the Canadian oil industry to build a major pipeline from Alberta to either the U.S. or the Pacific Ocean is increasingly dragging down WCS. Keystone XL, Northern Gateway, Energy East, Trans Mountain Expansion – all of these pipeline projects have run into years of delays, and in the case of Northern Gateway and Energy East, scrapped all together.That left WCS prices languishing at discounts in excess of $30 per barrel at times this year. But the problem blew up into a deeper crisis in late September. Maxed out pipelines are still a problem, but now refineries in the U.S. Midwest are in maintenance season, curtailing demand for Canadian oil. BP’s massive Whiting refinery in Indiana, Phillips’ Wood River and Marathon’s refinery in Detroit all undertook maintenance, according to CBC. WCS plunged to the low $20s per barrel, implying a discount of about $50 per barrel to WTI. The recent decline of WTI below $70 per barrel has somewhat narrowed the differential to the mid-$40s per barrel.The discounts mean that the oil industry in Alberta is losing around $100 million per day, according to GMP FirstEnergy and CBC.Wood Mackenzie told CBC that the refineries should come back online “within the next few weeks.” Producers are turning to rail to ship their product to the U.S., a much more expensive route. Oil-by-rail shipments from Canada to the U.S. hit an all-time high of 204,000 bpd in June, according to Rory Johnston of Scotiabank. By the end of the year, rail shipments could reach 300,000 bpd.

New restrictions could derail oil-by-rail shipments - The discount on Canadian crude oil hit a record last week – about US$50 per barrel – due in part to severe pipeline constraints that have forced more oil to move by rail. In July, a record 206,624 barrels per day of Canadian oil was shipped by rail to American refineries. Now, even that option could be severely crimped, thanks to accelerated Canadian railcar safety regulations and a unilateral move by the BNSF Railway (NYSE:BNI) in the U.S. that could potentially take a significant number of oil cars off the tracks. All major oil pipeline expansions in Canada and the U.S. have faced regulatory delays: the Trans Mountain pipeline expansion, the Keystone XL and Line 3. That has forced more oil to move by rail, which is more expensive and, in some cases, more hazardous than moving it via pipelines. The 2013 Lac-Mégantic explosion that killed 42 people underscored that danger, although in that case, the oil cars were carrying Bakken shale oil, which contains explosive methane gases, unlike the heavier crude that Alberta produces. To address safety concerns arising from oil shipped by rail, Transport Canada has ordered some 21,367 “unjacketed” oil cars to be retired as of November 1. That alone could decrease capacity to move oil by rail and exacerbate the already steep discount for Canadian oil. Transport Canada and U.S. regulators have accelerated the phase-out of older unjacketed railcars. They were to be phased out 17 months from now but are now scheduled for retirement November 1. These cars, which go by the model number 1232, must be replaced either with the new TC-117 or a retrofitted 1232 called the TC-117R. But following a massive derailment in Iowa in June involving some 117R cars, the BNSF Railway said it plans to restrict the use of the 117R oil cars as well. When there is a derailment, the railway operator is responsible for the damage it causes, so companies like BNSF are understandably concerned that the 117R still isn’t safe enough, based on the Iowa derailment. That derailment resulted in 160,000 gallons of oil spilling into the Little Rock River. Some of the oil cars punctured in that accident were the retrofitted 117R oil cars.

Maritime rule change stirs fears of diesel shortage- Kemp (Reuters) - The International Maritime Organization (IMO) has so far resisted pressure to soften or postpone the implementation of new regulations requiring ships to use bunker fuels with a lower sulphur content from the start of 2020. That has prompted warnings from some analysts that the regulations will squeeze the availability of low-sulphur diesel and jet kerosene required by trucks, trains, aircraft, farmers and industry, resulting in big price increases. The regulations and any associated rise in fuel prices will occur in the run up to the next U.S. presidential election so there is considerable political sensitivity around the timing and cost of the changes. But most IMO members are confident there will be enough low-sulphur fuel available to meet the needs of both the shipping industry and other users of middle distillates without an unacceptable spike in prices. From Jan. 1, 2020, ships will be required to use fuel oil containing no more than 0.5 percent sulphur, down from a maximum of 3.5 percent at present, and an actual average of around 2.5 percent. Ships operating in emission control areas in the Baltic Sea, North Sea, most of the coast of Canada and the United States, and parts of the Caribbean are already subject to a lower limit of 0.1 percent, which will not change. Reduced sulphur limits for the rest of the world were originally approved by IMO members in 2008 and the deadline was reconfirmed following a fuel availability assessment in 2016. A detailed study of the fuel market commissioned by the IMO before it confirmed the deadline examined multiple scenarios for marine fuel consumption and production at the end of the decade. The study concluded that "in all scenarios the refinery sector has the capability to supply sufficient quantities of marine fuels … to meet demand for these products while also meeting demand for non-marine fuels". Capacity increases in crude distillation as well as sulphur-removing hydrocracking and hydroprocessing would be enough to meet increased demand for low-sulphur distillates and fuel oil (“Assessment of fuel oil availability”, CE Delft, 2016).

API: US petroleum demand in September slowed from August - With seasonal slowing after the summer driving season, US petroleum demand was 20.1 million b/d in September, down 3.5% from August but up 2.4% compared with September 2017. This is according the latest monthly statistics report from the US American Petroleum Institute. Year-to-date through September, US petroleum demand remained at its strongest since 2007, averaging 20.4 million b/d. This was an increase of nearly 500,000 b/d over the same period in 2017. Total motor gasoline deliveries were 9.3 million b/d in September, which was a decrease of 4.4% from August and 1.4% from September 2017. Although crude oil price rose, with lower demand, the average price of regular-grade gasoline in September held steady at $2.92/gal in September. In September, demand for reformulated gasoline, consumed primarily in urban areas, increased 3.8% year over year to 3.1 million b/d, while conventional gasoline, used more in rural areas, decreased 3.7% year over year to 6.2 million b/d. In September, distillate deliveries of 4 million b/d decreased 2.7% from August but remained up 1.4% compared with September 2017. Through the first 9 months of the year, distillate demand was at its highest since 2007. About 97% of distillate demand in September was for ultralow-sulfur distillate (ULSD), driven by road freight transportation activity. The US Bureau of Labor Statistics’ Producer Price Index for freight trucking increased by 7.8% year over year in September but slowed for the third consecutive month. The remaining 3% of distillate demand was high-sulfur distillate fuel (HSD). In September, HSD deliveries decreased 31.1% from August and 35.4% compared with September 2017. This was a decrease from unseasonal strong demand in August, and monthly changes in HSD demand have been volatile this year. Jet fuel demand growth has remained solid. In September, kerosene jet fuel deliveries of 1.7 million b/d increased by 3.7% compared with September 2017. This was the second-strongest September monthly demand on record and highest since 2000.

Big Oil Resists Urge to Spend -- Forget "Drill, baby, drill!" The world’s biggest oil companies aren’t returning to their spendthrift ways, despite crude’s recovery. Equinor ASA and ConocoPhillips kicked off the earnings season for the energy majors on Thursday with an emphasis on restraint despite reporting their highest profits in four years, a possible indication of what to expect from the rest of the industry. Analysts are forecasting record cash flows for crude drillers after oil prices surged, prompting fears the industry would return to lavish spending. Morgan Stanley last week said that the 46 percent advance in international oil prices from the third quarter of 2017 will fuel the biggest profit jump since prices began to crash in 2014. Equinor Chief Executive Officer Eldar Saetre pledged to keep a sharp focus on costs as the market recovers. His words were met by actions as the company trimmed its 2018 budget by 9.1 percent to $10 billion, even as cash flow surged. ConocoPhillips, the largest independent explorer, disclosed results that trounced analysts’ estimates, but Chief Executive Officer Ryan Lance said on an earnings conference call it’s being "laser-focused on discipline." Conoco raised its full-year spending estimate 1.7 percent to $6.1 billion, citing decisions outside the company’s control such as drilling partners expanding operations. The Houston-based explorer handed almost $1 billion back to shareholders, part of a $9 billion expansion of buybacks announced in July. For 2019, Conoco expects capital spending to be roughly in line with this year’s drilling budget. Lance said that after years of cost-cutting and efficiency gains following the price crash, Conoco’s profits are back where they were in 2014, when Brent was closer to $100 a barrel. Brent traded at around $77 Thursday. 

U.S. Shale Has A Glaring Problem - Oil prices are down a bit, but are still close to multi-year highs. That should leave the shale industry flush with cash. However, a long list of U.S. shale companies are still struggling to turn a profit. A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) and the Sightline Institute detail the “alarming volumes of red ink” within the shale industry.“Even after two and a half years of rising oil prices and growing expectations for improved financial results, a review of 33 publicly traded oil and gas fracking companies shows the companies posting negative free cash flows through June,” the report’s authors write. The 33 small and medium-sized drillers posted a combined $3.9 billion in negative cash flow in the first half of 2018.The glaring problem with the poor financial results is that 2018 was supposed to be the year that the shale industry finally turned a corner. Earlier this year, the International Energy Agency painted a rosy portrait of U.S. shale, arguing in a report that “higher prices and operational improvements are putting the US shale sector on track to achieve positive free cash flow in 2018 for the first time ever.”The improved outlook came after years of mounting debt and negative cash flow. The IEA estimates that the U.S. shale industry generated cumulative negative free cash flow of over $200 billion between 2010 and 2014. The oil market downturn that began in 2014 was supposed to have changed profligate spending, pushing out inefficient companies and leaving the sector as a whole much leaner and healthier.“Current trends suggest that the shale industry as a whole may finally turn a profit in 2018, although downside risks remain,” the IEA wrote in July.“Several companies expect positive free cash flow based on an assumed oil price well below the levels seen so far in 2018 and there are clear indications that bond markets and banks are taking a more positive attitude to the sector, following encouraging financial results for the first quarter.”But the warning signs have been clear for some time. The Wall Street Journal reported in August that the second quarter was a disappointment. The WSJ analyzed 50 companies, finding that they spent a combined $2 billion more than they generated in the second quarter.The new report from IEEFA and the Sightline Institute add more detail the industry’s recent performance. Only seven out of the 33 companies analyzed in the report had positive cash flow in the first half of the year, and the whole group burned through a combined $5 billion in cash reserves over that time period.Even more remarkable is the fact that the negative financials come amidst a production boom. The U.S. continues to break production records week after week, and at over 11 million barrels per day, the U.S. could soon become the world’s largest oil producer. Analysts differ over the trajectory of shale, but they only argue over how fast output will grow.Yet, even as drillers extract ever greater volumes of oil from the ground, they still are not turning a profit.

U.S. Shale's Glory Days Are Numbered - There are some early signs that the U.S. shale industry is starting to show its age, with depletion rates on the rise.  A study from Wood Mackenzie found that some wells in the Permian Wolfcamp were suffering from decline rates at or above 15 percent after five years, much higher than the 5 to 10 percent originally anticipated. “If you were expecting a well to hit the normal 6 or 8 percent after five years, and you start seeing a 12 percent decline, this becomes more of a reserves issue than an economics issue,”  . As a result, “you have to grow activity year over year, or it gets harder and harder to offset declines.” Moreover, shale wells fizzle out much faster than major offshore oil fields, which is significant because the boom in shale drilling over the past few years means that there is more depletion in absolute terms than ever before. A slowdown in drilling will mean that depletion starts to become a serious problem. A separate study from Goldman Sachs takes a deep look at whether or not the shale industry is starting to see the effects of age. The investment bank says the average life span for “the most transformative areas of global oil supply” is between 7 and 15 years. U.S. shale is entering the lower end of this range at about 7 years. While shale is still growing, there are some signs that the “Shale Tail,” which Goldman says is “the phase when shale becomes a less meaningful driver of global oil supply,” may not be that far off. Goldman lays out the five signals to watch out for, which would indicate that the glory days of shale are over. Although Goldman says the real trouble may be a few years off, there is some evidence that some of those dynamics are beginning to occur. The investment bank offers a breakdown as follows:

• 1. When inventory is being revised down, not up. This is already occurring in some areas, such as the Eagle Ford. Goldman notes that EOG Resources’ inventory fell in the Eagle Ford in the second quarter, with the company having drilled more wells than it added in new areas.
• 2. When well productivity stops improving. This one is inconclusive although perhaps it is beginning to become a concern. Goldman notes that the industry posed explosive productivity gains in 2017, but those gains slowed this year. Decline rates have accelerated in the Eagle Ford and Delaware Basin, but in the aggregate, there may still be some room for improvement for a little while.
• 3. When supply cost rises for structural reasons. Costs have climbed recently, but largely because of cyclical reasons, Goldman argues. High rates of drilling have created bottlenecks and pushed up costs, but those would come down if the cycle soured. It is still early for this metric.
• 4. When capital shifts to other regions. This looks the least threatening of the five warning signs. U.S. shale remains a top priority and the oil majors have stepped up their spending in shale, pivoting out of other regions. Spending on non-OPEC non-shale crashed post-2014 and hasn’t recovered. There has been some shifting of capital within shale plays – such as from the Permian to the Eagle Ford and the Bakken – but this is mostly due to pipeline constraints.
• 5. When growth is no longer impactful/meaningful (lagging indicator). Goldman Sachs still sees U.S. shale adding 1 million bpd+ at least through 2020. This indicator won’t become clear until the production gains actually start slowing down.

Why U.S. Shale May Fall Short Of Expectations - The U.S. shale industry may not grow as much, or at least as fast, as everyone thinks it will, according to a top industry executive.The drilling frenzy in West Texas is not only facing pipeline constraints – an issue that is very well-publicized at this point – but also some operational problems. Schlumberger’s CEO Paal Kibsgaard says that the shale industry is running into some productivity issues that might mean that shale growth ends up undershooting many of the heady growth forecasts.“[T]the well-established market consensus that the Permian can continue to provide 1.5 million barrels per day of annual production growth for the foreseeable future is starting to be called into question,” Kibsgaard said in an earnings call with analysts. Pipeline woes are indeed causing a slowdown in the Permian, but this isn’t the only problem. “Instead, we believe the main challenge in the Permian going forward is more likely to be reservoir and well performance as the rate of infield drilling continues to accelerate,” Kibsgaard said.At issue is the density and proximity of the zillions of shale wells drilled in places like the Eagle Ford and the Permian. In recent years, the industry increased the density of shale wells, stacking them closer and closer together. One well pad could host a greater number of wells. Companies also drilled longer laterals, used more sand and more water, and the improved returns seemed obvious. However, more recently, this intensification is bumping up against their limits. In the Eagle Ford, there is evidence to suggest that packing too many wells too close together actually reduces productivity, as wells interfere with each other. It’s a problem known as “parent-child” well interference, or “well-to-well” interference, as each additional well shooting off from a main “parent” well adds productivity, but only up to a certain limit. Beyond that threshold, additional wells start to reduce productivity

Prices Edge Higher As Storage Deficits Remain Large And Weather Remains Bullish - Highlights of the Natural Gas Summary and Outlook for the week ending October 19, 2018 follow. The full report is available at the link below.

• Price Action: The November contract rose 8.9 cents (2.8%) to $3.250 on an 18.5 cent range ($3.340/$3.155).
• Price Outlook: Prices continued higher but were unable to post either a new high or low and thus had a rare inside week. Since 2000, only 92 weeks of the 981 weeks witnessed an inside week. Physical data turned bearish this week with storage changes now indicating more bearish temperature adjusted changes. See our daily publication for more details. There will not be another +100 bcf injection this year with the +106 injection from May 11 the only one record for 2018.
• Weekly Storage: US working gas storage for the week ending October 12 indicated an injection of +81 bcf. Working gas inventories rose to 3,037 bcf. Current inventories fall (609) bcf (-16.7%) below last year and fall (596) bcf (-16.4%) below the 5-year average.
• Supply Trends: Total supply rose 0.6 bcf/d to 82.6 bcf/d. US production rose. Canadian imports rose. LNG imports rose. LNG exports fell. Mexican exports fell. The US Baker Hughes rig count rose +4. Oil activity increased +4. Natural gas activity increased +1. The total US rig count now stands at 1,067 .The Canadian rig count fell (4) to 191. Thus, the total North American rig count was unchanged at +0 to 1,258 and now exceeds last year by +143. The higher efficiency US horizontal rig count fell (1) to 926 and rises +155 above last year.
• Demand Trends: Total demand rose +0.8 bcf/d to +70.2 bcf/d. Power demand rose. Industrial demand rose. Res/Comm demand fell. Electricity demand fell (4,278) gigawatt-hrs to 74,100 which trails last year by (800) (-1.1%) and exceeds the 5-year average by 2,294 (3.2%%).
• Nuclear Generation: Nuclear generation fell (5,035)MW in the reference week to 77,759 MW. This is (8,933) MW lower than last year and (4,855) MW lower than the 5-year average. Recent output was at 78,851 MW.

The heating season has begun. With a forecast through November 2 the 2018/19 total cooling index is at (82) compared to (103) for 2017/18, (31) for 2016/17, (37) for 2015/16, (72) for 2014/15, (101) for 2013/14, (105) for 2012/13 and (101) for 2011/12.   Natural Gas Summary and Outlook for the week ending October 19, 2018 (pdf)

Long-Range Warming, Record Production Send Nymex Natural Gas Futures Plunging - Despite significant cold in medium-range weather outlooks, natural gas futures prices plummeted Monday as milder risks showed up in longer-range forecasts and production reportedly set fresh highs during the weekend. The Nymex November futures contract fell 11.2 cents to $3.138, while December dropped 9.5 cents to $3.214 and the winter strip (November-March) plunged 9.5 cents to $3.173. Spot gas prices were mixed as cooler weather in the Southeast drove prices lower there, while colder conditions in the eastern United States drove up prices in the Northeast and Appalachia. The NGI National Spot Gas Avg. rose 11 cents to $3.235. With weeks to go before winter, unseasonably chilly temperatures for much of October so far have kept weather front and center for the natural gas market. The last two weeks of trading have seen the Nymex futures curve flip flop throughout the week depending on which way the latest weather models trended. Monday was no different as the November contract opened the session several cents lower and then dropped as low as $3.137 before eventually settling just a few notches above that. Since last Thursday, both the Global Forecasting System and European weather models have been struggling to deal with a typhoon in the Western Pacific, leading to a huge range of possible outcomes in ensemble outlooks and large day-to-day and intraday forecast swings, according to EBW Analytics Group. Model guidance during the weekend added a rather significant amount of heating demand in the medium range, while also showing more clear signs of a pattern adjustment in the long range that would allow for more widespread ridging across the East with the Pacific/North American pattern gradually turning negative, Bespoke Weather Services said. The result would be to refocus any colder air back across the Great Plains later in Week 2 into Week 3, with heating demand quickly falling far below average across the eastern third of the country. 

October 25 Natural Gas Storage Report: Is December Contract Heading Towards 3.080? - Last week, the number of total degree-days (TDDs) jumped by more than 35% w-o-w, as heating demand more than doubled - particularly, in the Midwest and Northeast parts of the country. We estimate that total energy demand (as measured in total degree-days - TDDs) was no less than 60% above last year's level. Please note that during this time of the year, heating degree-days (HDDs) are driving natural gas consumption, while cooling degree-days (CDDs) no longer have any meaningful impacts. This week, the weather conditions cooled down again, but to a lot lesser extent. We estimate that the number of HDDs will increase by 8% w-o-w in the week ending October 26. However, total energy demand (measured in TDDs) should still be some 30% above last year's level. Next week, the weather conditions are expected to remain broadly unchanged. The number of HDDs is currently projected to remain flat w-o-w for the week ending November 2. On balance, total energy is projected to drop by 2.0% w-o-w (see the chart below).  The latest numerical weather prediction models are showing above normal HDDs and TDDs over the next 15 days (October 24-November 8). Consumption-wise, the latest weather models are bullish in absolute terms, but not as bullish as previously. Total demand is expected to average 80.0 bcf/d over the next 15 days (some 20% above 5-year average), supported (in part) by strong exports - specifically, into Mexico, which hit 5.2 bcf on October 24, an all-time record. Natural gas consumption is also supported by a number of non-degree-day factors such as higher nuclear outages. As of Wednesday, there were a total of 22,300 MW of nuclear power generation offline (-200 MW from Tuesday, but +15% vs. 5-year average). Although the deviation of nuclear outages from the historical norm has been moderating lately, the absolute figures are still high. \ Overall, while total demand remains strong, its deviation from historical norm is declining. We currently estimate that it will drop to only 5% by mid-November, before growing again (see the chart below). At the same time, we estimate that total natural gas supply will remain no less some 15% above 5-year average over the next three months (at least).

Loose Storage Print, Potentially Mild Mid-November Pressure Natural Gas Futures Overnight - November natural gas futures were trading 4.7 cents lower at $3.155/MMBtu shortly before 9 a.m. ET Friday, with the market processing the implications of loose government storage data as forecasters pointed to milder long-range temperature risks.  Bespoke Weather Services increased its total gas-weighted degree day expectations overnight for the next two weeks, factoring in less intense warmth in the long-range and a stretch of above average demand beginning next Friday (Nov. 2) through Nov. 5. “However, climate guidance continues to show that the middle of November will have sizable warm risks across the East, something we agree with as well,” Bespoke said. “European guidance similarly shows any cold shot being fleeting in the medium-range, as though it may briefly boost heating demand it is unlikely to stick around, and the upstream tropical forcing signal favors further warming to the forecast.” In addition to the medium-range cold potential, Bespoke also pointed to “evidence of balance tightening” weighed against Thursday’s “incredibly loose” Energy Information Administration (EIA) storage report. “A small cash bounce is possible with cash trading so far above prompt month prices yesterday, but any morning bounce appears likely to fail with these more bearish forecasts and easing storage concerns,” the firm said. Despite tightening from nuclear outages, record liquefied natural gas exports and low Canadian imports, with record-level production and “forecasts expected to only trend in a more bearish direction through the weekend,” the $3.10 area could be tested Friday and is “quite likely to break on warmth next week.” The EIA reported a 58 Bcf injection into storage inventories for the week ending Oct. 19, although the implied flow was an even greater 63 Bcf build because of a reclassification of 5 Bcf that decreased working gas in South Central non-salt gas stocks. Working gas in storage as of Oct. 19 was 3,095 Bcf, 606 Bcf less than last year at this time and 624 Bcf below the five-year average of 3,719 Bcf. While the inventory deficit to the five-year minimum increased with this week’s EIA report, “weather-adjusted, the market was about 3.0 Bcf/d oversupplied,”  “U.S. dry gas production continues to ramp up about 0.85 Bcf/d week/week (w/w) to 86.5 Bcf/d as the Northeast has increased 3.1 Bcf/d since the end of June.

Analysis: US LNG to Asia in question as prices fall, shipping costs rise Falling spot LNG prices in Asia and record-high shipping rates could deter the movement of US cargoes to the region this winter as offtakers seek higher-value markets for export. Not registered? Receive daily email alerts, subscriber notes & personalize your experience. Register Now On Wednesday, the prompt-month Platts JKM, the benchmark price for spot-traded LNG in northeast Asia, slumped to $10.20/MMBtu, S&P Global Platts data shows. After climbing to a four-year high at over $12/MMBtu in September, the prompt-month contract has since lost more than 15% of its value, trading as low as $9.87/MMBtu earlier this month. Weaker prices have come mostly on limited prompt-month buying interest from northeast Asian end-users in recent weeks. Falling prices for Brent crude, which sank below $80/b on Tuesday, have also made oil-linked supply contracts cheaper, putting additional pressure on the spot-market. As the JKM continues to trend lower, record-high LNG shipping rates are also narrowing the margin for profit on US exports. On Wednesday, the Asia Pacific rate climbed to its highest on record at $170,000/d. In the Atlantic Basin, the Platts-assessed rate of $140,000/d is now at its highest since 2012. In just the past two weeks, tightening supply in the spot-shipping market has seen rates in both basins surge from around $100,000/d to current levels. With 2018 expected to be a record growth year for the global LNG shipping fleet, the market isn't fundamentally short on tonnage. But with many chartered vessels currently unavailable for hire, there's no telling how long the spot-shipping crunch could last.

Ship scarcity threatens LNG market growth more than tight supply – IEA - The lack of timely investments in building the LNG carrier fleet threatens market development and security of supply, which could materialize earlier than insufficient liquefaction capacity, Keisuke Sadamori, Director of the Office for Energy Markets and Security at the International Energy Agency, said earlier this week. The Paris-based energy watchdog's comments come against the backdrop of LNG carrier spot rates hitting record levels. The Pacific and Atlantic shipping rates have touched $170,000/day and $140,000/day respectively, and Atlantic and Pacific ballast rates remain steady at 125% and 150% respectively, according to S&P Global Platts data.The IEA's projections show that spare fleet capacity in the LNG market was sustained well above 15% between 2015 and 2018, but starts to decline sharply from 2019 onwards into single digits, and drops below zero by 2022-2023, indicating severe vessel shortages. "Changes in the LNG market challenge the traditional LNG shipping business model," Sadamori said on the sidelines of the LNG Producer Consumer Conference in Nagoya on Monday. He said current liquefaction projects led to many new vessel deliveries, which reach a peak in 2018, but this may not be sufficient for new supply by 2020. Shipping investment has been under pressure as the banking sector has pulled bank due to sharp losses and write-downs incurred in the last decade as shipping companies reeled from heavy losses and oversupply. Rising interest rates and tighter money supply have raised concerns about new investment in LNG shipping. "Under the move towards a more volatile and flexible business environment, the shipping industry must find new ways of mitigating credit risks to incentivize shipping investment,"

The low-cost gas supply driving the LNG Canada project, part 2. -  LNG Canada, the newly sanctioned liquefaction/LNG export project in British Columbia, is an entirely different animal than its operational and under-construction counterparts in the U.S. The Shell-led LNG Canada project is being developed without any of the long-term offtake contracts that financed Sabine Pass, Cove Point and the projects now being built along the Louisiana and Texas coasts, and it requires the construction of a new, long-haul pipeline — Coastal GasLink. What’s also different is that the BC project’s co-owners have been developing their own gas reserves to supply the project, though they may also turn to the broader Montney and Duvernay markets for the gas they will need. Today, we conclude a two-part series with a look at how the project expects to undercut its U.S. competitors. As we said in Part 1 of this series, the initial phase of LNG Canada that achieved final investment decisions (FIDs) by Shell and its four project partners will consist of two 7-million-tonne-per-annum (MMtpa) liquefaction trains, each demanding about 900 MMcf/d of gas. The project site (yellow triangle in Figure 1) is near the mouth of the Douglas Channel in Kitimat, a town about 400 miles up the BC coast from Vancouver. Natural gas to supply the liquefaction trains will be transported from northeastern BC via TransCanada’s planned 420-mile, 2.1-Bcf/d Coastal GasLink pipeline (dashed orange-and-black line). The LNG export project is a long-term boon to Western Canadian gas producers, but it won’t come online until at least 2023 or 2024. That’s an eternity for producers in the region’s Montney and Duvernay shale plays, who through much of 2018 have been enduring profit-crushing price discounts for their gas relative to Henry Hub. We’ve chronicled the challenges faced by these producers in a number of blogs (including Montney’s Python, Don’t Do Me Like That and On the Border); an overriding theme is that while producers in the Montney and Duvernay have competitively low production costs, they are being squeezed out of many of their traditional markets — especially the U.S. Northeast and Midwest, plus Eastern Canada — because of soaring gas output in the Marcellus/Utica.

B.C. Faces Gas Shortage As Winter Approaches - A natural gas pipeline explosion that occurred earlier this month near the city of Prince George will reduce supply to British Columbia by between 20 and 50 percent this winter, the gas distribution company said in a statement.FortisBC said that although it had planned on having the ruptured pipe up and running by mid-November, it will not be able to fill it to capacity. At best, it would operate at 80 percent of capacity for the winter.To compensate, FortisBC said it was in talks with TransCanada to increase the flow along the Southern Crossing pipeline from Alberta. At the same time, the company said, it was working with industrial gas consumers to optimize their consumption. In its update, the company appealed to household consumers to also try and optimize their consumption of the fuel during peak demand season.The Enbridge-operated pipeline that exploded in early October is what FortisBC uses to transport as much as 85 percent of the natural gas it supplies to customers in British Columbia. The blast led to the evacuation of 100 people and forced the residents of British Columbia and the state of Washington to cut their gas consumption. At the time, FortisBC announced as many as 700,000 customers faced a temporary lack of access to natural gas because of the explosion. That’s more than two-thirds of the company’s customer base.Now that the inconvenience for gas consumers is set for a considerable extension, chances are that the anti-pipeline sentiment in the province, which became notorious for its opposition to the Trans Mountain expansion project, will deepen as the necessary cutbacks highlight consumers’ dependence on the pipeline network.Yet at the same time B.C. has just become the proud home of Canada’s first-ever LNG production and export project, LNG Canada, which received its final investment decision earlier this month.

Electricity can defuse LNG’s ‘carbon bomb,’ study says -- A liquefied natural gas industry can be developed without blowing B.C.’s carbon diet, but only if the industry is extensively electrified, according to a new Clean Energy BC white paper. “In all but the most aggressive decarbonization pathway scenarios, liquid and gaseous fossil fuels – including liquid natural gas (LNG) – will continue to play a leading role well into the decades of this century,” the white paper states. But without extensive electrification, an LNG industry would make it difficult for B.C. to meet its greenhouse gas (GHG) reduction targets, the white paper states. It estimates “extensive electrification” of the Montney region in northeastern B.C., where the natural gas for the $40 billion LNG Canada project would be produced, could reduce upstream emissions by 60%. Some electrification of the natural gas sector in northeastern B.C. has already occurred, as a recent tour of Shell Canada’s Groundbirch operation showed. And more is on the way, thanks to BC Hydro’s new $298 million Peace Region Electricity Supply (PRES) project, which is now in early construction. Shell’s Groundbirch region, south of Fort St. John, includes 500 natural gas wells, two large natural gas processing plants and two smaller ones. The newest and largest, the Saturn plant, is something of a showpiece for the industry. It is fully electric, with power transmission lines provided through the Dawson Creek-Chetwynd Area Transmission (DCAT) project. According to the BC Oil and Gas Commission, 13 of 110 gas plants in B.C. are electrified. Clean Energy BC estimates that electrifying the Peace region’s gas sector has already reduced emissions by two million tonnes of carbon dioxide equivalent (CO2e).

Minor earthquakes detected near fracking site in Lancashire - A series of small earthquakes have been detected in Lancashire close to the site where fracking operations began this week. The British Geological Survey (BGS), which provides impartial advice on environmental processes, recorded four tremors in the vicinity of the energy firm Cuadrilla’s site on Preston New Road near Blackpool on Friday.Fracking was stopped in 2011 after two earthquakes, one reaching 2.3 on the Richter scale, were triggered in close proximity to the site of shale gas test drilling. A subsequent report found that it was highly probable that the fracking operation caused the tremors.On Monday Cuadrilla began drilling again after campaigners lost a high court legal challenge.The BGS said: “Since hydraulic fracturing operations started at Preston New Road, near Blackpool, we have detected some small earthquakes close to the area of operations.“This is not unexpected since hydraulic fracturing is generally accompanied by micro-seismicity. The Oil and Gas Authority (OGA) has strict controls in place to ensure that operators manage the risk of induced seismicity.“All of the earthquakes detected at Preston New Road so far are below the threshold required to cease hydraulic fracturing.”  One of Friday’s tremors measured 0.3, the level beyond which t he BSG says hydraulic fracking should proceed with caution. Tremors above 0.5 would force operations to cease.

Blackpool suffers FOUR earthquakes in just two days after fracking restarts in the area despite protests - Blackpool has been hit by four earthquakes in two days – after fracking was restarted in the area this week.The most recent quake occurred yesterday afternoon at an amber level on the official monitoring scale, which means ‘proceed at caution’.Firms stopped fracking in Lancashire in 2011 after two earthquakes, and experts now fear further disturbances. Blackpool has been hit by four earthquakes in two days – after oil and gas firm Cuadrilla started fracking in the area again. But oil and gas firm Cuadrilla started drilling again on Monday after campaigners lost a last-ditch legal battle to stop them at the High Court.David Smythe, emeritus professor of geophysics at the University of Glasgow, warned that ‘there may be trouble ahead’ if work continues.He said: ‘Recent research by Stanford University shows that these tiny tremors can be indicators of bigger quakes to follow – like canaries in a coal mine. The problem for Cuadrilla is that if it carries on regardless, bigger earthquakes may well be triggered. Blackpool has been a focal point for the anti-fracking movement after the 2011 quakes. One reached 2.3 on the Richter scale on April 11. Fracking for shale gas was ceased in the UK in 2011 after one tremor of magnitude 2.3 hit the Fylde coast. Pictured: Protesters campaigned against the process being restarted Cuadrilla was ordered to stop all work shortly after the second smaller shock on May 27, 2011. Preliminary studies by the British Geological Society suggested the tremors were linked to fracking. Blackpool was hit by three minor quakes on Thursday at 3.48pm, 10.54pm and 11.44pm. They were at minus levels of seismic activity, only picked up on specialist equipment. Yesterday at 1.20pm the area was hit by an earthquake with a 0.3 magnitude – which would still not have been felt by residents.

Tremors Interrupt First UK Fracking Attempt in 7 Years -- A little over a week after fracking restarted in the UK, it's been paused again due to seismic activity, The Guardian Reported.Cuadrilla Resources, the company fracking two wells at the Preston New Road site in Lancashire in northwest England, confirmed Tuesday they had paused operations for the day after a tremor registered a magnitude of 0.4. Tuesday's tremor was only the largest of six that have been detected near the site since Cuadrilla began fracking again, The British Geological Survey said."It is only what we've been expecting as it is an undisputed consequence of extreme energy extraction," Gail Hodson of Frack Free Lancashire told The Guardian. "It highlights the fact that all the regulation in the world, even if it was gold standard, cannot stop seismic activity.Fracking was originally stopped in the UK in 2011 because of two earthquakes near the fracking site, one reaching a magnitude of 2.3. When British energy and clean growth minister Claire Perry approved the two new wells in July and September of this year, the government set up a traffic light system to monitor seismic activity and stop fracking if any tremor exceeded a magnitude of 0.5.  Since Tuesday's tremor wasn't quite that high, Cuadrilla explained their actions as an abundance of caution in a statement reported by ITV News: This is an extremely low level of seismicity, far below what could possibly be felt at the surface but classed as an amber event as part of the Traffic Light System (TLS) in place for monitoring operational activity. As such we are required to reduce the rate we are pumping fracturing fluid once it has been detected.

Fracking firm Cuadrilla vows to carry on after SIXTH earthquake - Fracking firm Cuadrilla has vowed to carry on after halting drilling on Tuesday following another tremor which broke out on their site in Lancashire. The seismic event, which measured 0.4 on the Richter Scale, was detected yesterday on the actual grounds of their operation in Little Plumpton while drilling was carried out, and is the sixth quake in the past six days in the area.Cuadrilla, which only resumed fracking on Monday last week, adheres to the 'traffic light system' regulations which measure tremors and registered this one on the amber level, which means 'proceed with caution'.It halted drilling for the rest of the day but confirmed operations were back to normal today.     The firm said: 'This is an extremely low level of seismicity, far below what could possibly be felt at the surface.'But it was classed as an amber event as part of the Traffic Light System (TLS) in place for monitoring operational activity.'As such we are required to reduce the rate we are pumping fracturing fluid once it has been detected.  'In fact we have adopted extra caution and have stopped pumping for the day.''Seismicity will, as always, continue to be monitored closely around the clock by ourselves and others and we plan to continue hydraulic fracturing again in the morning.'Local residents should be reassured that the monitoring systems in place are working as they should.

Fracking halted again in Lancashire after 17th earthquake in 9 days -  Another earthquake has hit a fracking site in Lancashire – this time reaching levels where operations must be stopped.It is the 17th earthquake in 9 days and has officially been classed as a ‘red event.’ The latest – and biggest – tremor happened this morning on land where energy firm Cuadrilla is drilling for shale gas. Campaigners are calling for an end to fracking after the latest quake in Lancashire (Picture: Getty)M 0.8 "red" event recorded at the hydraulic fracturing site in Lancashire, UK by the BGS and confirmed by the operator, Cuadrilla. Regulations mean that injection operations must be paused for at least 18 hours – i.e. probably until Monday.https://t.co/MHey0chBaN    The seismic event, measured 0.8 on the Richer Scale, and was detected on the grounds of their Preston New Road site. Earlier this week, the group voluntarily stopped drilling after a 0.4 event was detected. However regulations mean that injection operations must be paused for at least 18 hours although the firm plan to start again tomorrow. Campaigners, who lost a High Court bid to stop fracking, have demanded the firm stop following the latest set of quakes. Rose Dickinson, Friends of the Earth campaigner, said: ‘Fracking only started 11 days ago. In that time there have been 17 earthquakes, including one today that has reached a red warning level – which means work at the site has to stop. ‘This is obviously deeply concerning for those living nearby and why the industry must be closely monitored. ‘We’ve known all along that fracking poses risks to our environment and our climate. When is the government going to realise that fracking is the wrong choice for Lancashire, the UK and our global climate?’ In 2011, fracking was halted for seven years after experts said two Lancashire tremors – one registering 2.3 magnitude – were caused by shale gas test drilling.

$43B Slated for North Sea Projects Through 2025 - Sixty-seven oil and gas projects offshore four North Sea countries should start up through 2025, representing $43.1 billion in investment, according to a new report from GlobalData.“In 2025, key projects in the North Sea are expected to contribute about 1,327.4 thousand barrels of oil per day (Mbd) of global crude and condensate production and about 1,924.4 million cubic feet per day (MMcfd) of global gas production,” Jonathan Markham, GlobalData energy analyst, said in a written statement emailed to Rigzone.In its report, “H2 2018 Production and Capital Expenditure Outlook for Key Planned Upstream Projects in the North Sea, GlobalData states that approximately $18.9 billion will be spent to bring the planned projects online and $24.2 billion will go toward key announced projects. Markham pointed out that the U.K. sector of the North Sea boasts 11 planned oil and gas projects – the highest number among the countries. Norway will host eight projects and the Netherlands two, he added.“The UK also leads in terms of announced projects with 25, followed by Norway and the Netherlands with 18 and two, respectively,” said Markham.A breakdown of anticipated project starts in the North Sea countries, including Denmark, appears in this graph provided by GlobalData. In terms of capital expenditure through 2025, Norway tops the list with an anticipated $21.2 billion, stated GlobalData. Of this total, $12.8 billion will go to key planned projects and the remaining $8.4 billion is slated for announced projects, the consultancy noted. The planned UK CAPEX for the period follows at $20.2 billion - $5.6 billion for key planned projects and $14.6 billion on announced project, added the firm

At least 26 beaches affected by oil spill in southern France - Oil has washed up on at least two dozen beaches in the south of France following a collision between two cargo ships near Corsica some two weeks ago, according to local authorities and media reports. On Friday, officials from the prefecture of Toulon said a total of 26 beaches in nine municipalities had been affected, warning local residents not to touch the oil. On Sunday, the Var-Matin regional newspaper reported that the Almanarre beach, south of the town of Hyeres, had also been affected and was closed to visitors. The prefecture had previously reported that the town of Saint-Tropez on the French Riviera was affected, along with two other nearby towns. Clean-up operations continued over the weekend, local media reported. Citing a high-ranking official from the prefecture, news agency AFP reported that a complete elimination of the oil could take months. French and Italian authorities launched a clean-up operation after the two freight ships collided, but were unable to contain all of the oil.

Europe’s liquefied natural gas imports have increased lately, but remain below 2011 peak - Imports of liquefied natural gas (LNG) to the 28 countries that make up the European Union (EU-28) averaged 5.1 billion cubic feet per day (Bcf/d) in 2017, increasing for the third consecutive year but remaining below their 2011 peak. In 2017, imports of LNG into EU-28 accounted for 13% of the global total. LNG import capacity in EU-28 currently stands at 20 Bcf/d, or almost one-fifth of the global total, but utilization of EU-28 LNG import facilities has declined from about 50% in 2010 to between 20% and 25% in recent years as expansions in regasification capacity far exceeded demand for LNG imports. Currently, 13 of the EU-28 member countries import LNG. In 2017, LNG accounted for 11% of EU-28’s overall natural gas supply. Domestic natural gas production in EU-28, two-thirds of which is in the United Kingdom and the Netherlands, has steadily declined in recent years and in 2017 accounted for 25% of EU-28 natural gas supply. European natural gas production is expected to continue to decline because of an aging, mostly depleted resource base. In addition, the Netherlands’ largest natural gas field, Groningen, has been subject to increasingly strict production reduction measures.  Imports of natural gas by pipeline, in particular from Russia and Norway, have increased. In 2017, natural gas imports from Russia provided 35% of the total EU-28 supply and Norway provided 24%. In the first six months of 2018, pipeline imports from Russia continued to increase, averaging a record 17.1 Bcf/d, 8% higher than in the same period last year, based on data from S&P Global Platts.

Berlin mulls terminal for US Liquefied Natural Gas - Chancellor Angela Merkel’s spokesman Steffen Seibert said that “private investors are now studying the construction of an LNG terminal at various potential sites … and the government is studying options for funding under existing federal programmes”. The terminals would be needed to unload and store LNG from American tankers and convert it back into gas. According to the US daily, Merkel wants to help finance a 500 million euro ($575 million) project, through either subsidies, loans, credit guarantees or loss protection for investors or a mixture of the four. Merkel’s spokesman insisted that any decision to build an LNG terminal would be made regardless of US pressure but “based on Germany’s and Europe’s interest in having a diversified, secure, competitive and affordable infrastructure for energy imports”.

Europe's Gas Game Just Took A Wild Twist --  Despite the almost unprecedented divisive nature of Donald J. Trump’s presidency, he is chalking up some impressive foreign policy victories, including finally bringing Beijing to task over its decades long unfair trade practices, stealing of intellectual property rights, and rampant mercantilism that has given its state-run companies unfair trade advantages and as a result seen Western funds transform China to an emerging world power alongside the U.S. Now, it looks as if Trump’s recent tirade against America’s European allies over its geopolitically troubling reliance on Russian gas supply may also be bearing fruit. On Tuesday, The Wall Street Journal reported that earlier this month German Chancellor Angela Merkel offered government support to efforts to open up Germany to U.S. gas, in what the report called “a key concession to President Trump as he tries to loosen Russia’s grip on Europe’s largest energy market.”Over breakfast earlier this month, Merkel told a small group of German lawmakers that the government had made a decision to co-finance the construction of a $576 million liquefied natural gas (LNG) terminal in northern Germany, people familiar with the development said.The project had been postponed for at least a decade due to lack of government support, according to reports, but is now being thrust to the center of European-U.S. geopolitics. Though media outlets will mostly spin the development, this is nonetheless a geopolitical and diplomatic win for Trump who lambasted Germany in June over its Nordstream 2 pipeline deal with Russia.In a televised meeting with reporters and NATO Secretary-General Jens Stoltenberg before a NATO summit in Brussels, Trump said at the time it was “very inappropriate” that the U.S. was paying for European defense against Russia while Germany, the biggest European economy, was supporting gas deals with Moscow.Both the tone and openness of Trumps’ remarks brought scathing rebukes both at home and among EU allies, including most media outlets. However, at the end of the day, it appears that the president made a fair assessment of the situation. Russia, for its part, vehemently denies any nefarious motives over its gas supply contacts with its European customers, though Moscow’s actions in the past dictate otherwise.Moscow also claims that the Nordstream 2 gas pipeline is a purely commercial venture. The $11 billion gas pipeline will stretch some 759 miles (1,222 km), running on the bed of the Baltic Sea from Russian gas fields to Germany, bypassing existing land routes over Ukraine, Poland and Belarus. It would double the existing Nord Stream pipeline’s current annual capacity of 55 bcm and is expected to become operational by the end of next year.

Russia Discusses Big Projects With Exxon As New Sanctions Loom  - While U.S. legislators are discussing new sanctions on Russia that would increase economic pressure on Moscow by possibly expanding sanctions to the banking and energy industries, Russia is said to be in talks with U.S. supermajor ExxonMobil over possible new oil and gas projects currently beyond the scope of the sanctions.Russia’s discussions with Exxon could potentially lead to increased cooperation between the American company and Russia’s state-held Rosneft, the biggest oil producer in the country, Bloomberg reports, quoting Russian government officials.Russia has drafted several proposals to put up for discussion with Exxon for projects in natural gas, chemicals. These projects are for now outside the scope of the existing U.S. sanctions on Russia, two unnamed Russian officials told Bloomberg.If Exxon were to decide to go ahead with any of the possible projects, an agreement may come by the end of this year, one official told Bloomberg.The Russian offer for new cooperation projects comes as U.S. lawmakers discuss extending sanctions on Russia to energy and oil projects and sovereign debt markets in what Republican Senator Lindsey Graham called a “sanctions bill from hell.”Earlier this year, U.S. officials said that existing sanctions had limited “important investment in exploratory energy projects needed to help grow Russia’s oil and gas production capacity.” Total foreign direct investment into Russia has declined more than 5 percent since 2013, while U.S. investment has plunged by 80 percent since then

Are Claims Of Peak Oil Production In Russia Overblown? - Russian authorities have announced that domestic oil production hit 11.36 million barrels per day (bpd), on average, in September (Vedomosti, October 2). This marks a new historic peak, rea­ched despite the often-cited poor shape of the Russian economy and negative impact of Western sanctions, not to mention the restrictions self-imposed on Moscow by the 2016 deal with the Organization of the Petroleum Exporting Countries (OPEC) (see Jamestown.org, March 8).  Could Russia’s oil output continue to grow in the years to come?  To com­pare, oil output in Kazakhstan was, in 2017, 3.3 times higher than in 1989; while last year’s production in Azerbaijan, whose deposits were previously considered the most exhausted in all of the Union of Soviet Socialist Republics (USSR), were 2.9 times greater than that recorded in the Azeri SSR for 1990 (Bp.com, June 2018, accessed October 17). This data proves a simple fact: output figures in the former Soviet space have depended strongly on the presence of Western technology in the domestic industry and upon the governments’ efforts to explore new oil fields in order to substitute old and overexploited ones.   Even after around two decades of increasing investment, Russian oil companies still produce only 28–33 percent of oil from their wells; the average figure for British producers re­aches 42–43 percent (Neftegaz.ru, December 18, 2013; Ogauthority.co.uk, September 2017).  Were the recovery rates to rise at least to the average level of European firms, Russia would be able to add (at least theoretically) up to 800,000 barrels to its daily output. In fact, it would also result in longer service lives for existing oilfields.  Russia’s oil output has for years been held back by a lack of com­pe­tition in the domestic energy market. In too many cases, private companies are banned from exploring new deposits. Illustratively, only those corporations that are majority-controlled by the state may drill offshore or in the Far North territories. Additionally, giant (or so-called “strategic”) fields can be awarded to state-owned corporations (first of all to Gazprom, Ros­neft, or Gazpromneft) without obligatory auctions, and sometimes even for free (RBC, July 30, 2015). The result of these uncompetitive policies has been, in part, to keep overall production levels lower than they might otherwise have been.

First LNG Shipment Departs Ichthys - Inpex confirms that the first shipment of liquefied natural gas has departed from its operated Ichthys LNG project. Inpex Corporation confirmed Tuesday that the first shipment of liquefied natural gas (LNG) has departed from its operated Ichthys LNG project. The first LNG shipment is destined for the Inpex operated Naoetsu LNG terminal in Niigata Prefecture in Japan. Approximately 70 percent of the LNG produced by Ichthys LNG is scheduled to be supplied to Japanese customers, Inpex said in a company statement posted on its website. Ichthys is scheduled to gradually increase its production volume of LNG to approximately 8.9 million tons per year. “First cargo from Ichthys LNG is a historic moment for Inpex Japan and Australia. It demonstrates our commitment to being a safe, reliable long-term energy supplier,” Inpex President Director Australia, Seiya Ito, said in a company statement. “Ichthys is an iconic project for Australia. With an operating life of around 40 years, Ichthys LNG will be delivering benefits to the Australian economy and community for decades to come,” he added. The Australian Petroleum Production & Exploration Association (APPEA) Chief Executive, Malcom Roberts, said “industry applauds this first LNG shipment”. “This world-class LNG Project – seven years in the making – will deliver jobs, taxation and export revenues for Australia for decades to come,” Roberts added.

Colombia Ecopetrol cleans spill after latest bomb attack on Cano Limon pipeline (Reuters) - Colombia’s state-run oil company Ecopetrol is carrying out a clean-up operation after a bomb attack on the Cano Limon pipeline spilled crude into a waterway, the company said in a statement on Thursday. The attack on Wednesday, the seventy-sixth on the pipeline this year, had no immediate effect on exports or production at the Cano Limon field, operated by Occidental Petroleum, Ecopetrol said. Though the pipeline was not functioning at the time of the attack, some oil spilled into a creek in the La Blanquita area of Boyaca province, the company said. The 485-mile (780-km) pipeline, which can transport up to 210,000 barrels per day, has been off-line for much of this year because of bombings and illegal taps. The company did not name the group responsible for the bombing, but the pipeline is a frequent target of National Liberation Army (ELN) rebels. The ELN, considered a terrorist group by the United States and the European Union, has about 1,500 combatants and opposes multinational companies, claiming they seize natural resources without benefiting Colombians.

Nigeria: Clean-up of Ogoni oil spill to commence soon – Govt --The Minister of State for Environment, Alhaji Ibrahim Jibril, said on Monday that the Federal Government was set to commence the clean -up of oil spills in Ogoni land. Jibril told the News Agency of Nigeria (NAN) on the sideline of the 2018 International Day for Preservation of Ozone Lay in Abuja. He said that the exercise would begin before the end of this year. NAN recalls that the UN Environment Programme (UNEP) had recommended initial release of one billion dollars to be used for the clean-up of oil spills for over a period of five years. The clean-up exercise, according to UNEP, will take 25-30 years to restore the environment. Much of the funding for the clean-up is expected to come from the oil companies. The minister said that out of 200 million dollars expected from oil companies, 177 million dollars had been raised for the operation. "For 2018, 200 million dollars is expected but so far the joint venture partners and NNPC had been able to raise 177 million dollars for the operation, which will commence soon. "Right now, the procurement process is at the very last stage and very soon, we should be able to go to Federal Executive Council meeting to get approval for the contract to be awarded. "We believe that we should be able to go to the field in the fourth quarter of this year to commence remediation exercise," Jibril said. 

Big Oil Woos China With $24B Spree-- A Chinese archipelago that served as a pirate’s den in centuries past and was governed by President Xi Jinping in the new millennium is luring the world’s energy giants. State-run Saudi Arabian Oil Co. and U.S. behemoth Exxon Mobil Corp. were among firms that signed $24 billion in preliminary deals last Thursday at the International Petroleum and Natural Gas Enterprises Conference in Zhoushan -- the main island in a group of over 1,300 off China’s east coast. Saudi Arabia’s state oil company agreed to buy a stake in a refinery that his firm, Rongsheng Petrochemical Co., is building there. The high-profile deal illustrated the potential for Zhoushan and the wider Zhejiang province, in which the archipelago is located, to play an outsize role in energy markets. The local government’s ambition for a processing, storage and trading hub is spurring a rush for a piece of the pie. “China’s paramount position in the oil market today” is an important reason why almost 800 attendees were present at the IPEC gathering, said Janet Kong, who heads BP’s Asia trading business. “This position will become even bigger and heavier,” she said in a speech at the Oct. 18 event. While China is currently engaged in a trade war with the U.S. and its economy has slowed from the breakneck speeds of the previous decade, its demand for energy is still growing. It overtook America last year as the world’s biggest buyer of overseas crude and is now also the top importer of natural gas, ahead of Japan. As part of plans to revamp the economy, China has set up several free trade zones that typically feature fewer regulatory hurdles, greater transparency over government rules and looser restrictions for foreign investment. One such FTZ was established last year at Zhoushan in the province where Xi served as governor in the 2000s before he ascended to the nation’s presidency.

US concerned Russia to help Iran avoid oil sanctions -- The US is reportedly concerned that Russia could help Iran avoid sanctions by purchasing oil and then reselling it in the global market.The US is set to reimpose sanctions on 5 November with an aim to halt Tehran’s oil exports.The Trump administration decided to withdraw from 2015 nuclear pact,  which provided relief to Tehran from sanctions. Russia has been opposed to the decision of reimposing oil sanctions on Iran and withdrawing from the multilateral pact, which China, the UK, France, Germany and EU were also signatories.Following US decision to reimpose sanctions, its officials are now struggling to convince other countries to cut oil trade ties with Iran. They believe that Iran is exploring other supply channels, according to the Financial Times.A senior administration official was quoted by the financial publication as saying: “Iran might be pushing the idea of Russia selling their oil on the world market to evade sanctions.“Iran might be pushing the idea of Russia selling their oil on the world market to evade sanctions.”“I would discourage Russia from even considering this. It would be in Russia’s best interests not to facilitate Iranian evasion of US sanctions.”This warning was issued just as the Trump administration’s national security adviser John Bolton prepares to meet Russian counterpart in Moscow next week. Bolton would also visit Azerbaijan, which shares borders with Iran.US officials have been visiting countries that are Iran’s key oil consumers, including India, Japan and South Korea in an effort to make them halt their imports.The department spokesperson stated: “Our goal remains to get to zero oil imports from Iran as quickly as possible, ideally by 4 November.”The recent weeks have seen US officials preparing to provide special reduction exemptions to some oil consumers of Iran. This has increased the prospect of Iran continuing its oil exports to countries that indicate that they have reduced the total oil consumption from Tehran. A state department spokesperson told the Financial Times: “The United States is in the midst of an internal process to consider SRE waivers for individual countries.”

US issues warning to Russia about helping Iran escape upcoming oil sanctions - The United States warned Russia on Sunday about assisting any potential Iranian attempts to evade an upcoming round of U.S. sanctions against the Islamic Republic, scheduled to take effect on Nov. 4, months after U.S. President Donald Trump withdrew America from the 2015 nuclear deal. “Iran might be pushing the idea of Russia selling their oil on the world market to evade sanctions,” a senior administration official told The Financial Times. “I would discourage Russia from even considering this. It would be in Russia’s best interests not to facilitate Iranian evasion of U.S. sanctions.” This development comes as U.S. National Security Advisor John Bolton is expected to meet senior Russian officials in Moscow early next week. Russia supported the nuclear deal and supports Iran’s proxies, such as Syrian President Bashar Assad and Hezbollah in Lebanon. Additionally, U.S. Treasury Secretary Steve Mnuchin, visiting Israel this week, said on Sunday that it will be difficult for countries to receive waivers on Iran oil sanctions. “I would expect that if we do give waivers, it will be significantly larger reductions,” he said in an interview with Reuters.  In light of Bolton’s remarks in August about completely eliminating Iranian oil exports, “I don’t expect we will get to zero in November, but I do expect we will eventually get to zero,” added Mnuchin. “There have been already very significant reductions in advance of this date.”

Iran has produced and exported less crude oil since sanctions announcement – EIA - Iran's crude oil exports and production have declined since the May 2018 announcement by the United States that it would withdraw from the Joint Comprehensive Plan of Action (JCPOA) and reinstate sanctions against Iran.  The announcement included two wind-down periods to allow those doing business that involved Iran time to comply. On August 6, 2018, the first wind-down period ended and triggered the re-imposition of some sanctions. On November 4, 2018, the second wind-down period will end and trigger the re-imposition of full sanctions, including a number of measures that target Iran’s energy sector.  According to data from ClipperData, Iran's exports of crude oil and condensate peaked in June at about 2.7 million barrels per day (b/d), more than 300,000 b/d higher than the average during the first four months of the year (before the May announcement of sanctions). In September, Iran’s crude oil and condensate exports fell to 1.9 million b/d. Although some countries, such as France and South Korea, stopped importing crude oil and condensate from Iran in July, other countries continue to import from Iran. The United States has not imported crude oil and condensate from Iran in several decades. ClipperData indicates that China and India collectively received nearly half of Iran's crude oil and condensate exports in the first half of 2018. During this period, China's imports from Iran averaged 644,000 b/d and India's imports from Iran averaged 554,000 b/d. In September, China's imports from Iran dropped to 441,000 b/d, the second lowest level since December 2015, while India's imports from Iran were 576,000 b/d.  Whether Iran's energy exports are declining entirely because of the sanctions or for other reasons is unclear. Trade press reports indicate a willingness on India's part to at least partially comply with the sanctions, but China had continued to import from Iran even when previous sanctions were in effect. In response to the announcement of sanctions by the United States, the European Union passed a statute to protect European companies doing business in Iran from the effects of U.S. sanctions. Despite this effort, data from ClipperData indicate that France has not imported any crude oil or condensate from Iran since June. In addition, Italy’s and Spain’s imports from Iran in September were 27,000 b/d and 15,000 b/d lower than their averages for the first half of the year. Some countries could continue to import Iran's crude oil and condensate until the November 4 deadline, at which point they might stop importing from Iran.

Saudi Arabia Has No Plans to Repeat 1973 Oil Crisis -- Saudi Arabia has no intention of using its oil wealth as a political tool in the controversy over the killing of journalist Jamal Khashoggi, and the kingdom plans to boost crude output again soon. "For decades we used our oil policy as a responsible economic tool and isolated it from politics," Energy Minister Khalid Al-Falih said in an interview with Russia’s TASS news agency published on Monday. "So let’s hope that the world would deal with the political crisis, including the one with a Saudi citizen in Turkey, with wisdom," he said. Falih’s comments come just days after Saudi Arabia said Khashoggi, a critic of Crown Prince Mohammed bin Salman, was killed in the country’s consulate in Istanbul. While the official report won praise from U.S. President Donald Trump, many politicians and leaders in America and Europe questioned the official explanation that he was accidentally killed in an altercation. That contradicts details leaked by Turkish officials saying the journalist was murdered. The incident has damaged the kingdom’s image as a future investment hub, with global business leaders from Goldman Sachs Group Inc. to Uber Technologies Inc. distancing themselves from Prince Mohammed and scrapping plans to attend his business forum this week.  Last week, Saudi Arabia vowed to retaliate against any punitive measures linked to Khashoggi’s fate, fueling concerns of oil price hikes. Al-Falih said there’s no intention of repeating the 1973 oil embargo, in which the kingdom and several regional allies squeezed supplies to the U.S. and Europe in retaliation for their support for Israel. Saudi Arabia is ready to raise its output to 11 million barrels a day "in the near future" and has the ability to lift production as high as 12 million barrels a day if the market requires it, Al-Falih said. The world needs to show its appreciation of the efforts and multi-billion dollar Saudi investment that made this possible, he added. There are limits to the kingdom’s ability to respond, Al-Falih said. If the supply gap created by disruption in Libya, Nigeria, Venezuela -- as well as U.S. sanctions against Iran -- were to grow as large as 3 million barrels a day, Saudi Arabia would need to tap its oil reserves, he said. Joint work between the Organization of Petroleum Exporting Countries and non-OPEC oil producers needs to continue on a long-term basis, Al-Falih said. He expects the cooperation agreement, initially signed in late 2016, to be extended in December, at a meeting in Vienna. The deal "will allow us to intervene to rebalance the market in any appropriate time from January onward", he said. 

Two 'unstable' OPEC nations may decide whether oil takes another run at $100 a barrel - Two OPEC members could soon determine whether oil prices spike back towards $100 a barrel — and those countries are not Saudi Arabia and Iran. With U.S. sanctions choking off Iran's exports and Saudi Arabia hiking output to fill the gap, it's crucial for other major producers to keep crude flowing in the coming months. That's why many analysts are paying close attention to Nigeria and Libya, two nations heading into high stakes elections and where output has swung wildly in recent years. In Nigeria, Africa's largest oil producer, a change of leadership threatens to unsettle the current government's arrangement with militants who wreaked havoc on the country's oil output two years ago. In Libya, it's uncertain whether elections meant to resolve a long-running dispute between rival governments will bring an end to more than four years of civil conflict that has frequently disrupted the nation's crude exports. The situation in the two countries could play a "big role" in determining the price of oil — which is trading near four-year highs — according to Helima Croft, global head of commodity strategy at RBC Capital Markets. "What I always worry about is the stories we should be watching, the unstable suppliers," Croft recently told CNBC's "Worldwide Exchange." RBC has warned clients that 500,000 barrels per day could be periodically lost from the two nations, and elections may bring additional unrest. Half a million bpd represents just half a percent of daily global demand, but a disruption of that scale would have an outsize impact given the anticipated loss of roughly 1 million barrels a day of Iranian crude in the coming months. Iran's exports are shrinking as oil buyers cut off purchases under threat of sanctions from the Trump administration. "If you're going to have Venezuela continuing to decline, a million barrels of Iran off the market, you can't afford to lose another big, major producer," Croft said. Washington is largely depending on Saudi Arabia, Russia and a handful of other producers to keep the market supplied and prevent an oil price spike as Iran's shipments dwindle. Traders recently sent Brent crude to nearly four-year highs above $86 a barrel, as fears that the Saudi alliance will fall short stoked concern about $100 oil.

The IEA's Warning To Oil Producers - In disconcerting news for major oil producing countries, particularly production heavyweights Saudi Arabia and Russia, the Paris-based International Energy Agency (IEA) said on Thursday that the world’s largest oil producing nations are under unprecedented pressure to cut their reliance on energy revenues amid advances in fuel efficiencies and that electric vehicles threaten to undercut demand and erode their finances.The IEA’s special report focuses on energy producing countries where oil and natural gas make up at least one third of all exports and revenues contribute at least one third of total fiscal revenue. The agency said it examined Iraq, Nigeria, Russia, Saudi Arabia, the United Arab Emirates and Venezuela, in particular.The agency, which advises western powers on oil markets strategy and developments, warned that inaction or unsuccessful measures to diversify their revenue sources for these major oil producing nations would compound the risks facing both producer economies and global markets. IEA director Fatih Birol said that “more than at any other point in recent history, I believe there needs to be fundamental change in the development models of those countries.”He added that based on an oil price of $80 a barrel, oil and gas revenues for these countries were on average around $1,800 per capita per year. However, since shale has come into the picture and demand developments such as new technology and efficiencies, that could fall to $1,250 by 2030, a drop my as much as 30 percent.“When we look at these countries, on average they get more than 70 percent of their government revenues from oil and gas,” he said.“Those are under pressure from prices, they are under pressure from the amount of oil they export and under pressure from population growth ... We think it is very different from the past.” The world’s largest oil exporter Saudi Arabia and the world’s largest oil producer Russia have long been vulnerable to over reliance on oil and gas export revenue, while Riyadh is still recovering from a near financial collapse due to a plunge in global oil prices from 2015 to 2017. With oil prices plummeting from over $100 per barrel in mid-2014 to dropping below the $30 price point in January 2016, the kingdom had to enact first time ever and politically unpopular austerity measures as well as issuing its first international bonds to help offset budget deficits.

Hedge funds quit oil as rally reverses- Kemp (Reuters) - Hedge fund managers accelerated their profit-taking in crude oil and refined fuels last week, as confidence in the previous price rally faltered and the market fell. Hedge funds and other money managers cut their combined net long position in the six most important petroleum futures and options contracts by 133 million barrels in the week to Oct. 16. Fund managers have cut their combined position by a total of 187 million barrels in the last three weeks after earlier raising it by 196 million barrels in the previous five weeks. Funds now hold a net position equivalent to 912 million barrels, the lowest since Aug. 21 and before that September 2017, and far below previous peaks of 1.4 billion in April and almost 1.5 billion in January. Liquidation of old long positions again led the change last week (-119 million barrels) while the number of new short positions increased only slightly (+14 million barrels). Portfolio managers reduced their net long positions in Brent (-66 million barrels), NYMEX and ICE WTI (-37 million), U.S. gasoline (-15 million), U.S. heating oil (-6 million) and European gasoil (-9 million). The combined reduction in net long positions was the largest in any one week since the middle of July and before that the middle of February (https://tmsnrt.rs/2OD02A9). As a result, the ratio of bullish long positions to bearish short ones slipped below 8:1, down from a recent high of more than 12:1 at the end of September. While most of the adjustments came from the long side of the market, fund managers boosted short positions in NYMEX WTI by 16 million barrels. The one-week increase in NYMEX WTI short positions was the largest for 52 weeks and took the total number of short positions to its highest level since November 2017.

BP CEO- $80 Oil Is Unhealthy For The World -- Oil prices at $80 a barrel are too high and unhealthy for the world today, Bob Dudley, the chief executive of UK supermajor BP, said on the sidelines of an event on Friday.“There’s a healthy price for oil and energy and I believe that balances producing countries and consuming countries,” Quartz quoted Dudley as saying on the sidelines of the conference One Young World in The Hague. “In my mind, it’s somewhere between $50 and $65 a barrel. The world can live with this,” Dudley noted.Emerging and developing economies like India, South Africa, or Turkey are seeing their highest-ever prices of gasoline because their currencies have rapidly depreciated against the U.S. dollar and because oil prices in dollars are high, BP’s chief executive said.Currently, oil prices are “artificially high” due to Venezuela “defying gravity” and to the U.S. sanctions on Iran, according to Dudley, who said that once those geopolitical events subside, fundamentals will return to rule the market and prices should return back to $60-$65 a barrel.BP won’t be joining any EU special purpose vehicle designed to keep trade with Iran flowing, Dudley stressed, noting that “I think it’s full of risk.”The concerns of BP’s chief executive that $80 oil is unhealthy for the world are shared by major international organizations such as the International Energy Agency (IEA) and the International Monetary Fund (IMF).Expensive energy is back and it is threateningglobal economic growth, the IEA said in its Oil Market Report last week.Also last week, the IMF slightly downgraded its projection for global growth for this year and next—at 3.7 percent, growth is now expected 0.2 percentage point lower than IMF’s forecast from April this year. The key reasons for the downgrade included trade disputes, geopolitical tensions, and a weaker outlook for emerging economies due to higher oil import bills, among other factors, according to the IMF.

Oil slips below $80 after Saudi pledges rapid output rise -  Oil slipped below $80 a barrel on Monday as Saudi Arabia pledged to raise its crude production to a record, two weeks before U.S. sanctions potentially choke off Iranian crude supplies.Benchmark Brent crude oil futures were down 27 cents on the day to $79.51 a barrel by 11:09 a.m. ET (1509 GMT), while U.S. crude futures fell 32 cents to $68.80 a barrel.Several U.S. lawmakers have suggested imposing sanctions on Saudi Arabia over the killing of Saudi journalist Jamal Khashoggi, while the kingdom, the world's largest oil exporter, has pledged to retaliate to any sanctions with "bigger measures."Saudi energy minister Khalid al-Falih told Russia's TASS news agency that his country had no intention of unleashing a 1973-style oil embargo on Western consumers, but rather was focused on raising output to compensate for supply losses elsewhere, such as Iran. Falih said Saudi Arabia would soon raise output to 11 million barrels per day (bpd) from the current 10.7 million. He added that Riyadh had capacity to increase production to 12 million bpd."Oil prices are pointing lower again, with Saudi credit default swaps ballooning ... as the market becomes incredibly uncertain if there will be a shift in power when the crown prince is directly linked with the Khashoggi murder," said Stephen Innes, head of trading at foreign-exchange trader Oanda.Saudi credit default swaps, a form of insurance against a sovereign debt default, have shot to one-year highs, reflecting investor nervousness.U.S. sanctions on Iran's oil sector start on Nov. 4 and analysts believe anything up to 1.5 million bpd in supply could be at risk. "The big unknown is how much Iranian oil will be off the market and we'll know in about a month's time. Then we'll have a clearer picture of what to expect for the first quarter of next year,"

Oil prices shrug off Khashoggi crisis, but US lawmakers and Turkey are turning up the heat on Saudis - The oil market has so far shrugged off rising U.S.-Saudi tensions over the killing of journalist Jamal Khashoggi by agents of the kingdom in Turkey, but the saga appears to be far from over. A chorus of U.S. lawmakers is questioning Saudi Arabia's official story about the murder, raising the prospect of sanctions or a ban on weapons sales to Riyadh. A speech by Turkey's president slated for Tuesday could give the lawmakers fresh ammunition by further undermining the kingdom's narrative. Just one week ago, Saudi Arabia was denying any role in Khashoggi's disappearance and vowing to retaliate against foreign countries that sought to hold the kingdom accountable. The veiled threat raised concerns that the Saudis would exact revenge on the United States and others by cutting oil supply and allowing crude prices to bubble higher. The Trump administration is relying on Saudi Arabia to pump more oil to offset the effect of U.S. sanctions on Iran, OPEC's third biggest producer. By Monday, Riyadh had acknowledged Saudi agents killed Khashoggi in Istanbul, Turkey, and the nation's energy minister was reaffirming the country's commitment to keep the global oil market supplied. Minister Khalid al Falih said the Saudis had no intention of implementing an oil embargo. Oil prices were little changed on Monday, following a 3 percent decline for U.S. crude and a nearly 1 percent drop for international benchmark Brent crude last week. Analysts tell CNBC the market remains unconvinced that the Saudis would take the extraordinary measure of using oil as a tool of political retribution. The Saudis have done a complete 180 since their initial, confrontational statement last week, said John Kilduff, founding partner at energy hedge fund Again Capital. In order for oil prices to react to the scandal, "the Saudis are going to have to get their backs up like they initially did that first weekend," Kilduff said. The Saudis say Khashoggi died in a fight that broke out after agents confronted him in the Saudi consulate in Istanbul. Foreign Minister Adel al-Jubeir told Fox News the operatives overstepped their bounds by killing Khashoggi and then covered up the murder. But on Monday, a spokesman for Turkish President Recep Tayyip Erdogan's political party said the incident was "monstrously planned," ahead of the leader's speech on Tuesday. On Sunday, Erdogan said he would explain Khashoggi's killing. Turkish authorities have reportedly leaked details of the killing, even while the country conducted a joint investigation with Saudi Arabia into the disappearance. The question is whether Erdogan's speech will largely align with the Saudi account of Khashoggi's death or whether the president will shock the market with new information

Oil prices end barely higher as traders monitor U.S.-Saudi tensions- Oil futures ended barely higher Monday as the November U.S. benchmark futures contract expired and traders took stock of U.S.-Saudi tensions over the killing of journalist Jamal Khashoggi. Several U.S. lawmakers from both sides of the aisle called for sanctions on the kingdom over the weekend as Treasury Secretary Steven Mnuchin prepared to visit Saudi Arabia Monday. Mnuchin told reporters that the administration’s relationship with Saudi Arabia was critical to the U.S. plan to thwart Iran’s effort to become the region’s dominant power, according to news reports. Even so, tensions between Saudi Arabia and the international community are “not expected to trigger any meaningful disruption to crude supply and export flows," said Robbie Fraser, commodity analyst at Schneider Electric, in a daily market update. Saudi energy minister, Khalid al-Falih, told Russia’s TASS news agency that there was no intention to repeat the 1973 oil embargo that sent global energy prices soaring. Against that backdrop, West Texas Intermediate crude for November delivery rose 5 cents, or less than 0.1%, to finish at $69.17 a barrel on the New York Mercantile Exchange after spending much of the session trading lower. The expiration of the November contract at the day’s settlement often contributes to volatility. December WTI crude, which is now the front-month contract, added 8 cents or 0.1%, to $69.36. Global benchmark December Brent crude edged up by a nickel, or less than 0.1%, to $79.83 a barrel on the ICE Futures Europe exchange. Saudi Arabia said early Saturday that Khashoggi died in the country’s Istanbul consulate after a fistfight and that 18 Saudi nationals had been detained in connection with the incident. The Saudi account, which came after previous denials that Khashoggi had been harmed, has been met with disbelief by critics. “The Saudi version of events throws up more questions than it answers…Thus the international pressure on the Saudi leadership remains in place, as does the possibility of sanctions,” wrote analysts at Commerzbank, in a note. The market reaction, however, shows traders appear to think there is little chance of such a scenario, the Commerzbank analysts said. But other supply concerns, including a continued fall in Venezuela output and the full implementation of U.S. sanctions on Iranian oil on Nov. 4, remain in place, they said.

Oil falls as Saudi Arabia says it will play 'responsible role' - Oil prices fell on Tuesday after Saudi Arabia said it would play a "responsible role" in energy markets, although sentiment remained nervous ahead of new U.S. sanctions on Iran's crude exports that start next month. Benchmark Brent crude oil fell by $1.91 a barrel, down 2.4 percent, $77.92 by 9:24 (1324 GMT), falling below its 50-day moving average for the first time in two months. U.S. light crude dropped $1.65, or 2.4 percent, to $67.71 a barrel. "Saudi Arabia's energy minister has dealt a fresh heap of bearish fodder onto the energy complex," said PVM Oil analyst Stephen Brennock. U.S. sanctions on Iranian oil begin on Nov. 4 and Washington has said it wants to stop all of Tehran's fuel exports, but other oil producers are pumping more to fill any supply gaps. Saudi Energy Minister Khalid al-Falih told a conference in Riyadh on Tuesday the oil market was in a "good place" and he hoped oil producers would sign a deal in December to extend cooperation to monitor and stabilize the market. "We will decide if there are any disruptions from supply, especially with the Iran sanctions looming," Falih said. "Then we will continue with the mindset we have now, which is to meet any demand that materializes to ensure customers are satisfied." Falih said he would not rule out the possibility that Saudi Arabia would produce between 1 and 2 million barrels per day (bpd) more than current levels in the future. "Saudi Arabia's energy minister has dealt a fresh heap of bearish fodder onto the energy complex," 

Oil market trusts Saudi Arabia for now to temper impact of Iran sanctions --Saudi Arabia, the world's largest oil exporter, has become a source of market uncertainty just as the U.S. is about to curb Iran's oil exports.Yet, oil prices have fallen sharply to five-week lows, and the market does not show any concerns about a potential loss of supply.The Iranian sanctions are expected to remove about 1 million barrels a day from the global market by the end of the year, and some analysts had expected the price of crude to move higher ahead of the Nov. 5 sanctions. That was even before Saudi Arabia became a wild card, with lingering questions about whether its Crown Prince Mohammed bin Salman had any role in the death of journalist Jamal Khashoggi.However, Saudi Arabia still has the confidence of oil markets for now, which have been continuously reassured by Saudi Energy Minister Khalid al-Falih that Saudi will turn on the pumps to make up for less Iranian crude. Al-Falih said on Monday that Saudi can raise its output to 11 million barrels a day and that it will not use oil as a weapon. Saudi output has already increased to about 10.7 million barrels a day."There is no intention," the energy minister told Russia's TASS news agency when asked whether there could be a replay of the 1973-style oil embargo.On Tuesday, the energy minister told the kingdom's major investment conference that OPEC is in "pump as much as you can mode.""We will meet any demand that materializes," said Al-Falih, according to a Bloomberg report."When Khalid al-Falih comes out and says we're going to do 11 million barrels a day, he maintains a lot of credibility with the market," said Helima Croft, RBC head of commodities strategy. "If he changed his tune, the market would take that threat seriously." Another factor holding down oil prices is the fall off in global oil demand. Analysts say for now, trade wars with China and a stronger dollar are working in favor of lower prices, by dampening emerging market demand.

Oil Prices In Free Fall As Iran Fears Fade  -- Brent dipped below $80 per barrel last week and crashed even further in early trading on Tuesday. Iran sanctions still loom, but oil prices are trending downwards at a rapid rate. “[T]he latest withdrawal of speculators and the negative price response since yesterday indicate that the market is not nearly as nervous as it was just a few weeks ago. One role in this is doubtless played by the fact that the oil market looks set to ease noticeably in 2019,” Commerzbank said in a note. Halliburton reported that its North American operations are slowing down, a sign that pipeline constraints are taking a toll on the shale industry. Earnings in the third quarter for the oilfield services company were 50 cents per share, up 19 percent from a year earlier, but down from 58 cents per share in the second quarter. The fourth quarter could be even worse. Pipeline bottlenecks are hurting activity, but “our customers’ budget exhaustion” also led to a weakening of demand for its services. However, Halliburton says earnings will rebound strongly next year.  Saudi oil minister Khalid al-Falih said that Saudi Arabia and Russia will forge forward to institutionalize the OPEC+ partnership, likely moving to create a Secretariat based in Vienna. The group’s coordination would not have an end date, nor would it target a specific production level. The comments, made in an interview with TASS, suggest the Saudi-Russian partnership could supplant OPEC in terms of importance, even if not in an official way. Al-Falih also tried to reassure the markets that Saudi Arabia would not use its oil production as a weapon in retaliation to any punishment from the U.S. related to the death of journalist Jamal Khashoggi.  . Saudi Arabia has long maintained that it can produce 12 mb/d, implying spare capacity of around 1.3 mb/d at this point. Saudi Aramco’s CEO Amin Nasser said on Monday that it would only take 3 months to ramp up to that production rate. Saudi Arabia and Kuwait are still at an impasse on the territorial dispute over the Neutral Zone oil fields, which total around 500,000 bpd of capacity. Chevron said it stands ready to restart production at the Wafra oil field in the Neutral Zone if the negotiations between Saudi Arabia and Kuwait reached a breakthrough. The fields have taken on added importance with the oil market tightening, as the market turns its attention to available spare capacity.

Oil prices fall as Saudi Arabia pledges to play 'responsible role' in market (Reuters) - Oil prices fell on Tuesday after Saudi Arabia said it would play a "responsible role" in energy markets, although sentiment remained nervous in the run-up to U.S. sanctions against Iran's crude exports that start next month. Front-month Brent crude oil futures were at $79.33 a barrel at 0657 GMT, down 50 cents, or 0.6 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $69.14 a barrel, dropping 22 cents, or 0.3 percent, from their last settlement. U.S. sanctions against Iran's oil exports are due to kick off on Nov. 4, and Washington is putting pressure on countries to cut their imports of Iranian crude. South Korea's crude oil imports from Iran fell to zero in September from a year earlier, data from state-run Korea National Oil Corp (KNOC) showed on Tuesday. Top crude oil exporter Saudi Arabia has pledged to keep markets supplied despite its increasing isolation over the killing of Saudi journalist Jamal Khashoggi, and there are signs that crude oil supply from the Middle East is increasing. There has been concern that just as markets tighten with the start of the U.S. sanctions against Iran, Saudi Arabia could cut crude supply in retaliation for potential sanctions against it over the Khashoggi killing. Trying to dismiss such worries, Saudi Energy Minister Khalid al-Falih said on Monday that "there is no intention" for such action, and that Saudi Arabia would play a "constructive and responsible role" in world energy markets. Peter Kiernan, lead energy analyst at the Economist Intelligence Unit in Singapore, said a Saudi cutback would be self-defeating as "Saudi Arabia would ... risk losing market share to other exporters while losing its reputation as a stable actor in the market."

Crude Oil Down Four Percent - Front-month crude oil futures each lost more than 4 percent Tuesday. The December West Texas Intermediate (WTI) crude oil futures price fell $2.93 Tuesday to settle at $66.43 a barrel. The intraday range for the WTI spanned from a high of $69.66 down to $65.74. Brent crude oil for December delivery declined to a greater extent Tuesday, losing $3.39 to settle at $76.44 a barrel. Delia Morris, Houston-based commodity pricing analyst, attributes the down day to traders’ concerns that the market appears oversupplied amid slackening demand. “Oil prices fell sharply in intraday trading following the announcement from Saudi Energy Minister Khalid Al-Falih that the Kingdom would look to increase its current crude output from around 10.7 million barrels per day (MMbpd) to up to 11 MMbpd,” said Morris. “Earlier in the month, oil prices had hit multi-year highs off fears that the market was poised for a severe under-supply situation once U.S. sanctions on Iran would take effect Nov. 4.” Saudi Arabia’s pledge to raise oil production appears to be designed to allay other fears, Morris noted. “The announcement from Saudi Arabia – apparently, in a move to be seen as a stabilizing force in global markets – comes in contrast to more pugnacious rhetoric, which had pointed toward a possible production pullback, following the murder of Saudi journalist (Jamal) Khashoggi,” said Morris. Like crude oil, reformulated gasoline (RBOB) ended the day lower. The November RBOB contract price settled at $1.84 Tuesday, translating into a 7-cent drop. The November Henry Hub natural gas contract price bucked the trend among the benchmarks that Rigzone tracks. Gas futures posted a 7-cent gain to end the day at $3.21. 

WTI Slumps Back To A $65 Handle After Huge Crude Build -  Having rebounded modestly back off a $65 handle intraday after OPEC/Saudi production comments, all eyes are now on API tonight which printed a huge 9.88mm barrel inventory build (biggest since Feb 2017) sending WTI back to a $65 handle. Saudi Energy Minister Khalid Al-Falih said OPEC and its allies are in “produce as much as you can mode."  API:

• Crude +9.88mm (+3.7mm exp) - biggest since Feb 2017
• Cushing +971k (+1.5mm exp)
• Gasoline -2.8mm
• Distillates -2.44mm

After last week's surprise crude build (for the 4th week in a row), API has some catch up to do to DOE data and catch up it did reporting a massive 9.88mm barrel build...  WTI was hovering around $66.30 ahead of the API data and dropped back to a $65 handle on the print..."There are several reasons for the slide in crude oil, chief among them is it’s a risk-off day across all financial markets," said Bob Yawger, director of the futures division at Mizuho Securities USA. "You’re seeing people flee the commodities and equities space to most likely put their money in safe haven."

Oil extends declines as Saudi Arabia commits to meet demand --Oil slipped to around $76 a barrel on Wednesday, paring losses after hitting its lowest since late August, pressured by concern that demand is weakening and supply ample even as U.S. sanctions loom on oil exporter Iran.In a sign supply is plentiful, industry group the American Petroleum Institute said on Tuesday U.S. crude stocks had risen by 9.9 million barrels - more than forecast. The U.S. government's supply report is due at 1430 GMT.Brent crude, the global benchmark, was down 10 cents to $76.34 a barrel. It fell earlier in the day to $75.11, the lowest since Aug. 24. U.S. crude was unchanged at $66.43."Rising oil inventories and growing petro-nations' output calm the supply fears related to the Iran oil embargo," said Norbert Ruecker, head of macro and commodity research at Swiss bank Julius Baer.Crude fell sharply in the previous session, with Brent closing down 4.3 percent."This price movement comes as little surprise with attention now clearly being focused on the weakening economic situation and gloomy demand outlook," analysts at JBC Energy said in a report. A sell-off in equities due to concern about the economic outlook also weighed on crude on Tuesday. Forecasters such as the International Energy Agency already expect slower oil-demand growth for 2019 due to a slowing economy.

Analysis: Middle East crude oil complex nosedives on bearish sentiment — Market structure and flat prices came down significantly in the Middle East crude oil complex Wednesday, amid a general sell-off in global crude oil markets, traders told S&P Global Platts. At 4:30 pm Singapore time (0830 GMT), the outright price for December cash Dubai, the most prompt month trading in October, settled at $74.40/b, down 4.42% on the day from $77.84/b. This is the largest day-on-day move in the flat price in about four months. Previously cash Dubai M1 moved 4.55% lower on June 18 to $70.94/b. Prices followed global crude sentiment lower, with a general bearish tune to oil markets on Wednesday, traders said. "I think it's just a general downtrend; everything is coming off," said a Singapore-based crude oil trader. A second trader said: "All risk off today it seems." The plunge in price activity pulled the market structure lower across the board. The spread between cash Dubai M1 and M3 moved to a backwardation of 68 cents/b from $1.09/b Tuesday, Platts data showed at the close of business in Singapore Wednesday. The structure had briefly dipped below $1/b earlier this month, when it was assessed at 95 cents/b on October 18, but has otherwise stayed firmly above that level since September. It was previously lower than 68 cents/b on August 29, at 61 cents/b. The Dubai M1-M3 structure is tracked by traders of Middle East crude grades as an indication of spot market trading sentiment. At 68 cents/b the structure remains in backwardation, implying higher demand for prompt cargoes than for future ones, but with relatively less urgency than if it was above $1/b.  Despite the risk off sentiment in global crude oil benchmarks, the December Oman futures contract traded relatively higher Wednesday on the Dubai Mercantile Exchange, Platts data showed.

Oil Holds Loss Near Lowest Level in Over 2 Months -- Oil held losses near the lowest level in more than two months as Saudi Arabia pledged to offset any supply shortfalls and as global investors shunned risk assets. Futures in New York were little changed on Wednesday. Prices retreated about 4 percent on Tuesday following a tumble in American equities, which later pared losses. The Organization of Petroleum Exporting Countries and its allies are in a “produce as much as you can mode,” said Saudi Energy Minister Khalid Al-Falih. An industry report that points to rising U.S. crude inventories added to concerns over excessive supply. Oil has slumped about 13 percent after reaching a four-year high earlier this month as U.S. crude stockpiles continue to grow at a time when an ongoing trade dispute between China and America threatens to hurt global growth that underpins energy demand. Still, traders are concerned about whether OPEC and its partners can fill supply losses from Iran as renewed U.S. sanctions on the Islamic republic are set to take effect in November. Al-Falih’s remarks “signaled they could proactively act and prevent any supply shortages, contributing to a decline in oil prices,” Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., said by phone from Tokyo. “In addition, as wider financial markets are becoming volatile, risk-off mood is prevailing in the oil market.” West Texas Intermediate for December delivery fell as much as 33 cents to $66.10 a barrel on the New York Mercantile Exchange, and traded at $66.56 at 3:18 p.m. in Tokyo. The contract slumped $2.93 to $66.43 on Tuesday. Total volume traded was about 4 percent above the 100-day average. Brent for December settlement traded at $76.75 a barrel on the London-based ICE Futures Europe exchange, up 31 cents. The contract dropped 4.3 percent to $76.44 on Tuesday. The global benchmark crude traded at a premium of $10.19 to WTI. Saudi Arabia can boost its crude production from 10.7 million barrels a day, near an all-time high, to counter supply losses from Iran, Saudi Minister Al-Falih said at a conference in Riyadh. Meanwhile, Russia suggested its current output level is higher than September. 

WTI Settles a Tad Higher - WTI crude oil futures contract reversed its recent downward course Wednesday – at least to a small degree. The West Texas Intermediate (WTI) crude oil futures contract reversed its recent downward course Wednesday – at least to a small degree. The December WTI contract price picked up 39 cents during midweek trading, settling at $66.82 a barrel. The December Brent price, meanwhile, lost 27 cents to settle at $76.17. Movements for both benchmarks was considerably less volatile Wednesday compared to Tuesday, when each contract price shed more than 4 percent. “December WTI crude and Brent crude tested the major support levels,” said Jerry Rafferty, president and CEO of Rockville Center, N.Y.-based Rafferty Commodities Group, Inc., referring to the $66.10 and $75.47 support levels, respectively. “(B)oth markets have moved higher after testing these support levels. Should the market re-approach these levels we would view that as another buying opportunity.” Reformulated gasoline (RBOB) for November delivery ended the day lower, falling about a penny and a half to settle at $1.82 a gallon. Also losing ground Wednesday was front-month Henry Hub natural gas, which declined by a nickel to settle at $3.17. 

Oil Resumes Slide -- Oil fell near the lowest level in two months as a rout in U.S. stocks prompted investors to flee risk assets and as American crude inventories continued to rise. Futures in New York dropped as much as 1.2 percent after a 0.6 percent gain on Wednesday. Asia’s main equity gauge entered a bear market after U.S. stocks erased all of this year’s gains on Wednesday. While the stock-market rout spread to risk assets including oil and copper, safe-havens like gold gained. Meanwhile, a government report showed U.S. crude stockpiles climbed more than expected, rising for a fifth week. Oil is poised for the worst monthly decline since July 2016 as ongoing trade tensions stoke concerns over global growth that drives energy demand at a time when American crude stockpiles are increasing. Traders are also closely watching how much Iranian oil will be removed from the market by U.S. sanctions and whether the Organization of Petroleum Exporting Countries and its allies can fill the gap. “Sell-off in equity markets raised concerns over oil demand, contributing to a decline in prices,” said Satoru Yoshida, a commodity analyst at Rakuten Securities Inc. in Tokyo. In addition, the gain in U.S. crude inventories is adding to bearish sentiment, he added. West Texas Intermediate for December delivery declined as much as 83 cents to $65.99 a barrel on the New York Mercantile Exchange, and traded at $66.43 at 7:57 a.m. in London. The contract rose 39 cents to $66.82 on Wednesday. Total volume traded was about 5 percent below the 100-day average. Brent for December settlement fell 41 cents to $75.76 a barrel on the London-based ICE Futures Europe exchange. The contract dropped 27 cents to $76.17 on Wednesday. The global benchmark traded at a $9.32 premium to WTI.   In the U.S., nationwide inventories climbed by 6.35 million barrels last week for the longest streak of gains since March 2017, the Energy Information Administration reported on Wednesday. That compares with the median 3.7 million-barrel increase forecast in a Bloomberg survey. Meanwhile, American gasoline stockpiles declined by 4.83 million barrels and distillate inventories dropped for a fifth straight week, according to EIA data. Refinery runs in the country remained low due to seasonal maintenance. 

Oil Under Threat As Global Economy Struggles - Warning signs about the slowing of the global economy continue to crop up, and market jitters are taking the steam out of oil prices.U.S. corporate earnings are no longer sky-high, with a range of factors starting to cut into margins. The U.S.-China trade war has not made headlines in the same way it did a few weeks and months ago, but the reality is that the impact of tariffs is only growing as costs work their way through supply chains.“These trade tensions are coming home to roost and they are impacting the fundamentals of the market,” Tally Leger, equity strategist at OppenheimerFunds, told Reuters. “Thanks to trade tariffs we are facing the headwinds of a stronger dollar, higher oil prices, and rising interest rates.”This week, a slew of disappointing earnings came in. Caterpillar said that tariffs cost the company $40 million in the third quarter, and its share price fell roughly 7.6 percent after it reported its figures. Poor figures also came from 3M and Harley-Davidson, prompting selloffs in their stocks as well. 3M said that tariffs could cost the company $20 million this year, a figure that will balloon to $100 million next year. The results spooked the markets, dragging down equities more broadly. The S&P machinery index was down more than 4 percent in the last two days.Evidence of a slowdown in China is also becoming apparent. 3M saw sales dip in China, as did PPG Industries, which makes paint and coatings. “We see other signs of slowing in China; the automotive build rates are down significantly and that has a knock-on effect,” Michael Roman, CEO of 3M, said. Sales of cars in China fell 12 percent in September from a year earlier.  A strong dollar is another source of trouble for the global economy. Harley-Davidson said that international sales of its motorcycles were hit by a strong greenback. The Federal Reserve has hiked interest rates multiple times in the last year, and is expected to continue on that course.The array of problems raise the prospect of peak industrial earnings. Strong GDP figures and a massive corporate tax cut temporarily juiced profits, and earnings could fall to more pedestrian levels, particularly as costs start to creep up. Some analysts think the fears of weaker earnings are overblown, but investors have clearly grown worried about the trajectory of the U.S. economy. And it has been the U.S. that has stood out while much of the rest of the world already began to lose steam. The U.S. cannot defy gravity forever.

Oil Prices Fall Amid Global Stocks Sell-off - Oil prices traded lower on Thursday amid sharp selloffs in global stock markets. Crude Oil WTI Futures for December delivery lost 0.7% to trade at $66.38 per barrel by 1:38 AM ET  on the New York Mercantile Exchange. Brent Oil Futures for December delivery traded 0.7% lower to $75.72 a barrel on London’s Intercontinental Exchange. "Oil prices fell under extreme selling pressure ... as the steep selloff across stock markets fueled fears over a possible drop in oil demand growth," said Lukman Otunuga, analyst at futures brokerage FXTM. The U.S. stock markets closed with a slump Wednesday evening, with the S&P 500 dropping 3.09% and Nasdaq falling 4.43%. The nosedive prompted Asian markets to tumble Thursday morning, with Japan’s Nikkei down more than 3%. Elsewhere, International Energy Agency director Fatih Birol said the world's biggest oil and gas producers are under more pressure to reduce their reliance on energy revenues amid advancement in fuel efficiencies and electric vehicles. "More than at any other point in recent history, I believe there needs to be fundamental change in the development models of those countries," IEA director Fatih Birol said. Birol said oil and gas revenues for these countries could potentially fall to $1,250 by 2030, a 30% drop. "When we look at these countries, on average they get more than 70% of their government revenues from oil and gas," he said. "Those are under pressure from prices, they are under pressure from the amount of oil they export and under pressure from population growth ... We think it is very different from the past."

Oil prices fall one percent amid global stock market slump -- Oil prices stabilized on Thursday, bouncing back from an early sell-off after Asian and European stock markets plunged in the wake of Wall Street's biggest daily decline since 2011.  Brent crude oil fell 82 cents, or 1.1 percent, to a low of $75.35 a barrel before rallying to around $76.94, up 77 cents. The global benchmark has lost more than $10 a barrel since hitting a high of $86.74 on Oct. 3. U.S. light crude settled up 51 cents, or 0.8 percent at $67.33 after touching an intraday low of $65.99. The turnaround followed a rebound in U.S. stocks, with the three major indexes surging more than 1 percent each.City Index market analyst Fiona Cincotta said factors outside the oil market were now leading sentiment."Fear and anxiety about the global economy are currently playing a bigger role in the oil price than the actual fundamentals of supply and demand," Cincotta said.Financial markets have been hit hard by a range of worries, including the U.S.-China trade war, a rout in emerging market currencies, rising borrowing costs and bond yields, as well as economic concerns in Italy.Weakness is also starting to show in container and dry-bulk rates, both of which have declined significantly in October, pointing to a slowdown in global trade.Many investors are concerned about rising oil inventories as supply exceeds demand in some key markets, including the United States. U.S. crude oil production has risen steadily over the past decade and hit a record high of 11.2 million barrels per day (bpd) this month.U.S. commercial crude stocks rose for a fifth consecutive week last week, increasing 6.3 million barrels to 422.79 million barrels, the Energy Information Administration said.Saudi Arabia's OPEC governor said on Thursday the oil market could face oversupply in the fourth quarter."The market in the fourth quarter could be shifting towards an oversupply situation as evidenced by rising inventories over the past few weeks," Adeeb Al-Aama told Reuters. Saudi Energy Minister Khalid Al-Falih said on Thursday that there could be a need for intervention to reduce oil stockpiles after increases in recent months.

Oil Markets Gripped By Supply Glut Fears - Fears of a supply glut have gripped oil markets, sending oil prices down for the third consecutive week and forcing OPEC to consider a production reduction. Saudi Arabia and Russia agreed to extend their pact to manage oil production levels, according to comments from Saudi oil minister Khalid al-Falih. “Saudi Arabia and Russia will interfere together, along with the heads of the other producing states, to prevent the market from falling out of balance,” he said. This echoes his interview earlier this week in which he said he was looking to formalize a partnership with Russia within an official OPEC+ architecture. The fears of $100 oil seem long gone. OPEC suggested that it might need to cut output in 2019 to avoid a return of the supply glut. There are some mixed messages coming from the cartel. Earlier this week, Saudi oil minister Khalid al-Falih said that the group was in “produce as much as you can mode.” But a technical committee offering recommendations to the OPEC+ group said that it would prepare “options” for production plans in 2019 to avoid a glut.  Even as OPEC wonders whether or not it should cut output, the IEA pressed the cartel to increase production. “Global oil markets are going through a very sensitive period -- global economic growth as well,” IEA Executive Director Fatih Birol said in a Bloomberg interview on Thursday. “If the oil producers care about the health of the growth of the global economy, which I believe they do, they should take the steps to further comfort the market.” The head of Libya’s National Oil Corp., Mustafa Sanalla, said that Libya is hoping to reach 1.6 mb/d by the end of next year, a level not seen since the days of dictator Muammar Qaddafi. Libya’s production has been volatile since 2011, but seems to be on the upswing, having recently topped 1.25 mb/d. “We’ve put together a plan to boost field production, including pipeline maintenance and addition of new pipelines,” Sanalla said. “We aim to reach 1.6 million barrels a day by the end of next year, and this level can increase.”

Oil Holds Steady As Rig Count Stagnates - Baker Hughes reported a 1-rig increase for oil and gas in the United States this week, bringing the total number of active oil and gas drilling rigs to 1,068 according to the report, with the number of active oil rigs increasing by 2 to reach 875 and the number of gas rigs decreasing by 1 to reach 193. The oil and gas rig count is now 159 up from this time last year.Crude oil rallied somewhat on Friday, but not enough to erase three weeks of bearish activity in the industry that stripped roughly $10 off barrel prices. The slight uptick on Friday came as confused markets wrestle with two opposing ideas: the narrative that paints the oil market as having oil supply troubles as the Iranian sanctions loom, and poor equities performance yesterday combined with the narrative that future oil demand may not be as robust as previously thought.At 12:18pm. EDT on Friday, volatile WTI crude prices were up 0.39% (+$0.26) at $67.59. Brent crude was up 0.64% (+$0.49) at $77.37 per barrel. While up on the day, WTI is still down almost $10 per barrel from early October.  Canada’s oil and gas rigs for the week increased by 9 rigs this week after losing 4 rigs last week, bringing its total oil and gas rig count to 200, which is 9 rigs more than this time last year, with a 1-rig increase for oil rigs, and an 8-rig increase for gas rigs.EIA’s estimates for US production for the week ending October 19 were for an average of 10.9 million bpd for the second week in a row, off the forever high of 11.2 million bpd for the week of October 5.By 1:09pm EDT, WTI was trading up 0.40% (+$0.27) at $67.60. Brent crude was trading up 0.70% (+$0.54) at $77.42 per barrel.

US crude posts third straight weekly loss, settling at $67.59, as equities slump - Oil prices were higher on Friday, supported by expectations that sanctions on Iran would tighten supplies, but crude futures still dropped for a third straight week as a slump in stock markets and concerns about trade wars clouded the fuel demand outlook.U.S. crude ended Friday's session 26 cents higher at $67.58, posting a loss of 2.2 percent loss this week. The contract rose in four out of five sessions this week, but the gains were not enough to offset a nearly $3 drop on Tuesday.Brent crude oil was trading around $77.61 a barrel, up 72 cents, by 2:29 p.m. ET , after earlier falling more than $1 to a low of $75.77. The contract is on course for a weekly loss of nearly 3 percent. It has fallen by more than $10 in the last three weeks.Supporting prices on Friday, Iraq will stop trucking crude oil from its northern Kirkuk oil field to Iran in November to comply with U.S. sanctions, two sources familiar with Iraqi oil export operations said on Friday."The market has to wake up to the fact that Iranian sanctions are happening Nov. 4. That's just a couple weeks away," said Phil Flynn, an oil market analyst at Price Futures Group in Chicago.The market for months has weighed concern surrounding potential supply shortages from U.S. sanctions on Iran, due to come into force Nov. 4. Washington has said it wants to reduce Iranian oil sales to zero, although this looks unlikely.Many buyers, including Iran's biggest customer, China, appear to be falling in line, forcing Tehran to store unsold oil on tankers in the hope it can sell the crude once sanctions are lifted.However, a global collapse in equities has roiled oil markets this week. The N asdaq Composite confirmed a correction this week, while the S&P 500 and the Dow Jones Industrial Average erased their gains for the year.

US crude tumbles 12% from high as oil bulls retreat -- Crude oil futures posted their third consecutive weekly loss on Friday as the bulls that pushed oil prices to nearly four-year highs head into retreat. U.S. West Texas Intermediate crude ended this week down 2.2 percent and has now tumbled about 12 percent from its recent high of $86.74 on Oct. 3. Brent crude, the international benchmark for oil prices, fell 2.7 percent this week and is down 10.5 percent from its Oct. 3 high of $86.74.Crude futures have gotten swept up in a wider stock market rout this month, with most of the losses for oil coinciding with a sell-off in equities. But the narrative driving oil prices has also flipped in recent weeks, and traders are closing out bullish bets on the commodity. At the start of October, oil prices were rising on signs that U.S. sanctions are shrinking Iran's crude exports faster than anticipated, potentially leaving the world with a shortage of oil. The sanctions are expected to cut crude exports from Iran, OPEC's third-biggest oil producer, by about 1 million barrels per day.But concerns about faltering demand and rising output from OPEC and Russia now have traders focused on potential oversupply. "The narrative about the supply crunch with Iran got offset by this burst of supply that came on the market from OPEC and Russia and Saudi Arabia,"  Saudi Arabia says it hiked output to 10.7 million barrels per day in October and will increase production to 11 million bpd next month. Meanwhile, Russia says it pumped at a post-Soviet-era peak of 11.36 million bpd in September. The 15-nation OPEC group also managed to increase its collective output last month, despite supply declines in Iran and Venezuela.

OPEC, allies may need to change course as oil inventories rise: panel (Reuters) - OPEC signaled on Thursday it may have to return to oil production cuts as global inventories rise, in a statement that may further sour relations with U.S. President Donald Trump. The president has repeatedly lashed out at the Organization of the Petroleum Exporting Countries, saying it is not supplying enough oil. OPEC, plus Russia and other allied non-OPEC producers agreed to pump more in June. An OPEC and non-OPEC ministerial panel concluded that supply is “very comfortable” compared to demand and warned producers may need a change of tack because of rising inventories and economic uncertainties. “The committee, however, expressed concerns about rising inventories in recent weeks and also noted looming macroeconomic uncertainties which may require changing course,” a statement issued by OPEC said. Brent crude oil, the global benchmark, has lost about $10 a barrel since hitting a four-year high of $86.74 on Oct. 3, on signs of ample supply even as U.S. sanctions on Iran aimed at cutting the OPEC member’s oil exports loom. For now, producers are making progress in increasing production in line with the June agreement. OPEC and its partners agreed in June to lift oil supplies so that compliance with output curbs in place since January 2017 falls to 100 percent, from closer to 150 percent because of declining production in some countries. Countries complied with 111 percent of pledged supply curbs in September, the statement said, meaning production increased from August when adherence was 129 percent. The panel, called the Joint Ministerial Monitoring Committee, can make recommendations but does not set policy. OPEC and its allies hold their next policy meeting in December. Forecasters, including the International Energy Agency, expect slower growth in global oil demand next year and rising supplies from outside OPEC, which could further increase inventories if OPEC keeps output at the same level. The ministerial panel asked its technical group, called the Joint Technical Committee, to “continue to study the 2019 outlook and present options on 2019 production levels to prevent re-emergence of a market imbalance.” 

Crown Prince All Smiles As Saudis Sign $50 Billion In Deals At Davos In The Desert -- Even as lawmakers from the US, to Germany and Canada have weighed some form of economic punishment against Saudi Arabia - be it sanctions, an arms sale prohibition, or both - over the state's involvement in the murder of dissident journalist Jamal Khashoggi, Saudi Crown Prince Mohammad bin Salman was reportedly "all smiles" during the opening day of his second annual Future Investment Initiative, according to a Bloomberg report. The crown prince made his unexpected appearance toward the end of the day, drawing a crowd as people craned to catch a glimpse or take a photo. He sat next to King Abdullah of Jordan and they left together soon after, followed by onlookers and without the prince commenting publicly. Prince Mohammed is due to speak on Wednesday, organizers later announced. It was not clear if he would respond to Erdogan’s accusations, which came closer than ever to laying the blame for Khashoggi’s death at the ambitious young leader’s feet. And why wouldn't he be? Just over three weeks after Khashoggi's killing and purported dismemberment, calls for the Crown Prince's ouster have already subsided. Any hope that the royal family would act to oust him as the kingdom's de facto ruler disappeared when his father, King Salman, announced that MbS would be charged with leading a commission to oversee the restructuring of the Saudi intelligence service. And even as CEOs from Wall Street, Silicon Valley and global industrial giants decided to skip MbS's "Davos in the Desert", their top dealmakers, tucked away from the public glare, were there to represent in their stead and keep the money flowing. Adding to the irony, MbS received a standing ovation from a crowd of 3,000 dignitaries and investors, including hundreds of Saudi citizens.

Jamal Khashoggi case: All the latest updates - Saudi Arabia has admitted Jamal Khashoggi was killed inside its consulate in the Turkish city of Istanbul.Khashoggi - a Saudi writer, American resident, and Washington Post columnist - entered the building on October 2 to obtain documentation certifying he had divorced his ex-wife. He never came out.After two weeks of repeated denials that it had anything to do with his disappearance, the kingdom admitted on Saturday the journalist died in a "fist-fight" inside the consulate. Saudi King Salman and Crown Prince Mohammed bin Salman both called Khashoggi's son, Salah, to express their condolences, the Saudi Press Agency reported.Saudi Arabia has said Khashoggi, 59, died in a fight inside its Istanbul consulate - after two weeks of denials that it had anything to do with his disappearance.Khashoggi's son thanked the king and the crown prince, the report said.Foreign Minister Adel al-Jubeir also extended condolences to Khashoggi's family."This is a terrible mistake. This is a terrible tragedy. Our condolences go out to them. We feel their pain," Jubeir told US broacaster Fox. "Unfortunately, a huge and grave mistake was made and I assure them that those responsible will be held accountable for this." Some observers have speculated the powerful crown prince ordered the killing of Khashoggi - who had criticised bin Salman - but the Saudi leadership has denied any involvement.

Saudi official gives new version of Khashoggi killing: report - A senior Saudi Arabian government official has laid out a new version of the killing of journalist Jamal Khashoggi inside the Saudi consulate in Istanbul, that contradicts previous explanations on key points.The latest account, provided by a Saudi official who requested anonymity to the Reuters news agency, includes details on how the team of 15 Saudi nationals sent to confront Khashoggi on October 2 threatened to drug and kidnap the journalist and then killed him in a chokehold when he resisted.A member of the team then dressed in Khashoggi's clothes to make it appear as if he had left the consulate, the official said.After denying any involvement in the disappearance of Khashoggi, 59, for more than two weeks, Saudi Arabia on Saturday morning said he had died in a fistfight at the consulate.An hour after the first official statement, another Saudi official attributed the death to a chokehold, which the senior official reiterated to Reuters.Turkish officials suspect the body of Khashoggi, a Washington Post columnist and critic of powerful Crown Prince Mohammed bin Salman, was cut up but the Saudi official said it was rolled up in a rug and given to a "local cooperator" for disposal.Asked about allegations that Khashoggi had been tortured and beheaded, the official said preliminary results of the Saudi investigation did not suggest that to be the case. The Saudi official presented what he said were Saudi internal intelligence documents which appeared to show the initiative to bring back dissidents, as well as the specific one involving Khashoggi.  He also showed testimony from those involved in what he described as the 15-man team's cover-up, and the initial results of an internal probe.He did not provide proof to substantiate the findings of the investigation and the other evidence. This narrative is the latest Saudi account that has changed multiple times.

Saudis Shocked by Official Flip-Flop on Khashoggi -- Saudi Arabia’s about-face admission that journalist and government critic Jamal Khashoggi was killed inside its consulate in Istanbul earlier this month sent shockwaves through a country where many had believed -- and defended -- initial official claims that the authorities had nothing to do with it.“A very sad day for this nation, to see what the country had descended into,” said one Saudi man, who spoke on condition of anonymity to criticize a government that tolerates virtually no dissent. “No country is perfect, but used to be proud that the country had a certain morality that aligned with Arabian values. We lost that forever unfortunately.” The Saudi government admitted early Saturday that Khashoggi was killed on Oct. 2 after “discussions” turned violent in the diplomatic mission where he’d come for documents for his wedding. Khashoggi died after he was placed in a choke hold, according to a person with knowledge of the Saudi probe. King Salman removed a top royal adviser, and prosecutors said 18 others had been detained in the case.The moves were an abrupt reversal from previous professions of innocence. In an interview with Bloomberg News the day after Khashoggi vanished, Crown prince Mohammed bin Salman said the Washington Post contributor left the premises unscathed. Under mounting international pressure, King Salman ordered an internal investigation last week. While U.S. President Donald Trump welcomed Saturday’s moves as “a good first step,” the admission met widespread skepticism on Capitol Hill and in other capitals. Turkish media have cited unnamed officials as saying they have audio recordings and other evidence Khashoggi was tortured and dismembered by Saudi agents within minutes of arriving at the consulate. The crisis has revealed vulnerabilities for 33-year-old prince Mohammed as he faces the strongest questioning of his rule among skeptics abroad since he was appointed crown prince last year. The adviser the king removed Saturday, Saud al-Qahtani, was a prominent aide to the prince.

Scandal Over Dead Journalist Jolts Heir to Saudi Throne -- Saudi Arabia’s elderly king sent a strong signal this weekend that his handpicked heir, 33-year-old Crown Prince Mohammed bin Salman, remains in good standing despite the gruesome killing of a prominent government critic that many at home and abroad suspect he set in motion.Yet the events of the past few weeks have sharpened differences between the prince and royal family members who were beginning to question his judgment and temperament. And there is no sign that the global backlash over the killing will abate soon, testing Saudi Arabia’s modernization of its economy and its relationship with its most important ally, the U.S.On Saturday, King Salman granted Prince Mohammed new powers over the country’s intelligence bodies, to pair with his sweeping authority over Saudi Arabia’s economy and defense. That same day, the Saudi attorney general effectively exonerated the crown prince, blaming the death of journalist Jamal Khashoggi on “a brawl and physical altercation” in the Saudi consulate in Istanbul. Speaking after a political rally in Nevada on Saturday, President Donald Trump told reporters he wasn’t satisfied with the initial results of the Saudi investigation into the killing the Istanbul consulate. “I’m not satisfied until we find the answer,” Mr. Trump said, adding that he would consider sanctions, but not on military sales. He added that “it’s possible” the crown prince didn’t know about the killing, and that he was still looking to speak with him. People in Prince Mohammed’s camp say his power internally remains largely unchecked, and there is no indication the Saudi monarch is preparing to remove his son. The prospect of a family member pushing him aside is negligible, advisers say, largely because Prince Mohammed has solidified his power base by removing potential rivals.In the kingdom itself, a number of Saudi royals have tried to reach out to King Salman to discuss the crisis, but have been blocked by associates of the crown prince, said two members of the royal family. They have been secretly meeting in small groups to discuss the issue, they said.Among other things, some of these people are challenging the official version of what happened to Mr. Khashoggi. Prince Khalid al Faisal, an envoy of King Salman who was dispatched to Ankara earlier this month, had access to a short audio recording that offers evidence that Mr. Khashoggi was drugged, killed and dismembered minutes after walking into the consulate, these two members say. “The audio does not have this nonsense about a fight that broke after an argument,” said one royal member. “This is not what Khalid told the king and his friends. This is absolutely rubbish.”

Saudi Crown Prince Spoke to Khashoggi by Phone Moments Before He Was Killed — In the latest bombshell report involving the Khashoggi murder, Saudi Crown Prince Mohammed bin Salman reportedly spoke on the phone with journalist Jamal Khashoggi moments before he was murdered in the Saudi consulate in Istanbul. Turkish pro-government daily Yeni Safak disclosed the new alleged details of the case in a report on Sunday, contradicting claims by Saudi authorities that Prince Mohammed played no part in Khashoggi’s murder. “Khashoggi was detained by the Saudi team inside the consulate building. Then Prince Mohammed contacted Khashoggi by phone and tried to convince him to return to Riyadh,” the report said. “Khashoggi refused Prince Mohammed’s offer out of fear he would be arrested and killed if he returned. The assassination team then killed Khashoggi after the conversation ended,” it added. While the report is so far unconfirmed, the New Arab reports that so far Turkish pro-government media have been receiving a steady stream of leaks many of which turned out to be accurate, including pictures of the hit team as they entered Turkey and reports of audio recordings of the murder said to be in the possession of Turkish authorities. Meanwhile, the Saudi version of events has been changing significantly over the past two weeks with authorities conceded Saturday that Khashoggi, the Washington Post columnist and a Riyadh critic, was killed inside the kingdom’s Istanbul diplomatic compound following a “brawl”. The admission came after a fortnight of denials with the insistence that the journalist left the consulate alive, starting on October 5, when Crown Prince MBS told Bloomberg that Khashoggi was not inside the consulate and “we are ready to welcome the Turkish government to go and search our premises”.

Jamal Khashoggi: UK, France and Germany ‘urgently’ demand clarification of ‘exactly what happened’ in Saudi consulate  -- Britain, France and Germany have said “nothing can justify” the killing of journalist Jamal Khashoggi inside Saudi Arabia’s Istanbul consulate, as the nations demanded “credible facts” over his death. A joint statement issued by UK foreign secretary Jeremy Hunt and his counterparts in Berlin and Paris, Heiko Maas and Jean-Yves Le Drian, condemned the alleged murder “in the strongest possible terms”.  They said there was an “urgent need for clarification on exactly what happened” when Khashoggi, an outspoken critic of the Saudi regime, entered the consulate in Turkey on 2 October. “Defending freedom of expression and a free press are key priorities for Germany, the United Kingdom and France‎,” the statement added. “The threatening, attacking or killing of journalists, under any circumstances, is unacceptable and of utmost concern to our three nations.

Germany halts arms deals with Saudi Arabia, encourages allies to do the same - In a move that could put further pressure on President Trump to stop arms sales to Saudi Arabia, German Chancellor Angela Merkel announced Sunday evening that her government would not approve new arms exports to the kingdom until further notice.“There is an urgent need to clarify what happened — we are far from this having been cleared up and those responsible held to account,” she said at a news conference. “I agree with all those who say that the, albeit already limited, arms exports an’t take place in the current circumstances,” Merkel said.While the move affects future deals, exports that have already been approved to the second-biggest foreign market for German arms equipment will proceed for now but may be suspended in the coming days.Germany is the first major U.S. ally to cast doubts on future arms sales after the killing of Washington Post contributing columnist Jamal Khashoggi, and the move is likely to put pressure on bigger exporters to do the same. President Trump has ruled out suspending arms exports but faces bipartisan calls to hold the alleged perpetrators behind the writer’s killing accountable.Since the Oct. 2 disappearance of Khashoggi, companies and governments worldwide have come under pressure to abandon their ties to the Saudi Arabian leadership. Saudi Arabia first denied allegations that it was behind the columnist’s disappearance but later claimed that Khashoggi was killed inside the Saudi Consulate in Istanbul in a “fistfight” with more than a dozen Saudi officials. While Trump has sent mixed messages — both calling the Saudi investigation “credible” and accusing the Saudis of “deception” — key U.S. allies in Europe agree that Riyadh’s explanation does not add up.

A Visibly Irritated Macron Evades Question About Halting Saudi Weapon Sales - Just days after Germany announced it was suspending arms sales to Saudi Arabia - just weeks after inking a $500 million weapons deal with Riyadh - while the outrage over Khashoggi's murder lingers, French President Emmanuel Macron on Tuesday was less enthused about following in the footsteps of his ideological icon, Angela Merkel, and refused to take questions about halting arms sales to Saudi Arabia despite Germany's calls on its European partners to follow its example and stop arms exports to the kingdom.During a Tuesday visit to a naval defense show, journalists asked Macron whether France would follow Germany in halting weapons sales to Riyadh after it admitted to the death of dissident journalist Jamal Khashoggi in its consulate, to which the French president with the plunging approval rating was clearly triggered:"This has nothing to do with what we're talking about. Nothing. So I won't answer that question. I'm sorry but as long as I'll be in office this is how it will be, whether people like it or not," he responded, visibly irritated according to Reuters."It's not because one leader says something that I must react to it every time. So I won't answer that," he added in a bout of insecurity, after a journalist asked a follow-up question.As we reported on Monday, Macron's co-leader of Europe's hypocritical progressive movement of ideological purity, Angela Merkel, on Monday called the killing of Khashoggi a "monstrosity" and vowed to halt all German arms exports to Riyadh until the case is cleared up. After her comments, Germany's economy minister - hoping that Germany does not lose market share as it engages in international virtue signaling - Peter Altmaier, called on other European Union member states to follow its example in stopping arms exports to Saudi Arabia to increase pressure on Riyadh over the death of Khashoggi which has caused an international outcry.His appeal failed to stir Macron, however.

Erdogan: Turkey will reveal ‘naked truth’ over Khashoggi killing - Turkey's President Recep Tayyip Erdogan has promised to reveal the "naked truth" over the killing of Saudi journalist Jamal Khashoggi, saying that he will make a new statement on the case on Tuesday. His comments on Sunday are likely to increase speculation that Ankara may be about to reveal some of the results of its investigations into the killing of Khashoggi, a Washington Post columnist, who disappeared after entering the Saudi consulate in the Turkish city of Istanbul on October 2On Saturday, after weeks of denying any involvement in Khashoggi's disappearance, Saudi Arabia said the 59-year-old, a prominent critic of the powerful Crown Prince Mohammed bin Salman (MBS), died in a fistfight at the consulate. "I will make my statement about this issue on Tuesday at the party group meeting," Erdogan said in a speech in Istanbul. "We are looking for justice here and this will be revealed in all its naked truth, not through some ordinary steps but in all its naked truth," Erdogan added.Erdogan has remained largely silent on the case, although Turkey's pro-government newspapers have released information detailing a 15-member team that purportedly arrived in Istanbul to confront Khashoggi at the consulate."Why 15 people came ... why 18 people were detained ... These things have to be told in detail," Erdogan said.Saudi Arabia's public prosecutor on Saturday said 18 people were arrested in connection with the incident.

Turkey Adopts ‘Drip-Drip’ Tactic in Saudi Murder Case —Turkish authorities decided to leak evidence gradually in the days after the killing of a dissident journalist as part of an effort to blunt the international standing of rival Saudi Arabia, Turkish officials said. Turkish investigators quickly determined Jamal Khashoggi had been killed by Saudi operatives but authorities didn’t publicly announce what they knew because they were worried about provoking a confrontation with the rich and powerful kingdom. But as Mr. Khashoggi’s disappearance gained global attention and Saudi Arabia denied any knowledge of it, Turkish officials saw a chance to counter Riyadh’s narrative. “We turned on the drip-drip,” a Turkish official said. More drips came on Monday: Turkish security-camera footage showing a man with a fake beard and dressed to look like Mr. Khashoggi exiting a back door of the Saudi consulate in Istanbul after the journalist was killed. The footage weakens the narrative Riyadh released on Saturday that he died by accident during a brawl. A Saudi official confirmed the kingdom’s use of a Khashoggi double but declined to elaborate. President Trump said Monday that he was “not satisfied” with Saudi Arabia’s new explanation and that he expected to know more about the circumstances on Tuesday with the help of “top [U.S.] intelligence people” in Turkey. Central Intelligence Agency Director Gina Haspel flew on Monday to Turkey to meet with investigators there as the U.S. reviews evidence in the case. President Recep Tayyip Erdogan of Turkey pledged to reveal what happened “in its naked truth” in a Tuesday address to lawmakers from his ruling Justice & Development Party. Turkish officials said they have an audio recording proving the Saudis killed the journalist “in a barbaric way.” The Trump administration has forged a tighter military and political alliance with Saudi Arabia, putting its brash Crown Prince Mohammed bin Salman at the center of a Middle East coalition that is hostile to Iran and to Islamist movements like the Muslim Brotherhood that are supported by Mr. Erdogan’s Turkey. 

Jamal Khashoggi: Erdogan says murder was “planned’ – DW - The Turkish president has laid out the first official version of the investigation into the murder of journalist Jamal Khashoggi. Saudi Arabia could face its worst crisis if the crown prince is linked to the killing.  Turkish President Recep Tayyip Erdogan told lawmakers on Tuesday that Turkey had "strong evidence" the murder of Saudi dissident journalist Jamal Khashoggi was planned in advance by Saudi officials, contradicting Saudi accounts that the journalist died accidentally in a "fistfight" in the Saudi consulate in Istanbul.The Saudi government's alleged involvement in the journalist's death has caused an international outcry and prompted Germany to halt arms sales to the country. What did Erdogan say?

• Turkey has strong evidence that Saudi officials planned Khashoggi's murder days in advance.
• Saudi team visited forest in Istanbul and Yalova before Khashoggi's disappearance on October 2.
• Consulate security cameras were removed.
• A day before the murder, a number of forensics, intelligence specialists arrived in Istanbul
• A Saudi team of 15 entered the consulate on the day of Khashoggi's murder.
• Eighteen people arrested in Saudi Arabia in relation to the murder matches those identified by the Turkish intelligence.
• Khasoggi was killed in a violent, savage murder.
• He had no doubt to question the integrity of the Saudi King.
• The issue of diplomatic immunity under the Vienna Convention would be discussed in regards to the case.
• The suspects should be tried in Istanbul and not in Saudi Arabia.

Erdogan- Savage Khashoggi Murder Was Planned - Turkish President Erdogan's didn't quite deliver on his promise to reveal "the naked truth" in the killing of Saudi journalist Jamal Khashoggi during a speech on Tuesday before the Turkish parliament, though he did raise important questions while providing the most detailed public statement yet on the killing, which corroborated several anonymously sourced reports that surfaced in recent days. Though it was conspicuously timed to overlap with the opening of Crown Prince Mohammad bin Salman's "Davos in the Desert," Erdogan's speech didn't include any previously unreported bombshell allegations, nor the "smoking gun" to connect the killing directly to MbS, Erdogan did assert that the "savage" killing had been pre-planned by the Saudi government, contradicting the Saudi government's official story that Khashoggi's death was the result of a botched interrogation, and that he died after a brief struggle...with 15 Saudi intelligence operatives, as the Financial Times pointed out. Though his statement was the most aggressive yet from the Turkish government, it notably stopped short of directly accusing the Saudi leadership of murder."We have significant signs that this was not something that happened instantaneously, spontaneously," Mr Erdogan said in speech to members of his parliamentary party. "Khashoggi was murdered in a ferocious manner." Erdogan said the gathering of the 15 intelligence operatives in Istanbul was clearly no accident, and that the Turkish government wants to know "on whose orders" they were sent. While the Saudis had taken "an important step" in admitting to the killing, Erdogan said more details - such as the location of Khashoggi's remains - must be shared with Turkish investigators."People who had qualifications related to the incident gathered in Istanbul," he said. "On whose orders did they come . . .? We want an answer.""Why has the body not been found?" Erdogan also questioned why the Saudis had refused to open their consulate to Turkish investigators until days after Khashoggi's disappearance. Watch the full video of Erdogan's speech below:

Khashoggi Drama – A Deal Is No Longer Possible – Erdogan Demands That MbS Goes -The Khashoggi saga continues to influence Middle East policies.On Friday the Saudi regime admitted that Khashoggi was killed in its consulate in Istanbul. Since then they have changed their story twice:After weeks of denying involvement in Khashoggi's disappearance, Saudi Arabia said that he was killed in the Istanbul consulate, saying his death was the result of a "fistfight". A Saudi source close to the royal palace later told CNN that the Washington Post journalist died in a chokehold. On Sunday, its foreign minister, Adel al-Jubeir, went further, describing Khashoggi's death on Fox News as a "murder" and a "tremendous mistake."Mohammad bin Salman, the Saudi clown prince and effective ruler, does not seem to have any good media advisors. Erdogan's mouthpiece, the somewhat lunatic columnist Ibrahim Karagül, gives an insight into Erdogan's thinking and sets out his aims:The real trap was set against Saudi Arabia. Even though a Saudi Arabia-U.S.-Israel rapport was established and discourse about shielding the Riyadh administration from Iran, the objective was to destroy Saudi Arabia through Salman and Zayed. The next front after the Syria war was the Persian Gulf, Saudi Arabia. They never understood this, they could not understand it. Turkey understood it, but the Arab political mind was blinded. Now Saudi Arabia is in a very difficult situation. The world collapsed over them. Crown Prince Salman is going through a tough test via Zayed, who has control over him. If the gravity of the situation after the facts revealed with the Khashoggi murder is not comprehended, we will witness a “Saudi Arabia front” in less than a few years. The Riyadh administration must dethrone Crown Prince Mohammed bin Salman at once. It has no other choice. Otherwise, it is going to pay very heavy prices. If they fail to quash the trap set up targeting Saudi Arabia through bin Zayed, they will be victims of Trump’s “You won’t last two weeks” statement, and the process is going to start to work in that direction.  ...This duo must be taken out of the entire region and neutralized. Otherwise they are going to throw the region in fire. Crown Prince of Abu Dhabi Mohammed bin Zayed is Mohammad bin Salman's mentor and partner in crime in Yemen. MbZ is smarter than MbS - and will be more difficult to dislodge. Erdogan's aim seems clear. The chance for deal is gone. MbS has to go. He will try to play the case out until that is achieved.

How the man behind Khashoggi murder ran the killing via Skype (Reuters) - He ran social media for Saudi Arabia’s crown prince. He masterminded the arrest of hundreds of his country’s elite. He detained a Lebanese prime minister. And, according to two intelligence sources, he ran journalist Jamal Khashoggi’s brutal killing at the Saudi consulate in Istanbul by giving orders over Skype. Saud al-Qahtani, a top aide for Saudi Crown Prince Mohammed bin Salman, is one of the fall guys as Riyadh tries to stem international outrage at Khashoggi’s death. On Saturday, Saudi state media said King Salman had sacked Qahtani and four other officials over the killing carried out by a 15-man hit team. But Qahtani’s influence in the crown prince’s entourage has been so vast over the past three years - his own rise tracking that of his boss - that it will be hard for Saudi officials to paint Qahtani as the mastermind of the murder without also raising questions about the involvement of Prince Mohammed, according to several sources with links to the royal court.  “This episode won’t topple MbS, but it has hit his image which will take a long time to be repaired if it ever does. The king is protecting him,” one of the sources with ties to the royal court said.   Qahtani himself once said he would never do anything without his boss’ approval.  “Do you think I make decisions without guidance? I am an employee and a faithful executor of the orders of my lord the king and my lord the faithful crown prince,” Qahtani tweeted last summer.

Watch- Saudi Consulate Employees Burn Documents Day After Khashoggi Killing - The drumbeat of incriminating leaks from the Turkish investigation into the killing of Jamal Khashoggi has continued apace Monday afternoon. And in the latest salacious piece of evidence that appears to support the theory that Khashoggi's murder was a premeditated act ordered by a senior official in his government, if not the Crown Prince himself, a Turkish TV station has aired footage showing employees from the Saudi consulate in Istanbul burning documents on Oct. 3, the day after Khashoggi disappeared inside the consulate and was never seen again.Per Middle East Eye, Turkish television channel A Haber released on Monday a video seemingly filmed by a small drone of consulate employees throwing documents into a fire outside of the consulate building.BREAKING — Turkish TV @tvahaberbroadcasts images showing Saudi Consulate staff in Istanbul are burning documents one day after #Khashoggi murder pic.twitter.com/eeoDiCsn12 —   Turkish authorities haven't commented on the latest video, which was shared by a number of Turkish news outlets. The identity of the individuals in the video and the contents of the documents they burned remained unknown as of publication time.Meanwhile, Middle East Eye reported that five more Turkish employees of the Saudi consulate in Istanbul gave witness statements on Monday to investigators in the Khashoggi probe. That brings the total number of consulate employees interviewed to 25 - roughly 20 short of the 45 that investigators hope to interview. On Saturday, Saudi Arabia officially admitted that Khashoggi had been killed inside the embassy during what they described as a "botched interrogation. However on Sunday, Saudi Foreign Minister Adel al-Jubeir appeared to walk back these claims, saying the kingdom didn't know how Khashoggi died. There have also been conflicted reports about how Khashoggi's remains were disposed of, with Saudi sources saying his body was rolled into a carpet and given to a local fixer to dispose of, while Turkish sources insist that he was cut into 15 pieces.

Jamal Khashoggi’s ‘body parts and disfigured face found in Saudi consul’s garden’ as his son stares down Crown Prince THE dismembered body of Saudi journalist Jamal Khashoggi has been found near where he is believed to have been tortured and killed, it's been claimed today. Reports say the butchered remains of the writer - feared murdered by assassins inside the Saudi consulate in Istanbul - had been "cut up" and his face "disfigured". Slain journalist Jamal Khashoggi reportedly spoke with the Saudi Crown Prince just MINUTES before he was killed by a hit squad News of the grisly "find" came as the journalist's devastated son Salah came face-to-face with Crown Prince Mohammad Bin Salman. Members of the journalist's family were invited to meet the royal family in Riyadh so they could "pass on their condolences." Images released by the state-run Saudi Press Agency show King Salman and the Crown Prince shaking the hands of the journalist’s relatives. Salah was pictured looking steely-eyed as he came face-to-face with the man some have alleged was behind his father's killing.The Saudi government insists that the King and Crown Prince had no prior knowledge of the plan to kill Khashoggi.One source claimed the body parts were discovered in the garden of the Saudi consul general's home, reports Sky News.  Dogu Perincek, leader of Turkey's Rodina party, earlier alleged the body parts were discovered in a well inside the garden.However, neither reports have been officially confirmed by the authorities in the Turkish city.The news comes after Turkey's president said the body had not been found and called on the Saudis to reveal its whereabouts.  Earlier it was revealed one of the Saudi leader's top aides reportedly oversaw the murder via Skype yelling “Bring me the head of the dog”.

A wild rumor claimed Jamal Khashoggi's body had been found in a well, but Turkey's president says it is still missing - Turkey's president has publicly demanded the whereabouts of the body of journalist Jamal Khashoggi, shooting down a wild rumor that Khashoggi's body was found in a well in on the grounds of the Saudi consulate in Istanbul.Recep Tayyip Erdogan told lawmakers of his Justice and Development Party (AKP) on Tuesday that he still wanted to know where Khashoggi's body is."Where is the body of Jamal Khashoggi?" Erdogan said. "No one knows until now."On Monday Doğu Perinçek, the chairman of Turkey's left-wing nationalist Patriotic Party, claimed that parts of Khashoggi's body had been found in a well in the garden of the Saudi consulate in Istanbul.It was unclear where he got that information, or whether he was privy to Turkey's intelligence. He said he expected Erdogan to say as much in his speech, but it ultimately did not come to pass.Surveillance footage published by Turkish newspaper Hurriyet purports to show Jamal Khashoggi entering the Saudi consulate in Istanbul on October 2.   Erdogan also alluded to Saudi claims, made anonymously to Reuters on Sunday, that Khashoggi's body had been rolled up in a rug and given to a local person for disposal.That claim comes in contrast to that by Turkish intelligence, which says that Khashoggi's body was dismembered, according to news outlets including The New York Times and The Wall Street Journal.Erdogan said on Tuesday: "There is a claim that the body of Khashoggi has been given to a local person. I am asking: Who is that local person?"No one is talking about this local person. Someone has said that it was a local person. You need to reveal the name of this local person. "No one is allowed to think that this case will come to an end without answering any of these questions."

The global oil market doesn't believe Khashoggi death will lead to a major Middle East conflict - Saudi Arabia, the world's largest oil exporter, is mired in its biggest international crisis since King Salman took the throne in 2015, but one would hardly know it by looking at oil markets.The market remains unconvinced that the killing of journalist and U.S. resident Jamal Khashoggi will cause a conflict that shrinks Saudi supply. At the same time, analysts say traders are taking profits after this month's oil price rally, while investors sell crude as the broader market sheds risky assets.Oil prices have tumbled from nearly four-year highs just three weeks ago, despite rising U.S.-Saudi tension over the killing. U.S. crude dipped below $66 a barrel on Tuesday, hitting a two-month low and dropping more than $11 from its high on Oct. 3. Brent crude, the benchmark for international oil prices, dropped to a more than six-week low, tumbling below $76, more than $10 below its own four-year high.Saudi Arabia acknowledged Friday that several of its agents were involved in Khashoggi's death in the Saudi Consulate in Istanbul. The incident has sparked calls for sanctions against Saudi Arabia, a series of embarrassing intelligence leaks by Turkish authorities that undermined the Saudis' story and threats of retaliation from the kingdom.The scandal initially raised concerns that Saudi Arabia would refuse to hike oil output as planned. The Trump administration is largely depending on the Saudis to fill the gap left by the loss of Iranian oil exports, which are subject to U.S. sanctions beginning Nov. 4. However, Saudi Energy Minister Khalid al-Falih reassured markets over the past two days that Saudi Arabia intends to increase production as previously announced. He said there is no intention to hold back oil exports, after the nation's press agency released a statement last week threatening to retaliate against any foreign government that seeks to punish the country for Khashoggi's killing.

Khashoggi, Erdogan and the Truth -Craig Murray - The Turkish account of the murder of Khashoggi given by President Erdogan is true, in every detail. Audio and video evidence exists and has been widely shared with world intelligence agencies, including the US, UK, Russia and Germany, and others which have a relationship with Turkey or are seen as influential. That is why, despite their desperate desire to do so, no Western country has been able to maintain support for Crown Prince Mohammed Bin Salman. I have not seen the video from inside the consulate, but have been shown stills which may be from a video. The most important thing to say is that they are not from a fixed position camera and appear at first sight consistent with the idea they are taken by a device brought in by the victim. I was only shown them briefly. I have not heard the audio recording. There are many things to learn from the gruesome murder other than the justified outrage at the event itself. It opens a window on the truly horrible world of the extremely powerful and wealthy. The first thing to say is that the current Saudi explanation, that this was an intended interrogation and abduction gone wrong, though untrue, does have one thing going for it. It is their regular practice. The Saudis have for years been abducting dissidents abroad and returning them to the Kingdom to be secretly killed. The BBC World Service often contains little pockets of decent journalism not reflected in its main news outlets, and here from August 2017 is a little noticed piece on the abduction and “disappearance” of three other senior Saudis between 2015-17. The key point is that European authorities turned a completely blind eye to the abductions in that BBC report, even when performed on European soil and involving physical force. The Saudi regime was really doing very little different in the Khashoggi case. In fact, inside Saudi Arabia, Khashoggi was a less senior and important figure than those other three abducted then killed, about whom nobody kicked up any fuss, even though the truth was readily available. Mohammed Bin Salman appears to have made two important miscalculations: he misread Erdogan and he underestimated the difference which Khashoggi’s position as a Washington Post journalist made to political pressure on Western governments.

Khashoggi Drama – A Deal Has Been Made But Will It Hold? -- A preliminary deal has been made between the Turkish president Erdogan and the al-Saud clan in Saudi Arabia. Over the last 36 hours, since Erdogan's speech proved Saudi culpability, there have been no more damaging leaks about the case from the usual Turkish sources. During a podium discussion at yesterday's investor conference in Riyadh Mohammad bin Salman denounced the “heinous crime” committed against Jamal Khashoggi. He praised the "unbreakable relations" with Turkey and lauded Qatar's economic durability. The comments came after a phone call between MbS and Erdogan. The negotiations proved to be difficult. The Saudi King sent the governor of Mecca and Medina to make a deal: Prince Khalid al-Faisal returned home from Ankara with a bleak message for the royal family. “It is really difficult to get out of this one,” Prince Khalid told relatives after his return, one of those family members recalled this week. “He was really disturbed by it.” Early rumors spoke of a Saudi offer of $5 billion to burry the case. That was not enough. On Monday the NYT reported that Erdogan denied that he would make any deal of that kind: Erdogan's current source of money is Qatar, which is under blockade by Saudi Arabia and the UAE. Ending the crisis over Qatar was only one condition he set out to the Saudis. There are other issue related to Syria and more generally the Muslim Brotherhood. The Turkish side still has the leverage needed to 'adjust' any deal and to guarantee that the Saudis stick to it. The tapes of the Khashoggi murder, audio and video, have not been published. The former British ambassador Craig Murray reports: I have been shown stills which may be from a video. The most important thing to say is that they are not from a fixed position camera and appear at first sight consistent with the idea they are taken by a device brought in by the victim. If the Saudis try to cheat away from the deal the photos and audio tapes could still be released. They allegedly prove that MbS himself was very much involved in the killing. The U.S. gave the final push for a deal to fall into place. The CIA's torturer in chief Gina Haspel was sent to show Erdogan her instruments.    Whether Erdogan held back in his speech yesterday as a result of Haspel’s intervention I do not know. Haspel listened to the audio tape and found it 'compelling'.

Erdogan- Saudis Must Reveal Who Gave Order To Murder Khashoggi - Now that the Saudis have admitted that the killing of Jamal Khashoggi was a premeditated act, Turkish President Recep Tayyip Erdogan is stepping up his rhetoric, saying in a speech to AKP party officials that whoever ordered the 15-man hit squad to travel to the Saudi consulate on Oct. 2. must reveal himself.Erdogan also demanded that the kingdom reveal the location of Khashoggi's body, adding that the Turks have information about the killing that hasn't been publicly disclosed. If the Saudis truly did hand over Khashoggi's body to a "local cooperator", as they have claimed, Erdogan demanded they share the cooperator's identity with Turkish investigators, per Reuters.  The team of Saudi intelligence agents and a doctor specializing in autopsies was lying in wait for Khashoggi when he visited the embassy on that day to pick up documents to allow him to marry his Turkish fiance."Who gave this order?" Erdogan said in a speech to members of his AK Party in Ankara. "Who gave the order for 15 people to come to Turkey?" he said, referring to a 15-man Saudi security team Turkey has said flew into Istanbul hours before the killing. Erdogan also said Saudi’s public prosecutor was due to meet the Istanbul prosecutor in Istanbul on Sunday. While he has so far avoided using his name, the subtext of Erdogan's remarks was clear: the Turkish leader insinuated that Saudi Crown Prince Mohammad bin Salman, who is widely suspected of ordering Khashoggi's murder, admit to his role in the killing.

Khashoggi killing: as Saudi turns to China, for MbS it’s business as usual The warning signs were flashing long before Saudi Crown Prince Mohammed bin Salman’s image as the reformer who would take his kingdom into the 21st century was severely tarnished – at least in the West and a smattering of Muslim nations – by the murder of journalist Jamal Khashoggi.There was his insensitivity to mounting criticism of the military campaign in Yemen, led by Saudi Arabia and the United Arab Emirates, that sparked one of the worst humanitarian crises since the second world war; the debilitating boycott of Qatar; the mass detention and shakedown of hundreds of members of the ruling family and prominent businessmen in a power and asset grab; the confinement of Saad Hariri in an ultimately failed attempt to force the Lebanese prime minister to resign; the arrest of a large number of Islamic scholars, intellectuals and activists, including women who had campaigned for his lifting of the ban on women driving; and the diplomatic crisis with Canada over a tweet criticising the kingdom’s human rights record. Taken together with the killing of Khashoggi in Saudi Arabia’s Istanbul consulate, the signs suggest the 33-year old prince seemingly lacked an understanding of the limits of power and the best ways to wield it. The prince’s critics interpreted his actions as a reflection of his impetuousness, willingness to take risks and gamble without having a credible exit strategy, refusal to tolerate any form of criticism, and his ruthlessness. But until Khashoggi’s disappearance, Western leaders, including US President Donald Trump and British Prime Minister Theresa May, were willing to look the other way and eager to maintain military, energy and other commercial relations.Nonetheless, the reality is that Prince Mohammed may be down, but he is by no stretch of the imagination out. This week’s opening of a showcase investment conference in Riyadh sent a similar message. The standing-room-only conference hall was packed. Saudi, Arab, Asian and African leaders and investors, undeterred by the Khashoggi crisis and allegations of the crown prince’s involvement, took the place of prominent Western CEOs and government ministers who had withdrawn their participation.

"I Think They Might Kill Us": Saudi Dissident Pundit "Undeterred" By Khashoggi Killing, "Tubby Teddy Bear" Threat - A Saudi dissident who makes a living mocking the House of Saud told AFP that he is undeterred by the murder of Jamal Khashoggi at the Saudi embassy in Istanbul. Ghanem Almasarir, who lives in the UK, spoke at a Wednesday protest at the Saudi embassy in London where he said that the murder of Khashoggi revealed a darker side of Prince Mohammed bin Salman - who Almasarir mocks as a "tubby teddy bear." From self-imposed exile in Britain, the video-blogging political satirist, who regularly roasts the ruling Saudi royal family, has racked up more than 200 million views on YouTube. ...On August 31, just over a month before Khashoggi was killed, Almasarir said he was followed and beaten by two Saudi men. The scene -- in which he was punched in broad daylight opposite London's Harrods emporium landmark -- was captured on video. -AFP via Yahoo!"If they are not held accountable, they will continue to do it," said the 38-year-old social media star, adding that several Saudi dissidents living in the UK are "afraid right now to leave their house." Riyadh faces growing incredulity over its explanations about the killing of Khashoggi, a Washington Post contributor and critic of Saudi policies.After he disappeared at the Saudi consulate in Istanbul on Oct. 2, Saudi officials said he left unharmed. But on Friday they announced he had been killed inside in an altercation. World powers including Britain and France are demanding answers and US President Donald Trump has accused Saudi Arabia of lying about the murder. -AFP via Yahoo!

The front line of Saudi Arabia's invisible war in Yemen -- The Saudi-led war in Yemen has ground on for more than three years, killing thousands of civilians and creating what the United Nations calls the world's worst humanitarian crisis in the Arab world's poorest country. With the crisis over the killing of dissident Jamal Khashoggi in a Saudi consulate two weeks ago, Saudi Arabia's brash young crown prince, Mohammed bin Salman, now faces a fresh reckoning for his other foreign policy debacles.Outside Yemen, the catastrophic war has been largely overlooked.The Saudis barred foreign journalists from northern Yemen, scene of the biggest airstrike atrocities and the deepest hunger. The conflict is mostly unknown to Americans, whose military has backed the Saudi-led coalition's campaign with intelligence, bombs and refuelling, leading to accusations of complicity in possible war crimes. Since June, the war has centred on the Red Sea port of Hodeida. After a tense journey along a coastal highway prone to bombs and ambushes, we made a rare visit this month to the chaotic battlefield at the city gates.  There we saw what Crown Prince Mohammed's war looks like up close, from one side, among those Yemenis who are fighting and dying in it.  In 2015, the prince sent Saudi warplanes to bomb Houthi rebels who had seized control of northwestern Yemen and whom he saw as a proxy of Saudi Arabia's regional rival, Iran. Originally a movement of Shiite guerrillas from the mountainous northwest, the Houthis rose to power in the turmoil that followed the Arab Spring in 2011. After capturing the capital, Sanaa, in 2014, they soon controlled Yemen's three largest cities. Iran aided their advance with supplies of military equipment, including missiles. Since 2015, Saudi Arabia and the United Arab Emirates have led a military coalition in a war aimed at ousting the Houthis and restoring an internationally recognised government. But early promises of a swift victory have given way to a bloody stalemate, while the war has inflicted a catastrophic toll on Yemenis that includes widespread hunger and the worst cholera epidemic in history.

AP PHOTOS: Fishermen risk death in Yemen's violent waters (AP) — Every time Ammar Ahmed heads out to sea, he thinks about the helicopter. Earlier this month, after three days without a catch, he and eight other Yemeni fishermen decided to take their small boat into deeper waters, closer to the invisible boundary off the Red Sea coast enforced by the Saudi-led coalition at war with Yemen's Houthi rebels. That's when the Apache helicopter swooped in over the waves, its heavy guns causing a frenzy in the churning waters. "The Apache attacked, firing everywhere," the 70-year-old father of three told The Associated Press in his small port town of Mahwa. "Everyone jumped in the water." The men treaded water for more than 20 minutes as the Apache continued to hover overhead. When it flew off, they returned to their boat and sailed back to port empty-handed. Ahmed was so traumatized by the experience he couldn't go near the water for two weeks. But then a new fear took hold — hunger. The three-and-a-half-year war in Yemen has caused the world's worst humanitarian crisis, with two thirds of the population — some 18 million people — relying on humanitarian aid. International aid agencies say 8 million Yemenis don't know where their next meal is coming from. So an estimated 300,000 fishermen still ply the waters of Yemen's Red Sea coast, where heavy fighting has been underway for months as the coalition tries to pry the port city of Hodeida — a crucial lifeline for aid — from the Iran-aligned rebels. Just days before Ahmed's encounter with the Apache, a frigate opened fire on a fishing boat, killing 18 fishermen from a small village near the port of Khokha and leaving just one survivor. In October 2015, coalition ships and Apaches killed 48 fishermen who were heading to an island some 30 miles (48 kilometers) offshore to rest.

Assassins for Hire: US Citizens, Israelis, and Palestinians Kill for Money in Yemen - Real News Network video & transcript - On Tuesday, Aram Roston of BuzzFeed revealed that the United Arab Emirates, UAE, hired an American mercenary company called Spear Operations Group to assassinate individuals in Yemen, and that they also attempted to plant a bomb at the headquarters of the Islamic party in this operation. The UAE is cooperating with Saudi Arabia in its war against the Houthi ethnic group that is governing Yemen. It is very interesting to note that the UAE did not contact this company directly, but it was Mohammed Dahlan, a Palestinian from Gaza who is a former senior member of the Fatah party who reached out to the Spear Operations Group. And so why was the Spear Operations Group chosen out of dozens of similar mercenary companies? Spear Operations Group was founded by Abraham Golan, a former Israeli military officer and well-known businessman in the private military and security business. Already in February, the Yemeni Transportation Minister Saleh al-Gabwani warned that the U.S. intervenes in Yemen by creating small armies, and fragmenting the territory and its population. SALEH AL-GABWANI: The situation is very bad in all liberated areas, particularly those in the south, where there are tribal armies established and supported by the United Arab Emirates. There are also provincial armies, and there are gangs. Even Al Qaeda is spreading there in large parts of the governorates. Al Qaeda has never been as present as it is right now. GREG WILPERT: Joining me now to discuss the role of the U.S. mercenaries in the Yemen war is Antony Loewenstein. He’s an independent journalist and author of Disaster Capitalism: Making a Killing out of Catastrophe. Thanks for joining us again.

Saudi airstrike kills 21 civilians in Yemen - A United Nations (UN) report released on Thursday confirmed that at least 21 Yemeni civilians were killed and 11 more injured in an October 24 airstrike carried out by Saudi-led coalition forces. The latest civilian target destroyed by Washington’s despotic ally was a vegetable packaging facility, located in the town of Bayt el-Faqih, located approximately 43 miles southwest of Hodeidah. The dead and injured consisted of workers, farmers and children. According to a Yemen health ministry source, as reported to the Middle East Eye, about half of the fatalities were instant. The remaining deaths were a result of rescuers being unable to reach medical facilities in a timely manner. What should be a one-hour drive from Bayt el-Faqih to Hodeidah now takes over six hours to accomplish as the warring factions have set up checkpoints and roadblocks along the contested highway. Houthi rebels were not seen in the area, nor was any military equipment found in the aftermath of the slaughter. The Associated Press and Al-Jazeera have confirmed via an unreleased video that charred human remains were scattered throughout the facility and marketplace. This is third airstrike launched by the Royal Saudi Air Force (RSAF) in the last week that has resulted in civilian casualties. The RSAF is well equipped and supplied by Western imperialism, featuring US manufactured Boeing F-15 Eagles and the British Aerospace (BAE) Panavia Typhoons.

King says Jordan to reclaim land held by Israel under 1994 deal - Jordan has told Israel that it intends to reclaim two tracts of territories remained in Israeli private ownership under a 1994 peace treaty, King Abdullah II has announced, in a move that was welcomed by activists and civil society groups opposing the deal. As part of the agreement, Israel leased about 405 hectares of agricultural land in the southern sector of its border with Jordan called al-Ghumar, as well as the small al-Baqura area near the confluence of Jordan and Yarmouk rivers.The areas are currently regulated through a "special regime" in the peace treaty where Israel recognises Jordanian sovereignty with Israeli private land ownership. The territories - water-rich farmlands currently cultivated by Israeli farmers, kept in Israeli hands for 25 years, with a 12-month notice period needed to prevent an automatic extension. The deadline for renewing the leases is Thursday, October 25."We have informed Israel of an end to the application of the peace treaty annexes regarding al-Baqura and al-Ghumar," the king said on Sunday, according to the Petra state news agency."Al-Baqura and al-Ghumar have always been on top of my priorities. Our decision is to end the annexes of the peace treaty based on our keenness to take all that is necessary for Jordan and Jordanians," the king added. "Al-Baqura and al-Ghumar are Jordanian land and will remain Jordanian." Following the king's announcement, Israeli Prime Minister Benjamin Netanyahu said that Israel would negotiate with Jordan an extension of the leases, which expire next year.

Israel refusing Russian demand to give additional warning before conducting air strikes in Syria - Israel is rejecting reported Russian demands that Israel give the Russian military additional warning before carrying out airstrikes in Syria, Defense Minister Avigdor Liberman claimed on October 25.“We will not accept any restrictions on our freedom of operation, and when it comes to national security, we will take action,” the defense minister told Army Radio in an interview.In an attempt to save the face of the Israeli media, Liberman stated that the Israeli military has carried out more airstrikes on targets in Syria than have been attributed to it by media.“Just because the media did not report on Syria strikes does not mean there were none,” Liberman said. “I don’t think it’s our duty to report what the army must do. An army needs to act.” These remarks were clearly referring to to the fact that there have been no Israeli airstrikes on Syria since the delivery of Russian-made S-300 systems to the Syrian Air Defense Forces in late September.

Russia Accuses US of Coordinating Drone Attack on Russian Military Base in Syria -— Over the past year Russia’s chief military base in Syria, Khmeimim Air Base near Latakia (alternately Hmeimim), has come under sporadic waves of attack by small armed drones, which have appeared increasingly sophisticated.Those attacks were assumed to have been the work of jihadists operating out of Idlib, such as Jabhat Fatah al-Sham, who launched the small makeshift drones in an attempt to penetrate Russian defenses, even targeting the Russian naval facility at the Syrian port city of Tartus in addition. The Kremlin now says, based on new intelligence provided by the Russian defense ministry that a major attack on Khmeimim last January was coordinated by a US spy plane. Kremlin spokesman Dmitry Peskov presented statements confirming Russian intelligence has produced “undoubtedly a very alarming report” which finds a US P-8 Poseidon surveillance plane was behind the nighttime January 8th attack which involved 13 unmanned aerial vehicles (UAVs) in total — 10 approached Khmeimim while 3 attempted an attack on the naval facility in Tartus.Russian Deputy Defense Minister Colonel General Alexander Fomin went public with details of the Russian intelligence report at a plenary session of the Beijing Xiangshan Forum on security on Thursday: “Thirteen drones moved according to common combat battle deployment, operated by a single crew. During all this time the American Poseidon-8 reconnaissance plane patrolled the Mediterranean Sea area for eight hours.” He said that the moment Russia switched on its electronic countermeasures, the drones switched to manual mode while still operating in a sophisticated and highly coordinated fashion. The deputy defense minister noted: “Manual guidance is carried out not by some villagers, but by the Poseidon-8, which has modern equipment. It undertook manual control,” he said. “When these 13 drones faced our electronic warfare screen, they moved away to some distance, received the corresponding orders and began to be operated out of space and receiving help in finding the so-called holes through which they started penetrating. Then they were destroyed,” Col. Fomin continued. Most of the drones during the January attack were intercepted by Russian air defense systems, but six drones were landed by Russian forces after successfully taking control through electronic countermeasures.

American Defense Contractor Accused of Enslaving U.S. Citizen Linguists - A major American defense contractor held its translators in a tent city under slave-like conditions, breaking U.S. anti-slavery laws, according to allegations in a 2016 federal lawsuit that was recently unsealed. Under threat of arrest in Kuwait, the translators were held in tents where the temperature regularly topped 100 degrees. Company representatives seized their passports and indicated they would go to prison if they tried to escape. According to the suit, supervisors weren’t coy about coercing the translators. One plaintiff, a linguist named Edward Youkhana, complained about his treatment in Kuwait to a regional manager. “The linguists are slaves,” the manager replied. Human rights advocates have long lambasted the Gulf states for their widespread practice of trafficking foreign workers and confiscating their passports. But those charges have largely focused on the exploitation of people from developing nations, including India and Nepal. The allegations in this suit, if true, would join the growing evidence that Americans are also vulnerable to slavery—and by companies working for their own government. This isn’t the first lawsuit alleging an American defense contractor treated its employees like slaves; in a a suit unsealed in April, six plaintiffs made similar allegations against ManTech. “These U.S.-citizen linguists are heroes—they go into combat unarmed to help minimize the chaos of the battlefield and gather intelligence,” said Joseph Hennessey, a lawyer representing the plaintiffs in both lawsuits. “To have been treated so horrifically is unfathomable.”

As U.S. sanctions loom, China's Bank of Kunlun to stop receiving Iran payments - sources (Reuters) - Bank of Kunlun Co, the key Chinese conduit for transactions with Iran, is set to halt handling payments from the Islamic Republic under pressure of imminent U.S. sanctions against the country, four sources familiar with the matter told Reuters. Kunlun, the main official channel for money flows between China and Iran, has verbally informed clients that it will stop accepting yuan-denominated Iranian payments to China from Nov. 1, said the sources, who include external loan agents and business officials who trade with Iran. The bank, controlled by the financial arm of Chinese state energy group CNPC [CNPC.UL], had already quietly suspended euro-denominated payments from Iran in late August, the four sources said, declining to be named due to the sensitivity of the matter. Kunlun did not respond to an emailed request seeking comment. A CNPC spokesman declined comment. It was not immediately clear how long the suspension of services will last and how Chinese businesses still selling goods or services to Iran would be able to receive payment. It was also not clear whether the bank’s services settling China’s payments for Iranian oil purchases would be affected. China is the top buyer of Iranian oil and nearly all of its oil payments go through Kunlun. China had been buying some $1.5 billion worth of oil each month from Iran as recently as September. But state refiners have since October been scaling back oil purchases from Iran to comply with looming U.S. sanctions, oil industry sources have said. The previously unreported moves by Kunlun highlight the mounting pressure Beijing faces as Washington reimposes sanctions targeting Iran’s financial and oil sectors from early November. “A Kunlun account manager told us payments from Iran made after that date will be rejected and returned,” said one of the sources, an agent who serves as a go-between for the bank and corporate borrowers. 

China's Oil Addiction Is Its Main Weakness As A Superpower - For decades, the U.S. was so reliant on foreign crude oil imports that it dictated much of the country’s foreign policy spanning numerous presidential administrations. As far back as the 1970s, especially after the 1973-74 Arab oil embargo that threatened economic survival, foreign policy decisions became increasingly subservient to OPEC, and mostly Saudi oil imports.  Now, however, the U.S. has positioned itself among the top three global oil producers, and it has also removed the vulnerability that saw the U.S. embroiled in several middle eastern conflicts. Additionally, it still has the U.S. Navy’s 5th fleet guarding oil exports leaving the Middle Eastern region, including the volatile and strategic strait of Hormuz. While the U.S. still has to figure out its game plan going forward amid a record 11 million barrels per day (bpd) of oil production, and the increasingly complex relationship with long term key ally Saudi Arabia and other Arab states, China is now also finding itself in an increasingly vulnerable spot as it relies more on both foreign crude oil and natural gas imports to fund its growing economy. Just the numbers coming out of China should be cause for concern for Beijing energy planners. First, China’s gas consumption in 2017 soared to new record highs, reaching 235.2 billion cubic meters (bcm), marking an increase of 17 percent or 34 bcm from the previous year. However, the real story has been China’s LNG demand spikes. China bypassed South Korea last year to become the world’s second largest LNG importer, after Japan, while China’s LNG demand increased by more than 50 percent in 2017 compared with the previous year to around 38 million tonnes. The Paris-based International Energy Agency (IEA) said earlier this year that China will become the world’s top overall imports of natural gas sometime in 2019. Even as China’s growing dependency on imported gas continues, both in the form of LNG and pipeline gas, its oil thirst is even more problematic. In 2017, China's apparent oil demand rose 5.5 percent year on year to 11.77 million bpd. So far this year, in-spite of a bitter trade war with the U.S. and other economic headwinds, refinery throughput in China, the world's largest oil importer, increased in September to a record 12.49 million bpd, government data showed earlier this month. A CNBC report said that the refinery throughput data feeds hopes about oil demand in China, even though economic growth slowed in the third quarter to its weakest since the global financial crisis.