oil prices drop most since 2014; natural gas supplies drop most ever in mid-November, to a 16 year low for the date..

oil prices were lower for a 7th consecutive week, with this week's losses accelerating to the largest weekly drop since December 2014...after falling 6.2% to $56.46 barrel on a building oil glut last week, prices of US oil for December delivery initially fell to as low as $55.05 on Monday after the Russian Energy Minister hedged on cutting oil output, but recovered to end 30 cents higher $56.76 a barrel, as trading in the December oil contract expired...at the same time, the contract for January delivery of US crude, which ended the prior week at $56.68 a barrel, rose 52 cents to $57.20 a barrel, with IEA warnings on Saudi output capacity offsetting fears of Russian overproduction...now quoting January oil, prices plummeted on Tuesday as fears of a supply glut returned, falling a total of $3.77 or 6.6% to $53.43 a barrel, as a global stock market selloff raised the specter of decreasing demand due to a deteriorating global economy...prices recovered a part of the prior day’s losses on Wednesday, as expectations for a production cut at an early December OPEC meeting helped prices recoup, with oil ending $1.20 higher at $54.63 a barrel...while US markets were closed for the holiday, US oil prices fell in European trading on Thursday, and that selloff carried into Friday trading in the US, with oil prices initially plunging 8 percent to their lowest level in 13 months before ending the day near their lows at $50.42 a barrel, a 7.7% drop for the day, in a week that saw losses in excess of 11%, even as OPEC producers considered cutting production to stem the rising global oil surplus...

with yet another big drop in oil prices, we'll include a graph of US oil prices over the past two years, so you can get a sense of what the recent oil price drop looks like compared to its historical volatility...

the above graph is a Saturday afternoon screenshot of the interactive US oil price graph at Daily FX, an online platform that provides trading news, charts, indicators and analysis of the markets...each bar on the above graph represents oil prices for a week of oil trading between October, 2016 and this past week, wherein the green bars represent the weeks when the price of oil went up, and red bars represent the weeks when the price of oil went down...for green bars, the starting oil price at the beginning of the week is at the bottom of the bar and the price at the end of the week is at the top of the bar, whereas for red or down weeks, the starting price is at the top of the bar and the price of oil at the end of the week is at the bottom of the bar...also slightly visible on this "candlestick" style graph are the faint grey "wicks" above and below each bar, to indicate trading prices during the week that were above or below the opening to closing price range for that week...as you can see, the oil price collapse of last 7 weeks has completely reversed the long rally in prices that began in the second week of October 2017....(note that since this graph includes off market and after hours trading, the prices shown above do not correspond exactly to the  NYMEX exchange prices we have been quoting...)

meanwhile, the volatility in natural gas prices that we saw last week continued into this one, but prices actually ended the week with little change....natural gas for December delivery initially jumped 42.8 cents higher to $4.700 per mmBTU on Monday's forecasts of colder weather, but then dropped 42.6 cents early Tuesday before reversing and ending the day with a loss of just 17.7 cents at 4.523 per mmBTU...the price action on Wednesday was in the opposite direction, with prices jumping to as high as $4.864 per mmBTU on a record early withdrawal of natural gas from storage, before those gains were reversed and natural gas ended the day with a loss of 7.2 cents at $4.451 per mmBTU...prices then fell another 14.3 cents on Friday to end the week at $4.308 per mmBTU, just 3.8 cents higher than where they started...

the natural gas storage report for the week ending November 16th from the EIA showed that natural gas in storage in the US fell by 134 billion cubic feet to 3,113 billion cubic feet over the week, which left our gas supplies 620 billion cubic feet, or 16.6% below the 3,733 billion cubic feet that were in storage on November 17th of last year, and 710 billion cubic feet, or 18.6% below the five-year average of 3,823 billion cubic feet of natural gas that are typically in storage on the third weekend of November....this week's 134 billion cubic feet withdrawal from US natural gas supplies was quite a bit more than the 92 to 121 billion cubic feet withdrawal that analysts had been expecting, and way more than the average of 25 billion cubic feet of natural gas that have been withdrawn from storage during the second full week of November in recent years, as it was the largest withdrawal this early in the heating season in history; in fact, many years have not seen a natural gas withdrawal that large for the entire month of November...natural gas storage facilities in the Midwest saw a 32 billion cubic feet drop in supplies over the week, which increased the region's gas supply deficit to 12.0% below normal, and natural gas supplies in the East also fell by 32 billion cubic feet as their supply deficit rose to 11.7% below normal for this time of year...meanwhile, the South Central region saw a 55 billion cubic feet drop in their supplies, as their natural gas storage deficit jumped to 26.8% below their five-year average for the third weekend of November...at the same time, 8 billion cubic feet were pulled out of natural gas supplies in the Pacific region as their deficit from normal rose to 27.2%, while 7 billion cubic feet were withdrawn from storage in the Mountain region, where their natural gas supply deficit rose to 20.2% below normal for this time of year.... 

compared to other mid November low storage readings, this week's 3,113 billion cubic feet of natural gas in storage was 13.4% lower than the previous 5 year low of 3,594 billion cubic feet that was set on November 14th of 2014, 10.8% below the 10 year low of 3,488 billion cubic feet that was hit on November 14th of 2008, 4.9% below the 3,274 billion cubic feet of natural gas we had in storage on November 18th of 2005, and 1.3% below the 3155 billion cubic feet that were in storage to start the winter on November 14th of 2003...we have to go back 16 years, to November 15th 2002, when 3,096 billion cubic feet of natural gas were in storage, to find a lower quantity of natural gas in storage in mid-November than now....

for a visualization of what this week's natural gas withdrawal looks like historically, we have a graphic showing this year's weekly change in natural gas inventories as compared to last year's and to the long term averages:

the above graph was copied from a blog post at Bespoke Weather that was published on Wednesday of this week, shortly after the early release of the natural gas storage report...on this graph, purple shows this year's weekly additions to natural gas storage in billions of cubic feet above the zero line, and this year's weekly withdrawals from natural gas storage in billions of cubic feet below the zero line; similarly, weekly additions and withdrawals of natural gas in 2017 are shown in red, the 5 year average weekly change of natural gas in storage is shown in green, and the historical average weekly change of natural gas supplies in EIA data going back to 1992 is shown in orange...at the far left, you can see the record withdrawal of 359 billion of cubic feet that used 11.5% of all the natural gas we had on hand during the first week in January of this year, and a withdrawal of 288 billion cubic feet during the third week of January that would have also been a record withdrawal if not for the first week; those 2 big withdrawals thus dropped our natural gas supplies to 17.5% below normal to start the year...the cold April further reduced supplies vis a vis normal, as you can see that the averages show we should have been adding to supplies at that time of year....through most of the summer, our additions to storage were fairly close the normal range, but by then the stage had already been set for natural gas supplies to be at a 15 year low to start this winter...

to see what kind of temperature factors caused this week's large withdrawal, and what kind of temperatures will be influencing next week's natural gas supply report, we'll next look at the most recent average temperature summary from the EIA's natural gas storage dashboard:

the above graphic from the EIA's natural gas storage dashboard gives us both the average daily temperature from November 9th thru November 22nd in each of the five natural gas regions, as well as a color-coded variance from normal for each of those daily temperature averages, with shades of brown indicating the average temperatures in the region were above normal on a given date, while shades of blue indicate average temperatures that were below normal for the date, as indicated in the legend at the bottom....thus this graphic gives us not only the actual average temperature for each region for each day, but also indicates how much that temperature deviated from the norm...as you can see, temperatures for every region except for the 3 Pacific states were below normal through the week ending November 16th, with both the Midwest and South Central regions, encompassing the large expanse in the middle of the country, between 15 and 19 degrees below normal on three separate days in the period...the following week, which will be reported on next week, looks a bit warmer, but not by much, as if you look at the lower line on the graphic you'll see national average temperature only rose from an average of around 42 degrees during the week ending November 16th to around 44 degrees in the week after that, which means we can expect another large withdrawal this coming week, as consumption of natural gas for heating continues apace...

while average temperatures as shown above give us a general idea of the heating requirements over a given period, their relationship is inexact because they don't differentiate between broad sparsely populated regions of the country where heating demand might be minimal even if it is cold, and the larger cities where a cold snap would result in a large burn of natural gas for heat...moreover, an average temperature for a region like the East above, which includes all the states from Maine to Florida, tells us little about what parts of that region are seeing the heating demand corresponding to the average temperatures....for a better measure of heating demand, utilities and suppliers of heating fuels use a metric called heating degree days to determine what the daily demand for heating will be, so they can adjust their production or delivery schedules accordingly...those degree days are computed by taking the average daily temperature for a location and subtracting that number from 65 degrees, which is considered to be the temperature when most buildings will start to need heating...hence, the colder it gets, the higher the degree day factor becomes, and hence it's a effective measure of heating demand...thus this next graphic, which shows us population weighted heating demand for the entire country, is much more useful in determining the ultimate consumption of natural gas...

the above graph came from a Thursday email titled "Best in Energy" that John Kemp, senior energy analyst and columnist with Reuters, sends out free daily, on request...in this graphic, the yellow graph shows the average degree days that have been needed per capita each day over the typical US heating season (starting with zero in July), while the red dots indicate the actual population weighted degree days for each day of the 2018-2019 heating season...in addition, the graph also includes 7 white dots which are a forecast of population weighted degree days that will determine heating requirements for the next 7 days...John did not indicate the exact date for this graph, but since the first white dot shows a large spike, i'm guessing that would probably be for Thanksgiving day, when New York city and most of the Northeast saw their coldest Thanksgiving in 150 years...thus the red dots would represent the days prior to November 21st, with all the recent ones clustered roughly between 20 and 25 degree days per capita nationally, indicating heating requirements that would normally be more typical of mid-December...

the next graph, also from that John Kemp emailing, shows the cumulative heating degree day deviation from normal, up to and including this reporting week... 

in this graph, the divergence of cumulative heating degree days from normal for this year and for each of the previous three heating seasons is shown daily, with the current year shown as a solid white line, with last year's divergence shown as a solid yellow line, with the divergence from normal for the 2016/2017 heating season shown as a dashed yellow line, and with the divergence from normal of the 2015/2016 heating season shown as a dotted yellow line...note that the graphs for all three prior years trend downward, or negative from zero, because all three years experienced warmer than normal temperatures, and hence less degree days than normal...however, after a warmish October, when this year's heating requirements were also below normal, the white line for 2018-19 has now moved upwards into positive territory, meaning this year's cumulative heating requirements are now running above normal...the broader takeaway from this graph, though, is that the natural gas demand we saw over the past three years is not a good benchmark for what we'll need this year, because those years were warmer than normal, with the heating needs of both 2015/2016 and 2016/2017 roughly 17% below normal...as we pointed out four weeks ago, if our natural gas usage this winter is instead similar to that of 2014, our natural gas supplies could fall to below 200 billion cubic feet by the end of the heating season, implying widespread natural gas shortages and much higher prices....

The Latest US Oil Data from the EIA

this week's US oil data from the US Energy Information Administration, referencing the week ending November 16th, indicated a large increase in the amount of of oil used by refineries while oil imports, oil exports, and oil production were relatively little changed, and hence there was an smaller addition to our commercial crude supplies than the prior week, but the 9th increase in a row nonetheless...our imports of crude oil rose by an average of 102,000 barrels per day to an average of 7,554,000 barrels per day, after falling by an average of 87,000 barrels per day the prior week, while our exports of crude oil fell by an average of 81,000 barrels per day to an average of 1,969,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 5,585,000 barrels of per day during the week ending November 16th, 183,000 more 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 11,700,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from wells totaled an average of 17,285,000 barrels per day during this reporting week...

meanwhile, US oil refineries were using 16,855,000 barrels of crude per day during the week ending November 16th, 423,000 barrels per day more than the amount of oil they used during the prior week, while over the same period a net of 584,000 barrels of oil per day were reportedly being added to the total amount of 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 154,000 barrels per day short of 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 (+154,000) 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"...(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 7,472,000 barrels per day, now 2.7% less than the 7,680,000 barrel per day average that we were importing over the same four-week period last year....the net 584,000 barrel per day increase in our total crude inventories included a 693,000 barrel per day increase in our commercially available stocks of crude oil, which was partly offset by a 109,000 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 two and a half months earlier....this week's crude oil production was reported as unchanged at 11,700,000 barrels because the rounded figure for output from wells in the lower 48 states was unchanged at 11,200,000 barrels per day, while a 4,000 barrel per day increase to 503,000 barrels per day in oil output from Alaska was not enough to change the rounded national total...last year's US crude oil production for the week ending November 17th was at 9,658,000 barrels per day, so this week's rounded oil production figure was 21.1% above that of a year ago, and 38.8% 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...  

US oil refineries were operating at 92.7% of their capacity in using 16,855,000 barrels of crude per day during the week ending November 16th, up from 90.1% of capacity the prior week, and the highest refinery utilization rate for mid-November since 2004....the 16,855,000 barrels per day of oil that were refined this week were at a seasonal high for the time of year for the 22nd time out of the past 25 weeks, but were only fractionally higher than the 16,838,000 barrels of crude per day that were being processed during the week ending November 17th, 2017, when US refineries were operating at 91.3% of capacity... 

even with the big jump in the amount of oil being refined, gasoline output from our refineries was a bit lower, decreasing by 20,000 barrels per day to 10,036,000 barrels per day during the week ending November 16th, after our refineries' gasoline output had increased by 342,000 barrels per day during the week ending November 9th...with that slack in this week's gasoline output, our gasoline production during the week was thus 3.8% lower than the 10,432,000 barrels of gasoline that were being produced daily during the same week last year....on the other hand, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 208,000 barrels per day to 5,201,000 barrels per day, after that output had increased by 30,000 barrels per day the prior week....nonetheless, the week's distillates production was still 2.5% lower than the 5,335,000 barrels of distillates per day that were being produced during the week ending November 17th 2017.... 

with our gasoline production little changed, our supply of gasoline in storage at the end of the week fell by 1,295,000 barrels to 225,315,000 barrels by November 16th, the 5th decrease in the past 6 weeks, thus shrinking our gasoline supplies by 10,857,000 barrels since the first week of October....our gasoline supplies fell again in part because our exports of gasoline rose by 145,000 barrels per day to 885,000 barrels per day, while our imports of gasoline fell by 6,000 barrels per day to another 13 month low of 247,000 barrels per day, and while the amount of gasoline supplied to US markets fell by 7,000 barrels per day to 9,185,000 barrels per day...but even after falling most of the fall, our gasoline inventories are still at a seasonal high, 7.1% higher than last November 17th's level of 210,475,000 barrels, and roughly 7.6% above the 10 year average of our gasoline supplies for this time of the year...

even with the big jump in our distillates production, our supplies of distillate fuels fell for the 9th week in a row, but only by 77,000 barrels to 119,191,000 barrels during the week ending November 16th, after our distillates supplies had fallen by 11,108,000 barrels over the prior three weeks...our distillates supplies fell again even though the amount of distillates supplied to US markets, a proxy for our domestic demand, decreased by 363,000 barrels per day to 4,270,000 barrels per day, and as our imports of distillates rose by 201,000 barrels per day to 104,000 barrels per day, while our exports of distillates fell by 132,000 barrels per day to 1,046,000 barrels per day...after this week's decrease, our distillate supplies ended the week 4.7% below the 125,032,000 barrels that we had stored on November 17th, 2017, and were roughly 8.4% below the 10 year average of distillates stocks for this time of the year...       

finally, even with big increase in oil refining, our commercial supplies of crude oil increased for the 9th week in a row and now for the 25th time in 2018, rising by 4,851,000 barrels during the week, from 442,057,000 barrels on November 9th to 446,908,000 barrels on November 16th...that increase means that our crude oil inventories are now roughly 6% above the five-year average of crude oil supplies for this time of year, and roughly 28.1% above the 10 year average of crude oil stocks for the third weekend in November, 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 November 16th were still 2.2% below the 457,142,000 barrels of oil we had stored on November 17th of 2017, 8.6% below the 489,029,000 barrels of oil that we had in storage on November 18th of 2016, and 2.0% below the 456,035,000 barrels of oil we had in storage on November 13th of 2015..

This Week's Rig Count

with the Thanksgiving weekend, this week's rig count was reported on Wednesday rather than Friday and thus only covers 5 days....with that qualification, US drilling rig activity decreased for the third time in 9 weeks during the week ending November 21st, as lower oil prices may be starting to influence decisions to restart rigs that are not already under contract...Baker Hughes reported that the total count of rotary rigs running in the US decreased by 3 rigs to 1079 rigs over the week ending on Friday, which was still 156 more rigs than the 923 rigs that were in use as of the November 22nd report of 2017, but down from the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC announced their attempt to flood the global oil market...  

the count of rigs drilling for oil decreased by 3 rigs to 885 rigs this week, which was still 138 more oil rigs than were running a year ago, while it remained 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 was unchanged at 194 rigs, which was 18 more than the 176 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...

offshore drilling in the Gulf of Mexico increased by 3 rigs to 25 rigs this week, which was also 3 more rigs than the 22 rigs active in the Gulf of Mexico a year ago...with no other offshore US drilling being done elsewhere either this week or a year ago, those Gulf of Mexico totals are also equal to the national offshore rig count totals.... 

the count of active horizontal drilling rigs decreased by 10 rigs to 929 horizontal rigs this week, which was still 143 more horizontal rigs than the 786 horizontal rigs that were in use in the US on November 24th of last year, but down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...on the other hand, the directional rig count increased by 2 to 73 directional rigs this week, which was also up from the 71 directional rigs that were in use during the same week of last year....in addition, the vertical rig count increased by 5 rigs to 77 vertical rigs this week, which was also up from the 66 vertical rigs that were operating on November 24th 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 November 21st, the second column shows the change in the number of working rigs between last week's count (November 16th) and this week's (November 21st) count, the third column shows last week's November 16th 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 Wednesday the 22nd of November, 2017...

despite the removal of three rigs from the Texas Delaware basin, drilling in the greater Permian basin was unchanged, because 3 rigs were added to the Delaware on the New Mexico side of the state line...meanwhile, the 3 rig decrease in North Dakota despite the single rig decrease in the Williston basin leads to most noteworthy outlier in this week's count; that being that 2 more rigs were added in the Williston on the Montana side of the border, where there are now 4 rigs active, the most activity in Montana since February 2015; a year ago, there were 2 rigs active there...

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Ohio Senate Bill 250: A dangerous assault on civil liberties - Athens NEWS - Ohio Senate Bill 250 is a dangerous assault on civil liberties and free speech. It is unnecessary, since trespass is already covered by Ohio law. This bill creates a new level of penalties for trespass, with draconian fines and felony charges if the trespass is against so-called “critical infrastructure,” including corporate-owned pipelines and oil and gas wells (even if they are on someone’s own property) and Homeland Security sites, meaning that citizens supporting immigrants are also vulnerable to its penalties. The legislation is clearly meant to intimidate individuals and, even more dangerously, non-profit organizations that organize people to speak out against assaults by the oil and gas industry against our communities, climate and public health. Under the bill, organizations can be held liable for others’ actions through guilt by association, with 10 times greater penalties than penalties individuals would receive. This can only be intended to squelch environmental advocacy, so essential at this time of accelerating climate chaos.  We are especially outraged that this bill is being proposed as our planet begins to experience climate catastrophe brought about by corporate greed and government collusion. This is a time when the necessity defense is actually being successfully invoked in court to defend climate civil disobedience, which brings urgent attention to the role of fossil fuels and government inaction in the crisis. It is these government and corporate activities that threaten and destroy lives and property, not the peaceful, brave and selfless acts of those who practice peaceful climate disobedience. It is especially alarming that this legislation is being introduced as our federal government moves toward fascism, which will be greatly facilitated by such state actions. Fascism is when government works hand-in-hand with corporations to end democracy, free speech and assembly, free press, and other constitutionally protected civil liberties. Also pertinent in Merriam-Webster’s definition is that fascism entails “severe economic and social regimentation and forcible suppression of opposition.” People are very alarmed at such behavior by our state’s elected officials.

Critics say Ohio pipeline protest bill is unnecessary, maybe unconstitutional - Energy News Network - Ohio lawmakers have tweaked a bill meant to deter damage from pipeline protests, but environmental groups, civil liberties advocates and other opponents still say the bill could be unconstitutional. “From our perspective, it still has a whole lot of free speech problems,” said Gary Daniels, chief lobbyist for the American Civil Liberties Union of Ohio.Substitute Senate Bill 250 would make it a crime to knowingly destroy or improperly tamper with a “critical infrastructure facility,” or to “otherwise knowingly impede or inhibit the facility’s operations.” In Daniels’ view, SB 250 “goes far beyond” any valid concerns about property damage or destruction “in order to limit and discourage otherwise peaceful demonstrations or the mere exercising of one’s First Amendment rights.”He and more than two dozen other civil rights advocates, environmental group members, and citizens spoke out against the bill at the Ohio Senate Judiciary Committee’s meeting on Nov. 14.Opponents fear that the bill’s vague terms and penalties would have a chilling effect upon people’s First Amendment rights to freedom of speech and assembly by criminalizing or imposing added liability for protests against natural gas fracking, drilling and pipelines. SB 250 is among several bills introduced last year in several states in the wake of protests against the Dakota Access Pipeline. “SB 250 seeks to discourage and frankly deter such activities by stepping up the penalties associated with certain types of wrongful acts,” Sen. Frank Hoagland, R-Mingo Junction, said in his sponsor testimony on the bill in March 2017. Individuals would face third-degree felony charges under the current version of the bill. And any organization found “guilty of complicity” would face a fine of ten times the maximum that could be imposed on an individual for a felony of the third degree.  Hoagland testified that there were reports of alleged tampering with valves or controls at pipeline facilities, although he acknowledged there had not been any “dangerous or catastrophic events here in Ohio due to such unscrupulous and dangerous actions.”

Y'town voters again reject anti-fracking ballot issue - Youngstown Vindicator Editorial: November 18, 2018 -- Six months after they said no to amending the Home Rule Charter to ban fracking in the city, Youngstown residents underscored that decision with an even stronger rejection in the Nov. 6 general election. Yet, proponents of this unmitigated abuse of the electoral process aren’t willing to try their hand at some other self-aggrandizing ploy dressed up as public policy. Consider this comment from Susie Beiersdorfer, a member of the Committee for the Community Bill of Rights, which backed the issue: “We’re not finished fighting the corporate state. We’re not finished exposing the corruption in campaigns with huge money pouring into this every time. We’ll continue to fight for our community.” She contends that the anti-fracking campaign is about fighting the corporate state. Really? It is noteworthy the main opposition to this charter amendment for the eight times it has been on the ballot – no, it isn’t a misprint: eight – has come from the Mahoning Valley Jobs and Growth Coalition. The coalition is made up of local businesses, labor organizations, elected and community leaders and economic development entities that are committed to rebuilding the city of Youngstown and its economy. In a statement leading up to the Nov. 6 general election, the coalition warned that “out-of-state activists pushing the job-killing ‘Youngstown Drinking Water Protection Bill of Rights’ don’t care about the hardworking families in Youngstown and their jobs.” Most residents obviously agree with the coalition’s assessment of the charter amendment. They also aren’t fooled by the grandiose name “Youngstown Drinking Water Protection Bill of Rights.”  After being rejected six times, the self-appointed paragons of environmental virtues decided to scare the people of Youngstown into thinking that they would be drinking poisonous water if they again rejected the charter amendment. But putting lipstick on a pig doesn’t make it any less of a pig.   Here’s the bottom line: Out-of-state environmental activists have found easy marks in Susie Beiersdorfer and other members of the Committee for the Community Bill of Rights and so have chosen Youngstown to push their agenda.

Rig Count Stands at 18 in Ohio's Utica – The number of oil and gas rigs in operation for last week across the Utica shale in Ohio stood at 18, according to the Ohio Department of Natural Resources. ODNR reported that two exploration companies received a total of seven permits for horizontal wells during the week ended Nov. 17. All of the permits were issued in what is considered the “hot spot” of the oil and gas play in the state’s southeastern quadrant. Chesapeake Exploration LLC secured three permits for horizontal wells in Harrison County, while Eclipse Resources I LP received four permits for wells in Monroe County. As of Nov. 17, ODNR has issued 2,924 permits in Ohio’s Utica. Energy companies have drilled 2,457 of those wells, and 2,081 horizontal wells are in production in Ohio, according to ODNR. There were no new permits issued in the northern tier of the Utica, which includes Mahoning, Trumbull and Columbiana counties. No new permits for Utica wells were issued in neighboring Lawrence or Mercer counties in western Pennsylvania during the week, according to the Pennsylvania Department of Environmental Protection Collectively considered the Appalachian Region, the Utica shale in Ohio and the Marcellus shale in Pennsylvania stand to experience a boost in oil and gas production over the next month, according to the latest projections released from the U.S. Energy Information Administration. EIA reported this week that oil production across the Appalachian Basin is expected to increase by 4,000 barrels a day in December. In November, wells in the basin are expected to produce 137,000 barrels of oil. Next month, EIA projects production to hit roughly 141,000 barrels per day. Natural gas production across the Appalachia Region is also projected to soar in December, EIA said. The agency projects that gas production next month should increase by 403 million cubic feet per day. In November, Utica and Marcellus wells produced 30 billion cubic feet of natural gas. Next month, production is expected to reach 30.4 billion cubic feet per day, according to EIA.

More radioactive fracking waste could be coming to Michigan - U.S. oil and natural gas is on the verge of transforming the world’s energy markets for a second time, further undercutting Saudi Arabia and Russia. Some Michigan landfills could take in low-level radioactive waste from oil and gas fracking at up to 10 times the radioactivity currently allowed at landfills statewide, under bills proposed in the Michigan Senate.Critics contend the proposed bills further open Michigan up to becoming the dumping ground for fracking wastes from all over the United States.At issue is waste called "technologically enhanced, naturally occurring radioactive material," or TENORM. It includes materials whose low, naturally occurring radiation levels are increased through human activities that concentrate them. The controversial oil and gas drilling practice known as hydraulic fracturing, or fracking, is a major generator of it.Michigan's current TENORM disposal guidelines allow the waste to go to any state landfill — those designed for hazardous or common, municipal waste — provided the radioactive elements commonly found in TENORM, radium-226 and radium-228, do not exceed 50 picocuries per gram. One picocurie is roughly equivalent to background levels of radioactivity naturally occurring in the environment.Senate Bill 1196, sponsored by state Sen. Tom Casperson, would enshrine into law the 50-picocurie limit for TENORM going to state landfills, and add a limit for another radioactive element, lead-210, of up to 260 picocuries per gram. Casperson's bill would also allow landfills to seek state approval to take in TENORM wastes at higher radioactivity concentrations, up to 500 picocuries per gram for radium-226, radium-228 and/or lead-210, through modifications to their operating licenses. The 500-picocurie limit change matches a request US Ecology made in 2014 for an increase in allowed radioactivity in TENORM it takes in at its large Wayne Disposal hazardous waste landfill in Wayne County's Van Buren Township, north of I-94 next to the Willow Run Airport. The company withdrew the request in October 2014, following a Free Press report that August noting Wayne Disposal was preparing to take in 36 tons of low-level, radioactive fracking waste from a Pennsylvania oil and gas driller. The waste had previously been rejected by landfills in both Pennsylvania and West Virginia.

Tri-state groups continue fight against pipeline — Local environmentalists renewed their fight to stop the gas pipeline from going underneath the Potomac River. An estimated 40 environmental group members gathered in front of the National Park Service C&O Canal headquarters in Hagerstown, Maryland, on Monday, urging NPS officials to deny a right-of-way permit to TransCanada to build a pipeline underneath the Potomac River. Including representatives from the Chesapeake Climate Action Network, the Sierra Club, Potomac Riverkeeper Network, Water Keepers’ Eastern Panhandle Protectors and the Food & Water Watch, group leaders presented a written petition to NPS officials. The network of grassroots environmental groups have staged dozens of protests in Maryland and West Virginia in the past two years in an attempt to derail the pipeline project they say poses a threat to the area’s drinking water if a pipe fracture were to occur. They also claim the pipe is being dug through karst geology that is porous and unstable, and thus prone to collapse. “This pipeline is unnecessary and dangerous, said Brent Walls, Upper Potomac Riverkeeper. “It threatens the drinking water source for six million residents in this area, would deliver fracked natural gas not produced in Maryland and not to be used in Maryland, and would be the primary energy source for the controversial Rockwool USA insulation plant in West Virginia.” 

Century-Old West Virginia Leases Yield Paltry Gas Royalties. A Suit Could Cut Others’ Payouts to a Trickle, Too.  - Linda Stimmell gets upset every time EQT Corp.’s checks arrive in the mail. The energy giant extracts natural gas from beneath the Stimmell family’s old farm in Doddridge County, West Virginia, under the terms of a lease signed when Teddy Roosevelt was president. The royalty checks Stimmell receives from two “Bates Wells,” named for her great-great-grandfather, Andrew Jackson Bates, amount to just $9 and $3 each quarter. The lease Bates signed more than a century ago with Carnegie Natural Gas Co. of Pittsburgh allowed legendary industrialist Andrew Carnegie’s company to drill for, produce and sell as much natural gas as Carnegie wanted. Because of that deal, Stimmell and the many other Bates descendants who have since inherited the gas — and that 112-year-old lease — have received tens of thousands of dollars less than they would have if the contract were negotiated today. It’s not clear how many West Virginians are stuck with old leases that pay residents a fraction of what they might otherwise get. Observers guess it’s in the thousands. But what is clear is that thousands more could find themselves getting far less in royalties, if at least one major gas company gets its way. That’s because of a recent lawsuit filed by EQT — the state’s second-largest gas producer — that threatens to put far more people in Linda Stimmell’s situation, stuck with tiny monthly payments at a time when the natural gas industry is booming. The lawsuit, filed in April, challenges a 1982 law that aimed to give gas owners a bigger share of the profits. That law applied to situations where the gas lease was an old flat-fee arrangement and the well was drilled after the law took effect. In order to get a state permit for such wells, gas companies would have to pay the gas owners at least 12.5 percent of the revenue from the gas.

Army Corps Suspends ACP Permit - Following requests from Appalachian Mountain Advocates (Appalmad) attorneys, the Norfolk, Huntington, and Pittsburgh districts of the Army Corps of Engineers have each suspended its authorization of the Atlantic Coast Pipeline. As a result, ACP lacks authorization to do any instream or wetland construction anywhere along its route. Appalmad has argued this action was necessary in light of a recent federal court ruling that the Atlantic Coast Pipeline’s reliance on Nationwide Permit (NWP) 12 was improper. The NWP was issued by the U.S. Army Corps of Engineers under Section 404 of the Clean Water Act. It allowed contractors to trench through the bottom of streams and rivers. The Corps’ decision has had the effect of forcing the ACP to temporarily suspend water crossings along the entire project until it can obtain a satisfactory permit. Appalachian Mountain Advocates represents the Sierra Cub, West Virginia Rivers Coalition, West Virginia Highlands Conservancy, Appalachian Voices, and Chesapeake Climate Action Network in this action. 

Atlantic Coast Pipeline Can’t Cross Streams Until Court Case Is Resolved - The controversial Atlantic Coast Pipeline, which will carry fracked natural gas along a 600 mile route through West Virginia, Virginia and North Carolina, has been stalled yet again. This time, the U.S. Army Corps of Engineers suspended a permit allowing the pipeline to cross streams, The Associated Press reported Wednesday.This particular suspension was actually requested by one of the companies behind the pipeline, Dominion Energy, while it awaits a court ruling involving water crossings in two West Virginia counties. But the environmental groups behind the lawsuit, represented by Appalachian Mountain Advocates (Appalmad), welcomed the news.Appalmad represents the Sierra Club, West Virginia Rivers Coalition, West Virginia Highlands Conservancy,Appalachian Voices and Chesapeake Climate Action Network in the suit against the pipeline."If the polluting corporations behind the ACP ever thought this would be easy, they know better now. There is no right way to build this dirty, dangerous pipeline and we won't stop fighting it until construction is permanently halted," Kelly Martin of the Sierra Club said in a statement reported by The News & Observer.Appalmad had won a suspension of the West Virginia water crossing permits from the Fourth U.S. Circuit Court of Appeals on Nov. 7, and Dominion Energy decided to ask the U.S. Army Corps of Engineers to suspend all water crossing permits until the court makes its decision. It will hear arguments in January, The Associated Press reported.  "Because of that order, it is uncertain whether NWP (nationwide permit) 12 will ultimately be able to authorize work for ACP in North Carolina. Therefore as requested, the Wilmington district finds it appropriate to temporarily suspend your authorization and await clarity on this issue," Army Corps Wilmington, NC Division Chief Scott McLendon wrote in his decision, the News & Observer reported. The pipeline has faced both legal and popular opposition since it was announced. Just last week, 15 people were arrested outside North Carolina Governor Roy Cooper's office after a sit-in protesting the pipeline.

Legal fight over Bayou Bridge Pipeline will go to trial - A judge on Friday (Nov. 16) cleared the way for a trial that will decide whether a private company can seize private land to finish building the Bayou Bridge Pipeline. Judge Keith Comeaux of the 16th District Court in St. Mary Parish set the trial date for Nov. 27. The owners of an Atchafalaya River Basin property are challenging Energy Transfer Partner’s assertion that it has the right to take portions of private property to build the 163-mile oil pipeline. Texas-based Energy Transfer began work on the 38-acre property before claiming access to it through expropriation, commonly known as eminent domain. In September, Energy Partners filed an eminent domain lawsuit. The property’s owners and opponents of the pipeline had hoped Comeaux would toss out the Energy Transfer’s lawsuit on Friday. “We would have preferred it’d be dismissed, but now the case will go forward with a full trial,” said Bill Quigley, a Loyola University law professor and one of the lawyers representing the property owners in the case. The judge issued his ruling shortly after 6 p.m. Friday. St. Mary Parish landowners say the oil pipeline crossed property illegally. Eminent domain is typically used by governments to seize land for projects that benefit the public, such as highways or wastewater plants. Louisiana is one of only a few states that allow companies to take land by eminent domain. Energy Transfer did not respond to requests for comment Friday. The company has said the pipeline is 90 percent completed. It’s unclear whether Energy Transfer will restart construction before the trial.

Attorneys press company executive on disputed land ownership for Bayou Bridge Pipeline -  Attorneys pressed a company executive Friday during a pre-trial hearing in a court case to determine whether the company building the Bayou Bridge Pipeline project in the Atchafalaya Basin trespassed on private property without completing the necessary process to obtain the land.At the center of the lawsuit is a 38-acre parcel of land in St. Martin Parish on which landowners claim Energy Transfer Partners violated constitutional law in order to construct the 162-mile oil pipeline because they did not obtain the proper legal consent before doing so. The Center for Constitutional Rights is suing the company on behalf of the landowners in the basin and challenging the constitutionality of Louisiana’s eminent domain law for pipelines. Louisiana law allows a company to take land for a project deemed in the public interest through expropriation, which involves court filings and an agreement to pay the owner what the land is worth. Owners of some of the St. Martin Parish land in question say Bayou Bridge Pipeline LLC didn't complete the process in some cases, and made insufficient effort to identify, find and contact some owners.During the hearing in St. Martin Parish Courthouse before Judge Keith Comeaux, attorneys for the Bayou Bridge Pipeline entered into evidence Friday several documents concerning the company and its business dealings with securing property upon which the pipeline is being built. Among those were environmental assessments from the Army Corps of Engineers to determine how the pipeline could increase the area’s capacity for refining crude oil, which would produce gasoline, butane and petrochemicals needed for manufacturing plastics. These documents reported that the fully-functioning pipeline would help to diversify the state’s crude oil supply and bring $471 million in economic development to Louisiana alone.

Clean Up 14-Year Oil Spill or Face $40K Daily Fine, Feds Tell Taylor Energy - The U.S. Coast Guard has ordered Taylor Energy Co. to clean and contain a 14-year chronic oil spill in the Gulf of Mexico or face a fine of $40,000 a day.Environmentalists had warned about the unrelenting leak for years after the Gulf Restoration Network and the watchdog group SkyTruth discovered oil slicks via satellite imagery while investigating the BP Deepwater Horizon spill in 2010.The environmental catastrophe was brought to national attention last month when The Washington Postreported that Taylor's former production site is releasing up to 700 barrels (29,400 gallons) of oil per day into the gulf and could eventually surpass the Deepwater Horizonspill as the largest offshore disaster in U.S. history.The massive spill and ongoing oil pollution in the gulf's waters was even the subject of a recent episode of the show "Patriot Act" hosted by Hasan Minhaj. On Oct 23, a day after the Post's report was published, the U.S. Coast Guard ordered Taylor to "institute a … system to capture, contain, or remove oil" or face the $40,000-per-day penalty, the newspaper reported on Tuesday.The spill stems from a Taylor-owned production platform located 12 miles off the coast of Louisiana that was toppled by an underwater mudslide caused by Hurricane Ivan in 2004.Left unchecked, the discharge could continue for another 100 years or more until the oil in the underground reservoir is depleted, a government agency warns. So far, the Taylor site has spewed an estimated 1.5 million barrels to 3.5 million barrels of oil into gulf waters, which could surpass the 4 million barrels released from the BP blowout, the Post reported.  "The time to clean this up was 14 years ago,". "Taylor Energy has shown nothing but negligence all this time."

Coast Guard responds to crude oil spill into marsh near Dulac - The U.S. Coast Guard, state and federal agencies are responding to an oil spill in the marsh near Dulac, Louisiana, according to a news release. Authorities first received a report that approximately 420 gallons of crude oil had been spilled, but further investigation led those responding to learn 1,680 gallons of crude oil are “unaccounted for” and could be trapped in the marsh, the Coast Guard said. Coast Guard Sector New Orleans received a report Thursday afternoon (Nov. 15) that oil from a flow line owned by Texas Petroleum Investment Corporation was spilling into an unnamed marsh in the Lake Paige Oil and Gas Field, according to the release. The same day, a pollution response team from Coast Guard Marine Safety Unit Houma, as well as contracted oil spill response personnel from Environmental Safety and Health responded to the oil spill with hard boom and sorbents. On Friday, members from the Louisiana Oil Spill Coordinator’s Office, MSU Houma, Louisiana Department of Environmental Quality, Louisiana Wildlife and Fisheries and a TPIC representative re-evaluated the spill and planned cleanup operations, according to the release. In-situ burning is scheduled for 9 a.m. on Monday to remove the oil.

Coast Guard orders cleanup of massive, 14-year-old oil spill - The federal government issued an ultimatum to an energy company that has failed to stop its damaged oil platform from leaking thousands of gallons into the Gulf of Mexico every day for more than 14 years. In an order issued by the U.S. Coast Guard, Taylor Energy Co. was told to “institute a . . . system to capture, contain, are remove oil” from the site or face a $40,000 per day fine for failing to comply. The order was issued Oct. 23, a day after The Washington Post reported that the spill was far greater than Interior Department estimates, themselves based on company data. Up to 700 barrels of oil have leaked from Taylor Energy’s former site 12 miles off the coast of Louisiana since the platform was destroyed during Hurricane Ivan in 2004, according to an analysis issued by the Justice Department. Each barrel contains 42 gallons. Based on reports from contractors hired by Taylor Energy, the government had previously estimated that the spill amounted to just 0 to 55 barrels per day. 

Corpus Christi LNG Export Facility Starts Production- Cheniere Energy has begun producing liquefied natural gas (LNG) from its Corpus Christi Liquefaction project in Texas’ Coastal Bend region, Bechtel reported Thursday. Bechtel stated that the first Corpus Christi Liquefaction production train is the latest of six LNG trains that it has developed at two Cheniere sites on the U.S. Gulf Coast. Last week, Cheniere’s Sabine Pass Liquefaction complex in southwestern Louisiana achieved first LNG from that facility’s fifth train, the project management, engineering, procurement and construction contractor noted. “We are proud to have contributed to Cheniere’s success by collaboratively delivering these LNG trains ahead of schedule and with cost certainty through our lump sum approach,” Alasdair Cathcart, Bechtel Oil, Gas and Chemicals president, said in a written statement. Bechtel also reported that Cheniere recently awarded it the engineering, procurement and construction contract for the planned sixth train at Sabine Pass. According to Cheniere’s website, the Corpus Christi Liquefaction project is being designed for five trains with a total production capacity of up to 22.5 million tonnes per annum (mtpa) of LNG. All six trains of the Sabine Pass Liquefaction facility will be capable of producing up to 27 mtpa of LNG.

Coming Up, Part 6 - New Agreements Boost Sempra-Led LNG Projects In U.S. And Mexico. - Developers are scrambling to advance the next round of liquefaction/LNG export projects, primarily along the U.S. Gulf Coast. Earlier this month, LNG marketing behemoth Total SA signed initial agreements with Sempra Energy that would support Sempra’s efforts to add more liquefaction capacity at its Cameron LNG project in southwestern Louisiana and to build a liquefaction plant at its Energía Costa Azul LNG import terminal in Mexico’s Baja California state. A few days later, Total, Mitsui & Co., and Tokyo Gas signed heads of agreements for the entire capacity of the Mexican liquefaction project, propelling that project to the fore. Sempra also continues to pursue a third project: Port Arthur LNG. Today, we continue our series on the next round of liquefaction/LNG export terminals “coming up” with a look at Phase 2 of Cameron LNG, as well as Energía Costa Azul and Port Arthur LNG. By the end of the first quarter of 2019, four large liquefaction trains with a combined capacity of nearly 19 million metric tons per annum (MMtpa) — the equivalent of 2.5 Bcf/d of natural gas — are expected to begin operating along the U.S. Gulf Coast. (The first of them, Train 1 at Cheniere Energy’s Corpus Christi Liquefaction, had its grand opening last Thursday (November 15), but while a vessel is at the dock, feedgas volumes to the facility have remained low so loading is likely not imminent.) In the 12 to 15 months after that, another five big trains are scheduled to start up, adding another 24-plus MMtpa of capacity, or 3.2 Bcf/d of incremental gas demand. But then, there will be a multi-year lull in U.S. liquefaction-capacity growth, aside from a 4.5-MMtpa bump-up sometime in 2022 when Cheniere’s third train at Corpus Christi is likely to come online.

China's Tariffs- A Headache for the Next Wave of US Natgas Export Projects? - China is the world’s second largest importer of LNG after Japan and an important customer for U.S. LNG. For example, this year between January and August, China purchased 1.6 of the 14.9 million tonnes of U.S. LNG, according to Thomson Reuters’ data, but Sept. 24 marked the start of President Trump’s imposition of tariffs on $200 billion worth of Chinese goods and China’s retaliatory levy of 10 percent on imports of US LNG. What effect will this have on US LNG exporters in particular and LNG trade? Wholesale prices are already near their highest levels in a decade, driven by rising shipping costs, low European gas stocks and Chinese purchases to avoid a recurrence of last winter’s gas shortages. In the run-up to and during this winter, tariffs on U.S. LNG could lead Chinese purchasers to diversions and swaps with other sources of supply such as Qatar, Australia, Papua New Guinea, Russia and according to Guy Broggi of Consultant indépendant chez LNG Markets “even European re-loads.” China is expected to buy about 8 million tons of LNG in coming months on the spot market. Companies like Cheniere Energy could still benefit since they also supply the spot market for traders to swap cargoes, take advantage of price differences or shorter delivery times. How long and how far this tit-for-tat spat will go on for is anyone’s guess but on the surface, this sounds like bad news for U.S. LNG exporters. China National Petroleum Corp.’s contract with Cheniere Energy to supply 1.2 million tons of LNG a year until 2043 should be unaffected. There are five upcoming projects underway which would raise total U.S. LNG exports to 9.6 billion cubic feet a day by the end of 2019. These will have already signed up long-term customers for a large portion (if not all) of their prospective output. But for the dozen or so proposed export projects planned at existing or new terminals awaiting Final Investment Decision, the normal commercial realities will apply, including cancellation, postponement or else “projects have to find their own buyers and if not the Chinese then other markets” will have to be found, Broggi said. 

Texas Is About to Create OPEC’s Worst Nightmare -- The map lays out OPEC’s nightmare in graphic form.An infestation of dots, thousands of them, represent oil wells in the Permian basin of West Texas and a slice of New Mexico. In less than a decade, U.S. companies have drilled 114,000. Many of them would turn a profit even with crude prices as low as $30 a barrel.OPEC’s bad dream only deepens next year, when Permian producers expect to iron out distribution snags that will add three pipelines and as much as 2 million barrels of oil a day. “The Permian will continue to grow and OPEC needs to learn to live with it,’’ said Mike Loya, the top executive in the Americas for Vitol Group, the world’s largest independent oil-trading house.The U.S. energy surge presents OPEC with one of the biggest challenges of its 60-year history. If Saudi Arabia and its allies cut production when they gather Dec. 6 in Vienna, higher prices would allow shale to steal market share. But because the Saudis need higher crude prices to make money than U.S. producers, OPEC can’t afford to let prices fall. Even so, Saudi Arabia’s output swelled to a record this month, according to industry executives. That means the three biggest producers -- the U.S., Russia and Saudi Arabia -- are pumping at or near record levels.A similar scenario unfurled in 2016, when Saudi output rocketed just before OPEC agreed to cuts. This time the cartel’s 15 members, and allies including Russia, Mexico and Kazakhstan, will discuss the possibility of their second retreat from booming American production in three years. OPEC helped create the monster that haunts its sleep. After it flooded the market in 2014, oil prices crashed, forcing surviving U.S. shale producers to get leaner so they could thrive even with lower oil prices. As prices recovered, so did drilling.  Now growth is speeding up. In Houston, the U.S. oil capital, shale executives are trying out different superlatives to describe what’s coming. “Tsunami,’’ they call it. A “flooding of Biblical proportions’’ and “onslaught of supply’’ are phrases that get tossed around. Take the hyperbolic industry talk with a pinch of salt, but certainly the American oil industry, particularly in the Permian, has raised a buzz loud enough to keep OPEC awake.

The Wolfcamp play has been key to Permian Basin oil and natural gas production growth --Increased oil and natural gas development in the Wolfcamp play has helped drive overall crude oil and natural gas production growth in the Permian Basin during the past decade. Drilling and completion operations within the Wolfcamp play have been responsible for much of the crude oil and natural gas production growth in the Permian Basin since 2007. As of September 2018, the Wolfcamp accounted for about 1 million barrels of crude oil per day (b/d) and 4 billion cubic feet of natural gas per day (Bcf/d). Crude oil production in the Wolfcamp accounts for nearly one-third of total Permian crude oil production and more than one-third of Permian natural gas production. Rising productivity in the Wolfcamp, like in other plays in the Permian Basin, has been driven mostly by drilling longer horizontal laterals and optimizing completions. The length of the horizontal segments, or laterals, in the Wolfcamp increased from an average of 2,500 linear feet in 2005 to more than 8,500 linear feet in 2018. Well completion efficiency has also improved, primarily by more effectively using sand, or proppant, during the hydraulic fracturing process, as well as by using zipper fracturing—the completion of two or more wells side by side.  The number of producing wells in the Wolfcamp increased from 2,200 in 2005 to 7,750 in mid-2018. Average initial daily crude oil production per well for the first six months of operation grew from 37 b/d to 515 b/d, and average natural gas production per well for the first six months of operation grew from 0.1 million cubic feet per day (MMcf/d) to 2.0 MMcf/d during the same period. The Wolfcamp formation extends across the Delaware Basin, Central Basin Platform, and Midland Basin—the three sub-basins that comprise the Permian Basin. The stacked formation has four intervals, called benches, which are designated from top to bottom as A, B, C, and D. Most of the current drilling activities take place in the Delaware and Midland Basins and target the Upper Wolfcamp (benches A and B), which is more oil-rich, rather than the Lower Wolfcamp (benches C and D), which is more natural gas-rich. Of the stacked shale formations that comprise the Permian Basin, the Wolfcamp is the deepest and thickest but varies significantly across the formation. Wolfcamp subsea depth varies in the Delaware Basin from 0 feet in the west to 9,500 feet in the central areas. In the Midland Basin, the subsea depth ranges from 2,000 feet in the east along the Eastern Shelf to 7,000 feet along the basin axis, near the western basin edge. Wolfcamp thickness ranges from about 800 feet to more than 7,000 feet thick in the Delaware Basin, and thickness ranges from 400 feet to more than 1,600 feet thick in the Midland Basin, varying from 200 feet to 400 feet in the adjacent Central Basin Platform.

U.S. oil drillers cut rigs for first week in three- Baker Hughes - - U.S. energy firms this week cut oil rigs for the first time in the three weeks as crude prices have fallen to their lowest in over a year. Drillers cut three oil rigs in the week to Nov. 21, bringing the total count down to 885, General Electric Co’s (GE.N) Baker Hughes energy services firm said in its closely followed report on Wednesday. After the rig additions stalled at five during the third quarter, drillers have added 22 rigs so far this quarter. Baker Hughes released the weekly report two days early due to the U.S. Thanksgiving day holiday. The U.S. rig count, an early indicator of future output, is higher than a year ago when 747 rigs were active because energy companies have spent more this year to ramp up production to capture prices that are higher in 2018 than 2017. More than half the total U.S. oil rigs are in the Permian Basin, the country’s biggest shale oil formation. Active units there held steady this week at 493, the most since January 2015. U.S. crude futures were trading above $55 a barrel on Wednesday after falling to their lowest since October 2017 earlier in the week on concerns the global market is over supplied. [O/R] Looking ahead, crude futures for calendar 2019 CLYstc1 and calendar 2020 CLYstc2 were both trading below $56 a barrel. U.S. financial services firm Cowen & Co this week said the exploration and production (E&P) companies it tracks have provided guidance indicating a 25 percent increase this year in planned capital spending. Cowen said the E&Ps it tracks expect to spend a total of $90.0 billion in 2018. That compares with projected spending of $72.2 billion in 2017. Cowen said early 2019 capital spending budgets were mixed. Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast the average combined oil and natural gas rig count would rise from 876 in 2017 to 1,031 in 2018, 1,092 in 2019 and 1,227 in 2020. Year-to-date, the total number of oil and gas rigs active in the United States has averaged 1,027. That keeps the total count for 2018 on track to be the highest since 2014, which averaged 1,862 rigs. Most rigs produce both oil and gas.

Trump's quest to drive down oil prices turns the screw on American drillers --President Donald Trump is rooting for oil prices to fall even further after a stunning plunge over the last seven weeks. The U.S. oil and gas industry, a pillar of Trump's political base, is likely less enthusiastic.This year's oil prices rally has swiftly collapsed as fears of potential oil shortages give way to forecasts that crude supply will swamp demand next year. The sell-off is pushing U.S. crude prices to levels that may impact drillers' spending plans and their ability to return cash to shareholders."Exxon, Chevron, BP will survive because they are so big, but some of the smaller companies might have problems as costs are rising and revenue is falling," said Andrew Lipow, president of Lipow Oil Associates. U.S. crude futures tumbled from a nearly four-year high at $76.90 on Oct. 3 to a more than one-year low at $50.53 on Friday. From peak to trough, U.S. crude has lost more than a third of its value. Oil's drop below $55 earlier this week was apparently not enough for Trump. On Wednesday, the president took to Twitter to praise Saudi Arabia for hiking output and helping to cap oil prices. Trump implored the kingdom to keep at it, saying "let's go lower!" Trump sent the tweet one day after he declared his support for Saudi Arabia, shrugging off bipartisan calls to punish the kingdom after Saudi agents murdered journalist and U.S. resident Jamal Khashoggi last month. The CIA has reportedly concluded Saudi Crown Prince Mohammed bin Salman ordered the killing, but Trump has been casting doubt on that assessment throughout the week.The president's defense of Saudi Arabia comes about two weeks before a critical OPEC meeting on Dec. 6. Trump wants the Saudi-led group to keep pumping at full tilt, which would keep a lid on oil prices. In recent weeks, the 15-nation OPEC cartel and several other exporters have signaled that they will agree to a price-boosting output cut. But Trump's overtures to the Saudis could make it more difficult for the kingdom to support throttling back output.

The EPA Gave Its Website a Pro-Fracking Makeover - In January this year, the Environmental Protection Agency (EPA) revamped its webpage on fracking. The page now promotes the interests of the fossil fuel industry at the expense of scientific knowledge and public transparency.  These edits were documented by the Environmental Data & Governance Initiative, a coalition that has tracked changes made to federal environmental websites during the Trump administration. The president has vowed to ease restrictions on fracking as part of his fossil fuel-heavy economic plan.  Once titled “Natural Gas Extraction – Hydraulic Fracturing,” the single page is now called “Unconventional Oil and Natural Gas Development.” It informs the public of the EPA’s role in fracking, a technique for extracting natural gas by drilling down and injecting a pressurized mixture of water, sand, and chemicals into the rock.“‘Hydraulic fracturing,’ easily gives way to the popular and colloquial ‘fracking,’  “The oil and gas industry prefers the ‘unconventional’ phrasing because it helps link fracking to conventional oil and gas drilling." Some of the most significant changes to the page emphasize the economic benefits of fracking while obscuring its known risks, such as air pollution and drinking water contamination—findings the EPA’s own scientists stressed in the months preceding President Trump’s inauguration.  The EPA removed text about air pollution standards from the page, and links to press and compliance materials. One section’s title was subtly changed from “Addressing air quality impacts associated with hydraulic fracturing activities” to “Addressing air quality impacts.”  In another section, new information was added about industry stakeholders which “represent the engine of the American economy in order to explore significant opportunities for environmental improvement.” The page also now includes letters from oil and gas associations to former EPA Secretary Scott Pruitt, urging him to roll back EPA enforcement of certain oil and gas operators. One section also notably removed a sub-section called “Hydraulic Fracturing Chemicals and Mixtures.” Previously, this page disclosed the use of chemicals used during fracking and communicated issues such as outreach, peer review, and transparency with the public.

US Shale Firms To Spend $100 Million On West Texas And New Mexico Improvements - Over a dozen top US energy firms have agreed to devote $100 million towards much needed improvements in West Texas and New Mexico, in order to help the regions cope with shortfalls in health care, education and civic infrastructure in the wake of the shale oil and gas boom, the group said on Sunday.  Chevron, EOG Resources, Exxon Mobil and Royal Dutch Shell are among 17 companies backing the Permian Strategic Partnership, as the consortium is called, Don Evans, a former U.S. government official and energy executive helping launch the group, told Reuters on Saturday. -ReutersThe funds will be used to address labor and housing shortages, according to Reuters, along with traffic congestion caused by companies converging on the Permian Basin - the nation's largest oilfield, where billions of dollars' worth of oil and gas are expected to be extracted over the next several decades, according to experts. "t’s a significant amount of money, but these are huge challenges," said Evans, former US Secretary of Commerce from Midland, Texas. "We don’t have enough teachers. We don’t have enough doctors," he added. The consortium will work with regional and federal officials, as well as nonprofit groups, companies and educators in Texas and New Mexico. Evans - who became CEO of producer Tom Brown Inc. after starting his career in the Permian, joined the George W. Bush administration as Secretary of Commerce. . Companies are pouring staff and equipment into the oilfield, which is expected to pump 3.7 million barrels of oil per day by December, four times its rate in 2010, according to the U.S. Energy Information Administration. –Reuters

US Congresswoman calls for delay in New Mexico oil case (AP) — New Mexico oil and gas regulators are being pressured to delay a decision on an application by a Texas-based company that seeks to ease restrictions on well locations in one of the nation’s oldest producing basins. U.S. Rep. Michelle Lujan Grisham, who begins her first term as New Mexico governor in January, is among the Democrat politicians who are asking for a delay in the proceedings or to raise questions about the process. Her request on congressional letterhead was followed Friday by a similar letter from other members of the state’s delegation. Lujan Grisham wrote that more information is needed from the Bureau of Land Management and from Hilcorp Energy Co., the company seeking the state rule change. “The oil and gas industry is a cornerstone of the New Mexico economy, but it is imperative that we balance this key economic driver with health, safety and environmental considerations,” her letter reads. Lujan Grisham and the state’s Democrat-controlled Legislature will inherit a significant budget surplus for the coming year when they take office. Most of that surplus is linked to the state’s oil and natural gas sector. Environmentalists and landowners are concerned about increasing well densities in northwest New Mexico as developers look to tap more reserves in the San Juan Basin. Hilcorp has said its application does not seek to drill more wells or change the way new wells are permitted. 

Questions remain a year after 400,000 gallon South Dakota oil spill - The nation’s seventh-largest onshore oil or gas spill was discovered a year ago this month when the Keystone Pipeline leaked an estimated 407,400 gallons of crude oil into a field in rural Marshall County in the northeast corner of South Dakota near the North Dakota border.  The resulting problems have been mitigated, but what cracked the pipe has yet to be determined, at least with certainty. Twelve months after the leak, Marshall County Commission Chairman Doug Medhaug realizes things could have been worse. As bad as it was, the timing was fortuitous, and the response couldn’t have gone smoother, he said. Medhaug said he doesn’t think the pipeline will leak again in the county.There’s no way to know for sure, though. “Good thing was when it happened it was cold and frozen,” Medhaug said. Had temperatures been warmer, the melting ice and thawed ground would have made the cleanup process a lot messier and more expensive, he said.As things were, the spill cost TransCanada $9.57 million, according to the federal Pipeline and Hazardous Materials Safety Administration. “The roads were cold and didn’t get beat up,” Medhaug said.  The Keystone Pipeline carries crude oil more than 2,600 miles from eastern Alberta, Canada, to Oklahoma and Illinois. The pipeline passes through eastern North Dakota and South Dakota. There have been 14 leaks since it was commissioned in 2010, according to a federal spill database. Most have been fairly minor, including one in southeast South Dakota. TransCanada deployed hundreds of workers to the scene within a day of the Marshall County leak being confirmed. Within two weeks, the pipeline had the go-ahead to start back up after a temporary stoppage.   But a year after the leak, a final investigation report from the federal Pipeline and Hazardous Materials Safety Administration has yet to be released. Gary Hanson, a state utilities commissioner, questioned whether the company followed the conditions required by the state permit, but admitted it would be nearly impossible to prove violations during construction.

Why US Oil Production Won't Peak Anytime Soon - The U.S. shale oil revolution continues to defy the skeptics, and the country is now producing a record 11 million barrels per day (MMbpd) of crude. Helped by higher prices, production has been up 18 percent since the start of this year alone. Output has exploded 120 percent over the past decade to heights not dreamed about. Production was long thought to have peaked at 9.6 MMbpd back in 1970. The rush to shale has emanated from the rapid evolution and deployment of fracking and horizontal drilling technologies to extract petroleum and natural gas from shale rock. Texas and North Dakota have been at the forefront, with the former now yielding more oil than Iraq, the world’s fourth largest producer. Looking forward, given that the United States has accounted for 60 percent of new global oil supply since 2008, one of the most pressing energy concerns remains: how long can the United States continue to produce increasing amounts of oil? It’s surely a difficult question to answer. The shale bonanza itself has proven that predicting future energy production is a fickle business. Back in 2007, for instance, no forecasting body was projecting how quickly a U.S. shale oil (and natural gas) surge would not just change the U.S. outlook but also transform energy markets around the world. Despite using the most advanced forecasting techniques possible, both the Energy Information Agency’sNational Energy Modeling System and the International Energy Agency’s World Energy Model were completely blindsided. So it is clear that nobody can be fully counted on to accurately predict future U.S. crude oil production. One reason is that the benefits of higher prices augmented by the non-stop advance of evolving technologies for production cannot be properly factored into any forecasting model. After all, these factors are always in flux and therefore ultimately unknowable. We do know, however, that false pessimistic predictions regarding the future ability of U.S. companies to produce more petroleum have been around since the inception of the industry,   The record is known: “peak oil” theorists have been proven wrong every time.   The obsession with reserves (what’s currently available) instead of resources (what’s potentially available with price changes and better technologies) has made most Americans completely unaware of how much oil we have at our disposal. 

Alaska Sees Record Breaking Year For Oil And Gas Leases - Alaska is still trying to make an oil production comeback after years of declining production from maturing fields. On Wednesday, the Alaska Department of Natural Resources said in a release that the state held another record-breaking oil and gas North Slope lease, netting competitive bids from investors around the world and breaking last year’s bonus bid amount and the bid per acre record.The Alaska Division of Oil and Gas received 159 bids from companies and investors seeking oil and gas leases on state lands during the division’s annual North Slope, Beaufort Sea, and North Slope Foothills area wide oil and gas lease sales, the release added. Winning bids in the three lease sales totaled nearly $28.1 million.This year’s record lease comes after last year’s North Slope lease, the third largest ever, ranked by bonus bid amount since 1998, when area wide oil and gas leasing began. By bid per acre, it was the largest sale since 1998, netting an average of $110 per acre. Yesterday’s North Slope sale shattered the bid per acre record, netting an average of $121 per acre, and edged out the 2017 sale to rank third largest by dollar amount, bringing in $27.3 million, $6.9 million more dollars than last year.In the Beaufort Sea sale, the division received 12 bids on eight tracts totaling 20,270 acres, with winning bids totaling nearly $848,197. The division did not receive any bids for lease tracts in the North Slope Foothills or for Special Alaska Lease Sale Areas (SALSA) blocks. The uptick in oil lease sales will help Alaska regain some of its oil production prominence that has seen it go from leading the country in new oil production to trailing behind shale oil producing states. Most of Alaska's crude oil production occurs on the North Slope, where improved drilling efficiencies have recently resulted in the first increase in annual production since 2002. The state's annual oil production during 2017 was the highest in three years, but output was still down to just under 500,000 barrels per day (bpd) from its peak of 2 million bpd in 1988, according to the U.S. Energy Information Agency’s (EIA) most recent analysis of the state’s energy sector.  Starting in 2003, Alaska's annual oil production declined steadily as the state's oil fields matured, but it has remained one of the top five crude oil-producing states in the nation.

Trump Wants to Expand Drilling in Alaskan Oil Reserve -- The Trump administration is moving to expand the territory open for oil exploration in Alaska’s National Petroleum Reserve, a process that could shift drilling rigs closer to herds of caribou and flocks of threatened birds. With a notice Tuesday, the Interior Department is taking the first formal step toward rewriting a five-year-old Obama administration management plan that put roughly half of the 22.1-million-acre reserve off limits. The new management plan will reflect “exciting new discoveries” and advances in technology, said Joe Balash, assistant secretary of the Interior for land and minerals management. “Some of the acreage that is probably most prospective is currently not available for leasing under the plan; we want to take a look at some of those areas,” Balash told reporters in a conference call. “We think it’s time to reevaluate some of the areas that were previously left unavailable for leasing, as well as open up avenues for infrastructure to be installed -- both pipelines and, potentially, roads.” The effort responds to complaints from oil companies and state officials that the Obama administration’s plan was overly restrictive, blocking drilling in promising areas while hampering the construction of pipelines across the reserve. Interior Secretary Ryan Zinke last year issued a directive ordering up a new management plan that “strikes an appropriate balance” of promoting development while protecting other resources. The Interior Department now will consider options for opening new areas to oil leasing and examine current plan boundaries designed to protect ecologically sensitive habitat in the reserve. The agency said it also would weigh changes to conditions required of oil companies doing business in the reserve while developing management goals that are “environmentally responsible” and respect traditional uses of the land. Balash said it would take about a year to revise the NPR-A management plan and prepare a related environmental impact statement. Environmentalists argue the Obama administration in 2013 rightly blocked development in 11.8 million acres of the reserve home to caribou herds and polar bears -- and those protections shouldn’t be undone now. “Once we let the oil industry build roads, wells and pipelines in this special place, there’s no going back,” 

250,000 Liters of Crude Spills off Newfoundland Coast - An estimated 250,000 liters (66,000 gallons) of crude spilled from the SeaRose FPSO, a floating production, storage and offloading vessel, in the White Rose oil and gas field off the coast of Newfoundland, Canada. Husky Energy, the operator responsible, said the spill happened on Friday when the SeaRose FPSO "experienced a loss of pressure" in an oil flowline, according to the Canadian Press.The incident occurred while Husky was preparing to restart production that was halted on Thursday due to bad weather.Federal-provincial regulators said Sunday "there is no reason to believe ... that this is an ongoing spill, and it is believed to be a 'batch spill.'"However, Natural Resources Minister Siobhan Coady told CBC's St. John's Morning Show Monday there is no way to be sure that the leak has been contained, as poor weather conditions and rough seas have made it impossible to send remotely operated underwater vehicles to take stock of the damage."This is an ongoing situation," she said. "The consideration of how much oil has been let go and what the effects are of this spill is ongoing." The release has become the largest oil spill in Newfoundland offshore history, CBC reporter Chris O'Neill-Yates tweeted on Sunday.

250,000 litres of oil spilled into Atlantic in rig accident - A surveillance aircraft and six ships were dispatched Monday to assess a spill of 250,000 liters of oil from a drilling platform off Canada's Atlantic coast, officials said. The spill occurred on Friday when workers noticed "a loss of pressure on an underwater line" connecting the South White Rose platform and Husky Energy's Sea Rose tanker, 350 kilometers southeast of St. John's, Newfoundland, according to a government watchdog. A flight Monday morning found "no visible sheen" on the water, the Canada-Newfoundland Offshore Petroleum Board (CNLOPB) said in a series of Twitter messages. "Four oiled seabirds" were spotted and a wildlife rehabilitation team was called into action, Husky Energy said in a statement. A remotely-operated submersible was also deployed to inspect underwater flowlines, and collect images that will be reviewed by the regulator. Observation flights and sea vessel sweeps, however, indicated that "the oil is dispersing," the company said. The regulator added that "there is no reason to believe that the spill continues." All four offshore facilities in the area were shut down temporarily as a safety precaution due to stormy weather in the area over the weekend. Production resumed Monday at one of the oil platforms, the Hebron, owned by ExxonMobil.

Bad weather hampers oil spill containment off the coast of Newfoundland-- Nasty November weather is preventing spill responders from containing an estimated 250 cubic metres of oil that leaked into the sea off the coast of Newfoundland and Labrador on Friday, officials said Saturday. Husky Energy said the spill happened after the production, storage and offloading vessel SeaRose FPSO “experienced a loss of pressure” in an oil flowline to the South White Rose Drill Centre, about 350 kilometres southeast of St. John’s, N.L. An aerial surveillance flight on Friday identified two oil sheens south of the vessel, Husky Energy spokeswoman Colleen McConnell said in an email, adding that a follow-up flight is planned for Saturday. But she said high waves – between five and seven metres offshore – are hindering workers who are trying to contain the spill. “Sea states continue to prevent containment and recovery operations, but we did deploy two tracker buoys yesterday (one from Searose and the other from the Atlantic Hawk,)” she wrote. “Our spill modelling indicates there is no probability of the spill reaching land.” McConnell said Husky Energy continues to monitor the situation and will be sending additional support vessels, including Skandi Vinland, their subsea intervention vessel. The next step, she said, is to determine the exact location and nature of the problem, which would require a remotely operated underwater vehicle survey conducted by the Skandi Vinland. She said the vessel would head offshore on Saturday afternoon and will carry out the survey once conditions permit, likely on Monday. Meanwhile, the Canada-Newfoundland and Labrador Offshore Patroleum Board said it has sought advice from Environment and Climate Change Canada and the Canadian Coast Guard.

Oil spill off Newfoundland shore can’t be cleaned up - It’s now impossible to clean up Newfoundland’s largest-ever oil spill that leaked into the ocean last week, according to the regulatory board that oversees the province’s offshore activities. The 250,000-litre spill happened on Friday morning while Husky Energy’s SeaRose platform was preparing to restart production during a fierce storm that was, at the time, the most intense in the world. Scott Tessier, chief executive of the Canada-Newfoundland and Labrador Offshore Petroleum Board, said no oil sheens were spotted on the water on Monday or Tuesday, meaning the oil has likely broken down to the point that it cannot be cleaned up. The board is now focused on wildlife monitoring and its investigation into the incident, southeast of St. John’s. Husky Energy said in statement Tuesday that 14 oiled seabirds have been confirmed. Rough seas blocked workers from attempting a cleanup over the weekend but a remote-operated vehicle was dispatched Monday, confirming that the spill came from a “weak link” in a subsea flowline. Operators are responsible for following their own safety and environmental plans, Tessier said. The board’s role does not cover operational decision-making, but instead it monitors activities and investigates if things go wrong. “The facility and the responsibility is really theirs to shut down (in) a safe and controlled manner as conditions allow, so in this case it would’ve been the operator’s decision to attempt the restart,” Tessier said. All operators stopped work in light of the storm, but only Husky Energy attempted to restart production. There were 81 people on board the SeaRose at the time of the spill.#160;

Impossible to clean Husky oil spill - Husky Energy has spilled an estimated 1572 barrels of oil off Canada’s Atlantic coast. CBC News reports that it is the largest ever oil spill in the Canada-Newfoundland and Labrador (C-NL) province. Rough weather conditions in the area initially prevented clean-up, and clean-up has now been deemed impossible. Oil spilled into the sea from the Canadian energy firm’s White Rose Field at around midday on 16 November. It occurred as Husky was resuming operations following a shut down on 15 November due to concerns over severe weather. An underwater survey confirmed that the source of the leak was a subsea flow-line connecting the White Rose Field and the company’s storage vessel, SeaRose. The Canada-Newfoundland Offshore Petroleum Board (C-NLOPB) has launched an investigation into the incident. Operations at Husky’s field have been suspended and will remain so until a full inspection of all the facilities has been carried out and Husky receives approval from the C-NLOPB. Since the spill 18 oiled seabirds have been sighted, of which four have been recovered and transported to an onshore rehabilitation centre. One seabird has died. CBC News reported that biologists expect thousands more seabirds to be impacted. Husky, along with the C-NLOPB, and the Canadian Coast Guard are continuing to monitor the oil and the impact on wildlife. Husky said that its main focus remains “the safety of our people and the environment”. Mike Hudema, climate and energy campaigner as Greenpeace Canada said: “This underwater pipeline spill is an especially timely reminder of our spill clean-up limitations as the National Energy Board is looking at bringing 400 bitumen filled tankers right through the heart of endangered orca whale habitat on the west coast, by endorsing the Trans Mountain Expansion project. If we can’t deal with accidents when they happen, we shouldn’t be adding more threats to the mix.” Ongoing observation flights and sea vessel sweeps indicate that the released oil is continuing to disperse. On 22 November the C-NLOPB along with its federal and provincial partner agencies were to review Husky’s response and measures to date. Husky’s SeaRose operations were suspended earlier this year after the C-NLOPB discovered the company had not followed its own procedure when an iceberg came too close to the facility in March 2017. 

Deep Divisions Hinder Canadian Oil Patch  | Rigzone -- Amid the worst crude-price environment in its history, the Canadian oil industry is being hamstrung by internal divisions that are making it harder to rally around potential solutions. That draws a stark contrast to the U.S., where a less divided industry wields more clout. Most notable is the split between Canada’s pure producers, who are being devastated by plummeting local prices, and the large, integrated energy companies that have been mostly unscathed. There’s also a rift between oil-sands producers -- a target of climate-change activists around the world -- and the frackers and conventional drillers that have been suffering from the pipeline bottlenecks brought on by those environmental opponents. Reflecting these divisions is the industry’s two main lobbying groups: the Canadian Association of Petroleum Producers, the larger organization, which is dominated by the giant oil-sands producers; and the Explorers & Producers Association of Canada, consisting mainly of smaller firms. That split is hampering the sector’s ability to lobby the government with a consistent message. “There is definitely a lot of concern around whether it’s really appropriate that one body is representing what has become a very complex industry with varied products and interests,” said Rafi Tahmazian, who helps manage about C$1 billion ($760 million) in investments at Canoe Financial in Calgary. The Canadian divisions bubbled to a head late last month, when top executives from 15 of the nation’s top oil producers met with Alberta Premier Rachel Notley and, instead of presenting a unified front and a list of demands, they were said to have sparred with each other in front of her. At issue was whether to press her government to mandate industry-wide production cuts that might help clear the province’s glut of oil. Companies that focus mostly or solely on production, including Cenovus Energy Inc., Canadian Natural Resources Ltd. and Nexen Energy ULC, favor a mandated cut spread among the country’s producers that would bring supply down below pipeline shipping capacity. They argue that could clear the glut within weeks and bring prices back into a more normal range, helping their income statements as well as government coffers. But companies who have refineries that are benefiting from the cheaper crude prices -- such as Suncor Energy Inc., Imperial Oil Ltd. and Husky Energy Inc. -- opposed the push, saying the market is working to clear the glut and that companies have to live with the investment decisions they’ve made. 

Heavy Canadian Crude Falls to Record Low -- Heavy Western Canadian Select crude fell to a record low as several oil producers shut in production and some demand the Alberta government intervene to mandate across-the-board cuts. The oil-sands benchmark fell $2.29 to $13.46 a barrel Thursday, the lowest in Bloomberg data extending back to 2008. The price broke a previous record set in early 2016, when West Texas Intermediate crude futures were trading under $30 a barrel amid a world-wide supply glut. The price collapse comes as pipeline bottlenecks in Western Canada constrain exports just as WTI experienced a record losing streak amid rising U.S. stockpiles and projections for reduced demand. Producers including Canadian Natural Resources Ltd. and Cenovus Energy Inc. have responded to the price drop by curtailing what could amount to as much as 140,000 barrels a day or more, according to company statements. Some operators have gone further, asking that Alberta’s government mandate production cuts across the province. Western Canadian Select at Hardisty, Alberta, traded at $43-a-barrel discount to WTI Thursday, $2.50 wider than on Wednesday, data compiled by Bloomberg show.

Canadian Oil Patch Plunged into Crisis-- While the U.S. oil industry has hit a speed bump with the recent $20 drop in oil prices in New York, producers in Canada are in a full-blown crisis. Heavy Canadian crude has been on a downward spiral since mid-May, with prices plummeting by more than 60 percent as an onslaught of new production from the oil-sands overwhelms the nation’s pipelines. In the past two months, the decline accelerated as many of the U.S. refineries that processed all that oil shut down for maintenance. The result is the worst pricing environment in the Canadian oil industry’s history and a disaster for a sector that accounts for about a 10th of the nation’s economy and a fifth of its exports. The crisis is threatening oil producers’ profits, causing deep divisions within the industry and putting pressure on Justin Trudeau’s government to act. Adding to the gloom is the relatively positive outlook for the U.S. energy industry is enjoying. “In my 36 years in this business, I have never seen such a wide differential in sentiment between Canada and the U.S.,” . “I’ve never seen more frustration among our customers and our competitors and in our peer-group companies than right now.” Western Canada Select crude -- the main blend sold by the nation’s prolific oil sands -- closed at $13.46 a barrel on Thursday, the lowest in Bloomberg data stretching back to 2008. The blend’s discount to U.S. benchmark crude exploded to as much as $52.40 a barrel last month, also a record. While the price has recovered somewhat in recent weeks as some U.S. refining capacity has come back online, the crisis is far from over. The nation is still producing more oil than its pipelines can handle and its storage capacity is filled to the brim. That has prompted some Canadian producers to take extraordinary steps, like shutting down some of their production, striking deals to ship oil via costlier rail and even asking Alberta Premier Rachel Notley, head of the country’s top oil-producing province, to mandate output cuts until the glut of oil is cleared.

Exclusive: Canada considering proposal to buy rail cars to move stranded crude - sources (Reuters) - The Canadian government is considering a request from Alberta to share the cost of buying rail cars to move an additional 120,000 barrels per day of crude oil from the nation’s oil-rich province, two sources with direct knowledge of the matter told Reuters. Under the terms of the proposal submitted by the Alberta government last week, the additional rail cars would be in service by October 2019 and would run until some time in 2022, the sources added. The Alberta government estimates the one-time capital cost of adding extra rail capacity at about C$350 million ($264.6 million), with the total operating costs spread over three years estimated at about C$2.6 billion, the sources said. The 120,000 barrels per day of crude oil would cover most of the current estimated oversupply. A spokeswoman for Alberta Premier Rachel Notley would not confirm the details of the proposal, but said the premier has previously said she wanted to add 120,000 barrels per day of capacity. With a lack of pipeline capacity, Western Canadian oil producers have struggled to move oil to refineries in the United States, resulting in Canadian crude’s fetching record low prices. That has prompted the Alberta government to take urgent measures to shore up the industry, which drives its economy and accounts for the bulk of government revenues. Alberta’s finance minister, Joe Ceci, told reporters on Wednesday the province had asked Ottawa for support on capacity expansions and said he was disappointed that crude-by-rail spending was not included as an expenditure line in a fiscal update released by Canadian Finance Minister Bill Morneau earlier in the day. A spokesman for Morneau was not immediately available for comment. 

Lancashire fracking has stopped since small earthquakes, say locals - The shale gas firm Cuadrilla has refused to confirm whether it has halted fracking after triggering a series of minor earthquakes near Blackpool, raising questions over the operation’s future prospects. Dozens of small tremors have been registered near the company’s Preston New Road site, after it started pumping high volumes of water underground in October to explore for gas. Several signs suggest the company has not undertaken any fracking in the past fortnight. Fracking firm boss says it didn't expect to cause such serious quakes Read more One indicator is the absence of low-level seismic activity, which the firm has said is to be expected from fracking operations. A total of 37 tremors have been recorded since fracking began on 15 October, but none since 4 November. Locals have also said the company has told them no fracking took place last week. Julie Brickles, a local borough councillor, said: “Cuadrilla did confirm at the community liaison group this Monday that they hadn’t fracked for a week. They said they’d looked into the seismic data. It was very positive and they would start fracking again within days.” Campaigners who have kept up protests outside Preston New Road, in a farmer’s field halfway between Blackpool and Preston, said the site has resembled a “ghost town” for the past two weeks. They say there has been no sound of the five pumps used by Schlumberger, the oil services firm carrying out the fracking for Cuadrilla, which were heard in October. The company would not confirm whether it was fracking, saying only it was continuing to test the well. “We have been fracturing along the full length of the horizontal well using smaller volumes of water to test the micro-seismic response of the rock,” a spokesperson said.

The UK shale revolution that never was -  If I were a shareholder in Cuadrilla or any of the other companies hoping to drill in areas believed to hold shale gas such as Yorkshire or around Balcombe in West Sussex, I would be starting to think the game was not worth the candle.  The reason for scepticism is not environmental but economic. Since 2013, gas prices have fallen sharply. German import prices — the standard European benchmark — are half their 2013 level. There is no shortage of gas supplies in Europe or across the world. The British and Dutch sectors of the North Sea are certainly producing less but a range of suppliers are competing for the European market. As well as the established players — Norway, Qatar and Russia — new sources are becoming available from the US and central Asia. European demand for gas has grown much more slowly than expected: last year demand was up by 4 per cent on 2016 across the EU but it is still almost 10 per cent less than it was in 2007. Looking ahead, the position of gas in the energy mix remains threatened by increasing supplies of low-cost renewables. On the latest available authoritative figures from Lazard, the costs of unsubsidised, large-scale business utility-level solar and wind power fell in 2017, as in each of the last 10 years, and are around 50-60 per cent respectively below those of 2013. Overall, there is no longer any sense of scarcity. Energy security is protected by the diversity of supply options. This reduces the question of whether the development of shale gas in the UK is worthwhile, to one of simple economics. What matters is the unit cost of production. There are undoubtedly substantial shale resources in the north of England and elsewhere, according to studies by the British Geological Survey, but no evidence yet that the commercially recoverable volume is comparable to that produced in the US.

Big Oil digs North Sea's 'final frontier' (Reuters) - “Little hope of THIS rock ever producing oil,” BP geologist Bill Senior scribbled in 1977 on a note assessing a recent oil discovery in a distant corner of the North Sea. That same rock is today the heart of BP’s prized Clair field in the West of Shetland region, which this week started its second phase of production. The giant bridge-linked Clair Ridge platforms are among the projects that have given new life to this area of the North Sea, one of the oldest offshore basins, which was once predicted to run dry by the 2020s. Consultancy Wood Mackenzie predicts West of Shetland will be the only North Sea zone with growing output between now and 2025. With its deep waters, waves as high as 40 meters, brutal gales and thick fog, West of Shetland is hugely inhospitable. The contrast between today’s confidence and the scepticism of the 1970s is a result of big technological leaps, such as 3D seismic imaging and super-computers, and better drilling equipment that opened up new areas and gave a clearer picture of the rock lying miles under the water. BP, like rivals such as Shell, France’s Total and Norway’s Equinor, plans to invest billions in West of Shetland projects while scaling back in the mature areas of the North Sea. Forty years after its discovery, BP says Clair, which first produced oil in 2005, has another 40 years of production in it, thanks to its vast resources. The huge oil and gas deposits in the region mean that as expensive as projects are, they can still compete with those in other basins around the world like the U.S. onshore shale development, which require a much smaller initial investment and are much less complex. The Oil and Gas Authority, Britain’s industry regulator, estimates the region held 1.3 billion barrels of oil and gas equivalent in recoverable reserves as of the end of last year. 

Fracking threatens Aboriginal land rights in pristine Western Australia country - The colors of northwestern Australia are profound. In the build-up to the wet season, the deep shades of bloodwood trees (Corymbia spp.) and red-tailed black cockatoos (Calyptorhynchus banksii) take on an extra vibrancy. This place is called Yulleroo by the Yawuru people, whose ancestral lands lie in the Kimberley region of Western Australia, Australia’s largest state. Micklo Corpus, a Yawuru man and Traditional Owner of this country, walks through the bush until the tussocks of spinifex grass (Triodia spp.) give way to a wire gate. Behind it lies a hydrofracturing well belonging to the Australian mining company Buru Energy.  Having lived on these lands for generations, the Yawuru people are recognised as Traditional Owners under Australian law. As such, the people have certain rights to their land and waters, as well as a responsibility to protect, promote and sustain them.“As custodians, we were put on Earth in this form to look after the land,” Corpus says. “Our people have cared for [our] country for thousands of years, and fracking is a risk to our environment, to our water.” He shakes his head. “The issue is, they won’t listen to our concerns.” The Kimberley, roughly the same size as California, encompasses the northern reaches of Western Australia. The area is internationally renowned for its intact natural landscapes and for being home to the oldest continuous culture in the world. The North Kimberley is recognised as the last mainland refuge for many mammal species, including marsupials such as the golden bandicoot (Isoodon auratus). Its coastlines are among the world’s most pristine, comparable to those of Antarctica, and it houses the largest, most unspoiled savanna on Earth. It is also extremely rich in mineral and hydrocarbon deposits.  The region sits on top of the Canning Basin, which holds Australia’s largest shale gas reserve. As the international energy market turns away from coal and oil to cleaner-burning alternatives, developers like Buru Energy have been busy acquiring mining licenses that span the Kimberley.  If the moratorium is lifted, developers will have the potential to drop 40,000 wells across the Kimberley. This would represent almost one fracking well for every person in the sparsely populated region.  Australia has tapped into its mineral reserves so comprehensively in recent years that it is currently forecast to become the world’s biggest producer of liquefied natural gas in 2019. Ironically, the country is also home to some of the world’s most expensive domestic energy prices, as much of the local production is shipped to a burgeoning Asian market hungry for energy.

Natural Gas - The Volatile Energy Beast - The price action in the natural gas futures market over the past week has been enough to make even the most seasoned trader’s head spin. I had been writing that the low level of inventories going into the season of peak demand could push prices higher as the winter approached. However, I did not expect the wild price action that would occur this past week that lifted the price of the energy commodity to the highest price since 2014 and almost $5 per MMBtu on the nearby December NYMEX natural gas futures contract. Luckily, the price move occurred so fast and so early that I hung onto some of my long positions which I liquidated at prices over the $4.50 per MMBtu level.  Since natural gas futures began trading on the NYMEX in 1990, the price range has been from a low of $1.02 to a high of $15.65 per MMBtu. While prices over $10 per MMBtu are a thing of the past because of the massive reserves discovered in the Marcellus and Utica shale regions of the U.S. over recent years, the demand side of the fundamental equation has expanded at the same time. Requirements for power generations and LNG shipments around the world have caused stocks to flow into storage at a decelerated rate in 2018 despite record production levels. This past week, we witnessed the impact of low inventories and cold temperatures early in the season. The price action in the energy commodity caused massive volumes to flow into the triple-leveraged UGAZ and DGAZ ETN products which is a trend that is likely to continue over the coming weeks and months as we enter the peak season for demand and volatility in the natural gas market in 2018/2019.As the daily chart highlights, the price of natural gas gapped higher from $3.313 on November 2 to $3.471 on November 5 and broke above technical resistance at the mid-October high at $3.409 per MMBtu. The price kept on going and reached a peak of $4.929 on November 14. On November 15, gravity hit the natural gas futures market and took the price back to a low of $3.882 before settling last Friday at the $4.272 per MMBtu level. Daily historical volatility in the natural gas market rose to over 135%, its highest level in years.

NYMEX December natural gas dips 17.7 cents to settle at $4.523/MMBtu — The NYMEX December natural gas futures contract fell 17.7 cents to settle at $4.523/MMBtu Tuesday, retreating from Monday's gains. The December contract traded between $4.274/MMBtu and $4.672/MMBtu. S&P Global Platts Analytics data showed total US dry natural gas production decreased 0.5 Bcf Tuesday to 84.8 Bcf. Production is expected to remain flat over the next 14 days, averaging 84.9 Bcf/d, according to Platts Analytics data. Tuesday's production drop was primarily driven by Texas Onshore, which fell 400 MMcf day on day to 20.1 Bcf Tuesday, Platts Analytics data showed. US residential/commercial demand rose 3.1 Bcf to 41.7 Bcf Tuesday, with the Northeast and Southeast regions contributing 1.4 Bcf and 700 MMcf, respectively, of the 3.1-Bcf increase. Platts Analytics average population-weighted temperatures across the US are forecast to be 6 degrees Fahrenheit below normal at 44 degrees Tuesday. Temperatures are forecast to be above normal across the US by Saturday before decreasing to below normal again by next Tuesday. Eight to 14 days out, population-weighted temperatures are forecast to be 44 degrees, 2 degrees below norms. The recent price volatility demonstrates that the market is searching for support as it pivots into winter amid new supply/demand factors in the North American natural gas market. "Right now the market is searching for big round numbers for continued support,"  . "Where is the next big support from a technical perspective?" Levine cited $4.25/MMBtu or $4.75/MMBtu as supportive numbers, adding that the price is unlikely to remain at $4.50/MMBtu. Further out, the March contract settled at $4.125/MMBtu, losing 17 cents in trading Tuesday. The NYMEX settlement price is considered preliminary and subject to change until a final settlement price is posted at 7 pm EST (2400 GMT).

Natural Gas Sell-Off Fails --Today's December natural gas contract trading range eclipsed that of yesterday as prices continued to whipsaw around. Prices initially were strong before selling off through the day and spiking right into the settle to close only a few percent below yesterday's settle.  The January contract led the way lower today, with strong physical prices helping the December contract minimize gains relative to later contracts. The April contract also got into much of the selling after it got in on the buying action yesterday.  Today was rather surprising for us, as in our Morning Update when prices were just below $4.5 we highlighted that, "if anything we still see risk a bit higher, though prices likely stay from $4.4-$4.7" thanks to "...significant long range cold risks..."  Initially our prediction worked very well, as the December natural gas contract shot up to $4.67 this morning, though prices began selling off on some cash weakness after. However, this selling intensified through the afternoon, with $4.4 being surprisingly broken later in the day even as afternoon GEFS guidance did not seem much warmer (image courtesy of Tropical Tidbits).  In our Note of the Day for subscribers we outlined that the strip was showing some bearish signals, and crude prices were hit very hard today, so it did not appear weather was the reason for the move lower. Sure enough, then, prices spiked very significantly into the settle to move right back into the middle of the $4.4-$4.7 range we had expected for the day, verifying our market view. This came as European model guidance confirmed long-range cold, with more cold in the medium-range too per the Climate Prediction Center. . Traders were also preparing for tomorrow's early EIA print, where a very large storage build is expected to be announced. In advance of it Dominion Transmission announced their largest storage draw since the week ending March 22nd.

Triple-Digit Storage Withdrawal Predicted as Wild Ride Continues for Natural Gas Futures

• December Nymex settles at $4.523, down 17.7 cents; January down 19.1 cents to $4.521
• “It was another surprising day...as volatility remains incredibly elevated,” says Bespoke
• Recent volatility “driven by positioning, short-covering, stop-outs and the follow-through of algorithmic trading on the movements of both of the former,” says Energy Aspects
• Top-day production estimates down slightly Tuesday to 85.2 Bcf/d, including drops in Texas, Permian and Rockies

Natural Gas Keeps Shooting Higher On Cold Risks - It was another great day for natural gas bulls, as colder weather trends on weekend model guidance primarily in Week 2 helped the December natural gas contract shoot 10% higher on the day. After a large gap up prices did fall some on warmer overnight model trends before colder afternoon models sent prices right back up to highs. The entire winter strip was up about the same with the April contract and even the rest of the 2019 strip participating a bit more. In our Friday Pre-Close Update for subscribers we highlighted that weather models were likely to add GWDDs over the weekend, which skewed weather risk "Slightly Bullish." We started the report outlining too that "...we see upside risk winning out over downside risk..." which verified well with last evening's gap. Then this morning we noted warmer overnight weather models which would mean "bounces may be sold now" since these models were, "...an indication that prices will likely struggle to take out the $4.7-$4.75 resistance level they trended near last night" even though "bounces are still likely over $4.5 early in the week." All of these played out well, with sellers early then colder afternoon model guidance briefly sending prices over $4.75 before a reversal back below $4.6 post-settle. It was the colder GFS/GEFS models late this morning and early this afternoon that really got prices moving.  We also broke down expectations for Wednesday's EIA print, as well as how we see weather models likely to trend through the week, what current weather forecasts look like, and what natural gas spreads may be signifying about forward price risk. One point we have continued to emphasize is how bullish weather has been through 2018, a trend likely to continue moving forward. This will be seen on Wednesday when the EIA should announce a very large storage withdrawal.

Natural Gas Price Skips Higher on Huge Inventory Drawdown - The U.S. Energy Information Administration (EIA) reported Wednesday morning that U.S. natural gas stockpiles decreased by 134 billion cubic feet for the week ending November 16.  Analysts were expecting a storage withdrawal of between 92 and 121 billion cubic feet. The five-year average for the week is a withdrawal of 25 billion cubic feet and last year’s withdrawal totaled 42 billion cubic feet. Natural gas inventories rose by 39 billion cubic feet in the week ending November 9. Natural gas futures for December delivery traded up about 4 cents in advance of the EIA’s report, at around $4.56 per million BTUs and jumped to $4.70 after the report was released. For the period between November 21 and November 27, NatGasWeather.com predicts “high to very high” demand and offers the following outlook:  Cold air continues impacting the central, northern, and eastern US with snow showers, especially downwind of the Great Lakes as a reinforcing cold shot arrives. This will continue to result in strong demand as lows reach the single digits to. A milder break will set up across much of the country Sat-Sun before the next weather systems develops over the west-central US this weekend, then advancing eastward. Much needed showers will push into California the next few days with cooler conditions, while the rest of the West will see a mix of mild and cool periods. Total U.S. stockpiles decreased week over week from 14% to 16.6% below last year’s level and also fell from 14% to 18.6% below the five-year average. The EIA reported that U.S. working stocks of natural gas totaled about 3.113 trillion cubic feet at the end of last week, around 710 billion cubic feet below the five-year average of 3.823 trillion cubic feet and 620 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.733 trillion cubic feet for the same period a year ago.

This Overnight Gas Spike Fails - The December natural gas contract shot far higher overnight, moving above $4.85 briefly before gradually moving down through the morning. A bullish EIA print then spiked prices back into resistance, only for that second bounce to also fail with prices settling down a bit over 1.5% on the day. Losses were by far the worst at the front of the strip. The overnight spike was not surprising to subscribers, as in our Afternoon Update yesterday we warned that even even after significant buying into the settle we saw further upside into $4.7-$4.75 resistance (which ended up getting briefly breached). Our Morning Update then highlighted that $4.7-$4.75 resistance, "stands a good chance of being firm" today after prices moved back below it, which verified well as it was tested off a very bullish EIA announcement that 134 bcf of gas was pulled from storage last week. This was far tighter than what we have been used to seeing. Yet after a major spike even this was sold into a bit despite afternoon GEFS weather model guidance that was a bit mixed (images courtesy of Tropical Tidbits). All week we had highlighted "bullish risks" with this EIA print, which we reiterated this morning, so it was not all that much of a surprise when it missed quite bullish to our -109 bcf estimate. Still, the magnitude was impressive, and underscores a large storage deficit that is unlikely to be fixed anytime soon. This storage deficit and fears that we may run low on gas by the end of winter explains why the March/April H/J spread has blown out so much recently. Traders now head into the holiday knowing that volatility in thin liquidity is likely to continue.

Russia Takes Major Leap In European Gas War --On November 19^th, President Putin will stand shoulder to shoulder with President Erdogan during a ceremony to celebrate the completion of the first string of Turk Stream. The subsea gas pipeline will transfer 15.75 bcm directly from mainland Russia to Turkey. The capacity will double after the second string is completed. The pipeline will be operational at the end of 2019. Despite several setbacks, mutual interests concerning security and trade have ensured the strengthening of cooperation between Russia and Turkey in the face of opposition from the West. The first string of Turk Stream, which is almost completed, is important for bilateral relations. The second string, however, will service the European market and is a sign of Gazprom’s successful strategy in the face of opposition from the EU and several European countries. Rising tensions between Russia and the West after the crisis in Ukraine and the annexation of Crimea made Moscow reconsider its massive South Stream project. The pipeline would circumvent Ukraine and transport 63 bcm of natural gas to Europe via Bulgaria. The unbundling legislation and strong opposition from both Brussels and several European countries made Gazprom ditch South Stream and opt for a smaller albeit equally important Turk Stream. The strategy has worked as European companies are scrambling to participate in the project. Pricing disputes between Russia’s Gazprom and Ukraine’s Naftohaz Ukrayiny in the 2000s created a need on the Russian side to decrease transit dependency. After Nord Stream’s success, South Stream would have connected consumers in southeast Europe directly with Russia’s vast gas resources. Critics point out that state-controlled Gazprom intends to increase pressure on Ukraine by depriving it of billions of dollars in transit fees and weakening its negotiating position. The latter would be achieved by reducing the country’s transit importance. Moscow, however, insists that the projects aren’t a malign plan vis-à-vis Ukraine, but have the goal of improving energy security in the region.While both the first and second string reduce transit through Ukraine, the latter is more important for political and symbolic reasons. Gazprom has yet to decide which direction the second string of Turk Stream will be heading: north into South Stream’s backyard or west into Greece and finally Italy. Bulgaria has already increased the capacity of the Trans-Balkan pipeline to 15.75 bcm in a bid to receive the entire volume of the second string. Despite Sofia not being the strongest candidate, it makes sense from a strategic point of view.

Woodside applies to build big-polluting LNG plant – with no emissions plan - Oil and gas giant Woodside Petroleum has applied for environmental approval to build one of Australia’s biggest emitting industrial developments – a liquefied natural gas (LNG) plant 425km north of Broome – without a plan to reduce or offset its greenhouse gas pollution. Documents submitted to the federal government for the long-mooted $28bn Browse LNG project show the offshore part of the development alone is expected to emit up to 200m tonnes of carbon dioxide over 50 years, peaking at 7m tonnes a year. The total pollution from the Browse development could be significantly higher once processing the gas for export – usually the most emissions-intensive part of LNG projects – at an existing plant at Karratha is factored in, though Woodside has flagged it is considering running that plant on renewable energy. Browse would involve pumping gas about 900km from offshore reservoirs to the Pilbara to produce 10m tonnes of LNG a year, continuing an industry boom that has seen production triple since 2012. Government analysis expects the LNG industry is expected to reach a value of $48bn by 2020. It also shows the industry has been the main driver of the recent rise in national emissions. Researchers at Climate Analytics say the growth in LNG over the five years to 2020 is expected to effectively cancel out emissions avoided through the national renewable energy target. Woodside says it is evaluating options to manage emissions from Browse and would comply with national emissions-reporting legislation and the safeguard mechanism, under which companies can nominate their own emissions limits based on future projections. “While we are still in the early stages of the environmental approvals process, our position on offsets and emissions reductions is under consideration and will be outlined at an appropriate time,” a company spokeswoman said. Piers Verstegen, director of the Conservation Council of Western Australia, said the Browse proposal would be particularly emissions-intensive due to the inflated carbon dioxide content of the reservoir and the energy required to pump the gas. He said if the project was to go ahead it should have to offset all related emissions, both those in Australia and overseas. But he believed it was irresponsible to approve new fossil fuel developments as they were not consistent with global commitments to tackle climate change. He said offsets should be reserved for existing projects, not to enable new ones. 

South Korean shipbuilders' lock on LNG tanker market to hold for years (Reuters) - South Korean shipyards have boxed out their Japanese rivals from the market for building large ships carrying liquefied natural gas (LNG), winning all of the orders for the next three years worth more than $9 billion. Three South Korean yards - Daewoo Shipbuilding & Marine Engineering, Hyundai Heavy Industries and Samsung Heavy Industries - have won the more than 50 orders placed for new large-scale LNG tankers for delivery in the next three years, according to data from the companies and two tanker brokers. The bulging orderbook illustrates the dominance the South Korean yards have achieved over their competitors, especially in Japan. It is also sign of how the companies have rebounded from a sector-wide slump only two years ago and how they are positioned to command the sector in the future. “The demand for LNG carriers surged followed by increased global demand of LNG,” said Park Hyung-gun, vice president of DSME. “There is a bright outlook ahead for LNG demand and South Korean shipbuilders will be able to excel in the LNG market.” Including floating LNG storage and support vessels, ship brokerage Braemar estimates South Korean yards have bagged 78 percent of all LNG-related orders this year, with just 14 percent and 8 percent going to Japan and China, respectively. A set of data collected by another ship broker, who did not want to be identified, showed all of this year’s orders for large LNG tankers went to South Korea, at a combined value of over $9 billion. The new ships will increase the global LNG fleet by around 10 percent. Dominating this segment is key for shipyards, as gas consumption outgrows that of other fuels such as oil or coal. 

Ship master asked to clean up after oil spill near Chennai -The Coast Guard Monday said it has issued notice to the master of a cargo ship to clean up the oil spill off the coast here caused by a rupture in a hose of the vessel, failing which action will be taken as per law. Spillage of Fuel Furnace Oil occured early Sunday when 'MT Coral Stars,' an oil tanker vessel was offloading it through a 'flexible hose' in Kamarajar port, at Ennore near here. The notice, issued Sunday, tasked the ship master and the vessel's charterer -Atlantic Shipping Pvt Ltd- to clean up the spilled oil, undertake containment measures and recover the leaked oil that threatened the coastal area. "Take all other necessary action to keep the environment clean as it was prevailing before the incident....take action to prevent further spillage of oil into the sea," the notice said. Also, the Coast Guard asked the charterer and the ship master to take action to remove oil from the damaged tanks by transfer. Non-compliance of the instructions will entail Coast Guard to take action, the notice made available to the media by the Defence Public Relations office here said. The Coast Guard said it was empowered under the provisions of the Indian Merchant Shipping Act 1958 to issue notice and take action for non-compliance. It said initial assessment revealed that the port had taken a few measures to contain the oil spill. However, the "ship and her agents have not yet taken suitable measures to remove the spill of approximately one tonne of fuel furnace oil." 

Brazil Subsea Pipeline Project Goes to McDermott - Petrobras has awarded McDermott International, Inc. an engineering, procurement, construction and installation (EPCI) contract for the ultra-shallow segment of its Rota 3 natural gas export pipeline, McDermott reported Tuesday afternoon. “Rota 3 is a major pre-salt development area that is important to the future of oil and gas production for Brazil,” Richard Heo, McDermott’s senior vice president for North, Central and South America, said in a written statement emailed to Rigzone. According to McDermott, implementing the Rota 3 pipeline segment includes design and detailed EPCI of six miles (10 kilometers) of 24-inch rigid concrete-coated pipeline from the already-installed shallow water segment to the shore. In addition, the company stated that the scope includes a horizontal directional drill, tie-in spools and pre-commissioning of the six-mile segment. Petrobras’ 220-mile (355-kilometer) Rota 3 rigid pipeline project represents part of the Brazilian company’s Santos Basin pre-salt gas offloading and transportation system, McDermott stated. The Rota 3 project comprises four segments, three of which are subsea and one onshore. McDermott’s ultra-shallow subsea pipelay will link the shallow segment to the onshore segment at Maricá City 62 miles (100 kilometers north of Rio de Janeiro), the company noted.

Oil market readies for new IMO regulations: Kemp - (Reuters) - Global oil markets are adjusting to relatively strong demand for diesel and jet fuel compared to gasoline, coupled with the introduction of new bunker fuel regulations at the start of 2020. Rising diesel and jet fuel prices, at least relative to crude and gasoline, are forcing adjustments that should lessen the chance of a severe shortage at the end of next year. Futures prices for ultra-low-sulphur diesel delivered at New York Harbor have moved to a premium of more than $21 per barrel over futures prices for gasoline delivered at the same location. The diesel premium has doubled since the end of September. It is trading at the highest level since 2011 and before that 2008, both of which were years when diesel consumption was growing much faster than gasoline. Refiners have a strong incentive to maximise the production of diesel and jet fuel while minimising output of gasoline, and many are adjusting production plans in response. In the United States, for example, refiners cut gasoline yields by 1 percentage point while boosting yields of jet fuel by 0.7 point and distillate fuel oil by 0.5 point in August compared with a year earlier. U.S. refiners produced a near-record 40 barrels of middle distillates (mostly diesel and jet fuel) from every 100 barrels of crude in August, the most recent month for which data is available.

Libya's oil production could soar higher despite OPEC weighing cuts - As OPEC members weigh oil production cuts for the start of 2019 to keep prices from falling amid a potential oversupply, conflict-weary Libya is hoping for an exemption."The OPEC community has understood the difficulties we face –- Libya has withheld more than any other country from the global market," Mustafa Sanalla, chairman of the country's National Oil Corporation (NOC), told Bloomberg on Monday. "This should be factored in."The comments come on the back of months of increased production for Libya, which along with Nigeria has been exempt from OPEC cuts since January 2017 because of internal conflict.Now, with oil prices toying with bear market territory — down from a nearly four-year high in October to a 10-day fall that by last Friday became the longest losing streak for crude in 34 years — OPEC is in talks with both Libya and Nigeria about a production cut deal.  Saudi Arabia, the 15-member cartel's top exporter, has said the group needs to shave production by about 1 million barrels per day (bpd). The worry over a supply glut comes after the kingdom initially moved to bolster inventories ahead of U.S. sanctions on Iran's energy sector, which turned out to be less harsh than markets expected.Libya's output has skyrocketed in the latter half of the year to its highest level in more than five years, reaching 1.28 million barrels per day (bpd), the NOC chief reported on November 14. This is more than double its June production of 500,000 bpd, and Sanalla said in October the country is targeting an increase to 1.6 million bpd. The North African country of 6.4 million has been struggling to rebuild its energy industry since its 2011 revolution that ousted longtime leader Moammar Gadhafi and the ensuing collapse in central power. Authority is now contested between rival governments in the country's east and west, each supported by different external powers and tribal factions.

OPEC Will Struggle to Muster Friends for Oil Cuts -- OPEC will struggle to carry all of its partners from outside the group along with it as oil producing group looks to extend output cuts into a third year at meetings to be held in Vienna in early December, writes Bloomberg oil strategist Julian Lee. For key partner Russia, the decision will hinge more on President Vladimir's Putin’s assessment of its value in strengthening broader political ties with Saudi Arabia, than on any oil price impact. But Mexico, which offered up natural decline in its oil output as cuts last time around, may balk at extending its participation, as its output is forecast to grow next year. Saudi oil minister Khalid Al-Falih told reporters that the baseline for new output cuts should be a recent production level, without offering a specific suggestion. While this might not be a problem for Russia, which boosted its output to a post-Soviet high in October, it will pose more of a challenge for others. Below is a round-up of each country’s position and an assessment of its likely willingness to make further cuts for next year. The figures mentioned are for crude oil production and are from the International Energy Agency. Starting points for cuts in 2017 are October the preceding year, except for Kazakhstan, which was November.

DOJ is Said to be Reviewing Anti-OPEC Legislation-- The Department of Justice is formally reviewing antitrust legislation aimed at reining in OPEC’s power over oil markets, according to a department official. While the study is ongoing, there is an understanding that the oil cartel’s efforts to affect crude prices through production quotas has raised costs for American consumers, said the official, who spoke on condition of anonymity. That’s traditionally the type of conduct the Justice Department would frown upon, the person said. Bipartisan, anti-OPEC bills have been introduced in both the House and Senate, though neither chamber has voted on the measures yet. The House Judiciary Committee in June approved the “No Oil Producing and Exporting Cartels Act,” or NOPEC bill, which would give the attorney general the authority to file a suit against OPEC for trying to control oil production or to affect crude prices. It would amend the Sherman Antitrust Act of 1890, the law used more than a century ago to break up the oil empire of John Rockefeller. A similar Senate bill hasn’t seen any action yet. Although past presidents have threatened to use their veto power to prevent similar bills from becoming law, President Donald Trump has repeatedly attacked the cartel over high prices. OPEC is scheduled to meet next month in Vienna amid a collapse in oil prices that’s spurred calls for the group to curb output in 2019. Saudi Arabia has already signaled it supports a deep cut and as a first step will reduce its shipments by 500,000 barrels a day in December.

Washington looking for anti-monopoly tool to kneecap OPEC oil cartel - The US Department of Justice is reportedly exploring the possibility of introducing antitrust legislation that will allow the White House to reduce the power of the Organization of the Petroleum Exporting Countries (OPEC).  The measure has been triggered by the oil cartel’s successful attempts to bring global prices for crude under control. OPEC members and their non-OPEC allies, led by Russia, managed to affect global oil prices by establishing production quotas. The step reportedly raised costs for US consumers, an unnamed department official told Bloomberg. “That’s traditionally the type of conduct the Justice Department would frown upon,” the media quotes the source as saying. The anti-OPEC bills, reportedly backed by both Republicans and Democrats, were introduced in the House and Senate, but neither chamber has voted on the legislation yet. However, in June, the House Judiciary Committee approved the “No Oil Producing and Exporting Cartels Act.” The legislation, known as NOPEC bill, authorizes the US attorney general to sue the oil cartel over its efforts to put oil output and crude prices under control. US President Donald Trump has repeatedly blamed OPEC for rising oil prices, demanding that participants of the organization should increase crude production. In late 2016, the member countries along with non-OPEC producers, including Russia, made a multinational pact aimed at curbing total oil output by 1.8 million barrels per day (bpd) in order to support sliding prices. Back then, Russia pledged to cut 300,000 bpd out of 560,000 for total non-OPEC cuts. The agreement came into effect in early 2017, and was later extended until the end of the current year.

Iraqi Dinar May Replace Dollar And Euro In Iran's 2nd Largest Export Market -- Amidst continuing talks between Iran and Iraq over how to settle payments for Iraq's natural gas imports from Iran in the face of Washington sanctions, Iranian officials are mulling over Iraq's offer to pay in Iraqi Dinars instead of the dollar or Euro, according to Iranian state media. This follows the September announcement by Iran that it planned to completely ditch the dollar as a currency used by the two countries in the trade transactions. Iraq was among countries granted a temporary exemption as energy sanctions on its eastern neighbor and regional Shia ally took effect November 5, and since then Baghdad has pushed to process payments for gas and electricity in its own currency of dinars. Iraq is I ran's second largest export market with a substantial portion of that trade in energy, which cannot cannot easily be structured outside the new sanctions regime.Baghdad has found itself in the delicate position as a partner of both Washington and Tehran — largely reliant on the former for defense and on the latter for gas and power generation, keeping its economy afloat. Last summer a severe temporary electricity reduction fueled unrest across the south of Iraq. Chronic shortages and a failing Iraqi infrastructure means Tehran has been a key lifeline fueling Iraq's increasingly desperate needs. Iranian officials have also recently declared "Iraq is one of our successes" and a "strategic ally" as echoed in a weekend televised broadcast featuring the head of Iran's Islamic Shura Council, Hossein Amirabedhaleyan. However, as the head of the Iran-Iraq Chamber of Commerce Yahya Ale-Eshagh stated before the latest round of sanctions took effect: “Resolving the banking system problem must be a priority for both Iran and Iraq, as the two countries have at least $8 billion in transactions in the worst times,” according to a September statement. 

Why The EU Can't Save Iran -The full impact of U.S. sanctions on Iran is still to be assessed, as major underlying factors remain opaque. OPEC’s current fear of an oil glut in 2019, as indicated by investment banks, IEA, EIA and others, might not materialize. Market fundamentals are still strong, especially taking into account that U.S. refineries are ramping up production after maintenance season, while Iranian floating oil will end soon as sanctions are about to hit. Still, one of Iran’s major lifelines could be the current EU approach, which is largely trying to mitigate the effects of U.S. sanctions on European companies and financial operators. The rosy future painted by EU officials however shows severe cracks, while reality on the ground is extremely bleak. European efforts to protect trade with Iran, as an answer to mitigate U.S. sanctions, are hitting a brick wall. European politicians seem to be out of touch with reality not only in the markets, but also concerning the attitude of several of its member countries. European politicians, mostly working from their shiny offices in Brussels and Strassbourg, seem to be living in an ivory tower, as no real practical support for all their measures has been shown in the respective member states.The last factor showing the weakness of the EU Iran approach is the fact that no single European country is willing to host a so-called Special Purpose Vehicle (SPV) as they fear the wrath of the U.S. Washington’s influence in real politics and markets is still much larger on a global and even bilateral stage than Brussels wants to admit. Leading European powers – Great Britain, Germany and France – are currently putting pressure on minor league EU member Luxembourg to host the SPV. The latter however is already doomed, as not only is the influence of London on Luxembourg minimal, but the small EU member can hide behind the refusal of Austria to host the SPV too. Brussels is showing a brave face, but it’s likely that Eastern European and Balkan member countries will reject the SPV plans, while Italy and Spain are still in limbo. Statements made by EU Justice Commissioner Vera Jourova that the EU cannot accept that a foreign power takes decisions over our legitimate trade with another country, seem to be very hollow and empty.            The SPV at present is seen as the lynchpin in the EU moves to save not only their trade with Iran but also the overall JCPOA agreement. At present, Brussels and its main supporters, Paris and Berlin, are trying to keep the JCPOA agreement in place, risking a direct confrontation not only with the U.S. but with most of the Arab world. The SPV has been set up as a kind of clearing house that could be used to help match Iranian oil and gas exports against purchases of EU goods in an effective barter arrangement circumventing U.S. sanctions. The main issue European companies are facing with Iran are currently based on the position of the US dollar in international trade. Even with full EU support, the SPV, according to most analysts, will not shield EU companies and banks from US sanctions. These will be hefty, for sure much more than the current Iran-EU trade volumes could counter.

Oil market bull run ends as hedge funds square up positions: Kemp (Reuters) - Hedge fund managers have exited from all the bullish positions in crude oil and fuels they accumulated in the second half of 2017 as the bull market has unwound. Upside price potential from Iran sanctions and prospective production cuts by OPEC is matched by downside risks from rapidly rising U.S. shale production and a deteriorating economic outlook. Hedge funds and other money managers cut their combined net long position in the six most important petroleum futures and options contracts by a further 74 million barrels in the week to Nov. 13. Portfolio managers have sold the equivalent of 553 million barrels of crude and fuels in the last seven weeks, the largest reduction over a comparable period since at least 2013. Funds now hold a net long position of just 547 million barrels, less than half the recent peak of 1.1 billion at the end of September, and down from a record 1.484 billion in January. Net length has been reduced to the lowest level since July 2017 essentially unwinding the petroleum bull market of 2017/18 (https://tmsnrt.rs/2QPSxmw). Bullishness towards oil prices has evaporated and hedge funds now have the fewest outright long positions in crude and fuels since January 2016, when oil prices were hitting the bottom of the last slump. By contrast, short positions have climbed to 261 million barrels, the highest for a year, and up from a recent low of just 96 million barrels at the end of September. 

Oil prices fall as Russia maintains wait-and-see approach to output cuts -- Oil gave up overnight gains on Monday, having risen in the previous three sessions from the prospect that top exporter Saudi Arabia will push OPEC and maybe Russia to cut supply towards the year-end. Brent crude futures were down 67 cents, or 1 percent, at $66.09 a barrel by 10:27 a.m. ET (1527 GMT). The contract hit a session low at $65.27. U.S. futures fell 66 cents, or 1.2 percent, to $55.80, after dropping as low as $55.08, near last week's one-year low. The drop followed comments by Russian Energy Minister Alexander Novak that the oil market alliance needs to monitor supply and demand in the coming weeks before making a decision on production levels. "Those Novak comments seemed to really catch the market's gaze all of a sudden," said John Kilduff, founding partner at energy hedge fund Again Capital. "The Russians have been consistent on this. They're not as sure as the Saudis are that we're in oversupply." OPEC, led by Saudi Arabia, is pushing for the group and its partners to reduce output by 1 million to 1.4 million barrels per day to prevent a build-up of unused fuel. "It appears that the market takes a production cut for granted. We'll see if it is right after the next OPEC meeting on December 6. It is not unreasonable to anticipate stable prices until then," PVM Oil Associates strategist Tamas Varga said. Novak said on Monday that Russia, which is not an OPEC member, planned to sign a partnership agreement with the group, and that details would be discussed at OPEC's Dec. 6 meeting in Vienna.

WTI Slumps Back To $55 Handle As Russia Delays Production-Cut Decision  - Oil prices are re-tumbling this morning after weekend hopes for 'news' of production cuts to stabilize prices failed to appear.“It appears that the market takes a production cut for granted,” PVM Oil Associates analyst Tamas Varga wrote in a report. “We’ll see if it is right after the next OPEC meeting on Dec. 6. It is not unreasonable to anticipate stable prices until then.”But, Bloomberg reports that Russia held off committing to further output curbs, opening up a gap with Saudi Arabia which has called for supply cuts.Russia’s Energy Minister Alexander Novak said producers need to “better understand both the current conditions and the winter outlook” before agreeing to a supply cut. A weak demand outlook, waivers on sanctioned Iranian crude and high U.S. production has pushed oil into a bear market. To counter this, Saudi Arabia has said producers may have to cut output by 1 million barrels a day, but Novak wants them to “make a balanced decision, and so far there are no criteria for it.” Furthermore, trade tensions between the U.S. and China escalated over the weekend, adding to worries supply may overtake consumption.

Oil Advances as Capacity Warnings Counter Russia Queries - Oil prices gained ground as traders weighed countervailing signals about how much OPEC and its allies can afford to trim production. Futures in New York climbed 0.5 percent, after reversing direction multiple times Monday. The International Energy Agency noted spare output capacity in Saudi Arabia remains low. Russian Energy Minister Alexander Novak, meanwhile, said producers need to better understand current conditions before paring supplies, leaving the strategy for major oil exporters uncertain. “You had the IEA reminding everyone that we still are fairly tight on spare capacity," said Ashley Petersen, an oil analyst at Stratas Advisors in New York. “It’s a bit of a slow news week so oil markets are going to latch onto anything they hear." While crude markets are currently well supplied, extra capacity in Saudi Arabia, OPEC’s leading producer, remains “ very thin," IEA Executive Director Fatih Birol said Monday at a conference in Slovakia. Longer term, “cutting the production significantly today by key oil producers may have some negative implications for the markets." Russia’s wait-and-see approach threatened to open up a gap with Saudi Arabia, its partner in orchestrating supply cuts in recent years. The Saudis said earlier this month that producers may have to reduce as much as 1 million barrels a day to resuscitate a market that’s fallen into bear territory. U.S. benchmark crude notched its sixth straight week of losses last week. OPEC ministers are scheduled to meet in Vienna on Dec. 6, with allies from outside the group joining talks the next day. In Moscow on Monday, Novak said he wants them to “make a balanced decision, and so far there are no criteria for it.” “The statements from Russia have turned the market’s attention back to worries about slowing demand growth and excess supply" 

Crude oil futures higher as markets anticipate OPEC cuts - — Crude oil futures were higher during mid-morning trade in Asia Monday as investors digested the possibility of OPEC and its allies cutting oil production in December. At 10:00 am Singapore time (0200 GMT), ICE January Brent crude futures were up 77 cents/b (1.15%) from Friday's settle at $67.51/b, while the NYMEX December light sweet crude contract was 76 cents/b (1.35%) higher at $57.22/b. OPEC and its allies are likely looking to cut oil production in 2019 to shore up what they see as a weak market ahead, according to recent statements by OPEC delegates. The group next meets December 6-7 in Vienna and discussions have already begun on those particulars, delegates say, with talk that between 1 million and 1.4 million b/d may need to be slashed. Russia, a key ally of OPEC, produced a record 11.4 million b/d of crude in October, which helped to ease concerns about the impact of US sanctions on Iran. Russian President Vladimir Putin last Thursday said it was "obvious we need to cooperate with Saudi Arabia" but did not commit to any cuts, adding that he was satisfied with the current oil price. While initial price reaction to the talk of production cuts is bullish, "investors are not convinced that they will be able to mitigate the increase in output from the US, while expectations of heavy falls in Iranian exports have eased," ANZ analysts said in a note Monday.

Oil climbs 1 percent on prospect of OPEC, Russia supply cut -- (Reuters) - Crude futures rose ahead of settlement in choppy trade on Monday, supported by a reported drawdown of U.S. oil inventories, potential European Union sanctions on Iran and possible OPEC production cuts.   Brent crude settled up 3 cents at $66.79 a barrel, strengthening late in the session after earlier hitting a low of $65.27 a barrel. U.S. crude futures traded 30 cents higher at $56.76 a barrel in a session that saw swings in a $2 per barrel range. The market is struggling to find firm footing after a rout that has seen prices fall more than $20 a barrel since early October on global oversupply fears. “The market needs a steady drumbeat of negative pressure to move down further,” said Gene McGillian, director of energy research at Tradition Energy in Stamford, Connecticut. “We’ve seen a significant exodus of a lot of the speculative length in the market.” The market pared losses early in the U.S. trading day when energy information provider Genscape reported that crude inventories fell in the latest week, traders said. It then strengthened further into the close. EU foreign ministers endorsed a French government decision to sanction Iranian nationals accused of a bomb plot in France, diplomats said. That could take additional oil off the market from OPEC member Iran. U.S. sanctions on Iran, which were put in place in November, have taken less oil off the market than anticipated as the U.S. has granted waivers to some of Iran’s oil customers. The Organization of the Petroleum Exporting Countries is pushing allied producers including Russia to join in output cuts of 1 million to 1.4 million barrels per day. Russian Energy Minister Alexander Novak said Russia planned to sign a partnership agreement, and that details would be discussed at OPEC’s Dec. 6 meeting in Vienna. “For a cut to be successful in supporting the market, they’re going to have to present a front that is not fractured and the chance of that is looking less and less likely as Dec. 6 approaches,”

The Saudis Are Hinting At Another U-Turn In Oil Markets -- A month after President Donald Trump announced that the United States was withdrawing from the Iran nuclear deal and re-imposing sanctions on Tehran’s oil, Iran’s archrival and OPEC’s de facto leader Saudi Arabia got in June its Arab Gulf fellow cartel members and OPEC+ deal partner Russia on board to start pumping more oil to offset the expected loss of Iranian supply.Just five months later, Saudi Arabia and OPEC are hinting at a fresh oil production cut, as rising production and signs of waning demand growth point to oversupply next year.The oil market and analysts—who were questioning just two months ago the Saudi and Russian ability to offset expected steep Iranian losses—are now thinking that OPEC and its allies reacted too early to come to the rescue of global oil supply.Analysts say that President Trump, intentionally or not, ‘duped’ the Saudis into overproducing to compensate for what was expected to surely be more than 1 million bpd and even close to 2 million bpd loss from Iran.  The Saudis and Russia actually never said that they were compensating for Iran—their goal, as always, was to ensure ‘market stability’, OPEC’s favorite buzzword.All through the summer and early fall, the United States was hinting that this time around sanctions will be more severe than during the Obama administration and that the goal was to have Iranian oil exports down to ‘zero.’ In reality, few thought that Iran’s exports would be zero at the start of November, but the oil market and analysts started to fear that the Iranian loss would be much more than anticipated earlier. As a result, the market welcomed the rising production from Saudi Arabia and Russia, and even questioned whether that would be enough.  

Oil Companies Lose $1 Trillion As Prices Crash - Oil prices fell in early trading on Tuesday on persistent fears of oversupply. OPEC+ could cut output in two weeks’ time, but for now, volatility is here to stay. “The name of the game in the oil market is volatility,” IEA executive director Fatih Birol said at a conference in Oslo. “And with the increasing pressure of geopolitics on oil markets that we are seeing, we believe that we are entering an unprecedented period of uncertainty.” Major oil-producing countries in the Middle East will add 2.7 mb/d of capacity through 2025, according to Rystad Energy. Iraq will add the most at 1.5 mb/d, and an additional 1.2 mb/d will come from the UAE, Iran, and the Neutral Zone between Saudi Arabia and Kuwait. Global output from conventional fields outside the Middle East peaked in 2010, Rystad says, and will fall by another 2.3 mb/d by 2025.  The bull market has now fully unwound after hedge funds and other money managers have sold off all the bullish positions they had accumulated since the second half of 2017, according to Reuters. The last seven weeks has seen the largest liquidation of long positions since 2013. Long positions are now at their lowest level since January 2016 – a period of time that coincided with the very bottom of the oil market cycle. Fund managers now have a roughly neutral position towards the market.. The global oil and gas sector has lost $1 trillion in value over a 40-day period since October after crude prices fell by about $20 per barrel. U.S.-listed companies in the S&P 500 shed $240 billion. ExxonMobil, for instance, lost $35 billion in value. Some analysts are warning that OPEC+ will need to cut output to balance the market. “If they don’t cut, I guarantee you it’s going to be 2014 all over again,” Mike Bradley, managing director at the energy investment firm Tudor, Pickering, Holt & Co., told the Houston Chronicle.

Oil Crashes Most In 3 Years, Triggering CTA Max Short Programs -- Exactly one week after West Texas Intermediate plunged 7% on November 13, oil is being thrown out with the bathwater so to speak, plunging 7.5% on Tuesday, and sliding from $56.76 to below $53... ... the lowest price since November 2, 2017, and WTI's biggest drop since Sept. 1, 2015. While some have noted that the oil, pardon the pun, liquidation is not unique and is hitting all commodities - perhaps in response to the surge in the dollar - the sell off has also spilled over into commodity currencies, with NOK getting hammered, while the Loonie has dropped to the lowest level against the dollar in 4 months, while AUD and NZD are also getting hit. Predictably, the dollar is surging (just as virtually every bank declared the time to sell the greenback is here). Positioning is also helping the slide, as the latest CFTC data showed the seventh consecutive week of net longs positions being sharply reduced in Brent as well as the tenth straight week of managed money declines in WTI. Then there are the usual geopolitical suspects, with headlines suggesting that another OPEC output production cut in December is still up in the air, as Russia has yet to decide if it will side with Saudi Arabia. Finally, oil is also getting the "capitulatory rinse-treatment" by the algos as well, as systematic and trend-following models jump on the short side: Nomura's CTA model shows that the "-13% Short" as of Monday's close shifts to “Max Short” below $53.93, which would imply an additional -$1.3B on notional supply. And with WTI now below $53, it is likely that any additional declines will only lead to even more algos jumping on the short side and accelerating what is already a historic plunge. 

Crude Oil Down on OPEC Uncertainty  | Rigzone - January 2019 West Texas Intermediate (WTI) crude oil futures declined by $3.77 Tuesday to settle at $53.43 a barrel. The WTI traded within range from $57.44 down to $52.77. Brent crude oil for January 2019 delivery also fell sharply Tuesday, losing $4.26 to end the day at $62.53. “Uncertainty about OPEC’s response to lower oil prices and ongoing concerns about weak economic growth and soft petroleum demand continued to undercut oil prices,” Jason Feer, global head of business intelligence with Poten & Partners, told Rigzone. “The fact that U.S. crude inventories are above five-year averages also contributed to a nearly seven-percent decline in January U.S. crude futures prices.” New speculation regarding relations between the United States and Saudi Arabia added another twist to the uncertainty surrounding the direction OPEC will take, added Feer. He was referring to a White House statement Tuesday expressing support for Saudi Arabia despite the controversy surrounding the recent murder of a Saudi journalist at the Kingdom’s consulate in Istanbul, Turkey. “President Trump’s statement of strong support for Saudi-U.S. relations also spurred theories that Saudi Arabia would forego production cuts as the Trump administration has been working to talk down oil prices,” explained Feer. “However, if prices remain low through next week, when OPEC ministers will meet, it seems likely the organization will reduce output in a bid to support prices.” The December futures price for reformulated gasoline (RBOB) also ended the day lower. RBOB settled at just under $1.50 a gallon, representing a nearly nine-cent drop for the day. 

US crude oil dives 6% to fresh one-year low as stock market slides- Oil prices plummeted on Tuesday, snapping four days of gains and renewing a sell-off that has plunged crude futures into bear market. U.S. West Texas Intermediate (WTI) crude futures fell $3.22, or 5.6 percent, to $53.98 per barrel by 10:33 a.m. ET (1533 GMT). The contract earlier fell more than 6 percent, hitting its lowest level going back to October 2017. Brent crude, the international benchmark for oil prices, dropped $3.13, or 4.7 percent, to $63.66 a barrel. Brent hit a fresh eight-month low on Tuesday. The renewed selling in the energy complex dovetailed with a sharp pullback in the stock market. The Dow Jones Industrial Average fell more than 550 points on Tuesday. Crude futures and equities fell in tandem during a broad market sell-off that saw investors dump risk assets last month. Since then, commodity watchers have grown more concerned that supply will outstrip demand next year. The market now expects OPEC, Russia and several other allied producers to launch a fresh round of output cuts in the coming weeks to prevent a price-crushing global crude glut. U.S. crude prices have now dropped as much as 30 percent from a four-year high last month. Brent has tumbled 27 percent from its recent high. "The same old adage applies...Too much supply, not enough demand," said Matt Stanley, a fuel broker at StarFuels in Dubai. U.S. crude oil production has soared by almost 25 percent this year, to a record 11.7 million barrels per day (bpd). Amid the uncertainty, financial traders have become wary of oil markets, seeing further price downside risks from the growth in U.S. shale production as well as the deteriorating economic outlook. Portfolio managers have sold the equivalent of 553 million barrels of crude and fuels in the last seven weeks, the largest reduction over a comparable period since at least 2013. Funds now hold a net long position of just 547 million barrels, less than half the recent peak of 1.1 billion at the end of September, and down from a record 1.484 billion in January.

Oil slumps 6 percent as equities slide feeds demand worry (Reuters) - Oil prices tumbled more than 6 percent on Tuesday in heavy trading volume, with U.S. crude diving to its lowest level in more than a year, caught in a broader Wall Street selloff fed by mounting concerns about a slowdown in global economic growth. U.S. West Texas Intermediate (WTI) crude futures ended the session down $3.77, or 6.6 percent, at $53.43 per barrel. The contract fell as much as 7.7 percent during the session to touch $52.77 a barrel, the lowest since October 2017. More than 946,000 front-month WTI contracts changed hands, exceeding the daily average over the last 10 months and the second-highest daily volume since June, according to Refinitiv data. Brent crude futures fell $4.26, or 6.4 percent, to settle at $62.53 a barrel. The international benchmark fell as much as 7.6 percent to $61.71 during the session, the lowest since December 2017. Oil’s slide has been largely unimpeded since early October when WTI prices were near four-year peaks. Since then, WTI has fallen more than 30 percent. “For the time being it’s more about risk,” said Jim Ritterbusch, president of Ritterbusch and Associates. “When the stock market comes off 8 or 9 percent, it tends to conjure up images of a weak global economy and that feeds into expectations of weaker-than-expected oil demand.” The S&P 500 index on Tuesday hit a three-week low as weak results and forecasts from big retailers fanned worries about holiday season sales, while tech stocks slid further on concerns about iPhone sales. Global stock markets have slumped in the past two months on worries about corporate earnings, rising borrowing costs, slowing global economic momentum and trade tensions. Traders see further downside risk to oil prices from growing U.S. shale production and a deteriorating economic outlook.  

Trump Claims Victory As Oil Prices Plummet -- Oil prices are now down over 20 percent from recent highs, and President Trump knows exactly where the credit for that belongs. “If you look at oil prices they’ve come down very substantially over the last couple of months,” President Trump said in a news conference last week. “That’s because of me.”The President is partially correct about that, but not for the reasons he thinks. He attributes it to his hard line on OPEC. But what has actually happened is that crude oil inventories in the U.S. have risen for seven straight weeks.As pointed out in the previous article, one reason for that is that China, in response to the ongoing trade spat, has stopped importing U.S. oil. Earlier this year China imported more than half a million barrels of day of crude oil from the U.S. Loss of this export market has contributed to the inventory growth in the U.S. — and hence to the drop in crude oil prices. (Presumably, crude oil inventories are dropping elsewhere, but possibly in countries with less transparency about their inventories).Some feel that there is also an element of fear that global demand may be slowing. But this week Reuters reported that China’s crude oil imports reached an all-time high in October. So, despite the trade war, demand in China doesn’t appear to be slowing. But China isn’t getting its oil from the U.S. now. Where is China getting its oil? Iran, for one. Another way that President Trump has helped oil prices go down is that he blinked as the deadline for sanctions on Iran’s oil exports neared. Oil prices had risen about 50 percent over the past year because of the impending sanctions that were expected to take Iran’s oil off the market. (I don’t recall him taking credit for oil prices that rose in response to sanctions).

WTI Barely Bounces After Surprise Crude Draw - After the collapse in the energy complex today amid concern OPEC’s plans to cut production won’t be enough to stem a surge in stockpiles, all eyes are on API's report to see if crude inventories rose for the ninth week in a row...12-month lows for WTI... And Oil vol has reached its highest since Feb 2016... “I think you’re going to see a risk-off type of market," Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors LLC, said in an interview. “It wouldn’t be surprising to see new lows being printed on oil" if U.S. inventories jump. API

• Crude -1.545mm
• Cushing +398k - 9th week in a row
• Gasoline +706k
• Distillates -1.823mm - 9th week in a row

After last week's huge DOE-reported crude inventory build, API has some catching up to do.. but it didn't - API reported a draw of 1.545mm barrels, ending the streak. WTI was hovering around $53.20 before the API print hit and kneejerked very modestly higher...

Crude oil futures rebound on bargain hunting, surprise US stock draw — Crude oil futures were higher in mid-morning trade in Asia Wednesday, rebounding from a slump in prices overnight, on bargain hunting and a report showing a surprise draw in US crude stocks. At 10:00 am Singapore time (0200 GMT), ICE January Brent crude futures were up 64 cents/b (1.02%) from Tuesday's settle at $63.17/b, while the NYMEX January light sweet crude contract was 57 cents/b (1.07%) higher at $54.00/b.US crude stocks fell 1.5 million barrels in the week ended November 16, according to American Petroleum Institute data released Tuesday; analysts surveyed Monday by S&P Global Platts had been expecting a 2.8 million-barrel build. More definitive data from the Energy Information Administration is due for release later Wednesday."The rise in prices this morning [Wednesday] is sentiment driven and probably just a correction to the over-reaction by the market following the plunge in prices overnight," Mizuho Bank senior economist Vishnu Varathan said. "Bargain hunting and production cuts previously mentioned by Saudi Arabia also definitely played a role in the higher prices this morning," Varathan added.US President Donald Trump Tuesday voiced support for OPEC kingpin Saudi Arabia, highlighting its efforts to keep "oil prices at reasonable levels" by boosting production ahead of the reimposition of US sanctions on Iran, Platts reported. "The news that the US President wouldn't punish Saudi Arabia any further for the killing of [journalist] Jamal Khashoggi eased geopolitical risks. There has been concern that Saudi Arabia may tighten oil markets to push prices higher if it was severely punished by the US," ANZ said in a note.

Oil recovers some losses after 6-percent plunge, but market remains on edge -- Oil bounced above $63 a barrel on Wednesday to claw back some of the previous day's 6 percent plunge, lifted by a report of an unexpected decline in U.S. crude inventories.The American Petroleum Institute (API) said on Tuesday that U.S. crude inventories last week fell by 1.5 million barrels, easing concerns for now that a supply glut is building up."The move yesterday was extremely sharp; after such moves you expect to have some rebound," said Olivier Jakob, analyst at Petromatrix. "The API reported a stock draw - it is not a big one but at least it's not a 10-million-barrel build."Brent crude, the global benchmark, was up 92 cents to $63.45 per barrel at 0944 GMT and traded as high as $63.67. U.S. crude gained 98 cents to $54.41. Yet Wednesday's bounce did little to reverse overall market weakness. Crude fell more than 6 percent in the previous session and world equities tumbled as investors grew more worried about economic growth prospects.Brent has fallen by more than 25 percent since reaching a 4-year high of $86.74 on Oct. 3, reflecting concern about forecasts of slowing demand in 2019 and record supply from Saudi Arabia, Russia and the United States.Worried by the prospect of a new supply glut, the Organization of the Petroleum Exporting Countries is talking about a U-turn just months after increasing production.OPEC, plus Russia and other non-OPEC producers, is considering a supply cut of between 1 million barrels per day (bpd) and 1.4 million bpd at a Dec. 6 meeting, sources familiar with the issue have said. Still, Saudi Arabia may find taking action to support prices harder, analysts say, given U.S. pressure to keep them low and President Donald Trump standing by the Saudi crown prince in the wake of the murder of journalist Jamal Khashoggi.

Oil ends higher on prospects for a global output cut - Oil futures climbed on Wednesday as expectations for a production cut at a meeting of major oil producers early next month helped prices recoup part of the previous day’s nearly 7% slump.  Prices, however, finished off the day’s best level as U.S. government data showed a ninth straight weekly rise in U.S. crude supplies.January West Texas Intermediate crude rose $1.20, or nearly 2.3%, to settle at $54.63 a barrel. It was trading at $54.34 right before the supply data. It lost 6.6% Tuesday to settle at a more than one-year low of $53.43 on the New York Mercantile Exchange. U.S. markets will be closed Thursday for the Thanksgiving Day holiday and hold an abbreviated trading session Friday.Global benchmark January Brent climbed by 95 cents, or 1.5%, to end at $63.48 a barrel on ICE Futures Europe. Its finish at $62.53 Tuesday was the lowest settlement since February.Early Wednesday, the Energy Information Administration reported that domestic crude supplies rose for a ninth straight week—up 4.9 million barrels for the week ended Nov. 16. Analysts surveyed by The Wall Street Journal had forecast a rise of 1.9 million barrels, while the American Petroleum Institute on Tuesdayreported a decline of roughly 1.5 million barrels.Gasoline stockpiles fell by 1.3 million barrels last week, while distillate stockpiles edged down by 100,000 barrels, according to the EIA. The Wall Street Journal survey had shown expectations for supply declines of 400,000 barrels in gasoline and 2.3 million barrels for distillates. December gasoline rose 1% to $1.511 a gallon. December heating oil  fell 1% to $1.97 a gallon—the lowest settlement for a front-month contract since April, according to Dow Jones Market Data. Among the figures in the EIA report, the “real eye opener was distillates,” which include heating oil  The much smaller draw was “quite surprising with the cold spell that we are currently [experiencing] in the Midwest and East Coast.” Separate data from Baker Hughes released Wednesday, two days earlier than usual because of the holiday, showed the number of active U.S. oil-drilling rigs fell by 3 to 885 this week, after posting gains in each of the past two weeks.

U.S. crude stockpiles rise more than forecast in ninth weekly build: EIA (Reuters) - U.S. crude oil stockpiles rose more than expected last week, building for the ninth consecutive week, while gasoline and distillate inventories fell, the Energy Information Administration said on Wednesday.   Crude inventories rose 4.9 million barrels in the week to Nov. 16, compared with analysts’ expectations for an increase of 2.9 million barrels. Total inventories were 446.91 million barrels, the highest level since December 2017. The last time crude stocks grew for nine straight weeks was between Jan. 6, 2017 to March 3, 2017. Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures fell by 116,000 barrels, EIA said. “The report was somewhat bearish due to the large crude oil inventory build,” Still, the drawdown in refined product inventories and jump in refinery activity could signal the end of the recent string of mostly bearish reports. “Gasoline demand remains strong, and it will only strengthen as we get into the holiday shopping season,” . Crude pulled back immediately after the report but then strengthened, with U.S. crude up nearly 3 percent and Brent futures up 1.6 percent by 11:30 EST (1630 GMT) as attention turned to more bullish data on refined products. Refinery crude runs rose by 423,000 barrels per day, EIA data showed. Refinery utilization rates rose by 2.6 percentage points to 92.7 percent of total capacity. 

WTI Tumbles After Ninth Consecutive Weekly Crude Build -- WTI has rallied since last night's API-reported surprise crude draw, but remains drastically lower even from yesterday's highs.  President Trump's tweet thanks Saudi Arabia for lower oil prices one day after announcing the U.S. won’t let the murder of a journalist jeopardize relations with the kingdom, slowed the momentum a little. “Another week of inventory builds would most certainly push oil prices down further, as market concerns over waning demand growth intensify,” says Cailin Birch, global economist at The Economist Intelligence Unit.   DOE:

• Crude +4.85mm (+3.45mm exp) - 9th week in a row
• Cushing -116k
• Gasoline -1.295mm (+100k exp)
• Distillates -77k - 9th week in a row

Reversing the gains from API's reported draw, DOE reported a bigger than expected crude build - the 9th weekly build in a row. Distillate inventories drewdown for the ninth week in a row and Cushing's streak of rising stocks ended.. Production was unchanged at record highs on the week.The kneejerk reaction was to erase the post-API gains...back to a $53 handle...

Shell is Wrong: Global Oil Demand Can Only Increase -  Bolstered by the U.S. shale revolution, global oil production has surged by over 20 percent in the past 15 years. The great rise has put to bed the “peak oil production” theory but it has not stopped the apparent new concern of “peak oil demand,” now portrayed as perhaps the main threat to the future of the world’s oil industry. In fact, it’s hardly just anti-oil environmental groups; many of the major producers themselves (Royal Dutch Shell plc in particular) assert that global oil consumption will soon peak and thereafter begin its terminal decline. The basis of this belief is the growth of electric vehicle sales and the need to reduce oil use to combat climate change. Yet for oil, what’s past is prologue: even with higher prices, both the Energy Information Administration (EIA) and International Energy Agency (IEA) modeling have repeatedly forecast more demand for as far as the eye can see. After all, oil is the world’s most important fuel, supplying 35 percent of all energy used. While the link between economic growth and oil use can be viewed from a variety of perspectives, the two clearly progress in tandem – a long studied link demonstrated in regression modeling and peer-reviewed studies. Indeed, as the main energy source that powers the world’s economic engine, oil is so important that demand is ever-growing: 61 million barrels per day (MMbpd) in 1980, 77 MMbpd in 2000, and 100 MMbpd this year. Over the past 33 years, annual global oil demand has only failed to increase three times, tellingly all during times of economic recession. Looking forward, with no significant substitute whatsoever, there is simply no evidence that global oil demand will peak anytime soon. Around 85 percent of the global population lives in still developing nations, such as China, India, Pakistan, and Nigeria. They have huge populations, and their future transport needs contingent on more oil are just now coming to light. These poorer countries naturally seek to become rich, and the West has shown them that the ascension from poverty begins as extensive petroleum-based transportation infrastructure gets constructed. These systems are capable of achieving massive economies of scale that provide large amounts of energy at low cost. Illustrating the high value of oil, the rich OECD nations constitute 46 percent of global use despite being just 15 percent of the population. The numbers in oil’s favor are overwhelming. The global oil-based passenger vehicle fleet is around 1.5 billion, with 95 million new ones being bought this year alone. In total, there are less than 5 million electric cars in operation, a growing niche market but nowhere near lowering oil demand in any significant way. In fact, just achieving a 20 percent market share of total global car sales by 2040 would be a huge achievement for those running on electricity—but not nearly enough to significantly reduce oil needs since more oil-requiring planes and heavy-trucks will compensate. 

Oil dips on swelling US inventories, but expected OPEC supply cut stems losses - Oil prices fell on Thursday after U.S. crude inventories swelled to their highest level since December adding to concerns about a global glut but OPEC talk of an output reduction limited losses.Benchmark Brent fell 23 cents to $63.25 a barrel by 1212 GMT, after dropping by over $1 in early European trading. U.S. WTI fell more than a $1 before easing back to trade down 39 cents at $54.24.U.S. commercial crude oil inventories climbed by 4.9 million barrels to 446.91 million barrels last week, the U.S. Energy Information Administration (EIA) said on Wednesday, its highest level since December.U.S. crude oil production also stayed at a record 11.7 million barrels per day (bpd), the EIA said. . "The question is what OPEC will do in December, will they cut, and if so, by how much?" he said. The Organization of the Petroleum Exporting Countries is worried about the emergence of a glut that could pull down prices further. But OPEC's biggest exporter Saudi Arabia is also under U.S. pressure to prevent prices spiking higher again.

Oil prices wobble in holiday-thinned trade - Oil prices wobbled Thursday, but clawed back losses from earlier in the session on jitters over U.S. supply data in a session thinned out by the Thanksgiving Day holiday.From a drop of over 1% at one point, January West Texas Intermediate crude fell 16 cents, or 0.3%, to $54.55 a barrel. The contract rose nearly 2.3% on Wednesday, after losing 6.6% Tuesday to settle at a more than one-year low of $53.43. For the week so far, WTI is down 3.8%.  Global benchmark January Brent LCOF9, -5.45% turned higher from a loss of over 1% earlier, gaining 14 cents, or 0.2%, to $63.59 a barrel, after closing up 1.5% on Wednesday. Its finish at $62.53 Tuesday was the lowest settlement since February. An “unexpectedly pronounced” 4.9 million-barrel rise in U.S. crude oil stocks reported Wednesday was leaving investors unsettled, said analysts at Commerzbank in a note to clients. The Energy Information Administration reported that domestic crude supplies rose for a ninth straight week, well above the 1.9 million-barrels that had been expected by analysts surveyed by the Wall Street Journal. “No end to the downswing is in sight for the foreseeable future. This would require a clear statement from OPEC that it is willing to cut production considerably” added the Commerzbank analysts.The Organization of the Petroleum Exporting Countries and its allies signaled earlier this month that they could enact a joint production cut. The cartel has reportedly reached an initial agreement to cut output at the meeting next month, but haven’t yet agreed on the amount, according to Reuters.U.S. President Donald Trump has been pressuring the Saudis to try to push oil prices down by pumping oil into the market, and thanked the oil-producing giant on Twitter Wednesday for causing those prices to fall. And a day earlier, Trump had sided with the Saudi Arabian leadership and against his own CIA on the matter of the murdered journalist Jamal Khashoggi, a critic of the Saudi regime. “It therefore remains to be seen whether Saudi Arabia will cut production and thereby snub a U.S. president who is continuing to hold a protective hand over the Saudi dynasty,”

Oil plunges about 8 percent to lowest level in more than a year - Oil prices fell on Friday to their lowest levels in more than a year, deepening a rapid seven-week sell-off that has plunged crude futures deep into a bear market.Friday's declines further ramp up the pressure on OPEC ahead of a much-anticipated meeting between the influential oil cartel and its allies in Vienna on Dec. 6, when they are expected to announce that output will be curtailed.So far, the prospect of the Middle East-dominated group orchestrating a fresh round of supply cuts has done little to prop up crude futures.U.S. benchmark West Texas Intermediate crude ended Friday's session down $4.21, or 7.7 percent, at $50.42. WTI hit its weakest price since mid-October 2017 on Friday.International benchmark Brent crude dropped $3.66, or 5.9 percent, to $58.94 by 1:34 p.m. ET. The contract hit its lowest level since late October 2017. WTI has now lost 34 percent of its value from its peak on Oct. 3 to the trough on Friday. Brent has fallen as much as 32 percent. "I have to say that the speed in which the oil market has declined has surprised me even as OPEC and non-OPEC members discuss a production cut,". "The market does not think it will be enough."The latest wave of energy market selling comes amid escalating concerns about an increase in global supply and a slowdown in economic growth.Saudi Energy Minister Khalid al Falih on Thursday said the kingdom's output this month would surpass October's productionof 10.6 million barrels per day. That is near an all-time high but below the 10.7 million bpd guidance for October that Falih announced last month. Falih also said in October that November output would hit 11 million bpd. Sources told Bloomberg News this week the Saudis are currently pumping a record 10.8 million to 10.9 million bpd.

Oil prices hit a 2018 low as OPEC considers an output cut - Oil prices fell to their lowest in a year on Friday, on course for their biggest one-month decline since late 2014, even as oil producers consider cutting production to try to stem a rising global surplus.Oil supply, led by the United States, is growing more quickly than demand and to ward off a build-up of unused fuel such as the one that emerged in 2015, the Organization of the Petroleum Exporting Countries is expected to start withholding output after a meeting planned for Dec. 6.But this has done little so far to prop up the price. The value of a barrel of oil has dropped by around 20 percent so far in November, in a seven-week streak of losses.Benchmark Brent crude oil futures fell $2.31 a barrel, or 3.7 percent, to a low of $60.29, its lowest since November 2017. By 1050 GMT, Brent was trading around $60.75, down $1.85.U.S. West Texas Intermediate (WTI) crude futures lost $2.90, or 5.3 percent, at one point to touch a low of $51.73 a barrel."The question is now how much longer bears are able to keep firing. Are they going to run out of ammunition shortly or they have ample supply of bullets?" "It is reasonable to compare the current economic and supply/demand picture with the one four years ago. After all, it was in November and December 2014 when oil prices fell more or less to the same level where they are now,"

Oil price plummets to low not seen since October 2017 - The oil price has slumped to its lowest point this year, as concerns mount about a glut of crude supply and fears that economic headwinds could lessen demand.Brent crude fell as low as $59.26 a barrel on Friday, a level last seen in October 2017. Three supermarkets said on Friday they would cut petrol prices, as Asda cut its national price cap by 1p per litre for petrol and 2p per litre for diesel, with Morrisons and Sainsbury’s following suit.After reaching a high of more than $86 a barrel in early October, which prompted warnings that it would climb further to $100, the oil price has since plunged by more than 30%.But some industry observers said they expected it to recover next year if Opec took action to avoid an oversupply of crude.The price is expected to average $75.50 a barrel in 2019 compared with $73.91 this year, according to a survey of 11 oil forecasters by S&P Global Platts.The recent fall follows US waivers for eight countries to import oil despite sanctions on Iran, high output and markets worried about a drop in demand. Jefferies bank said: “The market is currently oversupplied.”Earlier this week, Donald Trump thanked Saudi Arabia, the de facto leader of Opec, for pumping more and bringing down the price, but the US president said he wanted to see it lower still. The oil cartel is due to meet in Vienna in a fortnight to discuss what major producers should do next.

Oil Price crash: Crude limps to worst week in three years over glut fears - Oil notched its biggest weekly loss since the depths of the last price crash, as record Saudi output, pressure from President Donald Trump and a global stock sell-off intensified crude’s free fall.Futures slid below $60 in London on Friday and ended the week down about 12 percent, the worst showing since January 2016. Traders focused on the growing risks of a new glut of crude after Saudi Arabia’s oil minister said Thursday that production from the world’s largest exporter had climbed further this month. Oil joined a swoon in equity markets nervous about international trade and a weakening economy. Energy companies led declines.“Crude’s getting shellacked,” said Kyle Cooper, director of research at energy consultant IAF Advisors in Houston. “The equities are giving a foreboding sign for overall economic growth. I think that’s what’s disturbing people.” In the U.S., West Texas Intermediate oil prices slid toward $50 a barrel, the baseline at which many large shale explorers set their budget this year, RBC Capital Markets analyst Scott Hanold said in a note to clients. Smaller producers planned on even more, predicating budgets on WTI prices 10 to 15 percent higher, he wrote.“Outside of a few better-positioned companies, demonstrating free cash flow will be challenging at current oil prices,” Hanold said. The Saudis have signaled they will throttle back on production in December. But unless OPEC and Russia can reach a new deal to constrain output in Vienna next month, analysts see the prospect of sustained oversupply in 2019, undoing the group’s success over the last two years to drain global inventories. Crude collapsed into a bear market this month after the U.S. allowed some nations to continue buying Iranian supply. Trade tension between America and China is raising concerns over demand and Trump renewed a call for lower oil prices. Those factors pushed up oil’s volatility this week to the highest since early 2016.

7 key reasons the 'bottom is falling out' of oil prices on Black Friday - Crude-oil prices carved out fresh yearly lows early Friday, deepening carnage in a commodity that already had futures for the U.S. benchmark and the international contract falling beneath closely watched levels. Global benchmark Brent oil and West Texas Intermediate are in a bear market, usually defined as a drop of at least 20% from a recent peak. Here are a few reasons that industry experts say contributed to Friday’s tumble, which had WTI crude on the New York Mercantile Exchange shedding 7.7% to settle at $50.42 a barrel, marking the lowest finish since Oct. 9 of 2017:

• . Holiday trading volume: Traders say that Friday’s decline can at least partly be attributed to thinner trading volumes following Thanksgiving, when commodity markets were closed. Lower trading activity can exacerbate moves in an asset, and with crude engulfed in a vicious downtrend, the tendency is lower. Moreover, the crude market finished an hour earlier at 1:30 p.m. Eastern.
• . Oversupply: U.S. oil production topped 11 million barrels a day earlier this year, according to the Energy Information Administration, sparking fears that supplies will overwhelm demand. Major producers Russia and Saudi Arabia are also seen producing at record levels.
• . Margin calls: Traders say that Friday’s decline also has been intensified by margin calls from hedge funds and those speculating on the price of oil. A margin call occurs when a broker demands that a client that’s lost money making leveraged bets pony up additional money to meet a minimum maintenance margin. Margin calls can result in forced selling, amplifying upside and downside moves.
• . China demand: China’s demand for oil byproduct, gasoline, dropped to a the lowest level in 13 months, according to a Reuters report on Friday, offering further signs that the Beijing-Washington trade spat is hurting the world’s second-largest economy and one of the biggest importers of energy-related products.
• . Trump: President Donald Trump has consistently been advocating for lower oil prices and on Wednesday issued a tweet urging even lower prices and thanking the Saudis for recent declines.
• . Saudi Arabia in a corner: Market participants have said that the Saudi-orchestrated killing of journalist Jamal Khashoggi has complicated politics around oil. Trump is reluctant to sanction Riyadh because of a desire to keep fuel prices lower and preserve defense-sector deals. The oil-producing nation may feel compelled to comply with the U.S. president’s desire for lower crude prices.
• . Dollar gains: A rising dollar also helped to create a headwind for the commodity because the dollar-priced asset becomes less attractive to buyers using other currencies when the buck strengthens.

Wells Fargo's Scott Wren: Oil prices have 'dropped like a rock' but are finally nearing bottom - Oil prices have "dropped like a rock" over the past seven weeks but are finally approaching a bottom, Wells Fargo strategist Scott Wren told CNBC on Friday."It's caught the falling knife," the senior global equity strategist at Wells Fargo Investment Institute said in a "Squawk on the Street" interview. However, "from our perspective oil, while it's hard to say right now exactly where the bottom is going to be, we feel it's pretty close to where we are right now."Oil prices fell Friday to their lowest levels in more than a year.West Texas Intermediate crude fell $3.41, or 6.2 percent, to $51.22 in light trading after the Thanksgiving holiday. WTI briefly slid about 7 percent to its weakest prices since Oct. 12, 2017. International benchmarkBrent crude was around $59.52 a barrel, down $3.08, or 4.9 percentThe sell-off in crude comes amid escalating concerns about an increase in global supply and a slowdown in economic growth. OPEC and non-OPEC members meeting in Vienna on Dec. 6 are expected to start curtailing output.Wren also said the latest wave of energy market selling has added to fears in the broader market of a slowdown in economic growth. Wren has previously said two things will determine the market action by the end of the year: If there is "any whiff" of anything positive on U.S.-China trade and Federal Reserve Chair Jerome Powell's decision on interest rates.

OPEC+ Drowning Under Oil Supply Glut - Brent fell below $60 per barrel during trading on Friday, a threshold not breached in over a year. WTI also saw a significant collapse, threatening to break below $50. The more oil prices fall, the more pressure OPEC+ will feel as its December 6 meeting approaches.   Saudi Arabia’s oil production hit 11 million barrels per day (mb/d) temporarily in November, although the full monthly average is expected to come in a bit lower than that. The 11 mb/d figure is a record high, but Riyadh plans to cut exports by 500,000 bpd in December.  The inauguration of new oil pipelines in 2019 could unlock another wave of supply from the Permian basin. “The Permian will continue to grow and OPEC needs to learn to live with it,’’ said Mike Loya, the head of Vitol Group’s unit in the Americas, according to Bloomberg. The U.S. shale industry proved that it could weather pipeline bottlenecks this year, and even grow production at an incredible rate, which suggests that even more growth is forthcoming. Bloomberg says that shale executives talk about a coming “tsunami” or a “flooding of Biblical proportions,” with a lot of other hyperbolic adjectives being thrown around. U.S. total liquids production (both crude and natural gas liquids) could hit 17.4 mb/d by the end of next year, according to the EIA. The New York Times explores the secret negotiations between the U.S. and Saudi Arabia over a nuclear power deal. The agreement would allow for the construction of nuclear reactors in Saudi Arabia, but Riyadh wants to control the fuel cycle, which raises questions about motivations for a weapons program. The recent murder of Saudi journalist Jamal Khashoggi, and the shifting explanations for what happened, also seriously undercuts the credibility of the Saudi regime.  China’s gasoline exports in October fell to a 13-month low, a sign of an emerging glut in Asia. Inventories in Singapore are at a three-month high. At the same time, diesel exports in October jumped by 40 percent from a month earlier, as demand for middle distillates remains strong.   BP began production at the second phase of its Clair field in the West of Shetland region this week. According to Wood Mackenzie, the West of Shetland region will be the only area of the North Sea zone that will see output grow through 2025. The mature North Sea has struggled to attract new investment, but some of the oil majors see the West of Shetland region as promising.

Saudi Aramco to abandon plans to issue bonds to finance SABIC deal - Saudi Aramco has abandoned plans to issue bonds to finance a deal to buy a stake in Saudi National Petrochemical Company (SABIC), the Wall Street Journal quoted sources as saying. The sources attributed the drop to oil prices on world markets. "Aramco no longer plans to launch what would have been one of the largest bond sales to companies in the world, to finance a $ 70 billion stake in Saudi National Petrochemical Company (SABIC)," the paper said. Aramco sees "falling oil prices as a problem for bonds" and is concerned about the disclosure requirements of these bonds. The paper said that Aramco was looking instead for options that require less public disclosure, and quoted sources that SABIC - in return - may raise funding to complete the deal. The Reuters news agency quoted sources in June, that Aramco is seeking to buy a controlling stake in the company, "SABIC" may reach 70% of the company. According to Reuters at the time, Aramco was considering buying the entire public investment fund, but if not, it could end up buying a stake of more than 50% to become its majority shareholder. Reuters also said in September that Aramco was "in preliminary talks with banks on possible financing of between $ 50 billion and $ 70 billion to support its acquisition of a majority stake in SABIC." The Bloomberg network earlier commented on the deal, saying it would be a way to transfer billions of dollars from Aramco to the Public Investment Fund, which originally aspired to get those billions from Aramco's IPO, before being suspended. SABIC is the world's fourth-largest petrochemical company and is 70% owned by the Saudi Public Investment Fund (SIFC), the kingdom's largest sovereign fund, and the rest is listed on the Saudi bourse. Aramco is 100% state-owned. 

Trump thanks Saudis for lower oil prices amid Khashoggi criticism -- President Donald Trump on Wednesday doubled down on his defense of Saudi Arabia, thanking the kingdom for helping to keep a lid on oil prices, amid bipartisan criticism for his statement on the brutal murder of journalist Jamal Khashoggi.On Tuesday, Trump declared he would stand by Saudi Arabia, even though the CIA has reportedly concluded that Saudi Crown Prince Mohammed bin Salman ordered Khashoggi's killing. After releasing the statement, Trump repeatedly linked his position to his desire to boost arms sales to Saudi Arabia and the kingdom's role in preventing an oil price spike.Early Wednesday morning, Trump took to Twitter to promote the recent sharp pullback in oil prices and to praise Saudi Arabia. "Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy! $54, was just $82. Thank you to Saudi Arabia, but let's go lower!," Trump tweeted, giving an inaccurate account of the drop in oil prices.

Trump says breaking with Saudi Arabia would send oil prices 'through the roof' - US President Donald Trump and Saudi Deputy Crown Prince and Defense Minister Mohammed bin Salman speak to the media in the Oval Office at the White House in Washington, DC, on March 14, 2017.President Donald Trump on Tuesday linked his decision to continue backing Saudi Arabia — despite the murder of a U.S. resident by Saudi agents — to his desire to keep oil prices low."Saudi Arabia, if we broke with them, I think your oil prices would go through the roof," Trump told reporters on Tuesday. "I've kept them down. They've helped me keep them down."Trump issued a statement earlier on Tuesday saying the United States stands by Saudi Arabia after agents of the kingdom killed U.S. resident and journalist Jamal Khashoggi in a Saudi consulate in Istanbul, Turkey.The CIA has reportedly concluded that Crown Prince Mohammed bin Salman, an ally to the Trump administration, ordered Khashoggi's death. On Tuesday, Trump cast doubt on that assessment, saying in his statement "maybe he did and maybe he didn't!"The United States has sanctioned 17 individuals connected to the killing. U.S. lawmakers have called for the United States to suspend some arms sales to Saudi Arabia.Trump's comments on Tuesday illustrate how his administration has relied on Saudi Arabia to pump more oil and convince a group of producers to increase output in order to keep prices low. Trump's declaration of support for Saudi Arabia comes just two weeks before OPEC, Russia and several other producers meet to decide whether to reverse course and cut production next year.

Why the Khashoggi crisis could finally start to affect oil prices -The oil market has largely shrugged off the killing last month of Washington Post columnist Jamal Kashoggi by Saudi agents. However, a new CIA assessment that reportedly links the slaying to the kingdom's crown prince could soon change that, according to a commodities strategist and former CIA analyst. The assessment concludes that Saudi Crown Prince Mohammed bin Salman ordered Khashoggi's killing, according to the Washington Post and NBC News. The CIA is expected to present its report to President Donald Trump by Tuesday, just two weeks before major oil producers including OPEC and Russia meet in Vienna, Austria. The group has been coordinating oil policy since last year, and the members are now considering a fresh round of production cuts after a sharp pullback in the oil market.New supply caps would boost oil prices and prevent financial pain in countries dependent on fossil fuel revenue, including Saudi Arabia. The kingdom expects to its crude shipments to drop by 500,000 barrels per day in December, and its energy minister recently said OPEC and its allies may cut output by about 1 million bpd next year.But Trump, a populist focused on filling Americans' pocketbooks, opposes the output cuts because he wants prices to fall at U.S. gas stations.Despite reportedly being shown evidence that links Khashoggi's death to Prince Mohammed, Trump continues to cast doubt on the royal's role in the slaying. The Trump administration is closely aligned with Prince Mohammed, and the president wants to preserve billions of dollars in potential arms sales to the Saudis. In an interview with Fox News Sunday this past weekend, Trump stressed that Prince Mohammed has repeatedly denied any involvement in the killing during the leaders' private conversations. That gives the Saudis an incentive to hold off on cutting output, especially in light of growing pressure on the regime from Congressional Republicans, according to Helima Croft, the global head of commodity strategy at RBC Capital Markets and a former intelligence analyst for the Central Intelligence Agency.

Report- Saudi royals turn on king’s favourite son after killing - Members of Saudi Arabia's ruling family are agitating to prevent Crown Prince Mohammed bin Salman (MBS) from becoming king after the international uproar over the killing of Saudi journalist Jamal Khashoggi, sources close to the royal court told Reuters news agency. Senior US officials, meanwhile, have indicated to Saudi advisers in recent weeks they would support Prince Ahmed bin Abdulaziz - who was deputy interior minister for nearly 40 years - as a potential successor to King Salman, according to Saudi sources with direct knowledge of the consultations. Amid international outrage over Khashoggi's murder, dozens of princes and cousins from powerful branches of the Al Saud family want to see a change in the line of succession, but will not act while King Salman - the crown prince's 82-year-old father - is still alive, sources said. They recognise the king is unlikely to turn against his favourite son, the report added. Rather, they are discussing the possibility with other family members that after the king's death, Prince Ahmed, 76, uncle of the crown prince, could take the throne, according to the sources. Prince Ahmed, King Salman's only surviving full brother, would have the support of family members, the security apparatus, and some Western powers, one of the Saudi sources said. Prince Ahmed returned to Riyadh in October after two months abroad. During the trip, he appeared to criticise the Saudi leadership while responding to protesters outside a London residence chanting for the downfall of the Al Saud dynasty. He was one of only three people on the Allegiance Council, made up of the ruling family's senior members, who opposed MBS becoming crown prince in 2017, Saudi sources said at the time. Neither Prince Ahmed nor his representatives could be reached for comment. Officials in Riyadh did not immediately respond to requests from Reuters for comment on succession issues. 

Turkey reportedly has a second audio tape of a Saudi hit team discussing details of Jamal Khashoggi’s murder, bolstering the CIA’s claims - Turkish officials reportedly have a second, 15-minute audio tape of a Saudi hit team discussing the details of a plan to murder the journalist Jamal Khashoggi.The tape, first reported by a columnist at Turkey's Hurriyet newspaper, allegedly shows evidence that Khashoggi was the victim of a premeditated murder and directly contradicts the conclusions drawn by Saudi investigators.Khashoggi, 59, was a contributor to The Washington Post and a Saudi Arabian national who frequently wrote editorials critical of Crown Prince Mohammed bin Salman. The Central Intelligence Agency (CIA) concluded on Friday that t he crown prince ordered Khashoggi's assassination.In the first tape, "Khashoggi's desperate attempts to survive could be heard in a seven-minute audio recording. There is no hint of anyone trying to persuade him," Abdulkadir Selvi, the Hurriyet columnist,wrote on Friday.Khashoggi traveled to the Saudi embassy to obtain documents needed to marry his Turkish fiancee, Hatice Cengiz, 36. Saudi investigators said Khashoggi was killed only after consulate officials tried to persuade him to return to Saudi Arabia on his own volition.In the second tape, which was recorded 15 minutes before Khashoggi arrived at the Saudi consulate in Istanbul, Turkey, the Saudi team "discusses how to execute Khashoggi. They are reviewing their plan, which was previously prepared, and reminding themselves the duties of each member," reports Hurriyet."There is also evidence from the period after the killing," the newspaper added. "Turkey has the international phone calls made by the 15-member Saudi hit squad." The Saudi government has repeatedly changed its story on Khashoggi's death. On Thursday, the Saudi public prosecutor Saud al-Mojeb released his findings. A spokesman for the prosecutor, Shaalan al-Shaalan, said 11 people had been indicted and five face the death penalty. Their names were not released.

Traitor! You Will Be Brought To Account - Quotes From Khashoggi Murder Tape Leaked - The grisly recording of Saudi journalist Jamal Khashoggi's final moments (before his body was butchered and remains dissolved in acid)  that was purportedly captured by Turkish intelligence has reportedly been shared with international intelligence agencies including the US, and we imagine it's only a matter of time before it leaks.  In a chilling preview of what's to come, a Turkish news website has published quotes allegedly excerpted from the tape that delineate Khashoggi's final struggle with members of the 15-man hit squad that Turkey believes was sent to the consulate with specific instructions to murder Khashoggi.Haaretz gathered the quotes and translated them into English. According to the website, Khashoggi was immediately confronted by four Saudis after entering the consulate, one of whom grabbed his arm."Release my arm! What do you think you are doing?" website Haberturk quotes Khashoggi as saying at the consulate's "A unit," where the visa department is located, and where seven minutes of the tape are recorded.Khashoggi was then brought to the embassy's "B Room", where the purported leader of the hit squad, Maher Abdulaziz Mutreb, started threatening the journalist."Traitor! You will be brought to account," Mutreb is heard shouting, according to Haberturk.The rest of the recording features what the Turkish news organization described as verbal fighting, brawling and torture. After Khashoggi had been murdered, one of the hit squad members donned his clothes in an attempt to disguise himself as the journalist to bolster the embassy's eventual claim that he left the embassy. This prompted a joke from one member of the hit squad, according to RT. It is spooky to wear the clothes of a man whom we killed 20 minutes ago.

Erdogan, MBS, Islamic leadership and the price of silence - Pepe Escobar -  It was packaged as a stark, graphic message, echoing across Eurasia: Presidents Erdogan and Putin, in a packed hall in Istanbul on Monday, surrounded by notables, celebrating completion of the 930 kilometer-long offshore section of the TurkStream gas pipeline across the bottom of the Black Sea. This is no less than a key landmark in that fraught terrain I named ‘Pipelineistan’ in the early 2000s. It was built by Gazprom in only two and a half years despite facing massive pressure from Washington, which had already managed to derail TurkStream’s predecessor, South Stream. TurkStream is projected as two lines, each capable of delivering 15.75 billion cubic meters of gas a year. The first will supply the Turkish market. The second will run 180 km to Turkey’s western borderlands and supply south and southeast Europe, with first deliveries expected by the end of next year. Potential customers include Greece, Italy, Bulgaria, Serbia and Hungary. Call it the Gazprom double down. Nord Stream 1 and 2 supply northern Europe while TurkStream supplies southern Europe. Pipelines are steel umbilical cords. They represent liquid connectivity at its best while conclusively decreasing risks of geopolitical friction. Turkey is already being supplied by Russian gas via Blue Stream and the Trans-Balkan pipeline. Significantly, Turkey is Gazprom’s second largest export market after China. Erdogan’s speech, strenuously emphasizing the benefits of Turkey’s energy security, was played and replayed all across a rainy, ultra-congested Istanbul. To witness this geopolitical and geoeconomic breakthrough was particularly enlightening, as I was deep into discussing Turkish geopolitics with members of the progressive Turkish Left. Even the opposition to what in Europe is routinely defined as Erdogan’s brand of “Asian illiberalism” concedes Turkey-Russia trade connectivity – in energy, in the military domain via the sale of the S-400 missile system, in the building of nuclear power plants – has been conducted with consummate skill by Erdogan, who is always careful to send direct and indirect messages to Washington that Turkish national interests will not be compromised.

Criticism Of MbS A "Red Line" In Khashoggi Probe, Warns Saudi Arabia - Now that President Trump has not only given Saudi Crown Prince Mohammed bin Salman a pass on the murder of Jamal Khashoggi, but in his Tuesday written statement even heaped praise on the kingdom while ultimately blaming Iran for destabilizing the region, Riyadh has come out swinging and put political enemies on notice.  In an official statement issued Wednesday the Saudi foreign ministry warned that any any criticism of MbS is a "red line" that would not be tolerated. Saudi Foreign Minister Adel al-Jubeir specifically related his comments to the Khashoggi case, saying that calls for MbS to be held account would not be tolerated, according to the AFP. "In Saudi Arabia our leadership is a red line. The custodian of the two holy mosques (King Salman) and the crown prince are a red line," Jubeir told the BBC in an interview discussing the ongoing Khashoggi murder probe. The Saudi FM said that not even so much as "discussion" would be tolerated, saying of the kingdom's rulers: They represent every Saudi citizen and every Saudi citizen represents them. And we will not tolerate any discussion of anything that is disparaging towards our monarch or our crown prince.

Saudi Arabia Electrocuted, Flogged and Sexually Abused Female Activists, Human Rights Report Says - Saudi female activists were regularly tortured while held for interrogation, according to a new report from human rights groups that alleged a wide range of abuses. Amnesty International and Human Rights Watch both issued statements Tuesday detailing the brutality afforded to female activists at the deeply conservative kingdom’s Dhahban Prison. At least 10 women—including prominent activists who had fought for the right of women to drive—and seven men are currently detained in relation to human rights work, all on the pretence of national security concerns, the charities said. The testimonies were all anonymous, as the sources feared for their safety and the safety of the detained activists in question. Those held include Loujain al-Hathloul, Eman al-Nafjan and Aziza al-Yousef, all of whom had long campaigned for the right of women to drive before the ban was lifted in June. Though the new freedoms were allowed, several of those who fought for them were detained simultaneously. Dana Ahmed, a researcher at Amnesty, noted that none of those detained had been charged with any crimes, The Guardian reported. Citing three anonymous testimonies it had obtained, Amnesty said activists were repeatedly given electric shocks and flogged, leaving some unable to walk or even stand up. In one particularly brutal session, one prisoner was hung from the ceiling. One of the detained women also said she was subjected to sexual abuse by Saudi interrogators, who were wearing face masks at the time. Human Rights Watch quoted “informed sources” who said at least three female prisoners had been whipped, electrocuted and subjected to “forcible hugging and kissing.” The organization noted it was unclear whether interrogators were hoping to extract information or simply punishing the women for their activism. Amnesty said the abuse left prisoners suffering from uncontrolled shaking of their hands and marks on their faces and necks. A long-time adversary of human rights groups, Saudi Arabia’s authoritarian government is under the spotlight following the murder of dissident journalist Jamal Khashoggi at the country’s Istanbul Consulate on October 2. Many, including the CIA, suspect de facto ruler crown prince Mohammed bin Salman to have ordered the killing and directed the subsequent failed cover-up. Though Saudi officials have now admitted that Khashoggi—a columnist for The Washington Post—was murdered, his remains are yet to be found.

New Saudi Attack in Yemen Leaves 1,500 Pregnant Women at Risk of Death — The United Nations Population Fund (UNFPA) recently warned that as many as 1,500 pregnant women in the besieged Yemeni port city of Hodeida are at risk of death now that the city’s only hospital capable of providing emergency care services has become inaccessible due to the fighting. In a statement issued Wednesday, UNFPA’s Director for the Arab region, Dr. Luay Shabaneh, wrote that the agency feared that:  “Among the 10,000 pregnant women caught in the fighting in Hodeida City, the lives of an estimated 1,500 who are likely to encounter complications during pregnancy and childbirth might be at risk as the city’s only hospital [al-Thawra hospital] that can provide emergency care becomes inaccessible.”  Shabaneh went on to note that the al-Thawra Hospital has been forced to take on the majority of Hodeida’s civilians in need of medical assistance because “health facilities across Hodeida are closed or functioning at minimum capacity,” while others have been captured by the Saudi-led coalition. As a result, the hospital’s neonatal care facility sees 400 to 500 deliveries per month, including more than 200 caesarian sections. Without access to the hospital, over a thousand women likely to need caesarian sections, or other emergency care relating to childbirth and pregnancy complications, now face the risk of life-threatening complications, not to mention the risk to their unborn children.

Aid group: 85,000 children may have died of hunger in Yemen  (AP) — A leading international aid group said Wednesday that an estimated 85,000 Yemeni children under the age of 5 may have died of hunger and disease since the outbreak of the country's civil war in 2015. Save the Children based its figures on mortality rates for untreated cases of severe acute malnutrition, or SAM, in young children. The United Nations says more than 1.3 million children have suffered from SAM since a Saudi-led coalition went to war with Yemen's Houthi rebels in March 2015. The aid group said its "conservative estimate" was that 84,701 children may have died, based on historical studies that find that 20 to 30 percent of untreated cases lead to death. Save the Children says it calculated the figure based on the number of cases reported in areas where aid groups were unable to intervene. "For every child killed by bombs and bullets, dozens are starving to death and it's entirely preventable," said Tamer Kirolos, Save the Children's Yemen director. "Children who die in this way suffer immensely as their vital organ functions slow down and eventually stop." The war has given rise to the world's worst humanitarian crisis. Three-quarters of Yemen's people require life-saving assistance and more than 8 million are at risk of starvation. Tens of thousands of people are believed to have been killed in the fighting. 

At least 85,000 child deaths in Yemen highlight Saudi-US war crimes -- A new estimate by the aid agency Save the Children that 85,000 children have died of hunger in Yemen since Saudi Arabia’s US-backed bombings of the country began in 2015 underscores the criminal character of Washington’s sponsorship of this horrific slaughter.The charity said 85,000 was a conservative estimate of how many children under the age of five had starved between April 2015, when the Saudi regime began its air war, and October this year. It is difficult to get an exact number of deaths. According to aid workers, many go unreported because only half of Yemen’s health facilities are functioning and many people are too poor to access the ones that remain open. Backed by the Obama administration, Saudi Arabia intervened in Yemen’s civil war in 2015 to fight Shiite rebels allegedly backed by the Saudi ruling elite’s regional rival, Iran. The brutal offensive has become a virtual proxy war by the US against Iran. The Pentagon has supplied aerial refuelling for Saudi bombers, naval support for a blockade of the port city of Hodeidah and intelligence assistance for selecting targets.Save the Children said it based its figures on mortality rates for untreated cases of Severe Acute Malnutrition in infant children from data compiled by the UN. The charity warned that, based on historical studies, if acute malnutrition is left untreated, around 20–30 percent of children will die each year.“For every child killed by bombs and bullets, dozens are starving to death—and it’s entirely preventable,” Tamer Kirolos, Save the Children’s country director in Yemen said. “Children who die in this way suffer immensely as their vital organ functions slow down and eventually stop.“Their immune systems are so weak they are more prone to infections with some too frail to even cry. Parents are having to witness their children wasting away, unable to do anything about it.” The Red Sea port of Hodeidah, the entry point for some 80 percent of urgently needed food supplies, medicines and aid into Yemen, has been under blockade since last year.

Houthis ready for ceasefire if Saudi-UAE alliance wants ‘pace’  - A senior leader from Yemen's Houthi rebels says his group will halt all rocket and drone attacks on Saudi Arabia and the United Arab Emirates (UAE) and is ready to institute a ceasefire - if the Saudi-UAE alliance battling his movement is prepared to do the same. "We are willing to freeze and stop military operations on all fronts to reach a just and honourable peace if they really want peace for the Yemeni people," Mohammed Ali al-Houthi, head of the group's Supreme Revolutionary Committee, said in a statement on Twitter. Al-Houthi called on the group's forces to refrain from carrying out attacks and said that, in a gesture of goodwill, the movement would halt all missile and drone attacks on Saudi Arabia, the UAE and their Yemeni allies. "We announce our initiative and call on the official Yemeni [Houthi] authorities to stop firing missiles and unmanned aircraft at the US-Saudi aggression countries and their allies in Yemen to drop any justification for their continued aggression or siege," he added. International pressure has mounted on Yemen's warring parties to end the war, which has killed more than 56,000 people, according to a recent estimate, and pushed the country to the brink of famine. On Monday, the United Kingdom is expected to present a draft resolution to the Security Council to address the conflict.

Saudis Agree To Yemen Peace Talks - Ceasefire In Effect For First Time Since War's Start - The prospect for peace - or at least a lasting ceasefire - is advancing rapidly following a surprise weekend proposal by Yemen's Houghis to halt all attacks on Saudi coalition forces. On Sunday the head of Yemen's Iran-backed Houthi Supreme Revolutionary Committee Mohammed Ali al-Houthi, said "We are willing to freeze and stop military operations" — something which now appears to have taken effect, according to a breaking Reuters report.In the biggest turning point in the war which has raged since 2015, Reuters confirms: Houthi rebels in Yemen said on Monday they were halting drone and missile attacks on Saudi Arabia, the United Arab Emirates and their Yemeni allies, responding to a demand from the United Nations. “We announce our initiative...to halt missile and drone strikes on the countries of aggression,” an official Houthi statement reads. Crucially, it appears this halt in fighting was precipitated by a Saudi agreement to the Houthi extension of an olive branch as according to the AFP Yemen's internationally recognized Saudi-backed government says it has informed UN envoy Martin Griffiths it is ready to take part in proposed peace talks with Houthi rebels to be held in Sweden. "The [Saudi-backed Yemen] government has informed the UN envoy to Yemen ... that it will send a government delegation to the talks with the aim of reaching a political solution," Yemen's pro-Saudi foreign ministry said, quoted by the official Saba news agency.

Saudi official hints at Qatar-canal announcement - The Saudi government appears to be close to announcing the winner of a tender to dig a canal along the border with Qatar, effectively transforming the peninsula nation into an island.The tender process for the ambitious project to dig a 60-kilometre navigable canal closed on June 25 with Saudi media reporting at the time that the results would be announced in September.A senior government official signalled on Friday that the final approvals for the project may be in the works.“I am eagerly awaiting details on the implementation of the Salwa island project, a great, historic project that will change the geography of the region,” Saud Al Qahtani, a senior adviser to Crown Prince Mohammed bin Salman, said on Twitter. Five unnamed international companies with experience in digging have reportedly submitted bids to carry out the work worth 2.8 billion Saudi riyals (Dh2.74 billion). The canal will stretch from the town of Salwa just south-west of the Qatari border to Khor Al Adeed. It will be 200 metres wide and 15 metres to 20 metres deep, allowing ships up to 295 metres long and 33 metres wide to navigate it. The channel will be set one kilometre back from the official border. Riyadh is looking to develop significant infrastructure along the canal, including a military base and an atomic waste storage dump to service nuclear power stations it plans to build in the country.Seaports will be built in Salwa and in Aqlat Al Zawayed for shipping and marinas for pleasure yachts and water sports will be built along the banks of the canal near two planned holiday resorts with beaches.The funding has reportedly been put forward by Saudi and Emirati private investors, and an Egyptian company will be involved in the undertaking.

Syria Sitrep - Army Wins Al-Safa Battle - More Troops Move Towards Idelb - Today the Syrian army won the al-Safa battle. Al-Safa is a barren area around an old volcano southeast of Sweida where in July ISIS abducted dozens of hostages. The last of those hostages were freed in a commando raid ten days ago.With the hostages out of the way the Syrian army could finally use heavy weapons against ISIS which hid in the caves of the al-Safa field. Under heavy artillery cover the troops made good progress (video). Then came three days of unprecedented rain fall. ISIS fighters drowned in their caves and fighting positions. The commander of ISIS in the area, a Chechen, was killed. Those ISIS fighter who were left fled towards the al-Tanf area, which is under U.S. control, and into the desert in east Homs. The Syrian army is now in full control al-Safa. The situation in the U.S. controlled northeast is complicate. The Kurdish YPG/PKK forces the U.S. allied with do not get along with the Arab fighters in the Syrian Democratic Forces and vice versa. Isolated attacks on Kurdish SDF units happen each day. It is unknown if these are by ISIS sleeper cells, local Arabs who despise the new Kurdish overlords, or some third party under Turkish direction.

Iran Seizes Saudi Fishing Boat In Persian Gulf, Arrests Crew - Iran’s elite Revolutionary Guards have detained a Saudi Arabian fishing boat and arrested its crew, Reuters reports citing Iran's judiciary’s website Mizan reported on Friday.  A local official at the Iranian port city of Bushehr told Mizan that the reason for the detention was under investigation, although subsequent reports suggested that the crew was detained for "illegally fishing" in Iran's territorial waters. “Yesterday, the coast guards deployed in the country’s Southern waters came to spot two vessels in Iran’s protected waters in the South using electronic and optic tools and equipment,” Commander of Bushehr province Coast Guards Qalandar Lashkari said, according to Fars news agency. Lashkari added that the Iranian coast guards rushed to the scene and were faced with two vessels which were illegally fishing in the Iranian waters under the Saudi flag. Noting that 9 sailors were arrested thereafter, Lashkari said further investigation showed that the 9 people are nationals of different countries.

Here We Go Again- US Accuses Iran Of Hiding Chemical Weapons - In a trite refrain straight out of the standard Washington regime change playbook, the United States has lodged a formal complaint alleging Iran is developing nerve agents "for offensive purposes". Like Syria before (and Russia), first comes the "outraged!" human rights violations rhetoric, then come crippling sanctions and international "pariah status", and for the final push comes unfounded chemical attack claims, a charge now being formally prepped and set in motion against Tehran by the West. After the AP first revealed a week ago that the U.S. is set to accuse Iran of violating international bans on chemical weapons, an American diplomat has told the global chemical weapons agency in The Hague that Tehran has not declared all of its chemical weapons capabilities. On Thursday Ambassador Kenneth Ward told a meeting of the Organisation for the Prohibition of Chemical Weapons (OPCW) that Iran was in violation of an international non-proliferation convention. "The United States has had longstanding concerns that Iran maintains a chemical weapons program that it has failed to declare to the OPCW," Ward said at an OPCW conference. "The United States is also concerned that Iran is also pursuing central nervous system-acting chemicals for offensive purposes," he added. He connected this with the general White House charge and theme that Iran and Russia had "enabled" Syria in attacking civilians with nerve agents, according to claims of officials in the West. Specifically Amb. Ward claimed Iran has been hiding a production facility for filling aerial bombs while simultaneously maintaining a secret program to procure banned toxic munitions, include nerve agents. While a number of commentators acknowledged the sheer lack of evidence to back the claims — something that's never stopped US officials from making the charge whether it was Iraq, Libya, or Syria — Ward merely cited historical information from the 1980s alleging Iran had transferred banned chemical munitions to Gaddafi's Libya.

Top Iranian Commander Identifies US Bases Within Reach Of Precision Missiles - Threats issued from Iranian officials against U.S. military operations in the Persian Gulf are nothing new, however, it will be interesting to see the White House response to an elite Iranian Revolutionary Guard (IRGC) commander specifically designating that American bases in Afghanistan, the UAE, Qatar, as well as U.S. aircraft carriers in the Gulf are within range of Iranian ballistic missiles. Amirali Hajizadeh, the head of the IRGC airspace division, was quoted as saying by Tasnim news agency, via Reuters: They are within our reach, and we can hit them if they make a move… Our land-to-sea missiles have a range of 700 kilometers [450 miles]… and the US aircraft carriers are our targets. In his remarks the IRGC commander singled out the Al Udeid Air Base in Qatar, which hosts some 10,000 US troops involved in routine operations in the Middle East, as well as Al Dhafra base in the United Arab Emirates and Kandahar base in Afghanistan.The Iranian military official further boasted about the improved the precision of their missiles — a claim that hasn't been born out by both recent tests and a series of rocket launches in October which targeted an ISIS camp in Eastern Syria — nearly all of which failed to hit their target, with a number landing in the desert near the Iran-Iraq border.  Tensions between Washington and Tehran are already at their highest point in years as aggressive sanctions especially targeting the energy sector continue crippling Iran's economy, and after threats and counter-threats over Tehran laying claim to the vital Strait of Hormuz oil waterway over the past two months, through which some one-third of the world's oil passes.

U.N. Report Confirms ISIS Given Breathing Space In US-Occupied Areas Of Syria - A recent report from the UN Security Council’s Sanctions Monitoring Team has found that many of the places in Syria where the terror group Daesh (ISIS) continues to operate, recuperate and extract oil for profit are in areas of the country occupied by the United States.According to the report’s executive summary:  Islamic State in Iraq and the Levant (ISIL), having been defeated militarily in Iraq and most of the Syrian Arab Republic during 2017, rallied in early 2018 [owing to] a loss of momentum by forces fighting it in the east of the Syrian Arab Republic, which prolonged access by ISIL to resources and gave it breathing space to prepare for the next phase of its evolution into a global covert network.”  While the text itself doesn’t explicitly state who controls these areas of Syrian territory, maps of eastern Syria make it clear that the pockets of Daesh within U.S.-controlled territory have remained unchanged in size since November 2017while the Daesh pockets in the Syrian government-controlled portion of eastern Syria have shrunk considerably since last November.Furthermore, the UN report states that the areas where Daesh has rallied since the year began are located in “pockets of territory in the Syrian Arab Republic on the Iraqi border” where the group has mounted “attacks, including across the border into Iraq.” Again, area maps clearly show that the ISIS-controlled areas in only the U.S.-occupied portion of eastern Syria are along the Syria-Iraq border.

Syria - Back In The Arab Fold - Following Syria's military success against its enemies, Arab states which supported the war on Syria are again making nice with it. The United Arab Emirates will reopen its embassy in Damascus. Kuwait and Bahrain will follow. Today a delegation of parliamentarians from Jordan visited Damascus and met with President Assad.The members of the delegation affirmed that the pulse of the Jordanian street has always been with the Syrian people in the face of the terrorist war against the, as Syria is the first line of defense for the entire Arab region and the victory in this war will be a victory for all the Arab countries in the face of Western projects aimed at destabilizing and fragmenting these countries in service of Israel’s security.First signs that this was going to happen appeared a few month ago when a Kuwaiti TV personality spoke about the pleasure of visiting an again peaceful Damascus. In June the Foreign Affairs Minister of UAE called the expulsion of Syria from the Arab league a "mistake". In an interview with a Kuwaiti paper Assad said that he had reached "major understanding" with Arab states.The Saudis though are not yet welcome back in Damascus. They were one of the largest financiers of the Jihadis and will have to pay an equally large price to come back into good standing. Negotiations are ongoing. A formal reentry of Syria into the Arab League can not be far away. Behind this change is a fear of renewed Turkish ambitions. Not only Saudi Arabia but all the Arab states do not want Turkey to expand and become more powerful. They do not want to see Arab land in Syria under Turkish control. The sole exception so far is Qatar which is allied with Turkey and has Turkish troops on its land to protect it from Saudi imperialism.

Why the UAE and Saudi Arabia Are Reaching Out to Syria’s Assad — Last week the United Arab Emirates announced it was negotiating the reopening of its embassy in Damascus and restoring full ties with Syria.  After the opening of the Nassib border crossing on the Jordan-Syria border, for the first time since the war began, Syria now has a through road linking Turkey to Jordan.At the same time the Israelis have also handed over the Quneitra border crossing in the occupied Golan Heights to Damascus after four years of closure.It is not just that all roads are leading to Damascus but also there is a quiet – but strategic – shift by the most powerful Arab actors in the region towards establishing a working relationship with the Syrian President Bashar al-Assad.For example, and according to the pro-Syrian regime news outlet, al-Masdar, Saudi Arabia and Syria are working through back channels via the UAE to reach a political reconciliation. In an ironic twist, Saudi Arabia, the UAE, Egypt, Bahrain and Kuwait suddenly realised the need to strengthen Syria and become a counterweight to growing Iranian and Turkish control over affairs in the Levant.As the headlines over the last few weeks have been dominated by the murder of Saudi journalist Jamal Khashoggi and the viability of the Crown Prince Mohammed Bin Salman – quietly but strategically Damascus has been regaining lost ground with key Arab states.Written off seven years ago by the likes of the then Turkish prime minister, Recep Tayyip Erdogan, and former Israeli prime minister Ehud Barak, Damascus is now quietly re-positioning itself as the key arbiter in the regional tussle for control over strategic choke points in the Middle East.Recent statements by the UAE, Bahrain and Egyptian officials point to making Syria “an Arab issue” to steer it away from Turkey and Iran. This view goes as follows: only by engaging with Damascus can the influence of Tehran and Ankara be balanced out. Also, the seven-year policy of isolating Assad and Syria did not help the Arab cause and allowed the Turks and the Iranians to wield stronger influence in Syria.

US Airstrikes Kill at Least 40, Mostly Civilians, in Eastern Syria  — Continuing weeks of near-daily civilian death tolls from the US air war in Eastern Syria, the Syrian Observatory for Human Rights has reported that Saturday’s US attacks killed 40 more people, overwhelmingly civilians. The victims were described as mostly women and children.Saturday’s attacks were against the village of Abu al-Hassan, along the Iraq border. It is adjacent to the ISIS-held towns that the US has been mostly attacking in recent weeks, and which Kurdish ground troops are attempting to invade.The Syrian Observatory said it was unclear if any of the men killed in the attacks were actually militants, but that 17 children and 12 women were confirmed among the slain. In general, these attacks have targeted residential areas, not militants. The US, as is increasingly typical of these incidents, has not offered any commentary on the matter at all. Though earlier in the war they would try to explain such killings, or at least deny involvement, in the past weeks they seem simply to be refusing all comment.

US Sanctions Russian, Iranian Companies To Disrupt Oil Shipments To Syria - The US announced new sanctions against what a "network of petroleum shipments" to Syria, including Russian and Iranian companies and individuals, in what Washington said was an attempt to disrupt shipments to Syrian-owned ports. Six individuals and three institutions were sanctioned in what the Treasury said was an illicit plot involving officials in Iran working with Russian companies to send millions of barrels of oil to the Assad government in exchange for funds that Tehran then used to fund Islamic militant groups Hamas and Hezbollah.Those sanctioned include two officials working with the Central Bank of Iran, a Syrian national and his Russia-based company Global Vision Group, and Russia’s state-owned Promsyrioimport, a subsidiary of the Kremlin’s energy ministry, as well as its first deputy director. The administration is also sanctioning an Iranian entity that purports to be a medical and pharmaceutical company that U.S. officials say has been repeatedly used to facilitate illicit money transfers in the scheme.“Today we are acting against a complex scheme Iran and Russia have used to bolster the Assad regime and generate funds for Iranian malign activity,” Treasury Secretary Steven Mnuchin said in a statement. “Central Bank of Iran officials continue to exploit the international financial system, and in this case even used a company whose name suggests a trade in humanitarian goods as a tool to facilitate financial transfers supporting this oil scheme."As detailed in the Treasury statement, Russian companies would act as middlemen, taking money from Iran to move the oil to Syria. In one case detailed in a Treasury Department press release, the Iranian central bank transferred money to an Iranian pharmaceutical company, hoping that its humanitarian name would throw US observers off the trail. That money was then allegedly wired to a Russian bank, then to a Russian company that shipped the oil from Iran to Syria. Along the way, the Treasury Department claims that Russian ships would switch off their GPS tracking systems to conceal the origin of their cargo.

The Final Push for Idlib Will Come Soon - The situation in Syria is that of a frozen conflict, following the agreements made between Russia, Turkey and Syria on the demilitarized zone created around Idlib. Except for some sporadic terrorist attacks, the truce seems to be holding up over the last few weeks, even though it has become clear to everyone what the next step is for the province. The Syrian Arab Army (SAA) has been busy eradicating Daesh in the southern part of Syria in recent weeks, concentrating its efforts on securing all areas that have been liberated from terrorist control but which still remain vulnerable to sporadic attacks, as occurred in Sweida at the end of July 2018. In that incident, there were dozens of victims and numerous abductees who remained in the hands of Daesh for months. This caused the Syrian population in neighbouring areas to clamor for protection, forcing the SAA to undertake an anti-terrorist campaign that has been ongoing since August.This effort by the SAA has slowed down in part due to subsequent events, with an agreement reached between Erdogan and Putin to create a demilitarized zone in the province of Idlib. From October 15, an area spanning 20 kilometres and guarded by Turkish and Russian troops guarantees a separation between the SAA and terrorist groups in the province.Russian and Syrian efforts have been moving in two very specific directions over the last few weeks. While Moscow supplies Damascus with new equipment in preparation for the future advance on Idlib, Putin and his entourage continue diplomatic efforts to draw more of Syria’s enemies closer to the Russia-Iran-Syria axis. The meeting that brought about the demilitarized zone included Macron and Merkel, the Europeans having evidently come to terms with the impossibility of overthrowing the legitimate government of Syria. Macron and Merkel were offered a way out of the Syrian conflict, decoupling themselves from the belligerent stance of the United States, Israel and Saudi Arabia. The intention is to usher Paris and Berlin towards the same direction Qatar, Turkey and Jordan have been progressively gravitating. Certainly, these are not countries to be considered friends of Damascus. Rather, they are parties with whom a constructive dialogue needs to be entered into in order to advance common diplomatic interests.

What NYTimes Called Israel’s “1st Incursion” Was Actually at Least Its 263rd — In a piece headlined “Deadly Gaza Raid by Israel Threatens Nascent Ceasefire” (11/11/18), the New York Times described an Israeli assault near the city of Khan Yunis that killed seven Palestinians as the first known Israeli ground incursion into Gaza since Operation Protective Edge, in July 2014, set off a seven-week war.  York Times article (11/11/18) misstates the number of recent Israeli ground incursions into Gaza by two orders of magnitude.This depiction of the attack as a unique occurrence in recent times is wildly inaccurate. Since the 2014 Gaza War, the IDF has carried out 262 ground incursions into the Gaza strip, according to the UN Office for Coordination of Humanitarian Affairs. Seventy of these have occurred in the past year alone. As Henriette Chacar, writing for +972 Magazine (11/13/18), points out:Israel carried out 21 incursions into Gaza in 2014…. The next year, in 2015, that number more than doubled, to 56 incidents. In 2016 and 2017, 68 and 65 incursions took place, respectively. By end of October 2018, 73 such incidents had been recorded, according to the UN data.Such incursions are a regular occurrence, but are rarely reported by media or known to the general public. Chacar’s article (which was reposted by Lobe Log—11/14/18) quotes retired Israeli Gen. Tal Russo: “Activities that most civilians aren’t aware of happen all the time, every night and in every region.”Operations by the Israeli military can have a devastating effect on ordinary Palestinians in Gaza. Combined with the ever-changing “buffer zone” declared by the IDF, they make it difficult for nearby farmers to grow crops or raise livestock, worsening the area’s already tenuous economic situation. Errors like the New York Times’ minimize the degree to which Israel continues to occupy Gaza, despite claiming to have “disengaged” in 2005, and aid a media narrative in which the IDF is reacting defensively rather than acting as an aggressor.