Sunday, December 8, 2019

oil prices rise most in 23 weeks as OPEC deepens production cuts; horizontal rig activity at a 32 month low...

oil prices finished higher for the fourth time in five weeks after OPEC and other oil producers agreed to a deeper output cuts for the first 3 months of next year...after falling 4.5% to $55.17 a barrel last week on fears that OPEC and Russia would not offer further cuts at this weeks OPEC meeting, the price of light sweet domestic oil for January delivery open higher and jumped more than 2% early Monday on a report that factory activity in China increased for the first time in seven months, and then held most of those gains to close 79 cents higher at $55.96 a barrel on hints that OPEC and its allies might agree to deepen output cuts at their meeting later in the week...oil prices extended their gains on Tuesday on a report that OPEC’s crude output had dropped in November, but the ​day's increase was limited to 14 cents at $56.10 a barrel after Trump said it might be better to wait until after the 2020 election to complete a trade deal with China...oil prices opened higher again on Wednesday, after an industry report late Tuesday ​had ​pointed to shrinking U.S. crude stockpiles​,​ then surged 4% to close $2.33 higher at $58.43 a barrel after the EIA reported a larger than expected crude draw and Iraq’s oil minister endorsed dramatically higher crude production cuts for OPEC and its non-OPEC allies...oil prices then whipsawed between gains and losses in choppy trade on Thursday as oil traders awaited the OPEC outcome and ended the day unchanged at $58.43 a barrel...oil prices moved higher​ again​ on Friday after OPEC and other producers agreed to deepen oil production cutbacks by 500,000 barrels a day through to March 2020 and went on to close 77 cents, or 1.3%, higher at $59.20 a barrel in its highest settlement since September, and thus ended the week $4.03 or 7.3​% higher than last week​'s close in its biggest one week surge since ​mid-​June....

natural gas prices also finished higher this week, but only modestly so...after falling nearly 16% to an all time contract low of $2.281 per mmBTU on record production and warmer weather last week, the price of natural gas for January delivery rose 4.8 cents Monday and then 11.2 cents more on Tuesday, as a high pressure ridge was ​forecast to form in the west to Alaska​ and thus allow an outbreak of cold to plunge into the nation's midsection, which was forecast to result in below-average temperatures up and down the East Coast for the next 6-10 days...prices then fell 4.2 cents on Wednesday as traders awaited an expected bearish storage report, but then rallied 2.8 cents on Thursday as the report was consider "neutral"...but natural gas futures fell almost 4% on Friday following the release of weather forecasts calling for less cold over the next two weeks than ​was ​previously expected, ending down 9.3 cents at $2.334 per mmBTU and cutting the price gain for the week down to 2.3%...

the natural gas storage report for the week ending November 29th from the EIA indicated that the quantity of natural gas held in storage in the US decreased by 19 billion cubic feet to 3,591 billion cubic feet by the end of the week, which left our gas supplies 591 billion cubic feet, or 19.7% higher than the 3,000 billion cubic feet that were in storage on November 29th of last year, but still 9 billion cubic feet, or 0.3% below the five-year average of 3,600 billion cubic feet of natural gas that have been in storage as of the 29th of November in recent years....the 19 billion cubic feet that were withdrawn from US natural gas storage this week was a bit less than the average forecast of a 21 billion cubic feet withdrawal by analysts surveyed by S&P Global Platts, and was less than half of the average 41 billion cubic feet of natural gas that have been pulled from natural gas storage during the last week of November over the past 5 years...

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending November 29th indicated that because of a big increase in the amount of oil being used by refineries, we had to pull oil out of our stored commercial supplies for the second time in the past twelve weeks...our imports of crude oil fell by an average of 201,000 barrels per day to an average of 5,989,000 barrels per day, after rising by an average of 217,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 345,000 barrels per day to an average of 3,135,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,854,000 barrels of per day during the week ending November 29th, 144,000 more barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reported​ly​ unchanged at a record 12,900,000 barrels per day, ​and thus ​our daily supply of oil from the net of our trade in oil and from well production totaled an average of 15,754,000 barrels per day during this reporting week..

meanwhile, US oil refineries were reportedly processing 16,798,000 barrels of crude per day during the week ending November 29th, 464,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA reported that a net average of 837,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....hence, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from storage. from net imports and from oilfield production was 207,000 barrels per day less than what our oil refineries reported they used during the week....to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA inserted a (+207,000) 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 they label in their footnotes as "unaccounted for crude oil", thus suggesting an error or errors in the​ oil supply & demand​ figures we just transcribed....(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) indicated that the 4 week average of our oil imports fell to an average of 5,975,000 barrels per day last week, now 21.3% less than the 7,597,000 barrel per day average that we were importing over the same four-week period last year....the 837,000 barrel per day net withdrawal from our total crude inventories included a 694,000 barrel per day ​withdrawal from our commercially available stocks of crude oil, and a withdrawal of 143,000 barrels per day from our Strategic Petroleum Reserve...this week's crude oil production was reported to be unchanged at a record 12,900,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was unchanged at a record 12,400,000 barrels per day, while a 8,000 barrel per day decrease to 480,000 barrels per day in Alaska's oil production was not large enough to impact the final rounded total...last year's US crude oil production for the week ending November 30th was rounded to 11,700,000 barrels per day, so this reporting week's rounded oil production figure was 10.3% above that of a year ago, and 53.1% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...   

meanwhile, US oil refineries were operating at 91.9% of their capacity in using 16,798,000 barrels of crude per day during the week ending November 29th, up from 89.3% of capacity the prior week, but still below normal for the last week of November...as a result, the 16,798,000 barrels per day of oil that were refined this week was still 3.9% below the 17,487,000 barrels of crude per day that were being processed during the week ending November 30th, 2018, when US refineries were operating at 95.5% of capacity....

even with the increase in the amount of oil being refined, gasoline output from our refineries was somewhat lower, decreasing by 114,000 barrels per day to 9,941,000 barrels per day during the week ending November 29th, after our refineries' gasoline output had increased by 12,000 barrels per day the prior week....but even with this week's decrease in gasoline output, our gasoline production was 2.8% higher than the 9,666,000 barrels of gasoline that were being produced daily over the same week of last year....on the other hand, our refineries' production of distillate fuels (diesel fuel and heat oil) rose by 188,000 barrels per day to 5,263,000 barrels per day, after our distillates output had decreased by 49,000 barrels per day over the prior week...but even after this week's increase in distillates output, our distillates' production for the week was still 5.5% below the 5,571,000 barrels of distillates per day that were being produced during the week ending November 30th, 2018....

even with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the 4th time in ten weeks and for the 10th time in 24 weeks, rising by 3,385,000 barrels to 229,363,000 barrels during the week to November 29th, after our gasoline supplies had increased by 5,132,000 barrels over the prior week....our gasoline supplies increased by less this week because our imports of gasoline fell by 374,000 barrels per day to 399,000 barrels per day while our exports of gasoline fell by 62,000 barrels per day to 873,000 barrels per day, and while the amount of gasoline supplied to US markets decreased by 72,000 barrels per day to 9,032,000 barrels per day....after this week's increase, our gasoline supplies were 1.4% higher than last November 30th's inventory level of 226,250,000 barrels, while remaining roughly 4% above the five year average of our gasoline supplies for this time of the year...

with the increase in our distillates production, our supplies of distillate fuels rose for the 2nd time in 11 weeks and for 12th time in the past 36 weeks, increasing by 3,063,000 barrels to 119,469,000 barrels during the week ending November 29th, after our distillates supplies had increased by 725,000 barrels over the prior week...our distillates supplies rose more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 837,000 barrels per day to 3,556,000 barrels per day, ​even as our exports of distillates rose by 596,000 barrels per day to 1,412,000 barrels per day while our imports of distillates fell by 95,000 barrels per day to 143,000 barrels per day...but even after this week's inventory increase, our distillate supplies were still 4.9% lower than the 125,612,000 barrels of distillates that we had stored on November 30th, 2018, while inching up to 11% below the five year average of distillates stocks for this time of the year...

finally, this week's big jump in oil refining, combined with a decrease in oil imports, meant our commercial supplies of crude oil in storage fell for the thirteenth time in twenty-five weeks and for the eighteenth time in 45 weeks, decreasing by 4,856,000 barrels, from 451,952,000 barrels on November 22nd to 447,096,000 barrels on November 29th...but even after that decrease, our crude oil inventories remained roughly 3% above the five-year average of crude oil supplies for this time of year, and 34.1% higher than the prior 5 year (2009 - 2013) average of crude oil stocks at the end of November, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...since our crude oil inventories had generally been rising over this year up until July, after generally falling until then through most of the prior year and a half, our oil supplies as of November 29th were still 0.9% above the 443,162,000 barrels of oil we had stored on November 30th of 2018, but at the same time were fractionally below the 448,103,000 barrels of oil that we had in storage on December 1st of 2017, and 8.0% below the 485,756,000 barrels of oil we had in commercial storage on December 2nd of 2016...     

This Week's Rig Count

the US rig count fell for the 15th time in 16 weeks and for the 38th time in 42 weeks over the week ending December 6th, and is now down by 26​.2​% since the end of last year....Baker Hughes reported that the total count of rotary rigs running in the US fell by 3 rigs to a 32 month low of 799 rigs this past week, which was also down by 276 rigs from the 1075 rigs that were in use as of the December 7th report of 2018, and 1127 fewer rigs than the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began their attempt to flood the global oil market...

the number of rigs drilling for oil decreased by 5 rigs to a 32 month low of 663 oil rigs this week, which was also 214 fewer oil rigs than were running a year ago, and well below the recent high of 1609 rigs that were drilling for oil on October 10th, 2014...at the same time, the number of drilling rigs targeting natural gas bearing formations increased by 2 rigs to 133 natural gas rigs, which was still down by 65 gas rigs from the 198 natural gas rigs that were drilling a year ago, and way down from the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition to those drilling for oil & gas, three rigs classified as 'miscellaneous' continued to drill this week; one on the big island of Hawaii, one in Washoe County, Nevada, and one in Lake County, California, in contrast to a year ago, when there were no such "miscellaneous" rigs deployed..

offshore drilling activity in the Gulf of Mexico was unchanged at 22 rigs this week, with all 22 of those drilling offshore from Louisiana...that was down by one from the Gulf of Mexico rig count of 23 a year ago, when 22 rigs were drilling in Louisiana waters and one was drilling offshore from Texas...since there are no rigs deployed off US shores elsewhere, nor were there a year ago, the Gulf of Mexico count for both years is equal to the national total in each case..

the count of active horizontal drilling rigs was down by 6 rigs to 695 horizontal rigs this week, which was the least horizontal rigs deployed since April 7th 2017 and hence was a 32 month low for horizontal drilling...it was also 238 fewer horizontal rigs than the 933 horizontal rigs that were in use in the US on December 7th of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014....at the same time, the directional rig count was down by 1 to 52 directional rigs this week, and those were down by 20 from the 72 directional rigs that were operating during the same week of last year....on the other hand, the vertical rig count was up by 4 to 52 vertical rigs this week, but those were still down by 18 from the 70 vertical rigs that were in use on December 7th of 2018...

the details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that 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 December 6th, the second column shows the change in the number of working rigs between last week's count (November 29th) and this week's (December 6th) count, the third column shows last week's November 29th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running before the same 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 the 7th of December, 2018...  

December 6th 2019 rig count summary

as you can see, this week's rig changes were concentrated in the Permian basin of western Texas, where we find that four rigs were pulled out of Texas Oil District 8, or the core Permian Delaware, and two rigs were shut down in Texas Oil District 8A, or from the northern Permian Midland, while a rig began operating in Texas Oil District 7C, or the southern part of the Permian Midland...meanwhile, the new rig that was added in the panhandle area Granite Wash ​basin ​appears to have been set up on the Oklahoma side of the state line, since the rig count in Texas Oil District 10 was unchanged, and hence that balances Oklahoma's total after two rigs were pulled out of the Cana Woodford...among rigs drilling for natural gas, two were pulled out of the Haynesville shale; one of which had been operating in northwest Louisiana, and the other in adjacent eastern Texas (Oil District 6), while a natural gas rig was added in Pennsylvania's Marcellus and three more natural ga​s ​rigs were added in basins not tracked separately by Baker Hughes...one of those could have been in Mississippi, which also added a rig this week and now has 4 rigs operating...while that's still down from the 5 rigs that were operating in Mississippi a year ago, the rig count in that state has been quite volatile, ranging from 1 to 6 rigs over the past year..

+++++++++++++++++++++++++++++++++++++++++++++++

Rover pipeline asking for assessment reduction - – Rover Pipeline’s unofficial request for a 50% average reduction to the tax year 2019 assessment could cause a domino effect of consequences for school districts and other entities counting on the revenue they expected to receive. “It isn’t official yet,” said Wayne County Auditor Jarra Underwood, but Rover did contact the Ohio Department of Taxation Equalization seeking the reduction. Underwood subsequently alerted those who could be impacted by it over the Thanksgiving holiday. If the matter is not settled before the first tax collection due in February, Rover will be billed the original amount, Underwood said, based on the assessment from the Ohio Department of Taxation. The Rover Pipeline runs natural gas from West Virginia to Michigan, a little more than 700 miles. It enters the southeastern portion of Wayne County through Paint Township and proceeds through Salt Creek, Franklin, Wooster and Plain townships, where it then enters neighboring Ashland County. It goes through four school districts in the county: Southeast, Triway, Northwestern and ?Hillsdale. Work on the Wayne County portion of the pipeline began in spring 2017 and continued into 2018. If Rover chooses not to pay the full bill when it is due, but rather the reduced amount it is asking to pay, a 10% penalty will ultimately be applied or assessed, Underwood said. On top of that will be the interest prescribed by the state. The same penalty and interest will apply if an agreement is not reached by the second collection, which is scheduled in July. If Rover is successful with its request, those penalties and interest would be remitted by the county. Similarly, if Rover paid the full amount originally assessed and the reduction was approved, part of that revenue would then have to be “pulled back” from the recipients by the county, Underwood said. The full impact on local school districts, for example, is not yet known. Although the reduction request by Rover is 50% overall, “it might not be 50% everywhere,” she said.

Public Employees Retirement System of Ohio Purchases 19744 Shares of ONEOK, Inc. - Public Employees Retirement System of Ohio raised its position in ONEOK, Inc. (NYSE:OKE) by 13.8% during the 3rd quarter, HoldingsChannel.com reports. The institutional investor owned 163,153 shares of the utilities provider’s stock after acquiring an additional 19,744 shares during the period. Public Employees Retirement System of Ohio’s holdings in ONEOK were worth $12,023,000 as of its most recent filing with the Securities and Exchange Commission (SEC).  ONEOK, Inc, together with its subsidiaries, engages in the gathering, processing, storage, and transportation of natural gas in the United States. It operates through Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines segments. The company owns natural gas gathering pipelines and processing plants in the Mid-Continent and Rocky Mountain regions.

As fracking rises in Ohio, officials eye protecting the Great Miami Aquifer - — While fracking is raising concerns in other parts of Ohio and the country, it’s not an issue in Butler County or other areas where the Great Miami Aquifer, which provides drinking water for many area residents, is located.  That makes life easier for Tim McLelland, manager of the Hamilton-to-New-Baltimore-Area Ground Water Consortium, whose job is protecting the underground water reserve that contains 1.5 trillion gallons of water and provides drinking water for 3 million consumers. “The good news, at least in my opinion, is there is no fracking going on in this area,” McLelland said. “The type of shale that they are in, the Marcellus shale, is more southeast in Ohio,” and not located in this area of the state.  The U.S. Environmental Protection Agency recently issued a report that found fracking has harmed drinking water reserves in some circumstances, including when wells are not properly designed to avoid leaking, or when the liquids on the surface leak into the ground or streams.  “For folks in the southeast part of the state, I’m sure they’ve got concerns about the potential for groundwater contamination, but fortunately, we don’t have to worry about it in our neck of our woods.,” McLelland said.  If there were shale of the desirable type in this region, “it would be a pretty difficult thing to stop, because there’s a lot of support for it, both at the state level and nationally.” Tish O’Dell of the Community Environmental Legal Defense Fund, a Pennsylvania-based non-profit law firm, said fracking isn’t the only issue people wanting to protect water sources in Ohio are facing. Another issue in Williams County and elsewhere is companies that want to export groundwater from one place to another, as one business has sought to do through privatization of the Michindoh Aquifer. “Someone up there who has a water company wants to put a pipeline in and possibly sell it to suburbs of Toledo,” O’Dell said. “And so all of a sudden, (residents) woke up and went, ‘Oh, my gosh.’ And once you allow one pipeline to go in, that person can then sell that to say, Nestle, or someone else. “Everyone takes water for granted, and it’s under threat from so many more issues than they even realize.”

Ohio governor meets with proposed 'cracker' plant developer — Ohio’s Republican governor and lieutenant governor met Wednesday with officials from one of the companies proposing to build a multi-billion dollar ethane “cracker”plant in southeast Ohio. A spokesman for Gov. Mike DeWine said no “substantive update” would be provided from the meeting in Columbus with board members from Thailand’s PTT Global Chemical. State and local officials for nearly two years have anticipated an announcement about whether PTT in partnership with South Korea’s Daelim Industrial Co. would build the plant along the Ohio River in Belmont County. Cracker plants convert ethane, a byproduct of natural gas drilling, into the raw material for plastic and other products used in everyday life. Royal Dutch Shell is building a similar plant about 25 miles northwest of Pittsburgh. Thousands of construction workers would be needed to build the plant in an unincorporated area of Belmont County called Dilles Bottom with hundreds then hired to operate it. The project is seen as an economic savior for an Appalachian region that has long struggled economically from the loss of jobs in steel, aluminum and glass manufacturing decades ago. The hope among state and local officials is that the plant will spur further development and revitalize the region. PTT board members met Tuesday in Belmont County with locals officials and representatives from the U.S. Department of Energy and JobsOhio, a private nonprofit corporation that supports economic growth in the state. No Daelim representatives were at that meeting or the one Wednesday with DeWine and Lt. Gov. Jon Husted.

As Petrochemical Industry Extends Along Ohio River, Pollution Follows Close Behind – WOSU -  Two out of every five power plants that burned coal to make electricity in 2010 were shut down by 2018, largely replaced by natural gas power plants — the result of a decade-long fracking rush. Few places have been quite as dramatically impacted as the northern Ohio River Valley, where shale well pads now lace the backroads of Appalachia's former coal towns. Twenty-nine new gas-fired power plants are planned or under construction in Pennsylvania, Ohio and West Virginia alone. Historically, coal and steel marched hand in hand — coal powered the steel mills that built the Rust Belt. Now, with natural gas, industry can make a different kind of raw material, one that drillers and the International Energy Agency say represents the future of global demand for oil and gas: plastics.The vast majority of petrochemical production in the United States has always taken place along the Gulf Coast. But, drawn by low-priced shale gas from fracking in Pennsylvania, Ohio and West Virginia, the petrochemical industry is increasingly eyeing the Ohio River Valley as a manufacturing corridor. Oil giants are banking on plastics and petrochemicals to keep the fossil fuel industry expanding amid rising concern over climate change. "Unlike refining, and ultimately unlike oil, which will see a moment when the growth will stop, we actually don't anticipate that with petrochemicals," Andrew Brown, upstream director for Royal Dutch Shell, told the San Antonio Express-News last year. Industry analysts have projected the region could support as many as seven additional plants on a similar scale. The American Chemistry Council has tallied $36 billion in potential investment that could be tied to an Ohio River Valley petrochemical and plastic manufacturing industry.Projects currently on the drawing board would unleash a flood of newly manufactured plastic from the region, using raw materials from fracked shale gas wells. Shell's $6 billion ethane cracker in Potter Township in Beaver County, Pa., is projected to create roughly 3.5 billion pounds of polyethylene pellets each year. A similar volume is expected from a second plant proposed just over an hour's drive south in Dilles Bottom, Ohio — to be built on the site of the razed R.E. Burger coal-fired power plant. Green-lighting petrochemical projects along the Ohio River could bring new industrial vitality to a region that's been hard hit by the slow decline of American coal and steel. It could also bring a host of issues. Shell's cracker will be permitted to pump out 522 tons of volatile organic compounds into the air — nearly double the amount that the state's current largest source, U.S. Steel's Clairton Coke Works, produced in 2014 (the most recent year available). State permits also allow Shell to produce 2.25 million tons of carbon dioxide. That means this one plant, with its 600 jobs, will wield a carbon footprint one-third the size of Pittsburgh (population 301,000).Plastic made on the banks of the Ohio is likely to reach the farthest corners of the globe. Shale Crescent USA, an industry group, projects that half of the plastic made on the Ohio would be shipped to Asia for use there. Only 9% of the plastic ever made has been recycled, with the vast majority of the rest winding up in landfills or oceans.

Manufacturers want more pollution related to plastics allowed in rivers and streams - Angie Rosser, executive director of the West Virginia Rivers Coalition, noted Wednesday that several pollutants the West Virginia Manufacturers Association is recommending be permitted in West Virginia waterways at higher levels are those associated with the petrochemical industry. During a public meeting on West Virginia water quality standards at West Virginia Department of Environmental Protection offices, Rosser noted that some of the pollutants are related to an industry that both Gov. Jim Justice and the manufacturers association have said they hope to see boom in response to natural gas extraction in the state, as part of an "Appalachian Petrochemical Renaissance" in West Virginia. "We can't delay protections when it comes to human health," Rosser said. "We can't keep our citizens at risk. It's time to move on these. In light of the governor's commitment to expanding the petrochemical industry, there is more at stake." In 2015, the EPA recommended that West Virginia update water quality standards for 94 pollutants known to have human health effects, including carcinogens. The standards specify concentrations of pollutants, such as pesticides, allowed in rivers and streams. In May 2018, following hundreds of public comments, the West Virginia Department of Environmental Protection submitted to the Legislature its proposal for a regulation that would have updated standards for pollutants known to have human health effects for 56 pollutants instead. For two-thirds of the pollutants, the proposal would have required lower amounts of those pollutants in rivers and streams. During the 2019 legislative session, at the request of the Manufacturers Association, West Virginia lawmakers opted not to do so, while Jennie Henthorn, a scientist representing the West Virginia Manufacturers Association, reviewed the recommendations. The Legislature would then revisit the subject in the 2021 legislative session. Wednesday, Henthorn unveiled a proposal with weaker protections for 63 percent of the pollutants and stronger protections for 20 percent, in comparison to the DEP proposal they had opposed. Meanwhile, the West Virginia Rivers Coalition released a proposal, supported by eleven other citizen groups, to strengthen protections. Or, if the EPA and DEP had proposed weakening protections, they proposed leaving standards at current levels instead.

UPDATE: Large gas leak in south Parkersburg is stopped - Dominion Energy says the 3-inch medium natural gas line was hit by a contractor nearby at 6:30 p.m. The line has been isolated, and the flow of gas is suspended. One commercial customer will be without service until it's repaired. This is a release from West Virginia Dominion Energy: "At approximately 6:30pm a 3-inch, medium pressure natural gas distribution line was hit while a contractor was working near 305 Erickson Blvd. Dominion Energy West Virginia (DEWV) arrived on site and immediately began safely isolating the impacted area. Emergency personnel are at the site to maintain a safe perimeter while DEWV crews make the necessary repairs. The flow of natural gas has been suspended to this line while repairs are safely completed. During this time, one commercial customer will experience a temporary service interruption. DEWV anticipates repairs will be completed later tonight at which time natural gas will be safely restored to the line."

Texas construction company no longer working on Mountain Valley Pipeline - A Texas corporation that has put down roots in Raleigh County is no longer working on a controversial natural gas pipeline in West Virginia, after the pipeline's major stakeholder unexpectedly cancelled the Texas company's contract last month. The Mountain Valley Pipeline is a joint project of EQM Midstream Partners LP, Con Edison Transmissions Inc., NextEra US Gas Assets LLC, WGL Midstream and RGC Midstream. The Federal Energy Regulatory Commission (FERC) in October halted construction of the 303-mile, interstate pipeline in October, pending the outcome of a series of court challenges launched by environmental groups.In the last week of November, EQM Midstream Partners LP cancelled a work contract for Trinity Energy Services of Argyle, Texas, Trinity spokesman Bob McKibbon verified Monday.  "We've all been kind of in the dark with it, as far as not much detail," McKibbon said Monday. "There's nobody else talking to us about it." On Tuesday, he reported that he had no new information to share. He referred The Register-Herald to EQT Midstream. EQM Midstream and Mountain Valley Pipeline representatives did not respond to requests for comment on Monday or Tuesday.  Mountain Valley began work on the pipeline in February 2018, with partners anticipating the project would be completed by the end of 2019, at a cost of $3.7 billion. In October, MetroNews reported, Mountain Valley announced plans to have the pipeline operational by mid-2020, at a cost of $5.3 to $5.5 billion.

Tracing the path of the proposed 600-mile Atlantic Coast Pipeline | Grist  (reporter travels the 600-mile route of the proposed Atlantic Coast Pipeline) The pink ribbons start in northern West Virginia. Tied to flimsy wooden posts stuck a few inches into the earth, they’re easy to miss as they whip in the crisp, fall wind. Heading south, they dot landscapes for 600 miles, marking the proposed route of the Atlantic Coast Pipeline. They pass over cave systems and watersheds, climb up and down densely forested Appalachian slopes. They stamp quiet hollers and hillside family cemeteries. They divide historic African American communities and indigenous land. The route stretches from the Marcellus Shale region of West Virginia, through Virginia, to southern North Carolina — though the energy companies behind the pipeline have floated the idea of extending it into South Carolina. If completed, the hundreds of miles of 42- and 36-inch diameter steel would carry 1.5 billion cubic feet of natural gas every day — enough to power 5 million homes daily. Three compressor stations along the route would help transport the gas, and, like much of the pipeline, would be built in lower-income, rural communities, bypassing more affluent property owners. The project is part of a pipeline boom in the United States prompted by the fossil fuel industry’s shift from a fuel source on the decline, coal, to one on the rise, natural gas. Dominion Energy owns the majority share of the project, which was first proposed in 2014. Some of the most powerful utilities in the Southern U.S. — Duke Energy and Southern Company — own the rest. Those utility companies are also the wholesalers that would profit by reselling the gas to their ratepayers. The companies say the project is necessary because they and other utilities serving Virginia and North Carolina need cheaper gas. And they claim it would be an economic boon to the region, estimating that it would provide 17,000 construction jobs and generate $28 million each year total in property taxes for the 25 counties and two cities it will pass through. But economists, environmentalists, researchers, and many residents in the places the pipeline would pass through say the project’s risks and costs outweigh its potential short-term benefits.

Trump Lawyers Defend Pipeline’s Route Across Appalachian Trail -- The U.S. Forest Service has full authority to allow natural gas pipelines to cross the Appalachian Trail, industry lawyers and the Trump administration told the Supreme Court in a pair of Dec. 2 legal filings. Government and industry lawyers say a lower court got it wrong when it ruled that only the National Park Service can oversee development across the trail.“Simply put, there is no basis in any federal statute to conclude that Congress intended to convert the Appalachian Trail into a 2,200-mile barrier separating critical natural resources from the eastern seaboard,” lawyers for Atlantic Coast Pipeline LLC told the court in a brief.The case, set for oral argument before the justices in February, controls the fate of the $7.5 billion Atlantic Coast Pipeline. It could have broader ramifications for infrastructure projects across the Appalachian Trail, which stretches from Maine to Georgia and crosses nearly 1,000 miles of national forestland along the way.When Congress established the trail, it put the Interior Department’s National Park Service in charge of managing it. Environmental groups opposed to the Atlantic Coast pipeline say the Forest Service—which is housed in the Department of Agriculture—overstepped when it granted a right-of-way under the Mineral Leasing Act for the project to cross beneath the trail in Virginia.The U.S. Court of Appeals for the Fourth Circuit sided with the challengers. Solicitor General Noel J. Francisco argued that the Fourth Circuit misunderstood the National Trails System Act, which established a management system for national trails.The law puts the Appalachian Trail itself into the National Park System, but doesn’t change the management of the adjacent lands, the government’s brief says. Congress would not have tucked in “a sweeping prohibition against pipeline rights-of-ways under the Mineral Leasing Act for all federally owned land crossed by the roughly 2000-mile-long Appalachian Trail” without being explicit about it, the brief says.

Shale's Debt-Fueled Drilling Boom Is Coming To An End - The financial struggles of the U.S. shale industry are becoming increasingly hard to ignore, but drillers in Appalachia are in particularly bad shape.  The Permian has recently seen job losses, and for the first time since 2016, the hottest shale basin in the world has seen job growth lag the broader Texas economy. The industry is cutting back amid heightened financial scrutiny from investors, as debt-fueled drilling has become increasingly hard to justify.But E&P companies focused almost exclusively on gas, such as those in the Marcellus and Utica shales, are in even worse shape. An IEEFA analysis found that seven of the largest producers in Appalachia burned through about a half billion dollars in the third quarter. Gas production continues to rise, but profits remain elusive. “Despite booming gas output, Appalachian oil and gas companies consistently failed to produce positive cash flow over the past five quarters,” the authors of the IEEFA report said.  Of the seven companies analyzed, five had negative cash flow, including Antero Resources, Chesapeake Energy, EQT, Range Resources, and Southwestern Energy. Only Cabot Oil & Gas and Gulfport Energy had positive cash flow in the third quarter.  The sector was weighed down but a sharp drop in natural gas prices, with Henry Hub off by 18 percent compared to a year earlier. But the losses are highly problematic. After all, we are more than a decade into the shale revolution and the industry is still not really able to post positive cash flow. Worse, these are not the laggards; these are the largest producers in the region.  The outlook is not encouraging. The gas glut is expected to stick around for a few years. Bank of America Merrill Lynch has repeatedly warned that unless there is an unusually frigid winter, which could lead to higher-than-expected demand, the gas market is headed for trouble. “A mild winter across the northern hemisphere or a worsening macro backdrop could be catastrophic for gas prices in all regions,” Bank of America said in a note in October.   The problem for Appalachian drillers is that Permian producers are not really interested in all of the gas they are producing. That makes them unresponsive to price signals. Gas prices in the Permian have plunged close to zero, and have at times turned negative, but gas production in Texas really hinges on the industry’s interest in oil. This dynamic means that the gas glut becomes entrenched longer than it otherwise might. It’s a grim reality plaguing the gas-focused producers in Appalachia.

Dominion suspends plan to add 1.5 GW of peaking capacity as Virginia faces gas glut - Dominion Energy on Wednesday announced it suspended a request for proposals (RFP) that targeted up to 1,500 MW of dispatchable peak capacity in its Virginia territory, which observers said would have likely resulted in natural gas additions. Announced in November, the utility said the RFP aimed to replace retiring generation and provide system balancing needs as more renewables are added onto the grid. Dominion said it may reissue the RFP in the future, if it determines the capacity is needed. The utility's announcement follows reporting from S&P Global that the company has been over-forecasting its demand for years in order to justify spending on new natural gas facilities. Dominion declined to give a reason for the RFP cancellation, but opponents of the plan said the utility's decision is a recognition that Virginia does not need or want more fossil-fuel based generation, and instead must add significant clean energy resources to meet the state's goal of delivering carbon-free electricity by 2050.The utility's plans to add more gas resources "have stretched the bounds of credulity with regulators and lawmakers,"  Walton Shepherd, Virginia policy director for the Natural Resources Defense Council, told Utility Dive.Virginia Gov. Ralph Northam, D, in September set the state on a course to reach 30% renewables by 2030, and 100% carbon-free power by 2050. "The regulatory environment was looking less favorable,"

Early November cold weather prompts fuel switching in PJM and MISO – EIA - A historic November cold snap sent temperatures below freezing in 75% of the Lower 48 states. Because of this cold snap, the price of natural gas increased from an average of less than $2.00 per million British thermal units (MMBtu) in October to a mid-November high of $5.11/MMBtu at the Tetco M3 hub, located in northeast Pennsylvania in the PJM Interconnection (PJM). Prices rose about $1.00/MMBtu and reached nearly $3.00/MMBtu at the Chicago Citygate hub in the Midcontinent Independent System Operator (MISO). These price increases resulted in coal-fired power generation replacing natural gas-fired generation starting in late October in both of these regional transmission organization markets. In both PJM and MISO, where strong competition exists between natural gas- and coal-fired generation, relative shifts in fuel prices can influence which type of power plant operates. Throughout all of 2019, natural gas-fired generation has accounted for an increasing share of power generation in PJM and MISO, averaging 35% in PJM and 27% in MISO. This summer, the natural gas market in the Lower 48 states experienced record-high natural gas consumption, relatively low natural gas prices, retirements of coal-fired generation, and increasing natural gas-fired capacity. In October, when regional natural gas prices were particularly low because of moderate autumn temperatures, natural gas-fired generation in MISO reached its highest level for 2019 at 36%. However, as natural gas spot prices in the PJM and MISO regions approached nearly $2.70/MMBtu in late October, the coal-fired generation share increased from its earlier lows.  The PJM Interconnection spans states in the U.S. Middle Atlantic. On November 9, the share of natural gas-fired generation in PJM decreased to 34%, its lowest level since May. Conversely, the share of coal-fired generation increased to 31% on November 14, which was the highest coal share since March. MISO covers much of the U.S. Midwest and part of the Gulf Coast. For several days in October, the share of natural gas-fired generation was higher than the share of coal-fired generation in the region for the first time in 2019. With low natural gas spot prices, natural gas-fired generation peaked at a 36% generation share on October 14. In contrast, coal’s generation share fell to 25% on October 12 because natural gas prices were lower than $2.00/MMBtu and wind generation was strong. However, by November, lower wind power and higher natural gas prices made coal-fired generation more economically attractive.

Natgas Ready To Soar- Next Cold Pattern Could Spark Energy Demand For 118 Million Americans -- The Global Forecast System (GFS) weather model shows for the next 6-10 days, below-average temperatures could be seen up and down the East Coast. The result of colder than average temperatures would increase energy demand for nearly 118 million people, reported Ed Vallee, head meteorologist at Empire Weather, adding that increased energy demand could put a bid in natural gas spot prices."We continue to watch for much colder risks next week across the Mid Continent as the pattern re-shuffles. This will bleed into key heating demand areas of the Great Lakes and Northeast later in the 6-10 day period, upping demand risk with temperatures well below normal. Beyond this time frame into mid-month, most data remains cooler than normal, especially in the northern tier of the country, and into the Northeast. This would allow heating demand to remain elevated, but upcoming weather data and forecasts will help drive price action as this challenging forecast period is sorted out," said Vallee.GFS day 11. One run change. 20+°F of change across the Plains. Live tweeting this model and/or following it is a fool's errand at best. Yikes!#natgas $UNG pic.twitter.com/PvPqQ7xqtB— Ed Vallee | Empire Weather LLC (@EdValleeWx) December 4, 2019  Cold risk into Mid-December is legitimate, but there are plenty of questions. We continue to advise clients on the risks to the forecast in our live blog.

Weather Volatility Continues: Colder Trends Erase More Than Half Of The Black Friday Natural Gas Selloff - One thing you can typically count on in the winter season is weather volatility, often in both directions, and this season is proving to be no different so far. Late last week, we were watching a sizable shift in the weather guidance toward a warmer pattern, which culminated with a massive selloff of nearly 23 cents in prompt month natural gas prices back on Friday. Mind you, anyone who has been around in the natural gas market for awhile will tell you that one must be careful trusting moves during a holiday period, as lower liquidity can exaggerate moves in either direction, but the picture did not look pretty for bulls either way. How quickly things can change. The largest change has come in the GEFS model since Friday. We previously picked on this model for busting to the cold side, but to show that weather is an equal-opportunity offender in both directions, here is what the GEFS shows currently for the 6-10 day upper air pattern:
Notice the ridge along the west coast up into Alaska, favorable for cold air transport southward into the U.S, seen in its temperature forecast for the same period.Now let's look at what this same model showed back on Friday, valid the exact same dates. There was no upper level ridging around Alaska, and as such, the flow was more progressive, almost zonal, which is not conducive for cold weather in the U.S. Here is what the model showed for temperature anomalies. Whoa! It does not take more than a very quick glance to see that this pattern is not close to what it is showing today. Now, it is worth pointing out that the change in the ECMWF model (not shown here, but often a more reliable model, skill score wise) is not this drastic, but it, too, has moved colder due to similar reasons. The modeling clearly is struggling to resolve the features that will drive the upcoming pattern, which is great for price volatility, but can drive weather forecasters batty. As of this writing, prompt month natural gas prices have made up around 13 cents of the nearly 23 cent selloff from Black Friday.

US natural gas in underground storage decreases 19 Bcf: EIA — US working natural gas volumes in underground storage dropped 19 Bcf last week, falling by less than half of the five-year average, while the remaining NYMEX Henry Hub winter strip made modest increases following the number's release Thursday morning. Storage inventories fell to 3.591 Tcf for the week ended November 29, the US Energy Information Administration reported Thursday. Stocks are now nearly 600 Bcf above year-ago levels. There is little indication that figure will decline in the coming weeks. The pull was slightly below an S&P Global Platts' survey of analysts calling for a 21 Bcf draw. Survey responses ranged from withdrawals of 15 Bcf to 27 Bcf. The withdrawal was much less than the 62 Bcf pull reported during the corresponding week in 2018 as well as the five-year average draw of 41 Bcf, according to EIA data. As a result, stocks were 591 Bcf, or 19.7%, more than the year-ago level of 3 Tcf and 9 Bcf, or 0.3%, less than the five-year average of 3.6 Tcf. The draw was even less than the 28 Bcf pulled from working gas in storage reported for the week ended November 22. US supply and demand balances were slightly wider for the week ended November 29 as demand trended down more than supply. Total supplies fell 0.2 Bcf/d to an average 96.1 Bcf/d during the week, as a roughly 0.8 Bcf/d increase in US onshore production was matched with a 1.1 Bcf/d drop in net Canadian imports, according to S&P Global Platts Analytics. Texas drove the bulk of production growth, while the drop in net Canadian imports was spread out across border crossings with the US in both eastern and western Canada. The NYMEX Henry Hub balance-of-winter contract strip was trading 2 cents/MMBtu higher Thursday, but prices remain challenged amid a normal to above-normal weather outlook in the coming weeks. Despite small gains, Thursday gas prices are roughly 30 cents lower than they were two weeks ago. Platts Analytics' supply and demand model forecasts a draw of 70 Bcf for the week ending December 6, which is 2 Bcf more than the five-year average. Total supplies are averaging 96.6 Bcf/d this week, with most of the gains stemming from higher Canadian imports to meet higher US demand. Total demand is averaging 105.8 Bcf/d, led by sharp increases in residential and commercial demand primarily in the East storage region, but also joined by higher loads in the South-Central and Midwest regions.

US natgas futures fall on less cold midday weather forecasts - US natural gas futures fell almost 4% on Friday following the release of midday weather forecasts calling for less cold over the next two weeks than previously expected. Traders noted prices were already down a bit Friday morning on forecasts for less cold next week. “The market is simply oversupplied by the massive amount of production that has been added in the past two years," said Kent Bayazitoglu, director of market analytics at Gelber & Associates in Houston, noting, “It will take an Ice Age of a winter to threaten storage levels come March or April." Front-month gas futures for January delivery on the New York Mercantile Exchange fell 9.3 cents, or 3.8%, to settle at $2.334 per million British thermal units (mmBtu). That put the front-month up about 3% for the week after falling over 14% last week in its biggest weekly decline since December 2018. Futures for calendar 2020, meanwhile, dropped to $2.34 per mmBtu, their lowest on record, according to Refinitiv data going back to 2016. That boosted the premium of calendar 2021 over 2020 to its highest since August. The latest weather forecasts at 12 p.m. EST projected heating degree days (HDDs) in the US Lower 48 states would only reach 413 over the next two weeks. That is lower than an earlier forecast at 6:00 a.m. calling for HDDs to reach 430 and compares with a 30-year average of 412 HDDs for this time of year. HDDs measure the number of degrees a day's average temperature is below 65 degrees Fahrenheit (18 degrees Celsius). The measure is used to estimate demand to heat homes and businesses. Despite the outlook for less cld, Refinitiv projected average gas demand in the Lower 48 states, including exports, would rise from 115.1 billion cubic feet per day (bcfd) this week to 119.7 bcfd next week and 131.2 bcfd in two weeks with the seasonal cooling of the weather. Those demand forecasts, however, were lower than Refinitiv's estimates on Thursday of 115.3 bcfd this week and 121.2 bcfd for next week. Gas flows to liquefied natural gas (LNG) export plants rose to 7.7 bcfd on Thursday from 7.0 bcfd on Wednesday, according to Refinitiv data. That compares with an average of 7.3 bcfd last week and an all-time daily high of 7.9 bcfd on Nov. 28. Pipeline flows to Mexico, meanwhile, edged up to 5.4 bcfd on Thursday from 5.3 bcfd on Wednesday, according to Refinitiv data. That compares with an average of 5.4 bcfd last week and an all-time daily high of 6.2 bcfd on Sept. 18.

Natural gas is one of the few trades that hasn't worked on Wall Street, down 50% in 12 months - Pretty much every trade has worked on Wall Street this year except one:natural gas.Futures prices fell to a one-month low on Friday after plunging more than 12% for the week. The commodity is currently trading around $2.34 per million British thermal units, which is nearly 50% below where it traded a year earlier. It's down 21% for 2019.Excess supply is pressuring prices. Inventory built up last spring following a warmer-than-expected winter, and U.S. production has climbed to a record high, according to data from the U.S. Energy Information Administration.A milder fall season is also having an impact on prices. According to Credit Suisse, temperatures since September have been 4% warmer than they were last year, although they are 20% below the 5-year average. Bespoke Weather chief meteorologist Brian Lovern said that since the middle of the summer the weather has been bullish, but that the excess supply is what's keeping prices lower. Going forward he said to expect volatility as different weather patterns play out, all of which could have a drastically different impact on prices. "From here, we feel that we will have a lot of volatility in the weather pattern, with some warming seen as we move into December (a big reason prices fell so much this week), but there will be more cold threats either late in December, or into the middle portion of winter," he said to CNBC.  Lovern said that a "normal" winter could see prices decline to the $2.25 level while a colder-than-expected winter could "still save the market." An uptick in demand for heat could chip away at inventory levels, in which case Lovern said prices could reach $2.75. On the flip side, he said a rise in temperatures would be "disastrous" and could send prices well under $2.00. With winter approaching, colder temperatures have started to eat away at inventories. For the week ending Nov. 22 stockpiles decreased by 28 billion cubic feet — the second straight week of declines — bringing total inventory to 3.61 trillion cubic feet. The last two weeks mark a turning point, before which inventories had been steadily increasing since the middle of March.

Chester County DA charges Energy Transfer security manager, others in scheme to use constables for Mariner East pipeline security -- The Chester County district attorney alleged Tuesday that Energy Transfer — parent company of Mariner East 2 pipeline builder Sunoco Logistics — hired armed Pennsylvania constables to illegally provide security for the pipeline, then hid how the constables were paid. DA Tom Hogan said in a news release that he has filed bribery, conspiracy and related charges against Energy Transfer’s security manager, Frank Recknagel; James Murphy and Richard Lester of Raven Knights LLC, a Harrisburg-area security firm; as well as Nikolas McKinnon and Michael Boffo from the international security firm TigerSwan. “State constables sold their badges and official authority,” Hogan said in the release. “Energy Transfer bought those badges and authority, then used them as a weapon to intimidate citizens. And the defendants attempted to conceal their activity through a maze of companies and payments.” The charges stem from a criminal investigation Hogan launched in December 2018 following the appearance of sinkholes in West Whiteland Township and an explosion at another Energy Transfer line in Beaver County. But what began as an investigation of potential environmental crimes quickly included a probe into the security services after a plain-clothed Chester County detective encountered an armed private security guard at a construction site, where the guard tried to prevent the detective from parking on a public street. Residents also reported feeling intimidated by state constables who restricted movement on their own property.

N.J. dodged a bullet in Philly refinery blast. Will we be so lucky next time? --In June, according to a recent report from the U.S. Chemical Safety Board (CSB), a million residents of South Jersey and Pennsylvania narrowly escaped exposure to hydrofluoric acid, a highly toxic gas, after a preventable series of explosions at the Philadelphia Energy Solutions refinery.Hydrofluoric acid (HF) can burn and penetrate your skin, and cost you a lung or a limb – or even your life.The Philadelphia refinery suffered severe fire damage in the June 21 incident and has been shut down. Its future is unknown. But the PBF Energy Paulsboro Refinery in New Jersey is still operating and still uses HF as a chemical catalyst.The Philadelphia Energy Solutions explosions released more than 5,200 pounds of HF gas. “It’s likely, though we have no way of measuring this, that it just dissipated into the atmosphere,” said Kristen Kulinowski, the chemical safety board’s interim executive.“No way of measuring”? That’s not very reassuring. Even more alarming, a much greater quantity of toxic HF would have been released if not for rapid response by four refinery workers. An HF cloud from Philadelphia Energy Solutions, according to the company’s own worst-case data, could travel seven square miles, threatening more than a million people. The Paulsboro refinery, located just across from Philadelphia in Greenwich Township, has an even bigger footprint: An HF release there could travel 19 square miles, endangering 3 million people.What can be done to reduce or eliminate this risk?First, PBF Energy could convert to a safer alternative to HF to dramatically reduce or eliminate off-site risks. Safer alternatives have been known for years. Some refineries have recently committed to stop using HF gas. Chevron’s Salt Lake City refinery is converting to ionic liquid catalyst, which will eliminate an HF danger zone of 1 million residents. The Wynnewood Refining Co. is Oklahoma is switching to a solid acid catalyst. So far, the PBF site in South Jersey has chosen not to make such a change.

One lesson of the Philly refinery disaster: Executives shouldn't be rewarded for that failure -- News of the Philadelphia Energy Solutions oil refinery explosion on the morning of June 21, 2019, was frightening, first and foremost as we worried about the safety of the plant’s employees and neighbors, and then about the short-term and long-term effects on those same employees, neighbors and the environment. But what happened in the boardroom aftermath of that explosion should also make you sick. PES executives pocketed roughly $4.59 million in retention bonuses after the explosion and fire led to the plant’s closure, the golden parachute money paid out mere weeks before the company filed for bankruptcy. Stunningly, according to the Philadelphia Inquirer and others recently, PES is seeking an additional $2.5 million in bonus payments as part of the plan to reorganize or sell the company. Meanwhile, the majority of the company’s 1,100 employees was laid off in rapid-fire succession, with minimal or even zero severance pay, and nary an offer of health insurance coverage because PES terminated its group health insurance plan. What’s more, seven years ago, PES accepted $25 million in taxpayer money to support its dealings. That’s in addition to environmental liability waivers, plus local and state tax breaks. So while the company’s chief executive officer, Mark Smith, figured out how to spend his $1.545 million retention bonus – and various other executives did likewise with their six- and five-figure bonuses – the men and women who showed up to work every day; who regularly risked their safety on behalf of the company; were recklessly tossed aside to fend for themselves; to wonder how their next electric bill would be paid; or how they might afford life-saving prescription drugs, or when they might actually be able to fix the muffler on their vehicle.

Gas Pipeline Caught in Cuomo Standoff Pulls N.J. Applications -- The natural gas pipeline that was caught up in a months-long feud between New York Governor Andrew Cuomo and utility National Grid Plc has pulled its applications for permits in New Jersey. Pipeline developer Williams Cos. took an “administrative step” to withdraw the New Jersey applications for its Northeast Supply Enhancement project, spokeswoman Laura Creekmur said in an email. The company is evaluating next steps for the project, she said. A representative for the New Jersey Department of Environmental Protection said Williams has indicated it will resubmit the applications, while a representative for Cuomo declined to comment. Within three months,... To read the full article log in. To learn more abou.

4 arrested as protesters block entrance as work begins at Weymouth compressor station — Protesters waving signs and chanting “Go home Enbridge” blocked construction crews Thursday morning in Weymouth at the site of a 7,700-horsepower natural gas compressor station fiercely opposed by nearby residents and elected officials alike. After nearly five years of protests and standoffs, opposition letters and lawsuits, construction started Wednesday on the Algonquin Gas Transmission, a subsidiary of Enbridge. About 30 protestors had gathered at 50 Bridge St., where just days earlier crews had begun preliminary work on a station that will allow for the expansion of a natural gas pipeline from New Jersey into Canada. Four protesters were arrested. Protestors sang and unfurled a banner reading “Fore River residents say no more toxins” in front of a large truck, the Patriot Ledger reported. Protesters had visited the site several times since soil remediation work began Tuesday but not in such large numbers. Alice Arena of the Fore River Residents Against the Compressor Station said opponents were at the site since Tuesday, had warned that they would not stay away. Algonquin received initial approval for the compressor station in January 2017 from the Federal Energy Regulatory Commission, known as FERC. The company also needed several state permits, all of which were granted by regulators despite vehement and organized opposition from local officials and residents. The town of Weymouth alone filed two dozen lawsuits attempting to stop the project.

Offshore drilling ‘creates pressing threat’ to Massachusetts’s environment, residents’ health, report says - An Environment America report released this week suggests offshore drilling could severely impact communities throughout Massachusetts and other coastal states.The report warned that expansion of offshore drilling, pushed by the Trump administration last year in a plan that is tied up in court, would result in onshore infrastructure that could damage the environment, including pipelines through sensitive coastal habitats and harmful greenhouse gas emissions from oil refineries. Environment America is a coalition of 29 state environmental groups, including Environment Massachusetts.“We want to visit clean beaches, smell the ocean breeze, and admire the marine life off our coast — not avoid pipelines, choke on pollution from oil refineries, and contend with oil barges,” Ben Hellerstein, Environment Massachusetts’s state director, said in a statement. “The onshore infrastructure necessary to drill for dirty fossil fuels creates a pressing threat to the health of both our ecosystems and Massachusetts residents.”The 32-page report highlights how pipelines from offshore rigs to inland processing facilities could increase the chances of oil spills and worsen water quality in estuaries. The report also argues toxic waste brought onshore from drilling operations could pollute land and drinking water.Proponents of offshore drilling say expansion could tap into vast available resources and boost the U.S. economy.The Cape Cod Times reported that Jason McFarland, president of the In ternational Association of Drilling Contractors, has said that inclusion of the Atlantic, Pacific and Arctic oceans and expansion of Gulf of Mexico drilling areas were vital steps in U.S. energy dominance. McFarland cited U.S. Energy Information Administration estimates that world energy demand could jump almost 50% over the next two decades.

A tale of two oil pipelines and their place in the presidential race ⋆ The political debate over how to regulate the fossil fuel industry in the United States is more important — and ideologically divisive — than ever before, as the 2020 election is fully underway. One of the core arguments is over the need for and the ethics of energy pipelines. With 2.4 million miles of pipeline, the United States has more than than any other country in the world. And the oil industry isn’t done expanding, even with protests raging over the climate crisis. Enbridge Energy is the largest pipeline company in North America. It is perhaps best known as a partial owner of the Dakota Access Pipeline (DAPL), the oil pipeline which fueled huge protests in 2016 and led to violent clashes between indigenous people and law enforcement. The Canadian company’s Line 5 pipeline in Michigan and Line 3 pipeline in Minnesota both converge in Northeast Wisconsin and have been at the center of intense fights from activists and indigenous people for years. Michigan and Minnesota also happen to be the sites of the two largest inland oil spills in U.S. history, both of which came from Enbridge pipelines. Last month, Wisconsin and Minnesota lent their support to Michigan’s legal fight against Line 5, which the company says is necessary to provide energy to northern Michigan. “If you’re a state like Michigan or Minnesota, and you’re looking at two of the greatest lakes in the world, being faced with the possibility of an Enbridge oil spill [from] some 50- or 60-year -old pipelines, you’d be pretty worried,” said Winona LaDuke, a former Green Party vice presidential candidate and executive director of Honor the Earth, an indigenous environmental justice nonprofit based in Minnesota.  “And you should be.” Both pipelines are more than a half-century old and facingstructural issues. And environmentalists note that both have a history of leaks and carry major risks to ecosystems if a major rupture were to occur, even as the company says it’s taken precautions. With the backdrop of increased activism, such as this fall’s climate strikes held in Michigan and across the globe, some presidential contenders are starting to take notice. So far, two current Democratic presidential candidates — U.S. Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) — have declared their opposition to Minnesota’s Line 3 replacement project.  Sanders also has publicly opposed Line 5 in Michigan. Washington Gov. Jay Inslee, whose presidential campaign was centered around the climate crisis, spoke out against both pipelinesbefore dropping out of the race in August. “This fight … it was hard at first to get anyone to listen. Now, a lot of people are listening,”

Enbridge sampling work leaves debris in Straits for months -On Sept. 12, while crews were collecting rock and soil samples for Enbridge Energy in the Straits of Mackinac, a bore hole collapsed, leaving mechanical debris at the bottom of the waterway. The company waited two months — until the sample work was done — to tell anyone. As a result of the incident, 40-feet long piece of three-inch drill rod became lodged beneath the lakebed, and another 45-feet long piece of the equipment fell on top of the lakebed. The company completed the sampling work Nov. 17. According to documents obtained by the News-Review, they reported the drill rod debris to the Michigan Department of Environment, Great Lakes and Energy two days later, on Nov. 19. In a phone interview Wednesday, Enbridge spokesman Ryan Duffy said the two-months span between the date of the incident and the report were spent determining the best way forward. And now, after that delay, the company won't be able to retrieve the debris until at least spring 2020. "We were evaluating ways to go down and get it, and looking at the best way to go forward," he said. "We hoped to do it this season, this year, but it became unsafe with the change in the weather. It would be a dive operation that would be high risk in the cold weather, so we're just going to retrieve it in the spring." He said the debris does not pose any inherent safety or environmental risk. The rod is in a portion of the straits that is about 240 feet deep. "The crew had some difficulties retrieving (the rod), so ... the crew and Enbridge made the decision to lean the rod on the lake bottom until it can be retrieved in the spring, and it doesn't pose a threat of interfering with traffic or anything like that."

‘Oil destroys life’: Winona LaDuke on why she fights Midwest pipeline projects ⋆ Michigan Advance -Winona LaDuke is internationally known as a vocal indigenous activist in northern Minnesota, where Canadian oil giant Enbridge Energy has been attempting for years to construct a new Line 3 pipeline through tribal lands and sacred wild rice lakes. She is also an economist, writer, author of seven books and co-author of many more. LaDuke is perhaps best known as Ralph Nader’s Green Party running mate during the 1996 and 2000 presidential campaigns.But her true passion lies in activism. LaDuke is co-founder and executive director of Honor the Earth, a Minnesota-based nonprofit organization that works toward environmental justice for indigenous people. Battling pipeline projects is one of the group’s main objectives.Honor the Earth has been involved in a number of resistance efforts to combat fossil fuel infrastructure projects that would negatively impact tribal land; the most well-known being the infamously violent confrontation between law enforcement and Standing Rock activists their supporters over the Dakota Access Pipeline (DAPL).LaDuke is Ojibwe herself and moved to Minnesota’s White Earth Reservation several decades ago before becoming an activist. “People ask me where I live, to describe it, and I say, ‘Where the wild things are.’ That’s where I live.. …We just want to keep it that way,” she said. “[An oil spill here] would destroy life. Oil destroys life.”

Enbridge takes two steps forward on controversial Line 3 oil pipeline project - Enbridge this week took two steps forward on its controversial oil pipeline project, but the company is still waiting on a Minnesota regulatory process that could take several months to play out. Labor contracts were signed Tuesday for the $2.6 billion Minnesota portion of the 340-mile pipeline across northern Minnesota to Superior, Wis. On Sunday, Calgary-based Enbridge opened the 665-mile Canadian portion of the new pipeline. The project will replace Enbridge’s Line 3, a 1960s vintage pipeline that is aging and corroding and can operate at only 51% capacity due to safety concerns. The new Canadian Line 3 will run at 53% of its capacity of 760,000 barrels of crude since the oil must be transferred to the current Line 3 at the Canadian-Minnesota border. Since new Line 3 in Canada is carrying a little more oil than old Line 3 can handle, Enbridge is shunting some crude to its other pipelines at the border. Enbridge has a six-pipeline corridor across northern Minnesota, the largest conduit of Canadian oil into the U.S. Enbridge says the new Line 3 in Minnesota — which would restore the pipeline’s full flow of oil — is needed for safety reasons. Environmental groups and some Ojibwe bands have fought the new Line 3, which would partly follow a new route. They say it would add to global warming and open a new region of Minnesota waters to degradation from oil spills. Enbridge in August chose two general contractors to build the Minnesota portion of Line 3, which would be one of the state’s largest construction projects in recent history. Brownsville, Wis.-based Michels Corp. would be responsible for pipeline construction to Clearbrook, Minn.; Precision Pipeline, an Eau Claire-based unit of the Florida-based multinational construction company MasTec, would handle the rest. Minnesota Limited in Big Lake, an arm of Houston-based CenterPoint Energy, has a contract to build four of eight new Line 3 pump stations; Michels would build the other four. The contractors Tuesday signed a project labor agreement with four unions that represent workers who would build Line 3: the International Union of Operator Engineers, which represents heavy equipment operators; the United Association, which represents pipeline welders; the Laborers International Union; and the Teamsters. The Line 3 project is expected to employ 4,000 at its peak, according to the unions. Only construction of the $800 million Essentia Health complex in Duluth would appear to employ more in the next few years, with about 5,600 workers at its peak. Site preparation on that three-year union project started in September. Pipeline construction is specialized, whereas a big building requires workers from a dozen different trades who come in at different stages of construction. The unions are hoping that construction on the Minnesota leg of Line 3 starts by “midyear at the latest,” s

8 Mile oil spill in the Atchafalaya Basin causes concern for wildlife -An oil spill in the Atchafalaya Basin has state and industry officials on alert. This particular spill could have severe impacts on the environment since the barge has been leaking oil since Monday. The oil now reaching 8 miles into the basin. After oil began spewing into the Basin for 5 days Thyssen Petroleum Inc. began the clean up process.“The company has provided resources to be able to recover the oil which includes containment,” says one Coast Guard representative. Some hunters like Mark Patin are already planning to scrub down their boats “I would think it’s going to leave a film on the side but I mean aluminum boats are very simple to clean otherwise if you have a fiberglass boat it may take a little work to get it off,” says Patin. But are even more worried about the wildlife in the area.Mark adds, “…because of any further 14’15’ and you’re looking at affecting wildlife.” “It could have very significant impacts in the basin.”  Founder of Atchafalaya Basin keeper Dean Wilson says small oil and chemical spills happen often through out the basin but this spill is more concerning because of where the spill is located.Dean says, “…of all the oil spills in the basin they’re very easy to contain because they have been a swamp or place without a current but my concern with this oil spill in particular is the fact there is a river with the current.”Though the Coast Guard says the spill has been contained Dean is still worried that their still may be some oil lingering out there. “I’d be very surprised if they could have contained all this oil that’s been going down occurring for so long,” adds Dean.” Dean also tells News 15 he’s especially worried about the fish and other wild life in the basin, since other larger animals feed on them. They could contaminate land animas that migrate through the winter. At this time the spill has again been contained but not totally cleared. Crews will continue operations tomorrow morning.

Report: Offshore oil, gas drilling creates new onshore risks -  Devastating oil spills of the Deepwater Horizon variety aren’t the only risk posed by expanded offshore drilling in waters off the United States, a new environmental report says. New oil and gas drilling along the country’s Atlantic and Pacific coasts — which the Trump administration proposed but put on hold — would spur a flurry of energy development on dry land, raising the risk of broken pipelines and refinery pollution in coastal areas, according to a report released Wednesday by Environment America, a coalition of 29 state environmental groups.“Whether it causes oil spills off our coast or pollution on our shores, offshore drilling is dirty and dangerous,” report co-author Kelsey Lamp, oceans advocate for Environment America Research & Policy Center, said in a news release.President Donald Trump has previously supported expanding offshore drilling, including signing an executive order in 2017 aimed at opening coastal areas to offshore fossil fuel development, the News & Observer reported in April. But Trump’s moves were opposed by North Carolina’s Democratic Gov. Roy Cooper and other leaders in states bordering the Atlantic and Pacific, according to the News & Observer, which reported that “offshore drilling is already allowed in the Gulf of Mexico, off the coasts of Louisiana, Texas, and Alabama.”California’s Democratic Gov. Gavin Newsom also vocally protested expanded offshore drilling, writing that “the catastrophic harm from an offshore oil spill is well-established,” and “California has perhaps the highest risk from an oil spill and the most to lose,” according to The Sacramento Bee. Environment America said Trump’s administration “increased the likelihood of more offshore drilling in January 2018, when it released a plan to open more than 90 percent of America’s oceans to oil and gas drilling” — a plan that’s temporarily on hold. Trump’s offshore drilling plan is supported by the American Petroleum Institute, an oil and gas industry group, according to the News & Observer.

Florida senator blocks Trump Interior nominee over offshore drilling - (Reuters) - Florida Republican Senator Marco Rubio has placed a hold on the Senate confirmation of President Donald Trump’s pick to become the deputy secretary of the Interior Department over concerns about the agency’s plans to expand offshore drilling, his office said on Wednesday. The move underscores opposition in most U.S. coastal states to a stalled Trump administration plan to open up nearly all U.S. offshore waters to drilling. Environmentalists and lawmakers of both parties have expressed concern that an oil spill could pose a risk to wildlife and beaches, hurting tourism and the fishing industries. “When it comes to offshore drilling and exploration, the Florida delegation is united in opposition to allowing our shores to be subjected to new leases,” Rubio spokesman Nick Iacovella told Reuters by e-mail. Rubio’s hold on Katharine MacGregor, who Trump nominated to take on the No. 2 position at Interior after Secretary David Bernhardt, will continue “until our office is able to discuss our concerns regarding offshore drilling with her directly,” Iacovella said.

Gulf oil spill- The new flood of BP lawsuits hitting Mobile’s federal court – Nearly a decade after the Gulf of Mexico oil spill, a new wave of lawsuits against BP is hitting the federal courts. The new litigation is the result of a court ruling that blocks thousands of people from a medical settlement negotiated after the 2010 environmental disaster. It threatens to clog court dockets for years. It also means plaintiffs like Sherry Carney might have to wait a long time for their day in court. “It was a fine line between life and death; I can tell you that,” Carney said, reflecting on how the oil spill changed her life. Carney was a Dauphin Island city councilwoman at the time. She said she had planned to make her house on the island’s fragile west end her “forever home.” But she said that months of breathing in toxic fumes took a toll on her health. In 2012, she said she spent 34 days in the hospital, part of it the intensive care unit. She said the ordeal included four different stints on a ventilator. At times, she added, she was worried she would not make it. Even after recovering, she said deterioration of her lungs has killed her long-distance running hobby. “My respiratory system after those four episodes of ventilation won’t ever be the same,” she said. “I was a runner. I do a lot of walking. But I can’t run anymore.” After the oil spill, the federal courts consolidated all lawsuits under U.S. District Judge Carl Barbier in New Orleans. Part of that litigation involved a medical settlement for coastal residents and clean-up workers with spill-related health issues. But under a ruling by Barbier, the fund is not available to anyone who did not have a doctor’s diagnosis by April 16, 2012 – two years after the accident. That shuts out people with cancer and other conditions to take a long time to develop. It also bars people like Carney who say they felt the effects shortly after the spill but did not get a prompt diagnosis. Court records indicate that a doctor diagnosed Carney with chronic sinusitis and chronic bronchitis in April 2013 – a year too late. “Unfortunately, a lot of people didn’t understand that part,” said Craig Downs, a Miami lawyer who represents some 2,000 people from Florida to Texas. Potential to clog court dockets Barbier has been transferring the lawsuits to the federal courts with jurisdictions over where the plaintiffs live. More than 500 suits have been filed in Mobile’s federal court since the beginning of the year. BP lawyers have asked that Carney’s case also be transferred.

Shreveport city leaders concerned over proposed pipeline - A new oil and gas company wants approval for a natural gas pipeline under Cross Lake in Shreveport, the city's main drinking water supply. Representatives from Pine Wave Energy Partners explained their idea to some city leaders Thursday and got mixed reaction. The company is looking at southwestern portion of the lake. Specifically, south of South Lake Shore. This proposed pipeline could impact the drinking water of 300,000 people. Pine Wave Energy Partners wants an agreement to use the lake to move natural gas from the Haynesville Shale. Company representatives tried to convince city leaders that the pipeline is safe. But, citizens and city leaders are concerned about the potential impact of the pipeline on the water source. Also, some present Thursday weren't impressed by Pine Wave Energy Partners because they showed up late and couldn't answer a lot of questions. "I think that the oil and gas industry has had such a comfortable relationship with Louisiana that they haven't actually expected Shreveporters in particular to be so savvy and to be so concerned. And, I think that it's time for people to realize that while we might be open for business, we are going to have some demands of our own," said Councilwoman LeVette Fuller. Councilwoman Fuller tells KTBS the issue will come up at the next council meeting. Council members plan to withdraw the proposal, hear from experts about the pipeline, and then resubmit it. Pine Wave representatives said the city will get $150,000 for a 20-year servitude agreement. They also said this project could result in royalties for property owners and local governments. Their estimate of total royalties over the 20 years is a half-billion dollars. There is already a natural gas pipeline under Cross Lake. It's been there since before the lake was created. But its condition and depth are unknown.

Audubon: Commonwealth LNG could destroy habitat of rare, elusive marsh bird -   Environmentalists are raising concerns that building a new liquefied natural gas export terminal along the mouth of the Calcasieu Ship Channel in southwest Louisiana could harm a shy and elusive marsh bird that is expected to be added to the endangered species list. In a public letter filed with the Federal Energy Regulatory Commission on Tuesday, the Audubon Society of Louisiana wrote that the proposed Commonwealth LNG export terminal could destroy habitat for the eastern black rail, a rare marsh bird that fits in the palm of the average person's hand.Described as "shy and elusive" by the U.S. Fish & Wildlife Service, the rail is one of 41 species of animals that have been nominated to be added to the agency's endangered species list next year. Exact population figures remain unclear but with an estimated 1,300 left along the coastal prairies of Texas and less than 1,000 breeding pairs along the Atlantic Coast, Audubon Louisiana has captured and banded more than three dozen of the rare birds on private lands along Highway 82 in southwest Louisiana. The environmental group said the rail prefers habitat heavy with gulf cordgrass, which is visible on the proposed LNG project site.

Port Neches plant explosion: Another burning tower falls, officials say no airborne asbestos found -- Another distillation tower toppled late Saturday as fire continued to burn at the Port Neches, Texas, chemical plant that exploded Wednesday night. Area residents have been cleared to return to the area since Friday, and officials said Saturday that they have found no measurable concentration of asbestos in the air. They say the fire continues to be contained, and that the falling tower had no impact outside the TPC Group facility. Insurance adjusters are assessing the damage at homes Sunday. The plant, which has been cited for environmental violations in the past, experienced two explosions that forced a mandatory evacuation for 50,000, while sparking fears of asbestos contamination. Officials noted that some of the equipment that had exploded from the TPC Group chemical plant site contained asbestos insulation, adding that toxicology consulting firm CTEH will be leading lead removal efforts. "Specialists will be assessing homes and yards within approximately one-half mile of the TPC Port Neches Operations fence line," TPC Group said in an update. "Please be aware that the cleanup specialists are required to wear protective clothing to remove debris beyond the fence line. We expect assessments and clean up to begin immediately." Smoke and fire are visible from the TPC Group Port Neches Operations explosion on Wednesday, Nov. 27, 2019, in Port Neches, Texas. (Marie D. De Jesus /Houston Chronicle via AP) Three plant workers were injured in the blasts, including two TPC employees and a contractor, who have since been treated and released from hospitals in Port Arthur and Houston, said Troy Monk, TPC's director of health, safety and security.

Texas Petroleum Chemical Plant Explosion, and Our Petrochemical 'Collective Suicide' -  A plume from the Texas Petroleum Chemical (TPC) plant hung over Port Neches, Texas on Thanksgiving as emergency workers continued to fight the fire following explosions at the plant on Nov. 27. A mandatory evacuation that called for 60,000 people within a four-mile radius from the plant to leave their homes the day before the holiday was lifted on Nov. 29.  However, officials warned that returning residents be aware of the plume's location because elevated levels of particulate matter associated with the plume near the plant could be "harmful to sensitive groups," and direct exposure could result in respiratory irritation.  I visited the evacuation zone on Thanksgiving, figuring not everyone would heed the order.  Driving in from Louisiana, I spotted the plume from ten miles to the east in Bridge City, Texas, close to the Louisiana state line.  I photographed homes within a half-mile of the plant and chatted with residents who were out on the street sharing holiday greetings with their neighbors. They were talking about damage to their homes and the size and the direction of the plume. TPC's plant manufactures highly flammable 1,3 butadiene, a known human carcinogen used to make rubber tires and plastics. The explosion was a reminder of the potential risk for those that live near petrochemical plants.  Environmental advocates are questioning if the Trump administration's rolling back of standards established by President Barack Obama's administration following the 2013 West, Texas fertilizer plant explosion, could be responsible for the 2019 explosion. Heather McTeer Toney, who was an EPA regional administrator under the Obama administration, said, "What we can say with all certainty is that rules like this are critical to ensuring that we're at least aware and are doing everything that we can to prevent these types of explosions." "I woke up this morning tired, depressed and scared. I cannot be the only person terrified of this disastrous path we're on," Angela Blanchard, a Houston-based long-term disaster recovery expert and Brown University senior fellow, told me in an email.  Although she has been committed to developing solutions for community challenges that the rest of the country will face due to sea level rise from climate change, she didn't offer any of the optimistic, uplifting thoughts she usually dispenses. Instead she concluded, "The plant expansions continue at a record pace. We are committing a kind of collective suicide."

'Stop going to social media to get your information': Officials lift Port Neches evacuation, give updates Thursday — Officials say levels of 1, 3-Butadiene have been "greatly reduced to non-irritating amounts" in Port Neches in the area of the TPC Group plant. The voluntary evacuation and shelter in place have been lifted, according to the Jefferson County Office of Emergency Management. In a Thursday afternoon news conference, officials with the Chemical Safety Board said worker's descriptions of events leading up to the explosions are consistent with a butadiene release. CSB teams can do a full investigation once the area is stable and safe. They goal for the group is to 'determine the root cause' for the explosions. They say a fundamental failure in the system at the facility is to blame for the release. Officials say the investigation is in the early stages, but they do not believe employees were working on the equipment that failed. Officials said it's too early to say how much butadiene has been released. Jefferson County Judge Jeff Branick said he stayed in his home in Port Neches on Wednesday night, but the voluntary evacuation order was put in place for anyone who felt uncomfortable or had symptoms of butadiene exposure. Judge Branick said about 5:30 Wednesday evening, air quality readings started to show 'hits,' leading to the order. He said the hits were detected about a half mile to the southwest of the TPC site. He said the levels are far below anything that might cause long-term health risks. Jason Sanders, Environmental Manager at TPC Group said they're working to remove all materials that are still on site. Sanders said the goal is to do it as safely as possible. According to Sanders, the tanks hold butadiene, crude butadiene and rafinite. He said to ensure there aren't any more leaks or releases, they'll perform 'mechanical integrity assessments' to make sure there aren't breaches in the equipment.

Trump administration plans to open national forests in Texas to more oil and gas drilling - Environmentalists and other opponents are fighting Trump administration plans to open more than 1.9 million acres of national forests and grasslands in Texas to more oil and natural gas drilling activity, which would include plans to drill thousands of feet under Lake Conroe — the principal drinking water source for thousands of people in suburban Montgomery County. Seeking to overturn an Obama-era moratorium, the administration is proposing to lease large areas of Sam Houston National Forest, Davy Crockett National Forest, Angelina National Forest, Sabine National Forest, Caddo National Grasslands and LBJ National Grasslands to oil and natural gas companies. The forests are part of the Haynesville shale of East Texas and Louisiana, and the grasslands are part of the Barnett shale of North Texas. Oil and gas companies have drilled on those lands for decades, but new leasing on them stopped in 2016, when the Obama administration bowed to pressure from environmentalists and other opponents concerned about the effects of hydraulic fracturing. More Information Proposed Drilling on Federal Lands in Texas The Trump administration is seeking to open more than 1.9 million acres of federal lands in Texas on more oil and natural gas drilling. Location Proposed Wells Angelina National Forest 202 Caddo National Grassland 4 Davy Crockett National Forest 98 Lyndon B. Johnson National Grassland 475 Sabine National Forest 624 Sam Houston National Forest 127 Total 1,530 Source: U.S. Forest Service Company Drilling Permits Filed in 2019 Rockcliff Energy 38 Sabine Oil & Gas 32 Aethon Energy 30 Tanos Exploration 25 Sheridan Production Company 24 BP 21 Exxon Mobil 19 Comstock Resources 18 KJ Energy 13 CCI Texas 11 Read More

Texas among top states in country to cut funds to environmental agencies - Texas slashed funding to its environmental enforcement agency by more than a third over the last decade, a new study has found, raising concerns about how closely the oil and gas industry is being policed at a time when the sector is booming and petrochemical plant fires in the Houston region are drawing national attention.The Lone Star State cut funding for pollution-control programs at the Texas Commission on Environmental Quality by 35 percent between fiscal years 2008 and 2018, even as the overall state budget grew by 41 percent, according to the Environmental Integrity Project.The analysis of states’ budget cuts comes as the Trump administration has eased environmental rules and sought to reduce funding to the Environmental Protection Agency. “The Trump Administration has been trying to roll back EPA’s authority and funding by arguing that the states will pick up the slack and keep our air and waters clean,” said Eric Schaeffer, executive director of the Environmental Integrity Project. But it’s just a shell game, he said, “because state agencies are often badly understaffed and the EPA workforce is already at its lowest level in more than thirty years.” Nationwide, the Austin- and Washington, D.C.-based group found that 30 states had cut funding from their respective environmental agencies and 40 had reduced staffing over the decade reviewed. Texas and Louisiana tied for second place, with only Wisconsin reducing a larger share.

Hill Country pipeline construction could begin in January — Kinder Morgan, the company that's building the Permian Highway Pipeline, said construction is underway. Allen Fore, Kinder Morgan vice president, said roughly 100 miles of pipeline is under construction in West Texas. The more than 400-mile pipeline would carry natural gas from West Texas to an area near Katy, Texas, near Houston. Fore said the company is preparing for construction in the Hill Country. "We’re finalizing land acquisition," he said. "We’re over 95%, so the land has been acquired for the properties. We have over 1,000 landowners that are part of this, so that’s significant progress there." He said there has been some kickback from property owners, typically ones in the Hill Country. "A lot of the landowners, this is the first time they’ve experienced pipelines and negotiations and evaluations and those types of things," said Fore. "And, also, understanding what we’re talking about and what we’re planning on doing. What is a pipeline? Is it buried underground? What are your construction techniques and plans? So it’s been a lengthier process in the Hill Country, expected to be, and part of that is making sure everyone understands what the process actually is." Karen Smith, who's lived in the Woodcreek area for five years, is one of the concerned homeowners. "It’s very disturbing. It makes me sick to my stomach. I know some people whose land is being taken, and it’s just not right," said Smith, saying she worried about the impact on the community and environment.

EIA updates geologic maps of the Delaware Basin’s Bone Spring formation -- The U.S. Energy Information Administration (EIA) has released new maps and geologic information for the Bone Spring play in the Delaware Basin, which spans from southeastern New Mexico to western Texas. The updated information includes formation geology, deposition history, and regional tectonic features. The Delaware Basin is in the western part of the larger Permian Basin, one of the most prolific areas for oil and natural gas production in the United States.The Bone Spring formation lies directly under the Delaware Mountain Group and over the Wolfcamp formation. The Bone Spring formation consists of interbedded (settled between existing layers) siliciclastic, carbonate, and shale rocks up to 4,000 feet thick and is divided into four intervals. These intervals are named, from top to bottom, the First, Second, and Third Bone Spring. The Avalon shale is within the First Bone Spring carbonate. Each interval has very low permeability, which means that oil and natural gas cannot flow easily. Recent advances in completion techniques have increased oil recovery factors to as high as 34%, meaning 34% of the estimated resource base in an area is produced.With the introduction of hydraulic fracturing and horizontal drilling, hydrocarbon p roduction has increased considerably in the Bone Spring. The number of producing wells in Bone Spring grew from 436 wells in January 2005 to 4,338 wells in mid-2019. These wells have become more productive over time: average initial daily crude oil production per well for the first six months of operation increased from 67 barrels per day (b/d) in 2005 to 770 b/d in 2019. In that same period, 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 1.6 MMcf/d.

Railroad Commission sued for lax oversight of natural gas flaring  - A major pipeline operator is suing the Texas Railroad Commission — the state agency that regulates oil and gas drilling — alleging that it has blatantly disregarded longstanding state law that restricts the controversial and growing practice of burning off natural gas. The lawsuit, filed Nov. 20 in Travis County District Court, is the latest development in a first-of-its-kind dispute between Tulsa-based Williams Cos. and Exco Operating Co. over the Dallas-based company’s authority to flare natural gas that comes up with the oil it pumps from the Eagle Ford Shale in South Texas. In December 2017, Exco asked the Railroad Commission for permission to burn off excess gas from dozens of oil wells and later asked for a two-year extension of that authority. The request was unusual because the wells were already connected to a pipeline gathering system owned by Williams that's capable of transporting the fossil fuel to market. When oil and gas producers ask the Railroad Commission for permission to flare, which they have increasingly done amid a historic oil boom in the state, it is often because they are unable to hook up to a pipeline. But in this case, Exco, which emerged from bankruptcy in July, said it was because the company didn't have a contract with Williams and couldn’t afford its rates to transport the gas even if it did. The company also noted that Williams historically had only been able to accept 70% of its gas, so it would need a permit to flare, anyway.With oil production reaching historic levels in the Permian Basin as new pipeline construction has lagged, the price of natural gas in West Texas has traded in negative territory several times this year, prompting oil producers to flare it or pay pipeline operators with spare capacity to take it away. Williams filed a protest with the commission early last year, arguing Exco didn’t need to flare because it had the ability to move the natural gas to market — and that the cost-benefit analysis Exco submitted to justify its flaring request used only revenues from dirt-cheap natural gas and omitted revenues from far more valuable oil so the Railroad Commission would think the company was barely scraping by. According to Williams, it was the first time anyone had ever protested an oil producer's request for long-term flaring. Approving the request, the company argued, would be an unnecessary waste of the state’s valuable natural resources, which is heavily restricted by state law and frowned upon in the state constitution.

ENERGY IMPACTS: Toxic, briny water surfaces in Okla. Is oil to blame? -- Contaminated brine bubbling from the ground in Oklahoma could endanger groundwater and highlights the challenge for an oil and gas industry running out of places to dispose of waste. It also could signal a new problem for industry as salt water breaking out without a conduit like an old well is extremely unusual.

EPA May Allow Disposal of Oil Waste in Waterways. Is Public at Risk? - Oklahoma Watch - Within a year, Oklahoma could get approval from EPA to start issuing permits that will allow the oil industry to dispose of briny oil field waste in waterways, alarming environmentalists and making it the first of three Southwestern states to step into a thorny regulatory landscape closely watched by the industry. If it catches on, the plan could help the oil industry cope with a growing waste disposal problem — one exacerbated by industry-linked earthquakes. And it could boost a multibillion-dollar industry that has grown up to manage oil field wastewater. But environmentalists are warning that the industry could wind up polluting waterways by releasing the treated water before it fully understands what’s in the fluid. Once the wastewater is handed off to other users or allowed into surface water, “we can’t bring those discharges back,” said Nichole Saunders, a senior attorney with the Environmental Defense Fund’s Climate and Energy Program. Historically, the industry has disposed of wastewater, also known as produced water or salt water, in deep injection wells. Oklahoma, Texas and New Mexico are exploring the idea of allowing oil companies to recycle the fluid and either transfer it to other users or release it into surface water like streams and rivers. Both sides agree it could happen quickly, although the regulations on releasing treated wastewater into surface water will likely vary from state to state. Oklahoma has already asked EPA for authority to issue permits for oil field waste disposal, and both Texas and New Mexico enacted laws this spring that require their environmental agencies to explore the idea.

Energy Transfer Expands Pipeline Network - Energy Transfer LP reported Thursday that it has added crude oil and natural gas liquids gathering and transmission pipelines in the DJ Basin in Colorado and Anadarko Basin in Oklahoma and Kansas as well as natural gas gathering and processing assets in Western Canada’s Alberta Basin. The larger pipeline network, along with a major crude oil terminal near Houston, come with the completion Thursday of Energy Transfer’s approximately $5 billion cash and stock acquisition of SemGroup Corp. During a special meeting Wednesday, holders of a majority of Tulsa-based SemGroup’s stock voted to approve the deal, Dallas-based Energy Transfer said in a written statement. Effective with the opening of the market Thursday, SemGroup ceased to be a publicly traded company and its common stock discontinued trading on the New York Stock Exchange, Energy Transfer added. It contends that combining both firms’ operations will save more than $170 million annually, yielding “commercial and operational synergies of $80 million, financial savings of $50 million and cost savings of $40 million.” As Rigzone reported in September – when the companies revealed their agreement to merge – the assets from SemGroup complement Energy Transfer’s infrastructure in the Permian Basin and on the Gulf Coast. Moreover, the combination adds the Houston Fuel Oil Terminal (HFOTCO) on the Houston Ship Channel to Energy Transfer’s holdings. Energy Transfer is adding to its pipeline assets further by building the Ted Collins crude oil pipeline, a 75-mile (121-kilometer) conduit linking HFOTCO to the acquiring firm’s existing terminal in Nederland, Texas. The company stated Thursday that the pipeline – with an initial capacity of 500,000 barrels per day – should begin service in 2021.

North Dakota oil pipeline spill cleanup continues -- TC Energy crews worked through the holiday weekend as cleanup efforts continue at the oil spill site outside Edinburg. A company spokesperson said that as of Saturday, Nov. 30, workers had clocked about 65,000 man hours on the site with about 40 to 50 people on-site per day. The pipeline, operated by Canada-based TC Energy, spilled about 383,000 gallons of crude oil on Oct. 29, contaminating nearly five acres of wetlands outside of Edinburg. TC Energy spokesperson Sara Rabern said crews are continuing to remove and test contaminated soil, though it is unclear when cleanup will be completed. "Our crews continue to clean and (remove contaminated soil), which we hope to have completed in the coming weeks," Rabern said. "But again, this depends on the weather. We will continue to monitor and follow the appropriate precautions with the winter weather conditions. We do not have a deadline as we want to do so safely and accurately." With temperatures expected to drop below zero next week, TC Energy spokesperson Sara Rabern said crews will be on "high alert" monitoring hours to make sure no one is working in the cold for too long. TC Energy crews prepare for frigid temperatures as Keystone pipeline oil spill cleanup continues Rabern added that the pipeline is still running at reduced pressure as the investigation of the incident is finalized, and the Pipeline and Hazardous Materials Safety Administration has not yet lifted the pressure reduction requirement. Edinburg is about 75 miles northwest of Grand Forks.

Saltwater leaks from Burke County well abandoned in 1980s - A saltwater spill occurred last week from a disposal well abandoned in the 1980s at a gas plant in Burke County, the North Dakota Department of Environmental Quality reported Monday. The Alberta-based company Steel Reef estimates that 1,980 barrels of saltwater leaked from the well at its Lignite Gas Plant about a mile east of the town of Lignite, according to the department. The amount is equal to about 83,000 gallons. The company first reported the leak to the state on Nov. 24, but the volume of the fluid spilled was unknown at the time. Most of the liquid leaked into surrounding farmland, said Bill Suess, spill investigation program manager for the department. The well was plugged and capped in the 1980s, and Suess was not aware of any past problems at the site. He said the saltwater that leaked came up through a threaded fitting. The North Dakota Oil and Gas Division is investigating the cause of the spill. Leaks from abandoned saltwater disposal wells are not common, spokeswoman Katie Haarsager said. The saltwater that spilled appeared to be a mixture of naturally occurring water in the Dakota rock formation and brine from oil and gas development decades ago, Suess said. Its salt content is less than what’s typically considered brine or “produced water" within the oil and gas industry.Brine comes up alongside oil and gas at well sites, and it’s typically injected back underground for permanent storage. It can render farmland infertile when it spills. Steel Reef said it's working with state regulators as it responds to the incident.

Digital roughnecks: Oil and gas workforce changing as tech’s role grows - Scrum master. Agile coach. Data scientist. Cloud architect. Jobs in the oil and natural gas industry are changing as technology plays an ever larger role in extracting fossil fuels beneath the ground and under the sea. A younger, diverse class of tech workers holding these and other titles, such as big data engineer or user experience designer, are increasingly replacing roughnecks, roustabouts and other blue collar workers who toil under the hot Texas sun or on platforms in the Gulf of Mexico. Energy companies, fighting to stay profitable with oil prices stuck in the $50 to $60 range, are making a major push to digitize and automate operations, allowing drilling in West Texas or in the middle of the ocean to be operated and monitored from control rooms in Houston. That push is driving the growth of six-figure tech jobs that prize skills such as coding, design, data analysis and computer system architecture over physical prowess. While statewide employment in the oil and natural gas industry is down by 3 percent compared to a year ago, tech jobs in the sector appear to be growing, especially in Houston where nearly two-thirds of the estimated 228,000 tech jobs in the region are outside of traditional technology companies such as Google, Amazon and Dell. “There’s a misnomer that energy companies and pipeline companies are not technology companies,” said Al Monaco, CEO of the pipeline company Enbridge. “Nothing could be further from the truth. In fact, industrial applications like ours are a treasure trove of opportunity.”

US Drops Five Oil Rigs - The U.S. idled five oil rigs and added two gas rigs for a net loss of three rigs this week, according to data from Baker Hughes Company. This week’s variations bring the nation’s total number of active rigs to 799, which is 276 fewer rigs than the count of 1,075 one year ago. Texas led all states in declines, dropping five rigs this week. Louisiana and Oklahoma shed one rig apiece. North Dakota and Pennsylvania were the only states to add rigs, tacking on one each. Among the major basins, the Permian idled five rigs this week. This brings the Permian’s number of active rigs to 400, which accounts for more than half of the nation’s total. The Cana Woodford and the Haynesville each shed two rigs. The Granite Wash, Marcellus and Williston each added one rig this week.

Ban fracking? Good luck with that, Mr. or Ms. President -- The Democratic presidential candidates who promise to ban fracking are keeping a secret: The president can't do that. At least five contenders for the Democratic nomination have called for a "fracking ban" in their plans for fighting climate change and shifting to renewable energy. The slogan appeals to the party's most left-leaning voters. But banning hydraulic fracturing would take an act of Congress. And getting Congress to do it would be difficult, even if the Democrats control both chambers. The oil and gas industry, though, shouldn't take much comfort from that, energy analyst Kevin Book says. There are still a lot of ways for a president to affect the industry unilaterally. "This is probably one of those areas where it makes sense to take them seriously rather than literally," said Book, of ClearView Energy Partners. There are signs the industry is taking the prospect seriously. The energy arm of the U.S. Chamber of Commerce released a report this week warning of the economic effects of ending fracking in New Mexico, where Permian Basin oil drilling is boosting the state's budget. And the American Petroleum Institute, after an October Democratic debate in Ohio, accused pro-ban candidates of undermining that state's economy. And major oil companies are being pressed on what they would do if the federal government were to enact policies to limit or end drilling (Energywire, Nov. 4). A president could ban new drilling and fracking on public lands, a concept supported by most of the Democratic contenders. That is a stark contrast to President Trump — who has prioritized increased domestic production. It's also a contrast to former Democratic presidents, including Barack Obama, whose administrations routinely presided over public land drilling. Still, only about 10% of the country's drilling occurs on federal land. The administration could also use regulations to clamp down on the industry's emissions, making it too expensive to operate. But oil companies and others might be able to block such rules, or a public lands drilling ban, in court for years. With a Congress united behind him or her, a president could enact laws with even more impact on oil and gas production, and that includes banning fracking. But lawmakers would have to get past the political might of the oil and gas industry, the thousands of jobs in the sector, and voters very sensitive to increases in the price of gasoline.

People Who Want to Ban Fracking Immediately, Says Joe Biden, 'Oughta Vote for Someone Else' - If you want a candidate committed to banning fracking in the United States immediately, find another candidate than Joe Biden. That's the advice of Biden himself, given to an activist from the Sunrise Movement in a video posted online Thursday after the two discussed the former vice president's adviser Heather Zichal and Biden's plans for the future of fracking. In the video of the interaction posted on Twitter by Sunrise Thursday afternoon, Biden appears confused about Zichal's connections to the natural gas industry, protesting that the adviser "worked for us in the administration." "No, no, I know," the Sunrise activist patiently explains as Biden grabs him by the shoulders. "But she also worked—" "If you look at my record," Biden begins, "look at my record. Just look at my record." The two discuss fracking as well. Biden tells the activist that "you can't ban fracking right now" because "you gotta transition away from it." "You're gonna ban fracking all across America, right now, right?" Biden asks the Sunrise activist. "I would love to," the activist replies. "I'd love to, too," says Biden. "I'd love to make sure we can't use any oil or gas, period. Now, now, is it possible?" "Yes," replies the Sunrise activist. "Well, you oughta vote for someone else," says Biden, releasing the young man and moving on.

This U.S. Shale Giant Is On The Brink Of Collapse - One of the shale gas pioneer companies in the United States said earlier this month that depressed oil and natural gas prices may force it to breach loan covenants over the next year and that a massive debt pile threatens its ability to “continue as a going concern.” Chesapeake Energy—which helped propel the shale gas revolution in the late 2000s with leading positions in the Marcellus, Barnett, and Haynesville shale basins—is now facing tough times trying to heal its balance sheet, on which US$9.7 billion in total debt weighs. The company is looking to improve its balance sheet and is evaluating multiple options to reduce debt and to become, finally, free cash flow positive next year.  Chesapeake Energy’s troubles are indicative of the current woes of the whole U.S. shale patch—firms now have to focus on generating free cash flow and successfully manage the debt they had taken on to boost production instead of profits. Squeezed between the scarce availability of capital from debt and equity markets and investors demanding more profits, many U.S. oil and gas firms are reducing capital expenditure plans for 2020. Producers are also cutting production targets and now admit that the fast-paced growth of the past two years will slow down to moderate growth over the next few years.   In this challenging environment, aggravated by low commodity prices, Chesapeake Energy warned in early November that “If continued depressed prices persist, combined with the scheduled reductions in the leverage ratio covenant, our ability to comply with the leverage ratio covenant during the next 12 months will be adversely affected which raises substantial doubt about our ability to continue as a going concern.”

Meet The Biggest Losers Of The US Shale Bust -After a decade of unprecedented growth and seemingly endless investments, the writing is now on the wall: the Great American Shale Boom is slowing down and this could have some grave consequences both the industry and the financial markets.  A total of 32 oil and gas drillers have filed for bankruptcy through the third quarter, with the total number of bankruptcy filings since 2015 now clocking in at more than 200.Unlike Phase 1 of the oil bust that featured shale production declining due to an epic global price collapse, the current slowdown is being driven partly by industry-wide core operational issues, including declining production due to wells being drilled too close to one another as well as production sweet spots running out too soon. Yet, the most important underlying theme precipitating the collapse is a growing financial squeeze as banks and investors pull in the reins and demand that shale drillers prioritize profitability over production growth.The shale industry has been built on mountains of debt and the day of reckoning is finally here. As many company executives who hoped to drill their way out of debt are belatedly discovering, trying to squeeze a profit from shale-fracking operations is akin to trying to draw blood from stone with the industry having racked up cumulative losses estimated at more than a quarter of a trillion dollars.From the Permian of the Southwest to the Eagle Ford in Texas and the Bakken of central North America, the future is looking decidedly bleak for shale companies that racked up the most debt and expanded too aggressively.Chesapeake Energy Corp. (NYSE:CHK) is widely considered the posterchild of debt-fueled shale investments gone woefully wrong. A decade ago, the company’s deceased CEO, Aubrey McClendon (aka the Shale King), was the highest paid Fortune 500 CEO. McClendon had a rather unusual modus operandi: instead of trying to sell oil and gas, he was essentially flipping real estate using borrowed money to acquire leases to drill on land, then reselling them for 5x- 10x more.He was unapologetic about it, too, claiming it was far more profitable than the drilling business.McClendon’s aggressive leasing tactics finally landed him in trouble with the Oklahoma authorities before he was killed in a car crash shortly after being indicted.  He left the company that he founded in a serious liquidity crunch and corporate governance issues from which Chesapeake has never fully recovered--CHK stock has crashed from an all-time high of $64 a share under McClendon in 2008 to $0.60 currently.

Chesapeake Debt Deal Skirts Bankruptcy -- Chesapeake Energy Corp.’s move to tame its $10 billion debt load alleviates immediate concerns about the oil and gas producer’s viability, yet fundamental issues threatening the company’s long-term outlook remain. The company’s shares and bonds gained Wednesday after it said lenders agreed to loosen some restrictions on its ability to incur debt, clearing up a prior “going concern” issue. Chesapeake also announced it was securing an additional $1.5 billion loan package from a group of banks, as well as plans to buy back $700 million of notes due in 2025 at discounted prices and swap other bonds into new securities. The company’s financing proposals could reduce leverage from its current level of around 4 times a measure of earnings and trim its overall debt load. Yet it doesn’t change the fundamental trajectory for the Oklahoma City-based energy producer, which has struggled to generate positive cash flow in recent years as weak oil and gas prices cast a pall over America’s shale boom, according to James Spicer at TD Securities. “I’m not sure that it solves their problems,” said Spicer, a high-yield analyst focused on the energy sector. “The underlying issue is generating free cash flow. The company is saying it can, but I think it’s very much a show-me story for investors.” The company’s bonds had extended losses since the driller warned last month that its financial survival was in doubt. Its fortunes rose during the boom years under Aubrey McClendon, when it became the second-largest U.S producer of natural gas. But Chesapeake was brought down by years of low prices as the market was flooded with new supply. The company needs oil prices around $60 a barrel and natural gas prices around $2.75 MMBtu in order to maintain production and generate free cash flow, Spencer Cutter, a Bloomberg Intelligence energy analyst, said in an interview. They were trading at around $58 a barrel and $2.38 MMBtu respectively on Wednesday.

Oil-Sands Crude Could Get Heavier Amid Pipeline Shortage - Canada’s struggling oil-sands industry has a plan to cut costs while exporting more of their crude: Make it even heavier. Companies including Cenovus Energy Inc., Gibson Energy Inc., Imperial Oil Ltd. and MEG Energy Corp. are looking to remove condensate and other light oils from the oil-sands bitumen they produce, so they can get more of it onto rail cars. Doing so would dramatically reduce the cost of shipping crude by rail to the U.S. Gulf Coast, which otherwise can cost twice as much as shipping by pipeline. Removing the light oils, called diluent, would make rail shipments...

Coast Guard responds to oil sheen off Afognak Island - Coast Guard officers responding to an oil sheen in Kitio Bay off Afognak Island say containment boom is in place and the leaking underground transfer line at the Kitoi Bay Hatchery that caused the spill has been replaced. Seven hundred feet of containment boom was in place, plus an additional 300 feet of secondary containment boom to absorb the sheen from discharges from the leaking transfer line. Staff at the hatchery, which is owed by the Kodiak Regional Aquaculture Association, took all the right measures and are doing the cleanup themselves, the Coast Guard said. Coast Guard Sector Anchorage Incident Management Division and Marine Safety Detachment Kodiak said the command center received a spill report at 4 p.m. Nov. 22 from hatchery officials. A pollution response crew, funded with $15,000 from the Oil Spill Liability Trust Fund, was on scene on Nov. 23, the Coast Guard said. Coast Guard officials said their focus was to assess the situation and provide guidance for effective pollution response. The Kitoi Bay Hatchery is on the west side of Izhut Bay, some 30 miles north of the city of Kodiak.

U.S. petroleum exports exceed imports in September - In September 2019, the United States exported 89,000 barrels per day (b/d) more petroleum (crude oil and petroleum products) than it imported, the first month this has happened since monthly records began in 1973. A decade ago, the United States was importing 10 million b/d more petroleum than it was exporting. Long-running changes in U.S. trade patterns for both crude oil and petroleum products have resulted in a steady decrease in overall U.S. net petroleum imports.  Net petroleum trade is calculated as total imports of crude oil and petroleum products less total exports of crude oil and petroleum products. Although the United States currently imports more crude oil than it exports, it exports more petroleum products than it imports, resulting in net total petroleum exports.  Increasing U.S. crude oil production, which rose from an average of 5.3 million b/d in 2009 to 12.1 million b/d in 2019 (through September), has resulted in a decrease in U.S. crude oil imports from an average of 9 million b/d in 2009 to 7.0 million b/d in 2019 (through September). The decrease in U.S. crude oil imports also corresponded with a decrease in the number of sources the United States imported crude oil from. In December 2015, the United States lifted restrictions on exporting domestically produced crude oil. Since then, U.S. crude oil exports have been the largest contributor to U.S. petroleum export growth; U.S. crude oil exports have grown from 591,000 b/d in 2016 to 2.8 million b/d in 2019 through September. Despite increasing exports of crude oil, however, the United States remains a net importer of crude oil. The United States continues importing primarily heavy high-sulfur crude oils that most U.S. refineries are configured to process, and more than 60% of U.S. crude oil imports come from Canada and Mexico.  At the same time, U.S. refineries responded to increasing domestic and international demand for petroleum products (such as distillate fuel, motor gasoline, and jet fuel) by increasing throughput. Gross inputs into U.S. refineries rose from an annual average of 14.6 million b/d in 2009 to 17.0 million b/d through the third quarter of 2019, and they have regularly set new monthly record highs. The increase in refinery production of petroleum products has outpaced the increase in U.S. consumption, contributing to an increase in petroleum product exports. The United States has gone from net petroleum product imports of 698,000 b/d in 2009, to net petroleum product exports of 3.2 million b/d so far in 2019. In the first nine months of 2019, the United States exported 1.4 million b/d of distillate, 1.1 million b/d of propane, and 864,000 b/d of motor gasoline, the three largest petroleum product exports.

U.S. oil output growth slows: just how much is anyone's guess - (Reuters) - U.S. oil producers could expand daily output by 1 million barrels next year, or by as little as 100,000 barrels, with the wide gap creating huge uncertainty as OPEC officials gather this week to weigh production curbs. Shale output has routinely defied naysayers over the past three years as U.S. production has surged to nearly 13 million barrels per day (bpd), making the nation the world’s largest crude oil producer and a major exporter with an average of just under 3 million bpd so far this year. But the outlook for 2020 comes with growing skepticism from those inside the industry - and should growth fall short, it could shift the balance of power in world supply back to the Organization of the Petroleum Exporting Countries. An increase in U.S. crude output by 1 million bpd would satisfy nearly all of the 1.2 million bpd increase in world demand next year, the International Energy Agency expects. [IEA/M] That would keep a lid on prices, pressure OPEC to extend production cuts and leave shale producers still trying to achieve elusive profits. As a result, most industry executives and consultants said they expect slower U.S. shale growth. OPEC and its allies, which have cut output by 1.2 million bpd, meet in Vienna on Dec. 5-6 to weigh their next steps. The current supply cuts now run through to March.

Oil and Gas Industry Rebukes Fracking Ban Talk as UN Shows Just How Much Fossil Fuel Plans Are Screwing Climate Limits - The American Petroleum Institute, the nation’s largest oil and gas trade association, is promoting a new video touting domestic natural gas production as essential to energy security. The video, titled “America’s Energy Security: A Generation of Progress At Risk?” comes at a time when calls for halting new fossil fuel production and infrastructure are getting louder and coincided with the release of a United Nations report highlighting the misalignment between global climate goals and countries’ plans to develop fossil fuels. API’s video is part of a broader strategic campaign by the oil and gas industry to quash public support for a national ban on hydraulic fracturing (fracking) and to promote itself as the “natural gas and oil industry.” The lobbying group released its video last week to coincide with the fifth Democratic presidential debate, saying, “some Democratic presidential candidates are now proposing restrictive energy policies that would erase a generation of American progress.” Several leading Democratic presidential contenders have said they would include a ban on fracking as part of their climate plan. The fact that presidential candidates are even talking about a fracking ban undoubtedly has the petroleum industry concerned, as the new API video implies. The video features former presidents from both political parties, from Jimmy Carter and Ronald Reagan to George W. Bush and Barack Obama, declaring the importance of ending reliance on foreign oil and speaking to progress in advancing domestic petroleum production. The video, which also features patriotic images like the Statute of Liberty and American flags, concludes with the message: “Support America’s Energy Security. Oppose a Fracking Ban.”  Patriotic imagery is central to the branding and messaging of another organization pushing gas industry talking points. That group, The Empowerment Alliance (TEA), is a new dark money organization devoted to “securing America’s energy independence” by singularly promoting natural gas.  The oil and gas industry pushback comes at a time when momentum is building in the U.S. and abroad towards serious climate action that includes a just transition away from fossil fuels. In September on the eve of the massive global climate strikes, over 400 activists sent a letter to UN Secretary General António Guterres calling for a worldwide ban on fracking. The United Kingdom announced a temporary fracking ban in early November, and on November 14 the European Investment Bank announced that it would end financing for fossil fuel projects by 2021. In the U.S., California Governor Gavin Newsom recently took a step towards banning fracking in the state by announcing a moratorium on steam-injected drilling along with stricter review and regulations on oil and gas extraction. And last week, the greater Boston community of Brookline, Massachusetts, passed a ban on oil and gas systems in new buildings and renovations, following the lead of California communities that have passed similar measures.

Equinor says Sverdrup oil field output now at around 350,000 bpd – (Reuters) - Oil production at Norway’s giant Johan Sverdrup oilfield has risen to around 350,000 barrels per day (bpd), operator Equinor told Reuters on Tuesday. The North Sea field, which began output on Oct. 5, is now western Europe’s largest oil producer with output exceeding fields such as Equinor’s Troll and ConocoPhillips’ Ekofisk in Norway and Britain’s Buzzard, operated by a unit of China’s CNOOC. The production ramp-up is progressing “very well” and Equinor’s goal of reaching phase-one capacity of 440,000 bpd in the summer of 2020 remains unchanged, said Arne Sigve Nylund, the company’s head of Norwegian output. Equinor’s partner Lundin Petroleum, which discovered Sverdrup in 2010, has said two to four new production wells could be needed to reach full capacity. Eight wells were drilled before the field’s startup in October. Svedrup’s oil loading program showed 19 cargoes are expected in January, totaling 11.8 million barrels or 381,000 bpd, up from an expected 337,000 bpd in December, analysts at DNB Markets said last week. Daily production is expected to peak at 660,000 barrels after phase two development comes on stream in late 2022.

Shell Victorious in Banning Activists From North Sea Oil Platforms - (Bloomberg) -- Royal Dutch Shell Plc won a court ruling preventing environmental protesters from boarding unmanned oil installations in the North Sea. Greenpeace activists in October boarded two of Shell’s offshore platforms in the Brent field to protest decommissioning plans they claimed will leave “hazardous oily sludge” in the sea. A judge in Edinburgh, Scotland, said that the protesters had no right to enter the installations, and are now banned from going within a 500-meter (1,640-feet) safety zone around the platforms. “This is a setback, but the public will understand the real concern here is Shell’s plan,” Meike Rijksen, a Greenpeace campaigner, said in a statement. “We will continue to fight alongside experts and governments against Shell’s intention to dump 11,000 tons of oil in the North Sea.” Shell said it sought the court order “only to prevent protesters breaching the statutory 500-meter safety zones around platforms in the Brent field, putting themselves and Shell staff at risk.” The oil major has asked for a reprieve from international rules, and sought permission to leave some massive structures in the sea as part of the process of closing the Brent fields. Shell claims that it would be safer and more cost effective to leave some parts of the platforms in place because the remaining oil in the structures has a low risk of contaminating the sea. But Greenpeace opposed the company’s plan saying the platform “legs” contain oily sediments that would eventually leak into the sea.

Shell wins oil spill court case against Nigeria - Shell has won a court ruling that blocks the enforcement of more than a half a billion dollars for damages against the oil supermajor in a decade-old oil spill case in Nigeria, Bloomberg reported on Thursday.   A Nigerian court ruled back in 2010 that Shell was liable for an oil spill in the Ejama-Ebubu community in 2001, and awarded the sum plus interest to the community. Shell, which has fought several lawsuits over oil spills in the Niger Delta in the 1990s and early 2000s, has also sought to have the cases transferred to Nigerian courts instead of in UK courts.The Ejama-Ebubu community, however, had the award claim registered in London, which could have potentially meant that UK courts could enforce the award against Shell.  But UK judge Jason Coppel set aside the registration on Thursday, thus preventing UK courts from enforcing the award.  A lawyer for the Nigerian community told Bloomberg they would appeal today’s UK court decision, while a Shell spokesman said that the supermajor continues to believe that “no payment was due” in the case that is still being tried in Nigerian courts.Shell and its Nigerian unit have also been dragged through the courts over the supermajor’s alleged complicity in abuses of human rights in Nigeria’s military suppressing protests in the oil-rich Niger Delta in the 1990s, especially in the Ogoniland area.  In early 2018, the UK Court of Appeal ruled that Nigerian communities cannot pursue Shell in UK courts over oil spills in the oil-rich Niger Delta, upholding a previous High Court ruling that UK-based multinational companies cannot be tried in England for the actions of their subsidiaries overseas.

CMA CGM and Total to develop LNG ship refuelling in Marseille - (Reuters) - Container shipping firm CMA CGM will use the French Mediterranean port of Marseille for refuelling some of its planned gas-powered vessels, backed by a supply partnership with energy group Total. Total will supply liquefied natural gas (LNG) and a refuelling barge to enable CMA CGM to refuel LNG-powered vessels at the Marseille-Fos hub starting in 2021, the companies said in a joint statement on Wednesday. The initiative covers five vessels with a capacity of 15,000 twenty-foot equivalent units (TEU) each that will come into service from 2021 and operate between the Mediterranean and Asia. Total will supply around 270,000 tonnes of LNG per year over 10 years at Marseille, while also providing a complementary refuelling service in Singapore, according to the statement. LNG has been promoted as an alternative to bunker fuel oil for shipping lines facing a January 2020 deadline to meet new international standards on emissions. French-based CMA CGM, the world’s fourth-largest container shipping line, turned to LNG two years ago when it ordered the first-ever giant container vessels to be powered by gas. These nine 23,000-TEU ships, the first of which is due to come into service next year on the Europe-Asia route, will be refuelled at Rotterdam in a similar partnership with Total. “We’re in the process of creating an LNG market for very large ships,” Farid Trad, CMA CGM’s head of bunkering, said by telephone. “We’re looking at ports everywhere, the idea is to roll out LNG worldwide.”

About five thousand tons of crude oil collected along Brazils coast -About 5,000 tons of oil were collected off the coast of Brazil, since the first oil slicks appeared on August 30, the Navy reported.  Quoted today by the G1 news website, the report indicates that this figure was communicated by the Monitoring and Evaluation Group (GAA), formed by the Navy, the National Petroleum Agency and the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA).'In this monitoring phase we verified a stabilization of the situation,' said squadron Admiral Marcelo Francisco Campos, who coordinates the group.The monitoring of the affected areas shows that, in the last week, 99 percent of the efforts correspond to traces of oil on polluted beaches (in the northeast and the Espiritu Santo state in the southeast). In Rio de Janiero, 320 grams of the material were discovered.  According to a press release published by the group, since the first signs of the oil spill were noted, 803 locations have been affected. Even so, according to the agency, there have been no oil spills at sea for 19 days. The first slicks appeared on August 30, on the beaches of Paraiba. The clean-up efforts are supported by 10,000 military personnel from the Navy, the Army and the Air Force, as well as 5,000 IBAMA, Chico Mendes Institute, Civil Defense and Petrobras employees.

Brazil mulls fund to combat oil leaks - Brazilian lawmakers are mulling the idea of creating a fund to combat the effect of oil spills on the coast.   The debate comes as a lower house commission (CPI) was meeting to investigate the source of an oil spill that has been affecting scores of beaches in the northeast and southeast regions since August, in what is considered the country’s biggest offshore disaster to date.    The CPI was set up last month to identify the origin of the spillage and propose measures to prevent new leaks. The navy has been investigating the origin of the spill for months but has yet to reach a conclusion. Molecular analyses concluded the oil was from Venezuela.   “The Brazilian parliament has the responsibility to be at the center of this debate and build a more efficient state not only for the investigation and prevention of natural disasters but also more efficient in damage mitigation,” congressman João Campos, who requested the creation of the CPI, recently argued.    Oil institute IBP, which is giving technical support to the government and started studies to identify the origin of the oil, believes the country is learning from the accident and information from the case could be used to create good response practices to emergencies.    Specialists, however, say creating a fund with resources from producing companies to deal with spills in the future would not be the best solution since the operators currently working in Brazil already follow best practices and are unlikely to cause similar incidents.    Anderson Dutra, an associate member at consultancy KPMG, argues that such a fund could cause legal disputes, as firms that will not contribute could be the ones needing to use it. He said that in order for it to work it would be necessary to impose a tax on the entire sector, which would also be complicated.  

Oil spill on Taranaki beach is under investigation - An investigation is under way in to an oil spill on one of Taranaki's most popular beaches. The Taranaki Regional Council is investigating the spill on Oakura Beach. It is looking to find the source of oil that has washed up at the beach's southern end, Fred McLay, TRC director of resource management, said in a press release issued on Wednesday. A member of the public had made a complaint, McLay said.The council is also cleaning up a small amount of oil that has been found and checking other locations, he said. "Contaminated sand is being manually removed from the beach for appropriate disposal at a licensed facility.  Staff from the Taranaki Regional Council clean up small amounts of oil which have washed up on the south end of Oakura Beach. On Wednesday afternoon, several TRC staff were near the Ahu Ahu Rd end area of the beach, looking for small pieces of sand contaminated by oil drops. Most patches were very small, about the size of seaweed marbles. The workers had shovels and were scooping the contaminated sand and some seaweed into black plastic bags.It is the second oil spill in the region in as many weeks.

Cause of Oakura Beach oil spill remains unknown - The oil spill that left contaminated sand on Oakura Beach, Taranaki, remains under investigation.In a statement issued on Thursday morning, Taranaki Regional Council director of resource management Fred McLay said officers had removed what contaminated sand they have found, and were continuing to check if there is more."Given the evidently small scale of the event, there is unlikely to be a health risk to the public."  Most patches of oil were quite small. On Wednesday TRC staff were collecting pieces of contaminated sand and removing them from the beach. Most patches were quite small, about the size of seaweed marbles - some slightly larger.

Pirates Board Oil Supertanker, Kidnap 19 Crew Members-- Pirates boarded a fully loaded supertanker off the coast of Nigeria, an act that is sure to ring alarm bells for insurers about the risk of collecting oil from Africa’s biggest producer. Nineteen crew were kidnapped and remain missing, a spokeswoman for Navios, the ship’s owner said by phone Wednesday. The incident happened late Tuesday about 77 nautical miles from Bonny Island, a key loading point for Nigerian crude. The vessel had only recently collected its cargo. The waters of the Gulf of Guinea have suffered from sporadic incidents of piracy for a few years, but an attack on a supertanker is a rare event. Nigeria suffered a spate of militancy that crippled its oil industry in 2016, but it rarely strayed into shipping. Out of 95 attacks worldwide where hijackers boarded the vessel in the first nine months of 2019, 17 took place in Nigerian waters, according to data from the International Maritime Bureau, a piracy watchdog. As a region, the Gulf of Guinea accounts for for almost 82% of the crew kidnappings globally. The crew that didn’t get kidnapped were able to sail the vessel to a safe location, the Navios spokeswoman said, adding that the company’s priority is the safe return of those who are missing. The vessel, the Nave Constellation, can carry 2 million barrels of oil. It was full when it was hijacked and there was no damage.

Thai ship sinks, oil spill spreads over Vietnam coast - An oil spill covered over three km of Ha Tinh’s coast after a Thai ship sank near the Son Duong port last Saturday. Local authorities are cooperating with the Central Committee for Natural Disaster Management, and the Vietnam National Committee for Search and Rescue to contain the spill. They have dispatched personnel to the scene to try and prevent the environmental disaster from getting worse. Pool floats have been set up around the shipwreck area and pumps used to move the remaining fuel in the sunken ship out onto barges. Ha Tinh Province marine forces and the ship owner have also joined forces to make sure maritime traffic and local trading at ports go on smoothly. Local fishermen and farmers have been advised not to use seawater at this time. The operations are expected to end on December 15. Nordana Sophie HSCP2, a cargo ship, departed from Hong Kong to Son Duong Port in central Vietnam with 18 Thai crew members. As it neared the port early morning of November 28, the crew discovered that seawater had leaked into the ship through a hole in the hull. The ship sank soon afterwards. Ha Tinh authorities deployed rescue boats and personnel after hearing about the incident. At noon, all 18 crew members were safely brought ashore. 

India's diesel demand growth seen stuck in low gear until mid-2020 -  (Reuters) - India’s demand for diesel will remain subdued until the second half of 2020, when analysts expect various policy measures aimed at stimulating industrial activity to kick in and soak up excess fuel. Until consumption picks up in Asia’s third-largest economy, where economic growth has slowed to six-year lows, refiners are likely to extend their recent stretch of rare diesel exports, which have weighed on refining margins in the region. Diesel accounts for about two-fifths of refined fuel demand in India, which has grown by its slowest pace since fiscal year 2014 this year amid tight credit markets, contracting auto sales and slowing rail and air traffic. Diesel exports could climb by up to 8 million tonnes in the 2019-20 fiscal year from the 28 million tonnes shipped the year before, said an executive at a state refiner who could not be named due to company policy.Ship-tracking data compiled by Refinitiv show India’s diesel exports since the fiscal year start in April have jumped 8.9% from the same period in 2018 to 17.7 million tonnes, the highest for that time span since at least 2015. India consumed 83.5 million tonnes of diesel in the 2018/19 fiscal year, Ministry of Petroleum and Natural Gas data show, which was a record and 3% above the prior year’s total. But demand growth in 2019/20 could be “flat or 1%”, according to K. Ravichandran, group head for corporate sector ratings at ICRA Ltd, a local of arm of Moody’s.

Asian refiners strive to finish IMO preparations in hunt for profits -  (Reuters) - At SK Energy’s largest refinery in South Korea, engineers are rushing to complete a new processing unit ahead of schedule as the firm looks to boost sales of low-emission fuels before new marine fuel standards take effect in just one month. In Japan, the country’s second-biggest refiner Idemitsu Kosan Co is taking a more cautious stance, increasing capacity for low sulphur fuel oil (LSFO), but also relying on blending to produce IMO2020 compliant bunker fuel. The different approaches come as refiners across the world grapple with the shipping industry’s most drastic fuel transition since it moved from burning coal to oil early last century. New International Maritime Organization (IMO) rules from Jan. 1, 2020 prohibit ships from using fuels containing more than 0.5% sulphur, compared with 3.5% now, unless they are equipped with exhaust-cleaning “scrubbers”. The changes affect demand from 50,000 merchant ships consuming about 4 million barrels of marine fuel a day. When completed in January, three months earlier than planned, SK Energy’s 40,000 barrels-per-day vacuum reside desulphurisation (VRDS) will be its first plant solely devoted to producing compliant LSFO. “We conservatively expect (the new unit) to create 200 billion won ($170 million) worth of profits annually depending on market conditions,” Lee Duk-hwan, project leader of SK Energy’s optimization operation office, told reporters during a site visit last week. “If market conditions are favourable we see 300 billion won worth of profits,” Lee said. The unit will start commercial operations in March after making fuels on a trial-basis. The refiner has so far relied on its trading arm to create useable blends from a mix of produced and purchased fuels and oil. With shipping companies delaying fuel orders until the last minute, global refiners do not have clear indications of what fuels will be most in demand. Refiners also have not been able to guarantee the quality and compatibility of fuels they supply, the Chamber of Shipping of America said last week.

Asian oil refiners' shipping fuel profits grow on IMO 2020 demand - (Reuters) - Asia’s oil refiners are starting to see a surge in demand for cleaner fuels that is pushing up processing profits for very low sulphur fuel oil (VLSFO) and gasoil just weeks before new rules take effect for fuel products burned in ships. Most ships have to switch from high-sulphur fuel oil (HSFO) to cleaner fuels such as VLSFO and marine gasoil (MGO) when new sulphur emissions rules set by the International Maritime Organization (IMO), known as IMO 2020, start on Jan. 1. Ships will have to use fuels containing not more than 0.5% sulphur, compared with 3.5% now, unless they are equipped with exhaust-cleaning “scrubbers”. The oil industry stocked up on IMO-compliant fuel, expecting high demand and a big boost in profits ahead of the rules taking effect, but ship owners kept their purchases to a minimum until this month, delaying a run-up in demand that refiners had expected earlier in the fourth quarter.

China to launch new state oil and gas pipeline group next week: notice - (Reuters) - China plans to launch its long-awaited national oil and gas pipeline company on Monday, part of a sector-wide reform aimed at providing fair market access to infrastructure and boost investment in oil and gas production. Most of the country’s pipeline infrastructure is controlled by energy giant PetroChina, CNPC’s listed arm, and small, non state-owned oil and gas producers and distributors often don’t have access to the pipelines at competitive rates, analysts have said. This also hinders companies from investing in oil and gas exploration as they are concerned about access to the pipelines. Beijing started considering reforming the sector nearly a decade ago to improve access but only approved the plans early this year, spurred by a national campaign to boost consumption of the cleaner burning natural gas and curb dirtier coal.

Oil Tankers Idling Off China Possess Key to Shipping Rates-- The fate of at least 15 oil tankers idling off the coast of China holds the key to determining the path of global freight rates. The vessels are owned by a unit of Chinese shipping giant COSCO that was sanctioned by the U.S. in late September for carrying Iranian oil. They’ve been floating off the coast for over a month, ship-tracking data show, in limbo as owners, charterers and potential customers await clarity over the sanctions. For as long as they’re stuck there, effectively removed from the market, global freight rates are likely to remain supported. The impact of the sanctions was magnified by the fact that many customers avoided booking any COSCO vessels due to confusion over whether they would run afoul of the U.S. In the weeks after the penalties were announced, shipping fees spiked and, while they’ve since retreated, they’re still well above where they were. Some clarity could come on Dec. 20, a U.S.-imposed deadline for charterers and business partners of the companies to wind down their activities. COSCO’s lawyers have been in discussions with American authorities regarding potential sanctions relief, while the Chinese government has also reportedly asked the White House to lift the penalties as part of trade-deal negotiations. “The ships are likely waiting for more sanction clarity after Dec. 20,” said Michal Meidan, director of the China Energy Program at the Oxford Institute for Energy Studies. This could take a while and unless COSCO Shipping can clearly explain its ownership structure to the market and insulate itself from the sanctioned units, these vessels, as well as some of the company’s other ships, may remain offline for a few more months, she said. It’s unclear if any of the 15 or so vessels, owned by COSCO Shipping Tanker (Dalian) Co., have been transferred to other COSCO units. Nobody at COSCO Shipping Energy Transportation Co., the Dalian unit’s parent, or China COSCO Shipping Corp. answered phones or responded to emails seeking comment.The Baltic Exchange Dirty Tanker Index, a gauge of the costs of shipping crude and fuel oil, surged 130% to an 11-year high on Oct. 14. It’s still 48% higher than just before the penalties. The higher costs have also flowed through to vessels carrying fuels such as gasoline and diesel, with the Baltic Exchange Clean Tanker Index also at elevated levels.

Russia opens Siberian pipeline to China as Beijing expands its influence in the Arctic - A new natural gas pipeline connecting Russia and China is the latest example of increasing collaboration between Moscow and Beijing in the Arctic Circle. The pipeline comes after China unveiled a plan nearly two years ago called the “Polar Silk Road,” expanding its campaign for influence to the Arctic. While Beijing has branded itself as a “near-Arctic state,” that far-stretched claim on the region is dependent on its partnership with Russia. In a $400 billion deal signed in 2014, the 3,000 km long “Power of Siberia” pipeline stretches from Russia’s Siberian fields to China’s historically coal-burning northeast. ″(The pipeline) diversifies import supplies for China. It will be very competitive gas at the border and I think gradually improves gas penetration for the northeast part of China,” said Scott Darling, head of Asia Pacific commodities research at J.P. Morgan. That region is an attractive market for Russia, as it “has low affordability for high-priced gas” compared with regions farther south which already have “well-established gas markets” with a diverse supply mix, IHS Markit said in a Monday report. “New exports to this rapidly growing gas market is a growth strategy for the company,” but the European market will still remain a “top priority,” IHS said. Reuters reported that Russia’s Gazprom expects the LNG pipeline to initially supply 4.6 billion cubic meters (bcm) of gas in 2020 before ramping up to its full capacity of 38 bcm by 2025.

Putin and Xi oversee launch of landmark Russian gas pipeline to China - (Reuters) - Russian President Vladimir Putin and his Chinese counterpart Xi Jinping on Monday oversaw the launch of a landmark pipeline that will transport natural gas from Siberia to northeast China, an economic and political boost to ties between Moscow and Beijing. The start of gas flows via the Power of Siberia pipeline reflects Moscow’s attempts to pivot to the East to try to mitigate pain from Western financial sanctions imposed over its 2014 annexation of Ukraine’s Crimea. The move cements China’s spot as Russia’s top export market and gives Russia a potentially enormous new market outside Europe. It also comes as Moscow is hoping to launch two other major energy projects — the Nord Steam 2 undersea Baltic gas pipeline to Germany and the TurkStream pipeline to Turkey and southern Europe. The 3,000-km-long (1,865 mile) Power of Siberia pipeline will transport gas from the Chayandinskoye and Kovytka fields in eastern Siberia, a project expected to last for three decades and to generate $400 billion for Russian state coffers. “This is a genuinely historical event not only for the global energy market but above all for us, for Russia and China,” said Putin, who watched the launch via video link from the Russian Black Sea resort of Sochi. “This step takes Russo-Chinese strategic cooperation in energy to a qualitative new level and brings us closer to (fulfilling) the task, set together with Chinese leader Xi Jinping, of taking bilateral trade to $200 billion by 2024.” The new pipeline emerges in Heilongjiang, which borders Russia, and goes onto Jilin and Liaoning, China’s top grain hub. Xi told Putin via a video link on Monday that the newly launched gas pipeline is “a landmark project of bilateral energy cooperation” and an “example of deep integration and mutually beneficial cooperation”. 

Why Did Oil Prices Plunge This Black Friday? - It was a pretty big drop, nearly 5 percent for the day for both West Texas and Brent crude, with the latter now just above $60 per barrel. The big headline is the resignation of Iraqi prime minister Adil Abdul Mahdi. The immediate trigger of that was that it was demanded by Iraq’s most influential cleric, Ali Sistani. This came after weeks of mounting protests in Iraq against the government, both in Baghdad, but also among Shia in the South, with Sistani a Shia cleric. He is based in Najaf, the Shia holy city where Imam Ali is buried, the son-in-law of the Prrophet Muhammed. Protestors had just torched an Iranian consulate there. The supposed reason this might justify a fall in oil prices is that it is thought that the protests have reduced exports from Iraq, which is currently the second largest oil exporter in OPEC. I do not know if that will result, but if indeed this leads to Iraqi oil exports rising, then indeed a price drop is justified. While less headline-generating but arguably more important are rumors regarding a major OPEC meeting in Vienna next week. Supposedly the Saudis have gotten tired of cutting oil production to offset increases by other OPEC members. This may not help out the ARAMCO IPO going on, with falling oil prices resulting. But that would certainly portend a reasonable basis for them to fall. On top of that there are also reports that non-OPEC member Russia is now withdrawing from agreements over the last three years, largely with the Saudis, to restrain their production, especially of condensates. This too would reasonably push oil prices down. There are also reports of snags in US-China trade talks, a less important item that might reveese tomorrow, but one that makes all the markets nervous, and indeed stock markets were down today also. So, while “Black Friday” in the US means businesses supposedly coming out of negative red territory on their profit accounts, in the the oil patch it looks more like something unwanted, black indeed.

Oil jumps on Chinese factory growth, hopes for deeper OPEC cuts - Oil prices rose more than 1% on Monday as signs of rising manufacturing activity in China pointed to increasing fuel demand, and hints that OPEC may deepen output cuts at its meeting this week indicated supply may tighten next year. Brent crude futures rose 76 cents, or 1.3%, to $61.25 a barrel by 0415 GMT. West Texas Intermediate (WTI) futures rose 91 cents, or 1.7%, to $56.08 a barrel, having risen by more than $1 earlier. On Friday, WTI futures settled 5.1% lower while Brent plunged 4.4% on concerns that talks to end the trade war between the United States and China, the world’s two biggest oil users, would be disrupted by U.S. support for protesters in Hong Kong. But oil rose on Monday after factory activity in November in China, the world’s biggest oil importer, increased for the first time in seven months because of rising domestic demand amid government stimulus measures. “At the open, prices remain supported by the surprising resilient China factory activity with the forward-looking PMI’s beating expectations,” said Stephen Innes, chief Asia market strategist at AxiTrader. Prices were also supported after Iraq’s oil minister said on Sunday that OPEC and allied producers will consider deepening their existing oil output cuts by about 400,000 barrels per day (bpd) to 1.6 million bpd. The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, are expected to at least extend existing output cuts to June 2020 when they meet this week. The OPEC+ group has coordinated output for three years to balance the market and support prices. Their current deal to cut supply by 1.2 million bpd that started from January expires at the end of March 2020. OPEC’s ministers will meet in Vienna on Dec. 5 and the wider OPEC+ group will meet on Dec. 6.

Oil Markets Remain Hopeful Of OPEC Cuts - Broader financial markets saw some downward pressure on concerns of new trade conflicts, but oil markets are holding out some hope for deeper OPEC cuts. JP Morgan said that the group may increase the reductions from 1.2 to 1.5 mb/d.  The rumor mill says that OPEC+ may look at a deeper production cut in the neighborhood of 400,000 bpd, but with so many obstacles standing in the way, the odds still seem remote. Most analysts see an extension as the most likely outcome. The world is on track for 3 to 5 degrees Celsius warming by the end of the century, a faster pace than previously thought, according to the World Meteorologic Organization.  Saudi Aramco attracted bids worth around $44.3 billion as of last Friday, putting it on track for a $1.6 to $1.7 trillion valuation. Most of the subscriptions come from Saudi investors, while major international investors have largely stayed away.  The “Power of Siberia” pipeline is set to open on Tuesday, a long-distance, 3,000-km natural gas pipeline connecting Russia and China. The project was initially inked back in 2014, and the contract lasts for 30 years. The pipeline could knock out coal demand, as well as LNG imports, in China. Global coal consumption is set to fall this year, but China also has plans to build 121 GW of new coal-fired power plants and also open new mines, hurting global efforts to cut greenhouse gas emissions. Iran said that 200,000 people took part in protests last week, arguably one of the biggest anti-government protests in decades. The protests were initially sparked by a hike in fuel prices, which itself was a symptom of the weakening economy, largely because of U.S. sanctions. The Wall Street Journal reports that Iran is in a deeper financial crisis than most analysts previously thought. Iraqi security forces reportedly killed at least 45 people on Thursday, after protesters burned an Iranian consulate. It was one of the bloodiest days since the protests began a month and a half ago.  While the EIA and IEA, among others, predict strong U.S. oil production growth lasting through 2020, the drillers themselves are more pessimistic. “I can’t remember another time when oil was $55 and the industry was in such shambles,” Frank Lodzinksi, an industry veteran, told Bloomberg. There is a wide gap between the bullish and bearish forecasts for U.S. oil production growth for 2020, ranging from 1 mb/d down to almost nothing. OPEC+’s likely decision to extend cuts rather than deepen them suggests the group also sees U.S. shale slowing down.

Oil Up as OPEC Output Slips - -- Oil extended gains as OPEC’s crude output dropped before the group and its allies meet this week to set the path for future production cuts. Futures added 0.7% in New York even as Asian stocks declined following the announcement of fresh tariffs by President Donald Trump. Output from the Organization of Petroleum Exporting Countries slipped by 110,000 barrels a day last month, according to data compiled by Bloomberg, while an analyst survey predicted a weekly drop in U.S. crude stockpiles. Crude has climbed since early October on signs the U.S. and China are close to a breakthrough on an initial trade deal. Iraq said on Sunday that OPEC+ may consider deepening output cuts, contrary to expectations, while Saudi Arabia has signaled it will no longer tolerate cheating by other members on quotas. “The global oil supply-demand balance requires an extension of the current OPEC+ cuts,” Damien Courvalin, an analyst at Goldman Sachs Group Inc., wrote in a report. “Already large speculative buying in recent weeks and some expectations for a longer/larger cut suggests that an uneventful three-month extension is unlikely to provide much upside to current prices.” West Texas Intermediate for January delivery advanced 40 cents to $56.36 a barrel on the New York Mercantile Exchange as of 9:05 a.m. London time. Brent for February settlement gained 33 cents to $61.25 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5 premium to WTI for the same month. The drop in OPEC’s production last month was led by Angola, whose output fell to the lowest in more than a decade. Iranian volumes, already squeezed to the lowest since the 1980s by U.S. sanctions, dwindled even further. U.S. crude inventories probably shrank by 1.5 million barrels last week, according to the Bloomberg survey of analysts. If that’s confirmed by Energy Information Administration data on Wednesday, it would be the first decrease in six weeks.

Brent oil ends near 5-week low, but U.S. prices rise as traders weigh prospects for deeper OPEC+ output cuts - Oil futures ended on a mixed note Tuesday, with Brent oil prices logging their lowest settlement in almost five weeks, but U.S. benchmark prices were up a second straight session.Traders weighed the potential for deeper production cuts when the Organization of the Petroleum Exporting Countries and its allies meet later this week, as well as comments from President Donald Trump, who said it might be better to wait until after the 2020 election to complete a trade deal with China. The lack of a trade deal has fed uncertainty over energy demand.“Energy traders are unlikely to see oil prices break above [their] recent trading range unless we see OPEC and its allies deliver deeper production cuts,” said Edward Moya, senior market analyst at Oanda.West Texas Intermediate crude for January delivery rose 14 cents, or 0.3%, to settle at $56.10 a barrel on the New York Mercantile Exchange, following a gain of 1.4% on Monday.   Global benchmark February Brent crude, however, lost 10 cents, or 0.2%, to finish at $60.82 a barrel on ICE Futures Europe—the lowest front-month contract settlement since Oct. 31, according to Dow Jones Market Data. “We should not be surprised if the Saudis lead the charge for higher oil prices,” he said in emailed commentary. “Too much is at stake for the Saudis with their Aramco IPO just around the corner.”

WTI Extends Gains After Bigger Than Expected Crude Draw - Oil prices managed a modest gain today, after Friday's big plunge (and yesterday's modest gains) thanks to investors hope that the upcoming OPEC+ meeting that could lead to deeper supply cuts by some of the world’s biggest crude producers.“With the OPEC meetings coming up, there are expectations that not only will there be an extension of the existing cuts but also a further production cut,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.Crude also bounced above its 50-day moving average - and the dollar was weaker - which both helped technically but all eyes are once again on inventories tonight... API:

  • Crude -3.72mm (-1.5mm exp) - biggest draw since September
  • Cushing -251k
  • Gasoline +2.931mm
  • Distillates +794k

After 5 straight weeks of builds, API reports that crude inventories drew down more than expected in the last week (-3.72mm vs -1.5mm exp)...

Oil Up Despite Trade-Deal Bearishness-- Oil defied trade-deal bearishness to rise for a third day after an industry report pointed to shrinking U.S. crude stockpiles and before OPEC+ decides on its output-cut policy later this week. Futures added as much as 0.9% in New York as Asian stocks dropped amid heightened uncertainty over whether the U.S. and China will reach their much-touted limited trade agreement. The American Petroleum Institute reported crude inventories fell by 3.72 million barrels last week, according to people familiar with the data. That would be the biggest decline since September if confirmed by Energy Information Administration figures due Wednesday. Oil has been rising since early October on optimism the U.S. and China are close to an initial deal, suggesting crude has room to fall if the two sides can’t reach an agreement. However, the likelihood that OPEC and its allies will extend production cuts and toughen compliance, together with some signs that they could deepen them, appears to be propping up prices this week. “Oil’s getting support as the market widely expects OPEC+ to extend the current output curbs when they gather this week,” said Will Sungchil Yun, a commodities analyst at HI Investment & Futures Corp. in Seoul. If U.S.-China trade relations worsen again, crude will likely be driven downward, he said. West Texas Intermediate for January delivery climbed 27 cents, or 0.5%, to $56.37 a barrel on the New York Mercantile Exchange as of 7:42 a.m. in London. The contract rose 0.3% to close at $56.10 on Tuesday following a 1.4% gain on Monday. Brent for February settlement added 37 cents, or 0.6%, to $61.19 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $4.88 premium to WTI for the same month. Analysts surveyed by Bloomberg expect the EIA to report a 1.5-million barrel decline in U.S. crude inventories, according to the median estimate. That would be the first drop in six weeks.

Deeper oil cuts and stricter compliance top agenda as OPEC+ gathers in Vienna  - An upcoming meeting between OPEC and non-OPEC allies could see the group deepen oil production curbs, energy analysts told CNBC, although an extension of existing cuts and an emphasis on stricter compliance is still seen as the most likely outcome. OPEC members will host a meeting in Vienna, Austria on Thursday to discuss the next phase of their oil production policy. The 14-member group will then hold talks with non-OPEC allies on Friday. The wider group, sometimes referred to as OPEC+, has reduced output by 1.2 million barrels per day (b/d) since the beginning of the year. The current deal, which runs through to March 2020, replaced a previous round of production cuts that began in January 2017. “I think there is a possibility that we see around 400,000 barrels per day deeper cuts,” Amrita Sen, chief oil analyst at Energy Aspects, told CNBC’s Dan Murphy in Vienna on Wednesday. “Saudi Arabia is definitely keen to surprise the market to the upside,” Sen said, but cautioned deeper production cuts had “definitely not been firmed yet.” International benchmark Brent crude traded at $62.93 on Thursday morning, down around 0.1%, while U.S. West Texas Intermediate (WTI) stood at $58.29, down more than 0.2%. Oil prices have rallied in recent trading sessions, boosted by intensifying speculation about the potential for deeper production cuts. However, Brent crude futures remain around 15% lower when compared to an April peak, with WTI down 12% over the same period.

Iraq, one of OPEC’s biggest over-producers, is urging deeper production cuts — Iraq’s oil minister on Wednesday endorsed dramatically higher crude production cuts for OPEC and its non-OPEC allies, known as OPEC+, in order to lift global oil prices after a year of lackluster demand. The comments, from a country that has consistently pumped beyond its agreed output targets, came as the price of Brent crude rose 1.8% in morning trade London time. “The 1.2 (million barrels per day) is not really that effective,” Thamer Ghadhban told CNBC’s Dan Murphy in Vienna, referencing the communal output cuts agreed by OPEC+ in December of 2018 that were extended last June. Oil ministers are now convening to discuss whether to carry on or deepen the cuts. Iraq, the second-largest oil producer of OPEC’s 14 members, is also one of its most chronic over-producers, having consistently violated output cut agreements due to its complicated political situation and heavy reliance on hydrocarbon revenues for reconstruction after years of war. But Ghadhban, ahead of OPEC+ meetings on Thursday and Friday, voiced his support for a further 400,000 barrel per day (bpd) production cut across the group’s members. “The 1.6 (million bpd) ... I think it would be more effective, no doubt about that,” the minister said. “It would improve the situation within the oil supply and demand. And it is not only OPEC now who is the main player — OPEC contributes oil about 30%, and the number one producer is the U.S. So there are new realities in the world.” The minister maintained that it was too early to know whether such cuts would be unanimously approved by the group’s 24 members, something that is required for any production cut agreement.

OPEC considering deeper production cuts, but its meeting is in disarray before it even gets started- OPEC’s meetings appear to be in disarray even before they begin this week, but analysts see a growing chance the fractured group may ultimately agree to deeper production cuts. Members of the Organization of the Petroleum Exporting Countries meet Thursday in Vienna, and they will be joined by Russia and other non OPEC producers Friday. That larger group, known as OPEC plus, had been expected to extend an existing agreement to cut 1.2 million barrels a day through June. The agreement had been set to expire in March. Helima Croft, RBC head of global commodities strategy, said it is now her understanding that a larger cut had the support of the OPEC core operating group, as well as its partner Russia. Croft, speaking from Vienna, said it appears the defacto operating group of OPEC has agreed to larger cuts, but it was not discussed at a meeting on Tuesday of the Joint Technical Committee that monitors the production deal. Iraq oil minister Thamer Ghadhban Wednesday told CNBC’s Dan Murphy in Vienna that the current cuts are not enough, and the group should cut 400,000 more. Croft said the Iraqi minister’s comments created a stir and helped send oil prices about 4% higher Wednesday. “If the plan was for a surprise party, it has been been dashed,” she said. “The problem with the Iraqi oil minister putting this information out there is now it has set market expectations. Now if they come out with just an extended cut, and not deeper, and just honor the rolling agreement to go to March, that’s a bearish outcome. He really did upend everything.”

JP Morgan expects bigger OPEC production cuts and no more ‘free passes’ for U.S. shale drillers - Many analysts expect OPEC and its partners to extend their current production agreement by three months when they meet later this week, but J.P. Morgan analysts expect further cuts of another 300,000 barrels a day. The J.P. Morgan analysts said their base case now is that the deal will be for cuts of 1.5 million barrels a day, extended through June. The ongoing agreement between OPEC, Russia and other non-OPEC producers is for a 1.2 million barrel a day reduction. That deal was set to expire in March. OPEC and Russia and other producers, or OPEC plus, meet Thursday and Friday in Vienna. The J.P. Morgan analysts said they held a conference call with Jaafar Altaie, managing director and founder of Manaar Energy, on the OPEC plus outlook. Their main takeaway from the call is that Manaar expects OPEC to agree to deeper cuts. Manaar expects Saudi Arabia’s oil minister to commit to production of 10 million barrels a day, down from its current quota of 10.3 million barrels a day. Larger cuts should make the market tighter and help boost prices. The J.P. Morgan analysts said they also understand from Manaar that OPEC has been focused on the growth of U.S. shale production and wants no more “free passes” for U.S. producers. U.S. shale production has surged to 12.9 million barrels a day, while OPEC and its partners have held oil off the market. U.S. oil exports also increased by about 1 million barrels a day this year, boosting market share at the expense of OPEC and others Goldman Sachs oil analysts expect OPEC plus to keep its production cut at current levels and to extend them through June, when the OPEC plus group is next scheduled to meet. The Goldman analysts expect oil prices to be choppy around this week’s meeting because there is so much uncertainty about what the producers will do. “Already large speculative buying in recent weeks and some expectations for a longer/larger cut suggests that an uneventful 3 month extension is unlikely to provide much upside to current prices,” the Goldman analysts wrote. They noted that Brent should trade around $60 per barrel in 2020, absent any geopolitical shocks. Brent futures were trading just over $61 per barrel in afternoon trading, while West Texas Intermediate crude was around $56 per barrel.according to Goldman Sachs energy analysts. The J.P. Morgan analyst said Saudi Arabia would like to see a higher price, and its fiscal ‘comfort level’ for near-term Brent is around $60 to $70 per barrel. Saudi Arabia has been bearing the brunt of the cuts, while some members, like Russia, Nigeria and Iraq, are still not in complete compliance. Oil analysts have expected OPEC plus to continue pressing members that are not holding to production quotas.

Oil Slides After Saudis Threaten To Boost Production If Oil Producers Don't Comply With Output Cuts -  Three days after oil tumbled following a Bloomberg report that Saudi Arabia was angry at its (N)OPEC co-members for not complying with production quotas, and was no longer willing to compensate for excessive production by other members of the cartel, the WSJ reports that Riyadh, furious that the price of oil refuses to rise and set to take Aramco public, is threatening to boost oil production and unilaterally flood the market if "some" OPEC nations continue to defy the group’s output curbs.The surprising ultimatum which reeks of what Saudi Arabia did in November 2014 when it effectively dissolved the cartel, and flooded the world with oil in hopes of putting shale producers out of business only to fail miserably as it never accounted for cheap money and the greed of US junk bond investors, comes one day ahead of a gathering between OPEC and non-OPEC nations including Russia on Thursday and Friday in Vienna.As the WSJ reports, at a technical meeting Tuesday, a Saudi delegate said his government is growing tired of indirectly benefiting the budgets of countries that are flouting the OPEC pact by overproducing oil, said a person who was present. If the noncompliance continues, "the Saudi official signaled that the kingdom would begin merely complying with its commitment—rather than overcutting to make up for laggards in the group."The target of Saudi ire are reportedly three specific nations, namely Iraq, Nigeria and Russia; this emerged during a slide presentation by a Saudi official who said the trio of oil-producing nations weren’t adhering to the pact that commits the 14 OPEC nations and 10 allied countries to a collective 1.2 million-barrel output curb. Saudi Arabia, the argument goes, is contending with weak oil prices and members of the cartel who aren’t complying with the collective output cut they agreed to last summer. As a result, the Saudis are considering radical measures, including a new pact that would deepen production cuts although if there is one thing the cartel is notorious for, it is ignoring self-imposed production limits when it suits the individual member states as the Crown Prince is finding out now. The stakes for Riyadh are huge: the (N)OPEC spat comes as Saudi Arabia is finalizing the IPO of its national oil company, Aramco, and hopes to bring the company public at the highest possible price, however that also needs a much higher oil price. While the company wasn’t mentioned at the meeting, another delegate said the Saudi position was "all about the IPO of Aramco."

Saudi Arabia denies pushing OPEC allies to commit to a deeper round of production cuts, source says - OPEC kingpin Saudi Arabia has denied pursuing a deeper round of production cuts, one senior oil official told CNBC on Thursday, despite intense speculation the global oil-producing group was on the cusp of imposing further output curbs. The oil-rich kingdom was widely considered to be pushing for other OPEC members to sign up for at least an additional 400,000 barrels per day (bpd) of production cuts. But, one anonymous Saudi oil official told CNBC on the sidelines of a meeting in Vienna, Austria that this was not the case — and Riyadh had not proposed any figures. OPEC and non-OPEC allies — sometimes referred to as OPEC+ — have gathered in Vienna this week to discuss the next phase of their oil production policy. The 14-member group will hold talks on Thursday, before meeting with non-OPEC allies, including Russia, on Friday. The energy alliance has reduced output by 1.2 million bpd since the beginning of the year. The current deal, which runs through to March 2020, replaced a previous round of production cuts that began in January 2017. International benchmark Brent crude traded at $63.53 on Thursday afternoon, up more than 0.8%, while U.S. West Texas Intermediate (WTI) stood at $58.76, approximately 0.5% higher. Oil prices have rallied in recent trading sessions, boosted by growing speculation about the potential for deeper production cuts. However, Brent crude futures remain around 15% lower when compared to an April peak, with WTI down 12% over the same period.

Saudis Offer OPEC+ Quid Pro Quo-- Saudi Arabia is offering fellow OPEC+ members a quid pro quo: If you stop cheating, we’ll curb production. With just hours to go before the Organization of Petroleum Exporting Countries’ meeting in Vienna, it was unclear if the kingdom was simply offering to return to its average output for 2019 -- ending a brief surge to compensate for the September attacks on its oil facilities -- or whether it was willing to take even more oil off a market that’s looking oversupplied in early 2020. What was becoming clear, according to OPEC delegates, was new Saudi Oil Minister Prince Abdulaziz bin Salman’s reluctance to endorse the status quo, in which countries including Iraq, Nigeria and Russia have consistently failed to implement their pledged output cuts, leaving the kingdom carrying most of the burden of supporting crude prices. “The kingdom has explicitly communicated to OPEC that it will no longer tolerate under-compliance,” said Amrita Sen, chief oil analyst at Energy Aspects Ltd. “If it continues, Saudi Arabia can easily return to producing at or above its current quota.” The outcome of the meeting remained in the balance on Thursday as OPEC officials shuttled between sit-downs in the suites of luxury hotels. Iraq, the country with the poorest track record complying with the pact, had been the main advocate for a deeper cut of about 400,000 barrels a day, but later on Wednesday the minister said instead he favored an extension of the current accord until the end of 2020. For the oil market, a new deal could be a psychological boost as traders fret about possible oversupply next year, but may take relatively few barrels out of the physical market. Saudi Arabia has already been pumping significantly below its official OPEC level, and few are likely to believe that nations such as Iraq, Nigeria or even Russia, which haven’t complied with the deal so far this year, are about to start. Crude prices jumped 4.2% in New York on Wednesday, the biggest gain since September. West Texas Intermediate crude was little changed at $58.42 a barrel as of 5:36 a.m. local time on Thursday. The so-called OPEC+ alliance has an agreement to reduce output by about 1.2 million barrels a day since the start of the year in order to eliminate a surplus and bolster crude prices. That deal expires at the end of March, right in the middle of what looks to be a tricky patch for the oil market. Demand growth is slowing and another big expansion in rival production is coming down the pipeline.

WTI Hovers Above $58 After Bigger-Than-Expected Crude Draw - Oil prices, led by hope-ridden trade-deal headlines and OPEC+ chatter, have soared back above $58, erasing Friday's losses... But, after API's reporting a bigger than expected crude draw, all eyes are on the official government data this morning... DOE:

  • Crude -4.856mm (-1.5mm exp) - biggest draw since August
  • Cushing -302k
  • Gasoline +3.385mm
  • Distillates +3.063m - biggest build since July

DOE data shows an even bigger crude draw than API reported (and an even bigger build in gasoline stocks)...  US crude production held at record highs... And WTI was unsure where to go now that the algos ran the stops...

Oil jumps 4% on U.S. stockpiles drop; further OPEC output cuts seen -(Reuters) - Oil prices surged 4% on Wednesday on expectations that OPEC and allied producers would extend production curbs, and as U.S. government data showed a large drop in domestic crude stockpiles. Brent crude LCOc1 futures were up $2.44, or 4%, at $63.26 a barrel by 11:09 ET (1609 GMT). U.S. West Texas Intermediate (WTI) crude CLc1 futures were up $2.38, or 4.2%, at $58.48. The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, could approve deeper crude output cuts when they meet in Vienna this week. U.S. crude stocks fell by 4.9 million barrels in the week to Nov. 29 as refineries hiked output, the Energy Information Administration said, a much deeper draw than expected. Analysts had forecast a decrease of just 1.7 million barrels. “A jump in refining activity and ongoing subdued net imports have helped yield the first draw to oil inventories in six weeks,” said Matt Smith, director of commodity research at Clipper Data. Iraqi oil minister Thamer Ghadhban told reporters in Vienna on Tuesday that “a deeper cut is being preferred by a number of key members”. On Wednesday, Ghadhban said he would support at least extending existing cuts to end-2020 from March. “We have to give a positive signal to the market and to me at least we should roll-over the present agreement,” he said. Some in the market remained skeptical of whether OPEC+ will deepen cuts, though many analysts expect an extension of the existing supply pact. OPEC members meet on Thursday, with the OPEC+ group meeting the following day. OPEC+ has been curbing supply since 2017 and is expected to keep the cuts in place to balance out record production in the United States. Oil prices had been held back by the uncertainty over prospects for a trade deal between the United States and China. The dispute between the world’s two biggest economies has weakened the global economy and limited oil demand growth.

Oil Holds Surge as Stockpiles Add to Trade Optimism-- Oil held its biggest surge in more than two months as signs of a potential U.S.-China deal and tightening American crude stockpiles bolstered prices ahead of the OPEC+ meeting. Futures were little changed in New York after jumping 4.2% on Wednesday, the biggest gain since the attacks on Saudi Arabia’s energy facilities. The U.S. and China are moving closer to agreeing on the amount of tariffs that would be rolled back in an initial trade deal, according to people familiar. American crude inventories fell more than expected last week, while Oman’s Oil Minister Mohammed Al Rumhi said Gulf Arab members of the OPEC+ coalition have reached a consensus on the need to prolong output cuts. Oil has rallied since early October on optimism Beijing and Washington are close to a breakthrough in the prolonged trade war that has dented demand. While Iraq backed away from a proposal for steeper production curbs, Saudi Arabia may lead the way in deepening cuts if other countries better comply with their quotas, according to delegates from the Organization of Petroleum Exporting Countries. The precise terms of any proposed deal remain unclear. “Any hint of tariff rollback is absolute positive mood music to the oil market’s ears,” Stephen Innes, chief Asia market strategist at AxiTrader, wrote in a note. “An extension of the existing OPEC+ agreement and stricter enforcement of compliance would be the bare minimum to expect, but the real debate is on whether deeper cuts will be announced.” West Texas Intermediate for January delivery fell 17 cents to $58.26 a barrel on the New York Mercantile Exchange as of 8:02 a.m. in London. The contract advanced $2.33 to close at $58.43 on Wednesday, the highest level in two weeks. Brent for February settlement lost 13 cents to $62.87 a barrel on the London-based ICE Futures Europe Exchange. The contract gained 3.6% to close at $63 on Wednesday. The global benchmark crude traded at a $4.71 premium to WTI for the same month. U.S. negotiators expect a phase-one deal with China to be completed before American tariffs are set to rise on Dec. 15, people familiar with the talks said. Outstanding issues include how to guarantee China’s purchases of American agricultural goods and exactly which duties to roll back, they added.

Oil whipsaws in choppy trade as Street awaits OPEC output decision - Oil moved between gains and losses on Thursday as traders awaited the decision from OPEC on its production policy. Ahead of the meeting in Vienna, Russian energy minister Alexander Novak said that OPEC+ was discussing a larger-than-expected 500,000 barrel a day production cut for the first quarter of 2020. Oil briefly gave back its gains after Novak also said to Bloomberg that the deeper cuts would only be implemented if each member complies with its current production quota. U.S. West Texas Intermediate settled unchanged at $58.43. Brent crude futures gained 44 cents to hit $63.45. Ahead of Thursday’s meeting, Iraq said that it was pushing for a 400,000 barrel a day production cut on top of the existing agreement for cuts of 1.2 million barrels per day. Helima Croft, RBC head of global commodities strategy, said to CNBC ahead of the meeting that it was her understanding that a larger cut has the support of the OPEC core operating group, as well as its partner Russia. 24-country OPEC+ has cut output by 1.2 million barrels per day since the beginning of the year, and the current deal runs through March of 2020. Production cuts were first implemented in January of 2017 in an attempt to bolster prices as the U.S. kicked up its shale oil production, among other things. As the meeting kicked off reports conflicted over who proposed the cuts. WTI briefly sold off after CNBC reported that one senior Saudi oil official denied pursuing a deeper round of production cuts. On Monday Reuters had previously reported that Saudi Arabia could be in favor of deeper cuts in order to give Aramco a boost as it hit the public market. Also in focus will be individual country’s production output. Again Capital’s John Kilduff said that he believes Saudi Arabia is “open” to a cut, but that the most important thing to the nation is that country’s comply with the quotas that are currently in place.

Oil Sputters After OPEC+ Fails to Pin Down Details-- Oil sputtered near $58 a barrel as the OPEC+ coalition failed to pin down the details of an agreement to adjust its official output target even after six hours of talks in Vienna. Futures were little changed in New York after gyrating throughout the previous session. While the Organization of Petroleum Exporting Countries is nearing a deal to deepen its output cut by 500,000 barrels a day, ministers left the cartel’s headquarters on Thursday without cementing an agreement. Saudi Prince Abdulaziz bin Salman, in his first meeting as energy minister, left reporters with a promise of “beautiful news tomorrow.” Oil is still on track for the biggest weekly gain since September as shrinking American crude stockpiles and signs of progress on a possible U.S.-China trade deal added to the bullish tone. Full compliance to cuts got easier for Russia, which has achieved its targeted curbs in just three months this year, after OPEC agreed to exclude a very light oil called condensate from the country’s quota, while the new target for Iraq was a particular sticking point. “We may even see oil prices falling if the group officially excludes condensate from Russia’s quota and fails to come up with a solution to improve Iraq and Nigeria’s compliance level,” said Kim Kwangrae, a commodities analyst at Samsung Futures Inc. in Seoul. “Details will matter when OPEC makes an official announcement.” West Texas Intermediate for January delivery lost 8 cents to $58.35 a barrel on the New York Mercantile Exchange as of 7:45 a.m. London time. The contract closed unchanged on Thursday after swinging between gains and losses. Prices are up 5.8% this week, the most since the week ended Sept. 20. Brent for February settlement fell 10 cents, or 0.2%, to $63.29 a barrel on the London-based ICE Futures Europe Exchange. The contract is up 1.4% this week. The global benchmark traded at a $5.03 premium to WTI for the same month. A reduction of 500,000 barrels a day by OPEC and its allies would largely be symbolic, simply formalizing the extra supply reductions the group has already been making for most of this year, rather than taking barrels off the market. The emphasis on compliance reflects Saudi Arabia’s unhappiness with the status quo, in which countries including Iraq and Nigeria have consistently failed to implement their promises.

‘Is this the beginning of the end?’: OPEC discord raises questions about its long-term future -The future of OPEC looks increasingly uncertain, energy analysts told CNBC Friday, citing a deepening rift among the 14-member group.OPEC and non-OPEC partners, sometimes referred to as OPEC+, have gathered in Vienna, Austria to decide the next phase of their oil production policy.Led by Saudi Arabia, the oil cartel agreed in principle on Thursday to cut production by an additional 500,000 barrels per day (b/d) through to the end of March 2020, according to CNBC sources.But it was initially unclear whether OPEC members had secured a deal, following an acrimonious meeting that ran late into the evening.Herman Wang, OPEC and Middle East specialist at S&P Global Platts, said Thursday’s meeting had caused him to question the long-term future of OPEC.Speaking to CNBC’s Dan Murphy in Vienna on Friday, Wang said: “What we saw last night was not a unified OPEC. Is this the beginning of the end?”Wang highlighted several issues that suggested a cause for concern, including Ecuador’s decision to quit the group at the end of the year, media reports of Angola’s delegate walking out of the OPEC meeting, Iraq consistently over-producing its quota and a strained relationship between OPEC kingpin Saudi Arabia and non-OPEC leader, Russia. “It’s all about the unity of OPEC. Can they hold this coalition together to keep oil prices from falling?” he added.

OPEC meeting ends with market expecting deep production cut - Global oil-producing group OPEC reportedly considered cutting production by an additional 500,000 barrels per day as its biannual meeting kicked off Thursday in Vienna. The meeting of the 14-member cartel ended just after 11 p.m. local time. While initially it was unclear if a deal had been reached, Dow Jones reported that Iran’s oil minister said a deal had been reached although he would not comment further. Earlier, sources told CNBC’S Brian Sullivan that the organization still had multiple issues to resolve, and just before 4 p.m. ET OPEC announced that it was canceling its customary press conference that usually follows the meeting. The reported 500,000 cut is larger than the numbers floated ahead of the meeting. It would bring the total production cut to 1.7 million barrels per day. On Friday, OPEC and its allies — known as OPEC+ and which includes Russia — will meet to finalize any proposed measures, including how any cuts would be implemented by each country. Earlier Thursday, Russian Energy Minister Alexander Novak said that the steeper cuts would extend through the first quarter of 2020 and would only be implemented if each member complies with its current production quota. Novak also said, according to reports, that condensates would no longer be quoted as part of output for countries, a move which would reduce the total impact of the cuts. In after hours trading international benchmark Brent crude gained 21 cents to trade at $63.21. U.S. West Texas Intermediate shed 10 cents to trade at $58.33.

OPEC and its allies agree to deepen oil production cuts - Energy ministers from some of the world’s largest oil producers have agreed to deepen recurring production cuts by an additional 500,000 barrels per day (b/d) through to March 2020. OPEC and non-OPEC allies, often referred to as OPEC+, decided to implement tighter oil production policy at a biannual meeting in Vienna, Austria on Friday. The new deal, which is much larger than many analysts had expected, will see OPEC+ reduce total oil output by 1.7 million b/d. The energy alliance has said it plans to review the policy at an extraordinary meeting on March 5-6. Oil prices rallied shortly after the OPEC+ announcement. International benchmark Brent crude traded at $64.70 on Friday afternoon, up around 2%, while U.S. West Texas Intermediate (WTI) stood at $59.63, over 2% higher. However, Brent crude futures remain around 15% lower when compared to an April peak, with WTI down almost 12% over the same period. Compliance quotas Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman told reporters on Friday that the oil-rich kingdom’s quota would be an additional 167,000 b/d through to March 2020. Sitting alongside OPEC delegates at a press conference shortly after the meeting, Abdulaziz explained his country would also extend a voluntary cut of 400,000 b/d. This means the energy alliance’s total cuts would effectively amount to 2.1 million b/d, he said, before emphasizing that OPEC+ would only be able to achieve this figure with improved compliance. OPEC’s de facto leader, Saudi Arabia has been adamant those that have previously been overproducing — such as Iraq and Nigeria — must comply with the group’s quota. Russian Energy Minister Alexander Novak said Moscow’s quota would be 300,000 b/d during the first three months of 2020. This measurement excludes gas condensate — a high-value light crude extracted as a by-product of gas production. The energy alliance was prompted to act after global oil prices tumbled in mid-2014 due to an oversupply, but U.S. shale producers are not a part of the deal and shale oil supply has grown exponentially.

Saudi energy minister defends US shale producers: ‘They are creating jobs’ - Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman played down any rivalry between U.S. shale producers and more established oil producers in the Middle East. Speaking to CNBC’s Hadley Gamble following an OPEC decision in Vienna, Austria, on Friday, Abdulaziz said: “They (U.S. shale producers) didn’t do anything wrong, they produced more barrels, they put the U.S. on the map in terms of its energy requirements, they are growing the economy, they are creating jobs.” The U.S. is now the world’s largest oil producer hitting 12.3 million b/d in 2019, according to the U.S. Energy Information Administration, up from 11 million b/d in 2018. It now produces more oil than Saudi Arabia and Russia, although there are signs that production growth is slowing in the States. Due to the boom in U.S. shale production, alongside other factors, the OPEC energy alliance was prompted to act after global oil prices tumbled in mid-2014. U.S. shale producers were not part of that deal and shale oil supply grew exponentially as OPEC producers curbed output. “They did a remarkable job,” Abdulaziz told CNBC regarding the U.S. energy industry. He spoke of “legal limitations” when asked whether there could be pact with shale producers in the future, but said that Saudi Aramco — his country’s state-owned oil firm — “would go more and more international.” In May, Aramco signed an agreement to buy U.S. liquefied natural gas from San Diego-based utility Sempra Energy, which helped to advance its ambitions to become a player in the growing international gas market. The new deal, which is much larger than many analysts had expected, will see OPEC+ reduce total oil output by 1.7 million b/d. However, Abdulaziz told reporters on Friday that his country — the de facto leader of OPEC — would also extend a voluntary cut of 400,000 b/d, saying that the energy alliance’s total cuts would effectively amount to 2.1 million b/d.

Oil Jumps After OPEC Agrees To 500,000 bpd Production Cut - One day after the latest OPEC summit in Vienna ended in chaos and disarray, with the cartel unable to decide whether it will cut output further or instead punish violators of the current quote, leaving oil journalists asking questions and begging for pizza, on Friday Saudi Arabia and Russia surprised markets when they spearheaded a deal in which OPEC and non-OPEC nations committed to some of the deepest oil output cuts this decade aiming to avert oversupply and support prices amid declining global demand. The group of more than 20 producers agreed to an extra 500,000 barrels per day in cuts for the first quarter of 2020, taking the total to 1.7 million bpd, or 1.7% of global demand, in hopes of boosting sagging oil prices in an environment where Saudi Arabia has been increasingly vocal in accusing cartel members and other producers of not sticking to pre-agreed quota levels. Under the new deal, OPEC will agree to 372,000 bpd in fresh cuts and non-OPEC producers - mostly Russia - an extra 131,000 bpd. Brent jumped more than 2%, rising above $64 a barrel after Saudi Energy Minister Prince Abdulaziz bin Salman said effective cuts could be as much as 2.1 million bpd as Saudi would carry on cutting more than its quota. The impetus behind the cut was all Saudi Arabia, which has been eager to provide a floor for oil in the aftermath of the Aramco IPO which priced yesterday at the top of its range, yet some $300BN below the $2 trillion target previously revealed by Crown Prince MbS. "The Saudi goal was not necessarily to push oil prices significantly higher, but rather - fresh on the heels of the Aramco IPO - to put a firm floor under them during the first quarter to temper any seasonal weakness," said Amrita Sen, co-founder of Energy Aspects, quoted by Reuters

Oil posts best week since June as OPEC and allies announce deep production cut  - Oil moved higher on Friday as OPEC and its allies agreed to deepen oil production cuts to 500,000 barrels a day through to March 2020. This brings the total production cut to 1.7 million barrels a day. U.S. West Texas Intermediate crude futures gained 77 cents, or 1.3%, to settle at $59.20 a barrel. For the week WTI gained more than 7%, for its best week since June. During Friday’s trading session Brent gained 1.6% to settle at $64.37. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman told reporters on Friday that the oil-rich kingdom’s quota would be an additional 167,000 barrels per day. He also said that the kingdom would continue to exceed its quota by 400,000 barrels a day, which means the overall production cut will actually be closer to 2.1 million barrels a day. The country is OPEC’s de facto leader, and has been adamant that those who were previously overproducing — such as Iraq and Nigeria — comply with the group’s quota. Prince Abdulaziz bin Salman said that the country’s additional and voluntary cut would be contingent on other countries abiding by their allocation. Russian Energy Minister Alexander Novak said Moscow’s quota would be 300,000 b/d during the first three months of 2020. This measurement excludes gas condensate — a high-value light crude extracted as a by-product of gas production. The energy alliance said it plans to review the policy at an extraordinary meeting on March 5-6. Ahead of the decision On Thursday the 14-member cartel, as well as its allies, which is known as OPEC+ and includes Russia, agreed in principle to reduce output by an additional 500,000 barrels per day. But as day two of meetings in Vienna kicked off Friday, there were still many questions, including how the quota would be allocated, and how long the agreement would stretch for. Friday’s meeting followed a tumultuous and marathon session Thursday. Talks stretched on for hours, and the customary press conference held after the meeting wraps was abruptly cancelled. The duration of the deal was one of the key unknowns. On Friday OPEC said it would meet again on March 5-6. The cartel typically meets every six months, so the announcement had led some on the Street to believe the increased cut would only extend through the first quarter. “It remains unclear what would occur in 2Q20, potentially reflecting Saudi’s new stance that they could walk away from this deal if other countries did not comply fully,” Goldman Sachs analyst Damien Courvalin said in a note to clients Thursday. Another key factor was compliance. Currently several members including Iraq, Nigeria and Russia are over-producing. Saudi Arabia, on the other hand, exceeds its current target cut, and signaled ahead of OPEC’s meeting that stricter rules should be implemented.

Saudi Aramco prices shares at top of the range, valuing it at $1.7 trillion — Saudi Arabian Oil Co., or Saudi Aramco, priced its IPO at 32 riyals ($8.53) per share — the top of its indicative range — which puts the company on track to raise $25.6 billion. The state-owned company’s public debut will become the largest on record, topping the $25 billion Alibaba raised when it went public in September 2014. Aramco’s initial public offering may have priced at the top of its range, but the $1.7 trillion valuation is below what the kingdom had initially been targeting. The long-awaited IPO of the world’s largest and most profitable company will list locally on the Tadawul, Saudi Arabia’s stock exchange, and forms the centerpiece of Crown Prince Mohammed bin Salman’s Vision 2030 aimed at transforming the Saudi economy. The pricing announcement follows a weeklong local roadshow around the Middle East that saw Aramco’s local listing oversubscribed by nearly three times, attracting offers worth 189.04 billion riyals ($50.4 billion), according to banks advising the listing. Institutional investors had between Nov. 17 and Dec. 4 to place their orders. Aramco has said in the past that 0.5% of its listed shares would be available to individual retail buyers, while the remaining 1% would be for institutional investors. That 1% is equivalent to 2 billion shares. In the first 2½ weeks of Aramco’s book-building period, it drew subscription orders for 5.9 billion shares. The IPO’s size is well short of the crown prince’s initial valuation of $2 trillion. The kingdom needed to rely predominantly on local investors after canceling roadshows in London and New York on the back of lackluster international interest.

OPEC supply cut not timed for Aramco listing, Saudi energy minister says  -Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman told CNBC that an agreement to further trim global oil supply wasn’t intentionally timed to coincide with the initial public offering (IPO) of state-owned energy company Saudi Aramco. On Thursday, Aramco priced its IPO at 32 riyals per share ($8.53), putting it on track to raise $25.6 billion in what would be the largest IPO ever conducted. On Friday, OPEC and its allies — a wider grouping termed OPEC+ — agreed to cut an extra 500,000 barrels per day (bpd) of their oil production during the first three months of 2020. Following the announcement, Abdulaziz told CNBC’s Hadley Gamble that the two events weren’t linked. “The fact that they coincided, people try to draw a correlation between the two. Some media outlets tried to use that as a way to explain what we are trying to do at this meeting,” he said. Abdulaziz said Saudi Aramco’s value couldn’t be evaluated by “a tweak here or a tweak there” in the oil supply. He said that the list of institutional investors for Aramco signaled that organizations were keen to back the firm for the long term. A small portion of Saudi Aramco will start trading on the local stock exchange on Wednesday, December 11. He described the decision to list locally as the “brightest day of his life,” as the benefit of the listing would go, first and foremost, to “our people” and to others who “believe in Saudi Arabia.”

Exclusive: Saudi Aramco pursues war cover after attacks - sources - (Reuters) - Saudi Aramco is looking to buy insurance against war and terror attacks after a damaging drone and missile attack on some of its oil facilities in September, two sources told Reuters. Aramco, the world’s largest oil company, has been looking for cover from insurers including those based at Lloyd’s of London and elsewhere in the London market, they added. The firm is seeking cover for facilities in Saudi Arabia’s Eastern Province, its oil heartland, where it suffered the September attacks, one of the sources said. Aramco said in the prospectus of this month’s planned listing that it did not insure against all risks and its cover may not protect it from terrorism or acts of war. At the launch of the IPO, which could be the world’s biggest and raise up to $25.6 billion, Aramco said that it did not expect the Sept. 14 attack to have a material impact on its finances and operations.

Houthi rebels say 2nd aircraft shot down over Yemen in 2 days - Spokesman --   Houthi Rebels said they have shot down an unmanned drone over northern Yemen just a day after claiming to bring down a Saudi Apache helicopter, Yahya Sarea, the group's military spokesman, said on Saturday, Eurasia Disry reports on Sputnik News. "Yemeni air defences were able to shoot down a Chinese-made Wing Loong fighter reconnaissance aircraft in the Hiran district of Hajjah province this evening during hostilities", Sarea said in a post in Twitter.Sarea added that the operation was caught on tape and that footage will be published shortly.Earlier in the day, Yemeni news outlet Almasirah released footage it said showed the Saudi Apache military helicopter shot down on Friday. Sarea on Friday said that two crew members on board the helicopter died.The purported spike in hostilities comes after a week which saw peace overtures from the Saudi-led coalition. A statement by the Saudi defence ministry on Tuesday announced the release of 200 Houthi captives from its prisons and the reopening of the airport in Yemen's capital Sanaa for medical patients.The International Committee of the Red Cross later confirmed the return of 128 Yemeni prisoners from the kingdom. The armed conflict in Yemen between the government forces and Houthi rebels has been ongoing since 2015. The former is backed by a military coalition of Arab countries led by Saudi Arabia.

Why the resignation of Iraq’s prime minister will not automatically stop the mass uprising on the horizon - Patrick Cockburn. -Protesters in Iraq have won their first big success by forcing the resignation of the Iraqi prime minister, Adel Abdul-Mahdi, after the killing of 45 unarmed protesters by the Iraqi security forces in a single day. As the news spread, the crack of celebratory fireworks replaced that of gunshots in Baghdad's Tahrir Square, which has been the centre of demonstrations since they began two months ago. The impending departure of Mahdi is a symbolic victory for the protests, but too many people have been killed for it to quell what is close to a mass uprising by the majority Shia community. He had proved an ineffectual leader and the entire ruling elite in Iraq is probably too corrupt and too determined to hang on to power to make the radical reforms demanded by the protesters.    The announcement that the prime minister was stepping down came after 36 hours in which the security forces had switched from killing individual demonstrators to massacres on a larger scale – with as many as 50 people shot dead on a bridge in the southern city of Nasiriya – bringing the number killed to 408, as well as thousands more wounded, since 1 October. Compare this horrific casualty list over eight weeks with that in Hong Kong, where just one protester has been killed and one has died accidentally since protests started six months ago.  Probably the world has got used to Iraqis being murdered in large numbers, whether it is by Isis, Saddam Hussein or the US air force, so it is no longer considered news. But history is made by unreported massacres. “It plants hatred in the heart,” a Palestinian once said of a mass killing by Israeli troops decades ago in Gaza in which his uncle had been killed. The violence is seen as only affecting Iraqis, but it has the potential to reshape the politics of the Middle East. Since the Iranian revolution in 1979, one of the most powerful political and military forces in the region has been the increasing strength of Shia communities under Iranian leadership.   But in the last two months, this victorious, Iranian-led Shia coalition has been fractured as pro-Iranian sections of the Iraqi security services and paramilitary groups repeatedly shot down Shias protesting about the lack of jobs, inadequate social services and pervasive corruption on the part of Iraq’s ruling elite. These protests were initially on a small scale and only gained momentum because of the government’s overreaction to what was at first a very minor threat. 

Iraq parliament approves PM Adel Abdul Mahdi’s resignation - Iraqi legislators approved Prime Minister Adel Abdul Mahdi's resignation on Sunday during a parliament session held in the capital Baghdad amid weeks of deadly anti-government protests. An embattled Abdul Mahdi had announced on Friday that he would quit, after 50 demonstrators were killed the previous day by security forces in Baghdad and Iraq's mainly Shia southern cities of Nasiriya and Najaf. The prime minister also faced criticism from Iraq's top Shia leader, Ayatollah Ali al-Sistani, who condemned the use of lethal force against the protesters and called for a new government. A cabinet meeting on Saturday had approved Abdul Mahdi's announcement, which also suggested the resignation of key members of the Iraqi government, including the prime minister's chief of staff. Legal experts told Al Jazeera that the government would assume a caretaker role for 30 days or until the largest bloc in parliament agrees on a new candidate to replace him. "Based on the constitution, this resignation includes the whole government - ministers and the deputy prime minister," legal expert Tareq Harb told Al Jazeera. "The government has now become a caretaker government which will only address urgent issues until a new government is elected," he added.

The Superpowers Battling Over Iraq’s Giant Oil Field  - Ever since the U.S. signalled through its effective withdrawal from Syria that it now has little interest in becoming involved in military actions in the Middle East, the door has been fully opened to China and Russia to advance their ambitions in the region. For Russia, the Middle East offers a key military pivot from which it can project influence West and East and that it can use to capture and control massive oil and gas flows in both directions as well. For China, the Middle East – and, absolutely vitally, Iran and Iraq – are irreplaceable stepping stones towards Europe for its era-defining ‘One Belt, One Road’ project. Earlier this week an announcement was made by Iraq’s Oil Ministry that highlights each of these factors at play, through a relatively innocuous-sounding contract award to a relatively unknown Chinese firm. Specifically, it was announced that China Petroleum Engineering & Construction Corp (CPECC) has been awarded a US$121 million engineering contract to upgrade the facilities that are used to extract gas during crude oil production at the supergiant West Qurna-1 oilfield in Iraq, 50 kilometres northwest of the principal oil hub of Basra. The project is due to be completed within 27 months and aims to increase the capture of gas currently being flared across the site. Two factors that were not highlighted in the general announcement were firstly that CPECC is a subsidiary of China’s principal political proxy in the oil and gas sector, China National Petroleum Corp (CNPC), and secondly that the gas capture project will also include the development of the oil reserves at West Qurna 1. The current level of oil reserves at West Qurna 1 is just under nine billion barrels but, crucially, the site is part of the overall massive West Qurna reservoir that comprises at least 43 billion barrels of crude oil reserves.  Certainly it makes sense for Iraq to finally begin to monetise its associated gas that it has been burnt off for decades as a product of its burgeoning oil production. Aside from the negative environmental impact of this practice, there is the bizarre practical result that Iraq – which holds some of the biggest oil and gas reserves in the world – has to go to its neighbour Iran every year and beg for electricity imports to plug the huge power deficits that afflict it, particularly during the summer months.

Officials confirm 25 dead, 130 wounded after gunman targets Iraqi protests - Iraqi officials confirmed Saturday that 25 people died and 130 are wounded after a gunman targeted anti-government protesters in the country’s capitol overnight. Three of the dead were law enforcement officers and the rest were protesters, CBS News reported. The gunfire continued until early Saturday morning, shots fired in Baghdad’s Khilani Square and Sinak Bridge. These areas have been the center of the uprising, and chaos erupted after the electricity was cut and people fled into mosques and other areas to escape the shooting. A car park that protesters were using as a base for their sit in was lit on fire, as shots were fired into surrounding buildings. Protesters raised a bloody white flag as they returned to the site Saturday, according to CBS News. Iraqi security forces were deployed to the square early Saturday morning. A prominent Shiite cleric, Muqtada sl-Sadr, the head of the country’s parliament’s Sairoon bloc, said a drone targeted his home in Najaf Saturday as well. Nassar al-Rubaie, head of Sairoon's political committee, sharply criticized the attack in televised remarks and called for an emergency parliamentary session to address the violence. Anti-government protestors initially blamed supporters of Iran-backed Iraqi militias, which have attacked past protests. A string of knife attacks also targeted protesters this week, after the militias held a counter-demonstration in Baghdad.

Iranian General: Our Missiles Are Aimed at 21 US Bases — In a speech over the weekend in the city of Bushehr, Iranian General Allahnoor Noorollahi talked of Iran’s substantial military power, particularly as it relates to conventional missiles, declaring them the fourth most powerful missile system behind the US, Russia, and China. And with tensions between the US and Iran mounting, and the US constantly emphasizing military perspective, the Iranian general was doing the same, saying Iran’s missiles are aimed at all 21 US bases in the region. This is both a reflection of how dangerous the environment in the region is getting, with both the US and Iranian militaries being told to gear up for a potential conflict, and how little of an accident it might take to lead to a full-scale war. Gen. Noorollahi’s comments reflect the reality of Iran’s posture toward a long-threatened US attack, which they are trying to deter with retaliatory capabilities. It seems risky to count on that, however, with both sides constantly scaling up their capabilities, and relations getting progressively worse.

US Enraged After 6 More EU Nations Join Effort to Bypass Iran Sanctions (ZH) — On Friday six European countries issued a bombshell joint statement declaring their intent to join INSTEX, or the Instrument in Support of Trade Exchanges, a European special-purpose vehicle serving as a ‘SWIFT alternative’ to bypass US sanctions on Iran.Finland, Belgium, Denmark, Netherlands, Norway, and Sweden released a joint statement asserting it’s of “the utmost importance to the preservation and full implementation of the Joint Comprehensive Plan of Action (JCPoA) on Iran’s nuclear program by all parties involved.”“In light of the continuous European support for the agreement and the ongoing efforts to implement the economic part of it and to facilitate legitimate trade between Europe and Iran, we are now in the process of becoming shareholders of the Instrument in Support of Trade Exchanges (Instex) subject to completion of national procedures,” the statement reads. Instex is an initiative set up by France, Germany and the UK in January 2019 to provide humanitarian and sanctions relief to Iran after in November 2018 the SWIFT network suspended Iranian banks under Washington pressure, months after Trump pulled the US out of the nuclear deal.  Though the new alternative financial device had shaky beginnings amid further aggressive threats from the US administration, it continued through a trial phase even though Tehran officials had complained it appeared ‘too little, too late’.  But now as this latest six country statement announces, it will serve as the European vehicle to “facilitate legitimate trade between Europe and Iran,” while also providing incentive for Tehran to return to its commitments under the JCPOA, specifically to recently breached uranium enrichment limits. Upon the announcement, US Ambassador to Germany Richard Grenell lambasted the move, saying: Terrible timing – why fund the Iranian regime while its killing the Iranian people and shutting off the internet? You should be standing for human rights not funding the abusers.

These photos show what it’s really like in Iran, where — despite its antagonistic relationship with the US— life is surprisingly normal - Business Insider

Iranian government kills hundreds in bid to suppress the worst protests in decades - According to reports from international rights organizations, opposition groups and local journalists, Iranian President Hassan Rouhani’s security forces have killed more than 400 people since the eruption of mass protests by workers and youth on November 15. The upheavals were triggered by an overnight hike in gas prices and widespread economic hardship. A further 2,000 people have reportedly been wounded and 7,000 arrested during the government crackdown. Given the government’s five-day internet blackout and the hostility of the Western media towards Iran, it is difficult to know how accurate these figures are and the veracity of the claims and counterclaims as to who was behind the brutal suppression of the protests. The government acknowledged that 12 people had been killed after three days of protests, while Amnesty International claimed that at least 161 people had been killed across 10 provinces, mostly as a result of live fire. According to the New York Times, which has close links to the US military and security apparatus, the death toll from the government’s crackdown during the last two weeks was between 180 and 450. Interior minister Abdolreza Rahmani Fazli said that 731 banks, 140 public spaces, nine religious centres, 70 gasoline stations, 307 vehicles, 183 police cars, 1,076 motorcycles and 34 ambulances were attacked and damaged. He said that there had been protests in 29 out of 31 provinces and 50 military bases had been attacked. If true, it implies a level of coordination unseen in previous demonstrations in 2009 and 2017-18, or indeed elsewhere in protest movements in the Middle East. “They were like a gang, marching in the streets with faces covered, destroying specific targets like banks” and they looked like “professionals with sophisticated tools.” He added that some of them “must have been led by foreign forces.” The IRGC claimed that some of the protesters were carrying tools not normally available in Iran. While the protests began in response to a new rationing system that allows just 60 litres (16 gallons) per month to each passenger vehicle (more for taxis and commercial vehicles) for 15,000 rials per litre—a 50 percent increase, and 30,000 rials per litre, a 300 percent increase on purchases over the 60 litres—they soon spread to encompass broader social, economic and political demands.

Iran says it killed ‘rioters’ in deadliest unrest in decades (AP) — Iran acknowledged for the first time Tuesday that its security forces shot and killed protesters across the country to put down demonstrations last month over the sharply spiking price of gasoline, the deadliest unrest to hit the country since the turmoil of the 1979 Islamic Revolution. A report by Iranian state television sought to portray those killed as “rioters” or foreign-backed insurgents who threatened military posts, oil tanks and the public. It acknowledged that the violence also killed passers-by, security forces and peaceful protesters without assigning blame. However, online videos of demonstrations purport to show security forces firing machine guns and rifles at crowds. Amnesty International believes the unrest beginning in mid-November and crackdown that followed killed at least 208 people. An Iranian judiciary official disputed the toll Tuesday as “sheer lies,” without offering any evidence to support his position. The demonstrations show the widespread economic discontent gripping Iran since May 2018, when President Donald Trump imposed crushing sanctions after unilaterally withdrawing the United States from the nuclear deal that Tehran struck with world powers. Trump himself, speaking to journalists before a NATO summit in London, claimed without evidence Iran has killed “thousands.” The demonstrations followed months of attacks across the Middle East that the U.S. blames on Tehran. Meanwhile, Iran has begun breaking the limits of the nuclear deal in hopes of pressuring Europe into finding a way for Tehran to sell its crude oil abroad despite the American sanctions. The state TV report alleged that some of those killed were “rioters who have attacked sensitive or military centers with firearms or knives or have taken hostages in some areas.” Some sought to access arsenals inside the police and military posts, the report said. In one case, the report said security forces confronted a separatist group armed with “semi-heavy weapons” in the city of Mahshahr in Iran’s southwestern Khuzestan province. The Arab population of the surrounding oil-rich province long has complained of discrimination by Iran’s central government, and insurgent groups have attacked oil pipelines there. Iran blamed both area separatists and the Islamic State group for an attack on a military parade in the region in September 2018 that killed at least 25 people.

Understand The OPCW Scandal In Seven Minutes - Caitlin Johnstone - One of the annoying things about continuing to write about the OPCW/Douma scandal in the near-total absence of mainstream media coverage is the fact that it’s difficult for a new reader to just jump in on this developing story without having followed it from the beginning. There are a lot of details to go over to introduce someone to the story, and if I repeat them every time I write an article on the subject I’m twelve paragraphs in before I get to the new developments, and by that time I’ve bored all the readers who didn’t need the introduction. I’m sure other alternative media figures commenting on this story have encountered the same problem. Fortunately for us, In The Now and journalist Dan Cohen have stepped up to the plate and put together a concise, easy-to-follow video on both Twitter and Facebook explaining the OPCW scandal in a way that enables anyone to familiarize themselves with the story in seven minutes. This article exists solely to draw attention to this excellent resource. Cohen has been really great about quickly getting concise, quality videos out to help people make sense of specific developing stories which the haze of western propaganda makes difficult to understand; his recent videos on the Bolivia coup and the Hong Kong protests were very helpful in the same way. He uses robust arguments and independently verifiable facts to clearly show that there’s much more to these stories than the mass media have been letting us know. I’ll definitely be linking to this video in my articles going forward to enable anyone who hasn’t been following the OPCW scandal closely to quickly familiarize themselves with the story. The more of these lucid, accessible resources we’ve got circulating within the information ecosystem, the better.

‘When they come, they will kill you’: Ethnic cleansing is already a reality in Turkey’s Syrian safe zone - The brutal killings were not hidden, nor were they meant to be. From the very beginning of Turkey’s invasion of northern Syria, the fighters it sent across the border to carry out the mission have proudly documented their own war crimes. Videos posted online by soldiers of the Turkish-backed Syrian National Army (SNA) – showing summary executions, mutilation of corpses, threats against Kurds and widespread looting – have struck terror into the tens of thousands who find themselves in the path of the offensive.The ethnic dimension to many of the crimes has resulted in a mass exodus of Kurds and religious minorities from these once diverse borderlands. Now, stranded in displacement camps across northeast Syria and in neighbouring Iraq, they fear they may never be able to return home. And that, they believe, was precisely the point.   “No one can go back there now, it’s impossible,” says Muhammad Amin, 37, a Kurdish man who fled with his family from the city of Ras al-Ayn in the first days of the Turkish-led operation. “We’ve seen the videos,” he tells The Independent at a camp near the Syrian town of Tal Tamr. “They are shooting Kurdish people where they find them.” Turkey launches offensive into Syria Show all 25 The same story is being told by countless others like Amin, in the camps and temporary shelters that have sprung up in the past two months. Taken together, they paint a picture of a dramatic demographic change. Turkey launched a long-planned incursion into Syria on 9 October to establish what it described as a “safe zone” some 20 miles deep and 300 miles wide along the border. Recep Tayyip Erdogan, the Turkish president, claimed the offensive was aimed at removing the Kurdish-led Syrian Democratic Forces (SDF) – a group his country classifies as a terror organisation for its links to Kurdish separatists inside Turkey.

Turkey Declares Ownership On Half Of Eastern Mediterranean Waters -  A Turkish diplomat has revealed a map which delineates waters in the Mediterranean claimed by Turkey, amid an ongoing months-long standoff with Cyprus and Greece over Turkish oil and gas exploration and drilling inside Cyprus' Exclusive Economic Zone (EEZ). "After signing deals with its own puppet state in occupied northern Cyprus and with the pseudo-government in Libya's Tripoli, Turkey declares that it owns half of the eastern Mediterranean," Aron Lund, an analyst at The Century Foundation, observes of the newly published map. New map outlining Turkey's claimed continental shelf and the borders of its Exclusive Economic Zone (EEZ), via Hurriyet Daily. Meanwhile the entire eastern side of Cyprus is claimed by the internationally disputed "Turkish Republic of Northern Cyprus."And Turkey's Hurriyet Daily explains: "With the chart, Çağatay Erciyes showed the outer boundaries of Turkey's continental shelf and EEZ, designated in a 2011 agreement between Turkey and the Turkish Republic of Northern Cyprus (TRNC), the median line between Egypt and Turkey's mainlands and a recent memorandum with Libya."Over the past year Turkey has sent both oil and gas exploration ships, as well as military transport vessels, into Cypriot waters in the East Mediterranean related to expanded claims based on the Turkish occupation of northern Cyprus (since 1974), earning the condemnation of both Nicosia and top EU officials, who have defended EU-Cyprus' interpretation of the conflict.

US carries out fresh massacre in Afghanistan, killing entire family with drone strike - A US drone strike in Afghanistan last Friday wiped out an entire family after they were leaving a clinic, including a woman who had just given birth to a child. Gul Marjan Kochi, the head of the local council in the Alisher district of Khost province, where the strike took place, told Pajhwok Afghan News that the attack was launched against a carload of civilians who were heading home from a local hospital after the birth of the baby. He said that three women, two men and the newborn were all slaughtered in the attack. The account appeared to have been confirmed by the director of the Al-Madina clinic whom Pajhwok reported saying that the family had brought in a pregnant woman Friday night and had been discharged at around 11:30 pm after the birth. He said that among those who were present was a nine-year-old girl. Only later did he learn that they had all been killed. Another account from Afghan officials said that the 25-year-old woman had been brought to the clinic because her health had deteriorated after giving birth at home, and that the baby had not been in the car. The horrific war crime came just a day after US President Donald Trump flew into the devastated country for a Thanksgiving photo-op with American troops, where he boasted about how much money his administration has funneled to the major military contractors and told the assembled military personnel at Bagram air base that “Victory on the battlefield will always belong to you, the American warrior.”   The US president was compelled to fly into Afghanistan under a veil of total secrecy, in an unmarked plane fitted with a port-a-potty, with its lights out and windows shut and all cellphones dead. While there, he was surrounded by a convoy of heavily armed troops even while moving through the most fortified US base in the country.