first quarter oil prices rise most in 10 years; first quarter rig count drops most in 3 years

oil prices rose for a 4th straight week despite a Trump attempt to drive them lower this past week and thus ended March with the largest quarterly price increase since 2009...after rising just 0.4% to $59.04 a barrel last week, prices for US crude to be delivered in May drifted lower on Monday, as concerns about a global economic slowdown more than offset the prospect of tighter crude supply, with prices finishing 22 cents lower at $58.82 a barrel...but oil prices rose nearly 2 percent on Tuesday as traders turned their attention to geopolitical factors, including U.S. sanctions on Iran and Venezuela, that were tightening global supplies, with US crude ending $1.12 higher at $59.94 a barrel...an early Wednesday rally to $60.22 was cut short, however, when the EIA surprised traders by reporting ​an increase in US crude supplies and record production, with May WTI oil falling 53 cents for the day and settling at $59.41 per barrel...oil prices then fell more than 2% to $58.20 on Thursday morning, after Trump tweeted it's 'very important that OPEC increase the flow of oil' because prices are too high, but then recovered from those losses and subsequently rallied above pre-tweet levels before slipping back to settle 11 cents lower at $59.30 a barrel..​.​.momentum from the Trump tweet recovery carried into Friday, as oil prices opened 23 cents higher and then rallied to as high as $60.73 a barrel after weekly data from Baker Hughes showed the number of oil rigs fell by eight and went on to close 84 cents, or 1.4% higher at $60.14 a barrel, the highest closing price since Nov. 9th and a 32% increase ​over the first quarter, the​ ​biggest quarterly rise in a decade...

with all the media headlines touting that largest quarterly oil price rise since 2009, it seems a little perspective is in order, so we'll include a graph that shows daily US oil prices over the last six months...

the above graph is a Saturday afternoon screenshot of the interactive US oil price graph at Daily FX, an online platform that provides trading news, charts, indicators and analysis of the markets...each bar on the above graph represents oil prices for a day of oil trading between October 1st, 2018 and Friday of this week, wherein the green bars represent the days when the price of oil went up, and red bars represent the days when the price of oil went down...for green bars, the starting oil price at the beginning of the day is at the bottom of the bar and the price at the end of the day is at the top of the bar, while for red or down days, the starting price is at the top of the bar and the price at the end of the day is at the bottom of the bar...also slightly visible on this "candlestick" style graph are the faint grey "wicks" above and below each bar, to indicate trading prices during the day that were above or below the opening to closing price range for that day...so while you can see that prices have rallied steadily since the first of the year, and are now up 32% for the 1st quarter, they are still more than 21% lower than the 4 year high of $76.41 a barrel that they closed at on October 3rd 2018, less than 6 months ago...put another way, while prices are up $18 from their Christmas​ eve​ low, they're still $16 below where they were in early October (​and ​note that since the above graph includes off market and after hours trading, the prices shown above do not correspond exactly to the NYMEX exchange prices we have been quoting..  

while oil prices were pushing higher, natural gas prices fell quite steadily on progressively warmer April forecasts following a gain of just two-tenths of a cent on Monday...quoting natural gas for April delivery at the beginning of the week, prices for that contract fell 4​.2​ cents ​over the next two days ​before expiring at $2.713 per mmBTU on Wednesday...then natural gas prices for May delivery, which had ended last week priced at $2.767 per mmBTU and had fallen 4.8 cents by Wednesday's close, ​​fell another seven-tenths of a cent on Thursday and 5 cents more on Friday to end the week down 10.5 cents at $2.662 per mmBTU, pressured by warm weather and the report of a weak supply draw...

the natural gas storage report for the week ending March 22nd from the EIA ​showed that the quantity of natural gas held in storage in the US fell by 36 billion cubic feet to 1,107 billion cubic feet over the week, which meant our gas supplies ended the period 285 billion cubic feet, or 20.5% below the 1,392 billion cubic feet that were in storage on March 23rd of last year, and 551 billion cubic feet, or 33.2% below the five-year average of 1,658 billion cubic feet of natural gas that have typically remained in storage after three full weeks of March....this week's 36 billion cubic feet withdrawal from US natural gas supplies was slightly more than the 33 billion cubic feet withdrawal that analysts surveyed by S&P Global Platts had expected, but it was less than the average of 41 billion cubic feet of natural gas that have been withdrawn from US gas storage during the same March week over the last 5 years.... 

with the past week's temperatures generally above normal over the lower 48 states, and with Cheniere's Sabine Pass LNG export faculty partly down for maintenance, it appears that this will have been the last storage report of this heating season to show a draw on supplies, as most heating needs in the moderate temperatures of April should be able to be met out of current production...analysts at S&P Global Platts are calling for an injection of 16 billion cubic feet of natural gas into storage for the week ending March 29th and then a 32 billion cubic feet injection for the following week...the national weather service's 8 to 14 day forecast ​on Saturday ​had indicated a high probability of much above normal temperatures for every place east of the Great Plains, and a better than average chance of above normal temperatures almost everywhere else, so the chances of a late winter cold spell affecting supplies nationally now seem slim...that does not preclude some areas still seeing natural gas shortfalls, though...as Platts points out, the 62 billion cubic feet left in storage in the Rockies region is almost one-quarter lower than at any other time in EIA's historical data, and further draws were expected on nearly empty regional storage fields this weekend as a cold front sweeps the region...but from after that until next fall, we should be seeing additions to storage, so the immediacy we've associated with these reports over the past several months should now be by the boards...

The Latest US Oil Supply and Disposition Data from the EIA

this week's US oil data from the US Energy Information Administration, reporting on the week ending March 22nd, indicated modest decreases in both our crude oil imports and our oil exports, but an addition to our commercial supplies of crude, as oil that was unaccounted shifted from the demand side of the balance sheet last week to the supply side this week...our imports of crude oil fell by an average of 392,000 barrels per day to an average of 6,540,000 barrels per day, after rising by an average of 186,000 barrels per day the prior week, while our exports of crude oil fell by an average of 506,000 barrels per day to 2,886,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,654,000 barrels of per day during the week ending March 22nd, 114,000 more barrels per day than the net of our imports minus exports during the prior week...over the same period, field production of crude oil from US wells was reported to be unchanged from last week at 12,100,000 barrels per day, so 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 using 15,831,000 barrels of crude per day during the week ending March 22nd, 367,000 fewer barrels per day than the amount of oil they used during the prior week, while over the same period 400,000 barrels of oil per day were reportedly being added to the oil that's in storage in the US.....therefore, this week's crude oil figures from the EIA would seem to indicate that our total working supply of oil from net imports and from oilfield production was 477,000 fewer barrels per day than what was added to storage plus the oil refineries reported they used during the week...to account for that disparity between the supply of oil and the disposition of it, the EIA inserted a (+477,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that is labeled in their footnotes as "unaccounted for crude oil"....since last week's unaccounted oil was at -812,000 barrels per day, that means 1,289,000 million barrels of oil per day miraculously appeared on the US oil balance sheet from one week to the next, meaning that any comparison of figures from this week to last week is pretty much meaningless.. (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 rose to an average of 6,805,000 barrels per day last week, still 11.7% less than the 7,703,000 barrel per day average that we were importing over the same four-week period last year.... the 400,000 barrel per day increase in our total crude inventories was all added to our commercially available stocks of crude oil, as the oil stored in our Strategic Petroleum Reserve remained unchanged...this week's crude oil production was reported to be unchanged at 12,100,000 barrels per day because the rounded estimate for output from wells in the lower 48 states was unchanged at 11,600,000 barrels per day, while a ​5,000 barrel per day increase in Alaska's oil production to 48​9,000 barrels per day was not enough to make a difference in the rounded national total...last year's US crude oil production for the week ending March 23rd was at 10,433,000 barrels per day, so this reporting week's rounded oil production figure was 16.0% above that of a year ago, and 43.6% 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 86.6% of their capacity in using 15,831,000 barrels of crude per day during the week ending March 22nd, down from 88.9% of capacity the prior week, and quite a bit lower than before Venezuelan imports of heavy crude that Gulf Coast refineries are optimized to use were cut off....​similarly, the 15,831,000 barrels per day of oil that were refined this week were down by 5.7% from the 16,795,000 barrels of crude per day that were being processed during the week ending March 23rd, 2018, when US refineries were operating at 92.3% of capacity... 

with the decrease in the amount of oil being refined, the gasoline output from our refineries was also lower, falling by 268,000 barrels per day to 9,657,000 barrels per day during the week ending March 22nd, after our refineries' gasoline output had increased by 190,000 barrels per day the prior week....with that decrease in the week's gasoline output, this week's gasoline production was 6.3% less than the 10,305,000 barrels of gasoline that were being produced daily during the same week last year....​at the same time, our refineries' production of distillate fuels (diesel fuel and heat oil) ​inched up​ by 2,000 barrels per day to 4,925,000 barrels per day, after that output had increased by 67,000 barrels per day the prior week...but after this week's small increase, the week's distillates production was 1.7% above the 4,844,000 barrels of distillates per day that were being produced during the week ending March 23rd, 2018.... 

with the decrease in our gasoline production, the supply of gasoline left in storage at the end of the week fell by 2,883,000 barrels to 238,620,000 barrels over the week to March 22nd, after supplies had fallen by 4,587,000 barrels over the prior week....the draw from our gasoline supplies was smaller this week than last because the amount of gasoline supplied to US markets decreased by 285,000 barrels per day to 9,124,000 barrels per day, after increasing by 269,000 barrels per day the prior week, while our exports of gasoline rose by 34,000 barrels per day to 693,000 barrels per day, and while our imports of gasoline fell by 105,000 barrels per day to 688,000 barrels per day...after having reached a record high nine weeks ago, our gasoline inventories are now fractionally lower than last March 23rd's level of 239,593,000 barrels, even as they remain roughly 2% above the five year average of our gasoline supplies at this time of the year...

with little change in our distillates production, our supplies of distillate fuels fell for the 19th time in twenty-seven weeks, decreasing by 2,075,000 barrels to 130,167,000 barrels during the week ending March 22nd, after our distillates supplies had decreased by 4,127,000 barrels over the prior week...the draw on our distillates supplies was smaller this week because the amount of distillates supplied to US markets, a proxy for our domestic demand, fell by 490,000 barrels per day to 4,216,000 barrels per day, and because our imports of distillates rose by 93,000 barrels per day to 195,000 barrels per day, while our exports of distillates rose by 291,000 barrels per day to 1,200,000 barrels per day...but even with this week's inventory decrease, our distillate supplies ended the week 1.0% above the 128,954,000 barrels that we had stored on March 23rd, 2018, while falling to roughly 5% below the five year average of distillates stocks for this time of the year...

finally, with the sudden reappearance of some of the crude that had gone missing for two weeks, our commercial supplies of crude oil in storage increased for the seventh time in 10 weeks, rising by 2,800,000 barrels over the week, from 439,483,000 barrels on March 15th to 442,283,000 barrels on March 22nd...however, with a total draw of over 13.4 million barrels in the 2 previous weeks, our crude oil inventories were still roughly 2% below the recent five-year average of crude oil supplies for this time of year, while remaining around 30% above the prior 5 year (2009 - 2013) average of crude oil stocks after the third full week of March, with the disparity between those figures arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...since our crude oil inventories had mostly been rising since this past Fall, after generally falling until then through most of the prior year and a half, our oil supplies as of March 22nd were still 2.9% above the 429,949,000 barrels of oil we had stored on March 23rd of 2018, but ​at the same time, still 17.2% below the 533,977,000 barrels of oil that we had in storage on March 24th of 2017, and 12.2% below the 503,816,000 barrels of oil we had in storage on March 25th of 2016...        

This Week's Rig Count

US drilling rig activity fell for the sixth week in a row and is now down by more that 7% so far this year, which is the largest drilling pullback in any quarter since the first quarter of 2016....Baker Hughes reported that the total count of rotary rigs running in the US fell by 10 rig to 1016 rigs over the week ending March 29th, which was still 13 more rigs than the 993 rigs that were in use as of the March 30th report of 2018, but down from the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC announced their attempt to flood the global oil market...  

the count of rigs drilling for oil fell by 8 rigs to 816 rigs this week, which was still 19 more oil rigs than were running a year ago, while it was well below the recent high of 1609 rigs that were drilling for oil on October 10th, 2014...at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 2 rigs to 190 natural gas rigs, which was 4 rigs less than the 194 natural gas rigs that were drilling a year ago, and way down from the modern era high of 1,606 natural gas targeting rigs that were deployed on August 29th, 2008...

drilling activity offshore in the Gulf of Mexico increased by 3 rigs to 23 rigs this week, which was more than double the 11 rigs active in the Gulf a year ago, which was the lowest on record at that time...at the same time, a drilling platform set up on an inland body of water in southern Louisiana was shut down, leaving just two of those so-called "inland water rigs" ​left ​active, in contrast to the 4 inland waters rigs active in the state a year earlier...

the count of active horizontal drilling rigs decreased by 9 rigs to 891 horizontal rigs this week, which was still 21 more horizontal rigs active than the 870 horizontal rigs that were in use in the US on March 30th of last year, but was down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014.....at the same time, the vertical rig count decreased by 2 rigs to 51 vertical rigs this week, which was also down by 12 rigs from the 63 vertical rigs that were in use during the same week of last year....on the other hand, the directional rig count increased by 1 rig to 64 directional rigs this week, which was also up by 4 rigs from the 64 directional rigs that were operating on March 30th of 2018... 

the details on this week's changes in drilling activity by state and by shale basin are included in our screenshot below of that part of the rig count summary pdf from Baker Hughes that shows those changes...the first table below shows weekly and year over year rig count changes for the major ​oil & gas ​producing states, and the second table shows the weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of March 29th, the second column shows the change in the number of working rigs between last week's count (March 22nd) and this week's (March 29th) count, the third column shows last week's March 22nd active rig count, the 4th column shows the change between the number of rigs running on Friday and those running before the equivalent weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 30th of March, 2018...  

for the second week in a row, half of this week's rig decrease was due to rigs being shut down in the Permian of western Texas and New Mexico, where a total of 4,004 uncompleted wells could be reducing their incentive to drill more...​this week, ​all 5 of those Permian rig reductions were pulled out of Texas Oil District 8, which would correspond to the core Permian Delaware, while Permian rigs in New Mexico and the Midland basin were unchanged...also in Texas, another 5 oil rigs were pulled out of the Eagle Ford​ in the southeast​, where a 9th natural gas rig was concurrently started up...Texas drillers managed to hold the statewide reductions to 6 rigs primarily through the addition of 3 rigs in the panhandle Texas Oil District 10, two of which were the Granite Wash ​basin ​additions you see above, with one of those targeting natural gas...the once highly touted STACK/SCOOP play in the Cana Woodford of Oklahoma also saw a 3 rig reduction this week and is now down by 14 rigs from a year ago, while the old Bakken shale in the Williston basin saw three rigs added and is now pulling ahead of its year ago totals...despite the 2 gas additions we've cited, natural gas rigs ended down two because one of the 3 natural gas rigs that had been drilling in the Arkoma Woodford of Oklahoma was replaced by an oil rig, and 3 natural gas rigs in basins not tracked separately by Baker Hughes were concurrently shut down...also note that other than the usual major producing states shown above, Virginia also saw a ​directional ​drilling rig start up ​in Campbell County ​this week, in only the second time there was drilling activity in the state since 2014...

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Risberg Pipeline crews begin clearing land  — Work has begun on the Risberg Pipeline as crews have started clearing land in Pennsylvania and Ohio. The $86 million natural gas pipeline expansion project includes a 28-mile expansion of a pipeline that now ends in Meadville, Pennsylvania. New, 12-inch pipe will stretch in a northwestern direction through Pennsylvania before entering Ohio in Conneaut near Baldwin Road. Once in Ohio, the pipe will extend another 12 miles through stretches of Conneaut and Kingsville Township before reaching its end in North Kingsville near the CSX Railway crossing on Route 193."The project in earnest is still in Pennsylvania," Dennis Holbrook, spokesperson for RH energytrans, said.There also is some work happening in Ohio at the meter station in North Kingsville, where the pipeline will end. The project currently employs more than 170 people, and Holbrook expects that number to rise above 200 before the project finishes.  RH energytrans has set up a camp in Kingsville, just north of Interstate 90, he said. The camp will act as a staging area, and also has temporary office facilities and portable restrooms."The biggest challenge right now is getting cooperation from the weather," Holbrook said. If the weather cooperates, he said, the project should be completed sometime in the early summer.

Work Underway at Injection Well Idled by Quake - businessjournaldaily.com  – Work is underway at a Class II injection well site in Coitsville Township that was drilled, but then idled after a 4.0 magnitude earthquake rocked the Mahoning Valley more than seven years ago.On Friday morning, backhoes and construction workers were busy at the well site along McCartney Road, preparing the area for further development.“The Northstar Collins No. 6 well is listed as drilled, and the old permit has expired,” said Adam Schroeder, spokesman for the Ohio Department of Natural Resources Oil and Gas Division. “We’re having ongoing conversations with the owners and are awaiting an application for a new permit, if that’s the direction they want to go with the property.”Schroeder said it’s likely that Bobcat Energy will apply for a permit to use the site for “oil and gas activity” once it is prepared.When contacted by a reporter, a representative from Bobcat Energy hung up the phone.The Collins No. 6 well was drilled but never activated. That’s because an injection well in Youngstown, then owned by now-defunct D&L Energy, was tied to a series of earthquakes that shook the region beginning in March 2011. On New Year’s Eve of that year, a magnitude 4.0 quake that officials say was triggered by the Youngstown well shook the Mahoning Valley.Gov. John Kasich ordered the well shut down and declared a moratorium on further injection well activity within a five-mile radius of the Youngstown well. That moratorium has since been lifted. The Coitsville well, once owned by D&L but now owned by Canfield-based Bobcat, was drilled in 2011 but never activated, according to the Ohio Department of Natural Resources.

ODNR Issues 2 Well Permits in Columbiana County - The Ohio Department of Natural Resources last week awarded five new permits for horizontal wells in the Utica shale – two of which are targeted for Columbiana County. ODNR approved permits March 18 for Houston-based Hilcorp Energy Co. to drill two horizontal wells at the Auer well pad in Elk Run Township, according to records. There were no new permits issued for Mahoning and Trumbull counties in the northern tier of the Utica shale. EAP Ohio LLC secured three permits to drill new wells in Jefferson County, in the southeastern tier of the play, ODNR reported. As of March 23, the state had issued 3,042 permits across Ohio’s Utica shale. Of these, 2,554 wells have been drilled and 2,167 of these wells are in production. ODNR reported there were 15 rigs operating in the Utica shale during the week ended March 23. There were no new permits issued in the Utica for Lawrence or Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.

Natural gas industry has generated $45.8 million in taxes in eastern Ohio - Over the past nine years, the oil and gas industry has brought jobs, better roads and increased tax revenues to counties and school districts throughout eastern Ohio. That was the message that Mike Chadsey, director of public relations for the Ohio Oil and Gas Association, brought to members of the New Philadelphia Rotary on Tuesday. After he made his presentation, he stopped at The Times-Reporter office to discuss issues related to the industry. “My message was, as Tuscarawas County, you are not on the outside looking in, regarding shale development. There is much going on locally that is positive and directly connected to the oil and gas industry.” Between 2010 and 2015, the industry has paid $45.8 million in taxes in six Ohio counties — Belmont, Carroll, Guernsey, Harrison, Monroe and Noble, he said. During that time, it paid $14 million in property taxes in Carroll County and $11 million in Harrison County. In addition, the industry has spent $302.6 million to improve 639 miles of highway in eastern Ohio. That includes $44.7 million in Carroll County for 99.33 miles of roads and $31.4 million in Harrison County for 54.75 miles of roads. Energy companies have invested $8.1 billion on five pipeline projects. Kinder Morgan spent $500 million to build the 215-mile-long Utopia Pipeline and Energy Transfer spent $4.3 billion to build the 570-mile-long Rover Pipeline. Both pipelines run through Harrison, Carroll and Tuscarawas counties.

Power sector pushed domestic U.S. natural gas consumption to new record in 2018 - U.S. natural gas consumption increased by 10% in 2018, reaching a record high of 82.1 billion cubic feet per day (Bcf/d), according to EIA’s recently released Natural Gas Monthly. Domestic consumption of natural gas increased across all sectors in 2018, led by a 3.8 Bcf/d increase in the electric power sector caused by a combination of recent natural gas-fired electric capacity additions and weather-related factors. The electric power sector consumed 29.1 Bcf/d in 2018, or 35% of total domestic U.S. natural gas consumption. Natural gas continued to make up the highest share of utility-scale electricity generation after first surpassing coal-fired generation on an annual basis in 2016. Specifically, natural gas accounted for one-third (35%) of utility-scale electricity generation in 2018, followed by coal (27%), nuclear (19%), and hydropower (7%). New natural gas generator capacity additions continued to displace coal-fired power plants and other less efficient sources of electricity. In 2018, about 14.5 gigawatts (GW) of net natural gas capacity were added, while almost 13 GW of coal-fired capacity were retired. Annual fluctuations in natural gas consumption are largely driven by weather. During the winter, U.S. natural gas consumption levels are at their highest because natural gas is the predominant source of space heating in the residential and commercial sectors. As natural gas makes up a larger share of electricity generation, natural gas consumption increases both in the summer—when air conditioning demand is high—and in the winter, especially in places such as the South where electric space heating is more common. In 2018, the United States experienced several periods of extremely warm and cold weather, contributing to record-high natural gas consumption. Much of the Lower 48 states experienced prolonged periods of colder-than-normal temperatures in January 2018, and record-high average monthly temperatures during summer 2018 increased natural gas use in the electric power sector. In July 2018, natural gas consumption in the electric power sector set an all-time record of 39.9 Bcf/d, followed by the second-highest recorded level in August 2018 of 38.6 Bcf/d.

IHS Markit Study: Ohio Valley region will supply nearly half of USA’s natural gas by 2040 - The Marcellus and Utica shale formations are among the largest sources of natural gas and NGLs in the world, and their production will increase exponentially in the next two decades, according to an IHS Markit study released at the World Petrochemical Conference in San Antonio, Texas. Natural gas from the tri-state region of Ohio, Pennsylvania and West Virginia will supply 45% of the nation’s production by 2040, up from 31% this year, according to the study. The production of the highly lucrative NGLs ethane, propane, and butane is expected to nearly double in the same period, accounting for 19% of the nation’s total by 2040, up from 14% in 2018, the study shows. The study, ‘Estimated Logistics Benefits of the Shale Crescent USA Region Versus the U.S. Gulf Coast for Natural Gas and LPG’ examines both production trends and the economics of petrochemical production in the region. “Research continues to drive home the myriad economic advantages for manufacturers in the Shale Crescent region when compared to other, more traditionally accepted energy and chemical hubs,” said Wally Kandel, spokesperson for Shale Crescent USA. “Investors are catching on that the Marcellus and Utica Shale formations offer unprecedented benefits. There are few other places in the world, if any, where the supply, manufacturing facilities and end users are all in close proximity.” The IHS study, commissioned by Shale Crescent USA and JobsOhio, quantifies for the first time the anticipated development and production growth emerging from one of the world’s most prolific sources of natural gas and natural gas liquids. In 2018, an IHS study evaluated the prospects for a world-scale ethylene and polyethylene plant based on ethane feedstock in the Shale Crescent region. The 2019 study says the region “will play a key role in satisfying America’s increasing reliance on natural gas, as well as keeping energy costs moderate. Favourable production economics place the Marcellus and Utica shale plays amongst the most cost competitive in the nation.”

Marcellus-Utica turn US energy picture upside down — The Marcellus Shale in Pennsylvania and West Virginia and the Utica Shale in eastern Ohio have transformed the U.S. energy picture, an industry expert said Thursday. That assessment came from product manager Colette Breshears of Genscape, a speaker at the Sixth Annual Utica Midstream conference sponsored by the Canton Regional Chamber of Commerce and Shale Directories.  In 2018-2019, total U.S. natural gas production will reach roughly 97 Bcf/d – with the Marcellus and Utica together producing about 33% of that total, Breshears said. The Rockies are producing 13%, the Permian Basin 12% and the Mid-Continent 11%, she noted. “Today there’s just a huge surge of gas coming out of the Northeast,” according to Breshears. That natural gas is being increasingly being shipped to markets on the Gulf Coast, which has required major changes to the country’s energy infrastructure, she said. More pipelines from the Appalachian Basin to markets and additional infrastructure are needed, Breshears told her audience. She cited roughly 20 pipeline projects in development, and more announcements are expected soon, she added. Utica production has grown from 0.2 Bcf/d in 2009, to 7.3 Bcf/d in 2018, she said.   If prices hold, there is enough natural gas in the Marcellus and Utica to drill for another 20 to 30 years, Breshears said. As of March 9, Ohio has permitted 3,094 Utica horizontal wells, of which 2,586 have been drilled, said Rick Simmers, chief of the Ohio Division of Oil and Gas Resources Management. He said Ohio lists 2,163 wells as being capable of production, but that number of wells is actually closer to 1,700 wells. Ohio has 15 rigs at work in the Utica, compared to 60 rigs at the peak of production in 2015. Drillers in Ohio have become more efficient, Simmers said. In 2012-2103, it took drillers 35 days to drill a 6,000-foot vertical well with a 4,000-foot lateral, he said. Today, drillers in 14 days can drill a 10,000-foot-deep well with a 12,000-foot lateral. Ohio is reworking its rules to allow drillers to determine the spacing between wells on a pad, after a micro-seismic review indicated significant oil and gas was being left behind in drilling, Simmers said. Those rule revisions will likely be completed by July

Shell Sees New Role for Former Steel Region: Plastics — The expansive Royal Dutch Shell chemical processing plant under construction on a big bend of the Ohio River in western Pennsylvania is one of the largest and most expensive projects ever to be built along the tributary. It’s not only the plant’s mammoth scale that has attracted attention. Just as significant is the project’s location: 30 miles northwest of Pittsburgh, on a river that for four decades has been a corridor of Rust Belt industrial ruin.That era is over, Shell executives say. The sentiment is shared by the region’s tradespeople, business executives and political leaders, who are eager to strengthen the economies of towns along the river. For the first time in two generations, steel girders and worn tubing are not being dismantled along the banks of the upper Ohio and shipped away. Instead, new parts are being assembled by Bechtel, Shell’s primary contractor, into a world-scale, state-of-the-art chemical processor to convert liquid natural gas into polyethylene, a common plastic. The 386-acre plant replaces a long-shuttered zinc smelter. It is among the most expensive industrial production projects ever built along the 981-mile Ohio River and the first sizable new factory on the Ohio since North American Stainless opened its metal manufacturing operation in 1992, downriver in Ghent, Ky.    Shell never discloses the cost of its projects, but an economic analysis prepared several years ago for Shell by Robert Morris University and submitted to the state projected that the cost would be $6 billion. Shell ended its polyethylene production in 2005 in the face of increasing costs and growing competition, but it began evaluating a return in 2012. At the time, the colossal dimensions of the natural gas reserves bound up in shale formations deep beneath the rural upper Ohio River counties in Ohio, Pennsylvania and West Virginia were becoming clearer, and technology was making it easier to tap those reserves.In 2005, the first wells were drilled in the region. Since then, some 17,000 more gas wells have been drilled and hydraulically fractured under high pressure to release a torrent of “dry” methane for electrical generation and heating and “wet” gas liquids like ethane, pentane and propane. During the same period, billions of dollars were spent on gas separation plants, pipelines, pumping stations, gas-fired electrical generating stations and shipping terminals. The investments turned the upper Ohio River Valley into the largest natural gas field in the United States. The region produced nine trillion cubic feet of fuel last year, a third of the national production.

Meeting set on proposed shale gas well at U.S. Steel mill in Mon Valley - The state Department of Environmental Protection will hold a public meeting this week on a controversial proposal that eventually could result in a half-dozen Marcellus Shale gas wells being drilled and fracked on U.S. Steel Corp.’s Edgar Thomson steel mill site in the Monongahela Valley. Lauren Fraley, spokeswoman for DEP’s southwest district, said in an email response to questions that the department has received approximately two dozen letters or postcards expressing opposition to the proposed project. At the meeting, scheduled from 6 to 8 p.m. Wednesday, DEP will present information and answer questions about the proposal to build the well pad and drill an initial shale gas well between Braddock Avenue and Turtle Creek, straddling the North Versailles-East Pittsburgh border.   The well-drilling operation, which could include as many as five additional wells, was proposed by Merrion Oil & Gas Corp., which has leased the land from U.S. Steel. New Mexico-based Merrion previously has said the well would be drilled vertically about 6,000 feet below the surface and then have extended laterals of 8,500 to 10,000 feet horizontally. The company, which is invited to Wednesday’s meeting, did not return phone calls seeking comment Friday. The shale gas well would be the first “unconventional” horizontal shale well drilled by the company, and the first well of any kind it has drilled in Pennsylvania. Merrion does have extensive experience drilling vertical, so-called “conventional” wells, in New Mexico, Colorado, Wyoming and Montana. Environmental advocates have opposed the project and called for public hearings, saying they have public health and safety concerns about such a drilling operation in a densely populated area already impacted by industrial emissions from steel making and coke making operations in the Mon Valley. Approximately 21,000 people live within a 2-mile radius of the proposed shale gas drilling site. 

New Risks Posed by 2100 psi Pressure on Mariner 2x Pipeline in Penna. - Pipeline opponents are raising new concerns about the safety of Energy Transfer/ Sunoco Logistics’ Mariner East 2x natural gas liquids line, which the company says will have a maximum operating pressure much higher than that of the Mariner East 1 and 2 lines.  The pressure on the Mariner East 2x had previously been reported in public documents as equal to the pressure of parallel Mariner East 2, which uses the same right-of-way. A pipeline’s “Maximum Allowable Operating Pressure,” or MAOP, is set by the Department of Transportation and, for safety reasons, is lower than what the design characteristics of the pipe can withstand.In permit applications filed in 2016 with the Pennsylvania Department of Environmental Protection, and with the Delaware River Basin Commission in 2015, Sunoco stated the MAOP for Mariner East 2 and 2x would be 1480 psig, or pounds per square inch gauge. But a footnote in recent reports filed with the Pennsylvania Department of Environmental Protection point to a much higher number: 2100 psig.  Clean Air Council attorney Alex Bomstein, who says he discovered the difference while analyzing Sunoco’s new horizontal directional drilling plans filed with DEP, said a risk assessment conducted of the pipeline project was based on a lower pressure. “Every risk assessment done on Mariner East has used the 1480 psig figure in calculating destructive potential, because that’s what Sunoco has always represented to the public and to regulators,” Bomstein said. Del-Chesco United for Pipeline Safety hired Quest Consultants to do a risk assessment on the line. Quest’s senior engineer Jeff Marx, who conducted the assessment, says the risks are greater with a higher pressure. “Something up in the 2100 psi range would be a significant increase and will increase the hazard because the release rate of material is largely driven by pressure,” Marx said. Sunoco spokeswoman Lisa Dillinger confirmed in an email that the maximum operating pressure of the Mariner East 2x is 2100, but insists that is not a change. In a review of public documents submitted to the PA-DEP as part of their permit applications in 2016 and to the Delaware River Basin Commission in 2015, StateImpact Pennsylvania could find no reference to the 16-inch Mariner East 2x line operating at 2100 psig. The only references are from the footnotes in recent drawings submitted to DEP as part of the revised construction plans involving horizontal directional drilling.

Property owners along Atlantic Sunrise gas pipeline get letters warning of possible liens -A fight over payment for work on the Atlantic Sunrise gas pipeline made its way to the mailboxes of Lancaster County residents who own land the pipeline crosses.Some local landowners along the Atlantic Sunrise gas pipeline are expressing surprise and concern about letters warning that liens might be placed on their properties.Several said they received certified letters in the last few days that were formal notice of intent to file liens against their property if Michigan-based MacAllister Machinery Co. Inc. does not receive timely payment of about $1.02 million it asserts it is owed by Welded Construction LP, which was the main contractor on the project.Jeff Kann of Conestoga said he never wanted the pipeline, which  crosses about half an acre of his pasture land, and was surprised and concerned to receive the letters.“They can come and take the pipe any day they want it,” he said.But, he added, he’s seeking advice because “I don’t think a mortgage company would refinance me with a lien against my property.”  The letters indicated the liens would be filed under the Mechanics’ Lien Law, which allows unpaid contractors, subcontractors and suppliers to recover payment for work done by filing liens against the owners of properties where “improvements” had been made.The pipeline crosses 250 properties across 37 miles in the western part of the county. It was not clear if all of those property owners received letters, because Harpst Ross Becker, an Ohio-based law firm that sent the letters, did not return phone and email messages Monday morning.The Adorers of the Blood of Christ  are Roman Catholic nuns near Columbia who unsuccessfully sued to stop the pipeline crossing their property. Dwight Yoder, a Lititz attorney representing them, confirmed Monday that they had received the letters warning of liens.

Grid steps up pressure to get state approval of undersea pipeline - National Grid will begin notifying the dozens of midsize companies that apply for new natural-gas service that it won’t be able to supply them with firm gas service if a new undersea pipeline fails to win state approval, a company official said. It's the latest move by the company to highlight its need for a supply project that would increase local gas capacity by 14 percent, easing demand constraints, National Grid says. Con Edison has issued similar moratorium alerts. The latest letters this week will include a footnote that tells customers their future service is "contingent on the successful and timely approval and permitting" of the Northeast Supply Enhancement Project, a $1 billion pipeline to bring an additional 400 million cubic feet of natural gas per day to the region, connecting to existing infrastructure in the Rockaways, the company official said Tuesday. National Grid announced in February that it had put 35 large customers on notice about a potential moratorium on new gas service, informing them of its inability to supply “firm” gas service to planned projects such as the redevelopment of Belmont Park. The new notifications to midsize customers — those with businesses of around 15,000 square feet — is the latest move by the company to highlight the need for the new pipeline.

Containership spills oil in New York -  A containership has reportedly leaked fuel oil into the Arthur Kill waterway near Staten Island, N.Y., the U.S. Coast Guard said. The Coast Guard said it is working alongside partner agencies to respond to the spill, which occurred while the vessel was moored at the Global Marine New York Container Terminal on Thursday afternoon. The amount of fuel spilled is currently unknown, and the cause of the spill is under investigation, the Coast Guard said. A Unified Command has been established on scene to coordinate cleanup efforts. Containment boom has been placed around the vessel and there are multiple oil spill response vessels actively skimming. The vessel has activated its vessel response plan and engaged commercial oil spill removal organizations. The Captain of the Port has established a safety zone on the Arthur Kill waterway from the Goethals Bridge to Shooters Island. “The Marine Transportation System in this area is vital to the movement of commercial goods and petroleum cargoes throughout the Port of New York/New Jersey,” said Capt. Jason Tama, Captain of the Port of New York and New Jersey. “Our priorities are to mitigate the risk of pollution and re-open the waterway as quickly as possible.” Coast Guard Sector New York Vessel Traffic Service is monitoring all marine traffic in the area. An Coast Guard helicopter aircrew conducted an overflight to assess the situation. Members of the New York Police Department Aviation also responded to the incident.

Briefing: Atlantic Coast Pipeline – Risk Upon Risk - The Atlantic Coast Pipeline (ACP), a proposed fracked gas pipeline owned by Dominion Energy, Duke Energy, and Southern Company, faces some of the stiffest community and environmental opposition in the country today, comparable to that faced by TransCanada’s ill-fated Keystone XL project. Seventeen months after the project was granted certification by the Federal Energy Regulatory Commission, construction has barely progressed due to this opposition and other sources of risk. The ACP, if completed, would be a 600-mile, 42-inch-diameter pipeline carrying fracked gas from the Appalachian Basin in West Virginia through Virginia to North Carolina. First announced in 2014, the project is two years behind schedule and substantially over-budget. The latest update from Duke Energy estimates the project cost at between $7 to $7.8 billion – 37% to 53% higher than the original estimate of$5.1 billion – with the latest date for full operation now pushed back to 2021. The ACP is facing a triple threat of challenges that combine to present serious obstacles for the project to reach completion:

• Extensive legal and regulatory challenges that are delaying construction and raising costs, which may lead to cancelation;
• Fundamental challenges to its financial viability in the face of lack of growth in domestic demand for methane gas and increased affordability of renewable energy options; and
• The Pipeline Compliance Surveillance Initiative, an unprecedented citizen initiative positioned to ensure strict compliance with environmental laws and regulations, even in remote locations, if construction proceeds.

These challenges and the accompanying risk are likely to further delay construction and raise the project’s price tag even higher. If completed, state utility regulators in North Carolina and Virginia are unlikely to justify passing the full cost of methane gas transportation contracts onto ratepayers. It would be prudent for investors in Dominion, Duke, and Southern to question whether pursuing the ACP further is a good use of capital. As the transition to clean energy gathers pace, the risks and growing costs of this major methane gas pipeline project look increasingly unwise to ratepayers, regulators and investors alike. Download the full briefing here.

ACP builders reject claim pipeline project is dead — The Sierra Club has issued a statement painting a picture of and end for the Atlantic Coast Pipeline, but builders of the natural gas highway and one industry observer reject that notion. Doug Jackson, a spokesman for the environmental group, sent out an email, which was received Tuesday by The Robesonian, in which the Sierra Club stated Duke Energy CEO Lynn Good is considering a “Plan B” for the pipeline. The email cites a recent Bloomberg article for which Good was interviewed and in which Good “conceded that because ‘Atlantic Coast pipeline was sized and designed with a time frame,’ the energy giant may need to move on to another project.” The 600-mile pipeline that would carry fracked natural gas from West Virginia to a point near Pembroke has been besieged by a string of legal challenges that has forced work on it to stop. “Local activists and communities along its route have opposed the project from the beginning, and recent court decisions, combined with a negative outlook on the economics of fracked gas, have cast doubt on the fate of the pipeline,” Jackson’s email reads in part. Sierra Club Beyond Dirty Fuels Campaign Director Kelly Martin issued a statement in which she says Duke Energy is seeing that it cannot defeat the grassroots organizations that have stepped forward to oppose the ACP and an economic environment that favors clean energy. “Now, Duke is trying to double down on fracked gas but ‘plan B’ for Duke is still a worst-case scenario for our climate and communities,” Martin said in her statement. “To avoid severe negative health effects, polluted water, and the worst impacts of climate change, Duke must abandon their dirty fossil fuel projects and invest in the clean, renewable energy sources that are already abundant and affordable.” Builders of the ACP, subsidiaries of Dominion Resources, Duke Energy, Piedmont Natural Gas and Southern Company, remain “highly confident” in timely resolution of the legal challenges that have been filed in Virginia and North Carolina and that the pipeline will be completed, said Karl Neddenien, Media Relations manager for Dominion Energy. “Our current expectation is that construction could restart in the third quarter of this year,” Neddenien said. “Regardless of temporary delays, we know that the completion of ACP is essential to meeting the energy needs of millions of Americans, and we are confident in the ultimate outcome: The ACP will be completed.” 

Duke Energy needs ‘plan B’ if Atlantic Coast Pipeline fails, CEO says  - Duke Energy Corp. will need another way to shuttle natural gas to customers in the U.S. Southeast if the troubled Atlantic Coast shale pipeline fails to overcome legal setbacks, Chief Executive Officer Lynn Good said. “Atlantic Coast pipeline was sized and designed with a time frame to meet the needs of our customers,” Good said Monday in an interview with Bloomberg Television at the BNEF Summit in New York. That time frame is in limbo after a federal appeals court vacated key permits that allowed the pipeline to cross the Appalachian Trail, a decision lead developer Dominion Energy Inc. is planning to appeal to the Supreme Court. Atlantic Coast has seen its start date pushed back several times and its price tag balloon to as much as $7.5 billion. Construction has been stopped since late last year. If the embattled conduit fails to prevail, a potential Plan B could include a pipeline that would run from eastern to western North Carolina, versus north-to-south, Good said, adding that the company “remains committed” to completing Atlantic Coast. The 600-mile (966-kilometer) project isn’t the only pipeline out of America’s hottest shale gas play facing backlash. EQM Midstream Partners LP has said the company is closely watching Atlantic Coast’s legal battles to see if there’s any impact to its Mountain Valley pipeline, which has also been ensnared in court battles.

Prices Slide As The Storage Deficits Contract And Winter Comes To A Close - Highlights of the Natural Gas Summary and Outlook for the week ending March 22, 2019 follow. The full report is available at the link below.

• Price Action: The April contract fell 4.2 cents (1.5%) to $2.753 on a 17.6 cent range ($2.897/$2.721).
• Price Outlook: The market posted both a new high and low after bullish weather forecasts early in the week helped lift prices only to see moderating weather forecasts and a relatively small storage withdrawal and a bearish revision to the previous week’s storage report pressured prices lower. Of the 1,003 weeks since 2000, 115 have witnessed both a new high and new weekly low while only 96 have witnessed inside weeks, where neither a new high nor low was posted.  CFTC data indicated a 545 contract increase in the managed money net long position as longs added and shorts added. This is the highest net long position since February 5. Total open interest rose 37,054 to 3.202 million as of March 19. Aggregated CME futures open interest fell to 1.151 million as of March 22. The current weather forecast is now cooler than 5 of the last 10 years. Pipeline data indicates total flows to Cheniere’s Sabine Pass export facility were at 2.5 bcf. Cove Point is net exporting 0.8 bcf. Corpus Christi is exporting 0.698 bcf. Cameron is exporting 0.000 bcf.
• Weekly Storage: US working gas storage for the week ending March 15 indicated a withdrawal of (47) bcf. Working gas inventories fell to 1,143 bcf. Current inventories fall (303)bcf (-21.0%) below last year and fall (544) bcf (-32.3%) below the 5-year average. The EIA noted a revision for the withdrawal for the week ending March 8 that resulted in change from the originally reported (204) bcf to a withdrawal of (200) bcf. This was still a record weekly withdrawal.
• Supply Trends: Total supply fell (1.2)bcf/d to 83.0 bcf/d. US production fell. Canadian imports fell. LNG imports fell. LNG exports fell. Mexican exports fell. The US Baker Hughes rig count fell (10). Oil activity decreased (9). Natural gas activity decreased (1). The total US rig count now stands at 1,016. The Canadian rig count fell (56) to 105. Thus, the total North American rig count fell (66) to 1,121 and now trails last year by (35). The higher efficiency US horizontal rig count fell (7) to 900 and rises +30 above last year.
• Demand Trends: Total demand fell (24.5) bcf/d to +88.9 bcf/d. Power demand fell. Industrial demand fell. Res/Comm demand fell. Electricity demand fell (10,661) gigawatt-hrs to 70,792 which trails last year by (1,856) (-2.6%) and trails the 5-year average by (780)(-1.1%%).
• Nuclear Generation: Nuclear generation fell (3,303)MW in the reference week to 83,879 MW. This is (3,412) MW lower than last year and (1,525) MW lower than the 5-year average. Recent output was at 83,432 MW

Natural Gas Shakes Off Production Increase - The April natural gas contract shook off long-range warm trends and an increase in estimated production over the weekend that led prices to gap down last evening, as the contract eventually settled up two ticks from Friday. It was the May contract the led the way higher, however, as it dragged up both April and summer gas. The result was another tick lower in the April/May contract spread that is set to expire on Wednesday. Prices initially dipped on indications that production had surged back near record levels over the weekend. We also noted looser balances over the past month, and a dip in LNG exports hit prices last week as well. Through the day gas prices found some support on medium-range weather forecasts that continued to trend colder, verifying our Neutral sentiment in our Morning Update as well. Henry Hub cash prices saw some firmness through the morning with modest cold expected tomorrow, though they were not particularly strong. Attention now turns to April contract options expiry tomorrow, which last month brought quite a bit of volatility and a violent move upwards.

Warm Mid-April Pressures Gas Futures Lower -  It was another down day along the natural gas futures curve, with the April contract settling down around half a percent and the rest of the curve seeing more pronounced losses. The April contract was actually strongest into options expiry, with the rest of the curve getting hit even harder. The result was a pronounced move higher in the April/May contract spread, though this came back post-settle. Our Morning Update was "Neutral" for subscribers, but highlighted slight GWDD losses and also explained that looser daily balances seemed to pose downside risks even when prices were creeping higher. Afternoon Climate Prediction Center forecasts then moved towards our Week 2 ideas of widespread warmth. Combined with long-range weather we are expecting a loose EIA number to be announced Thursday as well, as seen by smaller combined draws in DTI/TCO. All this worked to limit upside Henry Hub futures today despite a small bump higher in Henry Hub cash prices. Tomorrow traders have to contend with both the April contract expiry, which will certainly increase volatility, as well as the pricing in of expectations around Thursday's EIA number. Another small draw is expected, and there's a chance this could be the last draw of the season as well.

April Gas Expires Lower Despite Pre-Expiry Bounce  The April natural gas contract sold off hard through the morning, and though it attempted to bounce into the expiry still wound up expiring lower by about a percent on the day. As expected the April contract showed some relative strength into expiry, with the rest of the curve getting hit about equally. The result is that the April/May contract spread went off the board at a very slight contango of -6 ticks. In our Morning Update for subscribers, we held a Neutral sentiment but highlighted that due to our reading of today's supply/demand balance, "we would look for April and eventually May gas to creep towards at least the $2.7 level over the next day or two, with any bounce or support at the front of the curve due to expiry temporary." This is exactly what played out, with the May contract heading to $2.7 before bouncing right around expiry. Both these factors came despite only minimal overnight GWDD changes. Now, gas traders are turning their attention to tomorrow's EIA storage number. The market expectation is for a draw slightly smaller than what was observed last week, as we saw slightly less weather-driven demand. Early estimates show as well this could be the final storage draw of the season, with next week a small injection potentially being announced. While it previously had appeared that next week a small draw could be announced, maintenance on the Sabine Pass LNG export facility has limited exports more than expected through the week.

US natural gas in storage falls 36 Bcf as heating season likely wraps up — The heating season ended with a whimper as US gas in storage likely posted its final net withdrawal of the season last week due to dwindling demand, but multiple regions have a lot of work to do to approach five-year average levels in time for the next one. US natural gas in storage decreased 36 Bcf to 1.107 Tcf for the week ended March 29, the US Energy Information Administration reported Thursday. The withdrawal was slightly more than an S&P Global Platts' survey of analysts calling for a 33 Bcf pull. However, the withdrawal was less than the 66 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 285 Bcf, or 20.5%, less than the year-ago level of 1.392 Tcf and 551 Bcf, or 33.2%, less than the five-year average of 1.658 Tcf. NYMEX Henry Hub May contract was static at $2.72/MMBtu following the announcement on its first day as the prompt month, as the draw was in line with market expectations. However, the summer strip, running from May through October, was down half a cent to $2.80/MMBtu. While low storage levels in the Pacific region, specifically on the Pacific Gas & Electric and Southern California Gas Company storage systems, have grabbed headlines this winter, equally notable is the large storage deficit in the Rockies. The current level of 62 Bcf in the Rockies region is lower than at any other time in EIA's five-region data history set that stretches back to 2010. Even during the polar vortex of 2014, the lowest Rockies storage fell was 80 Bcf. Within the Rockies, the Clay Basin storage field has just 2.3 Bcf left in the ground, its lowest mark in the past five years, while Ryckman Creek has only 2.7 Bcf remaining in inventory, also the lowest level in the past five years, according to S&P Global Platts Analytics. A further drawdown is expected on regional storage fields this coming weekend as a cold front sweeps the region. Rockies demand is forecast to rise as high as 3.8 Bcf/d this weekend, roughly 1 Bcf/d higher than today's mark. This appears to be the final withdrawal of the heating season. A forecast by Platts Analytics calls for a build of 16 Bcf for the week ending March 29 and a 32-Bcf injection for the following week. With 1.107 Tcf in the ground, it would mark the lowest volume for the start of the injection season since it bottomed out at 824 Bcf on March 28, 2014. Even with the low start that year, storage rebounded to 3.611 Tcf by the next heating season, which was only 119 Bcf below the five-year average.

Natural Gas Prices Pressured By Warm Weather And Weak Supply/Demand Balances -- May natural gas prices closed today's trading session down about 5 cents on the day, arriving there by way of a general slow decline throughout the day. The decline was felt throughout the natural gas strip, but was focused most on the front month contracts. Initially, the decline was due to a significant warming trend in overnight weather models, forcing forecasts to lower demand estimates this morning. This change pushed the 15-day forecast solidly to the warmer side of normal, and much warmer than the same period one year ago. On the supply side, natural gas production has finally returned back to near-record highs. With the increase in supply combined with the warmer, lower demand weather changes, we warned in our morning report that there was a "slightly bearish" risk to natural gas prices today. This worked out well, as prices did fall another 3-4 cents from the time our report was issued, with the supply/demand picture weak, and longer range weather data showing little sign of notably boosting demand.

What’s next for Enbridge Line 5? It may come down to Nessel -- For years, environmentalists have called to shut down a 66-year-old oil pipeline in the Straits of Mackinac. What happens next may be determined by an upcoming legal opinion from the state’s new attorney general. Attorney General Dana Nessel is expected to soon release a legal opinion on a 2018 Lame Duck law that, in effect, allows Enbridge to continue pumping oil through the Great Lakes for almost another century. The Canadian energy company’s Line 5 currently carries about 23 million gallons of oil and some natural gas every day through the intersection of lakes Michigan and Huron, at the tip of the Lower Peninsula. Nessel, a Democrat who made a campaign promise to shut down the oil pipeline, will issue an opinion that could further define the contours of a political battle with Enbridge that has dragged on for years. Although her opinion has not been released, Nessel has indicated that she has “serious and significant concerns” with it. The company was responsible for the largest inland oil spill in U.S. history, when one of its oil pipelines ruptured in 2010, spilling 1 million gallons of heavy crude oil into the Kalamazoo river. For environmentalists, nothing less than the purity of the Great Lakes hangs in the balance.

Whitmer budget calls for inventory of pipeline infrastructure - A $1.4 million line item in Gov. Gretchen Whitmer’s $60.2 billion budget proposal unveiled March 5 calls for a three-year project to catalog “hazardous materials pipelines” that cross Michigan waterways. Department of Natural Resources Director Daniel Eichinger told lawmakers this month the study, spurred by the debate over Enbridge’s Line 5 pipeline in the Straits of Mackinac, is needed to fill an information gap about dangers posed to Michigan waters. Michigan has 3,500 miles of such pipelines criss-crossing the state, but state government has a comprehensive inventory of just 645 miles, according to the DNR. Those are related to Line 5, and identify nearly 400 water crossings. “A lot of these are old,” Eichinger said. “A lot of the data about where they are and what sensitive environments or habitats they may cross is not well known or understood by us.” Speaking to a state Senate appropriations subcommittee March 12, Eichinger said the “mapping exercise” to inventory pipelines would “give us critical business intelligence of where risk might reside underground.” The plan is to digitize historic documents and gather information from pipeline owners, using GIS technology to overlay pipelines at water crossings. Once complete, the inventory “would be evaluated to determine priority water crossings, and we would provide that information to the public and applicable pipeline owners,” said DNR spokesperson Ed Golder. The federal Pipeline and Hazardous Material Safety Administration (PHMSA) defines these pipelines to include crude oil, refined petroleum products, “highly volatile liquids or other flammable or toxic fluids,” carbon dioxide and biofuel. 

Enbridge Line 5 Project Dealt Severe Blow In Michigan - The Governor of Michigan, Gretchen Whitmer, has ordered the suspension of all work on a tunnel beneath the Straits of Mackinac that’s part of a project for the replacement of a section of the Line 5 crude oil pipeline operated by Enbridge.The order followed an opinion by the state’s new Attorney General, Dana Nessel, who said the bill that allowed the construction of the tunnel violated the state constitution because “it went beyond what the bill’s title reflected,” the Associated Press reports. The AG’s opinion has the force of a law unless a court overrules it, the AP notes.Enbridge issued a response, stating “Enbridge worked in good faith with the Michigan government on the tunnel project,” adding, “We disagree with the Attorney General’s opinion and continue to believe in the benefits of the tunnel.”The pipeline producer also noted that the project could help bt 'reducing the chance of a release of product to virtually zero,' 'preventing an anchor strike from a ship in the Straits of Mackinac,' and 'ensuring Michigan will continue to receive the economic benefits from Line 5.'Last December, The Michigan Legislature approved the Great Lakes pipeline project that envisages the replacement of a section of Enbridge’s Line 5 pipeline, which is 65 years old, and agreed to set up a state authority to oversee the construction of a tunnel for a section of the new pipeline. The new pipeline will replace two old ones and be set in a tunnel, to be drilled at a depth of 100 feet under the four-mile Straits of Macinac linking Lake Huron and Lake Michigan. As part of the deal, Enbridge will pay between US$350 and US$500 million for the construction of the tunnel for the pipeline. The project could take between 7 and 10 years to complete.

Michigan Gov. Gretchen Whitmer halts action on Line 5 tunnel - – Michigan Gov. Gretchen Whitmer on Thursday ordered state agencies to halt action on a proposed tunnel to encase the controversial Line 5 pipeline in a tunnel.Whitmer’s executive directive came minutes after a fellow Democrat, Attorney General Dana Nessel, issued a legal opinion claiming that a law creating a state authority to oversee construction of the tunnel is unconstitutional.“I agree with the conclusion reached by Attorney General Nessel,” Whitmer said in a statement. “The Great Lakes are our most precious resource in Michigan, and because of their significance, I’ve instructed state departments and agencies to halt any actions in furtherance of this law.”Nessel’s opinion was her first since taking office Jan. 1, and it came in response to a request from Whitmer to review the law. Last year, both campaigned on shutting down the 66-year-old oil pipeline, and they opposed compromises including a tunnel.The move puts Whitmer and Nessel on a collision course with Republicans that could likely end up in court. "An AG opinion is exactly that, an opinion.  It’s not binding.  It's not final.  And it's certainly not without cause to challenge," said Senate Majority Leaker Mike Shirkey, R-Clarklake."The Senate will pursue its options in order to advance the very important work and purpose of the energy tunnel. This is the fastest, safest, and most economical long-term solution for Michigan. It’s very important to our economy."

State regulators issue final approval for Line 3 oil pipeline project -- Minnesota utility regulators have granted their final approval to the contentious Line 3 oil pipeline replacement project. Opponents of the Line 3 project — including the state Commerce Department — petitioned the Minnesota Public Utilities Commission to reconsider the approval it gave the project in June. The commission unanimously rejected that request Tuesday. Now the process moves to the courts. Tribes and environmental groups have already sued to overturn the state's approval of the environmental review conducted for Line 3. The Minnesota Court of Appeals held a hearing on that challenge last week. Tribes, environmental groups and the Department of Commerce have filed separate challenges seeking to overturn the PUC's approval of a certificate of need for Line 3. And appeals have also been filed to block the commission's granting of a route permit for the pipeline. "That's the process," Commissioner Dan Lipschultz said during the PUC's meeting Tuesday. "And I don't think any of us begrudge an appeal to the court of appeals. That's part of the checks and balances that we have in our system." Last year, the PUC approved Enbridge's plan for replacing its aging Line 3 oil pipeline, which has been transporting oil from Alberta, Canada, since the 1960s. The company said at the time that it anticipated having the new pipeline in service by the end of 2019. But the company still needs several state and federal permits before it can break ground on the project in Minnesota. And earlier this month, the state of Minnesota gave the company a timeline for issuing those permits that will likely put the new line in operation in the second half of 2020. The Minnesota Pollution Control Agency told the company it expects to issues its permits by November 2019. Within a month or two after that, the company expects to secure its remaining federal permits. The new pipeline would replace one of the five Enbridge pipelines that carry oil across northern Minnesota. It has drawn strong opposition from environmental groups, tribal groups and some tribal governments and climate change activists. 

House blocks bill to bar state’s Line 3 pipeline appeals (AP) — Just as quickly as the Minnesota Senate passed it, the state House shot down legislation to force the state Commerce Department to drop its appeals of a regulatory panel’s approval of Enbridge Energy’s hotly disputed plan to replace its aging Line 3 crude oil pipeline across northern Minnesota. The Public Utilities Commission gave its final reaffirmation to the project Tuesday. Gov. Tim Walz said his administration would study the decision before deciding its next steps. The GOP-controlled Senate voted 34-30 along party lines Thursday to prohibit the Commerce Department from spending money on further appeals. Some Democrats who strongly support Line 3 said they voted no anyway because the ban would set a bad precedent. But hours later the Democratic-controlled House voted 75-51 to table the bill, blocking further consideration. 

Enbridge proposes another pipeline replacement across Fond du Lac reservation -- Enbridge Energy is proposing to replace a 10-mile section of an oil pipeline that crosses the reservation of the Fond du Lac Band of Lake Superior Chippewa in northeast Minnesota. The Canadian company has filed an application with the Minnesota Public Utilities Commission to replace a section of its Line 4 pipeline — which was built above ground — with a new section of underground pipe. Enbridge said the proposal comes at the request of the Fond du Lac Band. Enbridge and the band are also asking state regulators a streamlined permitting process for the project. The $100 million proposal is "the result of the Band's requirement that Enbridge address the Band's concerns over the above-grade segment" of the pipeline that runs through the reservation, Fond du Lac Chairman Kevin Dupuis Sr. wrote in a letter of support to the utilities commission. Dupuis explained in his note that the pipeline has disrupted natural water flow across the reservation, and "also functions as a physical barrier, affecting not just wildlife crossings but Band members' ability to access areas where they gather medicinal plants and other culturally important resources." Enbridge asserts that Line 4, which was built in the 1970s, continues to operate safely. Some sections of pipe were intentionally built above ground in areas of heavily saturated soils and then covered with soil. But over the years, some of that soil has eroded away, and some band members have expressed concerns about exposed sections of the aging pipeline on the reservation. The commission voted to accept the application from Enbridge at a hearing Thursday. Commissioner John Tuma noted that he could actually see the exposed pipeline using the Google Earth mapping program. • Full coverage: Pipeline | Environment After installing the new 36-inch pipe, Enbridge proposes to remove the old 48-inch pipe segment, a step the company said would make the area more accessible to tribal members and "help restore traditional land use" for the band. 

Bayou Bridge Pipeline is now complete, after years of controversy  -The Bayou Bridge Pipeline is now complete and slated to begin transporting oil between Texas and St. James Parish next week, the companies that own the controversial project have announced.  The 163-mile-long Louisiana section of the pipeline, which sparked years of protest and legal challenges from environmentalists and property rights advocates, links to a nearly 50-mile section in Texas that was completed in 2016.  Houston-based Energy Transfer Partners owns a majority of the pipeline and will operate it. Phillips 66 Partners owns a 40 percent share of the pipeline. In a statement released Tuesday (Mar. 26), the companies said the pipeline will provide Louisiana refiners better access to North American crude oil and reduce U.S. reliance on foreign oil.   Environmental groups opposed to the pipeline say its route imperils the Atchafalaya Basin, considered one of the largest swamps in America, and poses human health and safety risks in dozens of communities.  Greenpeace USA and the Waterkeeper Alliance released a report last year indicating Energy Transfer is a poor manager of its pipelines. Citing data from federal and state regulators, the report documented nearly 530 hazardous incidents, including spills, from Energy Transfer pipelines between 2002 and 2017.  Energy Transfer defended its environmental record, pointing out that the spills represented a small percentage of the oil transported in its pipelines.

Embattled Louisiana Oil Pipeline Is Complete, But the Fight Isn’t Over - In Louisiana, the controversial Bayou Bridge Pipeline is finally complete. This Monday, it’s set to start transporting up to 480,000 barrels of oil a day between Nederland, Texas, and St. James, Louisiana. That doesn’t mean that its opponents are going to stop challenging this pipeline—and others like it—any time soon.  There’s a landowner upset that the pipeline company allegedly cut trees on his property without his permission. Indigenous-led activists who call themselves “water protectors” have taken direct action after direct action against the pipeline; their efforts motivated by the oil industry’s toll on the planet more broadly. There are also the environmentalists who want to protect the state’s splendid Atchafalaya Basin—the nation’s largest river swamp that spans some 15,000 acres—which the pipeline cuts right through. “We are calling for nothing new to be built.” A lawsuit was launched in federal district court to protect the basin in January 2018. The plaintiffs, including local environmental organization Atchafalaya Basinkeeper, are suing the Army Corps of Engineers for allegedly approving two key permits without proper environmental analysis. There’s still a chance that judge could decide that the approval didn’t follow federal laws, but that ruling could also be appealed, dragging the case on further. “There’s a number of ways this could turn out,” Misha Mitchell, a counsel on the case and attorney with the Atchafalaya Basinkeeper, told Earther. “At this point, I’m not really sure which way it could go.”  Mitchell hopes to see the pipeline hit pause if the judge rules that its approval was illegal, but she’s not confident it will. What’s certain is that the pipeline will begin moving oil through some of Louisiana’s most-polluted and predominantly black communities, in what’s known as Cancer Alley. In light of that reality, some residents are taking a renewed stand against the petrochemical industry. Their ultimate goal is nothing less than a shutting down of the state’s fossil fuel industry. “We are calling for nothing new to be built,” Rolfes told Earther. “And I think that this movement has been built in a significant way because of Bayou Bridge.”

USG Lease Sale 252 reflects some exploration interest, widespread wildcatting unlikely for now — US Gulf of Mexico Lease Sale 252 last week saw a slew of bidding aimed up shoring up production at existing fields, but also reflected some exploratory interest in areas that may be targets for future drilling and production given lower costs and seismic technology that better pinpoints prospects. Sale sponsor US Bureau of Ocean Energy Management noted some new areas targeted by larger companies - particularly Shell, which was far and away the busiest player in the auction, with 87 high bids captured for offers totaling nearly $85 million. The auction brought in $244 million in high bids, up 37% from the last US Gulf sale in August 2018. It was the largest such sum in two years and four sales, made for 227 blocks. Even though the line from prospect capture to drilling and production is not necessarily a direct one, most agree the US Gulf needs more exploration to replenish oil production in that arena, which is currently 1.85 million b/d, according to government estimates, and on track to reach 2.38 million b/d by the end of 2020. "Right, now, our estimate is peak production in 2020," William Turner, a Gulf of Mexico analyst for energy consultants Wood Mackenzie, said. "But our forecast doesn't include [fields] yet to find, and it's those barrels that would pick up production" from there. "I'm not convinced there are enough [exploration prospects today] to stop Gulf of Mexico production from peaking in 2020 and falling off in the first half of the [next] decade," Turner said. At the recent CERAWeek by IHS Markit conference, Hess Corp. CEO John Hess noted that in 2004, the number of blocks licensed to oil companies totaled 8,800, whereas today the number is 2,500. "The pipeline of long-cycle projects is running on empty," Hess told the annual gathering. Shell is already an aggressive explorer in the eastern Mississippi/western DeSoto Canyon area off the coast of Louisiana, where it has turned up a number of discoveries that include the Appomattox and Vicksburg fields that are currently being readied for first production this year. But BOEM Gulf of Mexico regional director Mike Celata said at a post-sale press briefing March 20 that Shell's bidding spree in the two deep- and ultra-deepwater areas where it won 24 blocks in DeSoto Canyon and seven blocks in the Lloyd Ridge area south of DeSoto, were chasing a relatively new, deeper play.

U.S. oil projects begin to falter as producers curb spending (Reuters) - The number of pipeline and storage terminal projects proposed to move shale to the U.S. Gulf Coast has dwindled amid steps by oil producers to pare exploration spending. Last year, booming West Texas production overwhelmed existing pipelines out of the region, sinking local prices and helping launch nine projects proposing to add 5.4 million barrels per day (bpd) through the first half of 2021. On Monday, Magellan Midstream Partners LP cut its capital spending outlook by $450 million over two years, saying the proposed Permian Gulf Coast pipeline was unlikely to proceed. The project, proposed with partners including Delek US Holdings Inc, would have carried up to 1 million barrels per day (bpd) to the Gulf Coast. Its proposed mid-2020 start lagged behind other projects and as shale producers pare drilling outlays. Delek on Monday also shifted its stance on the joint venture, deleting a reference to the venture in an investor presentation. “A winnowing process of sorts has been occurring, with some projects advancing and others falling to the wayside,” said John Zanner, an analyst at consultancy RBN Energy, in a blog post this week. The same day that Magellan ended its project, Schlumberger NV’s chief executive forecast North American onshore spending will decline more than 10 percent this year. Kinder Morgan Inc also this week exited an $800 million deepwater terminal project off Freeport, Texas, selling its stake to project leader Canada’s Enbridge Inc, which continues to pursue the terminal. Kinder said the project no longer fit its strategic priorities. There are eight proposed oil-export terminals for the U.S. Gulf Coast. If all eight were built, they would have capacity to export a combined 12.5 million bpd, more oil per day than the United States produced in the week ended March 15, according to the U.S. Energy Information Administration. 

Puerto Rico Faces Flood of Fracked Gas in Wake of Hurricane Maria -- Real News Network video & transcript - This is Dimitri Lascars reporting for The Real News Network. Media have descended on Puerto Rico since Hurricane Maria devastated the island a year and a half ago, and many reported on its struggle to rebuild its energy grid. But behind the scenes, some policymakers and fossil fuel industry leaders are using the crisis to transform Puerto Rico into a hub for liquefied natural gas–gas obtained from hydraulic fracturing, or fracking, in the mainland United States.

Commodity Traders Turn to LNG as Big Oil Profits Prove Elusive - With margins narrowing in the crude oil business, some of the world’s biggest commodity trading houses are helping to reshape the energy industry with a drive into liquefied natural gas. Gunvor Group Ltd., Trafigura Group Pte. Ltd. and Vitol SA have moved a step beyond trading LNG, investing in ships and terminals handling the fuel. That’s accelerating the growth of the industry, moving more gas that traditionally has flowed through pipelines onto ocean-going tankers chilled to minus 162 degrees Celsius (minus 260 degrees Fahrenheit). Those houses in the 1970s broke away from Big Oil’s long-term contracts and created a market where cargoes change hands in the blink of an eye. Now they’re turning their attention to LNG, where spot trading is rapidly expanding. The result is handing utilities from Centrica Plc to RWE AG more flexibility to buy gas, encouraging them to make the leap away from more polluting coal. “It looks like a much younger crude oil market,’’ Russell Hardy, chief executive officer of Vitol, said in an interview in Lausanne, Switzerland. “It is an area that can grow and that is a positive for us.’’ The top three commodity trading houses active in LNG have more than doubled their delivered volumes over the past two years and took almost 9 percent of the global trade in 2018, according to data compiled by Bloomberg. Royal Dutch Shell Plc remains the industry leader with 22 percent and stakes in LNG plants and import terminals. Other traders such as Glencore Plc and Koch Supply & Trading LP also are building expertise or looking to expand in LNG. Most trading houses set up their desks earlier this decade, while Vitol started back in 2005.

Port Report: Back To The Future As Politicians Seek To Make U.S. LNG Shipping Great Again -- Proposed legislation seeks to piggyback U.S. maritime industry to gas export boom, but bill lacks loan guarantees behind the ‘70s heyday.  The United States' growing role as an exporter of natural gas is one of the most remarkable turnaround stories for the domestic economy of the last decade. In 2017, the U.S. crossed over from being a net importer of natural gas to a net exporter thanks to the growing reserves of shale gas tapped through hydraulic fracturing. Concerns about shortages of U.S. natural gas reserves led to the construction of 12 import facilities for liquefied natural gas (LNG). Now four of those sites are in various stages of building export facilities, while another seven facilities have been approved for export LNG, according to the U.S. Energy Information Administration. Those new facilities are expected to make the U.S. the second largest exporter of LNG in the world, just behind Qatar, according to the International Energy Agency.Alongside the LNG story, the U.S. maritime industry sees an opportunity to revivify its fortunes. As FreightWaves' John Gallagher reports, U.S. Representative John Garamendi (D-CA) plans to reintroduce a bill that would require a relatively small, but escalating, percentage of LNG and crude oil be shipped on U.S.-built ships with American mariners starting in 2023. The bill, which was introduced last year as the "Energizing American Maritime Act," could mean upwards of 50 oil and LNG tankers being built over the next 10 years. In advocating for the bill, Garamendi said the goal of using U.S.-built ships and U.S. crews for energy shipping "is precisely what China, India and now Russia are doing."

Infected U.S. Shale Oil Is Being Turned Away by Asian Buyers - The complex web of U.S. pipelines, tanks and export terminals that’s helped make America the world’s top oil producer is causing a headache for some crude buyers. As various types of crude pass through the supply chain from inland shale fields spanning Texas to North Dakota, they risk picking up impurities before reaching Asia -- the world’s biggest oil-consuming region. Specifically, refiners are worried about the presence of problematic metals as well as a class of chemical compounds known as oxygenates, which can affect the quality and type of fuel they produce. Two refiners in South Korea -- the top buyer of U.S. seaborne supply -- have rejected cargoes in recent months due to contamination that makes processing difficult. Growing North American output from dozens of fields pushes everything from highly-volatile oil to sticky residue through shared tributaries and trunk pipes. Smaller carriers then take cargoes from shallow-water ports to giant supertankers in the Gulf of Mexico for hauling to far-away buyers. Throughout its transit from pipes to tanks and onto vessels, foreign compounds from other fuel or chemicals for cleaning tanks or stabilizing material can leach into the supply and foul up refining equipment. While crude passes through a similar chain in the Middle East too, the risk of impurities is lower because each oil variety typically has its own designated infrastructure. In the case of American condensates, a type of ultra-light oil pumped in shale fields, cargoes can get pollutants such as “oxygenates, metals and cleaning agents,” said Sebastien Bariller, senior vice president at South Korea’s Hanwha Total Petrochemical Co. That’s causing uncertainty around U.S. oil quality, unlike purchases from the Middle East, where quality is stable, he said.The two South Korean refiners -- SK Innovation Co. and Hyundai Oilbank Co. -- turned away their purchased shipments of Eagle Ford crude that were due to arrive in January and February due to quality issues, according to people with knowledge of the matter, who asked not to be identified because the information is private. The cargoes were sold by oil giant BP Plc, the people said. At least one of the unwanted cargoes was rerouted to China’s Qingdao port in a smaller vessel and purchased by Sinochem Hongrun Petrochemical Co., an independent refiner that has different quality requirements and plant configurations.

1,000 Locals Reportedly Seek Treatment After Multi-Day Fire at Houston Chemical Facility - Roughly 1,000 people sought treatment at a pop-up treatment center for symptoms including nausea, headaches, and respiratory problems after Intercontinental Terminals Co.’s (ITC) chemical storage facility in Deer Park, Houston caught fire this week, Bloomberg reported on Friday, with at least 15 cases dubbed serious enough to warrant a transfer to local emergency rooms.  The massive fire broke out on March 17, releasing over 9 million pounds of pollutants into the region, and was eventually extinguished on March 20. The catastrophe also released large amounts of benzene, a carcinogenic chemical, in the form of vapor after the fire was put out. On Thursday, benzene levels detected near the facility spiked to 190.68 parts per billion, exceeding Texas Commission on Environmental Quality one-hour maximum safe exposure limits of 180 parts per billion. (The TCEQ wrotethat level of exposure would cause “no lasting effects.”)On Friday, Bloomberg reported, a wall at the facility collapsed amid another blaze, resulting in contamination of and a temporary shutdown of the busy Houston Ship Channel:The U.S. Coast Guard is forbidding vessel traffic on a stretch of the key industrial shipping route after a wall collapse and fire at Intercontinental Terminals Co.’s already-damaged chemical storage complex on Friday. A mix of toxic gasoline ingredients, firefighting foam and dirty water flowed from the site into the channel, and a benzene plume above the water poses a threat to ship crews, said Coast Guard Capt. Kevin Oditt.... Since the initial blaze was squelched earlier in the week, ITC made two unsuccessful attempts to drain a charred tank that’s holding pygas, a petroleum derivative composed largely of benzene. Early on Friday, ITC executives estimated they would have that tank emptied in about 12 hours; then the wall failed and flames erupted nearby. Jerry Mouton, mayor of nearby Deer Park, told media on Saturday that “It’s been a never-ending, re-occurring case of things not working out as planned,” Bloomberg wrote. The news agency added that while ITC said approximately 2.52 million gallons of hazardous chemicals remained within the damaged facility as of Friday, on Saturday it said it could not produce a reliable estimate.

Dozens Of Tankers Stranded In Houston Ship Channel After Chemical Leak Contamination - The Houston Ship Channel — already closed for days since last Friday afternoon a large-scale contamination of leaked chemicals from the Intercontinental Terminals Co. (ITC) fire spilled Benzene and other dangerous chemicals into and over waterway (especially via toxic smoke clouds) — could remain shut to regular through traffic for several more days, the Coast Guard has confirmed, trapping dozens of inbound and outbound oil and LPG tankers.At the end of last week's days-long massive fire engulfing multiple petrochemical tanks at the oil facility, emergency crews led by the Coast Guard noticed elevated Benzene levels in the area, and even what was described as a "benzene plume" hovering above the water. This as Deer Park area residents complained of illnesses ranging from nausea to headaches to irritation and burning in the skin, eyes, nose and throat from the disaster which began on March 17.  And though the ship channel is not a source for drinking water, the stretch of a roughly 2-mile-long no-go zone near the ITC facility had been shut down to boat traffic due to the potential danger to crew members from a cloud of cancer-causing benzene from the onshore tank fire, per Bloomberg: The U.S. Coast Guard is forbidding vessel traffic on a stretch of the key industrial shipping route after a wall collapse and fire at Intercontinental Terminals Co.’s already-damaged chemical storage complex on Friday. A mix of toxic gasoline ingredients, firefighting foam and dirty water flowed from the site into the channel, and a benzene plume above the water poses a threat to ship crews, said Coast Guard Capt. Kevin Oditt. Fox Business has quoted a Coast Guard official who said Monday morning it could be "several more days" before a key section of the Houston Ship Channel will be opened up amid continuing clean up efforts.  The Coast Guard says it's currently testing the possibility that a limited number of ships could be let through if they undergo a decontamination process:  The vessels are being decontaminated as they move through the roughly seven-mile portion of the Houston Ship Channel near the Lynchburg Ferry, extending from Tucker Bayou, where the ITC facility is located, to Houston Ship Channel light 116. It's a test to see when the Houston Ship Channel could be reopened.

Katrina, the BP spill, now Houston: This consulting firm keeps coming under fire - A crude oil spill during Hurricane Katrina in 2005. A coal ash spill in Tennessee in 2008. The BP oil spill in 2010. In all three cases, the companies responsible for these environmental calamities turned to the same Arkansas-based consulting firm, the Center for Toxicology and Environmental Health, to monitor air and water quality and chemical exposure in workers.  In each case, CTEH was found to have either incorrectly handled data collection or downplayed the risks of exposure to toxic chemicals. But the companies used CTEH’s data to reassure people that the spilled chemicals posed little risk to public health. This week, a fire at International Terminals Company’s chemical storage facility outside Houston, blanketed the country’s fourth-largest city in a cloud of smoke. Multiple school districts in the area cancelled classes. Once again, CTEH got the call to provide air quality monitoring. The fire at ITC’s facility reignited late Friday afternoon after a dike wall used to contain chemicals partially collapsed, renewing concerns about air quality. According to initial reports, the company released 9 million pounds of pollutants in just the first day of the fire. On Thursday, the city of Deer Park, home to the facility, issued a shelter-in-place advisory after benzene levels spiked overnight. Long-term benzene exposure can cause anemia, lead to cancer, and damage women’s reproductive health. Earlier in the week, ITC had said that its air quality testing data showed conditions “below levels” that would raise health concerns, even as residents near the fire complained of nosebleeds, headaches, and irritated throats. The statement prompted Deer Park to lift an earlier shelter-in-place advisory. Elena Craft, senior director for climate and health at Environmental Defense Fund, said CTEH was a “concerning choice” as a consultant “given their history.” ITC has posted nine air quality monitoring reports produced by CTEH on its website since the Deer Park fire began and Craft, a toxicologist by training, said that at least one contained “clear, obvious errors.”

Permian region crude oil prices have increased with additional pipeline takeaway capacity -Crude oil prices in the Permian region have increased since the beginning of the year as two recent pipeline capacity additions reduced some of the takeaway constraints that developed in the middle of 2018. These transportation constraints had forced producers to use more expensive ways to transport crude oil, resulting in lower received prices.  The difference between the West Texas Intermediate-Midland (WTI Midland) crude oil price compared with WTI Cushing and Magellan East Houston crude oil prices began narrowing in September 2018, and they narrowed further in late January 2019. WTI Midland reflects crude oil prices in the Permian production region of western Texas and eastern New Mexico, and Magellan East Houston and WTI Cushing reflect crude oil prices at aggregation points in Houston, Texas, and Cushing, Oklahoma, respectively.  WTI Midland prices are now similar to WTI Cushing, suggesting the previous pipeline capacity constraints from the Permian region to Cushing have been largely removed. Conversely, WTI Midland prices still trade lower than Houston crude oil prices, suggesting that the region still faces some takeaway constraints in shipping Permian crude oil to the U.S. Gulf Coast. Most recently, the difference has been about $7 per barrel, which is less of a discount than in the middle of 2018. An extension to the Sunrise Pipeline added an estimated 120,000 barrels per day (b/d) of takeaway capacity from the Permian region in early 2019, which increased pipeline capacity to Cushing. In addition, the Seminole-Red pipeline, which had previously delivered natural gas liquids from the Permian region to the U.S. Gulf Coast, was repurposed to deliver crude oil. Seminole-Red is expected to be fully operational by April, adding an estimated 200,000 b/d of takeaway capacity.  Although EIA expects that growing Permian production could face takeaway constraints again in the coming months, the recent capacity additions could prevent prices from widening back to the levels reached in the second and third quarters of 2018. New pipelines scheduled to come online in the third quarter will alleviate the remaining takeaway constraints in the Permian region.

Tight oil development will continue to drive future U.S. crude oil production -  EIA’s Annual Energy Outlook 2019 (AEO2019) Reference case projects that U.S. tight oil production, which became the more common form of oil production in 2015, will continue to increase through 2030, ultimately reaching more than 10 million barrels per day (b/d) in the early 2030s. Tight oil production reached 6.5 million b/d in the United States in 2018, accounting for 61% of total U.S. production. EIA projects further U.S. tight oil production growth as the industry continues to improve drilling efficiencies and reduce costs, which makes developing tight oil resources less sensitive to oil prices than in the past.  Recent growth in U.S. crude oil production has been driven by the development of tight oil resources, primarily in the Permian Basin in western Texas and eastern New Mexico. Three major tight oil plays in the Permian Basin—the Spraberry, Bone Spring, and Wolfcamp—accounted for 41% of U.S. tight oil production in 2018. In the AEO2019 Reference case, approximately half of cumulative tight oil production through 2050 is expected to come from these three plays. The Bakken and Eagle Ford plays also remain major contributors to U.S. tight oil supply through 2050, accounting for 19% and 17% of cumulative tight oil production, respectively. However, future growth of domestic tight oil production depends on a variety of factors, including the quality of resources, technology and operational improvements that increase productivity and reduce costs, and market prices. AEO2019 includes several sensitivity cases that incorporate different assumptions regarding oil prices, technological improvement, and resource recoverability.  The High Oil and Gas Resource and Technology case uses more optimistic technology and resource assumptions than in the Reference case. In this case, U.S. tight oil production increases through the mid-2040s, as higher productivity reduces development and production costs, spurring additional resource development. Tight oil production slowly decreases toward the end of the projection period as drilling moves to less productive areas. Total U.S. oil production in 2050 in this case is nearly 19 million b/d, much higher than the Reference case level of about 12 million b/d.  In the Low Oil and Gas Resource and Technology case, which uses more pessimistic technology and resource assumptions than the Reference case, tight oil production still increases from its current level through the early 2020s before gradually declining through 2050. Total U.S. oil production in 2050 in this case falls to about 8 million b/d.

US oil output slips in January, hits monthly record in December, new data show  - U.S. oil production slipped in January, but fresh data from the Department of Energy show the nation's output was much higher than originally reported at the end of last year. American energy companies pumped 11.871 million barrels per day in January, according to the Energy Information Administration, the department's statistics bureau. That was down from 11.961 million bpd in December, a new monthly record.Last month, EIA reported that December's production averaged 11.849 million bpd — a difference of 112,000 bpd from its second reading released on Friday. November output was also revised higher, from 11.905 million bpd to 11.926 million bpd.EIA's first reading for January was roughly in line with preliminary figures, which the administration releases weekly. The latest weekly figures show U.S. production holding steady around 12.1 million bpd — an all-time high if confirmed by EIA's monthly reading.Bottlenecks in the biggest U.S. shale oil field, the Permian basin, are expected to keep a lid on growth through the first half of the year. There are not enough pipelines and other infrastructure in western Texas and southeastern New Mexico to accommodate the surge in crude oil from Permian fields.Production from Texas dipped 1.3 percent in January to 4.832 million bpd, the EIA data show. New Mexico's output was roughly flat at 815,000 bpd. Compared with January 2018, production was up 24 percent in Texas and 50 percent in New Mexico.

US oil, gas rig count continues downward slip, falls 6 on week to 1077 - The US oil and natural gas rig count fell by six on the week to 1,077 Thursday, down nearly 13% from mid-November peak levels and continuing what has largely been a 19-week downward slip, according to the latest S&P Global Platts Analytics data.Decreases were seen in both oil and gas rig counts: oil rigs fell four to 857, while gas rigs were down two to 217. "Small rig fluctuations over short periods of time can be considered noise, but since the [mid-November] 2018 peak, US rig activity has decreased by 156 rigs," Matt Andre, an analyst with S&P Global Platts Analytics, said. Rigs in the Permian Basin of West Texas and New Mexico, the US' largest producing oil and gas play with about 4.1 million b/d of oil production and nearly 14 Bcf/d of gas production, fell this week by three, to 466, after a three-week streak of increases. But several other basins gained two rigs apiece. Among them were the Eagle Ford Shale in South Texas, now at 92 rigs; the Denver-Julesburg Basin in Colorado, now at 29; the gas-prone Haynesville Shale in East Texas and Northwest Louisiana, now at 63; and the Williston Basin of North Dakota and Montana, also at 63.The Utica Shale, largely sited in Ohio, lost two rigs, leaving 14, while the dry Marcellus Shale, mostly located in Pennsylvania, lost one rig, to 40. Unchanged from last week were Oklahoma's SCOOP-STACK at 88 rigs and wet Marcellus, also largely in Pennsylvania, at 26.  "Smaller basins across the US have been ramping down drilling activity but even the major oil-rich basins have seen a significant decrease, with the Permian basin down 34 rigs since mid-November, down 7%, and SCOOP/STACK decreasing by 21 in the same time frame, a drop of 19%," Andre said.  WTI oil prices have continued to hang just shy of $60/b, up more than 25% from the start of 2019, although this was not reflected in permit levels, which tallied 1,091, down 21% on the week. Permitting fell the most in two large basins this week, including the Permian, down 35% to 151, and Denver-Julesburg, down 65% to 87 permits.Other than that, nominal increases were posted in the Eagle Ford, up 22 to 56 permits; Haynesville, up nine to 29 permits, and SCOOP-STACK, up by 15 to 50 permits. Slight decreases came from the Williston, down by six to 15 permits, and the wet Marcellus, down by 10 to eight permits.

US drillers cut most oil rigs in a quarter in three years -Baker Hughes (Reuters) - U.S. energy firms this week reduced the number of oil rigs operating to their lowest in nearly a year, cutting the most rigs in a quarter in three years despite a 30 percent hike in crude prices so far in 2019. Drillers cut eight oil rigs in the week to March 29, bringing the total count down to 816, the lowest since April 2018, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday. That is the first time the rig count declined for six weeks in a row since May 2016 when it fell for eight consecutive weeks. For the month, the rig count fell by 37 in March, the most in a month since April 2016 when it declined by 40 rigs. For the quarter, the rig count fell by 69, the most in a quarter since the first quarter of 2016 when it fell by 164 rigs. The U.S. rig count, an early indicator of future output, is still a bit higher than a year ago when 797 rigs were active after energy companies boosted spending in 2018 to capture higher prices that year. Drilling this year has slowed as independent exploration and production companies cut spending as they focus on earnings growth instead of increased output with crude prices projected to decline in 2019 versus 2018. U.S. crude production slipped in January to 11.87 million barrels per day (bpd), from a monthly record high of 11.96 million bpd in December, the U.S. Energy Information Administration said in a monthly report on Friday. U.S. crude futures rose to a four-month high over $60 a barrel on Friday, putting the contract on track for its best quarter since 2009, as U.S. sanctions against Iran and Venezuela as well as OPEC-led supply cuts overshadowed concerns over a slowing global economy. Looking ahead, crude futures were trading around $60 a barrel for the balance of 2019 and about $59 in calendar 2020. U.S. financial services firm Cowen & Co said this week that projections from the exploration and production (E&P) companies it tracks point to a percentage decline in the mid single digits in capital expenditures for drilling and completions in 2019 versus 2018. Cowen said independent producers expect to spend about 11 percent less in 2019, while international oil companies plan to spend about 16 percent more. In total, Cowen said all of the E&P companies it tracks that have reported will spend about $81.0 billion in 2019 versus $85.5 billion in 2018. There were 1,006 oil and natural gas rigs active in the United States this week, according to Baker Hughes. Most rigs produce both oil and gas. Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast the average combined oil and gas rig count will fall from 1,032 in 2018 to 1,016 in 2019 before rising to 1,092 in 2020. That was an increase in Simmons’ prediction last week of 999 rigs in 2019 and 1,087 in 2020.

The Declining Rig Count Doesn't Mean What You Think - Oil prices plunged in the last few months of 2018, putting stress on many oil producers' budgets. This led to widespread predictions of reduced capex, idled oil rigs, and a downturn in U.S. oil production in 2019. Sure enough, the number of rigs drilling for oil in the U.S. has been falling for most of this year, including declines in each of the past five weeks. The oil rig count is still higher than it was a year ago, but it has fallen by about 60 since late 2018. However, the widely followed oil rig count statistic doesn't really mean much anymore. Even with fewer rigs at work -- at least for now -- U.S. oil production is likely to continue rising at a rapid clip in 2019 and beyond as oil giants like Chevron and ExxonMobil ramp up their shale drilling activities. The most fundamental reason why the rig count has become misleading is that in shale oil plays, drilling an oil well doesn't always lead immediately to starting production. At some point after the well is drilled, hydraulic fracturing (also known as fracking) -- the injection of highly pressurized water and sand -- starts the flow of oil. Fracking sometimes takes place right after the rig is removed, but not always. There are various reasons for drilling but not immediately completing a well. For example, fracking crews or materials may be in short supply. Some oil leases require drilling within a certain time period, but don't require production to begin -- or require only a token amount of production. That means it might make sense to keep drilling but slow well completion activity when oil prices fall. Shortages of pipeline capacity could also affect well completion activity. Over the past five years or so, the number of drilled but uncompleted (DUC) wells in the U.S. has soared. At the end of 2013, the DUC well count was 4,199 in the seven major regions tracked by the Energy Information Administration (EIA). That figure reached 8,576 by the end of February 2019. The Permian Basin (centered in western Texas) accounts for the vast majority of this increase. The Permian DUC well count has surged more than sixfold (from 636 to 4,004) since the end of 2013, whereas the number of DUC wells has risen 28% across the other six regions combined.

With The Colorado Government Run By Boulder Democrats, Progressives Push Their Agenda In Denver -- Bernie Sanders made news this week when he stated that, if elected President, he wants to ban hydraulic fracturing in the U.S. While Sanders' proposal won’t become a reality anytime soon, at least on a national scale, the progressive lawmakers who run Colorado are seeking to make it happen at the state level this year with a new bill, Senate Bill 181, that is being rushed through the state legislature in Denver. SB 181 - which was introduced fewer than three weeks ago but has already passed the state senate and is now pending in the Colorado House of Representatives - would give local governments the authority to restrict or prohibit oil and gas development. In a further attempt to stifle fossil fuel development, under SB 181 municipalities could mandate financial assurances that make resources cost prohibitive to develop. "Make no mistake, this bill is not about local control, it is about total control," Weld County Commissioner Barbara Kirkmeyer told the Senate Transportation & Energy Committee when it heard SB 181 earlier this month. "It's about total control by Boulder County elected officials and the extreme left." Critics of SB 181 point out that this sweeping reform is being rammed through the legislature without needed and appropriate input from key stakeholders, such as the employers, workers, and officials who represent areas of the state that will be most directly and negatively affected by this proposal. Passage of SB 181 would would also have ruinous consequences for many employers outside of the oil and gas industry, such as restaurants, hotels, and gas stations.  This legislative attempt to shut down fossil fuel development in Colorado comes less than five months after Colorado voters rejectedProposition 112, a ballot measure that would’ve imposed restrictions on oil and gas extraction like those now sought through SB 181.

After Paris agreement, big oil and gas companies invested $110 billion in fossil fuels -- In the three years since most of the world's nations signed on to the Paris climate agreement, major oil and gas companies have poured more than $100 billion into their fossil-fuel infrastructure. That's more than 10 times the amount the same companies have spent on low-carbon investments, despite lip service toward that area, according to a new report. InfluenceMap analyzed public disclosures of major oil and gas companies. The five biggest—ExxonMobil, Royal Dutch Shell, Chevron, BP and Total—will collectively spend $115 billion on capital investments this year, according to the report. Just 3 percent of that spending will go to low-carbon investments, like hydrogen batteries or electric-car charging stations. InfluenceMap contrasts this with the money the companies spent on "branding and lobbying" related to climate, which cost the oil and gas giants $1 billion since the end of 2015, per the report. That includes money spent directly as well as through trade groups that oppose carbon restrictions, including the American Petroleum Institute and American Fuel and Petrochemical Manufacturers. "The aim is to maintain public support on the issue while holding back binding policy," the report says. The spending shows "the increasing disconnect between the oil majors' efforts towards positive climate branding and their lobbying and actual business decisions," it reads. BP last year put $13 million toward defeating a carbon pricing proposal in Washington State. Exxon stated it would support a carbon tax, provided that the tax wouldn't raise any government money and would offer immunity in climate-change lawsuits, of which there are many. At the same time, Exxon ran extensive social media ads promoting oil and gas development and opposing restrictions on fossil fuels. That's significant because scientists have given the world a roughly 10-year window to rapidly move off fossil fuels if it is to avoid catastrophic levels of warming, according to the United Nations' climate change panel and the U.S. federal government. Recognizing this, oil and gas companies have devoted more attention to low-carbon rhetoric, though InfluenceMap notes there's a lack of money backing the investment in alternatives. 

Recording Reveals Oil Industry Execs Laughing at Trump Access - Gathered for a private meeting at a beachside Ritz-Carlton in Southern California, the oil executives were celebrating a colleague’s sudden rise. David Bernhardt, their former lawyer, had been appointed by President Donald Trump to the powerful No. 2 spot at the Department of the Interior.Just five months into the Trump era, the energy developers who make up the Independent Petroleum Association of America had already watched the new president order a sweeping overhaul of environmental regulations that were cutting into their bottom lines — rules concerning smog, fracking and endangered species protection. Dan Naatz, the association’s political director, told the conference room audience of about 100 executives that Bernhardt’s new role meant their priorities would be heard at the highest levels of Interior.“We know him very well, and we have direct access to him, have conversations with him about issues ranging from federal land access to endangered species, to a lot of issues,” Naatz said, according to an hourlong recording of the June 2017 event in Laguna Niguel provided to Reveal from The Center for Investigative Reporting.The recording gives a rare look behind the curtain of an influential oil industry lobbying group that spends more than $1 million per year to push its agenda in Congress and federal regulatory agencies. The previous eight years had been dispiriting for the industry: As IPAA vice president Jeff Eshelman told the group, it had seemed as though the Obama administration and environmental groups had put together “their target list of everything that they wanted done to shut down the oil and gas industry.” But now, the oil executives were almost giddy at the prospect of high-level executive branch access of the sort they hadn’t enjoyed since Dick Cheney, a fellow oilman, was vice president.   Today, Bernhardt is in line for a promotion: the former oil industry lobbyist has been nominated by Trump to be secretary of the Interior.  The post gives Bernhardt influence over regulations affecting energy production on millions of acres of public lands, deciding who gets to develop it, how much they pay and whether they are complying with the law.

Feds Accused of Holding Back on California Fracking Plans - – Armed with a recent court ruling that climate change must be considered in decisions to open federal land to oil and gas drilling, conservationists shot the opening volley Thursday in what promises to be a protracted legal battle over the future of fracking and oil drilling in Northern California. The federal lawsuit filed by the Center for Biological Diversity accuses the Trump administration of withholding environmental review records on its plans to end a six-year moratorium on leasing federal land to oil and gas companies in California. “The Trump administration is plotting behind closed doors to turn over some of California’s most precious wild places to dangerous drilling and fracking,” said Clare Lakewood, a senior attorney at the center, in a statement Thursday. The suit was filed a mere eight days after a federal judge blocked oil and gas leases in Wyoming for failure to consider climate change. Environmentalists seek records that will reveal precisely what factors the Bureau of Land Management is considering in its ongoing environmental review of proposals to open up to 793,000 acres in 11 California counties to fossil fuel extraction. “We want to know what they’re looking at and who they’re talking to when they make decisions that will affect Californians,” Lakewood said in a phone interview. The renewed leasing program would end a six-year ban on federal oil and gas leases in California. That moratorium took effect in 2013 after a federal judge ruled the Bureau of Land Management violated the law by failing to consider the environmental risks of fracking when it issued oil leases in Monterey County. Since then, Monterey County and San Benito County voters passed ballot measures to ban fracking, and Santa Cruz County passed an ordinance also forbidding the practice.

Trump Doubles Down on Keystone Oil Pipeline With New Permit - President Donald Trump issued a new permit for TransCanada Corp.’s controversial Keystone XL pipeline Friday, circumventing a court ruling that blocked a previous authorization by his State Department. The move aims to undercut legal challenges to the $8 billion project, including a November ruling by a Montana-based district judge that faulted the State Department’s previous environmental analysis, according to a person familiar with the matter. It could pave the way for beginning some preliminary work, according to Clearview Energy Partners. “It looks like the intent is to wipe the slate clean and replace the previous presidential permit with this new one,” Height Securities LLC analyst Katie Bays said. Keystone XL doesn’t need the changes to the supplemental environmental impact statement “because Trump invalidated that whole process and issued this new president permit.” The pipeline, proposed more than a decade ago, would carry crude from Canada’s oil sands to the U.S. Midwest. Trump’s State Department approved the project in 2017 after President Barack Obama denied TransCanada a permit on grounds its oil would contribute to global warning.

Trump to sign executive order to speed up pipeline development -- President Trump is expected to sign an executive order imminently to expedite pipeline development, according to sources familiar with the plans. White House economic advisor Larry Kudlow said the executive order could come as soon as next week, while speaking at a closed-door event Wednesday hosted by conservative think tank American Council for Capital Formation, according to two sources with direct knowledge.  Trump has long supported pipelines as part of his agenda backing oil and natural gas and what the administration has dubbed America’s “energy dominance” around the world. The reality is more mixed.

• One of his first moves was to sign executive orders streamlining construction of the controversial Keystone XL and Dakota Access pipelines.
• The latter is operating, but the former remains stuck in legal limbo.
• The administration has a more mixed record with its role reviewing natural gas pipeline projects in the Northeast, which are facing intense opposition from local politicians and environmentalists.

Requests for comment to White House spokespeople weren’t immediately returned. It's unclear what the details of the policy will be. Politico reported on the potential of such executive orders in late January. The publication wrote then that the policies could “weaken states’ power to block energy projects and ease the construction of new pipelines to facilitate the movement of a glut of domestic oil and gas.”

Crude Shippers Struggle With Locking In Down-The-Rockies Pipeline Space - Crude production is at all-time highs in the Bakken and the Niobrara, and the latest pipeline-capacity expansions out of both regions have been filling up fast. At the same time, producers in Western Canada are dealing with major takeaway constraints and are on the hunt for still more pipeline space. Midstream companies are trying to oblige, proposing solutions like a major Pony Express expansion or a new Bakken-to-Rockies-to-Gulf Coast fix — the Liberty and Red Oak pipelines — that could help address all of the above. The catch is that, with multiple producing areas funneling crude along the same general eastern-Rockies corridor and the outlook for continued production growth uncertain, how’s a shipper to know whether to sign a long-term deal for some of the incremental pipe capacity now being offered? Today, we consider the need for new takeaway capacity, the potential for an overbuild scenario, and what it all means for producers and shippers. It’s tough enough to determine how best to increase pipeline capacity between one production area and one destination market — the Permian and Corpus Christi, for example, or the Permian and Houston. As we’ve seen recently, multiple pipeline projects in these distinct corridors were initially proposed, then a winnowing process of sorts has been occurring, with some projects advancing and others falling to the wayside. Things become even more complicated, though, when you’re dealing with a situation in which multiple producing areas are served by — and vying for space on — the same pipeline systems. Crude flows from one production area through (or nearby) another — and then another — on its way to a number of possible destinations. That’s the case along the eastern Rockies, where crude works its way down from Western Canada, the Bakken, and the Niobrara’s Powder River Basin (PRB) and Denver-Julesburg (D-J) Basin on its way to either the Midwest, the Midcontinent or the Gulf Coast. Put another way, Niobrara shippers are affected by production trends, pipeline capacity and pipeline utilization upstream and downstream of them — if pipes come down to Wyoming and Colorado filled to the brim, the opportunities to add PRB and D-J barrels to the systems diminish.

More States Crack Down on Pipeline Protesters, Including Supporters Who Aren’t Even on the Scene - Bills to clamp down on pipeline protests have spread to at least nine new states this year, part of an industry-backed push that began two years ago to heighten penalties for activists who try to block fossil fuel infrastructure projects. Several of the bills also allow prosecutors to go after people or organizations as "conspirators" or "riot boosters" for merely supporting or coordinating with others who violate the law. Civil liberties advocates argue that these vague and far-reaching provisions risk violating free speech protections under the First Amendment, and they have already started launching legal challenges. The latest government move came on Wednesday in South Dakota—one of the states the planned Keystone XL pipeline is slated to cross—when Republican Gov. Kristi Noem signed a law that enables state and local governments, as well as "third parties," to seek civil damages from people or organizations that engage in "riot boosting."Lawmakers in North Dakota, a hub of oil and gas development, also passed a bill this week that stiffens penalties for anyone who interferes with the construction or operation of pipelines and other "critical infrastructure."   While the details vary from state to state, the bills generally increase penalties for trespassing on or tampering with a range of facilities, including pipelines, oil storage tanks, railroads and utility infrastructure. Several of them, including North Dakota's, also include language assigning higher penalties—up to $1 million in some cases—for any group found to be a conspirator in violating the law. The South Dakota law is different. Rather than imposing new penalties for interfering in pipeline construction, the bill enables state or local governments—or a third party working with government—to seek compensation from anyone who engages in "riot boosting," which includes encouraging or directing someone to engage in a riot, defined by the state as the use of force or violence by three or more people acting together. Someone can qualify as a "riot booster" even if they reside out of state and act indirectly "through any employee, agent or subsidiary." Anyone found liable would be responsible for three times the ordinary penalty.

ACLU challenges South Dakota pipeline protest legislation (AP) — The American Civil Liberties Union is challenging a new law signed by South Dakota Gov. Kristi Noem aimed at potential protests against the planned Keystone XL oil pipeline. The ACLU filed a federal lawsuit Thursday on behalf of groups and individuals planning to protest the pipeline or encourage others to do so. Noem signed the act on Wednesday that allows officials to pursue money from demonstrators who encourage violence. The Republican governor also signed another bill requiring pipeline companies to help pay extraordinary expenses such as the cost of policing during protests, but the ACLU is not challenging that new law. The pro-pipeline GAIN Coalition says the legislation provides “clarity about what crosses the line.” But the ACLU and American Indian tribes say Noem’s approach will stifle free speech. 

The green scare: how a movement that never killed anyone became the FBI’s no. 1 domestic terrorism threat - So-called eco-terrorism became the Justice Department’s No. 1 domestic terror concern — “over the likes of white supremacists, militias, and anti-abortion groups,” as one senator pointed out at the time. Operation Backfire, which sent Dibee running, was the climax of the crackdown. “There was money, there was administrative support, there was management support,” said Jane Quimby, a retired FBI agent who worked on Backfire. The results were “an affirmation that given the resources that you need, and the support that you need, you can really make these things work.” In 2009, when a Department of Homeland Security intelligence report raised alarms about the rising threat of right-wing extremist violence, it provoked a very different response. After outcry from conservative groups, DHS backtracked on the report and later disbanded the domestic terrorism unit that produced it. Daryl Johnson, a former domestic terrorism analyst at DHS, says there’s a reason law enforcement took a less aggressive approach to right-wing white supremacists and anti-government attackers. In the case of the eco-extremists, the government had a powerful ally: industry. “You don’t have a bunch of companies coming forward saying I wish you’d do something about these right-wing extremists,” said Johnson, who left his position in 2010, after his warnings about right-wing violence were dismissed. “If enough people lobbied congresspeople about white nationalists and how it’s affecting their business activity, then I’m sure you’ll get legislation.”

Oil sheen detected on floodwaters of Yellowstone River -- A small oil spill that hadn’t been fully cleaned up in northwest North Dakota has contaminated the Yellowstone River after the well site flooded, the North Dakota Department of Health reported Tuesday. An oil sheen was detected on floodwaters of the Yellowstone River on Monday. Bill Suess, spill investigation program manager, said the oil originated on a Whiting Petroleum well pad in McKenzie County. The sheen appears to be from residual oil associated with a spill that occurred on the well pad that had not yet been fully remediated, the department said. Ashley McNamee, spokeswoman for Whiting, said the release occurred last week. “We immediately recovered the majority of the 2 barrels of oil which was contained on location; however, we were unable to fully remediate the affected soil before the Yellowstone River began to rise,” McNamee said. Suess said the health department was not aware of the original spill because it was contained to the well pad and less than 10 barrels and wasn’t required to be reported. State regulations do require all spills to be cleaned up, though there is no set timeframe required, Suess said.

Cleanup continues at Buskin River oil spill site - Oil spill responders are continuing the cleanup at the American President Lines facility near Anton Larsen Bay Road and Old Tom Stiles Road, the Buskin River, its tributary and the Saint Paul Harbor after a spill of approximately 1,370 gallons of diesel that occurred there on the night of March 15th, the Alaska Department of Environmental Conservation reports. The spill, which was discovered at 9 am on March 16th, originated from a broken fuel line to a refrigeration unit on the APL property. When discovered, the leak had emptied the contents of the storage tank into the yard. From the yard, rain runoff washed the oil into the drainage ditch and into a culvert on the property. From that point, the oil drained into a tributary of the Buskin River, into the Buskin and out into the Saint Paul Harbor. That area is Kodiak’s main subsistence and sport fishing river in the Kodiak area, and is also used to gather grasses for traditional use by Kodiak’s Sun’aq tribe. Immediately after discovering the spill, APL contacted their consultant Environmental Contracting Services who in turn contacted ADEC. By 12:20 pm, ADEC had contacted the Coast Guard’s Marine Safety Detachment. APL and ECS personnel set up check dams, dug trenches and laid absorbent materials to stem the flow into and out of the culvert. As personnel from the Marine Safety Detachment and the Coast Guard Fire Department responded to assist, ECS conducted aerial surveys to determine the extent of the spill area. After being notified, the U.S. Fish and Wildlife Service responded to begin wildlife surveys. Also, following notification that afternoon, Alaska Chadux Corporation arrived at the scene of the spill by the night of the 16th. By the morning of the 17th ADEC had also arrived and along with Chadux began shoreline assessments.

It’s been 30 years since the Exxon Valdez oil spill. Here’s what we’re still learning from that environmental debacle. - Dan Lawn was one of the first responders to reach the 986-footlong Exxon Valdez after it went off course and punctured its hull on Bligh Reef in a debacle that marks its 30th anniversary Sunday. Some 11 million gallons of crude would leak out of the Exxon Valdez in what was then the largest oil spill in U.S. history, and one that Lawn had long warned could happen. Eventually, the oil would foul parts of 1,300 miles of coastline, killing marine life ranging from microscopic planktons to orcas in an accident that would change how the maritime oil-transportation industry does business in Alaska, and to a lesser extent, elsewhere in the world. For four years, crews embarked on a $2.1 billion cleanup that left behind crude that still can be detected on some stretches of the Prince William Sound shoreline.  Up to 10,000 workers were employed in the cleanup, and 1,000 boats. One line of an attack was using hot water on the beaches, but that was stopped when it was found to cook marine life, do more harm than good, according to research cited by the Exxon Valdez Oil Spill Trustee Council. Amid the oil slicks in the water, killer whales surfaced to breathe. Among a resident pod of 36 whales in the area, 14 had disappeared by 1990, according to the Trustee Council. Whales likely inhaled petroleum vapors and may have eaten contaminated prey.  Over the long term, a transient whale pod that also frequented Prince William Sound fared the worst. Before the spill, the pod had 22 whales. Since then, the pod has declined to seven whales, and there have been no new calves born.  That pod appears doomed. “I give them maybe a two percent chance (of survival). It is so sad,” Matkin said. Today, due to changes to U.S. law and international regulations, all oil tankers traversing the oceans are double-hulled, unlike the more breech-prone single hull of the Exxon Valdez. This significantly reduces but does not eliminate the risk of spills, as was demonstrated last year when a double-hulled Iranian tanker exploded and leaked fuel oil after crashing into a freighter in the South China Sea.  Three decades after the spill, Alyeska and the oil companies — under pressure from the state of Alaska — have greatly expanded measures to prevent spills. Two escort tugs, for example, accompany every oil laden tanker that motors through Prince William Sound. If needed, they can steer the tanker, counter any unwanted move or take it under tow.  If oil should escape a tanker, Alyeska has more than 40 miles of boom, compared with five in 1989.

Groups say they will sue unless EPA renews effort to restrict oil spill dispersants - A coalition of environmental and public health advocates say they will sue the federal government unless it takes action to restrict the use of dispersants for oil spill cleanup.The plaintiffs say the federal Environmental Protection Agency is shirking its duty to update its rules so that they reflect the latest science on how dispersants affect the environment. They argue the update is especially urgent now that the Trump administration is moving to expand offshore oil leasing, including in Arctic waters.The news comes a day after the 30th anniversary of the Exxon Valdez oil spill in Prince William Sound, when thousands of gallons of dispersant were used.EPA did propose stricter standards for dispersants in 2015. But the agency has not moved to finalize those standards since then. The plaintiffs say they will file suit in 60 days unless the agency renews its work on the issue.“We’re very concerned about the lack of oversight and regulation that takes into consideration this newer science, and EPA is definitely long overdue in fulfilling their responsibility to regulate these chemicals,” said Pam Miller, executive director of the Alaska Community Action on Toxics.Alaska Community Action on Toxics is one of the plaintiffs in the case, along with the Homer-based advocacy group Cook Inletkeeper, Nuiqsut resident Rosemary Ahtuangaruak, La. resident Kindra Arnesen and Calif.-based environmental advocacy group the Earth Island Institute.In a statement, EPA said the agency is reviewing the notice of intent to sue, but declined to comment further. Dispersants don’t get rid of oil. They’re used to help oil dissolve in the water column so it doesn’t stay on the water’s surface or wash on shore.

The Russians are coming (and they're bringing oil) - As America's Russia hysteria is stirred once again by the arrival of the long-awaited report of the U.S. Department of Justice's investigation into Russian meddling in the 2016 presidential election, a surge in Russian oil imports has arrived on America's shores.   By effectively preventing the national Venezuelan oil company from getting paid for its cargoes to the United States, the U.S. government has forced Venezuela, previously a major source of imported oil, to seek other customers for its mostly heavy crude.   But the loss of Venezuela as a major U.S. oil supplier has opened up room for other exporters, most notably Russia. Russian oil has never been subject to the economic sanctions arranged by the United States against the country. The arrival of increasing amounts of Russian crude at America's ports belies the notion so frequently trumpeted by a chorus of fawning admirers of America's get-tough foreign policy that the U.S. can now use its rising oil dominance to advance its geopolitical goals.  Here's what's wrong with that story. First, the United States remains a substantial importer of petroleum products, both on a gross and a net basis. Yes, the country does export a large amount of the light oil produced from the shale deposits in Texas and elsewhere because American refineries cannot use all of it. Those refineries are generally designed to mix light and heavy crudes for optimal output. But, this means the United States must import a significant amount of heavy crude. America remains wildly dependent on world oil to keep its voracious refining industry in operation.  In addition, the official net import numbers are deceiving because they include liquids that come from natural gas wells called natural gas liquids. Once those are netted out and removed from the calculations, America's net imports of petroleum products rise from about 1.5 million barrels per day (mbpd) to about 2.4 mbpd. That's far lower than in the past, but it does not spell energy independence. The country remains dependent on the world market and must pay world prices.  That dependence is likely to increase over the long term. The U.S. Energy Information Administration (EIA) predicts that U.S. crude oil production (defined as crude oil and lease condensate) will peak in the mid-2020s and then decline slowly through 2050.  Given that almost all the rise in production and sustained output is expected to come from deep shale deposits—which the industry as a whole has lost money on every year—it's hard to see how the EIA forecast can be realized. To quote economist Herbert Stein, "If something cannot go on forever, it will stop." A more realistic forecast shows a dramatic decline in U.S. crude oil production between the 2020s and 2050.

Canada crude-by-rail exports fall to 325,499 b/d in Jan, first dip since Feb - Canadian crude-by-rail exports fell for the first time in 11 months in January as government-mandated production cuts took effect and differentials rose to levels that made rail shipments uneconomical. Exports by rail from Canada averaged 325,499 b/d in January, down 28,290 b/d from the all-time high of 353,789 b/d in December 2018, according to the latest figures from the country's National Energy Board published Friday. The slight decline in January comes after producers turned rail exports amid pipeline constraints and mounting inventories in Hardisty, Alberta.  Crude oil exports were still more than double the amount shipped in January 2018. The NEB's January export figures are the first to capture government-mandated production cuts of around 325,000 b/d that took effect January 1. Those cuts sparked a price rally for Western Canadian Select, the benchmark heavy crude, that saw its differential gain more than $44/b from October 11, 2018, to a high of minus $6.95/b January 11. Traders have said shipping WCS to the US Gulf Coast by rail is typically uneconomical when differentials are above WTI CMA minus $15/b. Stronger differential have prompted some players, such as Canada's Imperial Oil, to cut back or abandon rail shipments. During its February 1 earnings call, Imperial Rail CEO Richard Kruger said he expected Imperial' crude-by-rail shipments to be "at or near zero" for February. Western Canadian Select at Hardisty was last heard to trade at WTI CMA minus $9.25/b Friday morning, after it strengthened from Thursday on the prospect of upcoming supply turnarounds. Since limiting production by 325,000 b/d in January, the Alberta government has gradually lifted its production cap. Alberta Premier Rachel Notley increased production by 75,000 b/d at the end of January and by another 25,000 b/d in April and said the province was looking to buy 7,000 rail cars to move an additional 120,000 b/d by rail. Alberta officials said Monday they would lift the production restriction by 25,000 b/d in May and by another 25,000 b/d in June, increasing the total production cap to 3.71 million b/d.

Province releases review of hydraulic fracturing in B.C - The Province of B.C. has released a review of hydraulic fracturing.  The report, prepared by a three-member panel makes 97 recommendations the focus on environmental impacts and knowledge gaps about the industry.The report focused on four main areas, water quality, water quantity, induced seismicity, and fugitive emissions.   The panel also reviewed how hydraulic fracturing impacts human health, impacts on environmental health, and cumulative effects of the process.  The Ministry of Energy, Mines and Petroleum Resources says they will take a phased approach to implement the scientific panel’s 97 recommendations. In May of 2019, the Province will release its short-term plan and in December the long-term plan.  Read the full report below.  (236 pages, embedded) The Province says they have already started to make changes to now the OGC regulates dams and water storage, new regulations for orphaned well sites and instructing the OGC to work more with Treaty 8 members.

Fracking plan 'will release same CO2 as 300 million new cars' - The government's fracking proposals would release the same amount of greenhouse gas emissions as almost 300 million new cars, fatally undermining ministers' obligation to tackle the escalating climate crisis, according to new research. Analysis by the Labour party shows that the amount of carbon dioxide released into the atmosphere if the government's plans go ahead would be the same as the lifetime emissions of 286 million cars - or 29 new coal-fired power plants. The findings come as ministers' efforts to kickstart their fracking proposals face growing resistance, with defeat in the courts, fierce local objections and opposition from Labour and Tory councils alike.Labour leader Jeremy Corbyn, who was in Lancashire on Saturday to join the anti-fracking campaign in the region, said a future Labour government would ban fracking "once and for all"."The Conservatives' fracking plans will damage our environment and fly in the face of community opposition," he said. "There is a clear alternative to fracking. Clean, renewable energy is the future of our economy and will create more than 400,000 jobs as part of Labour's green industrial revolution."Concerns about drilling flared in the run-up to Christmas when energy company Cuadrilla was forced to pause operations near Blackpool three times after drilling caused small earthquakes that breached government safety limits. Several local authorities - including London, Manchester, Leeds, Wakefield, Hull and York - have expressed opposition to fracking. There is also opposition from many Tories. In Westminster, almost two dozen Tory MPs are reported to be against fracking and willing to "destroy the government's majority" if it tries to weaken planning laws. Several Tory-run local authorities - including Derby, Dorset and Nottinghamshire - are fiercely opposed to a change in planning proposals, which would mean companies could drill test sites without applying for permission. Labour, which has vowed to oversee "an economic revolution to tackle the climate crisis", says on top of the widespread opposition, the government's plans would produce huge amounts of greenhouse gases, wrecking any chance of the UK complying with its Paris climate obligations.

MPs warn taxpayers could face 'hefty bill' from North Sea and fracking decommissioning -The Public Accounts Committee (PAC) of MPs has today published a new report warning there is "significant uncertainty over costs to taxpayers of decommissioning offshore oil and gas assets", as well as a "poor understanding" within government of the potential liabilities associated with decommissioning fracking assets. The report calls for a clearer strategy from government to minimise decommissioning costs, establish the UK as a global hub for offshore decommissioning expertise, and take steps to ensure taxpayers do not "pick up a hefty bill"  to decommission fracking infrastructure. The report notes that HM Revenue & Customs (HMRC) estimates oil and gas companies will pass on £24bn of decommissioning expenditure to taxpayers through tax reliefs, but there remains a wide range of possible future costs as most companies are still improving the certainty of their cost estimates. Work is on-going to reduce the cost of decommissioning, but the PAC argues savings could be maximised if the government developed a more coherent strategy to support the sector. The report also raises fresh concerns about how tax breaks and wider support for the oil and gas industry could run counter to the UK's carbon targets."The Department... needs to ensure its support for oil and gas remains compatible with its other activities aimed at achieving climate change goals, including ensuring alignment with the development of carbon capture, usage and storage, which could potentially reuse offshore oil and gas assets," the report states."Taxpayers will incur costs running to billions for oil and gas decommissioning, but it is far from clear what these costs will be in practice," said PAC chair Meg Hillier, MP. "The Oil and Gas Authority must bring greater certainty to its cost estimates. Together with the Department for Business, Energy and Industrial Strategy it should be transparent about how these estimates measure up to reality, and explain exactly what impact it is having on reducing costs."

Fracking ban decision delayed by Scottish government - BBC News - A decision on whether to ban fracking in Scotland has been delayed, the Scottish government has said.A moratorium on the controversial process has been in place since 2015, and the government said in October 2017 that it backed an "effective ban".Scottish ministers pledged they would set out their finalised policy on fracking by the end of March.However, they have now said they will launch a further consultation process after the Easter break.The Scottish government said it planned to publish an "addendum" to its previous report which would require further comments from interested parties. It said it would make a final decision "as soon as possible after this process is complete".  The development of unconventional oil and gas remains prohibited in Scotland, with ministers enforcing a moratorium on it via planning powers. Mr Wheelhouse told MSPs in October 2017 that the moratorium would continue "indefinitely", calling this an "effective ban" and saying that fracking "cannot and will not take place in Scotland".This position was endorsed by MSPS by a vote of 91 to 28, and First Minister Nicola Sturgeon later told the SNP conference that "fracking is now banned in Scotland". However, when petrochemical firms Ineos and Reach launched a legal challenge, the government's legal representative told the Court of Session that there was no ban in place as the policymaking process was still ongoing.

Will Venezuela's Oil Sector Ever Recover? – podcast - On this week's Capitol Crude, Frank Verrastro and Andrew Stanley with the Center for Strategic & International Studies' energy and national security program talk about the state of Venezuela's oil sector, the impact of US sanctions on PDVSA and what recovery might look like. With US imports of Venezuelan crude now at zero, Verrastro and Stanley talk about India's plans to cut imports from PDVSA, remaining markets for Venezuelan crude, potential changes to the country's hydrocarbons law and why long-term sanctions may do irrevocable harm to the South American country's oil output.

Refinery Investments In Low-Sulfur Crude Production Hit $1B -- Investments in the production of lower-sulfur fuels at refineries across the world have reached US$1 billion to date, a BP executive said at an industry forum in the UAE. “There’s been a huge amount of investment in refineries since 2015 and (it) will continue beyond 2020,” Eddie Gauci, BP’s global head of marine fuels, said as quoted by Reuters at the Fujairah Bunkering and Fuel Oil Forum. Refiners have been preparing for the entry into effect of a sulfur emission cap drafted by the International Maritime Organisation. The cap is 0.5 percent, down from 3.5 percent, and it enters into effect in January 2020. The new rule has sparked a lot of speculation about where oil markets will swing in the coming months and years, with warnings about a possible shortage of middle distillates and an oversupply of light crude. What seems certain enough is there will be a lot of fuels in storage ahead of the entry into effect of the new rule. “We will see some floating storage of high sulfur or low sulfur for a period of time until the land-based infrastructure establishes some kind of equilibrium that’s in tune with what grades of fuel are called for in particular locations,” BP’s Gauci said. Earlier this month the International Energy Agency said in its annual Oil 2019 report, “The 2020 IMO marine regulation change is one of the most dramatic ever seen to product specifications, although the shipping and refining industries have had several years notice.” So refiners are investing in preparatory activities, be it by adjusting their equipment to produce lower-sulfur fuels or, most immediately, in changing refinery maintenance schedules to capture the higher profit margins of middle distillates such as diesel and marine gasoil, which have a lower sulfur content, with an anticipated spike in demand later this year. 

Tanker Hijacked By Migrant Pirates Seized By Special Forces In Mediterranean - Maltese special forces have seized a Turkish oil tanker, El Hibu 1,which had been hijacked by the very migrants it stopped to rescue in the Mediterranean Sea off the coast of Libya.  Five of the migrants have been arrested, and are accused of overpowering the vessel's 12-man crew - forcing the oil tanker's captain to cede control "through coercive action," according to the Telegraph, citing Maltese government sources.  77 of the 108 migrants - or 71% - were men, who were traveling with 19 women and 12 children.  "The captain repeatedly stated that he was not in control of the vessel and that he and his crew were being forced and threatened by a number of migrants to proceed to Malta."   The tanker was prevented from entering Maltese waters by a Maltese patrol vessel, after which a special forces unit was dispatched to board the tanker and regain control. The operation was backed up by a patrol vessel, a helicopter and two fast interceptor craft.  "The tanker, her crew and all migrants are being escorted by the Armed Forces of Malta to Boiler Wharf (in Valletta) to be handed over to the police for further investigations," said Maltese authorities.

Major new inquiry into oil spills in Nigeria's Niger Delta launched - A major new inquiry into oil companies operating in the Niger Delta has been launched by the Archbishop of York, John Sentamu. The probe will investigate "environmental and human damage" in Nigeria's vast oil fields. "This Commission will investigate the human and environmental impact of multinational oil company activity and is crucial to the prosperous future of the people of Bayelsa and their environment, Nigeria and hopefully to other oil-producing nations," he said. Nigeria is Africa's largest oil producer. The country's crude oil production -- estimated at over 300 million liters per day -- makes up 70 percent of the Nigerian government's revenue. This new commission, convened by Bayelsa Governor Seriake Dickson, says that it wants to make oil companies in the region more accountable. "The world has looked on for too long without taking the necessary collective action to put a stop to the damage being done by oil companies in Bayelsa. We must put the environment and the health and wellbeing of our communities first," Dickson said in a statement Wednesday. Big oil spills are common in the Niger Delta where over 40 million liters of crude oil is spilled annually, resulting in human deaths and damage to the local ecosystem. A 2018 study by the Journal of Health and Pollution found that more than 12,000 oil spill incidentshave occurred in the oil-rich region between 1976 and 2014. Pipeline corrosion and tanker accidents caused more than 50 percent of them. Other incidents can be attributed to operational error, mechanical failure, and sabotage mostly from militant groups, the study said.

Coast Guard probes oil spill in Sibulan-Dumaguete waters – The Philippine Coast Guard (PCG) here is investigating an oil spill that has left patches of oil in coastal areas in nearby Sibulan town and this capital city. Lt. Commander Jansen Benjamin, PCG-Dumaguete Station Commander, disclosed Friday that the oil spill was estimated to have occurred around three days prior to its discovery, based on the characteristics seen in the oil retrieved from shallow waters and from the shore. The extent of the damage, however, has yet to be ascertained pending reports on the effects of the oil spill on the environment. Benjamin hoped there would be no serious consequences. So far, no oil slick that would pose a greater threat to the environment has been reported yet although the Coast Guard here is coordinating with its counterparts in nearby areas outside of Negros Oriental to be on the lookout for any, he said. According to Benjamin, it is also difficult for them to determine as yet who could be responsible for the oil spill, or perhaps an oil leakage, but he said the oil most likely came from a sea vessel. The quantity of the spill could not be determined, as the black substance that hit the local shores here has already split up into smaller portions and there is no need for containment because there are no oil slicks or large oil clumps, he pointed out. Speaking in the vernacular, Benjamin explained that the oil appeared thick and heavy, and was emulsified, which means it was no longer fresh and had already been in the seawaters for several days. The oil spill was first brought to the attention of authorities, through the Provincial Disaster Risk Reduction and Management Council (PDRRMC) on Thursday, after a caller said oil patches were seen in Maslog, Sibulan.

Solomon Islands oil spill: currents push slick away from world heritage site –- Ocean currents have carried oil leaking from a shipwreck on the Solomon Islands away from a nearby world heritage site as authorities continue a clean-up operation that is expected to take months. Cleaning up after the bulk carrier MV Solomon Trader, which ran aground on a coral reef in early February and released 80 tonnes of oil, is expected to take up to four months. But the slick has been pushed away from the island’s eastern flank which is a world heritage site. Rennell Island is the the largest raised coral atoll in the world. Australian authorities, who kicked off the initial on-water clean-up, have now retreated and the ship’s Korean insurer has taken charge of the operation. There will be ongoing surveillance flights carried out to monitor the process. 'We cannot swim, we cannot eat': Solomon Islands struggle with nation's worst oil spill Read more MV Solomon Trader had been loading bauxite from a mine in the days before rough seas pushed it aground on a coral reef in the early hours of 5 February, in the lead-up to Cyclone Oma. The clean-up operation of the oil slick could take between three to four months, an expert said, while the ship wreck itself could be removed in the next four to six weeks. It is unknown what percentage of oil has been cleaned up so far and the amount removed from the water each day varies from dozens of tonnes to single digits. A barge pump has been steadily removing the 600 tonnes of oil still onboard the vessel. About 300 to 400 tonnes has been removed so far. The Solomon Islands Maritime Safety Administration said its investigation into the incident was ongoing and officials were trying to get access to the ship’s voyage data recorder. “This should shed some light on the circumstances of the incident,” acting director Jonah Mitau told the Guardian.

Australia's east faces gas shortage from 2024, market operator warns (Reuters) - Australia will face a gas shortage from 2024 unless new reserves are developed, pipeline capacity is increased or eastern states start importing liquefied natural gas, the country’s energy market operator warned on Thursday. The Australian Energy Market Operator’s (AEMO) annual gas outlook was more dire than in June last year, when it forecast no shortage before 2030. Since then, companies have cut reserve and production estimates, AEMO said. In the near term, government pressure on three liquefied natural gas (LNG) exporters in Queensland, led by Royal Dutch Shell, Origin Energy and Santos, to boost gas supply to the domestic market has succeeded in averting potential shortfalls, AEMO said. “However, southern Australia’s overall supply-demand balance for 2021-2023 remains very finely balanced, reflecting the ever-tightening integration of Australia’s electricity and gas markets,” AEMO’s chief system design and engineering officer Alex Wonhas said in a statement. Longer term, as gas output dwindles in the ageing Gippsland Basin fields off Victoria, which have long fed demand centres in Melbourne, Sydney and Adelaide, more gas will be needed from Queensland in the north or LNG will have to be imported. Victoria’s ability to supply New South Wales, South Australia and Tasmania is expected to drop from 150 petajoules (PJ) a year currently to just 23 PJ in 2023, AEMO said. To fill that gap with gas from Queensland, pipeline capacity would have to grow, it said. The key uncertainty in all the forecasts is demand for gas in power generation, which is hard to predict as it is highly dependent on weather, the speed of development of solar and wind farms, and outages at coal-fired power plants, AEMO said. While demand for gas-fired power has been falling, AEMO said that could reverse as more coal-fired power plants shut.  “Continued interest in LNG import terminals ... would be expected to help relieve pressure on meeting southern gas demand during peak periods and assist in reducing pipeline constraints, but may do little to ease gas pricing pressures,” AEMO said. 

U.S. orders foreign firms to further cut down on oil trades with Venezuela - (Reuters) - The United States has instructed oil trading houses and refiners around the world to further cut dealings with Venezuela or face sanctions themselves, even if the trades are not prohibited by published U.S. sanctions, three sources familiar with the matter said. The move comes as Washington’s efforts to oust President Nicolas Maduro in favor of opposition leader Juan Guaido have stalled, and is further evidence of how it is leaning on non-U.S. firms to achieve its foreign policy goals. The U.S. imposed fresh sanctions on Venezuela’s oil industry earlier this year but some companies have continued to supply the country with fuel from India, Russia and Europe. Washington is particularly keen to end deliveries of gasoline and refined products used to dilute Venezuela’s heavy crude oil to make it suitable for export. Jet fuel and diesel would be exempt for humanitarian reasons, the sources said. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) announced a ban in early February on the use of its financial system in oil deals with Venezuela after April. But as recently as this week, the U.S. State department has called up foreign firms to say that the scope of the sanctions is wider. The sources said that the State Department made clear that any kind of oil trade, whether it be direct, indirect or barter, would be considered a breach. OFAC did not immediately respond to requests for comment. A spokesman for the State Department said “we continue to engage with companies in the energy sector on the possible risks they face by conducting business with PDVSA.” “This is how the United States operates these days. They have written rules and then they call you to explain that there are also unwritten rules that they want you to follow,” one of the sources said.  Washington has been using its oil clout more and more. At a major oil event in Houston this month, U.S. Secretary of State Mike Pompeo made a rare appearance and laid out a vision of working with energy firms to isolate Iran and Venezuela.

US warns oil shippers to avoid violating Syria, Iran sanctions— The US government on Monday warned the oil shipping industry to avoid violating sanctions against Syria and Iran by scrutinizing vessel histories and trading partners. The advisory includes a list of vessels believed to have been involved in illicit oil shipments in 2016-2018, including 51 deliveries to Syria and 33 banned ship-to-ship transfers. "Any violations of prohibitions or weaknesses in compliance that result in sanctionable conduct exposes the shipping community to significant risks and can trigger severe consequences," the Treasury Department's undersecretary for terrorism and financial intelligence, Sigal Mandelker, said in a statement. The alert issued by Treasury's Office of Foreign Asset Control, along with the US State Department and US Coast Guard, comes after a similar advisory last week warning the oil sector to avoid violating sanctions against North Korea. That report said North Korea received at least 263 refined oil product deliveries from banned ship-to-ship transfers in 2018. If all of the vessels were fully laden, the shipments would amount to 3.78 million barrels, or more than seven times the annual limit that North Korea is allowed to import under UN sanctions, Treasury said. "Despite robust US and United Nations sanctions on North Korea, North Korea continues to evade sanctions, particularly through illicit ship-to-ship transfers of refined petroleum and coal," the Treasury said.

South Korean officials to press for Iran sanctions waiver in United States (Reuters) - South Korean government officials are expected to press for extending a sanctions waiver on Iran’s petroleum exports that expires in May on a visit to Washington this week. South Korea’s Deputy Foreign Minister for Economic Affairs Yoon Kang-hyun and other leaders will meet with U.S. State Department officials on Wednesday and Thursday to discuss the waiver issued in November to keep buying Iranian oil in exchange for having reduced such purchases, the Seoul government said in a news release on Monday. The Trump administration has unilaterally reimposed sanctions on Iran’s oil exports, the lifeblood of its economy, as it seeks to curb Tehran’s nuclear and missile ambitions and its influence Syria and other countries in the Middle East. Washington issued sanctions waivers for eight economies in November, including for South Korea, Iran’s fourth largest oil customer in Asia. But the administration has said it wants the exports to go to zero as quickly as possible. The U.S. goal is to reduce the number of sanctions waivers and to cut Iran’s oil exports about 20 percent, to below 1 million barrels of oil per day from May, sources said this month. The South Korean officials will meet with the State Department’s top energy diplomat Francis Fannon on Thursday. On Wednesday they will meet with Brian Hook, the U.S. special representative for Iran, and David Peyman, the deputy assistant secretary of state for counter threat finance and sanctions. A State Department official, who spoke on condition of anonymity, confirmed the meeting with Peyman. Officials did not immediately respond to requests for comment about the other meetings. Peyman met with South Korean officials in Asia earlier this month. He offered “to continue to closely consult on the extension of sanctions exemption and Korean companies’ technical issues regarding trade with Iran,” a statement from Seoul’s foreign ministry said at the time. South Korea is a large buyer of a light oil called condensates from Iran and has told a former U.S. official that there are few options for getting the same quality of condensate from other suppliers. South Korea’s oil imports from Iran fell 12.5 percent year-on-year in February, customs data showed this month. 

Oil Sanctioned by U.S. and Shunned by World Finds Haven in China - China is doubling down on purchases of cheap oil that other buyers are shunning due to U.S. sanctions. The world’s biggest crude importer boosted imports from Venezuela and Iran last month from January, with the shipments costing the least since November 2017, data released on Monday by the General Administration of Customs show. Both of the OPEC producers are subject to separate U.S. sanctions that have squeezed their sales to customers across the globe. While the U.S. has granted several buyers waivers from its sanctions to continue buying Iranian oil, the volumes they are allowed to buy are restricted. What’s more, other nations such as Japan are limiting cargoes to a minimum to avoid even the possibility of breaching America’s rules. China, however, has imported about 446,000 barrels a day on average since November, customs data show. The Asian nation is said to have been allotted 360,000 barrels daily under the exemption, though that excludes the share of oil owed to Chinese companies that hold stakes in Iranian projects. In Venezuela’s case, the Donald Trump administration’s sanctions only effectively block shipments to the U.S. and don’t restrict flows to other nations. Still, big buyers such as India’s Reliance Industries Ltd. have shied away from purchases to avoid potential repercussions. China buys more oil from Venezuela, Iran on cheaper cost “Increased purchases from Venezuela may very likely be due to cost concerns,” said Li Li, an analyst with Shanghai-based commodities researcher ICIS-China. If the import price is low enough, oil giant PetroChina Co. can easily make a profit by selling to independent refiners, also called teapots, at a higher premium, she said by phone. China bought 2.03 million metric tons, or 531,000 barrels a day, of crude from Venezuela last month, 17 percent more than January and the highest since December 2017, the customs data show. Imports from Iran rose 22 percent from a month earlier to 1.96 million tons. China’s purchases are also probably spurred by a shortage of so-called heavy oil, which is more dense and sulfurous than lighter crude. The squeeze has been exacerbated by output cuts by the Organization of the Petroleum Exporting Countries and its allies as well as the U.S. sanctions.

China cuts gasoline, gasoil exports in Feb— China's gasoline exports in February fell to a three-year low, a sharper decline than analysts had expected, latest data from General Administration of Customs showed. Exports to Singapore, the traditional top destination for China's gasoline, sank 66.5% from 1.14 million mt in January, to just 383,000 mt last month. It was also down 38.5% year on year. The February gasoline exports were well below market expectations. Two Beijing-based analysts and two traders in Singapore had earlier said they expected exports to be around the normal level of 1 million mt in the month. China's exports to Malaysia also dropped 69.6% month on month to 530,000 mt in February. Asian trading hubs of Singapore and Malaysia remained the top destinations for Chinese gasoline -- both took 84.6% of the total outflows from China amounting to 1.75 million mt, up from 75% over January-February 2018. Oil products from Asian countries are usually sent to the hubs for blending or trading before heading to end-users. Exports in February to all other Asian destinations except Vietnam fell drastically from January. The only increase outside Asia was to Australia, with 24,000 mt exported in February, compared with zero in January and a year earlier. The lower realized export total for the month could be due to the methodology used by GAC, one Singapore-based trader said. Monthly exports were last lower at 426,000 mt in October 2015. China's gasoil exports to African continues to grow in 2019, despite the drop in overall volume in February. Exports to Mozambique totaled 185,000 mt over January-February from zero a year earlier, to be the sixth top destinations for China's gasoil export. Mozambique, for the second time, has remained in the top 10 destinations in February, receiving 39,000 mt of gasoil. This compared with zero in February 2018, but was down 73.4% from January at 147,000 mt. Meanwhile, exports from China to Hong Kong were up 76.9% year on year to 272,000 mt, though down 11.6% from January. Total exports to Hong Kong over the first two months, rose 91.9% from a year earlier to 580,000 mt, making it the top second destination after Singapore.  Besides Singapore and Hong Kong, Bangladesh was the top third destination for China's gasoil export, taking 180,000 mt last month. It doubled from a year earlier, and also up 182.8% from January.

Us China Trade Tensions In Focus As The Lng2019 Conference In Shanghai Takes Center Stage (podcast) S&P Global Platts senior natural gas writer Harry Weber and Platts Analytics team lead for North America natural gas Ross Wyeno preview the upcoming LNG2019 conference in Shanghai with natural gas managing editor Joe Fisher. The conference will bring together global liquefaction terminal developers, end users and traders interested in buying capacity. The US will be a key player during the conference, and the question of whether trade tensions with China will ease or escalate will be on many people's minds, as officials from both countries continue to meet in Beijing and Washington.

World’s 2nd Largest Oil Company Sees Huge Drop In Profit -Sinopec reported a 76-percent drop in its latest quarterly profit for October-December 2018, which is the lowest since at least the third quarter of 2016, Reuters reports, citing the company. However, the bad news was not a result of the company’s normal operations but of derivatives trading losses incurred by its trading arm Unipec. The division booked net losses of US$690 million (4.65 billion yuan) in the fourth quarter of last year on bad oil hedging bets. This pressed the parent company’s net result to US$461.57 million (3.1 billion yuan) despite a 33-percent increase in revenues during the three-month period, as calculated by Reuters.In refining specifically, China’s top refiner reported even worse profit figures, according to Bloomberg calculations. This fell by as much as 90 percent in the fourth quarterFor the full year, however, things looked much better in the profit department, with Sinopec reporting a 23-percent annual rise and solid growth in revenues. The improvements, like the better results of other oil companies, came on the back of higher oil prices.Now the company plans to spend more to boost oil production as instructed by Beijing. This year, however, production will not grow but decline from 2018, projected at 288 million barrels, of which 39 million barrels from projects abroad. Last year, Sinopec pumped 288.5 million barrels, of which 39.6 million barrels from projects abroad.To this end, Sinopec’s 2019 capital spending will be the highest in five years at US$20.3 billion (136.3 billion yuan), versus US$17.58 billion (118 billion yuan) spent last year. Boosting local production of oil and gas is a priority for China’s government as demand for the commodities rises and so do imports.No wonder then that 44 percent of the total 2019 budget will be allocated for exploration and production, with the focus being on boosting natural gas production to 1.02 trillion cubic meters from 977 billion cubic meters in 2018.

More shale, who cares? Saudi Arabia pushes for at least $70 oil (Reuters) - Budget needs are forcing Saudi Arabia to push for oil prices of at least $70 per barrel this year, industry sources say, even though U.S. shale oil producers could benefit and Riyadh’s share of global crude markets might be further eroded. Riyadh, OPEC’s de facto leader, said it was steeply cutting exports to its main customers in March and April despite refiners asking for more of its oil. The move defies U.S. President Donald Trump’s demands for OPEC to help reduce prices while he toughens sanctions on oil producers Iran and Venezuela. The export cuts are designed to prop up prices, sources close to Saudi oil policy say. Saudi officials say the kingdom’s output policies are merely intended to balance the world market and reduce high inventories. “The Saudis want oil at $70 at least and are not worried about too much shale oil,” said one industry source familiar with Saudi oil policy. Another source said Saudi Arabia wanted to “put a floor under oil prices” at $70 or slightly lower, and added: “No one at OPEC can talk about output increases now.” Officially, Saudi Arabia, which plans to raise government spending to boost economic growth, does not have a price target. It says price levels are determined by the market and that it is merely targeting a balance of global supply and demand. Even a price of around $70 a barrel would not balance Saudi Arabia’s books this year, according to figures cited by Jihad Azour, director of the International Monetary Fund’s Middle East and Central Asia department in February. For that, he said, Riyadh needs oil prices at $80-$85 a barrel. Saudi Arabia, the world’s largest oil exporter, also wants to make sure it avoids a repeat of the 2014-2016 oil price crash below $30 per barrel, sources familiar with Saudi policy said. 

OPEC struggles to keep Russia on board with oil cut, may offer shorter extension (Reuters) - Saudi Arabia is having a hard time convincing Russia to stay much longer in an OPEC-led pact cutting oil supply, and Moscow may agree only to a three-month extension, three sources familiar with the matter said. Russian Energy Minister Alexander Novak told his Saudi counterpart Khalid al-Falih when the two met in Baku this month that he cannot guarantee an extension to the end of 2019, the sources said. “Novak told Falih that he will extend in June but can only do it until the end of September as he is under too much pressure internally to end the cuts,” a source familiar with Russian oil policy said. The Organization of the Petroleum Exporting Countries, Russia and other non-OPEC producers - an alliance known as OPEC+ - agreed in December to reduce oil supply by 1.2 million barrels per day from Jan. 1 for six months. “We can extend for three months when we meet in June and then see if we need to extend later,” an OPEC source said. “We really don’t know now, and we may not know until the last minute before we meet in June, whether the Russians will stay.” The OPEC+ alliance was formed in 2017. Since its inception, oil prices have doubled to more than $60 per barrel - mainly as a result of a series of production cuts by its members. Should Russia pull out of the latest agreement on cutting output, oil prices would drop. Saudi Arabia and other OPEC members could be forced to consider continuing the cuts alone if Russia opted not to stay, the OPEC source said. It was unclear whether Russia’s tough stance was a negotiation tactic or a real threat to quit the agreement as Novak faces mounting pressure from Russian oil companies that no longer want curbs on their production, the sources said. Igor Sechin, head of Russian oil giant Rosneft and an ally of Vladimir Putin, told the Russian president that the deal with OPEC is a strategic threat and plays into the hands of the United States, Reuters reported in February. There is no guarantee Putin will back Sechin’s view. The president sees the pact with OPEC as part of a bigger puzzle involving dialogue with OPEC’s de facto leader, Saudi Arabia, over Syria and other geopolitical issues. But Russia knows Saudi Arabia wants oil at a minimum $70 a barrel for its budget requirements, while Moscow needs just $55 a barrel to balance its books, the sources said. 

Hedge funds increase appetite for oil: Kemp-(Reuters) - Hedge funds bought another 65 million barrels of petroleum futures and options in the week to March 19, taking total purchases over the last 10 weeks to 384 million barrels, according to reports published on Friday. The one-week increase in net long positions was the largest since the end of August 2018, a strong bullish signal about the expected direction of prices over the next six months. Hedge funds and other money managers have boosted their overall bullish position in the six most important derivative contracts linked to crude and fuels prices to 685 million barrels, up from just 302 million on Jan. 8. Funds were substantial net buyers in the most recent week of NYMEX and ICE WTI (+50 million barrels) as well as Brent (+16 million barrels) and U.S. gasoline (+12 million barrels). But they were net sellers of U.S. heating oil (-4 million barrels) and European gasoil (-9 million barrels), according to exchange and regulatory data (https://tmsnrt.rs/2UT8fPK ). Funds now hold almost five bullish long positions for every short bearish one in petroleum, up from a ratio of less than 2:1 at the start of the year, but still far below the recent peak of 12:1 at the end of September. Until recently, most of the buying was concentrated in Brent and European gasoil, but buying rotated into WTI and U.S. gasoline in the most recent week. Funds have reduced most, though not all, of the short positions that they started to accumulate from the end of August, indicating that the most recent short-selling cycle is nearing its end. Portfolio managers have now reduced the number of short positions across the petroleum complex to just 173 million barrels, less than half a recent peak of 357 million on Jan. 8. 

Oil traders wait to assess impact of IMO regulations- Kemp (Reuters) - If oil traders and consumers are worried about the impact of new maritime fuel regulations from the start of next year, they have not yet started to mark up prices for low-sulphur middle distillate fuels. Under new rules agreed by the International Maritime Organization (IMO), ships will be forced to switch to using low-sulphur fuels rather than high-sulphur residual fuel oil, or fit scrubbers to remove sulphur dioxide emissions. Refiners have been gearing up to increase the production of IMO-compliant shipping fuels, and many ship owners have installed or plan to fit scrubber units to enable them to continue using cheaper residual fuel oil. There is considerable uncertainty about exactly how vessel owners will comply with the new regulations and how much extra low-sulphur fuel the refiners will manage to produce. But the forthcoming regulations are expected to increase consumption of middle distillates and cause that segment of the oil market to tighten significantly. Ships will be competing for the same low-sulphur middle distillates used as diesel, jet fuel and heating oil by road hauliers, railroads, airlines and farmers as well as many homes, offices and factories. As a result, some analysts are forecasting a severe shortage of middle distillates, causing prices to spike, while others see a more limited impact. 

Oil prices fall as markets brace for potential US recession - Oil prices slipped on Monday, with concerns of a sharp economic slowdown overshadowing support from tighter supply due to OPEC's production cuts and U.S. sanctions on Iran and Venezuela. Brent crude oil futures were down 14 cents, or 0.2 percent, at $66.89 per barrel, while U.S. West Texas Intermediate (WTI) futures were at $58.96 per barrel, down 8 cents, or 0.1 percent. Both crude oil price benchmarks closed down last week after briefly hitting their highest since November 2018. "Oil remains in a tug-of-war between fundamentals and a fickle sentiment in the global financial markets," said Vandana Hari of consultancy Vanda Insights. Concerns about a potential U.S. recession emerged on Friday after cautious remarks by the U.S. Federal Reserve caused 10-year treasury yields to slip below the three-month rate for the first time since 2007. Historically, an inverted yield curve - where long-term rates fall below short-term ones - has signaled an upcoming recession, and world stocks hit a 12-day trough on Monday. Bullish sentiment helped drive benchmarks to last week's highs, but that move could now leave them vulnerable to a correction. "Speculators increased their net long in ICE Brent by 15,934 lots over the last reporting week, to leave them with a net long of 308,606 lots ... the largest position since late October," ING said in a note. "A large gross long is a key downside risk for the market, especially with growing concerns over the economy."

Oil prices hit by worries of sharp economic slowdown – (Reuters) - Oil prices were mixed on Monday, as concerns about a slowdown in global economic growth lingered, offset by the prospect of tighter U.S. crude supply. Brent crude oil futures settled at $67.21 a barrel, up 18 cents, while U.S. crude fell to $58.82 a barrel, down 22 cents. “Some of the weakness we saw earlier was related to the reawakening of concerns surrounding demand growth,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. The market is now looking ahead to weekly data on U.S. crude inventories, McGillian said, beginning with Tuesday’s report from the American Petroleum Institute, an industry group, followed by U.S. Energy Information Administration figures on Wednesday. [API/S] “If we see another week of inventory numbers like we saw last week that could restart the rally,” he said. The latest data is expected to show U.S. crude inventories falling for a third straight week, after having declined by nearly 10 million barrels the prior week on a near-record week for exports. [EIA/S] “We expect U.S. crude balances to see some additional tightening as crude exports remain sharply elevated and imports are likely downsized,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. “(But) we see a reduction in the rate of global oil demand growth as becoming a larger price influencer during the next few weeks,” Ritterbusch said. Oil prices took a hit last week after cautious remarks by the U.S. Federal Reserve and weak factory data from the United States, Europe and Asia led to the inversion of the U.S. Treasury yield curve for the first time since 2007. Three-month Treasury bills currently yield more than 10-year notes. An inverted yield curve, where long-term rates fall below short-term ones, has historically pointed to a looming recession, as it reflects investor belief in greater short-term risk.

Oil rises 2 percent as tightening supplies take focus (Reuters) - Oil rose nearly 2 percent on Tuesday as attention centered on geopolitical factors tightening supplies that are leading to falling exports from Venezuela and declining U.S. inventories. Despite concerns about weaker demand due to an economic slowdown, oil prices have risen more than 25 percent this year, supported by supply curbs by the Organization of the Petroleum Exporting Countries plus allies, and losses due to U.S. sanctions on Iran and Venezuela. Venezuela’s main oil export port of Jose and its four crude upgraders have been unable to resume operations following a massive power blackout on Monday, the second in a month, according to industry workers and a union leader close to the facilities. “There is no electricity, everything is paralyzed,” oil workers’ union leader Jose Bodas told Reuters on Tuesday. The blackout earlier this month, due to years of underinvestment and lack of maintenance, also interrupted oil exports at Jose, the lifeblood of the OPEC nation’s economy, eroding total export volumes and causing delays in loading and discharging oil. “We’re seeing increasing attention paid to what is going on in Venezuela and to the effect of sanctions,” said Gene McGillian, director of market research at Tradition Energy. “Buyers are driving prices higher due to expectations that tightening of waivers on U.S. sanctions on Iran will create a tighter fundamental picture.” Brent settled up 76 cents at $67.97 a barrel, not far below its year-to-date high of $68.69, reached on March 21. U.S. crude futures’ gains were sharper, rising $1.12, or 1.9 percent, to $59.94 a barrel, ahead of government inventory data. Crude futures were little changed in post-settlement trade after the American Petroleum Institute, a trade organization, said U.S. crude inventories rose 1.9 million barrels in the latest week. The market was waiting to see whether official figures due on Wednesday confirmed the API data or were in line with estimates that forecast a 1.2 million-barrel decline. Worries about demand have limited oil’s rally as manufacturing data from Asia, Europe and the United States pointed to an economic slowdown, although bullish bets by some investors are rising.

WTI Drops Back Below $60 After Surprise Crude Build - WTI crude extended recent gains, hovering around $60 - setting the stage for its best quarter since 2002 - ahead of the API inventory report that was expected to show a draw after three draws in the last four weeks.“We’re back in rally mode,” said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. “We’re seeing a steady supply decline that’s getting us back to $60 and everyone is trying to figure out the fallout from the refinery snags in Houston and the disruption in the Houston Ship Channel.” API

• Crude +1.93mm (-3mm exp)
• Cushing +688k (+300k exp)
• Gasoline -3.469mm (-3mm exp) - 5th draw in a row
• Distillates -4.278mm (-500k exp)

Amid disruptions to refiners along the Houston Ship Channel, expectations for a 4th draw in 5 weeks were dashed as API reported a 1.93mm build... However, the notable draws in the product side took the bearish slant of price reaction.  “The second wave of the U.S. shale revolution is coming,” said Fatih Birol, the head of the International Energy Agency.“This will shake up international oil and gas trade flows, with profound implications for geopolitics.” WTI was hovering at $60 ahead of the API print and dropped as the data disappointed...

Oil prices mixed as US crude stockpiles rise, gasoline and fuel stocks fall - Oil prices were little changed on Wednesday morning after U.S. government data showed the nation's crude oil stockpiles increased last week, but its fuel inventories fell. Crude inventories rose by 2.8 million barrels in the last week, the U.S. Energy Information Administration reported, compared with analysts' expectations for a decrease of 1.2 million barrels. Meanwhile, gasoline stocks fell by 2.9 million barrels, a slightly greater draw than analysts expected in a Reuters poll that called for a 2.8 million-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels, versus expectations for a 896,000-barrel drop, the EIA data showed. Brent added 16 cents to $68.13 around 10:30 a.m. ET (1430 GMT), reversing earlier losses, and was not far off its year-to-date high of $68.69 reached last week. U.S. crude futures were down 5 cents at $59.89, also rebounding from an early morning dip. The U.S. benchmark rose 1.9 percent in the previous session. Crude futures gyrated earlier in the session as disruptions to Venezuela's crude exports provided support but were offset by an earlier report of rising U.S. fuel stockpiles last week. Gains were also kept in check amid growing fears over the impact of a global economic slowdown on demand. "We seem to have reached a state of equilibrium after the recent headline-driven choppy trading and we need to see some new impetus for price direction," said Jeff Halley, senior market analyst at OANDA in Singapore. That is unlikely until a conclusion is reached on U.S.-China trade talks, he added, referring to negotiations due to restart on Thursday as the world's two largest economies seek to end an eight-month old trade war. Worries about demand have limited oil's rally as manufacturing data from Asia, Europe and the United States pointed to an economic slowdown. Venezuela's main oil export port of Jose and its four crude upgraders were unable to resume operations following a massive power blackout on Monday, the second in a month.

WTI Tumbles Back Below $60 After Surprise Crude Build, Record Production - WTI chopped around after last night's surprise crude build from API but remains back at $60 ahead of the DOE dataAs Bloomberg Intelligence's Senior Energy Analyst Vince Piazza notes, WTI crude will likely have a difficult time sustaining $60 a barrel, with macroeconomic headwinds slowing its ascent. We're more concerned about demand slowing, yet we appreciate compliance with output curbs by OPEC and its partners. Still, capacity hasn't disappeared; it's been deferred. While U.S. production growth has ebbed on calls for capital discipline, the backlog of uncompleted wells highlights the industry's potential for just-in-time inventory should crude prices seem attractive. Stockpiles are 3% above 2018 levels and about 1% below the five-year norm and Cushing inventories, almost 58% above last year. DOE:

• Crude +2.88mm (-3mm exp)
• Cushing +541k (+300k exp)
• Gasoline -2.883mm (-3mm exp)  - 6th weekly draw in a row
• Distillates -2.075mm (-500k exp)

After last week's huge crude draw, and despite last night's surprise API-reported build, expectations remained for a smaller draw but, like API, crude inventories rose by 2.88mm barrels... Bloomberg notes that refinery runs took a tumble at a time when they have typically started to creep higher after seasonal maintenance, thanks to a spate of fires and other upsets. The Gulf Coast was especially hard hit, with crude demand down 294,000 barrels a day. That may have contributed to the 4.6 million-barrel increase in crude stocks in the region. Production was flat at record highs as the lagged impact of declining rig counts is set to hit... Unsurprisingly, Venezuelan crude imports into the U.S. remained at zero for the second week in a row. The LatAm country continues to struggle with power losses that have crippled production, as well as American sanctions on PDVSA.

Oil Prices Down Amid Unexpected US Build - Both major oil benchmarks were lower Wednesday.  May West Texas Intermediate (WTI) crude oil futures lost 53 cents Wednesday, settling at $59.41 per barrel. The benchmark traded within a range from $58.81 to $60.22.The latest U.S. commercial crude oil inventory data from the Energy Information Administration (EIA) contributed to the downward momentum for crude. The EIA data showed an unanticipated build in domestic crude stocks for the week ending March 22, 2019. Last week’s 2.8 million-barrel build brought the EIA’s oil inventory figure to 442.3 million barrels, which amounts to a nearly three-percent increase compared to this time last year.As an analyst told Rigzone Tuesday, the market had been expecting EIA to report a drawdown exceeding 1 million barrels. Bloomberg, in an article posted to Rigzone earlier Wednesday, reported that a survey of analysts that it conducted projected a 2.5-million-barrel decrease in inventories.Brent crude oil for May delivery posted a more modest decline than the WTI, shedding 14 cents during the midweek session to end the day at $67.83 per barrel.The contract price for reformulated gasoline (RBOB) also edged downward Wednesday. April RBOB futures dropped six cents to settle at just under $1.90 per gallon.  Henry Hub natural gas futures also finished the day lower. The April price for the gas benchmark fell three cents, settling at $2.71.

Analysis: US crude supply adds barrels as refinery runs, exports slow — US crude supply edged higher last week as exports dipped and refinery headwinds weighed on utilization rates, US Energy Information Administration data showed Wednesday. Commercial crude inventories added 2.8 million barrels last week, bringing stocks to 442.28 million barrels for the week ended March 22, EIA data showed. Despite the build, nationwide inventories still fell relative to historic levels, and the deficit to the five-year average widened to 1.8% from 1.6% the week prior.The crude build was concentrated in the US Gulf Coast, where stocks grew 4.58 million barrels on the week to 21.81 million barrels last week. Draws of 1.55 million and 1 million barrels in the Midwest and West Coast, respectively, blunted the nationwide crude build. Notably, stocks at Cushing, Oklahoma, the delivery point of the NYMEX crude contract, added 541,000 barrels, snapping back-to-back weeks of declines.Crude exports dropped 506,000 b/d to 2.89 million b/d last week, but the impact on crude stocks was mitigated by a 392,000 b/d drop in imports. The import decline was especially notable in the Gulf Coast where inbound crude volumes fell 219,000 b/d to 1.48 million b/d, testing multi-decade lows of 1.43 million b/d seen in early February. Nationwide refinery utilization dropped 2.3 percentage points to 86.6% of capacity. The decline put rates at the lowest since mid-February and more than 3% below the five-year average. About 3.1 million b/d of crude distillation capacity was offline for planned turnaround work last week, compared with 2.7 million b/d during the week prior, S&P Global Platts Analytics data showed. Last week was expected to be the high-water mark of seasonal turnaround work, and nationwide offline distillation capacity was expected to decline going forward.

Oil extends losses into second session as US stocks rise - Oil prices fell on Thursday, but bounced from session lows struck after President Donald Trump asked OPEC to hike production and tamp down the cost of crude.International Brent crude oil futures were down 59 cents, or nearly 1 percent, at $67.24 a barrel around 10 a.m. ET (1400 GMT). U.S. West Texas Intermediate crude futures were down 50 cents to $58.91 per barrel.Crude futures briefly extended losses, falling almost 2 percent, after Trump issued his second tweet this year geared toward changing OPEC's policy of cutting production."Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!" Trump tweeted.U.S. crude inventories rose last week by 2.8 million barrels, compared with analysts' expectations for a decrease of 1.2 million barrels, the U.S. Energy Information Administration said.  Demand concerns on the back of economic jitters linked to the U.S.-Chinese trade war have also capped prices.In a fresh development, China has made unprecedented proposals on a range of issues, including forced technology transfer, as the two sides work to end their protracted dispute.

Trump says it's 'very important that OPEC increase the flow of oil' because prices are too high -- President Donald Trump told OPEC on Thursday that its members should start pumping more oil, marking his second warning to the producer group this year as crude prices continue to rise. Trump's latest tweet comes as OPEC and a group of allies led by Russia are cutting production following a collapse in oil prices in the final months of 2018. The output curbs by the so-called OPEC+ group have played a major part in the rebound in the oil market this year.  Oil prices briefly fell nearly 2 percent after Trump's tweet, but soon rebounded, settling just pennies below Wednesday's closing price. The last time Trump tweeted at OPEC, oil prices tanked about $2 a barrel, or more than 3 percent."I would say that it is apparent that the oil market has concluded that the OPEC+ group has put President Trump's Twitter account on mute," said John Kilduff, founding partner at energy hedge fund Again Capital.Analysts say pressure from the Trump administration last year — punctuated by a series of Twitter attacks on OPEC — contributed to the producer group's decision to lift production limits in June. But in recent months, OPEC members have mostly shrugged off Trump's social media demands.The OPEC+ alliance agreed to a fresh round of production cuts in December, despite Trump calling on the group to keep pumping at high levels. Since January, the group has aimed to keep 1.2 million barrels a day off the market in order to drain oversupply.After Trump asked OPEC last month to "please relax and take it easy," Saudi Energy Minister Khalid al-Falihtold CNBC "We are taking it easy." He added that he is leaning toward extending the six-month production cuts into the second half of 2019.Last week, OPEC+ canceled an April meeting meant to review the output pact, leaving the production curbs in place until at least June. OPEC ministers have expressed frustration with the Trump administration for allowing several of Iran's biggest oil buyers to continue purchasing limited amounts of the Islamic Republic's crude, despite U.S. sanctions on the country.

Crude Oil Prices Plunge After Trump Tweet Bashes OPEC Supply Cuts -- President Trump tweeted this morning that it’s “very important that OPEC increase the flow of Oil” which sent crude prices tumbling lower. Trump’s remarks were not the first time he’s voiced his opinion that oil prices are too high. OPEC agreed to cut its supply of oil after prices collapsed through the fourth quarter of 2018 in response to shrinking demand for the commodity amid slowing global growth. Crude oil prices have since surged over 40 percent to $60/bbl after bottoming around $42/bbl in December. Although, risks of a slowing global economy remains a burden which is reflected by the latest downward revisions to GDP growth forecasts and plummeting sovereign yields.On that point, President Trump also stated that ‘world markets are fragile’ in his tweet. The President of the United States has a history of chiming in on market performance, especially when it comes to stocks and the Dow Jones Industrial Average. As such, it appears that POTUS is looking to jawbone growth-favorable turns attemping to boost the equity index higher with positive US-China trade war news – or alternatively talk down high oil prices which can increase costs across the economy as is the case today.That being said, OPEC likely will disregard Trump’s comments with the oil cartel independently deciding their production plans. OPEC was supposed to convene to discuss oil output in April, but have since canceled the meeting as the group and its allies remain in agreement to hold production cuts at 1.2 million barrels per day.However, Russia’s Gazprom Neft, one of the important non-OPEC oil producing stalwarts, stated it does not expect to continue the previously agreed upon supply cuts through the end of 2019. This news could be adding further downward pressure on oil prices today thus exacerbating the move lower in Crude following Trump's tweet. But, prices look to remain steady above $58/bbl as OPEC output decisions vastly outweigh non-OPEC members in terms of relative impact on the global supply of oil.

Oil near flat, shrugs off Trump calls for OPEC to boost output (Reuters) - Oil futures were near flat on Thursday after recovering from the day’s worst losses that came when U.S. President Donald Trump called for OPEC to boost crude output in an effort to lower prices that were headed for their best quarterly gains in a decade. Futures hit a session low immediately following Trump’s comments, but subsequently rallied above pre-tweet levels. U.S. West Texas Intermediate (WTI) crude futures dropped 11 cents to settle at $59.30 a barrel. Earlier the contract fell to $58.20 in the wake of Trump’s tweet, where he said it was “very important that OPEC (the Organization of the Petroleum Exporting Countries) increase the flow of Oil” due to fragile world markets. Brent crude futures lost 1 cent to settle at $67.82 a barrel, after earlier sinking to $66.54 a barrel. Oil prices have risen more than 25 percent this year, with WTI heading for the biggest first quarter gains since 2002 and for both benchmarks the best quarterly gain since 2009, mainly due to moves by OPEC and allies such as Russia to cut output. The group, known as OPEC+, agreed to cut 1.2 million barrels per day of output at the beginning of this year. “These Trump tweets where he ambushes the OPEC folks are not having the same kind of price significance that they did when it was a brand-new phenomenon,” “The market is finding this a bit old and it’s not a novelty anymore.” Sowing uncertainty for the OPEC-led pact, Saudi Arabia is having a hard time convincing Russia to stay much longer in the deal, and Moscow may agree only to a three-month extension, three sources familiar with the matter said. U.S. sanctions on Venezuela and Iran have restricted those countries’ oil exports and buoyed crude prices this year. The United States has instructed oil trading houses and refiners around the world to further cut dealings with Venezuela or face sanctions themselves, even if the trades are not prohibited by published U.S. sanctions, three sources familiar with the matter said. On top of U.S. sanctions, power blackouts this month have crippled Venezuela’s oil industry. The country’s main oil export port of Jose and four crude upgraders, needed to convert Venezuela’s heavy oil into exportable grades, were halted this week, industry sources said. 

Oil prices set for biggest first quarter gain since 2009 on US sanctions, OPEC - Oil prices rose on Friday, on track for their biggest quarterly rise in a decade, as U.S. sanctions against Iran and Venezuela as well as OPEC-led supply cuts overshadowed concerns over a slowing global economy.The rebound comes after a swift and punishing collapse in oil prices during the final quarter of 2018. U.S. West Texas Intermediate crude futures settled 84 cents higher at $60.14 per barrel, up 1.4 percent on the day. WTI earlier touched $60.73, its highest level since Nov. 12. WTI futures rose for a fourth straight week and surged 32 percent in the first three months of the year. The May Brent crude futures contract, which expires Friday, gained 57 cents to $68.39 a barrel, gaining 27 percent in the first quarter. The more-active June contract was up 57 cents to $67.67 a barrel around 2:30 p.m. EDT (1830 GMT). For both futures contracts, the first quarter 2019 is the best performing quarter since the second quarter of 2009 when both gained about 40 percent. U.S. sanctions on Iran and Venezuela have boosted oil prices this year, as the sanctions have restricted crude exports out of the countries. The United States is keen to see that Malaysia, Singapore and others are fully aware of illicit Iranian oil shipments and the tactics Iran uses to evade sanctions, a top U.S. sanctions official said on Friday.

Oil Rig Count Falls As WTI Hits $60 - The the number of active oil and gas rigs fell for the second week in a row in the United States this week according to Baker Hughes, while actual US production was stagnate for the week.The total number of active oil and gas drilling rigs fell by 10 rigs­ according to the report—like last week—with the number of active oil rigs falling by 8 to reach 816 and the number of gas rigs falling by 2 to 190.The oil and gas rig count is now just 13 up from this time last year, with oil being seeing a 19-rig increase year on year, gas rigs seeing a 4-rig decrease, and miscellaneous rigs seeing a 2-rig decrease for the year. Oil prices were trading up earlier on Friday leading up to the data release despite reports on Wednesday from the Energy Information Administration that showed a build in crude oil inventories.WTI was trading up $0.75(+1.26%) at $60.05—above the psychologically important $60 per barrel. The Brent benchmark was trading up $0.44 (+0.66%) at $67.54 at 10:47am EST. Prices for both represent a gain over last week’s prices at this time. US crude oil production for week ending March 22 was 12.1 million bpd for the second week in a row.Canada, too, saw a marked decline in the number of active rigs this week. Canada’s total oil and gas rig count fell by 17 and is now 88, which is 46 fewer rigs than this time last year as Canada’s oil industry continues to face steep uphill battles over its constrained pipeline capacity that is necessary to get its heavy crude to market along with production caps instituted to keep Western Canadian Select prices from falling further. By 1:08pm EDT, WTI was trading up 1.28% (+$0.76) at $60.06 on the day. Brent crude was trading up 0.70% (+$0.47) at $67.57 per barrel.

Oil posts biggest quarterly rise since 2009 on OPEC cuts, sanctions (Reuters) - Oil prices rose about 1 percent on Friday, posting their biggest quarterly rise in a decade, as U.S. sanctions against Iran and Venezuela as well as OPEC-led supply cuts overshadowed concerns over a slowing global economy. The May Brent crude oil futures contract, which expired Friday, gained 57 cents, or 0.84 percent, to settle at $68.39 a barrel, marking a first-quarter gain of 27 percent. The more-active June contract settled up 48 cents at $67.58 a barrel. U.S. West Texas Intermediate (WTI) futures rose 84 cents, or 1.42 percent, to $60.14 a barrel, and posted a rise of 32 percent in the January-March period. For the two benchmarks, the quarterly rise was the biggest since the second quarter of 2009, when both gained about 40 percent. U.S. sanctions on Iran and Venezuela have boosted prices this year. Washington is keen to see that Malaysia, Singapore and others are fully aware of illicit Iranian oil shipments and the tactics Iran uses to evade sanctions, a U.S. sanctions official said on Friday. Sigal Mandelker, under-secretary of the Treasury for Terrorism and Financial Intelligence, told reporters in Singapore that the United States had placed additional “intense pressure” on Iran this week. Meanwhile, the United States has instructed oil trading houses and refiners to further cut dealings with Venezuela or face sanctions themselves, even if the trades are not prohibited by published U.S. sanctions, three sources familiar with the matter said. “With U.S. sanctions taking Iranian and Venezuelan oil off the market, at the same time OPEC and non-OPEC producers want to see higher prices and are currently reluctant to make up for any lost volume,” said Andrew Lipow, president of Lipow Oil Associates in Houston. Also lifting prices this year has been a deal between the Organization of the Petroleum Exporting Countries and allies such as Russia to cut output by around 1.2 million barrels per day, which officially started in January 

U.S. approved secret nuclear power work for Saudi Arabia (Reuters) - U.S. Energy Secretary Rick Perry has approved six secret authorizations by companies to sell nuclear power technology and assistance to Saudi Arabia, according to a copy of a document seen by Reuters on Wednesday. The Trump administration has quietly pursued a wider deal on sharing U.S. nuclear power technology with Saudi Arabia, which aims to build at least two nuclear power plants. Several countries including the United States, South Korea and Russia are in competition for that deal, and the winners are expected to be announced later this year by Saudi Arabia. Perry’s approvals, known as Part 810 authorizations, allow companies to do preliminary work on nuclear power ahead of any deal but not ship equipment that would go into a plant, a source with knowledge of the agreements said on condition of anonymity. The approvals were first reported by the Daily Beast. The Department of Energy’s National Nuclear Security Administration (NNSA) said in the document that the companies had requested that the Trump administration keep the approvals secret. “In this case, each of the companies which received a specific authorization for (Saudi Arabia) have provided us written request that their authorization be withheld from public release,” the NNSA said in the document. In the past, the Energy Department made previous Part 810 authorizations available for the public to read at its headquarters. A Department of Energy official said the requests contained proprietary information and that the authorizations went through multi-agency approval process. Many U.S. lawmakers are concerned that sharing nuclear technology with Saudi Arabia could eventually lead to a nuclear arms race in the Middle East. Saudi Crown Prince Mohammed bin Salman told CBS last year that the kingdom would develop nuclear weapons if its rival Iran did. In addition, the kingdom has occasionally pushed back against agreeing to U.S. standards that would block two paths to potentially making fissile material for nuclear weapons clandestinely: enriching uranium and reprocessing spent fuel. Concern in Congress about sharing nuclear technology and knowledge with Saudi Arabia rose after U.S.-based journalist Jamal Khashoggi was killed last October in the Saudi consulate in Istanbul. The Part 810 authorizations were made after November 2017, but it was not clear from the document whether any of them were made after Khashoggi’s killing. 

Saudi Aramco reaches $69.1 billion deal to buy majority stake in petrochemicals firm SABIC - Saudi Arabia's state-controlled energy giant Aramco has reached a $69.1 billion deal to purchase a majority stake in petrochemicals firm Sabic from the kingdom's sovereign wealth fund. The deal will see Aramco purchase the 70 percent stake in Sabic held by Saudi Arabia's Public Investment Fund in a share purchase agreement. It will expand Aramco's footprint in refining and petrochemicals and inject cash into PIF, which underpins ambitious plans to remake Saudi Arabia's economy. Aramco and PIF announced the news Wednesday shortly after CNBC and other news outlets confirmed the transaction. The deal remains subject to closing conditions and regulatory approvals. Saudi Arabia is attempting to diversify its economy and reduce its reliance on oil revenues under a plan called Vision 2030 directed by Crown Prince Mohammed bin Salman. Plans to sell shares in Aramco are meant to underwrite that endeavor, but an initial public offering on an international exchange has been delayed by several years.  The Aramco-Sabic deal further delayed the IPO plans — the company now expects to list shares in 2021. The kingdom sought to raise $100 billion by publicly listing a small percentage of Aramco. Wednesday's agreement comes as Aramco, the world's largest oil company by production, is expanding its high-value downstream operations, which includes refining crude oil into fuels and making petrochemicals. Aramco currently has the capacity to produce 17 million tons of petrochemicals per year, while Sabic's capacity is 62 million tons. By 2030, Aramco aims to increase its refining capacity from 4.9 million barrels per day to 8 million to 10 million bpd. "This transaction is a major step in accelerating Saudi Aramco's transformative downstream growth strategy of integrated refining and petrochemicals," Aramco President and CEO Amin Nasser said in a statement. "SABIC is a world-class company with an outstanding workforce and chemicals capabilities." Sabic has operations in 50 countries and employees about 35,000 people around the world.

Saudi Aramco Buying 70% Of SABIC In $70 Billion Cash Injection For Mohammed bin Salman -- Saudi oil giant Saudi Aramco is acquiring a 70% stake in the country's petrochemcial firm Saudi Arabian Basic Industries Corporation - or SABIC - from the country's sovereign wealth fund, Aramco reported on its Twitter account shortly after Bloomberg leaked the news on Wednesday morning. The remaining 30% publicly traded shares in SABIC will not be part of the transaction The agreed purchase price for the shares is 123.40 riyals per share, totaling 259.125b riyals, which is just shy of $70 billion. The transaction will give Crown Prince Mohammed bin Salman’s agenda a giant jolt of cash according to the WSJ, adding that the agreement culminates over a year of negotiations between Saudi Arabia’s two biggest companies, which Prince Mohammed has urged to tie up to free up money for his economic agenda. The deal would give billions of dollars to the Public Investment Fund, which has become one of the world’s biggest tech investors in recent years in collaboration with Japan's SoftBank.The Sabic deal was initially proposed last year after the oil giant’s plans for an IPO were indefinitely postponed after potential investors threw up on the $2 trillion valuation proposed by MbS. By channeling money from Aramco to the PIF, two arms of the Saudi state, the deal offered another route to the cash originally sought from the offering.Saudi Aramco may stagger payments for the Sabic acquisition, offering flexibility in how to finance the largest deal in the kingdom’s history, Al-Falih said in January. The company has very little debt and plans to issue bonds to fund at least part of the purchase. Saudi Aramco picked banks including JPMorgan Chase & Co., Morgan Stanley, Citigroup Inc., HSBC Holdings Plc, National Commercial Bank to manage the bond sale, people familiar with the matter have said.  As a reminder, this is merely a money "recirculating" transaction meant to provide funding to Saudi Arabia by way of international creditors, who will be expected to buy tens of billions in bonds from Aramco as we explained last year.This is how we simplified the money flow last July: the cash goes from international yield chasers, to a consortium of banks, to Aramco, to Sabic, to Crown Prince MbS.

Saudi Aramco reportedly plans to issue $10 billion bond, opening books for the first time - Saudi Arabia's state-controlled energy giant Aramco plans to tap bond markets for the first time as early as next week, sources within the company told CNBC on Thursday. While the exact dollar figure has not been confirmed, initial media reports put the Aramco bond issuance amount at $10 billion, which sources have told CNBC is "reasonable as a minimum." The move is designed to help raise funds for a down payment on the oil giant's $69.1 billion purchase of a majority stake in Saudi petrochemicals firm Sabic. It would also mark the first-ever debt issuance from the world's largest oil firm, enabling greater visibility into its financial performance. While the corporate issuance has been in the works for some time, the news comes sooner than expected — Saudi Energy Minister Khalid al Falih said in January that Aramco would likely issue bonds in the second quarter of 2019. Al-Falih, who also serves as Aramco's chairman, has said the company will release data on its financial health and oil and gas reserves as part of a bond prospectus. The oil giant delayed a highly-anticipated initial public offering originally scheduled for 2018 reportedly over Saudi concerns about public scrutiny over its finances and because of the complexity of its corporate structure. Aramco declined to comment when contacted by CNBC Thursday morning. Saudi Arabia is attempting to diversify its economy and reduce its reliance on oil revenues under a plan called Vision 2030 directed by Crown Prince Mohammed bin Salman. "The Saudi government is increasingly becoming more open and transparent about its finances and budget updates,"

Hedge Fund Returns $300 Million To Saudis Over Khashoggi Killing - In a rare move, a hedge fund has returned about $300 million in investment funds to Saudi Arabia over the Oct. 2nd murder of journalist Jamal Khashoggi. Bloomberg cited anonymous sources with knowledge of the matter after British hedge fund Pharo Management told investors it had returned the money to the Saudi Arabian Monetary Authority (SAMA) due to the heinous killing which last year shocked the world, and further has made things increasingly difficult for Riyadh in attracting foreign investment for its Vision 2030 project.  SAMA, the kingdom’s central bank, invested the funds with Pharo in December, but the decision to publicly return the money has turned heads as a rare rebuke to one of the world's most powerful and influential investors. According to Bloomberg's sources: Guillaume Fonkenell, 54, who founded Pharo, told some investors in January that the decision was made to uphold its principles due to concerns about Khashoggi’s death at the hands of government agents last year, the person said.

US Media Remains Silent as Historically Huge Protests Take Place Across Yemen — Massive demonstrations took place across Yemen’s major cities on Tuesday to commemorate the fourth anniversary of the Saudi-led war on the country. The war ostensibly began on March 26, 2015, when Saudi Arabia, backed by the U.S. and other regional allies, launched a large-scale attack on Yemen under the pretext of reinstating ousted former president Abdrabbuh Mansur Hadi. The war’s real purpose was to defeat the Houthi Ansar Allah movement, which gained popular support following the Arab Spring and has grown even more powerful since the Saudi war began. In Yemen’s capital city of Sana`a, where the largest demonstrations took place, hundreds of thousands of residents from the suburbs of Sana`a and its neighboring provinces gathered in the southern al Sabaeen district carrying Yemeni flags and holding banners emblazoned with messages of steadfastness, promises to challenge to the Saudi-led Coalition, and pledges of resistance against foreign forces in Yemen. In the Sada’a province in northern Yemen, hundreds of thousands also took to the streets despite an ever-present hovering of Saudi warplane above. The Saudi air presence began two days ago as residents started their preparations for the upcoming rallies. The demonstrations were organized primarily by the Houthis, the main force battling the Saudi-led Coalition in Yemen. Large rallies also took place in the provinces of Hodeida, Ibb, Ta`ze, al-Jawf, Reimah and Dhamar. The number of people who took part in the demonstrations dwarfed similar rallies that took place in previous years, indicating a growing opposition to the Saudi-led Coalition war in Yemen. Anti-Saudi demonstrations were also held for the first time in the northwest province of Hajjah and the central province of al-Beidha. Images of demonstrations show a sea of Yemeni flags, posters bearing pictures of Houthi leader Abdulmalik al-Houthi and the slogan, “Four years of aggression — We are steadfast for the fifth year — We will win.” A protest leader in Sana`a’s Sabaeen Square rallied the crowd, chanting, “I am ready to make more sacrifices against the Saudi-led Coalition.”

With an Eye on Iran, US to Open Yet Another Military Base in the Middle East -  — The United States clinched a strategic port deal with Oman on Sunday which US officials say will allow the US military better access the Gulf region and reduce the need to send ships through the Strait of Hormuz, a maritime choke point off Iran.The US embassy in Oman said in a statement that the agreement governed US access to facilities and ports in Duqm as well as in Salalah and “reaffirms the commitment of both countries to promoting mutual security goals.” The accord is viewed through an economic prism by Oman, which wants to develop Duqm while preserving its Switzerland-like neutral role in Middle Eastern politics and diplomacy. But it comes as the United States grows increasingly concerned about Iran’s expanding missile programs, which have improved in recent years despite sanctions and diplomatic pressure by the United States.  A US official, speaking on condition of anonymity to Reuters, said the deal was significant by improving access to ports that connect to a network of roads to the broader region, giving the US military great resiliency in a crisis.

An Iran-Syria ‘Belt & Road’- A Far-Reaching Geopolitical Strategy Unfolds -  As the US tries to consolidate its strategy for weakening and confronting Iran, the contours of an important geopolitical strategy, launched by Syria and Iran, are surfacing. On the one hand, it consists of a multi-layered sewing together of a wide ‘deterrence’ that ultimately could result in Israel being pulled into a regional war – were certain military trip wires (such as air attacks on Syria’s strategic defences) – to be triggered. Or, if the US economic war on Iran crosses certain boundaries (such as blockading Iranian tankers from sailing, or putting a full stranglehold on the Iranian economy). To be clear, the aim of this geo-political strategy is not to provoke a war with the US or Israel – it is to deter one. It sends a message to Washington that any carelessly thought-through aggression (of whatever hybrid nature) against the ‘northern states’ (from Lebanon to Iraq) might end by putting their ally – Israel – in full jeopardy. And that Washington should reflect carefully on its threats.  The deterrence consists at the top-level of Syrian S300 air defences over which Russia and Syria have joint-key control. The aim here, seems to be to maintain strategic ambiguity over the exact rules of S300 engagement. Russia wants to stand ‘above’ any conflict that involves Israel or the US – as best it can – and thus be positioned to act as a potential mediator and peace-maker, should armed conflict occur. In a sense, the S300s represent deterrence of ‘last resort’ – the final option, were graduated escalation somehow to be surpassed, via some major military event.  At the next level down, deterrence (already well signalled in advance) is focussed on halting Israeli air attacks on either Iranian or Syrian infrastructure (in either state). Initially, air attacks would be countered by the effective (80%) Syrian, Panzir and BUK air defence systems.More ‘substantive’ attacks will be met with a proportionate response (most probably by Syrian missiles fired into the occupied Golan). Were this to prove insufficient, and were escalation to occur, missiles are likely to be fired into the depth of Israel. Were escalation to mount yet further, the risk would be then of Iranian and Hizbullah missiles entering into the frame of conflict. Here, we would be on the cusp of region-wide war.

Netanyahu: Golan Endorsement ‘Proves’ Israel Can Keep Occupied Territories - Still trying to make political gains on President Trump’s endorsement of the Golan Heights annexation, Israeli Prime Minister Benjamin Netanyahu is hinting that Trump’s extra-legal decree could have broad ramifications across the occupied territories.  Netanyahu claimed Trump’s move “proves” that Israel is able to hold occupied territories permanently, telling reporters that anything that is occupied “in a defensive war, then it’s ours.”  That the 1967 War actually saw Israel attack several countries and seize territory from them is beside the point, as Netanyahu and a generation of politicians have engaged in enough historical revisionism to sell at least a modicum of the far right on the idea that the attack was a “preemptive war.” The war not only saw the capture of Golan Heights from Syria, but also of the West Bank from Jordan. Netanyahu’s new “it’s ours” mantra is clearly meant to sent the message to Israeli voters that the annexation of the West Bank, too, could be in the offing. Annexing the West Bank would have been unthinkable before Trump’s Golan move, as it would be seen as a formal and irrevocable disavowal of peace with the Palestinians. Netanyahu may, however, believe that Trump will go for it, and his far-right constituents also certainly will go for it. Whether he intends to actually attempt to do so before the election or not, Netanyahu has made the West Bank annexation a political issue.

Israeli Jets Strike Syria’s Aleppo, Causing Electricity Blackout — The Syrian military said Israel on Wednesday launched air raids on an industrial zone in the northern city of Aleppo, causing damage only to materials, while opposition sources said the strikes hit Iranian ammunition stores and a military airport used by Tehran’s forces, Reuters reported. “The Israeli aggression targeted some positions in Sheikh Najjar industrial zone and a number of enemy missiles were brought down,” an army statement said, as cited by Reuters. Israel had not commented on the claims.A number of residents of Aleppo city told AFP that the attack caused a power cut for the entire city. The blasts caused an electrical blackout in Aleppo, the country’s second-largest city and a major industrial hub that bore the brunt of years of fighting and heavy Russian and Syrian aerial bombardment of its former rebel-held areas. Military experts told Reuters that Aleppo is one of the main areas where Iran’s elite Revolutionary Guards have a strong military presence supporting local militias that have for years been fighting alongside the Syrian army to defeat rebel groups. Two opposition sources familiar with Tehran’s military presence in the area told Reuters large ammunitions depot and a logistics hub that belonged to Iranian-backed militias inside the industrial zone received direct hits.Other strikes hit the vicinity of Nairab military airport on the outskirts of Aleppo in the second such strike on the installation used by Iranian troops in less than a year, they added. Israel, which considers Iran its biggest threat, has repeatedly attacked Iranian targets in Syria and those of allied militia, including Lebanon’s Hezbollah.

US Airstrikes Kill Over 50 People in Syria  — Officials very much want to brand the ISIS battle in Syria as “over,” so long as it is understood that it won’t involve withdrawing forces or ending anything in practice. The village of Baghouz, however, continues to be the center of conflict.According to the Syrian Observatory for Human Rights, US forces attacked some caves on the outskirts of Baghouz on Thursday, killing over 50 people. They are assuming everyone killed was an ISIS remnant, though of course none were positively identified.The conclusion of ISIS is based on the fact that ISIS had fighters hidden in caves and connecting underground bunkers. Yet there was also what Kurdish forces described as a nearly endless number of civilians hiding in the same area, with tens of thousands fleeing the tiny village long after everyone had assumed it was more or less entirely depopulated. That the strikes are still centering on what is effectively Baghouz also undercuts claims that the Kurds actually “won” in that village, as clearly the US believes someone is still there worth dropping bombs on well after the war was called over.

All ISIS Has Left Is Money. Lots of It. - BEIRUT—If you’re looking to transfer money here, there’s a chance you will be directed to Abu Shawkat. He works out of a small office in a working-class suburb of the Lebanese capital, but won’t give you its exact location. Instead, he’ll direct you to a nearby alleyway, and whether he shows up depends on whether he likes the look of you. Abu Shawkat—not his real name—is part of the hawala system, which is often used to transfer cash between places where the banking system has broken down or is too expensive for some to access. If he agrees to do business, you’ll set a password and he will take your cash, then provide you with the contact information of a hawala broker in the city where your money is headed. Anyone who offers that specific password to that particular broker will get the funds. Thus, cash can travel across borders without any inquiry into who is sending or receiving it, or its purpose.In the case of neighboring Syria, U.S.- and British-funded projects have sent millions of dollars into the country using the hawala system, humanitarian organizations use it to pay staff, and Syrians working abroad depend on it to get money to impoverished relatives. But Abu Shawkat runs the hawala equivalent of a mom-and-pop store: One of the giants of the industry, which analysts believe owns a network of money-services businesses and has moved millions of dollars a week, is the Islamic State. Even as U.S.-backed forces wrest back the Islamic State’s last strip of territory in Syria, the United States and its allies are nowhere close to bringing down the terrorist organization’s economic empire. The group remains a financial powerhouse: It still has access to hundreds of millions of dollars, according to experts’ estimates, and can rely on a battle-tested playbook to keep money flowing into its coffers. That continued wealth has real risks, threatening to help it retain the allegiance of a committed core of loyalists and wreak havoc through terrorist attacks for years to come. The Islamic State’s financial strength offers a window into the broader challenge facing the United States and other governments. In its effort to squeeze the group financially, Washington has been forced to rely on a fundamentally different strategy than it employed in its military campaign: The main weapons at its disposal are not air strikes and artillery barrages, but subtler tools, such as sanctioning Islamic State–linked businesses, denying them access to the international financial system, and quietly cooperating with governments across the globe. Successes will be less visible, the campaign against the group will likely take years, and there is no guarantee of victory.

Israel Avenges Burning Balloons With Airstrikes on Gaza Refugee Camp — Israeli fighter jets carried out two airstrikes in the Gaza Strip early Sunday following the launch of incendiary balloons from the Palestinian territory, according to the military. In a statement, the army said the attacks targeted two Hamas posts in the seaside enclave. According to an Anadolu Agency reporter, the Israeli warplanes struck positions in Al-Awda refugee camp, east of Rafah in the southern Gaza Strip. No injuries were reported. These airstrikes followed two other airstrikes earlier today, on eastern parts of the Bureyc refugee camp, which injured three Palestinians. Palestinian activists have been flying burning kites and balloons into Israel as part of ongoing anti-occupation protests along the Gaza-Israel buffer zone. According to Israeli officials, the improvised aerial “weapons” have caused a number of fires inside illegal Israeli settlements, causing significant material damage but not resulting in any deaths or injuries.Since March of last year, more than 250 Palestinians have been killed and thousands more injured by Israeli army fire during protests demanding the right of Palestinian refugees to return to their homes in historical Palestine from which they were driven in 1948 to make way for the new state of Israel. Israeli forces have recently been targeting Gaza with airstrikes, alleging that burning kites and balloons were sent from Gaza to the Israeli side.

Israel rocket attack: Seven wounded north of Tel Aviv - An early morning rocket, allegedly fired from the Gaza Strip, struck a home in central Israel on Monday, wounding seven people and prompting Prime Minister Benjamin Netanyahu to cut short a trip to Washington.The developments set the stage for a potential major conflagration, shortly before Israel's upcoming elections.The rocket attack destroyed a residential home in the community of Mishmeret, north of the city of Kfar Saba, wounding six members of the family.  Israel's ambulance service said it treated seven people overall, including two women who were moderately wounded. The others, including two children and an infant, had minor wounds.The sounds of air raid sirens jolted residents of the Sharon area, northeast of Tel Aviv, from their sleep shortly after 5am (03:00 GMT). A strong sound of an explosion followed. An Israeli military spokesperson said the rocket attack was carried out by Hamas, adding that the army was set to deploy two brigades and infantry units to the southern Gaza area. It also called up reserves after the rocket attack.There was no immediate claim of responsibility for Monday's incident. Al Jazeera reached out to Hamas officials in the Gaza Strip but received no response.Later on Monday, a Hamas official denied to AFP news agency that the movement was behind the attack. "No one from the resistance movements, including Hamas, has an interest in firing rockets from the Gaza Strip towards the enemy," the official said

Israel military mobilizes troops after Gaza rocket wounds 7— The Israeli military said it was reinforcing troops along the border with the Gaza Strip and calling up reserves after a rocket attack on an Israeli home wounded seven people. Prime Minister Benjamin Netanyahu said he would cut short his trip to the United States after news of the rocket strike on Mishmeret, an agricultural town north of Tel Aviv. In Mishmeret one house was completely destroyed, and at least one other house and cars were left badly damaged. Israel's Magen David Adom ambulance service said it was treating seven people, including an infant, a 3-year-old boy, a 12-year-old girl and a 60-year-old woman who was suffering from blast injuries, burns and shrapnel wounds. Netanyahu, who arrived in Washington on Sunday for a four-day visit ahead of an April 9 Israeli election, said he would fly home immediately after meeting President Donald Trump at the White House, as planned, later on Monday. "In light of the security events I decided to cut short my visit to the U.S.," Netanyahu said, calling the rocket fire a "heinous attack." The early morning attack came at a time of high tension ahead of the anniversary of Gaza border protests over the weekend, and Trump's expression of support for Israeli sovereignty over the occupied Golan Heights.

Israel Launches Strikes on Gaza, Putting ‘Ceasefire’ in Jeopardy - Israel has struck several targets in the besieged Gaza Strip, potentially shattering a ceasefire that Hamas said was negotiated between Egypt and Israel. Israel’s military attacked a Hamas compound and a weapons site in the Khan Yunis district, Haaretz reported, citing an Israeli army spokesperson. The strikes by Israel on Tuesday night came one day after a rocket from Gaza hit a house north of Tel Aviv. Contrary to Hamas’s claim, Israeli media outlets Haaretz and Ynet reported on Tuesday that a ceasefire had not been reached to end this week’s flare-up in violence in the Gaza Strip. The Israeli military bombed several targets in Gaza throughout the day on Monday, including the office of Hamas leader Ismail Haniyeh and a Palestinian family’s home in central Gaza City. The violence began after a rocket fired from the besieged Palestinian territory hit a town in central Israel, wounding seven people. Israel was quick to accuse Hamas of being behind the attack, but the Palestinian group denied responsibility. An unidentified official in Gaza told AFP on Monday that the rocket may have been triggered unintentionally due to “bad weather”.

Israeli Airstrikes Rock Gaza, Target Hamas Command, After Netanyahu Cut Short US Trip - As predicted, a major Israeli assault on the Gaza Strip is underway after an early Monday morning long-range rocket launch from the strip scored a direct hit on a home in central Israel. The Israeli Defense Forces (IDF) struck targets across the strip throughout the evening Monday, and targeted the offices of Hamas’ supreme leader, though there were no early reports of fatalities, but Gaza's Health Ministry cited at least seven wounded in the campaign.  Israel says it's responding to an early Monday morning rocket launch from Gaza which destroyed a residential home in Mishmeret, an agricultural town north of Tel Aviv, which reportedly left at least seven Israelis injured, including children, after the family was able to escape the flaming building. Prime Minister Benjamin Netanyahu announced in the immediate aftermath of the prior Hamas attack that he would be returning to Tel Aviv from a visit to the United States, cutting short his trip to Washington, saying he would “respond forcefully” to the rocket attack, on the same morning President Trump signed an order officially recognizing Israeli sovereignty over the occupied Golan Heights, seized from Syria in 1967, in a move which Netanyahu also welcomed as "historic". “The [Israeli Defense Forces] has begun striking Hamas terror targets throughout the Gaza Strip,” the IDF confirmed in a statement.Amidst the Israeli onslaught on Gaza, Israel opened public bomb shelters throughout most major cities, and its 'Iron Dome' missile defense systems appeared busy as Hamas responded to the Israeli assault with its own rockets. According to the AP, by Monday evening Hamas had fired at least ten rockets since the IDF aerial attack began. “Israel will not tolerate this. I will not tolerate this,” Prime Minister Benjamin Netanyahu said while meeting with Trump at the White House moments before he departed for Tel Aviv. “Israel is responding forcefully to this wanton aggression,” he said. “We will do whatever we must do to defend our people and defend our state.”

Gaza Strikes Continued Overnight Despite Reports Of Cease-Fire -  Local reports say that Israel and Hamas militants continued to exchange blows throughout the night and early Wednesday morning despite reports of a ceasefire brokered by Egypt, and after Tuesday witnessed moments of relative calm.  The Israeli military said it continued strikes on Hamas targets throughout the early morning hours of Wednesday after a rocket launch from the strip targeted southern Israel, triggering rocket sirens and seek shelter warnings in the Israeli city of Ashkelon.  Tuesday was the second day of cross-border violence after the latest round of fighting began when a long-range rocket launched from Gaza slammed into a residential house in central Israel, reportedly wounding seven, including multiple children.Israeli Prime Minister Benjamin Netanyahu had cut short his US trip where he discussed White House recognition of Israeli sovereignty over the Golan Heights with President Trump — a move which most international countries that have spoken on the matter have condemned, including close regional American ally Saudi Arabia. The politically embattled prime minister is now just under two weeks ahead the most high pressure reelection campaign of his career on April 9, and as he faces down indictments related to multiple corruption charges and a rising opposition.

Ten children killed by U.S. air strike in Afghanistan- U.N. - (Reuters) - Ten children, part of the same extended family, were killed by a U.S. air strike in Afghanistan, along with three adult civilians, the United Nations said on Monday. The air strike early on Saturday was part of a battle between the Taliban and combined Afghan and U.S. forces that lasted about 30 hours in Kunduz, a northern province where the Taliban insurgency is strong. The children and their family had been displaced by fighting elsewhere in the country, the UN Assistance Mission in Afghanistan (UNAMA) said, releasing its preliminary findings about the incident. UNAMA said in a statement that it is verifying that all 13 civilian casualties occurred around the time of the air strike. Three other civilians were wounded. The incident happened in the Telawka neighborhood near Kunduz city. Sgt. Debra Richardson, spokeswoman for the NATO-led Resolute Support mission in Afghanistan, confirmed that U.S. forces carried out an air strike, but she said on Monday that the mission still had not confirmed that it had caused civilian casualties. She said the mission aims to prevent civilian casualties, while the Taliban intentionally hides among civilians. A record number of Afghan civilians were killed last year as aerial attacks and suicide bombings increased, the United Nations said in a February report. Child casualties from air strikes have increased every year since 2014. Fighting has accelerated during a period of recurring talks between U.S. and Taliban officials aimed at ending Afghanistan’s 17-year war.