oil prices rose to a four month high before pulling back a bit this past week, as repeated power outages in Venezuela cut their oil exports to zero and the EIA reported a surprise drop in US crude supplies....after ending little changed at $56.07 a barrel on economic concerns last week, contract prices for US crude to be delivered in April rose 72 cents to $56.79 a barrel on Monday, lifted by comments from the Saudi oil minister that OPEC-led supply cuts would continue til at least June....oil prices then rallied to as high as $57.55 a barrel on Tuesday after a country wide power blackout in Venezuela disrupted both oil production and exports, but settled just 8 cents higher at $56.87 a barrel as the gains were limited by a report from the International Energy Agency that the surge in U.S. output would continue til 2024...oil prices then rose steadily throughout Wednesday, first due to a Tuesday evening report from the American Petroleum Institute showing an unexpected decline in oil and fuel supplies, and then in the afternoon after the weekly EIA data confirmed the drop in crude supplies and in gasoline inventories, with oil prices ending the day $1.37 higher at a 4 month high of $58.61 a barrel....oil extended those gains on Thursday, rising 35 cents to $58.61 a barrel, after the OPEC secretariat urged producers to continue supply cuts ahead of a meeting between representatives of Russia and the cartel....oil prices finally eased slightly on Friday after hitting a new 2019 high at $58.95 a barrel, as a slew of weak US economic reports renewed demand concerns, with oil closing 9 cents lower at $58.52 a barrel, but still finishing with a weekly gain of 4.4%, the sharpest weekly rise since the period ended Feb. 15th...
natural gas prices, on the other hand, finished the week lower, as forecasts turned warmer and the last big withdrawal of gas from supplies for this winter was a bit less than traders had expected...prices of natural gas for April delivery were initially down 9.3 cents, or more than 3% to $2.772 per mmBTU on Monday, after forecasts for late March had turned warmer over the weekend....gas prices then pushed 1.2 cents higher on Tuesday and 3.6 cents higher on Wednesday, as traders anticipated what was to be a record storage report for March on Thursday...although natural gas contracts sold off with the release of the report, prices still ended Thursday 3.5 cents higher on concerns about depletion of the natural gas stored in salt domes in the South...with a warmer forecast for late March released on Friday, prices then fell back 6 cents to end the week 2.4% lower at $2.795 per mmBTU...
the natural gas storage report for the week ending March 8th from the EIA indicated that the quantity of natural gas held in storage in the US fell by a March record 204 billion cubic feet to 1,186 billion cubic feet over the week, which meant our gas supplies ended the period 359 billion cubic feet, or 22.3% below the 1,545 billion cubic feet that were in storage on March 9th of last year, and 569 billion cubic feet, or 34.2% below the five-year average of 1,755 billion cubic feet of natural gas that have typically remained in storage after the first full week of March....this week's 204 billion cubic feet withdrawal from US natural gas supplies was a bit less than the 209 billion cubic feet withdrawal that analyst's surveys had forecast, but it was more than double the average of 99 billion cubic feet of natural gas that have been withdrawn from US gas storage during the same winter week over the last 5 years....
with a record March withdrawal of gas from storage this week, we'll include below the summary table that heads up the Weekly Natural Gas Storage Report page at the EIA to bring you all up to date with where our supplies stand now...
the above table came from Weekly Natural Gas Storage Report for March 8th, and it shows the amount of natural gas in storage as of March 8th in billions of cubic feet in each of 5 major US regions and in total in the first column, the amount of natural gas in storage on March 1st in the 2nd column, and the difference between the two in the third or "net change" column, with negative numbers in that column representing a natural gas withdrawal during the week...then, the 5th and 6th columns show the amount of natural gas in storage as of March 8th of last year, and the percentage change from last year to this year, while the last two columns show the five year average amount of gas in storage on March 8th for the years 2014 to 2018, and again the percentage change from that 5 year average to this year's natural gas inventory on the same date...
you can see from that table that natural gas storage facilities in the Eastern US saw a 49 billion cubic feet draw from their supplies over the week, which was well more than their average 34 billion cubic foot withdrawal during the same week over the past five years, and hence the region's gas supply deficit rose to 22.5% below average for this time of year, up from the 16.4% shortfall shown on this table last week...at the same time, natural gas supplies in the Midwest fell by 51 billion cubic feet, also quite a bit higher than their normal 32 billion cubic feet pull for that date, as their supply deficit increased to 27.9% below the average for the second weekend of March, up from 21.4% below normal last week...meanwhile, the South Central region saw a 88 billion cubic feet drop in their supplies, way above their normal 23 billion cubic foot withdrawal, as their natural gas storage deficit increased from 23.5% to 33.5% below their five-year average for this time of year...at the same time, 7 billion cubic feet were pulled out of natural gas supplies in the sparsely populated Mountain region, which has only averaged a 4 billion cubic feet withdrawal during this same week over the last 5 years, and hence their gas supply deficit from normal rose to 43.1%, up from 39.2% a week ago...finally, 10 billion cubic feet of natural gas were withdrawn from storage in the Pacific region, in contrast to the 5 billion cubic feet normally withdrawn in those western states during the same week of March, and hence their natural gas supply deficit rose to 48.7% below normal for this time of year, up from 45.1% a week ago....
even with natural gas supplies as depleted as they are now, and even with supplies in the Pacific and Mountain regions already at their modern day lows, it seems unlikely that we'd see any shortages any more at this time of year, since we've usually warmed enough nationally by April to begin adding surplus gas to storage for next winter....so it's natural gas for next winter that we'll have to be concerned about now, since our supplies as of this report are now 359 billion cubic feet below where they were on the same date in 2018...unless we can improve considerably on 2018's surplus, and can add at least 10 billion cubic feet or more natural gas to storage each week this year than we did last year, we risk starting next winter with supplies lower than we started the current one, which was at a 15 year low at the time...
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 8th, indicated a modest decreases in both our crude oil imports and our oil exports, but a withdrawal from our commercial supplies of crude, as oil that was unaccounted shifted from the supply side of the balance sheet to the demand side....our imports of crude oil fell by an average of 255,000 barrels per day to an average of 6,746,000 barrels per day, after rising by an average of 1,084,000 barrels per day the prior week, while our exports of crude oil fell by an average of 257,000 barrels per day to 2,546,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 4,200,000 barrels of per day during the week ending March 8th, 2,000 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 estimated to be 100,000 barrels per day lower than last week at 12,000,000 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 16,200,000 barrels per day during this reporting week...
meanwhile, US oil refineries were using 16,020,000 barrels of crude per day during the week ending March 8th, 30,000 more barrels per day than the amount of oil they used during the prior week, while over the same period 522,000 barrels of oil per day were reportedly being withdrawn from 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, from oilfield production, and from storage was 732,000 more barrels per day than 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 (-732,000) 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 +700,000 barrels per day, that means 1,432,000 million barrels of oil per day disappeared off the US oil balance sheet from one week to the next, meaning that any comparison of figures from this week to last week is essentially 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 6,797,000 barrels per day last week, now 9.0% less than the 7,473,000 barrel per day average that we were importing over the same four-week period last year.... the 522,000 barrel per day decrease in our total crude inventories all came out of 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 100,000 barrels per day lower at 12,000,000 barrels per day because the rounded estimate for output from wells in the lower 48 states fell by 100,000 barrels per day to 11,500,000 barrels per day, while a 6,000 barrel per day decrease in Alaska's oil production to 480,000 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 9th was at 10,381,000 barrels per day, so this reporting week's rounded oil production figure was 15.6% above that of a year ago, and 42.4% 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 87.6% of their capacity in using 16,020,000 barrels of crude per day during the week ending March 8th, up from 87.5% of capacity the prior week, but still lower than before Venezuelan imports of heavy crude were cut off....the 16,020,000 barrels per day of oil that were refined this week were down by 0.9% from the 16,162,000 barrels of crude per day that were being processed during the week ending March 9th, 2018, when US refineries were operating at 90.0% of capacity...
with little change in the amount of oil being refined, the gasoline output from our refineries was somewhat lower, falling by 117,000 barrels per day to 9,735,000 barrels per day during the week ending March 8th, after our refineries' gasoline output had increased by 299,000 barrels per day the prior week....with that decrease in the week's gasoline output, our gasoline production was 5.3% lower than the 10,280,000 barrels of gasoline that were being produced daily during the same week last year....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) decreased by 63,000 barrels per day to 4,856,000 barrels per day, after that output had increased by 103,000 barrels per day the prior week....but even after this week's decrease, the week's distillates production was more than 8.4% above the 4,478,000 barrels of distillates per day that were being produced during the week ending March 9th, 2018....
with the decrease in our gasoline production, the supply of gasoline left in storage at the end of the week fell by 4,624,000 barrels to 246,090,000 barrels over the week to March 8th, after supplies had fallen by 4,227,000 barrels over the prior week....our gasoline supplies fell again this week in part because the amount of gasoline supplied to US markets increased by 78,000 barrels per day to 9,140,000 barrels per day, after increasing by 81,000 barrels per day the prior week, and because our exports of gasoline rose by 20,000 barrels per day to 931,000 barrels per day, even as our imports of gasoline rose by 18,000 barrels per day to 573,000 barrels per day...after having reached a record high seven weeks ago, our gasoline inventories are still fractionally above last March 9th's level of 244,758,000 barrels, and remain roughly 2% above the five year average of our gasoline supplies at this time of the year...
even with the decrease in our distillates production, our supplies of distillate fuels rose for the 8th time in twenty-five weeks, increasing by 383,000 barrels to 136,369,000 barrels during the week ending March 8th, but after our distillates supplies had decreased by 2,393,000 barrels over the prior week...our distillates supplies increased by this week because our exports of distillates fell by 284,000 barrels per day to 1,086,000 barrels per day, while our imports of distillates fell by 8,000 barrels per day to 238,000 barrels per day, and because the amount of distillates supplied to US markets, a proxy for our domestic demand, fell by 192,000 barrels per day to 3,953,000 barrels per day...with this week's inventory increase, our distillate supplies ended the week 2.5% above the 133,066,000 barrels that we had stored on March 9th, 2018, but remained roughly 1% below the five year average of distillates stocks for this time of the year...
finally, while 1,432,000 million barrels of oil per day went missing from last week's stats to this week's, our commercial supplies of crude oil in storage decreased for the second time in 8 weeks, falling by 3,862,000 barrels over the week, from 452,934,000 barrels on March 1st to 449,072,000 barrels on March 8th...but with weekly increases in 17 out of the past 25 weeks, our crude oil inventories are still roughly 2% above the recent five-year average of crude oil supplies for this time of year, and around 35% above the prior 5 year (2009 - 2013) average of crude oil stocks after the first 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 8th were 4.2% above the 430,928,000 barrels of oil we had stored on March 9th of 2018, while falling to 15.0% below the 528,156,000 barrels of oil that we had in storage on March 10th of 2017, and 8.8% below the 492,160,000 barrels of oil we had in storage on March 11th of 2016...
OPEC's Monthly Oil Market Report
next we're going to review OPEC's March Oil Market Report (covering February OPEC & global oil data), which was released on Thursday of this past week, and which is available as a free download, and hence it's the report we check for monthly global oil supply and demand data...the first table from this monthly report that we'll look at is from the page numbered 60 of that report (pdf page 70), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate...for all their official production measurements, OPEC uses an average of estimates from six "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as an impartial adjudicator as to whether their output quotas and production cuts are being met, to thus resolve any potential disputes that could arise if each member reported their own figures...
as we can see on this table of official oil production data, OPEC's oil output fell by 221,000 barrels per day to 30,549,000 barrels per day in February, from their revised January production total of 30,770,000 barrels per day...however that January figure was originally reported as 30,806,000 barrels per day, so that means their production for February was effectively a 257,000 barrel per day decrease from the previously reported figures (for your reference, here is the table of the official January OPEC output figures as reported a month ago, before this month's revisions)...
as we can tell from the far right column on the table above, output cuts by Saudi Arabia and Venezuela alone accounted for this month's production reduction, with the cut of 142,000 barrels per day in the oil output from Venezuela being involuntary, due to US sanctions on their exports....except for Iraq and Nigeria, the oil output from the other OPEC members shown above is pretty close to the output allocations assigned to each member after their December 7th meeting, when they agreed to cut 800,000 barrels per day as part of a 1.2 million barrel per day cut agreed to with Russia and other oil producers...this can be seen in the table of OPEC production allocations we've included below:
the above table came from a February 6th post on Saudi cuts and OPEC allocations at S&P Global Platts, which has more details: the column of numbers shows average daily production quota in millions of barrels of oil per day for each of the OPEC members for the first 6 months of this year, as was agreed to at their December 2018 meeting...note that Venezuela and Iran, whose oil exports are being sanctioned by the Trump administration, and Libya, which has been beset by disruptive civil strife, are exempt from any production quotas, yet the oil output of all of them remains below that of the 4th quarter of 2018 shown in the fifth column of the OPEC production table above...
the next graphic we'll include shows us both OPEC and world oil production monthly on the same graph, over the period from March 2017 to February 2019, and it comes from page 61 (pdf page 71) of the March OPEC Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale...
OPEC's preliminary estimate indicates that total global oil production fell by 0.16 million barrels per day to 99.15 million barrels per day in February, after January's total global output figure was revised down by 10,000 barrels per day from the 99.32 million barrels per day global oil output that was reported a month ago, as non-OPEC oil production rose by a rounded 65,000 barrels per day in February after that revision, with increased oil output from US, the UK and Brazil the major reasons for the non-OPEC production increase.... the 99.15 million barrels per day produced globally in February was also 1.50 million barrels per day, or 1.5% higher than the revised 97.65 million barrels of oil per day that were being produced globally in February a year ago (see the March 2018 OPEC report online (pdf) for the originally reported February 2018 details)...after the February decrease in OPEC's output, their February oil production of 30,549,000 barrels per day represented just 30.8% of what was produced globally during the month, down from the 31.0% share they reported for January....OPEC's February 2018 production was reported at 32,186,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year, excluding Qatar from last year's total and new member Congo from this year's, are now producing 1,351,000 fewer barrels per day of oil than they were producing a year ago, with a 576,000 barrel per day decrease in output from Venezuela and a 1,070,000 barrel per day decrease in output from Iran from that time more than offsetting the year over year production increases of 245,000 barrels per day from the Emirates, 208,000 barrels per day from Iraq and 105,000 barrels per day from the Saudis...
however, despite the 0.16 million barrels per day decrease in global oil output we've seen during February, on top of the revised 1.02 million barrels per day decrease in January, we still had a small surplus in the amount of oil being produced globally during the month, as this next table from the OPEC report will show us...
the table above comes from page 35 of the February OPEC Monthly Oil Market Report (pdf page 45), and it shows regional and total oil demand in millions of barrels per day for 2018 in the first column, and OPEC's estimate of oil demand by region and globally quarterly over 2019 over the rest of the table...on the "Total world" line in the second column, we've circled in blue the figure that's relevant for February, which is their revised estimate of global oil demand during the first quarter of 2018...
OPEC's estimate is that during the 1st quarter of this year, all oil consuming regions of the globe have been using 99.02 million barrels of oil per day, which was the same as their estimate of a month ago....meanwhile, as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were still producing 99.15 million barrels per day during February, which means that there was a surplus of around 130,000 barrels per day in global oil production as compared to the demand now estimated for the month...in addition, with the downward revision of 10,000 barrels per day to January's output, the revised oil output surplus for January would now have been 290,000 barrels per day...
we should also note that the previous estimate for 2018's oil demand was revised 40,000 barrels per day lower with this report, a figure which we've highlighted in green...that downward revision wasn't evenly spread over the whole year, however, as the 2018 demand table on page 34 of the March OPEC Monthly Oil Market Report (pdf page 44) shows that demand for the 4th quarter was revised 210,000 barrels per day lower, and that demand for the 3rd quarter was revised 50,000 barrels per day lower, while oil demand for 2018's 1st and 2nd quarter was unrevised from previously published figures...that means that for all of 2018, global oil demand exceeded production by roughly 14,450,000 barrels, a comparatively tiny net oil shortfall that would be the equivalent of less than 3 and a half hours of global oil production at the revised December production rate......
This Week's Rig Count
US drilling activity slowed for the fourth week in a row, while active rigs are still down 6% so far this year, as the lower prices for both oil and natural gas we've seen in recent weeks and the large backlog of uncompleted wells continue to impact drilling decisions....Baker Hughes reported that the total count of rotary rigs running in the US fell by 1 rig to 1026 rigs over the week ending March 15th, which was still 36 more rigs than the 990 rigs that were in use as of the March 16th 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 1 rig to 833 rigs this week, which was still 33 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 was unchanged at 193 natural gas rigs, which was just 4 more than the 189 natural gas rigs that were drilling a year ago, but 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 was unchanged at 22 rigs this week, which is up by 9 from the 13 rigs active in the Gulf a year ago, which was sitting at a multiyear low at that time...the count of active horizontal drilling rigs increased by 3 rigs to 907 horizontal rigs this week, which was also 42 more horizontal rigs active than the 865 horizontal rigs that were in use in the US on March 16th of last year, but was down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014.....on the other hand, the vertical rig count decreased by 2 rigs to 54 vertical rigs this week, which was also down by 3 rigs from the 57 vertical rigs that were in use during the same week of last year....at the same time, the directional rig count was down by 2 to 65 directional rigs this week, which was also down from the 68 directional rigs that were operating on March 16th 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 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 15th, the second column shows the change in the number of working rigs between last week's count (March 8th) and this week's (March 15th) count, the third column shows last week's March 8th 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 16th of March, 2018...
as you can see, the rig decreases this week were concentrated in the Cana Woodford and Mississippian Lime, which are both in Oklahoma, although the Mississippian formation does stretch into Kansas, while the week's major drilling increase was in the Williston basin of North Dakota...those were all oil directed rigs, by the way; there were no net state or basin changes whatsoever in any natural gas rig metrics this week...in the Permian basin, which still accounts for more than half of the horizontal drilling nationally, single rig decreases are shown in Texas Oil District 8, which corresponds to the core Permian Delaware, and Texas Oil District 7C, or the southern Permian Midland basin, while a Permian rig was concurrently added in the Permian Delaware on the New Mexico side of the state line...meanwhile, the 3 rig increase in Alaska reverses the 4 rig decrease in the state the prior week, so those changes may have been weather related, rather than based on any economics of future production....we would also note that other than the changes shown above in the major producing states, Alabama also had its only rig pulled out this week, rendering the state rigless for the second time this year, in contrast to a year ago, when there was one rig active in the state....
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Utica Shale Production Reaches Record in Q4 - – Production of oil and gas from Utica shale wells in Ohio continues to hit new records, according to the latest results released Monday by the Ohio Department of Natural Resources. ODNR reported that energy companies drilling across the state yielded 663.5 billion cubic feet of natural gas during the quarter ended Dec. 31, 2018, or a 31.9% increase versus the same period a year ago. Production during the fourth quarter was also better than the previous three-month period, according to ODNR records. Energy companies reported 605.7 billion cubic feet of natural gas during the quarter ended Sept. 30, 2018. Oil production increased year-over-year by 38.5% during the fourth quarter, ODNR said. The agency reported that Utica shale wells yielded 5.8 million barrels of oil during the period, compared with 4.19 million barrels a year ago. During the third quarter, Utica wells in the state pumped out 5.54 million barrels of oil. The latest report from ODNR lists 2,241 Utica shale wells that produced either oil or gas during the quarter. The average amount of natural gas produced per well stood at 296.088 million cubic feet. The average amount of oil produced per well during the quarter was 2,593 barrels, according to ODNR. Most of the production is centered in the southeastern tier of the oil and gas play, where geological pressure is strongest. Eclipse Resources I LP’s Yellow Rose A 2H well in Monroe County produced the most natural gas of any single well in the Utica, eliciting 3.789 billion cubic feet of gas over 92 days. Another Eclipse well – the Outlaw A 1H in Guernsey County – produced more oil than any other well active in the Utica. That well produced 181,579 barrels of oil over a 92-day period. Natural gas production in Mahoning and Trumbull counties was negligible during the quarter, according to ODNR’s report. Nine wells operating in Mahoning County produced just 333.749 million cubic feet during the quarter, while wells in Trumbull County yielded 99.381 million cubic feet.
Economics professor discovers concerning effects for oil and gas boomtowns - -- Oil and gas "boomtowns," such as Ohio's Belmont County, may be bearing the costs of drilling without reaping all of its benefits, according to a newly published paper by Dr. Amanda Weinstein, assistant professor of economics at The University of Akron.Weinstein, along with coauthors Mark Partridge and Alexandra Tsvetkova from The Ohio State University, researched the flow of money in energy boomtowns across the country. They discovered that $1 out of every $5 in earnings leaks out of the counties where boomtowns are seated, as commuting workers take their earnings back home with them or spend it in nearby counties. For example, just a short drive from Belmont County, across the Ohio-West Virginia border, is a casino that draws in some of those earnings."This limits the ability of this energy boom to lift the living standards of the residents in drilling counties," said Weinstein. "It increases concerns that the counties bearing the brunt of the costs associated with drilling, from higher infrastructure costs to potential environmental costs, are not reaping all of the benefits of drilling." Additionally, Weinstein found that the earnings benefits of drilling vary substantially across the nation. "While some drilling counties, such as Williams County, N.D., are experiencing simultaneous growth in other industries, counties like Belmont are more likely to experience some crowding out of other industries as the energy industry grows," she said. Weinstein's findings were published recently in the Journal of Resource Policy, in a paper titled "Follow the money: Aggregate, sectoral and spatial effects of an energy boom on local earnings."
Ohio Supreme Court Decisions Have Columbus Fracking Opponents Eyeing May Ballot – WOSU - Last year, the Franklin County Board of Elections denied the "Community Bill of Rights" a place on the November ballot, arguing the proposal appeared to conflict with state law. Bill Lyons, one of the organizers pushing for the ballot measure, argues that recent Ohio Supreme Court rulings undercut the board's ability to intervene. “They basically have struck down that ruling that they used against us to not allow our initiative to go on the November ballot,” Lyons says.The cases have to do with two Toledo proposals. In particular,the court determined elections boards have “no legal authority to review the substance of a proposed charter amendment and has no discretion to block the measure from the ballot based on an assessment of its suitability.” During the August hearing for the Columbus fracking ban, Franklin County elections board member Brad Sinnot acknowledged he and other members were caught between a rock and a hard place. “The instruction given to us by the General Assembly is one that a board of elections is ill-equipped to follow,” he said. “It’s an instruction to perform a highly technical and complicated legal analysis relative to among other things, the home rule provisions of Ohio’s constitution.” Sinnot, one of the board’s two Republican members, voted to keep the proposal off the ballot. Organizers lodged a formal protest at the time, but the board's decision stood. Lyons and others plan to ask Columbus City Council to re-submit their measure for the May ballot on Monday.
'It's going to be a scar'- Residents list grievances with proposed Duke pipeline in Hamilton County - Natalie Smith fears Duke Energy's proposed pipeline would scar her community.The Reading resident attended a town hall meeting Wednesday evening that was organized by NOPE, or Neighbors Opposing Pipeline Extension. Smith and at least 100 others listened as various stakeholders and activists spoke at the Evendale Recreation Center."It's going to be a scar right down the middle of the city," Smith said after the meeting.Elizabeth Rueve-Miller, a NOPE member, lamented that the Ohio Power Siting Board does not consider human safety during its approval process for new pipelines. An evidentiary hearing is set for early next month, after which the OPSB may decide whether to grant Duke's proposal. "It's irresponsible and is a threat to the safety of our communities," Rueve-Miller said of the pipeline. The NOPE website has an interactive map featuring a "burn zone" in the event of an explosion. Sally Thelen, a Duke spokeswoman, emphasized that the company currently safely operates about 200 miles of high-pressure, large-diameter line. Those lines run near shopping malls, schools and hospitals. The proposed pipeline is "not unprecedented," Thelen said. "I'm very confident that as a company we are able to construct, operate and maintain this type of pipeline." But opponents disagree, citing the densely populated areas the proposed line would cross. Duke has proposed two lines that run along a preferred and alternate route through central Hamilton County. Haynes Goddard, a retired economics professor at the University of Cincinnati, said Duke's pipeline would be placed in an area of maximum impact due to its proximity to houses and people.
Equitrans Midstream's unit to buy gas pipeline assets for $1.03 billion - (Reuters) - U.S. pipeline operator Equitrans Midstream Corp’s unit on Thursday signed a deal worth $1.03 billion to take control of two pipelines that connect the Marcellus and Utica shale basins, the nation’s biggest gas producing region. The unit, EQM Midstream Partners LP, will buy a 60 percent stake in Eureka Midstream Holdings LLC and whole of Hornet Midstream Holdings LLC, from a fund managed by Morgan Stanley. EQM will pay $860 million in cash and assume $170 million of debt, as part of the deal. Gas companies have been betting heavily on pipeline infrastructure in the Utica and Marcellus shale basins, which span across Pennsylvania, Ohio and West Virginia, after a resurgence in drilling activity over the last few years led to tight pipeline capacity. Eureka Midstream is a 190-mile gathering pipeline system in Ohio and West Virginia that services both Utica and Marcellus production, while Hornet Midstream is a 15-mile, high-pressure gathering system in West Virginia that connects to Eureka system. “These assets will complement EQM’s basin-leading gathering and transmission system, allowing us to continue being the low-cost provider for gas transportation and, increasingly, for water handling as well” EQM Chief Executive Officer Thomas Karam said.
New warnings on plastic's health risks as fracking industry promotes new 'plastics belt' build-out – A new report traces the life cycle of plastic from the moment an oil and gas well is drilled to the time plastic trash breaks down in the environment, finding “distinct risks to human health” at every stage.Virtually all plastic – 99 percent of it, according to the Center for International Environmental Law (CIEL) report– comes from fossil fuels. And a growing slice comes from fracked oil and gas wells and the natural gas liquids (NGLs) they produce.The report concluded that plastics bring toxic or carcinogenic health risks to people at every stage.“Until we confront the impacts of the full plastic lifecycle, the current piecemeal approach to addressing the plastic pollution crisis will not succeed,” the report concludes. “At every stage of its life cycle, plastic poses distinct risks to human health, arising from both exposure to plastic particles themselves and associated chemicals.” People can be sickened not only when plastics are produced, in other words, but also while plastic is actively used by consumers and then again after it’s thrown out, where plastic trash often breaks down into smaller and smaller bits that can contaminate the food chain and make its way into people’s bodies. The scope of the risks requires an international response, the center said.“Both the supply chains and the impacts of plastic cross and re-cross borders, continents, and oceans,” said David Azoulay, the center’s Director of Environmental Health. “No country can effectively protect its citizens from those impacts on its own, and no global instrument exists today to fully address the toxic life cycle of plastics.”In the U.S., however, a major push is underway – and attracting hundreds of billions in investment, both foreign and domestic – to move in the opposite direction and produce more plastics and other petrochemicals. The goal? To create new demand from industry for the raw materials produced by fracked shale wells.
The Toxic Consequences of America's Plastics Boom - - A beach at sunset.. A long line of dump trucks idles at the edge of the waves, each full of plastic—bags and milk jugs and floss containers, hair clips, shrink wrap, fake ferns, toys, and spatulas. Every minute, one of the trucks lifts its bed and deposits a load of trash into the sea. The dump trucks aren’t real, but the trash is. No one knows exactly how much plastic leaks into the oceans every year, but one dump truck per minute—8 million tons per year—is a midrange estimate. Plastic waste usually begins its journey on land, where only 9 percent of it is recycled. The rest is thrown away, burned, or buried, left to wash into streams and rivers or to blow out to sea. Once in the ocean, the plastic drifts or sinks. The sun and the waves break it down into tiny particles that resemble plankton. Birds and fish and other sea creatures eat it and begin to starve. One analysis predicts that by 2050, the plastic in the oceans will outweigh the fish. Some of the trash winds up in one of five current systems in the oceans known as gyres, where it forms a slowly circulating plastic soup. The Great Pacific Garbage Patch is the largest of these zones, spanning an area twice the size of Texas between Hawaii and California, a merry-go-round of the remains of global consumption. Researchers have found small plastic shards and large objects in the gyre: hard hats and Game Boys and milk crates and enormous tangles of fishing nets, all swirling in a smog of microplastics. Often inaccurately described as a solid island, the garbage patch has become a potent symbol of the world’s plastic problem, alongside viral photos of a sea horse clutching a Q-tip, a sea turtle with a straw wedged deep in its nostril, and a dead adolescent albatross with a stomach full of jewel-like plastic shards.. Even the corporations that produce plastics have grown alarmed. In January, dozens of companies including Dow, ExxonMobil, Chevron Phillips, and Formosa Plastics Corporation announced the Alliance to End Plastic Waste, with an initial commitment of $1 billion to fund recycling and cleanup. But those same petrochemical giants are about to make the plastic problem worse. Companies are investing $65 billion to dramatically expand plastics production in the United States, and more than 333 petrochemical projects are underway or newly completed, including brand-new facilities, expansions of existing plants, vast networks of pipelines, and shipping infrastructure.
Fracking in Pennsylvania is too close to residents for safety: Study - – Regulations on how close fracking facilities can be to buildings and homes in Pennsylvania are too lax to adequately protect public health, according to a new study.The study, undertaken by the Southwest Pennsylvania Environmental Health Project (EHP) and published last week in the peer-reviewed journal PLOS One, asked a panel of 18 experts— including healthcare providers, public health practitioners, environmental advocates, researchers and scientists—to compare minimum setback requirements against emerging research about the health impacts of fracking.Unconventional oil and gas operations include hydraulic fracturing, or fracking—in which a high pressure mix of water, chemicals and sand are injected into wells to release oil or gas—and its related infrastructure, like well pads and natural gas compressor stations.Currently, horizontally drilled well pads are required to be at least 500 feet away from the nearest occupied building in Pennsylvania. For natural gas compressor stations and processing plants, the minimum goes up to 750 feet, but those minimums can be waived by property owners, and some fracking facilities operate within 300 feet of occupied buildings in residential areas in the state. Of the 18 experts the study consulted, 16 concluded that, in order to protect public health, the setback distance for a fracking facility, such as a well pad or compressor station, should be at least one-quarter mile (1,320 feet) from the nearest occupied building.
How Injected Microbes Persist in Hydraulically Fractured Shale - A boon to natural gas production, hydraulic fracturing or fracking introduces surface microbes thousands of feet below the Earth’s surface. How do they survive? Could they be harnessed to increase energy output? Scientists brought these microbes into the laboratory. They found that the amino acid glycine betaine protects the microbes. It also serves as an energy source for a specific community of microorganisms that become adapted to life in fractured shale. Sixty percent of U.S. natural gas comes from hydraulically fractured shales. These shales are located primarily in Ohio, West Virginia, and Pennsylvania. As engineers inject water and chemical additives into the ground, microbes hitch a ride. The microbes can affect the efficiency of gas and oil production, increase methane formation, corrode equipment, and “sour” the field. A greater understanding of the metabolism of these microbes will help scientists develop strategies to manage them and possibly increase gas production. The team re-created a shale microbial community in the laboratory. This allowed them to measure microbial activity and fluid chemistry under temperature and pressure conditions similar to those underground. They confirmed their results by comparing the laboratory re-created communities with more than 40 real-world samples from five fracturing wells in the Appalachian Basin. . Based on these data, the team used regression-based modeling to identify key indicators of microbial activity and predict conditions underground. By scaling results from the laboratory to the field, they discovered mechanisms behind critical biogeochemical reactions, including ways to increase gas production. Scientists could harness this knowledge to increase energy yields and improve management practices in hydraulically fractured shales. They could also apply such knowledge to protein-rich microbial ecosystems like soils to predict emission of potent gases.
Pennsylvania DEP reaches settlement with companies to plug abandoned wells in region - The state Department of Environmental Protection reached a settlement with two oil and gas companies over plugging abandoned wells, including hundreds around Southwestern Pennsylvania. The consent order and agreement with Diversified Gas & Oil Corp. of Birmingham, Ala., and Alliance Petroleum Co. — an Ohio company Diversified bought last year — addresses well-plugging violations in 23 counties overall. “This agreement is a win for the commonwealth because it ensures that over 1,400 oil and gas wells are properly maintained or plugged and that these operators, not Pennsylvania citizens, bear the full cost of operating or plugging them,” DEP Secretary Patrick McDonnell said.In July 2018, DEP issued orders to Alliance, XTO Energy Inc. and CNX Gas Company to plug 1,058 abandoned oil and gas wells across the state — based on required self-reporting of well production data. Those wells, along with wells that Diversified reported as non-producing, make up the approximately 1,400 wells addressed in the consent order, DEP said.Alliance, XTO and CNX appealed DEP’s orders to the Pennsylvania Environmental Hearing Board, which triggered settlement negotiations. Diversified officials could not be reached for comment.The Pennsylvania Oil and Gas Act requires owners and operators to plug wells upon abandonment, which it defines as a well that “has not been used to produce, extract or inject any gas, petroleum or other liquid within the preceding 12 months.”Alliance, XTO and CNX self-reported conventional wells that did not produce oil or gas during the 2017 calendar year, DEP said.“We noticed that some of these companies were transferring large numbers of conventional wells and … that in these transfers there are a lot of non-producing wells, which we would consider abandoned,” said DEP spokeswoman Lauren Fraley. “This agreement allows those transfers to move forward but makes sure that Diversified and Alliance are properly inventorying what they have and are on a schedule to plug or produce the wells that they have.”Diversified and Alliance have agreed to a $7 million surety bond for the wells covered by the settlement, plus an additional $20,000-$30,000 bond for each abandoned or non-producing oil and gas well acquired in the future, DEP said. Under current law, conventional oil and gas operators are required to secure $25,000 of blanket bonding to cover all of their wells, which in the case of the two companies amounts to bonding of approximately $2 per well, DEP said.
Delaware County, Pennsylvania District Attorneys Launch Joint Investigation Involving Mariner East Pipeline (CBS) — The Delaware County district attorney and Pennsylvania’s attorney general have teamed up for an investigation involving the Mariner East Pipeline. The joint investigation is regarding allegations of criminal misconduct by several entities, including Energy Transfer LP and Sunoco Logistics partners. BREAKING: Delaware Co. DA, Pa. Attorney General are “conducting a joint investigation regarding allegations of criminal misconduct by Energy Transfer LP, Sunoco Logistics Partners, and related corporate entities, involving….. Mariner East 1, 2, and 2X pipelines.” @CBSPhilly pic.twitter.com/1sjr4Nd7f3 “There is no question that the pipeline poses certain concerns and risks to our residents, and as District Attorney, I am working to do everything possible within my power to ensure the safety of residents. At this time, we are thoroughly reviewing the evidence available to us, working with the Attorney General’s Office, and seeking action within our jurisdictional boundaries. We want residents to know that we have heard their concerns, and we are willing to hear any new concerns that they may have about the pipeline by contacting my Office,” said Delaware County District Attorney Katayoun Copeland. “Due to the fact that the pipeline spans over 17 different counties in Pennsylvania, we sought assistance from our partners in law enforcement, the Pennsylvania Attorney General’s Office. As this remains an open and active investigation, the details available for disclosure are very limited, as is the case in any of investigation.” The exact focus of the investigation remains unclear.
State attorney general, Delaware County district attorney launch criminal investigation into Sunoco, Energy Transfer - Delaware County’s district attorney and the Pennsylvania attorney general have launched a joint criminal investigation into the pipeline company Energy Transfer LP and Sunoco Logistics Partners, responding to increased opposition to the Mariner East pipeline project in the Philadelphia suburbs.A spokesperson for Attorney General Josh Shapiro said Delaware County DA Katayoun Copeland requested assistance with the probe, which involves alleged criminal misconduct in building the Mariner East 1, 2, and 2x pipelines through the county. The lines carry, or will carry, natural gas liquids from the Marcellus and Utica shale fields of eastern Ohio and western Pennsylvania to an export facility in Marcus Hook, Delaware County.Shapiro announced the probe on Twitter: In a statement, Copeland said the pipeline “poses certain concerns and risks” to residents.“At this time, we are thoroughly reviewing the evidence available to us, working with the Attorney General’s Office, and seeking action within our jurisdictional boundaries,” Copeland said. “We want residents to know that we have heard their concerns, and we are willing to hear any new concerns that they may have about the pipeline by contacting my Office.”Copeland said her office has received formal complaints from residents including members of Del-Chesco United for Pipeline Safety and the Middletown Coalition for Community Safety, grassroots groups created to oppose the 350-mile project. She thanked the groups “and other residents for taking the time to meet with us and sharing their concerns and formal complaints.”Copeland’s announcement follows a similar probe by the Chester County District Attorney’s office, which has impaneled a grand jury.Residents says the natural gas liquids lines, which transport propane, butane and ethane, pose a risk of explosion in a densely populated region. Sunoco’s pipeline construction has resulted in dozens of drilling mud spills across the state, contaminated drinking water wells, and dangerous sinkholes in Chester County. Last September, a separate Energy Transfer natural gas liquids pipeline exploded in Beaver County just days after coming online. The fire burned one house to the ground.The Department of Environmental Protection has issued more than 80 violations, halted construction at times along the route, and fined the company $12.6 million. The company has also faced shutdowns of the Mariner East 1 line after construction of the parallel Mariner East 2 line led to sinkholes in Chester County.
Pennsylvania accounts for 25 percent of US natural-gas power generation - In 2018, Pennsylvania accounted for 25 percent of growth in natural-gas power generation, 4.4 gigawatts, according to a report by the U.S. Energy Information Administration (EIA). Nineteen natural-gas power generation projects in Pennsylvania are either under development, under construction or were recently brought online. These projects are the result of $12.6 billion in private capital investment and collectively will generate more than 16,700 megawatts of power. Two plants recently brought online are Invenergy’s Lackawanna Energy Center, outside of Scranton, and Tenaska’s Westmoreland Generating Station in Westmoreland County. The plants locally source natural gas and generate energy for more than 2 million homes. The average household using natural-gas power saves $1,100–$2,200 annually, according to Marcellus Shale Coalition. Natural gas also reduces harmful air pollutants, the group said. Of the electric generating plants installed nationwide in 2018, more than 60 percent were fueled by domestic natural gas. Nationwide last year, nearly 90 percent of the 19.3 gigawatts of the natural-gas-fired capacity added were from combined-cycle generators. The generators are the most efficient method of generating power from natural gas.
Appalachia gas production increase affects gas flow - The 2019 Annual Energy Outlook (AEO2019) reference case shows continued growth of US natural gas production in the Mid-Atlantic and Ohio region from the Marcellus and Utica formations, resulting in increases of natural gas being transported to the Eastern Midwest and, ultimately, into the South Central region, which includes the Gulf Coast and Texas. While the South Central region itself contains shale plays that produce natural gas, such as the Wolfcamp in the Permian Basin and the Haynesville, natural gas consumption in the region outpaces production in the reference case, requiring additional supplies of natural gas from other regions to meet growing demand both within the region and for liquefaction facilities that would export natural gas to other countries.Total US dry natural gas production across most AEO2019 cases is driven by continued development of the Marcellus and Utica shale plays in the East region. In the AEO2019 reference case, dry natural gas production reaches nearly 120 billion ft3/d by 2050, compared with 75 billion ft3/d in 2017.Dry shale natural gas production in the East accounts for over half of this growth as production more than doubles during the projection period from 24 billion ft3/d in 2017 to 50 billion ft3/d in 2050 in the reference case. This forecast growth is driven by technological advancements and improvements in industry practices, which lower production costs and increase the volume of oil and natural gas recovery per well. In the reference case, these advancements have a significant cumulative effect on plays that extend over wide areas that have large undeveloped resources, such as the Marcellus and Utica. Although historically a net supplier of natural gas to other US markets, the South Central region’s forecast demand growth outpaces its production growth throughout the AEO2019 projection period. Growing US LNG export volumes are the main contributor to this growth as US LNG export capacity is expected to double from 5 billion ft3/d to 11 billion ft3/d by the end of 2020.
Prices Have Rare Inside Week As Bullish Near-Term Weather Is Offset By The Impending End Of Winter - Highlights of the Natural Gas Summary and Outlook for the week ending March 8, 2019 follow. The full report is available at the link below.
- Price Action: The April contract rose 0.6 cents (0.2%) to $2.865 on an 8.4 cent range ($2.896/$2.812).
- Price Outlook: The market recorded a rare inside week as bullish weather forecasts provided support with the looming end of winter and falling demand limited the upside. Of the 1,001 weeks since 2000, only 96 have witnessed inside weeks while 114 have witnessed both a new high and new weekly low. There have only been 4 instances with 2 consecutive inside weeks and with this week’s miniscule 8.4 cent range, another inside is highly improbable. The CFTC data is finally current after the government shutdown. CFTC data indicated a 35,988 contract increase in the managed money net long position as longs added and shorts covered. Total open interest rose 22,418 to 3.178 million as of March 05. Aggregated CME futures open interest rose to 1.194 million as of March 08. The current weather forecast is now cooler than 8 of the last 10 years. Pipeline data indicates total flows to Cheniere’s Sabine Pass export facility were at 4.0 bcf. Cove Point is net exporting 0.8 bcf. Corpus Christi is exporting 0.665 bcf. Cameron is exporting 0.000 bcf.
- Weekly Storage: US working gas storage for the week ending March 1 indicated a withdrawal of (149) bcf. Working gas inventories fell to 1,390 bcf. Current inventories fall (235)bcf (-14.5%) below last year and fall (482) bcf (-25.8%) below the 5-year average.
- Supply Trends: Total supply fell (0.5)bcf/d to 83.4 bcf/d. US production fell. Canadian imports rose. LNG imports fell. LNG exports rose. Mexican exports rose. The US Baker Hughes rig count fell (11). Oil activity decreased (9). Natural gas activity decreased (2). The total US rig count now stands at 1,027 .The Canadian rig count fell (22) to 189. Thus, the total North American rig count fell (33) to 1,216 and now trails last year by (41). The higher efficiency US horizontal rig count fell (7) to 904 and rises +56 above last year.
- Demand Trends: Total demand fell (3.7) bcf/d to +104.8 bcf/d. Power demand fell. Industrial demand fell. Res/Comm demand fell. Electricity demand fell (2,501) gigawatt-hrs to 76,183 which exceeds last year by +4,458 (6.2%) and exceeds the 5-year average by 553 (0.7%%).
- Nuclear Generation: Nuclear generation fell (2,918)MW in the reference week to 88,626 MW. This is (1,827) MW lower than last year and +74 MW higher than the 5-year average. Recent output was at 86,623 MW.
The heating season has begun. With a forecast through March 22 the 2018/19 total cooling index is at (2,786) compared to (2,515) for 2017/18, (2,187) for 2016/17, (2,419) for 2015/16, (2,667) for 2014/15, (2,944) for 2013/14, (2,685) for 2012/13 and (2,422) for 2011/12.
US Northwest gas and power prices spike amid cold snap – Platts podcast - Natural gas prices at the Sumas hub in the Pacific Northwest reached a record high on March 1. On the same day, power prices at Mid-Columbia hub in the Northwest soared to an 18-year high.In this podcast, senior natural gas pricing specialist Veda Chowdhury and senior power pricing specialist Kelli Ainsworthtalk with senior natural gas pricing specialist John Delapp about the supply-and-demand factors that boosted natural gas and power prices to these historic levels.
Warmer Weather Forecasts And Weaker Balances Send Natural Gas Prices Lower - It was a solid down day for natural gas prices today, with the April contract finishing down just over 3% on the day. The weakness was felt along the entire natural gas strip, though was more pronounced in the front month contracts. Back on Friday, we took a "slightly bearish" stance in our afternoon update, citing risk of moderating weather forecasts helping to ease low storage concerns. This worked out quite well, as forecast GWDD totals for the next couple of weeks were roughly 15-20 GWDDs lower than Friday's forecasts. With balances already weakening, less weather demand means less natural gas burned, and allows the market to be more comfortable with storage levels. CPC's forecasts show, in map form, a notable day over day change in the warmer direction. hile the pattern can still be described as "variable" rather than "warm", there are signs that warm may begin to win out toward the end of the month into April, as seen in the latest CFSv2 April forecast.
U.S. storage of working natural gas decreased dramatically last week: EIA - (Xinhua) -- Working natural gas storage in the contiguous United States was 1,186 billion cubic feet (about 33.6 billion cubic meters) as of March 8, a net decrease of 204 billion cubic feet from the previous week, the U.S. Energy Information Administration (EIA) said in a report on Thursday. The natural gas storage decreased by 23.2 percent from this time last year, or 32.4 percent below the five-year average, according to EIA's Weekly Natural Gas Storage Report. Net withdrawal of 206 billion cubic feet for the lower 48 states last week was the largest value ever reported for March in the EIA's Weekly Natural Gas Storage Report. According to EIA, the larger-than-normal withdrawals from storage were driven by the return of cold temperatures throughout large portions of the Lower 48 states, which increased heating demand for natural gas Working natural gas is defined as the amount of natural gas stored underground that can be withdrawn for use.
Natural Gas Futures Take Hit After Somewhat Bearish EIA Storage Report - The Energy Information Administration (EIA) on Thursday reported a 204 Bcf withdrawal from U.S. gas stocks, on the low side of survey ranges, and the news ate into early morning gains in the natural gas futures market.The 204 Bcf pull for the week ended March 8 -- a week that saw unseasonably frigid temperatures and elevated prices in the cash market -- is bullish compared to the five-year average 99 Bcf withdrawal and last year’s 88 Bcf pull. But market observers had been looking for a hefty withdrawal from this week’s EIA report. Major surveys had pointed to a withdrawal in the 208-210 Bcf range, and some estimates approached 220 Bcf. Intercontinental Exchange EIA financial weekly index futures had settled on a pull of 205 Bcf, while NGI’s model had predicted a 222 Bcf withdrawal.The April Nymex futures contract had been trading a few cents higher early Thursday, up around $2.840-2.850. As the final number crossed trading screens at 10:30 a.m. ET, the front month quickly shed a couple pennies, trading as low as $2.826. By 11 a.m. ET, April was back up to around $2.840, 2.0 cents higher versus Wednesday’s settle. Bespoke Weather Services had been looking for a 209 Bcf pull and viewed this week’s EIA report as neutral.“Weekly data continues to be noisy, as last week’s draw was 6 Bcf larger than our expectation while this week’s was 5 Bcf smaller, indicating we continue to have a strong read of balance on a two-week rolling basis,” Bespoke said. “Though the number was slightly bearish to the market consensus we saw risk to the bearish side and still saw a very significant salt draw that can keep a bid under day-ahead cash.“This keeps us from seeing the number as all that bearish, though following the significant cold last week we should see significant loosening in future numbers as we look to just barely dip below 1.1 Tcf. The market has been bid up on worries of stagnant production and a large draw, and now one of those worries can be put behind us.”Total working gas in underground storage stood at 1,186 Bcf as of March 8, 359 Bcf (23.2%) below year-ago inventories and 569 Bcf (32.4%) below the five-year average. By region, EIA reported a 51 Bcf withdrawal in the Midwest, with the East pulling 49 Bcf from stockpiles. The Pacific saw a 10 Bcf pull for the week, while 7 Bcf was withdrawn in the Mountain region. The South Central saw 88 Bcf pulled from stocks, including 51 Bcf from salt and 37 Bcf from nonsalt, according to EIA.
April Gas Trends Lower On Milder End Of March And Loosening Supply/Demand Balances - The April natural gas contract settled down over 2% today as weather forecasts trended unimpressive through the day with balances doing little to support prices and cash trading weakly ahead of a weekend with one of the last cold shots of the season. The April contract led the whole curve lower after it led the way higher yesterday. We were all over this for clients, with our sentiment in our Afternoon Update yesterday turning bearish. Our Morning Update also outlined the bearish risks to natural gas prices we saw through the day, highlighting a test of $2.8 likely "into early next week" following the gap fill we were watching at $2.856. This came despite some slightly colder trends on overnight weather model guidance. Then afternoon weather model guidance moderated further, keeping the front of the natural gas curve under pressure (images courtesy of Tropical Tidbits). This came as we saw little in daily balance data to indicate prices were likely to bounce back, as Canadian imports were seen recovering a bit too despite lower production the last few days.
Pinelands Commission says South Jersey Gas pipeline approval void— The Pinelands Commission has notified South Jersey Gas its approval to build a pipeline from Maurice River Township to Upper Township is void, now that the B.L. England electric plant will not repower with natural gas. “We sent a letter to South Jersey Gas saying, ‘Hi, because of the fact that B.L. England is no longer part of the application, as far as we are concerned, the application is no longer valid,’” Executive Director Nancy Wittenberg said at Friday’s commission meeting. A South Jersey Gas representative was unavailable for comment Saturday. “Our court date has been pushed back to June. We have to remain vigilant because RC Holdings can sell this plant to another natural gas power company,” said Jeff Tittel, director of the New Jersey Sierra Club, one of the groups suing to stop the pipeline. “South Jersey Gas can also come back with another application. That’s why it is so critical that Gov. Murphy move ahead with new appointments to the Pinelands Commission and place a moratorium on all fossil-fuel infrastructure projects.” Commissioners said they would discuss the litigation, and motions filed in the case, during closed session. South Jersey Gas has said there is still a need for a new pipeline to provide a second route for gas to get to about 140,000 customers in Cape May and parts of Atlantic County, now served by only one transmission line. But Wittenberg’s letter made it clear SJ Gas will need to make a new application for any new or amended project through the Pinelands.
'Monumental step backwards' – the $1bn gas pipeline project dividing New York - A battle is erupting over a proposed gas pipeline on the doorstep of New York City, with environmental groups claiming the project is unnecessary and would lock in planet-warming emissions for decades to come. Energy company Williams, based in Oklahoma, plans to build a 23-mile-long underwater pipeline through New York’s lower bay to bring fracked gas from Pennsylvania to New York. The $1bn project would link existing infrastructure in New Jersey, to the Rockaways in the New York borough of Queens. Pipeline proponents argue the project is needed to allow thousands more New Yorkers to switch from oil to gas for their heating but environmental groups are marshaling a growing protest movement to pressure Andrew Cuomo, New York’s governor, to block the development. “This pipeline would incentivize reliance on gas, which is way more carbon-intensive than renewables,” said Robert Wood, a campaigner at 350.org, a climate advocacy group. “It would be a nightmare happening, not in a rural area, but right here in New York City.” A draft of a study commissioned by 350.org disputes many of the assertions made by Williams and National Grid, the utility that will be the sole customer for the gas. According to the analysis, New York is already well on its way to eliminating the dirtiest types of oil, a carbon-heavy fuel, for heating and the state’s power operators are forecasting a drop in electricity use due to efficiency improvements.
Exclusive: Rhode Island Governor Nixed Agency Critiques of LNG Facility, Silencing Health and Justice Concerns - Rhode Island Governor Gina Raimondo, a Democrat, squashed a letter by her own state health agency, which raised serious concerns about a proposed liquefied natural gas (LNG) facility in a densely populated Providence neighborhood. Documents obtained by DeSmog show that last summer Raimondo nixed a letter by the Rhode Island Department of Health (RIDOH) critical of National Grid’s Fields Point Liquefaction project right before it was to be submitted to the Federal Energy Regulatory Commission (FERC).FERC approved the project three months later. According to the internal documents, obtained from RIDOH through an open records request, in June last year several health department staff members began crafting a letter in response to the publication of FERC’s environmental assessment for the project. The assessment, which was carried out by a contractor supervised by FERC but paid for by National Grid, concluded that the project will “not significantly affect the quality of the human environment.” A final draft of the RIDOH letter, which was to be signed by its Director Dr. Nicole Alexander-Scott, was ready for submission to FERC in late July. The letter detailed various critiques of FERC’s assessment, from its fairly narrow scope under the National Environmental Policy Act (NEPA) and the ignoring of vulnerable communities, to public safety concerns and different scenarios for explosions. Earlier drafts discussed issues relating to climate change and environmental justice, which did not make it into the final product. “[T]he residents of the area feel disenfranchised and believe that their voices and health do not matter to government,” the letter warned, adding that the project “continues that historical pattern of discounting the voices of the people that live in the region and sets a precedent that may lead to additional, more concerning, projects in the future.” But the letter was never sent.
West Virginia lawmakers pass bills to expedite natural gas output, transport — Legislation West Virginia lawmakers passed in their recently concluded legislative session is expected to encourage the construction of distribution pipeline systems in underserved areas of the state, as well as to give a tax break to production from low-producing gas wells. Among the bills passed during the session, which closed Saturday, was House Bill 2661, which allows natural gas utilities to provide incentivizes for gas drilling "where dependable, lower-priced supplies of natural gas are not readily available." The legislation, which awaits the signature of Governor Jim Justice, will help encourage the utilities to build new gas gathering systems in areas of the state "where there haven't been wells drilled in the last several years," Charlie Burd, executive director of the Independent Oil & Gas Association of West Virginia, said Monday in an interview. HB 2661 was just one of several pieces of legislation that the lawmakers passed, which are expected to help increase the state's output of gas, Burd said. Gas production in the state has increased rapidly since the middle part of the current decade as producers began to tap into the deep liquids-rich Utica Shale formation, as well as the shallower Marcellus. Production grew from about 2.24 Bcf/d as of January 1, 2014, to about 4.54 Bcf/d currently, according to S&P Global Platts Analytics data. Production in the state is projected to continue to ramp up over the next five years, topping 7 Bcf/d by 2024, according to Platts Analytics. Another bill IOGA WV favored for passage was HB 2673, which increases the exemption from severance tax for marginally producing wells. Under current law, only wells producing 5 Mcf/d are exempted from paying the 5% severance tax, based on total production. HB 2673 raised that level of production eligible for exemption to 60 Mcf/d from 5 Mcf/d. For those affected wells, the severance tax will be replaced by a well plugging 2.5% tax, with funds going to the plugging of abandoned and orphaned wells for which no responsible owner can be found.
Student Reporters in West Virginia Find Atlantic Coast Pipeline Offers Only Two Dozen Permanent Jobs - It’s hard for anyone to miss a “help wanted” sign like this: “13,000 Union Workers Needed for Atlantic Coast Pipeline Project.” That’s how the website Oilfield Job Shop described the opportunities created by the $7 billion Atlantic Coast pipeline, planned to carry shale gas 605 miles from West Virginia into Virginia and North Carolina. Its builders, a group led by Dominion Energy, say all told, the project will support 17,000 jobs — no small amount of work anywhere, but especially in parts of West Virginia where the economy has long relied on coal mining. So, when high school students working with PBS NewsHour's Student Reporting Labs in Morgantown, West Virginia, set out to find out what “opportunity” looks like in 2019, they quickly zoomed in on pipeline jobs. The students were particularly interested in the kinds of jobs that could let workers stay in or near their hometown, a small city (population: 138,000) on the banks of the Monongahela River in north-central West Virginia. Earlier reporting by a different PBS project revealed that the 17,000 jobs advertised for the Atlantic Coast pipeline didn’t stand up to scrutiny. For one thing, that number is based on an estimate that re-counts the exact same position each year. “In other words, if someone was hired for a job that lasted for six years, that would count as six cumulative jobs,” Community Idea Stations reported. It added that during an average year, the pipeline would directly employ 1,556 workers (and the projections then added in a nearly equal number of spin-off jobs, also multiplied by six years). At no point, in other words, was the pipeline project hiring 13,000 union workers at one time. “It was trouble finding out how many jobs the pipeline would create,” another SRL reporter, Kyle Shaw, told DeSmog. So, they went to the source, interviewing Dominion’s Brittany Moody, lead engineer for the Atlantic Coast pipeline. “I’m thinking in the low 20’s range for permanent employees,” she tells Student Reporting Labs in a roughly six-minute video report produced by the students.
The fight for the Atlantic Coast & Mountain Valley pipelines (Forbes), Two proposed long-haul natural gas transportation projects—the Atlantic Coast Pipeline (ACP) and the Mountain Valley Pipeline (MVP)—are now in peril. That’s the result of a decision by the U.S. Court of Appeals for the Fourth Circuit in Richmond, Virginia in late February.The court didn’t just reject U.S. Forest Service permits for the ACP to cross the Appalachian Trail. They ruled the Forest Service lacks the authority to permit any pipeline crossing the A.T., without an act of Congress. If that stands, it invites a fresh challenge to the MVP project, which is also attempting to transport gas from Appalachia to the Southeast US.The ACP’s lead developer and 48 percent owner Dominion Energy(D) will file an appeal with the US Supreme Court "in the next 90 days." If that fails, management will have to decide whether to seek an unlikely exemption from Congress, substantially re-route the pipeline or cancel the project entirely. Prior to its defeat at the Fourth Circuit, Dominion had announced a plan to separately construct the "Supply Header" portion of the ACP, a pipeline system stretching from central to southeastern Virginia and then to southeastern North Carolina. That portion now has a projected commercial in-service date of end-year 2020 at a cost of $650 to $700 million and could conceivably be filled with gas from other sources.The rest of ACP is now projected to enter service in "early 2021." That’s a timetable management believes will allow for a court or legislative remedy, though probably not substantive re-routing. The total project cost including Supply Header is now $7.25 to $7.75 billion, up from an estimate of $6 to $6.5 billion in early November.MVP’s proposed route is considerably shorter, bringing gas from the Marcellus Shale of West Virginia into southern and western Virginia. According to lead developer EQM Midstream (EQM), the project is 70 percent complete, but work has been suspended, boosting expected cost to $4.6 billion. The company has filed an amicus brief at the Fourth Circuit in support of the ACP partners. That leaves two big questions for investors. First, is it still likely these pipelines will eventually enter service? Second, how exposed are the owners to further cost overruns, and to the worst case that these projects are abandoned and written off?
US Official Reveals Atlantic Drilling Plan, Hails Trump's Distractions - "Revealed: Interior department official says he is ‘thrilled’ by Trump’s ‘knack for keeping the attention of the media and public focused somewhere else’" "A top US official told a group of fossil fuel industry leaders that the Trump administration will soon issue a proposal making large portions of the Atlantic available for oil and gas development, and said that it is easier to work on such priorities because Donald Trump is skilled at sowing “absolutely thrilling” distractions, according to records of a meeting obtained by the Guardian.Joe Balash, the assistant secretary for land and minerals management, was speaking to companies in the oil exploration business at a meeting of the International Association of Geophysical Contractors, or IAGC, last month. “One of the things that I have found absolutely thrilling in working for this administration,” said Balash,“is the president has a knack for keeping the attention of the media and the public focused somewhere else while we do all the work that needs to be done on behalf of the American people.”"Jimmy Tobias reports for the Guardian March 14, 2019.
'Fracking' Ban Advances In The Florida Senate Amid Concerns — A move to ban “fracking” in Florida advanced Monday in the Senate with some oil-drilling protections for the Everglades, but not more comprehensive language sought by environmentalists. The Senate Agriculture Committee voted 3-2 along party lines to approve a measure (SPB 7064) by Chairman Ben Albritton that would meet Gov. Ron DeSantis’ call to ban hydraulic fracturing, or fracking, which involves injecting large volumes of fluids into rock formations at a “high rate” of pressure to help release natural gas and oil. Sen. Doug Broxson, a Gulf Breeze Republican who voted for the proposal, expressed concern that the ban could impact the industry. Broxson noted that while the fracking technique has not been employed in the state, Florida has long had oil drilling in parts of the Panhandle and Southwest Florida. “Florida has very limited resources as far as what is in the ground,” Broxson said. “What we’ve done is safe and responsible. And let’s don’t do anything to interrupt what we’ve done right for the last 60 years.” While adamantly opposed to fracking, environmentalists have opposed Albritton’s bill because it doesn’t address a technique called “matrix acidizing.”The acidizing technique utilizes many of the same chemicals as used in hydraulic fracking, but it dissolves rocks with acid instead of fracturing them with pressurized liquid. Sen. Kevin Rader, D-Delray Beach, said by not prohibiting the acidizing technique, as well as hydraulic fracturing, the proposal continues to be a “risky proposition” for the state’s fragile ecosystem. “I don’t understand why we are taking chances, Oklahoma has, as we heard last week, has fracking going on and for the first time in their history they’ve got 2,000 earthquakes between the years 2015 and 2017,” Rader said. “I know there is a little bit of debate that it is due to fracking or not, but the majority of the debate believes that it is.”
Environmentalists sue U.S. to block Gulf of Mexico energy lease sale - Three environmental groups on Wednesday sued the U.S. government over its plan to sell leases next week for offshore oil and gas fields in the Gulf of Mexico, saying they want a court order blocking the sales. The planned sales violate the National Environmental Policy Act and the Administrative Procedure Act because they rely on “arbitrary environmental analyses,” according to the complaint filed in U.S. District Court for the District of Columbia by Healthy Gulf, the Sierra Club and the Center for Biological Diversity. To read the full story on WestlawNext Practitioner Insights, click here: bit.ly/2T0jpjS
Underwater Mudslides Are the Biggest Threat to Offshore Drilling, and Energy Companies Aren’t Ready for Them - Ian MacDonald - Like generals planning for the last war, oil company managers and government inspectors tend to believe that because they survived the 2010 BP Deepwater Horizon oil spill, they are ready for all contingencies. Today they are expanding drilling into deeper and deeper waters, and the Trump administration is opening more offshore areas to production.In fact, however, the worst-case scenario for an oil spill catastrophe is not losing control of a single well, as occurred in the BP disaster. Much more damage would be done if one or more of the thousand or so production platforms that now blanket the Gulf of Mexico were destroyed without warning by a deep-sea mudslide.Instead of one damaged wellhead, a mudslide would leave a tangled mess of pipes buried under a giant mass of sediments. It would be impossible to stop the discharge with caps or plugs, and there would be little hope of completing dozens of relief wells to stop discharge from damaged wells. Oil might flow for decades. This scenario has already occurred, and we are seeing the results at a well off Louisiana, owned by Taylor Energy, that has been leaking oil since 2004. Based on this disaster and my 30 years of experience studying deep-sea oil and gas seeps, I believe that regulators and energy companies should be doing much more to prevent such catastrophes at other sites.
British, French buyers to receive commercial cargoes from Cheniere Sabine Pass starting August: company — Cheniere Energy will begin making commercial deliveries in August under long-term offtake contracts with Britain's Centrica and France's Total now that it has achieved substantial completion of its fifth train at its Sabine Pass LNG export terminal in Louisiana, the company said Friday. The biggest US LNG exporter has been ramping up service at Sabine Pass and its terminal near Corpus Christi, Texas, while also developing a mid-scale expansion and a new feedgas pipeline amid increased competition for domestic liquefaction services. The number of US export terminals in operation is expected to double by the end of this year, and more than a dozen new liquefaction projects are actively being developed. Cheniere, for its part, has been aggressively pursuing new long-term supply agreements with buyers in Europe and Asia, in an effort to solidify its market position. Cheniere is currently operating five trains at Sabine Pass and is nearing a final investment decision on a sixth train there. At its Texas facility, it is operating one train and building two more. On March 4, the company announced that substantial completion of Train 1 at Corpus Christi had been achieved, and with that milestone it said that it would begin commercial deliveries from the Texas terminal in June to Spain 's Endesa and Indonesia 's PT Pertamina under long-term agreements. Those contracts were signed in 2013 and 2014. Two 20-year agreements that were signed with Endesa called for the Spanish electric utility to buy a total of approximately 2.25 million mt/year of LNG upon commencement of service from Cheniere's Texas facility. Two 20-year agreements signed with state-owned oil and gas company PT Pertamina of Indonesia encompassed approximately 1.52 million mt/of LNG from Corpus Christi trains 1 and 2. In a statement Friday announcing substantial completion of Train 5 at Sabine Pass, Cheniere said that commissioning had been completed that that contractor Bechtel had turned over care, custody and control of the unit.
Cheniere says LNG exports to China could double its size, but trade war needs to end - Cheniere Energy CEO Jack Fusco said his company could ultimately double its size from Chinese demand, but the current trade rhetoric between the U.S. and China needs to come to an end.U.S. liquified natural gas exports are a part of the trade discussions between the U.S. and China, and both countries see it as an area for expansion. Cheniere Energy is expected to be a winner once a trade deal is concluded.LNG is a form of natural gas that is super-chilled and turned into a liquid for transport by sea. Cheniere has been a pioneer in the industry, and its Sabine Pass on the Gulf Coast was the first U.S. LNG export facility in the lower 48 states."I'm not going to speak about our commercial negotiations. China, as we've talked about, has been a real focal point for the company. We are dedicated to that market. We've sent over 60 tankers to China so far from our facility at Sabine Pass," he said in an interview with CNBC. "We've got a strong relationship with the counterparties in China, and we're expecting good things to happen there."Fusco said at lower levels the trade dealings with China are good, but at higher levels the trade talks have ramped up tensions."At the lower levels, we don't see much change. There's two willing counterparties trying to talk about terms. ... At the upper level, though, there's some tension, and I think until the tension gets smoothed out ... it's going to be rocky and it's going to be lumpy. And we're just going to have to be patient."Greater Asia demand also is growing. "Asia grew last year a whole Cheniere in size, so more than 30 million tons of LNG just in growth alone was attributable to Asia. So we're not only focused on China but we're focused on Asia more broadly," Fusco said. But he sees the most potential impact from China. The country is working to build out its infrastructure for the next four to five decades and gets natural gas via pipeline from Russia, LNG shipments and from its own drilling.
US will soon threaten to topple Saudi Arabia as the world's top oil exporter: IEA --The U.S. will start exporting more oil than Russia and threaten to unseat Saudi Arabia as the world's top exporter by 2024, according to the International Energy Agency. The forecast from IEA comes just weeks after the U.S. exported a record 3.6 million barrels per day of crude oil. The country also exports about 5 million bpd of petroleum products, including refined fuels like gasoline. Those shipments will surge in the coming years as crude production from the nation's shale fields continues to boom, IEA says in its annual five-year oil outlook. The Paris-based adviser to oil consumers and producers sees U.S. crude output — already at a record 12 million bpd — growing by another 4 million bpd through 2024."The second wave of the U.S. shale revolution is coming," IEA Executive Director Fatih Birol said in a statement. "It will see the United States account for 70% of the rise in global oil production and some 75% of the expansion in LNG trade over the next five years. This will shake up international oil and gas trade flows, with profound implications for the geopolitics of energy."The U.S. topped the Saudis and Russians to become the world's biggest oil producer in 2018. Pulling ahead of them in the export market would further erode their influence in the oil market. Saudi Arabia and Russia have formed an alliance in recent years, coordinating oil production among OPEC and other oil producing countries. The so-called OPEC+ alliance has capped output for much of the last two years, helping to boost oil prices after a punishing downturn. Most of the output growth from OPEC over the next five years will come from Iraq, IEA says. The group thinks the country will be the world's third biggest source of new supply, helping to offset production declines in Iran and Venezuela. The world will need that supply, in IEA's view. The group sees no signs that growing oil demand will peak in the coming years. It forecasts the world's appetite for oil will increase at an average 1.2 million bpd over the next five years, roughly in line with recent growth trends.
Oil shale boom will keep rocking crude prices as US moves closer to becoming net exporter - The U.S., now the world's largest oil producer, is playing the role of disruptor in the global energy market. Production has grown to a record 12.1 million barrels a day, eclipsing both Russia and Saudi Arabia in the past year. Exports have exceeded 3 million barrels a day, overtaking many OPEC nations. The implications are significant for both the U.S. and the oil market, which has seen huge price swings in just the past six months alone."Within the next two or three years, the U.S. will be a net exporter. By the end of the year, the U.S. will be producing 13 million barrels a day. This growth is a seismic event for the U.S. economy at this scale. U.S. oil production is 2.5 times what it was in 2008," said Daniel Yergin, vice chairman of IHS Markit.U.S. shale has posed a dilemma for OPEC as it has grown in spurts over the past decade, creating supply imbalances by pumping more when prices rise and cutting back as they drop. To battle the glut created by U.S. drillers, Russia formed an alliance with Saudi Arabia and the rest of the OPEC members, and together they have actively tried to either reduce or add supply to the market. But unlike those producers, U.S. production is driven by companies responding to market forces and that adds to the volatility in the world oil market."It's really become such a huge story in terms of U.S. production, but also because of our policy. The U.S. is a swing producer but it's also through policy that we've taken 1.6 million barrels off the market," said Helima Croft, global head of commodities strategy at RBC. "We've been really lucky we've had the U.S. producers. That's where the U.S. currently plays a role in helping out the market. Trump talks to the Saudis. Trump sanctions Venezuela. He's really active in the market. Have we had a U.S. president be this consequential in the oil market, in terms of intervention?" Trump's policy has added to oil market volatility. When sanctions were announced on Iran last year, the U.S. said there would be no waivers for its customers. That sent oil prices higher. Yet, the U.S. did grant waivers to India and others during the fall, and that sent oil prices reeling. Iran exports are now about 1.1 million barrels a day, down from about 2.5 million in the spring. The waivers granted for those customers are up for review in May, so if they are not extended, more Iranian oil could come off the market.
US oil and gas rig count rises on week to 1086: S&P Global Platts Analytics --The US oil and natural gas rig count ticked up one on the week to a net 1,086 Thursday, adding another bit of odd behavior to what has generally been a downward trend since November, according to the latest S&P Global Platts Analytics data.Oil rigs accounted for the gain, as the number of oil rigs rose by a net nine to 865, while the number of gas rigs dropped by eight to 217. "The decline in rigs is in line with the general guidance trend of rig reductions, although a number of producers have indicated that more rigs could be added if crude prices continue to improve," Platts Analytics analyst Sami Yahya said. The US rig count has been dropping more or less steadily since its recent peak of 1,233 last November. But in the last five weeks it has been erratic, dropping 20 rigs one week in mid-February and then rising 20 rigs another week later in the month. Click here for full-size graphic While the main focus of many producers remained production growth, operators could more than likely achieve that goal even with fewer rigs because of abundant drilled but uncompleted wells, especially in the Permian Basin of West Texas and New Mexico, Yahya said. Rig movements this week occurred in most of the nine large unconventional plays. The SCOOP-STACK in Oklahoma had the largest changes this week, up five to 93 rigs. Other rig movements were smaller. The dry Marcellus Shale in Pennsylvania and the Williston Basin in North Dakota/Montana each rose two rigs to 42 and 62, respectively, while the Permian Basin was up one rig to 463. Areas that lost rigs this week were the Haynesville Shale in Northwest Louisiana/East Texas, down three to 63; the Eagle Ford Shale in South Texas, the wet Marcellus Shale and the Utica Shale largely in Ohio, each down by one rig. That left the Eagle Ford with 88 rigs, the wet Marcellus with 26 and the Utica with 15 rigs.The Denver-Julesburg Basin of Colorado was unchanged this week at 27 rigs. US permits overall were down by 106 this week to a total of 1,416. Largest moves were seen in the Denver-Julesburg, up by 61 permits to 155; SCOOP-STACK, up by 17 permits to 41; and the Permian, down 31 permits from the previous week to 172. One big reason for the recently declining rig count is that operators are increasingly more efficient and able to produce more oil using fewer rigs. Perhaps the most noteworthy industry feature of the 2014-2018 period is the continued growth in US oil and gas production, despite a dwindling rig count,
Drillers are cutting billions of dollars in spending, raising questions about US oil output -- The shale drillers behind booming U.S. oil and natural gas output have survived a bevy of challenges in recent years, from a historic oil price downturn to an effort by OPEC to wash them out of the market with a flood of cheap crude.Now, with U.S. output at all-time highs near 12 million barrels per day, the industry is facing a new obstacle: how to keep growing output amid a wave of belt-tightening that is cutting billions of dollars from capital budgets.Publicly traded shale drillers emerged from the 2014-2016 downturn with a new mandate from investors to get their finances in order and start generating value for shareholders. For years, drillers have spent more cash than they generated, borrowing heavily to snap up acreage and increase their output at seemingly any cost.The latest round of quarterly earnings reports shows many shale drillers are cutting spending to meet investors' demands. That is translating into lower expectations for oil and gas output from the companies, which rely on advanced drilling methods like hydraulic fracturing to free oil and gas from shale rock formations.But even with these frackers now pursuing the elusive goal of drilling at a profit, forecasters expect another blockbuster year for U.S. output. After surging by 1.6 million barrels per day last year, making the U.S. the world's biggest producer, average annual American output is poised to grow by more than 1.4 million bpd in 2019, according to the Department of Energy.
Exxon, Chevron planning big expansions in shale drilling, a move which could shake up the industry - Big oil is getting even bigger in shale, and that could speed up a shakeout among independents and force more mergers and joint ventures.Last week, both Exxon Mobil and Chevron said they would boost their growth in the Permian basin substantially."All those companies [the majors] have demonstrated multi-decades history of delivering well on larger projects," said Nathan Strik, energy utilities sector leader at Fidelity.Exxon expects to boost production to 1 million barrels a day in five years in the 75,000 square mile area that runs through West Texas and southeastern New Mexico. Chevron expects to more than double its output to 900,000 barrels a day in four years.The contrast between those major producers, who can realize profits even when oil prices are low, and some others in the oil patch was a topic of discussion at the industry's annual IHS Markit CERAweek conference."I do think it raises the bar..I think what we've seen in shale is the benefits of scale are real," said Strik. The industry, punished by the stock market, has been under pressure by shareholders to cut costs and boost stock prices. Companies have cut back sharply on capital expenditures.
Will U.S. Supermajors Form A New Oil Cartel? -- The ambitious shale growth plans of the U.S. supermajors could in the future allow them to control so much of U.S. shale oil production that they could also control the price of the U.S. light tight oil going to foreign markets in an ‘OPEC of their own kind,’ Investing.com quoted John Kilduff, founding partner at Again Capital, as saying. If the U.S. supermajors, such as Exxon and Chevron, end up controlling a lot of the U.S. shale production with their plans to significantly boost Permian production, and if smaller shale players bleed cash and decide to sell acreage and operations to Big Oil, then supermajors could be the ones determining the price of light crude oil, according to Kilduff. Exxon and Chevron both announced increased targets for their Permian production last week. Chevron now sees its Permian unconventional net oil-equivalent production rising to 600,000 bpd by the end of 2020, and to 900,000 bpd by the end of 2023. Exxon revised up its Permian growth plans to produce more than 1 million oil-equivalent barrels per day by as early as 2024, which would be an increase of almost 80 percent.The shale game is now a ‘scale game’, as Chevron Chairman and CEO Michael Wirth told CNBC last week after the company announced its latest Permian growth targets.“With the majors going into the Permian to do roll-outs, the independents there are getting squeezed by the banks, which want them to cough out more money or get out,” Investing.com’s Barani Krishnan quoted Kilduff as saying. According to Rystad Energy, the players with large-scale operations and acreage positions could get average returns of 20 percent in three years in the Wolfcamp A in the Permian Delaware, for example, even if WTI Midland oil price is at $45 a barrel. But smaller operators could struggle because of higher drilling, completion, operation, and transportation costs. “These operators might struggle in the current price environment, and their best opportunity to monetize their investment could be to sell their acreage to larger operators with more efficient logistics, better infrastructure and more negotiating power through the value chain,” Rystad Energy senior partner Per Magnus Nysveen said last month. “Size matters, even more so when drilling for shale oil in the Permian Basin,” Nysveen added.
Fracking 2.0 Was a Financial Disaster, Will Fracking 3.0 Be Different? - Two years ago, the U.S.fracking industry was trying to recover from the crash in the price of oil. Shale companies were promoting the idea that fracking was viable even at low oil prices (despite losing money when oil prices were high). At the time, no one was making money fracking with the business-as-usual approach, but then the Wall Street Journal published a story claiming all of this was about to change because the industry had a trump card — and that was technology. Today, frackers are again relying on technology as a financial savior, but this time, they are looking to Microsoft. As ExxonMobil embarks on an ambitious move into fracking in the Permian oil fields of West Texas, it has announced a partnership with Microsoft to use cloud technology to analyze oil field data and optimize operations. Exxon claims the move could generate “billions in net cash flow.” In March 2017, the Wall Street Journal ran an article with the headline, “Fracking 2.0: Shale Drillers Pioneer New Ways to Profit in Era of Cheap Oil,” which detailed the ways the shale industry expected technology could help it finally deliver profits. The article mentioned “longer, supersize wells” and said, “The promise of this new phase is potentially as significant as the original revolution.” The article highlighted EOG Resources (as in, Enron Oil and Gas), a company often touted as the “Apple of oil,” and quoted the company’s chief information officer saying that technology advances allowed its employees to work at the “speed of thought.” It also reported that Chesapeake Energy was betting on these new supersize wells as part of its “turnaround strategy.” Chesapeake needed to “turnaround” from losing money and move in the direction of profits. But supersized wells weren’t the only solution for keeping shale drillers from losing more money. Another was more wells per drilling pad. A year ago shale company Encana announced plans for “cube development,” in which it would drill 64 wells on one gargantuan drilling site in the Permian oil fields of West Texas. The same thing was happening in the Marcellus Shale in Pennsylvania, where top natural gas producer EQTCorporation had plans for drilling 40 wells per pad. As the Pittsburgh Post-Gazette reported at the time, the higher number of wells per pad required “creative geometry,” which “ensures that the wells don’t crowd each other underground.” EQT did indeed drill the longest wells but also lost a lot of money in the process. According to the Wall Street Journal, “The decision to drill some of the longest horizontal wells ever in shale rocks turned into a costly misstep costing hundreds of millions of dollars.”
Striking it Rich: Money managers get more, children get less - San Antonio Express-News -- Second of four parts -- A little more than a decade ago, lawmakers gave an obscure board the power to invest the state's oil and gas revenue — money designated to benefit Texas schoolchildren — with outside fund managers. Then fracking boomed, pumping billions in royalties into the coffers of the Texas School Land Board. Big-name businessmen showed up quickly, hoping to be chosen to handle the investments and to gather the fees that came with the duty.And the campaign contributions flowed. Big donors received lucrative partnership agreements. Investment managers charged hundreds of millions in fees. Lines were blurred, and in some instances, crossed.Since the land board started investing with outside fund managers on behalf of the state's K-12 endowment in 2006, it has committed or invested nearly $3.7 billion with companies run by friends, business associates or campaign donors. Those donors together have given more than $1.4 million since 2006 to board members or elected officials with the power to appoint them, a Houston Chronicle investigation reveals. Texas Land Commissioner George P. Bush has recused himself four times since he took office in 2015, citing “personal relationships.” And they've since charged the fund more than $218 million in fees, records show. While the fees climbed during the past decade, the amount of money the $44 billion Texas Permanent School Fund sends to schools has declined, in real dollars, compared with the two decades prior. Rep. Donna Howard, a Democrat from Austin, said it's time to reassess how the school fund is managed. "Without the right oversight, the PSF is ripe for conflicts of interest," she said. "We have a responsibility for due diligence here."
Oil and Gas Industry Warns Against Proposed New Mexico Fracking Moratorium - With the oil and natural gas sector pumping record amounts of revenue into the state's economy, a freshman member of New Mexico's legislature has proposed a four-year moratorium on hydraulic fracturing (fracking), Senate Bill (SB) 459, which would surely mean a hit for that economy. The proposal is being pushed by environmentalists and members of the Navajo Nation's Counselor (NM) Chapter House. It would stop state permits for fracking and impose new reporting requirements on state agencies overseeing oil and gas activities that have ramped up in both the San Juan and Permian basins. Officials at the New Mexico Oil and Gas Association (NMOGA) have told lawmakers that SB 459 would be a "disaster" for New Mexico and lacks facts or science to support it.Advocates of the bill argue that regulations were not a priority under former Republican Gov. Susana Martinez over the last eight years. They say the public health and environmental impacts of fracking need to be examined more closely now that newly elected Democratic Gov. Michelle Lujan Grisham has taken office. The measure is currently in the Senate Conservation Committee.Under the proposal, the Energy, Mineral and Natural Resources Department would stop issuing hydraulic fracturing permits and be one of seven agencies required to report annually to the governor and legislative committees about the impacts of fracking. The other agencies would include the Departments of Agriculture, Environment, Health, and Indian Affairs, along with the Workers Compensation Administration and the State Engineer's Office. Democratic state Sen. Antoinette Sedillo Lopez of Albuquerque is one of the bill’s sponsors. She is new to the state legislature having been recently appointed by Lujan Grisham to fill a vacancy.NMOGA's spokesperson Robert McEntyre has complained that the backers of SB 459 did not seek input from the oil and gas industry, nor individual communities. He claims that fracking has been well studied in the state.
Judge upholds Line 5 tunnel law despite 'constitutional defect' – A Michigan judge has struck down a "constitutional defect" but otherwise upheld a recent state law that created a new authority to oversee construction of a Mackinac Straits tunnel poised to house a replacement for Enbridge's controversial Line 5 oil and gas pipeline. Court of Claims Judge Stephen Borrello on Friday rejected a request to invalidate the law because of a provision creating six-year terms for members of the new authority. Instead, Borrello ruled that members can only serve for four years, the maximum allowed under the Michigan Constitution. "The unconstitutional length of the term of office does not affect the authority of otherwise validly appointed board members," Borrello said of the law, approved in December by the Republican-led Legislature and signed into law during the final weeks of former Gov. Rick Snyder's tenure. The ruling appears to answer one of six questions that Democratic Gov. Gretchen Whitmer has asked Attorney General Dana Nessel to review as part of a request for a formal legal opinion that could still invalidate the law in whole or part. Republicans made “critical mistakes” in drafting the law late last year, Whitmer said Friday during a community event at Northeast Elementary School in Jackson. Snyder and legislative Republicans “pushed through” the controversial measure before Whitmer took office, “because they know that I don’t support keeping that pipeline in the water" while the tunnel is built, the governor said. “Like anything, when you rush, you make mistakes, and the last governor and the Legislature, I believe, made some critical mistakes,” Whitmer added.
Colorado election officials toss campaign finance complaint against anti-fracking group --State election officials on Friday dismissed a campaign finance complaint that had been lodged against Colorado Rising, the group behind Proposition 112.In its decision, the elections division of the Colorado Secretary of State’s Office wrote that Colorado Rising did submit an erroneous report about the origins of a $170,000 donation it received in October. But the agency said the error was “not an intentional falsification of contributor information” but a simple mistake.“Upon learning of the error, the respondent took immediate steps to correct the information,” the decision reads. Charles Heatherly, a Republican, filed the complaint in January alleging Colorado Rising incorrectly reported a $170,000 campaign contribution from the Sergey Brin Family Foundation, which was started by Google’s founder. After first reporting the money as a contribution from the foundation, Colorado Rising later amended its report to say that the money came from ProgressNow Colorado, a political advocacy organization that supports liberal causes. The complaint said Colorado Rising attempted to obfuscate the source of the funds by filing multiple amended campaign finance reports showing the money coming from a changing list of contributors.But the elections division said that the Sergey Brin Family Foundation had noted in an Oct. 17 letter to ProgressNow Colorado that its $170,000 contribution was for “general operating support,” making no mention of Prop 112.
Colorado Senate gives final approval to oil and gas reform bill - The Colorado State Senate on Wednesday gave its final approval along party lines to a bill that will dramatically reform the way oil and gas businesses are regulated. The legislation, Senate Bill 181, is one of the most hotly debated issues in front of the General Assembly this year. Wednesday’s final vote followed a day-long debate. Before the bill goes to Gov. Jared Polis for his signature, the state House, which is considered far more liberal than the Senate, must debate the bill as well. Among the changes, the bill would make is changing the mission of the Colorado Oil and Gas Conservation Commission to protect public health and safety. Supporters of the bill also say the bill will ensure more local control over oil and gas regulations. Republican state Sen. John Cooke of Weld County, which has more extraction operations than any other part of the state, said the bill flies in the face of local control. “If we opt out, we have to follow the same rules,” Cooke said, pointing out that local governments can’t write less restrictive rules, only stricter ones. “That’s not local control.” Other Republicans spoke out against the possible financial impact the bill could have for oil and gas workers, communities that are heavily dependent on oil and gas, as well as the state’s own coffers.
Fossil Fuels Choke Denver With Air Quality Three Times Worse Than Beijing's - Today from downtown Denver, the peaks of the Rocky Mountain foothills were barely visible through the brown cloud of pollution that covered the region with an unhealthy level of fine particulate matter. At six p.m., Denver’s air quality index measured 162, an unhealthy level more than three times worse than the moderate rating of 51 now in Beijing. The pollution triggered health warnings across the northern Front Range. Colorado’s “brown cloud” is an increasingly frequent reminder of the Denver-Boulder metro’s car dependency and the impact of the state’s oil and gas production, which the industry projects will generate $12.5 billion in revenue this year. Kyle Clark, a 9 News anchor, reported that 30 to 40 percent of ozone levels — a related form of pollution that is not responsible for the brown cloud — result from the state’s oil and gas industry. Traffic generates similar levels, he tweeted. He also pointed out the irony of today’s extreme air quality problems with the intense oil and gas industry lobbying that happened at the state capitol today as legislators considered sweeping environmental reforms. Reducing car dependency could help the region achieve clearer air, and Denver has plans to do exactly that. But the city is better at setting goals than achieving them. In Denver’s Mobility Action Plan, officials set a strategic goal of reducing single occupancy vehicle commutes from 73 percent of trips to 50 percent.The city plans to supplement current bus service with a high-frequency transit network. The proposal is part of the long-term planning process known as Denveright, which will be finalized later this year.But there are no concrete plans for the city to come up with the funding needed to provide the improved transit service promised in the plans.
Companies decry ‘valve turners’ who shut down pipelines (AP) — As Enbridge prepared to move climate-damaging tar sands crude through a 40-year-old pipeline in eastern Canada in 2015, environmentalists and indigenous peoples including Vanessa Gray thought about what happened in Michigan just five years earlier: Another of the company’s lines had burst, sending oil into a river in one of the largest spills in U.S. history. With that in mind, Gray and others decided they needed to do more than just speak out. In December 2015, three activists from Montreal entered Enbridge property near the Quebec-Ontario border and turned an above-ground emergency pipeline shut-off valve. About two weeks later, Gray and two others did the same at a different site, drawing even more attention because authorities levied charges that could have landed them in prison for life. They ended up with no jail time and accomplished their goal of raising awareness. “I hope it inspires others,” Gray, 26, a member of an Ojibwe tribe, said in a recent interview. It already has, by activists in the U.S. who believe fossil fuels are precipitating a global warming crisis. Just last month four activists targeted an Enbridge oil pipeline in northern Minnesota. But pipeline companies say so-called valve turners are dangerous — to themselves and the public — and many energy industry officials and advocates say they should be treated as domestic terrorists. Several states are considering increasing fines and prison terms for such incidents and holding associated organizations legally accountable as well. “When environmental groups go out to cause physical harm or to harm infrastructure, in my mind that is domestic terrorism.” said Alan Olson, executive director of the Montana Petroleum Association. “ To Michael Foster, it’s a wake-up call to a world quickly approaching “a life-or-death moment.” “We must stop the flow of fossil fuels as a society,” said the mental health counselor from Seattle who spent six months in jail for turning a pipeline shut-off valve in North Dakota in October 2016. Foster was part of a loose-knit group of 11 climate change activists who dubbed themselves Climate Direct Action and simultaneously turned shut-off valves on five pipelines in North Dakota, Minnesota, Montana and Washington state that carry Canadian tar sands crude into the U.S. “We were committed to nonviolence. We were committed to safety and making sure no communities were impacted or damage occurred. We weren’t interested in damaging equipment,”
Can Bakken producers finally put a lid on gas flaring? - Producers in the Bakken and the rest of North Dakota flared record volumes of natural gas in the fourth quarter of 2018 — an average of more than 520 MMcf/d, or about 20% of total production — far exceeding the state’s current 12% flaring target. What happened? For one, crude oil production in the play took off; for another, the gas-to-oil ratio at the lease continued to increase. And while some new gas processing capacity came online last year to reduce the need for flaring, the pace of the additions was too slow to keep up with the Bakken’s rising gas output. The good news is that 2019 will bring more incremental processing capacity to North Dakota than any year to date. Today, we discuss recent setbacks on the flaring-control front and the prospects for things getting better later this year. Bringing gas flaring under control in the Bakken in the Shale Era has been akin to breaking in a wild horse: Just when you start to think you’ve accomplished the task at hand, the bronco’s bucking again and you’re holding on for dear life. As we said a while back in There’s a Fire in the Night, producers in western North Dakota have been struggling for the better part of this decade to process and pipe out an increasing share of the gas they produce — and to reduce the share of gas they need to flare off. Back in 2011 and again in 2014, as much as 37% of the state’s produced gas was being burned off due to a lack of processing and pipeline takeaway capacity. That spurred the North Dakota Industrial Commission (NDIC) to require producers to file a “gas capture plan” (GCP) with their drilling permits and to put in place flaring limits. The new rules limit flaring to one year after a well’s first production, by which time producers will have to either connect the well to a gas gathering pipeline, cap it, or link it to an electrical generator or a compression or liquefaction system that consumes at least 75% of the gas onsite. Regulators also set targets for reducing the share of produced gas that is burned off statewide: flaring no more than 26% of total gas production by November 2014, 23% by January 2015, 20% by April 2016, 15% by November 2016, 12% by November 2018 and 9% by November 2020.
13K gallons of brine spilled, recovered at Dunn County well (AP) — An equipment problem is being blamed for the spill of about 13,000 gallons of saltwater at an oil and gas well in Dunn County.The state Oil and Gas Division says Bruin E&P Operating reported Monday that 310 barrels of brine had spilled the previous day at a well about 15 miles north of Dunn Center, due to a valve or piping connection leak. Brine, or saltwater, is a byproduct of energy production. All of the spilled saltwater was contained on site and recovered. A state inspector went to the site and will monitor any additional cleanup.
Corps fights tribal request for more pipeline study records - (AP) — Federal officials who permitted the Dakota Access oil pipeline are turning over some documents sought by American Indian tribes suing over the project, but said a request for dozens more records is vague and overly broad and should be rejected by a federal judge.Texas-based Energy Transfer Partners, which built the pipeline that’s now moving North Dakota oil to a shipping point in Illinois, also implored U.S. District Judge James Boasberg on Monday to deny the tribal request, saying it’s meritless and will “inject needless delay into a case that already has seen more than its fair share.”The tribal lawsuit has lingered since July 2016. Boasberg in June 2017 ruled that the Army Corps of Engineers “largely complied” with environmental law when permitting the $3.8 billion pipeline, but he ordered more study on tribal impacts. The Corps in August 2018 said more than a year of study had substantiated its earlier determination that the pipeline doesn’t pose a higher risk of adverse impacts to minorities.The agency last month turned over to the tribes documents it used in making that determination. The Standing Rock, Cheyenne River, Yankton and Oglala Sioux are challenging the Corps assertion and accused the agency of withholding about 50 documents . Justice Department attorney Amarveer Brar, who’s representing the Corps, in a response filed Monday said the tribes are trying to “add a broad array of documents to the record, most of which were not directly or indirectly considered by the Corps.” The agency does plan to provide eight additional records, but many other tribal requests are “non-specific” or “based purely on speculation,” Brar said. Some of the records the tribes allege are missing from the official record relate to the pipeline’s crossing beneath the Lake Oahe reservoir on the Missouri River in the Dakotas, which the tribes rely on for drinking water, fishing and religious practices.
Exxon asks EPA to regulate methane emissions from oil and gas - ExxonMobil Corp., the world’s biggest publicly traded oil company, is calling on the Environmental Protection Agency to regulate emissions of methane from all new and existing oil and gas wells across the country, according to a letter obtained by Axios. Methane, a potent greenhouse gas, is the primary component of natural gas and is sometimes purposefully or inadvertently leaked in the production and transport of the fuel, as well as when drilling for oil. The EPA has been slow in its approach toward rolling back Obama-era methane rules, in part due to industry divisions. Through its subsidiary XTO Energy, Exxon is one of America’s biggest producers of natural gas. It has two reasons to back such a regulation.
- Exxon is facing pressure from investors and lawsuits over climate change. By calling for regulations, it’s an attempt to show Exxon wants gas to be as clean as possible, even if those regulations never happen. “We believe the correct mix of policies and reasonable regulations help reduce emissions, further supporting the benefits of natural gas in the energy mix,” writes Gantt Walton, vice president in Exxon’s Washington office, in the letter sent as part of the regulatory process.
- As a massive global company, Exxon is positioned to benefit financially over smaller companies. It can easily afford pollution-control equipment that others have a harder time obtaining.
This is a subtle escalation in Exxon’s positioning on this issue. The company has previously said it backs federal methane regulations, but — until now —had not gone as far as to ask the EPA to do so in writing. It’s also significant that Exxon is asking the agency to regulate methane emissions from existing wells, which would affect hundreds of thousands of wells. Under Trump, the EPA is very unlikely to do this. President Obama’s EPA had started the initial groundwork for such a rule, but didn’t get far before Trump took over. This letter is in response to a technical rollback EPA is undertaking. The agency is expected to propose a broader rollback of the rules soon.
America's emergence as an energy powerhouse gives it a key lever in global trade talks - The rise of the United States as the world's top oil and gas producer and now growing exporter puts energy at the center of U.S. trade negotiations — as a lever and a potential source of friction.The International Energy Agency said Monday the U.S. should surpass Russia as an oil exporter in three years and challenge Saudi Arabia for the top spot within five as U.S. oil output continues to grow.That, together with the expected growth in U.S. exports of liquefied natural gas, is expected to turn the United States into the world's biggest exporter of energy.Increased sales of U.S. energy are a significant part of trade negotiations between Beijing and Washington. Since the United States resumed oil exports in early 2016, China has been a major importer of U.S. oil and at times, has been the largest. China also imports U.S. LNG and is expected to increase its purchases even more. "It's a big positive in U.S. trade talks with China. Until matters are resolved, it's a source of friction. it's also part of the equation in the European gas market," said Dan Yergin, IHS Markit vice chairman.
4.3 magnitude earthquake shakes central Alberta near Rocky Mountain House - A 4.3 magnitude earthquake hit west of Red Deer early Sunday morning, almost a week after a similar incident in the same area. Information posted by Natural Resources Canada states the earthquake happened around 4 a.m. 32 km northwest of Rocky Mountain House, at a depth of 10 kilometres. “It was a shallow event. It was felt by local residents,” said Dr. Honn Kao, a research scientist at the Geological Survey of Canada. “According to our recordings, we do not expect any particular damage.” “We have already spoken to the AER about this particular event and they are currently investigating to see if there’s any industrial activity around in that area,” Kao added. The Alberta Energy Regulator (AER) confirmed it is looking into the incident. Spokesperson Cara Tobin said the AER has heard reports but has not been able to identify one way or the other if the earthquake was induced. Sunday’s quake comes on the heels on a 4.6 magnitude earthquake last Monday near Sylvan Lake and Red Deer. AER said Vesta Energy Ltd. contacted the regulator on March 4 at 6:20 a.m. saying that seismic activity was detected due to hydraulic fracturing (also known as fracking) at the site. AER said that Vesta had shut down fracking right away.
Total amount of oil spilled in St. Lazare train crash reduced: TSB - Investigators have reduced their tally of how much oil spilled when a Canadian National freight train derailed last month on a western Manitoba ranch. Earlier this month, the Transportation Safety Board said at least one million litres of petroleum crude was released Feb. 16 when 37 tanker cars went off the tracks near the small community of St. Lazare. On Friday, the board revised that number down to 820,000 litres. Investigators say the oil spilled from at least 14 of the derailed tanker cars and most of the crude was contained in a low-lying area near the tracks. The board says it has finished its work at the site and seven of the damaged tanker cars will undergo further analysis, including a review of some parts by its engineering lab in Ottawa. The train, with 108 petroleum crude oil cars, was heading east in the early morning at an estimated 79 km/h when an emergency brake was applied.
Exxon Hits the Brakes on $1.9B Project -- Exxon Mobil Corp. is delaying a C$2.6 billion ($1.9 billion) oil-sands project in Canada by at least a year as the nation’s energy industry grapples with a shortage of pipeline space and government-mandated production cuts. Exxon’s Canadian subsidiary, Imperial Oil Ltd., had originally planned to bring the 75,000-barrel-a-day Aspen project online in 2022, but is now slowing the pace of development at the site in northern Alberta. Any decision to resume normal activity will depend on future government actions and general market conditions, Imperial said Friday. The delay is another blow to Canada’s oil-sands industry, which suffered from record low prices last year after a wave of new production overwhelmed the region’s pipeline capacity. That spurred the government of Alberta, where most oil-sands projects are located, to mandate production cuts to drain a glut of crude in storage and revive prices. The move also reflects Exxon’s increased focus on projects off Guyana’s coast and in the Permian Basin in Texas. The company last week increased its target for Permian production to 1 million barrels a day by 2024 and expanded its estimate for the size of its Guyana discovery to 5.5 billion barrels. New RisksImperial, which owns refineries that were benefiting from the cheaper feedstock, has been one of the loudest critics of the curtailment policy and cited the plan again in its explanation for the Aspen delay. “We cannot invest billions of dollars on behalf of our shareholders given the uncertainty in the current business environment,” Imperial Chief Executive Officer Rich Kruger said in a statement. “That said, our goal is to ensure the work we do this year will enable us to effectively and efficiently resume planned activity levels when the time is right.”
Mexico may still utilize hydraulic fracturing - Mexico has not ruled out utilizing hydraulic fracturing when drilling for oil and natural gas, despite earlier pledges to prohibit the practice, energy minster Rocio Nahle said.“We have gas reserves that can be obtained by fracking, and we are walking that path, analyzing new technology,” Nahle said in Mexico City Tuesday, Argus reported. Recently seated President Andres Manuel Lopez Obrador has said repeatedly his administration will not allow fracking hydraulic fracturing to be used to produce oil and natural gas because of environmental concerns,Kallanish Energy reports. Lawmakers in the Mexican senate have also called for a ban on the practice, Argus reported.But as domestic natural gas production has declined, less expensive imports by pipeline from the U.S. now account for more than half of Mexico’s natural gas needs, Kallanish Energy understands.Mexico’s state-owned Pemex has used fracking in roughly 22% of all wells developed in conventional resources. The company has said it could produce up to 60 billion barrels of oil-equivalent (Bboe) from unconventional plays, mainly located in northern Mexico’s Burgos Basin, across the Rio Grande River just south of the Eagle Ford shale play. The drop in crude production has also caused a reduction in associated gas production. Mexico imported roughly 4.9 Bcf/d of natural gas in September, the highest level in three years, according to the latest information from the energy ministry.How Mexico plans to develop its unconventional resources remains unclear as the country’s first-ever shale auction, originally scheduled for February, was canceled in December, with Pemex having pledged to refocus its efforts on shallow Gulf of Mexico production. Lopez Obrador has pledged to increase oil production to 2.6 million barrels per day (Mmbpd) by 2024, and raise gas production by 50%. While no further upstream auctions will be held for three years, Argus reported Nahle confirmed Tuesday private-sector companies are welcome in Mexico as long as they increase production under existing contracts. And while the government plans to reduce its dependence on natural gas imports, Nahle said the government is interested in building new pipelines.
Fracking the World: Despite Climate Risks, Fracking Is Going Global - The U.S. exported a record 3.6 million barrels per day of oil in February. This oil is the result of the American fracking boom — and as a report from Oil Change International recently noted — its continued growth is undermining global efforts to limit climate change. The Energy Information Administration predicts U.S. oil production will increase again in 2019 to record levels, largely driven by fracking in the Permian shale in Texas and New Mexico. And the U.S. is not alone in trying to maximize oil and gas production. Despite the financial failures of the U.S. fracking industry, international efforts to duplicate the American fracking story are ramping up across the globe. The CEO of Saudi Arabian state oil company Aramco recently dismissed the idea that global demand for oil will decrease anytime soon and urged the oil industry to “push back on exaggerated theories like peak oil demand.” But Saudi Aramco also is gearing up for a shopping spree of natural gas assets, including big investments in the U.S., and increasing gas production via fracking in its own shale fields. Aramco is deeply invested in keeping the world hungry for more oil and gas. As a major importer of oil and natural gas, it is no surprise that China is trying to exploit its own shale formations, which are rich with oil and gas. China is estimated to have the largest shale gas reserves of any country. However, China’s shale formations present different challenges than those in the U.S., including gas deposits at significantly greater depths. China's national oil and gas companies are making gains in fracking and lowering costs to produce gas but are still only producing a small fraction of the gas of U.S. frackers. In addition to technical challenges, China also faces local opposition in regions where fracking is occurring. One county in China's Sichuan province recently suspended fracking efforts after anearthquake killed two people. The event resulted in massive public protests against fracking, which protesters blame for the earthquakes. Fracking has also been blamed for earthquakes in the United Kingdom and Canada.The Chinese government insists that the earthquakes are unrelated to fracking activity, and points out the Sichuan region is known for earthquakes, including a devastating 2008 quake that killed an estimated nearly 90,000 people. To complicate matters, China has plans to test a brand-new fracking technology to access gas deposits at extreme depths, where the pressures required are too great for current hydraulic fracturing techniques. This approach, never before tried outside a lab, involves detonating a device deep underground to fracture the impermeable shale rock and release gas deposits.
No culprit yet in Port of Spain oil spill - The culprit/s responsible for an oil spill which contaminated the Port of Spain harbour on March 12, 2019, have not yet been identified. Minister of Works and Transport, Rohan Sinanan, said during a post-Cabinet briefing on March 14, 2019, that oil samples from vessels in the area at that time have been submitted to the Institute of Marine Affairs (IMA) for testing and analysis. “At this point in time the source of the oil spill would not have been found however the EMA, Min and Maritime services were in contact with the IMA and they are conducting samples of vessels in the area." Sinanan said the IMA took samples of oil from the spill and the vessels that were in the port at the time, and assured the public that those found culpable would be held accountable. “At this point in time they have not been able to ascertain the source of the spill but they are pursuing all avenues to ensure that the vessel the oil would have spilled from would be held accountable,” he said. Environmental NGO Fishermen and Friends of the Sea said sources reported that the oil appeared to come from a nearby industrial barge. The NGO called for more stringent law enforcement regarding dumping of contaminants into Trinidad and Tobago's waters. "Because our Laws are poorly regulated and enforced it is much cheaper to dump waste oil rather than to treat and dispose of it properly. Regularly there are deliberate discharges of oil into our marine waters, (often at our Ports) and even though the Environmental Management Authority (EMA) is called upon to investigate these disasters, the culprits are never held accountable."
Blackout Shuts Down Venezuela’s Oil Exports - Venezuela suffered a sweeping blackout last week, which threatens to cut off oil exports from the country. U.S. sanctions have already severely impacted oil operations, leaving cargoes stranded off the coast as well as leaving ships idling in the Gulf of Mexico unable to complete sales to U.S. buyers. However, Venezuela has entered a dangerous new phase, with an electricity blackout gripping most of the country.Argus Media reported on Sunday that Venezuela’s main oil export terminal and its heavy crude processing complex in Jose are shut down. “Three heavy crude upgraders and a blending operation that national oil company PDVSA operates with foreign minority partners, as well as petrochemical plants run by Pequiven in Jose, are suspended,” sources told Argus. These projects include the PetroPiar joint venture with Chevron, the PetroMonagas with Rosneft, and the PetroCedeno with Total and Equinor. Combined, the projects ostensibly have a capacity of 450,000 bpd.The joint ventures had weathered the multi-year economic and political crisis better than some of PDVSA’s operations, but now nothing is immune to a widespread blackout. New York Times journalist Anatoly Kurmanaev posted on a twitter a rather dire analysis of the blackout. He said that some of the evidence suggests that the blackout may have been the result of damage to turbines at a hydroelectric complex, which he said is “a scary thought” because if they are damaged, “they will be very hard to replace or repair” due to a lack of money or skilled people. So, while Venezuela has suffered from repeated blackouts in recent years, this one might be much more serious. The government’s lack of explanation has only fed fears that the situation is acute. Venezuelan President Nicolas Maduro blamed a cyberattack by the U.S. while American officials deny involvement.
Fracking could nearly triple Colombia oil and gas reserves-minister (Reuters) - At least five companies are interested in six fracking blocs in Colombia, and use of the technique could nearly triple the country’s reserves of crude and gas, the energy minister said. Exxon Mobil, Conoco Phillips, Parex and state-run oil company Ecopetrol are among those seeking to operate in the six blocs, Mines and Energy Minister Maria Fernanda Suarez said in an interview late on Thursday, without identifying the fifth company. An expert commission convened by the government to study the use of hydraulic fracturing, known as fracking, recommended strict monitoring of three pilot projects to determine whether the technique should be widely used. Suarez said she and the environment ministry will study the final recommendations and that while no specific law to allow fracking is required for the use of the technique to go ahead, further regulations are needed. “Most important is that the only regulation that’s in force refers to the exploration phase, in Colombia we still haven’t developed any regulation for the production phase,” she said. Fracking breaks up rock formations with pressurized liquid. Its use is credited for booming oil and gas production in the United States, but environmental activists have blamed it for water pollution. Some local communities and many environmentalists in Colombia oppose the technology. Other companies from the United States and Argentina may also be interested in the blocs, Suarez added. Use of fracking could nearly triple the country’s crude and gas reserves, she said. “We have 5.7 years of crude reserves and 11 years of gas reserves. Our estimates say that with unconventional deposits we could have 30 years of gas and 15 years of crude.”
CERAWeek: Brazil's Petrobras aims to become natural gas powerhouse — Petrobras is looking to become a natural gas powerhouse, a market that is relatively undeveloped in Brazil, the company's CEO Roberto Castello Branco said Tuesday at CeraWeek by IHS Markit. The state-owned company is working with the government to make conditions to create an open and competitive natural gas market in Brazil, he added. "Natural gas can put Brazil into the path of prosperity while protecting its environment," Branco said. There is an exciting opportunity to transition Brazil's transportation cargo fleet from diesel to compressed natural gas, he added. Branco said that Petrobras has an opportunity to become a relevant LNG player, something it will pursue. "I do not doubt that LNG will become a global commodity like oil," he added. Transporting gas onshore has become a major challenge for upstream operators in Brazil's deepwater regions. This is a challenge that will require cooperation among the oil and gas industry in Brazil, Equinor and BP executives said earlier Tuesday at the conference. Branco said Petrobras would focus on value creation under his leadership. Capital implementation on the most productive investments will be crucial, he added. "We will focus on assets where Petrobras can extract the maximum [profits] as natural owners," Branco said, adding the company will focus on Brazi's pre-salt assets. Petrobras will recede from mature fields, conventional onshore and offshore as well as midstream and downstream segments. Branco will also seek to bring discipline to Petrobras by turning it into a low-cost producer with low debt levels. With this discipline, the company will be able to have large returns with high oil prices and ensure its survival when those prices decrease, Branco said. The company plans to sell over $26.9 billion in assets over 2019-2023 to improve its balance sheet, which had over $70 billion in debt last year. Petrobras has a goal to increase its production to 2.8 million boe/d this year, 170,000 boe/d more than in 2018, Bronco said.
Fracking could cut Britain's gas imports to zero by early 2030s (Reuters) - Fracking Britain’s shale gas reserves could cut the country’s imports of gas to zero by the early 2030s, an industry group said on Monday. Britain currently imports more than half of its gas via pipelines from continental Europe and Norway and through shipments of liquefied natural gas from countries such as Russia, the United States and Qatar. Environmental groups strongly oppose the practice of hydraulic fracturing, or fracking, which involves extracting gas from rocks by breaking them up with water and chemicals at high pressure. But the British government, keen to cut Britain’s reliance on imports as North Sea gas supplies dry up, last year gave Cuadrilla permission to frack two wells at its Preston New Road site in Lancashire. Industry group United Kingdom Onshore Oil and Gas on Monday published updated forecasts for the county’s shale gas potential in the wake of recent data from Cuadrilla’s sites. The forecasts for well productivity were increased by 72 percent to 5.5 billion cubic feet (bcf) per lateral well, compared with estimates made in 2013 by Britain’s Institute of Directors. One hundred fracking well pad sites, each with 40 lateral wells could produce almost 1,400 bcf a year by the early 2030s, equivalent to the gas use of 35 million homes, the industry association report said. This would be more than the country needs as it has around 27 million households. But fracking companies say the industry is unlikely to take off in Britain under current regulations, which halt fracking activity if a seismic event of magnitude 0.5 or above is detected. Cuadrilla, currently the only company to have fracked for gas in Britain, had to halt operations several times last year due to seismic events which exceeded the limit. British chemical manufacturer Ineos, which has the largest shale gas license acreage in Britain, has called the current rules unworkable.
Dutch Feb Groningen natural gas output falls 23% on month — Natural gas production in February at the giant low-calorie Groningen field in the Netherlands fell by 23% on the month, registering its lowest monthly drop in four months as warm temperatures and healthy supplies kept a lid on heating demand, data from operator NAM showed Monday. N The Groningen February production of 1.57 Bcm places Gas Year 2018's current cumulative gas production at the field at 8.29 Bcm. The production quota for the current gas year, being at 19.4 Bcm, will allow for a maximum output of 1.59 Bcm/month for the remainder of GY-18. A production cap has been put in place to prevent earthquakes linked to gas extraction at the field. The Dutch government plans to phase out gas extraction at Groningen completely by 2030. The significant ramping up in send-out at the Dutch Gate LNG terminal in February has allowed production to fall on the year at Groningen. Lower Asian pricing on warm weather and a ramp-up in nuclear capacity largely contributed to favoring LNG economics in Continental Europe in February. LNG send-out at Gate surged to 486 million cu m in February, compared with just 41 million cu m a year earlier, data from S&P Global Platts Analytics showed. Production at two of Groningen's four fields has ceased. In March 2018, production ceased at Loppersum, while output at Eemskanall ended in April 2018. The production at Groningen's two remaining active areas -- Oost and Zuidwest -- have both eased in February. Oost's production fell 19% on the month to 1.144 Bcm. Production at Zuidwest meanwhile fell 11% on the month down to 427 million cu m.The rapid decline in pr oduction of L-cal gas from Groningen will continue to make the Netherlands increasingly dependent on LNG and pipeline gas imports from Norway and Russia.
Gas finds in East Mediterranean spark partnership between Israel and rival nations --On Jan. 14, 2019, a group of countries met in Cairo. The buzzing city had hosted many international events in the past, but this one had a special twist. For the first time ever, the Cypriot, Egyptian, Greek, Israeli, Italian, Jordanian and Palestinian Ministers of Energy met to discuss the establishment of the East Med Gas Forum, a platform for energy collaboration and partnership that could eventually take the form of an international organization. But what caused this special meeting in the first place? After all, such a gathering in the Eastern Mediterranean, where high tensions and religious, political and national rivalries were the norm, would have been unthinkable a mere few years ago. And yet, quietly but surely, the countries have been utilizing energy diplomacy to align interests and foster long-lasting relations with each other, essential elements for the much sought-after regional stability and peace.Their goal: to create a regional gas market, ensure supply and demand, optimize resource development, cut infrastructure costs, offer competitive prices and improve trade relations.Discoveries of natural gas are not uncommon in the Eastern Mediterranean basin. As a matter of fact, there have been plenty over the past few decades, albeit confined close to the Nile Delta. The "Tamar" discovery offshore Israel in 2009 changed the scene and initiated the emergence of what some geologists call the Nile Delta Cone, a vast area extending northeast and northwest of the river's banks. And it appears the Nile has been pretty busy over the past few million years.A number of world gas discoveries offshore Cyprus, Egypt and Israel have propelled the Eastern Mediterranean into the global energy stage. In the meantime, other countries in the region, such as Greece and Lebanon, are lining up with their own exploration plans. Unsurprisingly, these developments have increased the stakes for everyone involved. To put the numbers into perspective, since 2009 East Med discoveries amount to around 2,100 billion cubic meters of natural gas, including the latest big find offshore Cyprus, at Glaucus-1 well, announced a few days ago by ExxonMobil. By comparison, EU consumption in 2017 — the region's closest major gas market — was around 410 billion cubic meters.
The Easy Money In European Natural Gas Is Gone - At the end of last winter’s heating season, it was an unusually cold spell that upended European natural gas markets, with storage levels falling below average and prices firming up as demand shot up. At the end of this winter’s heating season, it is the unusually mild weather in most of Western Europe for most of the winter that has driven natural gas prices down and left supplies higher than the seasonal average.The summer gas futures at the Dutch TTF hub have declined by 16 percent so far this year and have been trading lately around the lowest in 10 months. The winter gas futures contract, however, has dropped by just one third of the decline in the summer contract, according to data from ICE Endex compiled by Bloomberg. So the discount of the Dutch summer natural gas futures to the winter contract widened to the biggest since 2011 as of early March. Typically, such a wide spread would mean that one of the most common European gas trades—buying cheaper gas futures in the summer to sell in the winter—would be the most profitable in eight years.However, traders are unable to take full advantage of the wide winter-summer spread because several factors have combined this winter season to create a perfect storm in the European natural gas markets. These factors are higher stockpiles than usual, limited available storage capacity as most of it is booked out amid declining overall capacity, and increased liquefied natural gas (LNG) shipments to Europe as Asian LNG spot prices continue to tumble. First, unlike last year’s winter, this winter has been unusually mild in many parts in Western Europe. This has led to lower natural gas demand and lower withdrawal from storage—a stark contrast compared to the 2018 winter. The cold spell in Europe at the end of February and early March of 2018 led to record withdrawals in the first quarter of 2018, and storage levels dropped to 18 percent of capacity—well below the five-year range—the European Commission (EC) said in its Q1 Quarterly Reporton European gas markets. By the end of the winter season, natural gas stock levels dropped below 10 percent of capacity in countries such as Belgium, France, and the Netherlands, where high gas demand from the UK contributed to strong withdrawals. Before the 2019 winter season began, the European market was tight amid higher demand in the summer’s heat wave, while natural gas stockpiles were still lower than usual after the winter of 2018, one of the coldest winters in the past decade. But the 2019 winter has been quite a different story. The UK, for example, registered its warmest February on record, with daily maximum temperatures the highest on record dating back to 1910, according to the UK’s Met Office. Due to the warmer winter, natural gas stockpiles across Europe are now higher than the typical levels for this time of the year. What’s left of the storage capacity is nearly “sold out”, according to analysts who spoke to Bloomberg.
Norway plans to expand Arctic oil exploration areas. Norway’s government is proposing to expand the area that will be offered for oil and gas exploration in the 2019 licensing round of acreage in mature areas, Petroleum and Energy Minister Kjell-Børge Freiberg said on Thursday.Norway plans to include a total of 90 new blocks in the so-called APA annual licensing round this year, including 48 blocks in the Barents Sea, 37 blocks in the Norwegian Sea, and five blocks in the North Sea, Freiberg said. “It’s important to maintain the positive development in exploration activity in the Barents Sea. I hope this will lead to robust field development solutions and increased value creation in the north,” Reuters quoted Freiberg s saying in a statement.There has been opposition to the extension of the acreage under the APA licensing round from politicians of the opposition and from environmentalists, who have argued that those licensing rounds with additional blocks are being used to expand exploration to beyond the scope of those rounds—that is mature and well-explored areas. In the 2018 APA licensing round, Norway awarded 83 production licenses—a record number of awards for such rounds.
France tries to contain oil spill off Atlantic Coast (AP) -- French authorities are working to contain an oil spill off the Atlantic Coast after an Italian tanker sank following a fire. French and British rescue teams saved all 27 people aboard the Grande America after it sank Tuesday, according to a French government statement. Images released Thursday by the French navy showed flames and plumes of black smoke spewing from the ship as it listed sharply. The regional maritime authority says the ship has since leaked oil over an area of about 10 kilometers (6 miles) long and one kilometer wide. A French cleanup ship was expected in the area Thursday. France has also reached out to the European Maritime Security Agency for help. The ship sank about 330 kilometers (200 miles) west of the French city of La Rochelle.
France- Brittany coast threatened by oil spill after cargo ship sinks - French authorities have said an Italian cargo ship that sank in the Atlantic was transporting 45 containers of "dangerous materials." The Italian-registered ship had also been carrying some 2,200 tons of fuel.French authorities are rushing to stop an oil spill from reaching the country's west coast after an Italian-registered cargo ship sank in the Bay of Biscay. Although the government's initial statement only said there had been "dangerous materials" on board the ill-fated Grande America, local officials told French news agency Agence France-Presse that the vessel was leaking oil. The ship had been en route from Hamburg to Casablanca, carrying 2,000 vehicles and 2,200 tons of fuel, when a fire broke out late Sunday. The 26 crew members and single passenger were forced to abandon ship and were rescued by Britain's Royal Navy. The lifeboat was "bobbing around like a cork in a bathtub," HMS Argyll officer Lieutenant Commander Dave Tetchner was quoted as saying in a news story on the Royal Navy's website. "The conditions were horrendous — the vessels were rolling at 30 degrees, which made it extremely hairy getting the sailors safely on board," he said. The drifting ship, still in flames, finally sank on Tuesday about 180 nautical miles (333 kilometers) west of France.
Solomons laws cant cope with oil spill – PM - Solomon Islands environmental laws are inadequate for dealing with disasters like the Rennell oil spill, the country's prime minister says. The Solomon Star reported it took almost a month for a response to the shipwrecked MV Solomon Trader to get underway. Mr Hou said by that time the ship, which grounded on a reef while loading bauxite in the middle of a storm, had been leaking oil into the ocean for over a fortnight. Existing legislation does not provide for emergency action in such an event, Mr Hou said. A review of the country's environmental and mining laws is needed, he said. Any new laws should include liability provisions to ensure companies involved in accidents are held responsible and are required to take action immediately, the prime minister added.
Salvors succeed in containing Solomon Trader spill - A successful salvage operation over the weekend has finally staunched the flow of bunker fuel from a grounded bulker in a UNESCO World Heritage site in the Solomon Islands. The 1994-built Hong Kong-flagged Solomon Trader, insured by Korea P&I, ran aground on February 5 while loading bauxite in bad weather off Rennell Island. Its anchor dragged and the ship became lodged on a reef near the world’s largest raised coral atoll. The ship, declared a total constructive loss, is owned by Hong Kong owner, King Trader. A delay in commencing salvage operations had seen nearly 100 tons of bunker fuel spill from the ship, washing up on nearby shores. Work began on Friday to pump the fuel from the ruptured tank into a secure container. It was then transferred to a barge over the weekend. The Australian Maritime Safety Authority also set up up a four-tonne dynamic boom system over the weekend brought from Brisbane to start cleaning up the oil that has already spilled into the sea. Other AMSA vessels also arrived on the scene on Sunday and locals ashore tell Splash that the worst of the spill now appears to be over. Of added concern is the high amount of toxic bauxite in the sea, which locals claim came in the wake of the ship grounding, two contracted barges (pictured below) dumped their cargoes onto the reef. Local newspaper Solomon Star reported over the weekend that the Marine Protected Area (MPA) at Lavangu Bay on Rennell Island where the ship grounded has been “completely destroyed” by spilled oil. “One cannot see anything inside the MPA as the water turns black from the oil and kills all the marine life inside the protected area,” an official from the Solomon Islands Maritime Authority told the local newspaper.
Solomon Islands oil spill worse than first thought, say owners of Hong Kong-flagged tanker, as three-mile-long slick threatens Unesco World Heritage site - The oil spill from a Hong Kong-flagged tanker that is threatening to destroy marine life at a Unesco World Heritage site in the Solomon Islands is worse than first thought, its owner King Trader has said. Bulk carrier MV Solomon Trader ran aground a month ago during bad weather near the remote Rennell Island in the South Pacific, home to the world’s largest raised coral atoll. So far, more than 70 tonnes of oil has been dumped into the ocean, causing a three-mile slick in Kangava Bay which experts said was likely to cause long-term damage to the local ecosystem. The ship ran into difficulties on February 5, while loading a cargo of bauxite, the ore used to make aluminium. In a statement on Thursday the vessel’s insurer said the spill might be more serious than expected.“Although initial estimates indicated that some 70 tonnes of oil entered the water, it’s now believed that the escaped amount is higher, something that will be clarified as the response progresses,” Korea Protection and Indemnity Club, and King Trader, said. “The majority of escaped oil drifted into the open ocean where it was naturally degraded by wave action, water temperatures and evaporation,” they added. The vessel’s owner said earlier it was transferring the remaining 600 tonnes on the vessel to safer tanks. As of Thursday, less than half of the remaining fuel oil – about 230 tonnes – had been transferred to a tank barge towed from Vanuatu. The 225-metre vessel carried about 700 tonnes of fuel on board before the accident. Hong Kong’s Marine Department said it was already in contact with the vessel’s owner about containing the spill, which sparked global concerns over the environmental disaster. The Australian government has sent specialised equipment and crew to help clean up the mess. “The department has urged the shipowner to take all actions to minimise the pollution impact to the environment,” the department’s spokeswoman said.
China experiences a fracking boom, and all the problems that go with it — The first earthquake struck this small farming village in Sichuan Province before dawn on Feb. 24. There were two more the next day.Sichuan is naturally prone to earthquakes, including a major one in 2008 that killed nearly 70,000 people, but to the rattled villagers of Gaoshan, the cause of these tremors was human-made. “The drilling,” Yu Zhenghua said as she tearfully surveyed her damaged home, still officially uninhabitable five days later.The drilling Ms. Yu referred to was hydraulic fracturing, or fracking. The technology, which has revolutionized the production of natural gas and oil in the United States, has created a boom in China, too, and with it many of the controversies that have dogged the practice elsewhere. In the hours after the quakes, thousands of residents converged outside the main government building in Rong County to protest widespread fracking in the rolling hills, and jostled with security guards along a sliding metal gate and dispersed only after officials announced they had suspended fracking operations of a regional subsidiary of China National Petroleum Corporation, the country’s largest oil and gas producer. China, like the United States and other countries, has embraced the fracking revolution in hopes of weaning itself from its dependence on foreign energy sources. But the public fury that unexpectedly boiled over in Gaoshan underscores the social and environmental challenges the country must overcome — even in a tightly controlled political system. The three earthquakes killed two people and wounded 13. More than 20,000 homes in three villages suffered damage and nine collapsed completely, according to a statement by the county. About 1,600 people were displaced, forced to move in with relatives or to live temporarily in 470 blue tents distributed by the authorities. The suspension of operations — which remains in effect — stilled 15 sites in the area affected by the quakes, pending a survey by officials from Sichuan Province, according to an official for the Rong County government, Huang Jing.
Saudi oil minister says US, China driving oil demand, but not enough for an April OPEC policy change - Saudi oil minister Khalid al-Falih said on Sunday that China and the U.S. would lead healthy global demand for oil this year but that it would be too early to change OPEC+ output policy at the group's next meeting in April. OPEC and its allies will meet in Vienna on April 17-18 and another gathering is scheduled for June 25-26. On Jan. 1, the Organization of the Petroleum Exporting Countries, along with Russia and other non-members — the OPEC+ alliance — began new production cuts to avoid a supply glut that threatened to soften prices. The group agreed to reduce supply by 1.2 million barrels per day for six months. OPEC's share is 800,000 bpd, to be delivered by 11 members — all except Iran, Libya and Venezuela, which are exempt from cuts. The baseline for the reduction was in most cases their output in October 2018.
Venezuela, Iran may be crushed by sanctions, but oil market has not been -- The sanctioning of two OPEC members by the Trump administration has caused some ripples in the oil market, but not the type of shortages or pain for consumers that might have occurred. One big reason is that U.S. production continues to grow, and for the barrels lost, more are coming on line. U.S. output is now at 12.1 million barrels a day, up more than 1 million from this time last year, and IHS Markit expects it to be 13 million by the end of the year. That has given the United States more muscle and flexibility when it comes to sanctions. Saudi Arabia, OPEC and Russia initially agreed last spring to add more oil to the market to make up for limited Iranian output, but even with Iran's exports down by 1.4 million barrels a day, there is no shortage. The Trump administration surprised the market in the fall by granting some countries waivers to continue with Iranian oil purchases, after threatening that all barrels would be kept from the market. The price of oil then fell sharply after that October announcement, and OPEC and non-OPEC producers have reversed course and are now pulling barrels from the market. "Trump is yelling at OPEC, but Trump's been the most effective cutter" in barrels on the world market, said Helima Croft, RBC head of global commodities strategy. "He has made sure OPEC's made its quota by sanctioning Iran and Venezuela." She said 1.6 million barrels a day have been removed from the market, and President Donald Trump could choose to remove even more from Iran's exports when waivers come up for renewal in May. "Everyone is trying to figure out what's going on with the next round of Iran waivers," Croft said. India, for instance, is purchasing about 300,000 barrels a day from Iran and is seeking to extend its waiver, according to Reuters. "Trump was the disruptor in chief in the market. He really was, if you look at where some of the biggest losses were," Croft said.
US sees room to be more aggressive on sanctions and take Iran oil exports to zero --A high-ranking State Department official said a well-supplied world oil market helps the U.S. maintain, or even tighten, sanctions on both Iran and Venezuela without causing an oil price spike.However, Brian Hook, the State Department Representative for Iran, would not comment on whether the U.S.will continue to make exceptions for buyers of Iran's oil.That is one of the most critical questions in the global oil market. The U.S. will decide by May 8 whether to continue making exemptions for certain buyers of Iranian crude. In October it exempted eight countries from the sanctions that went into place last November. Secretary of State Mike Pompeo reemphasized his policy of driving Iran's oil exports to "zero" when he spoke at the annual IHS Markit CERAWeek energy conference in Houston on Tuesday.On Wednesday, Hook said the fact that forecasts show more supply than demand for 2019 should help the U.S. be more aggressive in its efforts to take Iran's exports to zero barrels. He said Iran is currently exporting from somewhere under 1 million to 1.1 million barrels a day."Last year when we did our waivers it was a tight and fragile market, but we were able to successfully balance our interests," he told reporters after an appearance before gathering of industry officials. "There are projections that supply will exceed demand, but those are projections. But we will continue to balance our national security and our economic interests," Hook said. The forecast that Hook referenced shows that supply would exceed demand globally this year by 400,000 barrels. Industry officials are acutely interested in the amount of oil the U.S. can remove from the market since they were taken by surprise last October when the U.S. exempted certain buyers after threatening to remove all Iranian crude. That helped send oil prices tanking, and West Texas Intermediate lost more than 40 percent before bottoming in late December.
Analysis: Dueling US oil sanctions give India unexpected leverage — By asking India this week to cut its Venezuelan crude oil imports, the US may be showing its willingness to ease Iran sanctions enforcement for the world's No. 3 oil consumer. India needs both Iranian and Venezuelan oil to run its refineries, but Iranian crude has the advantage of being closer, less expensive and potentially more reliable as Venezuela's infrastructure collapses. The US is using sanctions against Tehran and Caracas to clamp down on both countries' oil exports to exert economic pressure. For major importer India, the two US policies have collided, likely making it impossible for diplomats to talk about one without addressing the other. India may point to a sharp drop in its Iranian imports, its potential room to cut Venezuelan imports and its increasing reliance on US crude in negotiating for further Iran sanctions relief in May, analysts said. Iranian shipments to India have dropped to around 270,000 b/d so far in 2019, from a 2018 average of 517,823 b/d, according to data from Platts trade flow software cFlow. The 2018 imports rose from 461,977 b/d in 2017 as the Trump administration geared up to reinstate sanctions along with Iran providing freight discounts to Indian refiners. Venezuelan shipments to India, however, have remained relatively steady despite the exporter's escalating crisis. India imported 296,356 b/d year to date, compared with 285,255 b/d in 2018 and 334,997 b/d in 2017, according to cFlow data. Increasingly steep Iran Heavy discounts are likely designed to keep Indian refiners interested, and at the possible expense of similar grades. On a delivered basis into West Coast India, Iran Heavy has held a $6.20/b discount to Venezuelan Mesa and a near-$7/b discount to the US medium sour benchmark Mars so far in March, according to S&P Global Platts calculations. This is a far cry from the near-parity sellers of Mars and Mesa enjoyed as recently as June and July. Venezuelan Mesa is similar in quality to Iran Heavy and Mars, albeit slightly less sour, and offers similar refining economics, in particular for coking on the US Gulf Coast, according to calculations based on Platts prices and Turner, Mason & Co. yield formulas. India's state-owned refiners are heavily reliant on Iranian oil, while the country's two private refiners, Reliance Industries and Nayara Energy, are significant buyers of Venezuelan crude.
OPEC, long a villain in America's eyes, is now trying to flip the script - For many Americans, OPEC is the villain of the oil market, a secretive cabal whose members enrich themselves at the expense of the rest of the world by withholding petroleum and driving up the cost of the precious resource. This week, the group's chief representative suggested that OPEC itself bears some responsibility for that perception — if only because it has neglected to tell its own story. "We have been operating in silos for too long, and this is not good practice in today's globalized world," OPEC Secretary Mohammed Barkindo told reporters gathered in Houston for CERAWeek by IHS Markit, one of the year's biggest energy conferences. The key message is that OPEC is a stabilizing force in a volatile oil market prone to a destructive cycle of boom and bust. By opening the taps or throttling back supply, OPEC can keep oil flows and crude prices at sustainable levels — not too high to hurt consumers, but not too low to choke off necessary investment in future supply. Turning around OPEC's image in the U.S. would be difficult at any time. Many Americans still view the group through the lens of the 1973 Arab oil embargo, when the Middle East-dominated group cut off oil supplies in retaliation for the West's support for Israel in the Yom Kippur War. More recently, President Donald Trump has reinforced that perception. Throughout the past year, he has regularly taken to Twitter to blame OPEC for rising oil prices. At last year's United Nations General Assembly, he told the nations of the world that OPEC is ripping them off. Those barbs have heightened concerns about anti-OPEC legislation advancing in Congress, injecting a urgency into Barkindo's project to reframe its role in the global market. The legislation, the No Oil Producing and Exporting Cartels Act, would give the U.S. Justice Department authority to sue OPEC for coordinating output. Cutting production to drain oversupply and boosting output in times of scarcity are OPEC's main levers for balancing the market and adjusting prices, so the NOPEC legislation represents something of an existential crisis for the group.
BP CEO: Anti-OPEC legislation in Congress would create big risk of oil booms and busts --BP CEO Bob Dudley said OPEC plays a critical role in stabilizing world oil prices and NOPEC legislation under discussion in the House would have serious and unpredictable consequences for the world oil market. The No Oil Producing and Exporting Cartels Act, or NOPEC, would make it illegal under U.S. law for foreign nations to work together to limit fossil fuel supplies and set prices. It would authorize the Justice Department to sue oil-producing nations for antitrust violations, by removing their sovereign immunity protections."I think the idea of opening global litigation against the OPEC countries has enormous unpredictable, unintentional consequences," said Dudley in response to a question at the annual IHS Markit CERAWeek annual energy conference in Houston. The legislation brought up in the House Judiciary Committee was a hot topic of discussion at CERAWeek. "I think reason will prevail," Dudley said. A bipartisan group of Congressmen on the House Judiciary Committee cleared the bill for a full House vote. Before it could become law, it would have to pass the House, the Senate and then be signed into law by President Donald Trump."The role of OPEC in my view has kept the price of oil within a reasonable fairway for producers and consumers and I think that's the important role OPEC will continue to play," he told CNBC. "Otherwise you'll end up with enormous overproduction and crashes in the price. Then it will come back up and then it will soar because there's been underinvestment. I think that's the essential role that OPEC plays."Others in the industry agree that the bill would be damaging. "If that happens, it's a risk to anyone with assets in the U.S.," said David Goldwyn, chairman of the energy advisory board at the Atlantic Council. OPEC Secretary General Mohammad Barkindo said he hopes the voices that oppose the legislation in both U.S. political parties are heard. He said the legislation would be bad for the industry and the U.S., which is the home of free markets.
OPEC Threatens To Kill U.S. Shale - The Organization of Petroleum Exporting Countries will once again become a nemesis for U.S. shale if the U.S. Congress passes a bill dubbed NOPEC, or No Oil Producing and Exporting Cartels Act, Bloomberg reported this week, citing sources present at a meeting between a senior OPEC official and U.S. bankers. The oil minister of the UAE, Suhail al-Mazrouei, reportedly told lenders at the meeting that if the bill was made into law that made OPEC members liable to U.S. anti-cartel legislation, the group, which is to all intents and purposes indeed a cartel, would break up and every member would boost production to its maximum. This would be a repeat of what happened in 2013 and 2014, and ultimately led to another oil price crash like the one that saw Brent crude and WTI sink below US$30 a barrel. As a result, a lot of U.S. shale-focused, debt-dependent producers would go under. Bankers who provide the debt financing that shale producers need are the natural target for opponents of the NOPEC bill. Banks got burned during the 2014 crisis and are still recovering and regaining their trust in the industry. Purse strings are being loosened as WTI climbs closer to US$60 a barrel, but lenders are certainly aware that this is to a large extent the result of OPEC action: the cartel is cutting production again and the effect on prices is becoming increasingly visible. Indeed, if OPEC starts pumping again at maximum capacity, even without Iran and Venezuela, and with continued outages in Libya, it would pressure prices significantly, especially if Russia joins in. After all, its state oil companies have been itching to start pumping more. The NOPEC legislation has little chance of becoming a law. It is not the first attempt by U.S. legislators to make OPEC liable for its cartel behavior, and none of the others made it to a law. However, Al-Mazrouei’s not too subtle threat highlights the weakest point of U.S. shale: the industry’s dependence on borrowed money. Shale, as Total’s chief executive put it in a 2018 interview with Bloomberg, is very capital-intensive. The returns can be appealing if you’re drilling and fracking in a sweet spot in the shale patch. They can also be improved by making everything more efficient but ultimately you’d need quite a lot of cash to continue drilling and fracking, despite all the praise about the decline in production costs across shale plays.
Oil rises as OPEC output cuts look set to continue while US drilling activity slumps -- Oil prices rose on Monday, lifted by comments from Saudi oil minister Khalid al-Falih that an end to OPEC-led supply cuts was unlikely before June and a report showing a fall U.S. drilling activity. U.S. West Texas Intermediate (WTI) crude oil futures were at $56.81 per barrel, up 74 cents, or 1.3 percent from their last close. Brent crude futures were at $66.61 per barrel, up 87 cents, or 1.3 percent.Despite the gains, markets were somewhat held back after U.S. employment data raised concerns that an economic slowdown in Asia and Europe was spilling into the United States, where growth has so far still been healthy."Downward revisions in global growth forecasts by OECD and ECB have capped bullish gains," said Benjamin Lu of Singapore-based brokerage Phillip Futures.In a further sign of a slowdown, China's auto sales fell 14 percent in February from the same month a year earlier, the country's biggest auto industry association said on Monday, the eighth straight monthly drop in the world's largest car market.New energy vehicle sales, in contrast, rose 54 percent year-on-year in February, the report said.Despite this, oil markets have generally been supported this year by ongoing supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and some non-affiliated allies like Russia - known as the OPEC+ alliance. OPEC+ has pledged to cut 1.2 million barrels per day (bpd) in crude supply since the start of the year to tighten markets and prop up prices.The group will meet in Vienna on April 17-18, with another gathering scheduled for June 25-26, to discuss supply policy. Saudi oil minister Khalid al-Falih told Reuters on Sunday it would be too early to change OPEC+ output policy at the group's meeting in April.
Oil gains 1 percent as Saudi minister stands by OPEC output cuts - (Reuters) - Oil prices rose more than 1 percent on Monday, lifted by comments from Saudi Energy Minister Khalid al-Falih that an end to OPEC-led supply cuts was unlikely before June. Brent crude futures were up 84 cents, or 1.28 percent, to settle at $66.58 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 72 cents, or 1.28 percent, to settle at $56.79 a barrel, a 1.28 percent. Falih told Reuters on Sunday it would be too early to change a production curb pact agreed by the Organization of the Petroleum Exporting Countries and allies including Russia before the group’s meeting in June. “The Saudis continue to take a proactive approach to get supply and demand in better balance,” said Andrew Lipow, president of Lipow Oil Associates in Houston. Oil markets have been supported this year by the ongoing supply cuts by the group called OPEC+, which has pledged to cut 1.2 million barrels per day (bpd) in crude supply since the start of the year to prop up prices. The group will meet on April 17-18, with another gathering scheduled for June 25-26, to discuss supply policy. OPEC is expected to review global oil demand and supply balance as the group maintains production cuts during the April meeting, a senior Gulf oil official said on Monday. “We want to see commercial stocks down,” the official said on the sidelines of IHS Markit’s CERAWeek energy conference. The official added that global crude and oil products stocks should fall back to a five-year average, a target the group had set to drain a global oil glut. In addition, a Saudi official said the country planned to cut crude oil exports in April to below 7 million barrels per day. Prices were also buoyed by U.S. energy services firm Baker Hughes’ latest weekly report showing the number of rigs drilling for new oil production in the United States fell by nine to 834. But the Paris-based International Energy Agency said in an outlook on Monday that crude output in the United States will rise nearly 2.8 million bpd to 13.7 million bpd in 2024 from about 11 million bpd in 2018.
Oil Prices Inch Higher On Venezuelan Crude Crisis - Oil started off the week with strong gains, largely due severe disruptions in Venezuela from a widespread blackout. WTI and Brent rose to a two-week high. Saudi Arabia plans to keep oil production below 10 mb/d in April, extending its deeper-than-required cuts for another month. The move highlights Riyadh’s desire to rapidly drain inventories and boost prices. A widespread electricity blackout in Venezuela disrupted oil operations, impacting both production and exports. Data is opaque at this time, but Venezuela’s oil exports could be headed for a freefall. Energy Aspects estimates output may have temporarily plunged to as low as 500,000 bpd, or half the output level from January. Due to U.S. sanctions, Citgo and Valero are trying to send back oil cargoes to Venezuela. In total, more than 6 million barrels of oil are in limbo, Reuters reports. American officials are pressuring India to stop importing oil from Venezuela. “We say you should not be helping this regime. You should be on the side of the Venezuelan people,” Elliott Abrams, Trump’s point man on Venezuela, told Reuters in an interview. The U.S. has sent signals that it is considering “secondary sanctions,” in which it would target foreign banks who do business with Venezuela. A similar approach has been crucial in increasing pressure on countries not to do business with Iran. The oil and gas sector is suffering from a “crisis of confidence,” according to Equinor CEO Eldar Sætre. Climate change and society’s lack of trust in the industry on environmental issues poses a long-term threat. "We are collectively not doing enough," Sætre said. He called on others to lower emissions and become more transparent. Equinor, for instance, invests heavily in renewable energy. The Wall Street Journal also reports that BP’s CEO Bob Dudley will voice similar concerns in a speech Tuesday evening.
Oil prices rise on OPEC supply cuts and healthy demand - Oil rose to around $67 a barrel on Tuesday, supported by Saudi Arabia's plan for further voluntary supply curbs in April and by a cut in oil exports from Venezuela due to a power outage. Saudi Arabia, seeking to drain a supply glut and support prices, plans in April to keep its oil output well below the level required of it as part of an OPEC-led supply cutting deal, a Saudi official said on Monday.Brent crude, the global benchmark, rose by 62 cents to $67.20 a barrel. U.S. West Texas Intermediate crude added 71 cents to $57.50."This shows Saudi Arabia's resolve to keep the oil market balanced by keeping oil supply tight," said Carsten Fritsch, analyst at Commerzbank."Additional buoyancy has come from news that the massive power outage in Venezuela is also hampering the country's oil exports."Crude has rallied this year after the Organizaton of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+, returned to supply cuts as of Jan. 1.Saudi Arabia has voluntarily cut its supply by more than the deal requires and in April will keep output "well below" 10 million bpd, the Saudi official said - below the 10.311 million bpd that the kingdom had agreed to pump. "We see a tightening underlying physical crude balance as a key pillar of support for outright prices at this point in the year," said analysts at JBC Energy in a report. A host of involuntary supply curbs in OPEC members caused by unrest in Libya, and U.S. sanctions on Iran and Venezuela, have also helped to boost prices.Venezuela's state-run oil firm PDVSA has been unable to resume crude exports from its primary port since a power outage last week, people familiar with the matter said on Monday.Offsetting these developments is the surge in U.S. supply, which the International Energy Agency said on Monday would continue to 2024, probably requiring OPEC and its allies to keep up their policy of market management.
Oil scores back-to-back session gains as signs of supply crunch linger - Crude-oil futures settled higher for a second straight session on Tuesday, giving up an earlier move toward 2019 highs. Signs of a supply crunch lingered and traders assessed the latest monthly U.S. government price and output forecasts and allowed recent comments from energy officials to hold. Prices were briefly poised to settle at their highest since November, on the back of tightening Venezuelan supplies and signs that OPEC would continue cutting output into the second half of the year. News that the Organization of the Petroleum Exporting Countries is “looking at more [output] cuts in the near-term took us higher late last Friday” and into Tuesday morning, said John Caruso, senior market strategist at RJO Futures. However, “I think you’ve got some profits being booked” ahead of the supply reports from the American Petroleum Institute late Tuesday and Energy Information Administration early Wednesday, he said. For WTI, there’s “strong overhead resistance” at $57.90. April West Texas Intermediate crude rose 8 cents, or 0.1%, to settle at $56.87 a barrel on the New York Mercantile Exchange on Tuesday after trading as high as $57.55. There was a brief delay to some energy futures price settlements on Nymex Tuesday, with Matt Stroud, a CME Group spokesman, citing “a technical issue.” Global benchmark May Brent crude gained 9 cents, or 0.1%, to $66.67 a barrel on ICE Futures Europe, following a high at $67.39.
Oil firms as Saudis trim exports and US output forecast is reduced - Oil prices rose on Wednesday, buoyed by a large U.S. inventories drawdown and as sanctions stall exports from Venezuela. International Brent crude oil futures were at $67.37 a barrel, up 70 cents, or 1.05 percent, from their last close. U.S. West Texas Intermediate crude futures were at $57.99 per barrel, up $1.12, or 2 percent — building on their strong gains from earlier in the day. The Energy Information Administration said Wednesday that U.S. crude inventories fell by 3.9 million barrels last week. The data came after the American Petroleum Institute also said Tuesday that U.S. crude stocks had fallen in the previous week.Oil prices have been pushed up this year by supply cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries.Saudi Energy Minister Khalid al-Falih said on Sunday that the production-curbing agreement would likely last until at least June. Saudi Arabia, the world's top oil exporter, indicated on Monday that it would cut April exports.Markets have been further tightened by U.S. sanctions against oil exports from OPEC members Iran and Venezuela.Venezuela's worst blackout on record has left most of the country without power for six days, with hospitals struggling to keep equipment running, food rotting in the tropical heat and exports from the country's main oil terminal stranded. "Failures in the electrical system ... (are) likely to accelerate the loss of 700,000 barrels per day" in oil supply, Barclays bank said.
WTI Hits 4-Month Highs, Tops $58 After Surprise Crude Draw, Production Cut - Crude rose for a third day after API reported an unexpected drop in U.S. stockpiles just as planned cuts and disruptions to OPEC output are tightening supply.While OPEC nations like Saudi Arabia press on with planned production curbs, crises in fellow members Venezuela and Iran are also removing barrels from the market.Additionally, the EIA in its monthly Short-Term Energy Outlook trimmed American crude output this year to 12.3 million barrels a day -- 110,000 barrels lower than it had forecast previously. API:
- Crude -2.58mm (+3.00mm exp)
- Cushing -1.06mm
- Gasoline -5.85mm
- Distillates +195k
DOE
- Crude -3.86mm (+3.00mm exp)
- Cushing -672k
- Gasoline -4.62mm
- Distillates+383k
DOE confirmed API's surprise crude draw (-3.86mm vs +3.00mm exp) and gasoline stocks tumbled further... Even more notable, US crude production dropped in the last week, tracking the lagged oil rig count...
Oil prices settle at a 4-month high as U.S. crude and gasoline supplies drop - Oil futures rallied Wednesday to settle at their highest level since November as weekly data revealed a surprise decline in U.S. crude stockpiles and a bigger-than-expected drop in gasoline inventories. April West Texas Intermediate crude rose $1.39, or 2.4%, to end at $58.26 a barrel on the New York Mercantile Exchange, near the session’s high of $58.44. Prices front-month contract haven’t traded or settled at levels this high since mid-November, according to FactSet data. May Brent crude gained 88 cents, or 1.3%, to $67.55 a barrel on ICE Futures Europe, the highest finish for the international benchmark in about four months.The Energy Information Administration on Wednesday reported that U.S. crude supplies fell by 3.9 million barrels for the week ended March 8. That ran counter to expectations for a climb of 3.3 million barrels expected by analysts polled by S&P Global Platts. The American Petroleum Institute on Tuesday had reported a 2.6 million barrel decline.“Stymied net imports and refinery runs clambering above the 16 million barrel-per-day mark has been enough to yield a second draw to crude inventories in three weeks,” said Matt Smith, director of commodity research at ClipperData. The EIA also reported that total domestic crude production inched down from record territory, down 100,000 barrels to 12 million barrels a day. “Gasoline inventories drew strongly, now down more than 12 million barrels—or 5%—in four weeks, while distillate inventories ticked higher as implied demand slipped last week,” said Smith.
Oil hits 4-month highs, Brent reaches $68 on tighter supply - Brent and West Texas Intermediate crude oil futures reached four-months highs on Thursday, as a production curb agreement by OPEC and its partners along with U.S. sanctions on Iran and Venezuela tightened global supplies. An unexpected dip in U.S. crude oil inventories and production also supported prices, traders said. Brent crude oil futures hit a 2019-peak of $68.14 per barrel on Thursday before easing modestly to $67.05 by 0840 GMT, up 50 cents or 0.74 percent from Wednesday's close. U.S. West Texas Intermediate (WTI) crude futures were at $58.62 per barrel, up 36 cents, or 0.62 percent, from their last settlement. "With OPEC's cuts in full-swing ... persistent supply issues and a deteriorating picture on Venezuela, oil is looking well supported," said Jasper Lawler, head of research at futures brokerage London Capital Group. The Organization of the Petroleum Exporting Countries (OPEC) and some non-aligned producers including Russia have been withholding oil supply since the start of the year to tighten global markets and prop up crude prices. In Venezuela, oil production and exports have been disrupted by a political and economic crisis that has caused massive blackouts and supply shortages, while Washington has barred U.S. companies from doing business with the Venezuelan government, including state-owned oil firm PDVSA. Adding to the turmoil, two storage tanks exploded at a heavy-crude upgrading project in eastern Venezuela on Wednesday, according to an oil industry source and a legislator. In the Middle East, the United States aims to cut Iran's crude exports by about 20 percent to below 1 million barrels per day (bpd) from May by requiring importing countries to reduce purchases to avoid U.S. sanctions, two sources familiar with the matter told Reuters. Meanwhile, a weekly report by the U.S. Energy Information Administration (EIA) said U.S. commercial crude oil inventories fell last week as refineries hiked output.
Oil Prices Surge To Multi-Month Highs -- Oil prices have surged to their highest level in months, with WTI rising above $58 per barrel and Brent trading north of $67. The instability in Venezuela and the growing evidence of a slowdown in U.S. shale have pushed prices up. Weekly figures show that U.S. oil production dipped to 12 mb/d last week, down from 12.1 mb/d the week before. The figures are just estimates, and are rounded off to the nearest 100,000 bpd, but they at least offer an indication that the explosive growth could be slowing down.. Opposition leader and self-proclaimed president of Venezuela, Juan Guaido, is working on overhauling the country’s oil sector if he gains power. The proposal would include weakening PDVSA and allowing a vastly larger role for private sector companies. The reforms would resemble those of Mexico over the past few years and would amount to a historic change, although for now, Guiado is still struggling to gain power. OPEC reduced production by 221,000 bpd in February, a more modest reduction than in prior months. Most of the reductions came from Venezuela, which saw output drop by 142,000 bpd. Meanwhile, OPEC estimated that OECD inventories rose by 22 million barrels in January, or 19 million barrels above the five-year average. The IEA said that although the crisis in Venezuela is disrupting the oil market, the OPEC+ production cuts have rebuilt spare capacity, providing a “supply cushion” that can offset the turmoil. “Much of this spare capacity is composed of crude oil similar in quality to Venezuela’s exports,” the IEA said. “Therefore, in the event of a major loss of supply from Venezuela, the potential means of avoiding serious disruption to the oil market is theoretically at hand.” The Trump administration’s lead envoy on Iran sanctions, Brian Hook, said that waivers granted to eight countries importing Iranian oil could be extended, as long as they demonstratereductions in purchases. The U.S. is aiming to get Iran’s oil exports below 1 mb/d, a reduction of roughly 20 percent from current levels, but a far cry from “zero.” Higher oil prices are constraining the Trump team. “He has made it very clear that we need to have a campaign of maximum economic pressure ... but he also doesn't want to shock oil markets, he wants to ensure a well-supplied and stable oil market,” Hook said, referring to Trump.
U.S. oil prices up a 4th straight session, but global prices fall from 2019 highs - Oil futures split ways on Thursday, with U.S. prices up a fourth straight session after recent data revealed a weekly decline in domestic supplies, but global prices ending lower in the wake of a reported delay in the U.S.-China trade discussions and a slowdown in OPEC output cuts. April West Texas Intermediate crude rose 35 cents, or 0.6%, to settle at $58.61 a barrel on the New York Mercantile Exchange, logging a fourth straight session climb. It settled at its highest since mid-November, according to FactSet data. May Brent crude, meanwhile, edged down by 32 cents, or 0.5%, to $67.23 a barrel on ICE Futures Europe. It settled at a four-month high a day earlier. The headline draw in U.S. oil supplies reported Wednesday “was correctly digested as positive but the underlying reasons for the draw were the real bullish development,” said Tyler Richey, co-editor of the Sevens Report. “Domestic crude oil production slipped for the first time this year ... meanwhile, net imports remained suppressed,” with U.S. sanctions on Venezuela being the primary driver of the import decline. On Wednesday, the Energy Information Administration reported that U.S. crude supplies unexpectedly fell by 3.9 million barrels for the week ended March 8. The EIA also reported that total domestic crude production inched down from record territory, down 100,000 barrels to 12 million barrels a day. Meanwhile, the Organization of the Petroleum Exporting Countries, in a monthly report released Thursday, said output by its members fell in February, though at a significantly reduced rate than the month prior and well-below the group’s pledge to the market.
Oil prices stable amid sanctions and OPEC cuts, but economic concerns drag -- U.S. crude futures briefly hit a 2019 high on Friday but later retreated along with benchmark Brent oil as worries about the global economy and robust U.S. production put a brake on prices. U.S. West Texas Intermediate (WTI) crude oil futures were down 48 cents at $58.13 per barrel at 1355 GMT, having hit their highest so far this year at $58.95.Brent crude oil futures were at $66.51 per barrel, down 72 cents from their last settlement, and below their 2019 peak of $68.14 reached on Thursday."The market is still torn between economic concerns and high U.S. oil production on one hand and remarkable OPEC+ compliance on the other. The latter is greatly aided by unplanned cuts in production," PVM oil broker Stephen Brennock said.The Organization of the Petroleum Exporting Countries and its allies including Russia, an alliance known as OPEC+, agreed last year to cut production, partly in response to increased U.S. shale output.OPEC+ ministers will meet on April 17-18 to decide production policy."If OPEC+ decide to extend (cuts) ... we expect that inventories will continue to draw through at least Q3," U.S. investment bank Jefferies said.The International Energy Agency said on Friday that the market could show a modest surplus in the first quarter of 2019 before flipping into a deficit in the second quarter by about 0.5 million barrels per day (bpd).It said a comfortable supply cushion by OPEC could prevent any price rally in case of possible disruptions and that non-OPEC oil output growth led by the United States should ensure demand is met. Preventing oil from rising further have been concerns that an economic slowdown that has gripped large parts of Asia and Europe will dent growth in fuel demand.
Oil prices pull back from 2019 highs as weak U.S. data breaks 4-day rally - Oil prices turned lower on Friday as weak data out of the U.S. prompted traders to take profits after a four-day rally. New York-traded West Texas Intermediate crude futures fell 36 cents, or 0.61%, at $58.25 a barrel by 10:35 AM ET (14:35 GMT), pulling off $58.95, its highest level of the year. Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., traded down 59 cents, or 0.88%, to $66.64. Manufacturing activity in the New York area fell unexpectedly in March, hitting its lowest level since 2017, while U.S. manufacturing production also registered a surprise decline, falling for a second consecutive month in February. The weaker data adds to other soft reports ranging from retail sales to housing, suggesting that the American economy lost significant momentum early in the first quarter. With signs of a slowdown in the global economy, there are marked concerns that a breakdown in trade negotiations between the U.S. and China could lessen demand from the world’s two largest oil importers. Even with Friday’s disappointing data, oil remained on track for a solid week of gains. A barrel of West Texas is up 3.5% since the week-ago close on signs that OPEC-led production cuts are working to constrain the supply glut. In fact, the International Energy Agency forecast on Friday that demand would increase, leading to a potential supply deficit as soon as the second quarter of this year. In other energy trading, gasoline futures fell 0.90% to $1.8329 a gallon by 10:38 AM ET (14:38 GMT), while heating oil dropped 0.91% to $1.9669 a gallon. Lastly, natural gas futures declined 1.23% to $2.820 per million British thermal unit.
Oil finishes with a loss, but U.S. prices mark sharpest weekly rise in a month - Crude-oil futures finished lower on Friday, with U.S. prices pulling back after four days of consecutive gains that prompted crude to tally its best weekly gain in about a month, amid growing signs of tightening global supplies.April West Texas Intermediate crude shed 9 cents, or 0.2%, to settle at $58.52 a barrel on the New York Mercantile Exchange, after settling at its highest level since mid-November on Thursday. WTI tallied a weekly gain of about 4.4% based on the most-active contracts, which marked its sharpest weekly rise since the period ended Feb. 15, according to Dow Jones Market Data. May Brent crude meanwhile, lost 7 cents, or 0.1%, to $67.16 a barrel on ICE Futures Europe, with the contract up 2.2% for the week. On Friday, the International Energy Agency said output from the Organization of the Petroleum Exporting Countries had fallen by 240,000 barrels a day last month, to 30.68 million barrels day, its lowest level in four years. The IEA cited losses in Venezuela, and lower output from Saudi Arabia and Iraq. It left its forecast for global oil demand growth in 2019 unchanged at 1.4 million barrels a day.The IEA report came a day after OPEC released its own monthly oil-market report showing a similar decline for February, though the report also highlighted that by OPEC’s member production fell at a significantly reduced rate than the month prior and well-below the group’s pledge to the market.Over the weekend, the OPEC, non-OPEC Joint Ministerial Monitoring Committee will gather in Baku, Azerbaijan, with an official meeting scheduled for Monday to review compliance with production cuts.Some market participants worry that the cartel might act to further push prices higher.
Pompeo enlists US energy conglomerates for global oil war - US Secretary of State Mike Pompeo delivered an extraordinary speech this week to a conference attended by representatives of the major US energy conglomerates in which he appealed to “Big Oil” to play an increasingly direct role in the drive by US imperialism for global dominance and the preparation for war on every continent. Speaking Tuesday at the annual CERAWeek conference in Houston, Texas which brings together US oil and gas company executives, representatives of OPEC and US government officials, Pompeo stressed that the steep growth in US energy production, driven by what industry insiders describe as the “shale revolution,” has provided Washington with a potent weapon to use against its global rivals.The growth in energy production, with the US surpassing both Russia and Saudi Arabia as the largest crude oil producer late last year, and estimates that US exports will exceed those of Russia in the next three years and those of Saudi Arabia in the next five, is seen by the US ruling elite as a means of exerting its hegemony on a worldwide scale. Pompeo’s speech provided a blunt description of US predatory aims across the planet that involve the interests of the American-based energy conglomerates. His attempts to present this as some kind of moral crusade were laughable. Countries targeted by US imperialism, he claimed, were “using their energy for malign ends, and not to promote prosperity in the way we do here in the West. They don’t have the values of freedom and liberty, or the rule of law that we do, and they’re using their energy to destroy ours.” The “prosperity” promoted by Exxon-Mobil, Chevron, ConocoPhillips and other US-based energy conglomerates is that of their CEOs and major capitalist investors. Their values of “freedom and liberty” and “rule of law” extend just as far as their freedom to exploit the planet’s energy reserves at will and to impose the rules dictated by the US government to protect their interests.Pompeo went on to link the interests of “Big Oil” to the multiple geostrategic conflicts between US imperialism and its global and regional rivals. He stressed that US energy production and export was crucial to countering a series of “bad actors.” “We don’t want our European allies hooked on Russian gas through the NordStream II project, any more than we ourselves want to be dependent on Venezuelan oil supplies,” Pompeo said, referring to the expansion of a natural gas pipeline linking Russia to Central Europe. This pitch for promoting US energy dominance in Europe came as the Pentagon announced that it is preparing to develop and test new low-flying intermediate-range nuclear missiles beginning in August, after the formal expiration of the Intermediate-Range Nuclear Forces Treaty (INF) between the US and Russia, torn up by the Trump administration last month.
Saudi Arabia Has Become the World’s Top Arms Buyer — Most reports on international arms sales focus on the biggest sellers. That inevitably means the United States, the largest exporter by far in the growing market. You can’t have sales without buyers, however, and that side of the equation centers heavily on the Middle East.Middle Eastern countries now buy more than a third of all global arms. The biggest customer not just in the Middle East but in the world, is Saudi Arabia, whose purchases have soared 192% over a five year period.Locked in an endless war in Yemen, and always looking toward a war with Iran, Saudi Arabia has seen its military spending soar in recent years. Recent estimates have put Saudi Arabia at the third costliest military on Earth, behind on the US and China, and ahead of Russia.Unlike the US, China, or Russia, however, Saudi Arabia lacks a huge decades-old military-industrial complex to make all their weapons of war. Instead, the Saudis are pouring into overseas contracts, buying vast amounts of arms from the US and Britain. The Saudis show no sign of slowing down on this, but it isn’t clear how sustainable this is either. Already, Saudi war crimes are fueling a lot of calls to rethink arms sales to them. On top of that, the Saudis are spending 10% of their annual GDP on a mostly-imported military, which is a heavy burden for their economy to bear.
Andrew Bacevich: The U.S.-Saudi Relationship Is a Principal Source of Instability in the Middle East (Democracy Now! video & transcript) We look at a number of recent developments in U.S.-Saudi relations, a day after the Senate Foreign Relations Committee held a confirmation hearing for retired four-star general John Abizaid to become U.S. ambassador to Saudi Arabia. On Monday, the Trump administration gave a private briefing to senators on the investigation into the murder of Washington Post columnist Jamal Khashoggi, who was killed inside the Saudi Consulate in Istanbul in October. Senators slammed the briefing for providing no new information. Meanwhile, The New York Times has revealed new details about the jailing and torture of a doctor with U.S. citizenship in Saudi Arabia. Walid Fitaihi is a Harvard-trained doctor who has been jailed without charge since 2017. We speak with Andrew Bacevich, a retired colonel and Vietnam War veteran, author and professor emeritus of international relations and history at Boston University, and William Hartung, director of the Arms and Security Project at the Center for International Policy.
Saudi Arabia says Jamal Khashoggi's killers have been 'brought to justice' and insists they were 'not subjected to torture' - but refuses to name them or reveal their punishment - Saudi Arabia has claimed Jamal Khashoggi's killers have been 'brought to justice' after describing the murder as a 'heinous crime' and 'unfortunate accident'. The head of the Kingdom's human rights commission refused to name any of those it said was involved - but insisted they had not been subjected to torture. Saudi Arabia was 'horrified' by the writer's killing in Istanbul in October last year but will continue to reject any international role in the probe, Bandar bin Mohammed Al-Aiban told the UN Human Rights Council. Those accused of the 'heinous crime' and 'unfortunate accident' at its Istanbul consulate had attended three hearings so far with their lawyers present, he said. Saudi Arabia has claimed Jamal Khashoggi's killers have been 'brought to justice' after describing the murder as a 'heinous crime' and 'unfortunate accident' 'Therefore what is being conveyed by certain media regarding the need for us to internationalise some of these matters is something we do not accept because such demands amount to interference in our domestic affairs and in our domestic judicial system,' he told the Geneva forum. Last month, a UN human rights expert said Khashoggi was murdered in a a 'brutal and premeditated killing' carried out by Saudi officials. Agnes Callamard, the UN special rapporteur on extrajudicial, summary or arbitrary executions, made her assessment after visiting Turkey. Khashoggi, a Washington Post columnist who wrote critically about Saudi Crown Prince Mohammed bin Salman, was killed inside the Saudi Consulate. His remains have not been found and it is feared his body could have been dissolved in acid after being cut into pieces by a Saudi hit squad. Callamard said that Saudi Arabia undermined Turkey's efforts to investigate the death and that the killing was carried out 'by officials of the State of Saudi Arabia'.
Immediate Action to Dismantle Terror Infrastructure Required- India to Saudi Arabia -In a clear reference to Pakistan, India on Friday conveyed to Saudi Arabia that that “immediate, irreversible and verifiable action” to dismantle terror infrastructure is essential to fight the menace of terrorism. This was conveyed during a meeting between external affairs minister Sushma Swaraj and Saudi state minister for foreign affairs Adel al-Jubeir, who made a 4.5-hour visit to India days after his trip to Islamabad. Sources, however, said there was no offer, either earlier or now, from the Saudi side to mediate the de-escalation of tensions between India and Pakistan. Jubeir held extensive talks with Swaraj here with a focus on deepening cooperation to combat terrorism. It is learnt that the recent tensions triggered by the Pulwama attack and India’s subsequent airstrike on a terrorist training camp in Pakistan also came up during the meeting. “They (Swaraj and Jubeir) took note of significant developments after the visit of His Royal Highness (Saudi Crown Prince Mohammad bin Salman) to India. EAM reiterated that an immediate irreversible and verifiable action to dismantle terror infrastructure is essential to fight the menace of terror,” a Ministry of External Affairs (MEA) statement said, without naming Pakistan or the post-Pulwama tensions between India and Pakistan. During his visit, Jubeir also called on Prime Minister Narendra Modi and discussed bilateral issues, officials said. “The Prime Minister thanked the leadership of Saudi Arabia for expressing full solidarity with India in the fight against terrorism in all its forms and manifestations,” the MEA said.
Seven Things Saudi Women Still Can't Do, Despite Driving Ban Lift - In a decree issued in September 2017, Saudi King Salman ruled that women would be allowed to drive cars in 2018, a move which ended the kingdom’s status as the only country in the world where it was forbidden. Saudi’s law against women drivers was one of many controversial laws presenting a web of restrictions to women. Saudi women are required to get permission from a male family member, sometimes even a younger brother, for some of the most important decisions of her life. And whilst they are now allowed to drive, here is a list of things Saudi women still can’t do:
- 1. Eat freely in public. As part of the kingdom’s dress code, women are required to wear a face veil. This, whilst selectively enforced, means that wherever it is, women must then eat under their face veil.
- 2. Dress ‘for beauty’. They must cover their hair and bodies. The kingdom’s dress code requires women to wear an “abaya,” a dress-like full length cloak.
- 3. Freely socialise with non-relative males. Women are not free to socialise with men outside of their immediate families, and can even be imprisoned for committing such an offence.
- 4. Marry whomever they like. There are rulings against Saudi marrying non-Muslim, Shia, or atheist men.
- 5. Travel. Travelling without a male guardian’s permission is prohibited.
- 6. Open a bank account. In Saudi Arabia, women still need their husband’s permission before they are allowed to open a bank account.
- 7. Get a job. Although the government no longer requires a woman to have a guardian’s permission in order to work, many employers still demand the permission before hiring.
The struggle for greater women’s rights in the kingdom has been a difficult one, with activists arrested for defying the driving ban last year. In recent months, a model was arrested for wearing a short skirt.
Libya's Gaddafi 2.0 Eyes Military Takeover Of Tripoli, Could Rattle Global Oil Markets - Libya is coming apart again — though of course it was never put back together in the first place after NATO's regime change war to topple Muammar Gaddafi in 2011 in the first place. Since then it's been a jihadist wasteland of three, or at times up to four, competing governments vying for control of land and resources. And now, as Bloomberg reports this week "Libya’s most powerful warlord has his sights on the capital" of Tripoli and "even his international backers are nervous." Who are Khalifa Haftar's international backers? He was for a couple decades believed to be on the CIA's payroll while living in suburban Virginia outside Washington, D.C. in exile during Gaddafi's rule. He's also financed by the UAE and quickly emerged as a main player collecting the spoils in the aftermath of the US-French-NATO bombing campaign in support of the rebels. Based in Libya's oil-rich east, Haftar's militia has already captured much of the country's oil resources, especially after a successful blitz to take much of the south this year.And now he reportedly has his eye on the capital of Tripoli in the west — home to the UN-recognized Government of National Accord (GNA) and Libya's state-run National Oil Corporation, which when combined with small subsidiaries under its direction accounts for some 70% of the country's oil output. But has an increasingly powerful Haftar gone rogue, outside the bounds of his international political and financial backers? Or is he actually the external brokers' "solution" to impose order after years of post-Gaddafi chaos? Are we witnessing the rise of Libya's new strongman — a Gaddafi 2.0 who will be amendable to western and gulf interests? Bloomberg reports the growing alarm of his international backers:Alarmed, international powers are clamoring to avert a military showdown that could rattle global oil markets and sow further chaos in a divided country already struggling to defeat Islamic State and stem the flow of migrants toward Europe.The UAE has reportedly tried to intervene with Haftar, urging him to put on the brakes and negotiate a power sharing situation, but to no avail.
Iran's Rouhani Makes First Ever Visit To Iraq To Bypass Unjust US Sanctions - What Iran is billing as President Hassan Rouhani's first "historic" and landmark visit to Iraq, both the United States and Israel are seeing as a provocative move to solidify Iran's influence over Baghdad. Just prior to arriving in Iraq Monday, Rouhani said on state television that his country is determined to "strengthen its brotherly ties" with neighboring Iraq. It's expected that the the three-day visit will result in a wide range of economic deals in fields such as energy, transport, and agriculture; however, as Israel's Haaretzwrites based on a Reuters report:The visit is a strong message to the United States and its regional allies that Iran still dominates Baghdad, a key arena for rising tension between Washington and Tehran.Reuters further noted that Shi'ite Iran will is using the official visit to gain all the trade and energy export deals it can as Tehran suffers amidst US-led international sanctions, and as it continues to demand more concrete action from Europe in the wake of last year's US pullout of the JCPOA nuclear deal. "We are very much interested to expand our ties with Iraq, particularly our transport cooperation," Rohani said at Tehran's Mehrabad airport. "We have important projects that will be discussed during this visit." Crucially, a senior Iranian official who is accompanying Rohani on the trip told Reuters: Iraq is another channel for Iran to bypass America's unjust sanctions imposed on Iran. This trip will provide opportunities for Iran's economy.Rouhani was welcomed and escorted by Iraqi President Barham Salih and Foreign Minister Mohamed Ali Hakim after the Iranian president touched down in Baghdad on Monday. The official itinerary begins with a visit to a Shia shrine in the Iraqi capital. The timing of Rouhani's visit is further interesting in light of the US-led coalition's anti-ISIL campaign, which is fast wrapping up just across the border in Syria's Baghouz.
Iran Holds Massive Drone Drills Called Way To Jerusalem In Persian Gulf - Iran unveiled that it launched a massive drone exercise to showcase its military and technological prowess on Thursday. Given that it involves some 50 Iranian-made drones and is officially named "Way to Jerusalem" exercises (or "Towards al-Quds 1"), it has been met with alarm in Israel especially considering many were armed drones operating along key choke points in the Persian Gulf. The Islamic Revolutionary Guard Corps (IRGC) described the military drills as Iran's largest exercise of its kind to date, and occurred mostly near the strategic Strait of Hormuz. State-run Fars and Tasnim news agencies described the operation as including, “for the first time, 50 Iranian drones on the RQ-170 [US Sentinel] model operated with a number of assault and combat drones." According to Iranian defense officials, including IRGC Ground Force commander Maj.-Gen. Golam Ali Rashid, who helped command the operation, the drone "offensive operation" saw UAVs operate simultaneously at distances of more than 1,000 km away from each other (about 620 miles) and struck remote targets with “high precision.” Gen. Rashid told state sources that contrary to the western perception that the Iranian Republic is failing in technological advancement, instead “today we are witnessing the strongest maneuvers of the IRGC’s Aerospace Forces.” He bragged that enemies would be “humiliated and feel shame,” according to state media.
Qatar's trade surplus hit $52 billion last year, minister says - Qatar's trade surplus reached $52 billion in 2018, the country's Minister of Commerce and Industry said Sunday.More than 20 months after the economic and diplomatic blockade enacted by its neighbors Saudi Arabia, Bahrain, Egypt and the United Arab Emirates, Qatar is endeavoring to tell the world that business is carrying on as usual.The tiny gas-rich monarchy has expanded its trade relations after the blockade effectively cut its access to an estimated 60 percent of the goods it imported.The countries who implemented the blockade charge Qatar of supporting terrorism, which the Qataris strongly deny.Speaking at a forum on Qatar-Pakistan trade, Minister Ali Al Kuwari said trade between the two countries grew over 230 percent in 2018 to $2.6 billion, Reuters reported Sunday. Trade with Iran and Turkey has also increased, while Doha is pursuing partnerships with Western countries, including an open skies agreement with the EU which will be the first between the bloc and any Gulf Cooperation Council state.The blockade has had an impact on air travel, shipping and trade routes and media, among other sectors. However, the economic impact of the blockade has been seen as short-lived, the International Monetary Fund said last May. This is helped by the fact that Qatar is the world's top exported of liquefied natural gas. The IMF forecasts 3.1 percent growth in 2019 for the country of 2.6 million, up from 2.4 percent last year.
US Airstrikes Kill at Least 50, Mostly Civilians, in Eastern Syria — Amid talk of a never-ending exodus of civilians from underground in the Syrian village of Baghouz, the Kurdish SDF is waiting on a final push into the last ISIS-held village. The US, however, is not so patient.On Monday, US warplanes attacked Baghouz, killing at least 50 people. Details on what the intended target was is unclear, but the reports suggest that the dead were mostly women and children.The attack came after the latest deadline set by the SDF for ISIS to surrender passed on Sunday, but with many thousands having left the village in the past few days, the SDF seemed fine just extending the deadline and getting more people out. In the past few months, US airstrikes backing the SDF offensive have killed hundreds, if not thousands, of civilians. With thousands of civilians still believed to be in Baghouz, the US strikes are undermining the SDF’s effort to convince them to leave, by showing that those who try to leave may be targeted.
CIA Is Conspiring With ISIS, Turning Syrian Refugee Camps Into ISIS Hotbeds The CIA is conspiring with ISIS commanders in northeastern Syria supplying them with fake documents and then transferring them to Iraq, according to reports in Turkish pro-government media. About 2,000 ISIS members were questioned in the areas of Kesra, Buseira, al-Omar and Suwayr in Deir Ezzor province and at least 140 of them then received fake documents. Some of the questioned terrorists were then moved to the camps of al-Hol, Hasakah and Rukban, which are controlled by US-backed forces. The CIA also reportedly created a special facility near Abu Khashab with the same purpose. Israeli, French and British special services are reportedly involved.An interesting observation is that the media of the country, which in the previous years of war, used to conspire with ISIS allowing its foreign recruits to enter Syria and buying smuggled oil from the terrorists, has now become one of the most active exposers of the alleged US ties with ISIS elements.Another issue often raised in Turkish media is the poor humanitarian situation in the refugee camps controlled by US-backed forces. These reports come in the course of other revelations. According to the International Rescue Committee, about 100 people, mostly children, died in combat zones or in the al-Hol camp controlled by the US-backed Syrian Democratic Forces just recently.In its turn, the Russian Defense Ministry released a series of satellite images revealing the horrifying conditions in the al-Rukban camp. The imagery released on March 12 shows at least 670 graves, many of them fresh, close to the camp’s living area. The tents and light constructions used to settle refugees are also located in a close proximity to large waste deposits. A joint statement by the Russian and Syrian Joint Coordination Committees for Repatriation of Syrian Refugees said that refugees in al-Rukban are suffering from a lack of water, food, medication and warm clothing, which is especially important during winter. According to the statement, members of the US-backed armed group Maghawir al-Thawra disrupt water deliveries to the camp, using this as a bargaining chip for blackmailing and profiteering purposes.
Syria Notifies Israel It Will Attack If IDF Doesn't Leave Golan Heights - In a surprising and provocative ultimatum, Syria has notified Israel through United Nations diplomatic channels that it is prepared to go to war if Israel does not leave the Golan Heights. Syrian Deputy Foreign Minister Faisal Mikdad reportedly sent the message through the head of the United Nations Truce Supervision Organization (UNTSO), Christine Lund, this past week, according to a World Israel News report and later picked up other major Israeli sources, including The Jerusalem Post. “Syria will attack Israel if it does not leave the Golan Heights,” Mikdad told the UN representative. Mikdad further warned Lund that Syria will respond with force should Israel continue its attacks on Syria, which have occurred more than a dozen times over the past year, but which seem to have recently paused following Russia's announced delivery of the advanced S-300 anti-air missile defense system to Damascus late last year. “We will not hesitate to confront Israel,” Syria's Mekdad said. “We are also not scared away by its [Israel’s] supporters who are helping to perpetuate the occupation of the Golan,” he added.Damascus' firm warning appears a response to a controversial bill recently under renewed consideration by US Congress, co-sponsored by Republican Senators Ted Cruz and Tom Cotton, and Democratic Rep. Mike Gallagher, which aims to give formal US recognition of Israel’s sovereignty over the Golan Heights region.Meanwhile, multiple Israeli political leaders have responded to Syria's historic claim to the Israeli-occupied Golan and willingness to go to war over it. While speaking on a visit to the Golan Heights, Blue and White party politicians Gabi Ashkenazi, Yair Lapid, Benny Gantz and Moshe Ya'alon vowed, "It is ours and it will stay ours" — certainly a dominant sentiment that cuts across Israeli party lines. "We will increase the numbers of residents in the Golan, sending a resounding message to all - we will never relinquish the Golan Heights," Gantz said, according to The Jerusalem Post. "We will enlist the support of the US and the international community to promote Israel's interests on our northern border," he added. This comes after last month the Syrian Army solidified its hold over its side of the occupied Golan after last year defeating al-Qaeda and ISIS groups who had held the Quneitra area for years prior during the Syrian war.
US drops 'Israeli-occupied' designation from Golan Heights - The United States no longer refers to the Golan Heights as an "Israeli-occupied" territory in its latest annual human rights report, published on Wednesday, though the State Department insists the wording change doesn't mean a policy change. The report now calls the area the "Israeli-controlled Golan Heights". When asked about the change on such a sensitive Middle East subject, a senior US official told reporters in Washington: "There's no change in our outlook or our policy vis-a-vis these territories and the need for a negotiated settlement there." "This, by the way, is not a human rights issue, it's a legal status issue," said Michael Kozak of the State Department's Bureau of Democracy, Human Rights and Labor. "What we try to do is to report on the human rights situation in those territories, and so you're just trying to find the way of describing the place that you're reporting on," he said. "And 'occupied territory' has a legal meaning to it; I think what they tried to do is to shift more to just a geographic description." Another semantic change that appeared in last year's report showed up again this year, with a section titled "Israel, Golan Heights, West Bank and Gaza," instead of its previous "Israel and the Occupied Territories" heading. Nabil Abu Rudeineh, spokesperson for Palestinian Authority President Mahmoud Abbas, said that the US dropping the term “occupation” from the Occupied Palestinian Territories and the Syrian Golan Heights is "a continuation of the hostile approach of the American administration toward our Palestinian people and is contrary to all UN resolutions." He stressed, "These American titles will not change the fact that the Palestinian territory occupied since 1967 and the occupied Arab Golan are territories under Israeli occupation in accordance with UN resolutions and international law,"
Benjamin Netanyahu says Israel is ‘not a state of all its citizens’ Benjamin Netanyahu has said Israel is “not a state of all its citizens”, in a reference to the country’s Arab population. In comments on Instagram, the prime minister went on to say all citizens, including Arabs, had equal rights, but he referred to a deeply controversial law passed last year declaring Israel the nation state of the Jewish people. “Israel is not a state of all its citizens,” he wrote in response to criticism from an Israeli actor, Rotem Sela. “According to the basic nationality law we passed, Israel is the nation state of the Jewish people – and only it. “As you wrote, there is no problem with the Arab citizens of Israel. They have equal rights like all of us and the Likud government has invested more in the Arab sector than any other government,” he said of his rightwing party. As the comments caused waves in Israel, Netanyahu again spoke of the issue at the start of a cabinet meeting. He called Israel a “Jewish, democratic state” with equal rights, but “the nation state not of all its citizens but only of the Jewish people”. Netanyahu has been accused of demonising Israeli Arabs, who make up about 17% of the population, in an attempt to boost rightwing turnout in elections due on 9 April. He has continually warned that his opponents will receive the support of Arab parties and that they will make significant concessions to the Palestinians. Netanyahu, under threat of indictment for corruption, is facing a tough challenge from a centrist political alliance led by Benny Gantz, a former military chief of staff, and Yair Lapid, an ex-finance minister.
71% of Israeli Jews find Israeli control over the Palestinians as immoral - A new survey by the Van Leer Institute, in cooperation with the Citizens Accord Forum and the Shaharit Institute, revealed on Thursday that 71% of the Jewish public in Israel thinks there is a moral problem with Israel's control over the Palestinians. Moreover, 78% of Israeli Jews think that control over the Palestinians in Judea and Samaria is not good for Israel. The survey, which was presented under the headline "Religious Faith, Peace and Coexistence," examined the Israeli public's stands regarding peace and the control of Israel over Palestinians in Judea and Samaria. Despite the high percentage who claim that control of the Palestinians is not good for Israel, only 12% think it should be stopped immediately, while the majority of the public (66%) thinks that there is no alternative at present. The poll also showed that 78% of the Jewish public and 93% of the Arab public in Israel agree that peace with people of other faiths is an important value in their religion, and 51% of the Jews and 72% of the Arabs agree that religious leaders representing different religions in the region should take part in making decisions related to peace. "The fact that different groups in Israeli society - Jews and Arabs - do not connect to the well-known liberal peace discourse does not mean that they do not have a value-based approach to peace," said Dr. Eilon Schwartz, head of the Shaharit institute.
Erdogan Calls Netanyahu a Tyrant Who Massacred Palestinian Babies - – Turkey’s President Recep Tayyip Erdoğan on Wednesday accused Israel’s Prime Minister Benjamin Netanyahu of being a “tyrant” who “massacred” Palestinian babies, in the latest exchange between the two leaders, AFP reported. “Hey Netanyahu, behave yourself. You are a tyrant, you are a tyrant who massacred 7-year-old Palestinian children,” Erdoğan told a rally in response to the Israeli leader branding him a “dictator.” Turkey and Israel have tense relations, and Erdoğan, who sees himself as a champion of the Palestinian cause, is a vocal critic of Israeli policies. Erdoğan’s remarks came after unrest near the Temple Mount, also known to Muslims as the Noble Sanctuary, on Tuesday. Palestinians threw a firebomb at an Israeli police post at a site revered by Jews and Muslims in Jerusalem, and Israeli forces shot dead two Palestinians in the occupied West Bank, including one, troops said attacked them with a knife, Euronews reported. Netanyahu’s office responded to Erdoğan with a statement. “Turkey’s dictator Erdogan attacks Israel’s democracy while Turkish journalists and judges fill his prisons,” it read. “What a joke!”
US Warplanes Accidentally Obliterate Allied Afghan Military Base- In the latest bizarre story to come out of the US "endless war" in Afghanistan, American warplanes obliterated an allied Afghan military post in an act of "self defense" on Wednesday. The incident took place in the tribal Uruzgan province of south-central Afghanistan and reportedly began when a joint convoy of US troops and Afghan Special Forces came under fire by another unit of Afghan ground troops in what appears a major instance of accidental friendly fire resulting in a devastating two dozen total casualties on the Afghan side. The incident is under investigation, but US mission spokesman Bob Purtiman appeared to excuse US actions in a statement on Thursday: "We are operating in a complex environment where enemy fighters do not wear uniforms and use stolen military vehicles to attack government forces," he said. American forces indicate they came under attack by an unknown entity. US planes flying overhead then destroyed the Afghan army post (described by the Pentagon as a "checkpoint"), which killed at least six soldiers and wounded nine others at the small base which housed a total of 17. The US side reported no deaths or injuries, though the Pentagon would likely not release such information until a full investigation is concluded. The US Department of Defense confirmed the incident on Wednesday, which it described as a mistaken "example of the fog of war". Pentagon Spokesperson Sgt. First Class Debra Richardson told The New York Times: “The U.S. conducted a precision self-defense airstrike on people who were firing at a partnered U.S.-Afghan force.”.
(Urgent)- YouTube terminates Middle East Observer after almost 10 years online -- After almost 10 years online, over 250 videos, almost 13,000 subscribers, and about 8 million total video views, YouTube has terminated the Middle East Observer (MEO) channel on its platform.Although perhaps MEO became best known for its video translations of regional political actors such as Sayyed Hassan Nasrallah, its work was certainly not limited to that. Middle East Observer sought to provide its viewers with reliable English translations on politics, religion, and culture from the Middle East more broadly, with a particular focus on media from key states such as Lebanon, Syria, Iraq, Qatar, Saudi Arabia and Iran. The termination of MEO’s channel came after several months of seemingly routine ‘violation’ emails sent to us by YouTube, the taking down of various videos of ours (most of which were uploaded several years ago) and the imposition of ‘channel strikes’ accompanied by emails about how we could better uphold its rather vague and in many ways hegemonic ‘Community Guidelines’. We gradually realised that no matter what measures we took, it would not satisfy YouTube’s ‘Guidelines’, as the platform’s architecture and policies increasingly moved towards the censorship of alternative news and views. This censorship process against MEO began several years earlier, when YouTube deactivated our ability to monetise the absolute majority of our videos, classifying them as “Non-advertiser friendly”. To bypass reliance on YouTube advertising revenue, we tried various options over the years, the last of which being an up-until-now successful experience on Patreon (here’s our page), where after only a few months 17 of our global viewers/readers joined the highly flexible crowd sourcing platform to fund our work and keep it going. Truly without their support we would not have been able to continue producing translations consistently (by all means support us to help us expand our work too). Nevertheless, we believe that the termination of our channel today is a great blow to the coverage on YouTube of voices, news, and perspectives found on Arab and Islamic media that are rarely covered – or even purposefully silenced – by Western mainstream media. YouTube’s message today is clear: the production, uploading, and viewing of genuinely critical and alternative ideas and viewpoints is not welcome.
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