Sunday, July 28, 2019

natural gas prices testing a 3 year low; natural gas drilling activity at a 20 month low

oil prices eked out a small increase this past week, as ongoing oil tanker trouble in the Persian Gulf and a large US inventory withdrawal outweighed ​the impact of falling demand from ​a global economic slowdown.​..​ after falling 7% to $55.63 a barrel last week as Gulf of Mexico production returned and tensions between the US & Iran and the US showed signs of easing, prices of US crude for August delivery rose on Monday on concerns that Iran’s reciprocal seizure of a British tanker could lead to further supply disruptions in the Gulf, with trading in the August oil contract expiring 53 cents higher at $56.22 a barrel​,​ while at the same time the more-active September WTI oil contract price rose 46 cents to end the session at $56.22 a barrel...after opening lower, oil prices continued higher on Tuesday, as expectations of lower U.S. crude supplies were only partially offset by weaker demand forecasts and the full restart of Libya’s largest oil field, with the price of September oil ending 55 cents higher at $56.77 a barrel...oil prices spiked higher early Wednesday on the the American Petroleum Institute report of the largest oil inventory draw so far this year and extended those gains when the EIA confirmed the big crude draw and also reported lower crude production, with oil rising to as high as $57.64 a barrel before traders turned their attention back to concerns about weaker energy demand and quickly pushed oil prices more than 4% lower, before they recovered a bit to close down 89 cents at $55.88 a barrel...oil prices recovered a bit on on Thursday amid ongoing Middle East tensions, but a manufacturing slowdown indicated by purchasing managers reports from Europe & the US capped the gains and US crude finished up just 14 cents, or 0.3%, at $56.02 a barrel...oil prices continued modestly higher on Friday after a stronger-than-expected U.S. GDP report and concerns over the safety of Persian Gulf oil transport, and finished the session up 18 cents at $56.20 a barrel, with September oil thus ending the week with a gain of just under 1%..

natural gas prices, on the other hand, again trended lower, and ended the week just a fraction above the multi-year low seen in June...after falling more than 8% to $2.251 per mmBTU on the recovery of Gulf production last week, prices of natural gas for August delivery moved up 6.1 cents on Monday and closed with the​ir​ first increase in 6 sessions, as forecasts indicated above normal temperatures would become more widespread ​at the end of July and to start August...prices then slipped 1.2 cents on notably lower trading volume on Tuesday, and then fell 8 cent on Wednesday as traders positioned against a possible bearish storage report...when the storage report came in line with expectations, natural gas prices recovered 2.4 cents on Thursday, but they sold off again on Friday on a forecast of cooler weather and a dip in demand in the 11-15 day time frame and ended down 7.5 cents on the day at $2.169 per mmBTU, just a penny higher than the lowest front month quote of the last three years, and only three-tenths of a cent above the June 20th lowest closing quote for this August contract..

the natural gas storage report for the week ending July 19th from the EIA indicated that the quantity of natural gas held in storage in the US increased by 36 billion cubic feet to 2,569 billion cubic feet by the end of the week, which meant our gas supplies were 300 billion cubic feet, or 13.2% greater than the 2,269 billion cubic feet that were in storage on July 19th of last year, while still 151 billion cubic feet, or 5.6% below the five-year average of 2,720 billion cubic feet of natural gas that have been in storage as of the 19th of July in recent years....this week's 36 billion cubic feet injection into US natural gas storage was in line with the consensus market expectation, but it was lower than the average 44 billion cubic feet of natural gas that have been added to gas storage during the third week of July in recent years, the second straight below average storage build, following 17 weeks of above seasonal stock changes.... nonetheless, the 1,391 billion cubic feet of natural gas that have been added to storage over the past 17 weeks has still been the largest injection of gas into storage on record for any prior similar period of the gas injection season...

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending July 19th, indicated that a jump in our oil exports and a drop in our crude oil production resulted in the the 9th withdrawal withdrawal of crude from our supplies in 17 weeks, in a week where the effects of tropical storm Barry on the oil data are still quite evident...our imports of crude oil rose by an average of 194,000 barrels per day to an average of 7,028,000 barrels per day, after falling by an average of 470,000 barrels per day over the prior week, while our exports of crude oil rose by an average of 758,000 barrels per day to 3,292,000  barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,736,000 barrels of per day during the week ending July 19th, 562,000 fewer barrels per day than the net of our imports minus exports during the prior week...over the same period, storm impacted production of crude oil from US wells was reported to be 700,000 barrels per day lower at 11,300,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from well production totaled an average of 15,036,000 barrels per day during this reporting week..

meanwhile, US oil refineries were reportedly using 17,034,000 barrels of crude per day during the week ending July 19th, 233,000 fewer barrels per day than the amount of oil they used during the prior week, while over the same period the EIA reported that a net of 1,548,000 barrels of oil per day were being withdrawn from the supplies of oil stored in the US....hence, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 450,000 barrels per day short of what our oil refineries reported they used during the account for that disparity between the supply of oil and the disposition of it, the EIA inserted a (+450,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that they label in their footnotes as "unaccounted for crude oil"....(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 7,187,000 barrels per day last week, which was still 13.7% less than the 8,331,000 barrel per day average that we were importing over the same four-week period last year...the 1,548,000 barrel per day decrease in our total crude inventories was all pulled out of our commercially available stocks of crude oil, while the amount of oil stored in our Strategic Petroleum Reserve remained unchanged...this week's crude oil production was reported to be 700,000 barrels per day lower at 11,300,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 700,000 barrels per day lower at 10,800,000 barrels per day, largely due to shut-in wells in the Gulf of Mexico, while a 4,000 barrels per day increase to 459,000 barrels per day in Alaska's oil production was not enough to impact the final rounded national production total...last year's US crude oil production for the week ending July 20th was rounded to 11,000,000 barrels per day, so this reporting week's rounded oil production figure was still 2.7% above that of a year ago, and 34.1% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 93,1% of their capacity in using 17,034,000 barrels of crude per day during the week ending July 19th, down from 94.4% of capacity the prior week, a drop that can largely be attributed to hurricane Barry....the 17,034,000 barrels per day of oil that were refined this week were almost 1.5% below the 17,285,000 barrels of crude per day that were being processed during the week ending July 20th, 2018, when US refineries were operating at 93.8% of capacity....

even with the decrease in the amount of oil being refined, gasoline output from our refineries was still higher, increasing by 234,000 barrels per day to 10,089,000 barrels per day during the week ending July 19th, after our refineries' gasoline output had decreased by 563,000 barrels per day the prior week....but even with that increase in gasoline output, this week's gasoline production was​ still​ 1.6% less than the 10,255,000 barrels of gasoline that were being produced daily during the same week last year....on the other hand, our refineries' production of distillate fuels (diesel fuel and heat oil) fell by 142,000 barrels per day to 5,219,000 barrels per day, after our distillates output had increased by 3,000 barrels per day the prior week....but even after that decrease, the week's distillates production was 1.2% more than the 5,157,000 barrels of distillates per day that were being produced during the week ending July 20th, 2018.... 

​despite the increase in gasoline production, our supply of gasoline in storage at the end of the week still fell for the fifth time in 6 weeks and for the 17th time in twenty-two weeks, slipping by 226,000 barrels to 232,526,000 barrels over the week to July 19th, after our gasoline supplies had jumped by 3,565,000 barrels over the prior week....our gasoline supplies decreased this week because the amount of gasoline supplied to US markets increased by 459,000 barrels per day to 9,673,000 barrels per day, while our exports of gasoline fell by 59,000 barrels per day to 558,000 barrels per day, and while our imports of gasoline rose by 133,000 barrels per day to 985,000 barrels per day...after our gasoline supplies had reached an all time record high twenty-four weeks ago, they then fell by nearly 13% over 10 weeks while US Gulf Coast refineries were crippled by the Venezuelan sanctions, and ​as a result they are still fractionally lower than last July 20th's inventory level of 233,504,000 barrels, while just 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 the past 19 weeks, increasing by 613,000 barrels to 136,816,000 barrels during the week ending July 19th, after our distillates supplies had increased by 5,686,000 barrels over the prior week...the increase in our distillates supplies was smaller this week because the amount of distillates supplied to US markets, a proxy for our domestic demand, increased by 699,000 barrels per day to 4,264,000 barrels per day, while our exports of distillates fell by 144,000 barrels per day to 972,000 barrels per day and while our imports of distillates fell by 27,000 barrels per day to 105,000 barrels per day....after this week's inventory increase, our distillate supplies were 12.9% higher than the 121,210,000 barrels of distillates that we had stored on July 20th, 2018, and returned to near the five year average of distillates stocks for this time of the year...

finally, with ​our oil exports ​rising ​while our oil production​ was​ interrupted by tropical storm Barry, our commercial supplies of crude oil in storage fell for a sixth week in a row and for the twelfth time in 27 weeks, decreasing by 10,835,000 barrels, from 455,876,000 barrels on July 12th to 445,041,000 barrels on July 19th ...but even with that big decrease, our crude oil inventories remained roughly 2% above the recent five-year average of crude oil supplies for this time of year, and roughly 33% higher than the prior 5 year (2009 - 2013) average of crude oil stocks for the 3rd week of July, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...since our crude oil inventories had generally been rising since this past Fall until the recent 6 weeks, after generally falling until then through most of the prior year and a half, our oil supplies as of July 19th were still 9.9% above the 404,937,000 barrels of oil we had stored on July 20th of 2018, but at the same time were 7.9% below the 483,415,000 barrels of oil that we had in storage on July 21st of 2017, and 9.3% below the 490,501,000 barrels of oil we had stored on July 22nd of 2016...     

This Week's Rig Count

the US rig count fell for the 20th time in 23 weeks during the week ending July 26th, and is now down by nearly 13% for this year so far....Baker Hughes reported that the total count of rotary rigs running in the US fell by 8 rigs to a new 17 month low of 946 rigs this past week, down by 102 rigs from the 1048 rigs that were in use as of the July 27th report of 2018, and quite a bit below 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 3 rigs to 776 rigs this week, which was also a 17 month low for oil rigs, 85 fewer than were running a year ago, and less than half of the recent high of 1609 rigs that were drilling for oil on October 10th, the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 5 rigs to 169 natural gas rigs, which was a twenty month low for natural gas rigs, down by 17 rigs from the 186 natural gas rigs that were drilling a year ago, and way down from the modern era high of 1,606 rigs targeting natural gas that were deployed on August 29th, addition, a rig classified as miscellaneous continued to drill this week, matching the "miscellaneous" rig count of a year ago...

the rig count in the Gulf of Mexico was down by 2 to 23 rigs this week, as two rigs that had been drilling off the coast of Louisiana were shut down...that still left 22 rigs drilling offshore from Louisiana and a single rig deployed offshore from Texas, an increase of 8 rigs from the 15 rigs that were deployed in the Gulf of Mexico in the same week a year ago, when 13 rigs were drilling in Louisiana waters and two were deployed offshore from Texas...however, another rig started drilling off the coast of Alaska this week, where there are now two rigs deployed, up from the one rig drilling off the Alaskan shore a year ago...​hence, the total US offshore rig count is ​now ​at 25, an increase of 9 offshore rigs from a year ago..

however, both of the rigs that had been drilling through inland bodies of water in southern Louisiana were shut down this week, leaving no such inland waters rigs active in the US this week, the first time in my memory that the US inland waters rig count has gone to zero; a year ago, there were two such inland waters rigs deployed..

the count of active horizontal drilling rigs was down by 6 to 823 horizontal rigs this week, which was the least horizontal rigs deployed since February 2nd, 2018 and hence also a new 17 month low for horizontal was also 99 fewer horizontal rigs than the 922 horizontal rigs that were in use in the US on July 27th of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of the same time, the directional rig count was down by 2 rigs to 67 directional rigs this week, but those were up from the 64 directional rigs that were operating during the same week of last year... meanwhile, vertical rig count was unchanged at 56 vertical rigs this week, but that was down by 6 from the 62 vertical rigs that were in use on July 27th of 2018...

the details on this week's changes in drilling activity by state and by shale basin are included in our screenshot below of that part of the rig count summary pdf from Baker Hughes that shows those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the second table shows the weekly and year over year rig count changes for the major US geological oil and gas both tables, the first column shows the active rig count as of July 26th, the second column shows the change in the number of working rigs between last week's count (July 19th) and this week's (July 26th) count, the third column shows last week's July 19th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number 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 27th of July, 2018...    

July 26 2019 rig count summary

in contrast to the recent weeks where most of the variances have been in the Texas Permian, there were quite a few unusual changes ​elsewhere ​this you can see, the entirety of this week's national rig count drop could be accounted for by the 8 oil rigs that were pulled out of the Bakken shale in North Dakota's Williston basin, the largest such drop in the Bakken since February 2015...​in addition, we've already accounted for the 4 rig decrease shown for Louisiana, with the ​2 ​offshore and ​2 ​inland waters rigs from that state that were shut down...on the other hand, Wyoming saw an addition of 4 rigs, including 1 in the Denver-Julesburg Niobrara chalk and three in other basins not shown above, the largest jump in the Wyoming ​rig ​count yet this year....also note that the Permian basin saw a three rig increase while the Texas ​rig ​count showed no change; that was as one rig was pulled out of Texas Oil District 8, or the core Permian Delaware, while single rigs were started up in Texas Oil District 7C, or the southern Permian Midland basin, and in Texas Oil District 8A, or the northern part of the Permian Midland...hence, that means the other two Permian rigs were added in New Mexico, in the western Permian Delaware...

for rigs targeting natural gas, two rigs were shut down in Ohio's Utica shale, two were shut down in the West Virginia Marcellus, and two were shut down in basins not itemized separately by Baker Hughes, while a natural gas rig was started up in Oklahoma's Arkoma might note that West Virginia's rig count is only down by 1; that's because a conventional rig began drilling in Monroe count​y​, W Va,​ targeting natural gas at a depth of less than 5,000 feet; across most of West Virginia, the Marcellus lies more than 15,000 feet below the surface..

also note that in addition to the changes in the major producing states shown above, the only rig that had been drilling in Alabama was also shut down this week, the first time since April ​that ​Alabama has had no drilling activity, and down from 1 rig a year ago; at the same time, a sixth rig began drilling in Mississippi this week, the first time this year that Mississippi had that many rigs deployed; a year ago, there were three rigs drilling in Mississippi...


In America’s Shale Country, Nukes and Gas Are Duking It Out – Subsidizing nuclear power to fight climate change is one thing in liberal states like New York and New Jersey. It’s quite another in the natural gas bastions of Pennsylvania and Ohio. Drillers and gas-fired power plant operators are girding to fight measures to save money-losing reactors in the Keystone and Buckeye states, saying they’ve learned from past defeats and are better positioned to win.The looming debates are a key test of how far lawmakers in shale gas country are willing to go to fight climate change. Four left-leaning states have already approved bailouts for reactors, in step with aggressive targets to replace coal and gas with clean energy. This time fossil-fuel proponents are fighting on their home turf.“Natural gas is very, very strong” in Pennsylvania, said state Sen. Ryan Aument, who supports subsidizing reactors. “Those interests are well represented.”  In Pennsylvania, a Republican lawmaker introduced a bill Monday to support the state’s five plants, owned by Exelon Corp., FirstEnergy Solutions and Riverstone Holdings LLC’s Talen Energy Corp. Ohio legislators are preparing their own measure. Time is critical for nuclear plants. Reactors are struggling to stay solvent as the fracking boom has made gas cheap and abundant, pushing down wholesale electricity prices. At least six have closed since 2013, including in New Jersey and Vermont. FirstEnergy Solutions said it will close its Davis-Besse and Perry nuclear plants in Ohio without subsidies. Exelon needs to order a new reactor core by May for its Three Mile Island plant -- site of the infamous 1979 meltdown -- making it crucial for lawmakers to pass legislation this spring, Chief Executive Officer Chris Crane said on call with analysts last month. “If we can get this through in that period of time, we will be able to save the unit,” Crane said.

Two Well Permits Awarded in Columbiana County - – Hilcorp Energy Co. has secured two new permits for horizontal wells in Columbiana County, according to the most recent data posted by the Ohio Department of Natural Resources. Both wells are targeted for Elk Run Township on the Johnston pad, and are the first permits awarded in Columbiana County since August 2018, according to records. No new well permits were reported for Mahoning or Trumbull counties in the northern tier of the Utica. Nor were there new permits issued in nearby Lawrence or Mercer counties in the northern Utica’s western Pennsylvania footprint, according to the Pennsylvania Department of Environmental Protection. ODNR issued a total of 15 permits for the week ended Feb. 9, the agency reported. Aside from Hilcorp’s two Columbiana County wells, Ascent Resources LLC secured six new permits – two for wells in Belmont County, three for wells slated for Guernsey County, and a single permit for a well in Harrison County. Equinor USA Onshore Properties Inc. was awarded four permits for wells in Monroe County, while Chesapeake Exploration LLC secured three permits to drill wells in Harrison County. To date, ODNR has issued 3,000 permits to oil and gas companies that use horizontal drilling methods to explore the Utica/Point Pleasant shale formation in Ohio. These companies have so far drilled 2,531 wells in the shale play, while 2,141 of these wells are in production. The majority of wells drilled are located in the southeastern portion of the state, where higher geological pressure in the shale allows for more production. ODNR reported that there were 14 rigs in operation during the week.

Fracking in Ohio: Amid industry activity, residents start their own shale gas-related health registry -A dozen people are scurrying around a church basement in Youngstown, Ohio. They’re arranging tables and chairs, setting up paperwork, and hanging up signs that read, “Ohio Health Registry.” “The Ohio Health Registry is really an attempt to collect the contacts of people who live close enough to any aspect of shale development, that they might be affected,” said Dr. Deborah Cowden, a family physician from the Dayton area, who started the effort.Cowden drove three and a half hours east this morning to organize the registration, while others came in from Oberlin, Cleveland and Lake County to register people in Youngstown.“This is the medical questionnaire, and I’m going to read some instructions,” a registrar tells one person who has shown up to fill out the forms, which take about 15 minutes to fill out.Participants are asked their proximity to gas development, and about any current health symptoms – everything from levels of fatigue, nausea, and asthma, to whether they have a diagnosis of cancer, their mental health, and their family health history. Martin Senganec, age 60, who is a truck-driver, filled out the registration forms at a similar event in nearby Lowellville. He’s heard about a new frack waste injection well being permitted near his home. “I live less than a mile from what they’re building there, and I’m worried about it,” he said. Sengenec remembers the magnitude 3.0 earthquake near here five years ago, that Ohio regulators linked to fracking. He’s also concerned that this area has become a dumping ground for fracking wastewater, a high salinity, chemical-laced brine.  Sengenic doesn’t think the state is ensuring that his drinking water well will be protected from contamination.“They say it’s not going to harm. I have well water, all the people around here have well water, and that’s what I’m worried about. If that hurts that…once the well is contaminated, you can’t do nothing with it,” he said.

Hot, Toxic Mess: Fracking Waste, Injection Wells, and De-Icing “Brine” - Randi Pokladnik - On July 1, I attended an environmental community science meeting at the Ohio University Campus Eastern in St. Clairsville, Ohio. The meeting was to provide local citizens with scientific information regarding a proposed oil and gas waste Class II injection well to be located at the intersection of U.S. 40 and Ohio 331. This Class II injection well would accept produced water wastes from high pressure hydraulic fracking. This waste contains flowback water, the fluid used to frack a well. This fluid is a chemical cocktail that can contain benzene, arsenic, formaldehyde, lead, mercury, and many other proprietary chemicals.The liquid waste also contains toxic metals, radioactive materials, and brine resulting from contact with the ancient rock formation that is being fracked. As a well is fracked, millions of gallons of fracking fluids are injected deep into the rock strata. According to a 2018 study out of Dartmouth College, in just hours, radioactive Radium 226 and Radium 228 can be leached out of the rock and into the saline solution. As the brine is pulled to the surface to be disposed of, the water-soluble radioactive isotopes hitch a ride as well.  “More than 18 billion gallons of waste fluid from oil and gas is generated annually in the USA” according to the American Petroleum Institute. The waste is often referred to as Technically Enhanced Naturally Occurring Radioactive Materials or TENORM.   A Pennsylvania study found that produced water from a horizontal unconventional well can contain water soluble Radium-226 in concentrations ranging from 40- 26,000 pCi/L. The safe drinking water standard for Ra-226 and RA-228 is 5 pCi/L. This toxic radioactive waste is what is pushed down injection wells in Ohio. In addition, much of the waste injected into Ohio’s Class II wells comes from out of state sources (Pennsylvania and West Virginia).According to a study done by our allies at FrackTracker Alliance, Ohio has 226 active Class II injection wells. These wells dot Ohio’s landscape in and along the area of Utica and Marcellus drilling, as well as expand into Ashtabula, Trumball, and Portage counties to the north and Washington, Athens, and Muskingum counties to the south.FracTracker data shows that the top twenty wells within these 226 are accepting more waste each year, at least 24,822 barrels more annually. This is due in part to an increase in the horizontal distances drilled to frack a well. In the beginning of the fracking boom, most lateral lengths were approximately two miles, now they have increased to three to three and a half miles. These “super laterals” require more water to frack and therefore create more wastes or “produced water”.

As Risky Finances Alienate Investors, Fracking Companies Look to Retirement Funds for Cash – DeSmog  A year ago, Chesapeake Energy, at one time the nation’s largest natural gas producer, announced it was selling off its Ohio Utica shale drilling rights in a $2 billion deal with a little-known private company based in Houston, Texas, Encino Acquisition Partners. For Chesapeake, the deal offered a way to pay off some of its debts, incurred as its former CEO, “Shale King” Aubrey McClendon, led Chesapeake on a disastrous shale drilling spree. Shares of Chesapeake Energy, which in the early days of the fracking boom traded in the $20 to $30 a share range, are now valued at a little more than $1.50. Chesapeake, of course, is not alone in discovering that shale drilling can be financially disastrous for investors. In 2018, the top 29 shale producers spent $6.69 billion more than they earned from operations, an April report by Reuters concluded — a spending record racked up two years after investors began pushing shale drillers to start turning a profit. In December 2017, the Wall Street Journal found that shale producers had spent $280 billion more than the oil and gas they sold was worth between 2007 and 2017, the first 10 years of the shale drilling rush. “We lost the growth investors,” Pioneer Natural Resources CEO Scott Sheffield recently told the Journal. “Now we’ve got to attract a whole other set of investors.”Encino, which bought up Chesapeake Energy’s 900,000 acres of drilling rights in Ohio’s Utica shale in that $2 billion deal, may have found its “other” investors: the Canada Pension Plan Investment Board(CPPIB), which manages retirement funds on behalf of the Canada Pension Plan. “We’re not your typical private equity company in that the Canada pension plan is I think the third largest pension plan in the world,” Ray Walker, Encino’s chief operating officer, told attendees at last month’s DUG East shale industry conference in Pittsburgh. “They have a long-term view on capital and they don’t expect their funds to start declining — in other words more people [in Canada] are putting in today than will be taking out, and they don’t expect that to flip til 2050-plus.”

Speakers cite health hazards linked to petrochemical industry  -- Matthew Mehalik, executive director of the Breathe Collaborative in Pittsburgh, and Dr. Ned Ketyer, a pediatrician from Washington County, Pennsylvania, addressed a large audience at Lunch With Books at the Ohio County Public Library.  Wheeling is in the bull’s-eye for harmful effects from the petrochemical industry, Ketyer said, with fracking well pads expanding greatly and compressor stations growing rapidly in size and number.  Citing potential dangers of the industry, they said an ethane cracker plant now under construction in Beaver County, Pennsylvania, and proposed cracker plants in Belmont and Wood counties are expected to create significant negative health care impacts.  For example, Mehalik said experts predict health care costs in Ohio County would increase $1.3 to $3.1 million annually, or $46-94 million over 30 years, as a result of the three plants. He said 30-year costs nationally are projected at $3.6-8.4 billion.  The Ohio River will be “a conduit for pollution” from the Royal Dutch Shell cracker plant in Beaver County, Ketyer said, adding that air pollution exposures “are going to be significant” in areas downwind from the plant.  Ketyer said people in an area 1 to 4 miles from the plant face extreme exposure, with potential health problems such as upper respiratory irritation, shortness of breath, higher blood pressure and changes in cognitive function.

DOE Official Tells W.Va. Lawmakers Petrochemical Development is a Top Priority - West Virginia lawmakers heard testimony Tuesday from a top Department of Energy official that the federal government is prioritizing building out a petrochemical industry in Appalachia. Speaking in front of the Joint Committee on Natural Gas Development, Steven Winberg, DOE’s assistant secretary for fossil energy, told lawmakers his agency and the Trump administration believe the Ohio Valley is “on the cusp of an Appalachian petrochemical renaissance.” “Federal efforts are strong and continue to gain momentum,” Winberg said. “We also recognize that others are doing a lot and we believe that together we can make this Appalachian petrochemical Renaissance happen for the benefit of the industry, the region and the country.” West Virginia, Pennsylvania and Ohio sit on top of some of the country’s largest reserves of ethane-rich natural “wet” gas, which can be processed into the chemical and plastics feedstocks. According to a 2017 U.S. Department of Energy report, U.S. natural gas liquids production in the region is projected to increase over 700 percent in the 10 years from 2013 to 2023. Winberg said the federal government is devoting resources into ensuring pipelines, ethane storage and cracker plants are built in the region, including to get final investment in a proposed cracker plant in Belmont County, Ohio. Thailand-based PTT Global Chemical, and its partner South Korea’s Daelim Industrial Co., have applied for permits and purchased 500 acres of land in Dilles Bottom, just a few miles from both Shadyside, Ohio, and Moundsville, West Virginia, just across the Ohio River. About 30 miles northwest of Pittsburgh, Shell’s Monaca cracker plant is already under construction. It’s slated to produce 1.6 million tons of ethylene each year and permanently employ about 600 workers when done, according to the company. Winberg urged West Virginia lawmakers to invest now in preparing sites for possible cracker development. “What we need, ladies and gentlemen, is one of these crackers in West Virginia,” he told the committee. “These crackers are the anchor facilities that will drive job growth in this region.”

Braskem abandons proposed petchem project in West Virginia; will sell site | S&P Global Platts — Brazilian petrochemical producer Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia, and is seeking to sell the land that would have housed it, the company confirmed Thursday. "Due to a number of recent inquiries about its site in Parkersburg, Braskem has engaged a financial advisor to help evaluate strategic alternatives for the site," the company said, declining further comment. The decision is the latest reversal seen by proponents of the Appalachian Basin region's natural gas industry, who are seeking to attract international investment in the energy and petrochemical industries to the Mountain State. The project, announced in 2013, has been on Braskem's back burner for several years. In May last year Mark Nikolich, CEO of Braskem's US arm, Braskem America, said the project remained on hold pending progress on infrastructure, such as pipelines. The company had not found the right risk profile by that time, he said last year. Since then, Braskem has faced multiple other challenges. The company is facing fallout from a government report that linked its salt mining operations in Brazil to geological damages, leading to one cash freeze of R$3.7 billion ($973 million) and a lawsuit seeking a second freeze of R$2.5 billion ($657 million). Braskem's failure to file a required annual report for 2017 with the US Securities and Exchange Commission on time and uncertainty about an extension of a naphtha supply contract with Braskem co-owner Petrobras were among issues that held up a conclusion for more than a year, market sources said. Odebrecht has since filed for bankruptcy protection. .

'Game-changer' cracker plant in Wood County is off, but another developer could step up - WV MetroNews The developers of a proposed petrochemical cracker plant that generated buzz several years ago have officially withdrawn, state officials said, but they’re still working to encourage other possible developers.Then-Gov. Earl Ray Tomblin announced the possibility of a petrochemical complex in 2013, calling it a “game changer.”The site was a long-time chemical plant location south of Parkersburg. The site, most recently held by a company called SABIC was more than 300 acres.But the $4 billion cracker plant has never come to be as complications arose with the Braskem and Odebrecht companies that were behind it. The companies in 2015 said the project wasbeing reevaluated. Mike Graney, director of the West Virginia Development Office, was updating a group of lawmakers about recent contacts with natural gas developers when he described the status of the cracker project. “Braskem, who owned 380 acres, I think, in Washington Works, has agreed they are not going to build a cracker and they are quietly marketing that property,” Graney said. “And they really want to guide that decision because they’d like to see another cracker built so they’re marketing to that group of companies that could make that investment. So that’s big news. Big news because that’s sort of moving this thing forward.” A cracker plant separates ethane from natural gas into components for the polymer industries. “I think that site probably is one of the best opportunities for a cracker or other investment in the state of West Virginia,”  “It has everything on that site that you need. You have close to highways, we have rails, we have river transportation and naturally we have the airport, which doesn’t do anything for product but it does get executives in and out of the area.”

Babies Born Near Oil and Gas Wells Are 40 to 70% More Likely to Have Congenital Heart Defects, New Study Shows -  Proximity to oil and gas sites makes pregnant mothers up to 70 percent more likely to give birth to a baby with congenital heart defects, according to a new study.  Led by Dr. Lisa McKenzie at the University of Colorado, researchers found that the chemicals released from oil and gas wells can have serious and potentially fatal effects on babies born to mothers who live within a mile of an active well site — as about 17 million Americans do. The researchers studied more than 3,000 newborns who were born in Colorado between 2005 and 2011. The state is home to about 60,000 fracking sites, according to the grassroots group Colorado Rising. In areas with the highest intensity of oil and gas extraction activity, mothers were 40 to 70 percent more likely to give birth to babies with congenital heart defects (CHDs).  "We observed more children were being born with a congenital heart defect in areas with the highest intensity of oil and gas well activity," said McKenzie in a statement.  The study was more precise than previous reports about the link between oil and gas extraction and CHDs. The researchers studied families in which the pregnant mother lived near an active oil or gas well up to the second month of pregnancy, when fetal cardiac development takes place.  They also estimated the level of intensity of the oil and gas activity, determined exactly how close the pregnant mothers lived to the well sites, and ensured there were no other significant air pollution sources which could skew their results. One science journalist, on social media, called the study "extremely convincing." This study that found a 40-70% increased risk of congenital heart defects in children born close to oil and gas infrastructure is extremely convincing. They adjusted for all the things I wondered about when I first saw the headlines. — Dave Levitan (@davelevitan) July 19, 2019   Biologist Sandra Steingraber was among the experts on the dangers of fossil fuel extraction who pointed to the study as the latest evidence that allowing oil and gas wells to operate, especially near communities, is a public health hazard. "It's a strong study," Steingraber wrote on Twitter after reading the paper, noting that the researchers built on knowledge scientists already have about chemicals that are known to be harmful to prenatal health and that are released during fracking.

Joint W.Va. Legislative Committee Urged to Find Fix for Plugging ‘Orphan’ Wells | West Virginia Public Broadcasting - Members of the West Virginia Legislature heard testimony Monday in support of reviving policy solutions to address the state’s growing number of abandoned and unplugged natural gas wells. In an afternoon hearing in front of the Joint Standing Committee on Energy, representatives from an industry trade group, the West Virginia Department of Environmental Protection and the West Virginia Surface Owners' Rights Organization urged lawmakers to provide more resources to the WVDEP. There are more than 14,000 abandoned wells across the state. More than 4,500 are classified as “orphan,” which means they don’t have an operator. Sealing orphan wells falls on state regulators. Plugging one well can cost upwards of $60,000. “It’s a big number, and we haven't done a very good job, I think, as a state and as an industry addressing those,” said James Martin, director of WVDEP’s Office of Oil and Gas. One challenge is money. WVDEP gets funding for well plugging from a portion of each $150 well work permit application fee as well as any forfeited bonds. Martin said those funding streams generage, on average, $80,000 a year.  In 2018, the Legislature passed the natural gas “co-tenancy” law, which governs oil and drilling on properties owned by multiple people. It includes a provision with the potential to funnel millions of dollars into the state’s orphan well fund, but not for a few years. “For orphan wells specifically, we need significant and sustained funding to necessitate an appreciable level,” Martin said. “ At $80,000 a year we can plug one well here. So that's not going to address the 4,600 anytime soon.”

Philadelphia Energy Solutions files for bankruptcy after refinery fire- (Reuters) - Philadelphia Energy Solutions filed for Chapter 11 bankruptcy protection, the company said on Monday, its second such filing in less than two years, after a fire last month prompted it to close the largest refinery on the U.S. East Coast. Following the June 21 explosions and blaze, PES started shutting down the 335,000 barrel-per-day Philadelphia plant without a planned restart. Some 1,000 workers are being laid off. The company’s lenders agreed to provide up to $100 million in new financing to PES to usher it through the bankruptcy, it said. The agreement allows PES to “safely wind down our refining operations and, with the support of our insurers and stakeholders, best position the company for a successful reorganization, the rebuilding of our damaged infrastructure, and a restart of our refining operations,” Mark Smith, chief executive officer of PES Energy, said in a statement. PES could receive payouts of $1.25 billion in insurance claims connected to the fire and business closure, according to two sources briefed on the company’s policies. The potential payouts include $1 billion for property damage and $250 million for loss of business, the sources said. The insurance payouts were expected to be used as collateral for the new bankruptcy financing, the sources said. The refinery has struggled financially for years, slashing worker benefits and scaling back capital projects to save cash. PES filed for bankruptcy in January 2018 to reduce debt, but cash on hand dwindled even after the company emerged from the process later in the year.

Shipping companies sue Philadelphia Energy Solutions for $600,000 in unpaid bills (Reuters) - Three Greek shipping companies sued U.S. refiner Philadelphia Energy Solutions Inc (PES) for about $600,000, claiming the company did not pay them for fees incurred by crude oil tankers chartered earlier this year, court documents showed. The lawsuit, entered into New York Southern District Court on Friday, just days before PES, the largest refinery in the East Coast, filed for Chapter 11 bankruptcy protection following a fire that damaged its 335,000 barrel-per-day refinery. PES exited bankruptcy in August and has struggled financially for several years. Bayview Shipping Co S.A., Skyview Marine Co S.A., and Gulfview Shipping Co S.A. are seeking a total of $605,160, chartering crude vessels, interest, legal fees and other costs they say PES was responsible for under the charter agreements. The cargoes, chartered between February and April, were loaded with N'Kossa crude oil, according to the lawsuit. N'Kossa crude is produced in the Republic of the Congo and is typically lifted as N'Kossa Blend which is a blend of N'Kossa and Kitina crude grades. At least two of the cargoes were loaded from the Djeno Terminal, according to the lawsuit, which is operated by French oil and gas company Total. PES was not immediately available for comment.

Pennsylvania court issues split decision on Marcellus Shale natural gas drilling rules - - A state court on Monday upheld portions of Pennsylvania regulations that address Marcellus Shale natural gas drilling, although the judges also sided with some of the arguments made by an industry group. The seven-judge Commonwealth Court panel's 91-page decision concerns a lawsuit brought by the Marcellus Shale Coalition against the state Department of Environmental Protection and the Environmental Quality Board. The judges said state officials were not authorized to require restoration of sites to their approximate original conditions within nine months of when drilling has ended. The agencies did not persuade the judges that they have the power to require well operators to monitor wells near their drilling operations, even if they do not have the right to go on those properties and plug them if needed, Judge Kevin Brobson wrote for the unanimous court. But the judges sided with DEP and the board in other respects, including on rules for liquid impoundment ponds and how drillers must respond when nearby wells are affected by their activity.

US Gas Economics Set to Fall Below $3 - U.S. natural gas economics will reach below $3 per million British thermal units (MMBtu) within the next decade, McKinsey Energy Insights reported Tuesday. According to McKinsey’s newly released 2019 North American Gas Outlook, North American gas demand will increase approximately 32 percent by 2030 – from 95 billion cubic feet per day (bcfd) to 125 bcfd. The firm contends the period will be marked by ample supply, escalating gas exports from North America and new domestic gas demand growth. McKinsey’s report also predicts that 20 bcfd of North American gas demand growth will come from gas and liquefied natural gas (LNG) exports. It also anticipates that coal-fired plant retirements will help gas’ share of the power mix to grow by 5 bcfd; however, it includes the caveat that renewables will start to displace gas after 2025 amid power sector decarbonization. “North American is endowed with abundant gas resources, which will play a major role in the energy mix domestically and provide security of supply through LNG to Europe and Asia,” Dumitru Dediu, partner at McKinsey, said in a written statement emailed to Rigzone. “We see over 1,000 trillion cubic feet of gas resources – which is sufficient to meet demand for the next two decades – at cost economics well below $3 per MMBtu.” The report assumes that gas production from Appalachia will grow to approximately 55 bcfd and supply roughly 40 percent of the North American market by 2030. Consequently, it projects that Appalachian gas output will displace the Western Canadian Sedimentary Basin and Rockies in the Midwest and supply the southern Mid-Atlantic region. “The building of pipeline infrastructure post-2023 will ensure Appalachian supply will continue to grow and limit price fly-up potential,” McKinsey stated. Also, the firm expects associated gas production – primarily from the Permian Basin – to increase by approximately 12 bcfd and supply one-quarter of the North American market by 2030. It pointed out that Permian production will limit southward gas flows from Appalachia, helping to meet LNG export demand on the U.S. Gulf Coast.

Listen: How fears of a US recession could impact spending in the US natural gas midstream sector – podcast - S&P Global Platts senior natural gas writer Harry Weber and Americas natural gas managing editor Joe Fisher discuss the outlook for the US midstream sector as fourth-quarter 2018 earnings reporting season begins, from the appetite for further major pipeline projects to the markets that will be served by increasing gas production to the impact LNG export growth will have on the industry.

Hotter Weather Trends End Natural Gas' Losing Streak - After closing lower every day last week natural gas prices ended the streak of down days today, with the prompt month August contract moving around 6 cents higher on the day. Hotter weather trends were the primary reason for the move higher. This was precisely the risk that we alerted clients to in our Pre-Close Update back on Friday. Indeed, after tagging our 2.25 target in Friday's session, buyers stepped back into the market after weekend weather models revealed that cooler weather would be confined to the current week, with above normal temperatures becoming more widespread again to end July and start the month of August. This gives us just a handful of days that are projected to be below normal in terms of weather demand (GWDDs). In terms of forecast changes, here is the change in GWDDs compared to the forecast back on Friday: 

Natural Gas Futures Post Small Gain as EIA Report Seen ‘Failing to Move the Needle’ - An on-target storage report from the Energy Information Administration (EIA) gave neither the bulls nor the bears much to feast on Thursday as futures gained slightly on the day. In the spot market, prices pulled back somewhat in the hot Southwest, while milder temps accompanied small adjustments in the Midwest and East; the NGI Spot Gas National Avg. added 3.5 cents to $2.080/MMBtu. The August Nymex futures contract, set to expire Monday, added 2.4 cents to settle at $2.244 after trading in a range from $2.222 up to $2.261. September settled at $2.227, up 2.5 cents, while October gained 2.6 cents to $2.253. The relatively tight trading range coincided with daily fundamentals data that offered little in the way of new information to change the market’s outlook,   Liquefied natural gas (LNG) demand “remains off its highs as well, and burns showed little change” compared to Wednesday, “still running a little stronger than last week on a weather-adjusted basis” but lower in absolute terms given milder temperatures,   The EIA on Thursday reported an on-target 36 Bcf injection into U.S. natural gas stocks for the week ended July 19, versus a 27 Bcf injection recorded in the year-ago period and a five-year average 44 Bcf build. After a long string of above-normal builds earlier in the injection season, this week marks the second straight EIA report to come in below the five-year average. Prior to Thursday’s report, estimates had been pointing to an injection in line with the actual figure. A Bloomberg survey had showed a median 37 Bcf, while Intercontinental Exchange futures had settled at 35 Bcf. NGI’s model predicted a 33 Bcf injection.Total Lower 48 working gas in underground storage stood at 2,569 Bcf as of July 19, 300 Bcf (13.2%) higher than last year but 151 Bcf (minus 5.6%) lower than the five-year average, according to EIA.  By region, the Midwest injected 23 Bcf on the week, while the East saw a net injection of 14 Bcf. Farther west, the Mountain region refilled 4 Bcf, while the Pacific on net grew its inventories by 3 Bcf. In the South Central, a 17 Bcf withdrawal from salt stocks was partially offset by a 9 Bcf injection into nonsalt, EIA data show. A combination of higher LNG feed gas demand and stronger power burns has seen injections “begin to normalize” during the last two report weeks, according to analysts with Jefferies LLC. “From the end of March until two weeks ago, 1.4 Tcf of gas was injected into storage, 45% above the five-year average of 0.9 Tcf,” the Jefferies analysts said. “...Lower prices are clearly impacting power burn, as July has averaged 40.4 Bcf/d, a new monthly record and up 1.1 Bcf/d year/year.” This year “has already seen 11 days of 40-plus Bcf/d power burn versus only nine in all of 2018. Power burn continues to exceed prior year levels despite” cooling degree days (CDD) coming in about 10% lower summer-to-date. “Even with this month’s hot weather, CDDs are still down around 2% year/year in July.”

Breaking Down Today's In-Line EIA Report  - Natural gas prices trade in a fairly tight range of just under 4 cents today, despite being an "EIA report" day. The August contract settled just over 2 cents higher on the day. One reason for the lack of significant movement? Today's EIA report, despite the uncertainty around how much influence Hurricane Barry would have on the number, wound up almost dead on with the consensus market estimate, with last week's build being 36 bcf. The draw in the salts was very impressive, but the overall report, while a lower build than the 5-year average, was reflective of supply demand balance that are still too loose to support a move higher, as seen when looking at the trend line of this same gas week in recent years. In fact, despite prices still being at historically low levels and a July that turned out to be a top-tier hot month in terms of national demand, end-of-season storage forecast have still not made a move lower, as the supply / demand balance has not tightened like what typically is observed with prices this low. As the saying goes, "low prices is the cure for low prices", and at some point that will again be true, but we have not reached that point as of this writing. Recent weather trends are introducing another potential cooler push in the medium range, placing some "blues" back in our 11-15 day forecast today. That will not help the bullish case as long as cooler trends persist. Having said all of that, it is just the 25th of July, meaning there is plenty of time between now and the end of injection season, and as we know here in the world of natural gas, things can change quickly.

Natural Gas Prices Move Closer To Last Month's Multi-Year Lows -  Natural gas prices continue to take a beating, with the August contract closing just a penny higher than last month's multi-year low for prompt month price. The contract was down 7.5 cents on the day today, settling at $2.169. As we mentioned in yesterday's post, while the EIA number in yesterday's report was almost exactly on par with market expectations, it was reflective of supply / demand balances that are still insufficient to allow prices to rally. The weather forecasts have been moving cooler as well, lowering forecast natural gas demand. We had outlined in our reports yesterday that we could see a continuation of that trend into today, and that proved to be correct, with our forecast moving 4.5 Gas-Weighted Degree Days cooler / lower. There are still some hotter than normal days on the way, but the dip in forecast demand is quite evident out in the 11-15 day time frame. In map form, it shows up even better, with larger coverage of below normal forecast temperature anomalies. The question is, how long will the cooler weather pattern hold? And will the lower price change supply / demand balances such that we can put in a price floor even with cooler weather trends? We can help answer these questions and more. Sign up for a 10-day free trial here and take a look at what our latest research indicates.

Energy regulators divided over natural gas and climate change - Regulatory decisions about America’s bounty of natural gas are in the hands of an obscure and understaffed federal agency with a limited mandate to think about climate change.   With America’s production of oil and natural gas soaring and Congress not acting on climate change, the once-sleepy Federal Energy Regulatory Commission is finding itself at the center of protests and lawsuits. Interviews with all 4 FERC members illustrate their division over how to handle greenhouse gas emissions.  Democratic FERC Commissioner Richard Glick wants to require companies seeking approval for pipelines and liquefied natural gas (LNG) export terminals to offset significant greenhouse gas emissions, similar to the way companies compensate for more traditional environmental impacts like creating wetlands. Natural gas is cleaner than coal and oil, but as a fossil fuel it still emits heat-trapping emissions.  “I just fundamentally disagree with Commissioner Glick on this matter,” said Neil Chatterjee, the panel's Republican chairman. “The approach the commission has been taking is what we are statutorily obligated to do.”  Chatterjee pointed to the commission’s February approval of a gas export terminal, calling it a “breakthrough” because it was the first in two years and because it listed the greenhouse gas emissions associated with the project. (Glick dismissed the move as "window dressing.")  The FERC's relatively limited legal authority is in the economic realm and rests largely on 2 nearly century-old laws — the Federal Power Act and the Natural Gas Act — that aren't environmentally focused. It's also short-staffed. Normally, it should have 5 commissioners; today it's at 4 and it's about to drop to 3. Democratic Commissioner Cheryl LaFleur is resigning next month (against her will).  LaFleur has struck the most centrist position and often cast the commission’s tie-breaking votes. She supports Glick's idea. "Certainly it’s potentially within our legal bounds," LaFleur said. "I think ultimately the courts are very likely to decide that." Indeed, recent court rulings have indicated FERC should do more to contend with the emissions associated with fossil-fuel projects; currently, the agency requires most companies to list them but nothing more. “If you listen to what’s going on in the courts, we’re going to have to have carbon offsets or something like that at some point soon,” said one natural-gas executive who works closely with the agency. Experts say Glick's idea is unlikely to go anywhere, at least under GOP leadership in Washington.

Fracking likely to result in high emissions - Natural gas releases fewer harmful air pollutants and greenhouse gases than other fossil fuels. That's why it is often seen as a bridge technology to a low-carbon future. A new study by the Institute for Advanced Sustainability Studies (IASS) has estimated emissions from shale gas production through fracking in Germany and the UK. It shows that CO2-eq. emissions would exceed the estimated current emissions from conventional gas production in Germany. The potential risks make strict adherence to environmental standards vital.In the last ten years natural gas production has soared in the United States. This is mainly due to shale gas, which currently accounts for about 60 per cent of total US gas production. Shale, a fine-grained, laminated, sedimentary rock, has an extremely low permeability, which in the past made it difficult - and uneconomical - to extract.However, recent advancements in horizontal drilling and hydraulic fracturing have opened up previously unrecoverable shale gas reserves to large-scale, commercial production.In light of experiences in the US and dwindling conventional gas reserves, the debate on shale gas has also taken centre stage in Europe. The purported climate advantages of shale gas over coal and the implications for domestic energy security have made fracking in shale reservoirs an interesting prospect for many European countries.  IASS researcher Lorenzo Cremonese led a study that investigated the greenhouse gas and air pollutant emissions (including carbon dioxide, methane, carbon monoxide, nitrogen oxides, particulates and other volatile organic compounds) expected to result from future shale gas production in Germany and the UK.  While methane leakage rates for the optimistic scenario approximate official figures in national inventories, the rates for the realistic scenario exceed them by a large margin. The emission intensity of shale gas in electricity generation is up to 35 per cent higher than estimates of the current emission intensity of conventional gas in Germany. The study also questions the accuracy of methane leakage estimates for current conventional gas production.

Zoning ordinance tabled over hazardous pipeline concerns -A major update to Boyle County’s zoning ordinance was tabled again this week, after the grassroots group Citizens Opposed to the Pipeline Conversion raised concerns over how it would alter regulations for hazardous pipelines. “I think there are shortcomings in the proposed ordinance that were not thoroughly considered,” said Mark Morgan, a Danville attorney who has been a leader in the COPC. Boyle County’s P&Z regulations concerning hazardous materials in pipelines dates back to 2015. That’s when the COPC got the P&Z Commission to require any company wishing to pipe hazardous materials through the county to get a conditional-use permit. The move was intended to protect against a plan from Houston-based energy giant Kinder Morgan, which intended to use Tennessee Gas Pipeline No. 1 to transport “natural gas liquids” — highly explosive byproducts of oil fracking — from northern Ohio to the Gulf Coast. A Kinder Morgan representative admitted to COPC members and other local residents that it had chosen Pipeline No. 1 rather than trying to pipe the fracking byproducts along the eastern coast because the company thought it would face less opposition from a less educated, less activist population, Morgan alleged during Wednesday’s hearing. Instead, they ran into far more opposition than they imagined in Boyle County. Ultimately, Kinder Morgan abandoned its plan to repurpose the pipeline, which currently carries natural gas. “They said it was due to economic reasons, which I think is absolutely correct,” Morgan said. “I think we were one of the economic reasons.”

Green’ Coalition Asks Burlington Freeholders to Block SRL Pipeline - Foes of the Southern Reliability Link are turning to the Burlington County board of freeholders to put a stop to the project by denying the pipeline project a permit to build along its county roads. New Jersey Natural Gas is already building the nearly 30-mile pipeline through parts of the 1-million-acre Pinelands National Preserve, even though the issue is still tied up in ongoing litigation by opponents. A coalition of 23 conservation groups led by the Pinelands Preservation Alliance is asking the board to exercise its authority to deny any permit, in this case a construction approval, in the interest of public safety. “If the freeholders conclude that the proposed route is unsafe and unnecessary, it is entirely within the board’s authority to reject a permit and easement for the job,’’ the letter from the groups argued. The pipeline, initially approved back in 2016 by the state Board of Public Utilities and challenged in court, is designed to provide more dependable gas delivery to New Jersey Natural Gas customers should there be major disruptions in other pipelines crisscrossing the state.The issue has become increasingly heated and a major headache for the Murphy administration, as most of the state’s most prominent environmental groups are urging a moratorium on new fossil-fuel projects to curb significantly greenhouse-gas emissions in New Jersey. There are about nine gas-pipeline projects pending, as well as four proposed natural-gas power plants. Critics contend those projects are not needed, given the administration’s goal to transition to 100 percent clean energy by 2050.

Federal appeals court hears arguments in South Portland pipeline case -  The city of South Portland is blocking the Trump administration’s push to promote cross-border transmission of crude oil from Canada to the coast of Maine, a lawyer for the Portland Pipe Line Corp. argued Tuesday in federal appeals court in Boston. The city’s attorney argued that if the court backs the company’s appeal, it would effectively create a nationwide exemption from zoning restrictions for any new oil pipelines installed anywhere, including in residential areas. The 1st U.S. Circuit Court of Appeals heard oral arguments Tuesday in the pipeline company’s effort to overturn a 2018 federal district court ruling that upheld South Portland’s 5-year-old Clear Skies ordinance. A ruling is expected in the coming weeks or months. The ordinance, approved by the South Portland City Council on July 21, 2014, effectively blocked the company from potentially reversing the flow of its pipeline to bring crude oil from western Canada to its shipping terminals on Portland Harbor. Since the company filed its lawsuit in February 2015, the city has spent $2.4 million defending the ordinance and received $173,603 in donations to its Clear Skies Legal Defense Fund. The company contends that the ordinance is preempted by state and federal law, violates the Commerce Clause of the Constitution and adversely impacts national and international oil trade. The clause gives Congress the power to regulate interstate and foreign trade. The company’s lawyer argued Tuesday that the city should not be allowed to block the Canadian-owned subsidiary of ExxonMobil, Shell and Suncor Energy from bringing crude into the United States from the pipeline’s northern terminus in Montreal.

Southbridge hires lawyer to address LNG plant proposed in Charlton - The Town Council has hired a lawyer to represent the town’s interest in a proposed and controversial $100 million liquid natural gas plant along Charlton’s energy corridor on Route 169. Liberty Energy Trust, operating under Northeast Energy Center LLC, seeks to construct an LNG plant on 12 acres at 304 Southbridge Road, Charlton, near Millennium Power, close to the Southbridge town line. The company wants to develop a plant that will liquify, store and load natural gas into trucks. The company is seeking exemptions from Charlton zoning bylaws. Approval has been sought from the state’s Energy Facilities Siting Board, an independent board that reviews proposed large energy facilities. On July 15, Town Council voted to appoint lawyer David McKay, an environmental specialist from the firm Mirick O’Connell. Mr. McKay will represent Southbridge as an intervener during the siting process.In an interview, Town Manager Ronald San Angelo said that councilors have been discussing just how involved the town wants to be in the case. “Southbridge has an interest because, even though the facility is not in Southbridge, God forbid something bad ever happened at that facility. We would be called to provide police and fire backup, and, because it’s so close to the line, it could have an impact on our residents,” Mr. San Angelo said. “The council wants to understand what the issues are in this case.”

Trump LNG rule: Will it address 'catastrophic' risks? -- For years, researchers have warned that stored materials at liquefied natural gas export facilities could pose a risk of catastrophic explosions and potentially be a threat to the public.  But the issue is unlikely to be addressed when the Trump administration publishes a proposed revamp of the regulations governing LNG safety this September, according to industry watchers.Instead, the upcoming proposed rule from the Pipeline and Hazardous Materials Safety Administration (PHMSA), which oversees LNG facilities, is likely to focus on streamlining U.S. regulations and harmonizing them with those in other countries (Energywire, April 11).Additionally, a PHMSA-led working group on LNG safety in Baltimore last fall suggested it could take two years to fully assess an "evaluation protocol for non-LNG release hazards," according to a presentation on the agency's research and development priorities. That timeline would put action on the issue far beyond the intended release of updated rules."There is no process in place to evaluate the suitability of the software models to calculate these hazards," and work should be done to figure out how to assess the accuracy of such models, attendees at the Baltimore meeting concluded.The details of the rule could have long-lived safety implications, considering that multiple LNG terminals now on the drawing board in the United States will likely remain in service for decades.The United States has a dozen LNG import facilities that have been built over decades of domestic natural gas use, but the shale gas boom of the last 10 years has triggered a flurry of development around new export facilities. The first of those, Cheniere Energy Inc.'s Sabine Pass LNG terminal, began commercial operations in 2016, and by the end of this year, five more are expected to be up and running. Another six export projects are fully permitted, but developers have yet to announce plans to build.The PHMSA rule overhaul comes at the direction of an April executive order, in which President Trump highlighted the complete turnaround in the U.S. LNG industry."New LNG export terminals are in various stages of development, and these modern, large-scale liquefaction facilities bear little resemblance to the small peak-shaving facilities common during the original drafting of [the LNG rules] nearly 40 years ago," the executive order said.PHMSA's mandate for the overhaul is vague, saying only that the regulator should "update" the relevant portion of the federal codes and that the process "shall use risk-based standards to the maximum extent practicable." While it's uncertain what the agency will do to address explosion risk, it has acknowledged the issue.

NATURAL GAS: Cheniere to feds: Cold weather contributed to spill -- E&E News -- - Cheniere Energy Inc. says unusually cold temperatures on the Louisiana Gulf Coast in January 2018 played a role in leaks from its liquefied natural gas tanks discovered a few days later.

Offshore GOM Operators Returning to Normal - Offshore oil and gas operators in the Gulf of Mexico (GOM) are resuming normal operations following tropical storm Barry, according to the Bureau of Safety and Environmental Enforcement (BSEE). Of the 669 manned platforms in the GOM, a total of 20, or 2.99 percent, remained evacuated as of Saturday, BSEE revealed, citing data from offshore operator reports. This figure stood as high as 42.3 percent, or 283 platforms, on July 14. Personnel have returned to all previously evacuated non-dynamically positioned DP rigs in the region, according to BSEE. The organization estimates that approximately 3.32 percent of oil production and 7.35 percent of gas production in the GOM remained shut-in as of Saturday. On July 14, BSEE estimated that approximately 72.82 percent of GOM oil production and approximately 61.68 percent of GOM gas production was shut-in. “Now that the storm has passed, facilities will continue to be inspected,” BSEE said in a statement posted on its website on July 20. “Once all standard checks have been completed, production from undamaged facilities will be brought back online immediately. Facilities sustaining damage may take longer to bring back on line,” BSEE added.

Deepwater GOM Pipeline System Starts Up - Williams reported Wednesday afternoon that it has acquired and placed into service the 16-inch Norphlet deepwater gathering pipeline system constructed by Shell Offshore Inc. and CNOOC Petroleum Offshore U.S.A. Inc. According to a written statement from Williams, the Norphlet system extends 54 miles (87 kilometers) from the Shell-operated Appomattox Floating Production System (FPS) in 7,400 feet (2,256 meters) of water to the Transco Main Pass 261A junction platform. The Transco platform is located approximately 60 miles (97 kilometers) south of Mobile, Ala., and first gas delivery occurred on June 22, 2019, added Williams. “We are excited to participate in this Jurassic development with Shell and CNOOC,” Williams President and CEO Alan Armstrong said on his company’s behalf. “Shell has exhibited a tremendous history of successful large-scale developments across the Gulf of Mexico and early indications here are for that to continue in the Jurassic play with their additional discoveries.” Shell reported in May of this year that it had begun production from the Appomattox FPS, noting that the milestone heralded a “new frontier” for the deepwater U.S. Gulf of Mexico. The Norphlet system can gather an estimated 261 to 291 million cubic feet per day of natural gas and connects more than 33,000 acres of dedicated leases to Williams’ Mobile Bay processing facility via the Transco lateral at the Main Pass 261A platform, Williams stated. Also, the company noted the system features a spare subsea connector for additional FPS volumes and modifications at the Mobile Bay facility that expanded slug handling capacity by 118 percent and stabilizing capacity by 329 percent. 

US GOM Drillship Market Picking Up Steam - The U.S. Gulf of Mexico drillship market is picking up steam, according to Westwood Global Energy Group. As of mid-July, marketed utilization of the 25-rig fleet stood at 96 percent, with 24 units either working or committed to begin contracts in the next few months, Westwood highlighted on its website. Contracted utilization in July 2018 stood at 76 percent. Westwood has predicted that utilization will remain in the 95-100 percent range, “assuming rig owners do not shoot themselves in the foot by mobilizing a large number of rigs to the region on speculation, something that has occurred a time or two in the past”. Last month, Westwood outlined that the global offshore rig market appears to have emerged from “one of the worst” downturns in its history. “Over the coming months and years, demand is expected to continue to increase as a backlog of delayed projects continues to be worked through and aging, under-spec rigs continue to be retired,” Westwood said in a statement posted on its website at the time. “Whilst, even in the most optimistic scenario, it seems unlikely that the offshore rig market will return to the heights of the previous upturn, there should no-doubt be cautious optimism,” Westwood added.

Oil, gas drilling plans for Gulf of Mexico concerns local representatives – More oil and gas drilling could start to happen in the Gulf of Mexico. The Department of the Interior says it plans to lease millions of acres for oil and gas exploration. While the Trump administration says it’s a safe way to make use of what the country has, critics say it brings the Gulf closer to an oil disaster. It’s been almost 10 years since the Gulf oil spill, but even now some are leery about allowing more drilling even though the administration says it’s safe and economically sound. Sail into the Gulf of Mexico and you may soon see more of oil rigs. The Department of the Interior says it plans to lease 77.8 million acres for oil and gas drilling starting in August. “It is a threat anywhere because you cannot ensure those rigs will be safe,” said U.S. Rep. Kathy Castor. The Florida Democrat isn’t happy with the announcement. “The BP deepwater horizon disaster proved the point that a spill anywhere in the Gulf of Mexico is detrimental,” Castor said. But in a statement, Secretary of the Interior David Bernhardt says the Trump administration “is laser-focused on developing our domestic offshore … resources in an environmentally conscious manner.” The department says any projects will have measures “to protect biologically sensitive resources (and) mitigate potential adverse effects on protected species.” “We don’t think the Trump administration is paying close attention to how the oil and gas industry operates in sensitive areas,” said Athan Manuel, director of the Sierra Club’s Lands Protection Program.

Industry group says jurisdiction battles steal resources from taxpayers, oil and gas companies -  For several years, the state of Louisiana has been faced with numerous battles between parishes and the oil and gas companies over the topic of climate and coastal erosion; now, one judge’s decision has moved one of these lawsuits back to state court. Tyler Gray, president and general counsel of the Louisiana Mid-Continent Oil & Gas Association, believes the forum shopping by plaintiffs within the legal system is a flawed strategy that will only end in more damages to the state’s business climate and residents.“The ruling is another procedural step in the judicial process, which unfortunately takes time and resources away from what could be collaborative efforts working towards real solutions for our coast,” Gray told Louisiana Record. “As we’ve learned from the Levee Board lawsuit and many years of litigation involving this case, the solutions to securing our coast will not be found in the courtroom.” According to, Judge Martin L.C. Feldman recently decided that the Plaquemines Parish’s lawsuit against the oil and gas industry should be returned to state court rather than being heard in federal court. Based on the parish’s allegations, the oil and gas industry has violated the Louisiana State and Local Coastal Resources Management Act by failing to repair the wetlands they have disrupted following industry operations. Following Feldman’s announced decision, the oil and gas industry has already decided that they will appeal it, in the hopes of returning to federal court.  The situation as a whole is highly controversial, with some groups believing that this is a state matter that should be sorted within Louisiana jurisdiction, while others are fighting for a federal hearing, claiming that it has wider-spreading implications.

SOWELA receives $1 million for new TC Energy Pipeline Academy (KPLC) - A big announcement from SOWELA Technical Community College where they are getting a million-dollar donation and a new oil and gas pipeline training academy.It will be the first in the state and only the third in the nation.From process technology to nursing, SOWELA plays a major role in training the workforce for Southwest Louisiana. Now, SOWELA will have an outdoor training pipeline and academy for students to learn all facets of the industry. TC Energy has donated $1 million to fund it.“They actually will build an actual pipeline training loop. This is an actual real pipeline, it carries no material, but it will be built on campus so individuals can come and train on actual pipeline. There’s classroom equipment, they provide funding for the instructor, and some of the planning that million dollars will be used for,” said SOWELA Chancellor Neil Aspinwall. "Most of the petrochemical industries, the huge pipelines that enter and exit those facilities--someone has to maintain them, someone has to design them, someone has to fix them if something's wrong. So, there's wonderful jobs there, good paying jobs. So, this program will help train the workforce for this industry," said Aspinwall.

Permian Fracking Activity Underreported in 2018 - Operators in the Permian have been failing to report the completion of some oil wells, according to one data analytics company.  Hydraulic fracturing (fracking) activity was underreported by 21 percent in the U.S.’ most prolific basin in 2018, according to Kayrros, a data analytics company serving the energy markets.  In findings released Tuesday, Kayrros claims that more than 1,100 wells were completed in the Permian Basin but not reported through state commissions or FracFocus – a public repository for information on chemicals used during fracking.  Kayrros said it uses optical and synthetic aperture radar imagery tracking along with proprietary algorithms to identify rigs and frack crews. Using those methods, they counted a total of 6,394 completed wells in the Permian in 2018 – a 21 percent increase from the FracFocus estimate of 5,272 wells as of June 20, 2019.  The discrepancy in the reported wells means the industry has failed to capture the full scale of fracking, Kayrros contends. This implies two things:

  • Oil inventory is smaller than believed – Kayrros estimates the Permian’s drilled but uncompleted (DUC) wells inventory is 1,000 wells each month with most of the rolling inventory coming from regular drilling and completions operations. Over time, the number of drilled wells matches completed wells, leaving DUC inventories unchanged. The belief that shale operators have a large backlog of DUCs that can quickly be brought to production in the event of an oil crisis without further drilling is misleading
  • Transformation of perception of light tight oil economics – Based on Kayrros’ measurements, the average well is less productive and of higher cost than what is reflected in public data

“For all its revolutionary impact on the oil industry, shale remains poorly understood,” Kayrros chief analyst and cofounder Antoine Halff said in a release sent to Rigzone. “Publicly available data based on old-fashioned company reporting have their limits. Hard measurements unlocked by new data technologies show that contrary to public belief, there is no great buildup of DUCs just waiting to be brought online. The whole idea that the market can rely on this sort of de facto spare production capacity is an illusion. The industry is actually running on a much tighter leash than that.”

Historic horizontal well in Permian Basin completed (AP) — Drilling of the longest horizontal oil and gas well in the history of the Permian Basin has been completed as booming oil production in the region continues to center around shale in southeast New Mexico and West Texas. The Fort Worth, Texas-based Basic Energy Services recently announced the well was completed in the Wolfcamp, The Carlsbad Current-Argus reports . Wolfcamp is shale of the Delaware Basin, which sits below most of New Mexico’s Eddy County and the southern half of the state’s Lea County. Records show the well also encompasses portions of Culberson, Reeves and Loving counties in Texas. The job was completed for Houston-based Surge Energy, and frac plugs were drilled out to around 3.4 miles (5.4 kilometers). “We are honored to partner with an innovative (exploration and production) company like Surge to deliver these record-setting results,” said Brandon McGuire, vice president of Basic’s Permian operations. “Reaching this milestone with our customer displays our leadership in well servicing for complex, long lateral completions in the Permian Basin.” 

Electric Fracking Could Take Over The Permian -- Shale production in West Texas continues to boom--so much so that shale oil and gas producers in the Permian Basin have more than they know what to do with. As production continues to outpace the expansion of sorely needed pipeline infrastructure, local operators in the Permian are letting approximately 104 billion cubic feet of natural gas go to waste each year by flaring, what is essentially just burning the gas away, instead of putting it on market.  For many producers in the Permian, this has led to diminishing profits. One such company is Houston-based oilfield service company Baker Hughes. The company’s first quarter profit also took a nosedive, clocking in at $32 million--less than half of its profits for the same period a year earlier, when Baker Hughes reported a profit of $70 million. On top of this major decline in profits, last month the company “ reported negative free cash flow for the first quarter at a time energy investors have been pushing companies to aggressively shore up capital for dividends and buybacks, sending its shares down as much as 8.5 percent” according to Reuters.  However, despite these dismal numbers, things are looking up for Baker Hughes. CEO Lorenzo Simonelli told investors in a call on Tuesday that he sees all of the burned off natural gas wasted by his company and so many others as a byproduct of their oil drilling as a major business opportunity. The company is debuting a new, cutting-edge technology that will harness this otherwise wasted gas to power their hydraulic fracturing equipment in the Permian Basin in West Texas. Simonelli announced to investors this week that his company will be forging a new path in fracking by introducing a revolutionary fleet of “electric frack” turbines that will “use excess natural gas from a drilling site to power hydraulic fracturing equipment — reducing flaring, carbon dioxide emissions, people and equipment in remote locations” according to reporting by the Houston Chronicle. During a Tuesday call with investors Simonelli characterized the new strategy as an across-the-board win for their customer base, saying, “We’re solving some of our customers’ toughest challenges such as logistics, power and reducing flare gas emissions with products from our portfolio.”

Second Round of Lawsuits Targets Permian Highway Pipeline - A second round of lawsuits are underway in an effort to stop a massive natural gas pipeline from running right through the Texas hill country. Hays County is teaming up with landowners and conservation groups, threatening to sue the U.S. Army Corp of Engineers, the U.S. Fish and Wildlife Service and Kinder Morgan. Now, the energy giant behind the project is firing back. San Marcos resident Rachel Haggard is worried the proposed Permian Highway Pipeline could threaten her favorite, natural swimming spot. "No matter what kind of precautions you take, there's always a risk of pollution," said Haggard. The worry extends beyond the banks of the river. Signs protesting the project can be found all around town. A failed round of lawsuits by opponents have inspired a second round. This time, Attorney David Smith is representing groups targeting Kinder Morgan's permitting process. "They're doing less than the bare minimum," said Smith. Smith claims the energy giant behind the project has applied for permits that only cover about three percent of the 430-mile natural gas pipeline. "What Kinder Morgan wants to do, is they want to get Fish and Wildlife Service's blessing, coverage, if you will, for the entire pipeline," said Smith.

Pipeline operator sues to block Kyle regulations - - Kinder Morgan, a pipeline operator working to build a 430-mile natural gas line slicing across Hays County, has asked a federal judge to block a Kyle ordinance that regulates the construction and operation of pipelines in the city.The lawsuit argues that the Kyle regulations, enacted three weeks ago, violate federal and state law and should be struck down. ″(Kyle officials) passed the ordinance that runs roughshod over federal and Texas law, ignores the regulatory schemes that have been in place for decades, and imposes criminal penalties for alleged violations,” said the lawsuit, filed Monday in Austin. Houston-based Kinder Morgan also filed a complaint with the Texas Railroad Commission, a state agency that regulates pipelines, arguing that the Kyle ordinance subjects pipeline operators to excessive fees and should be invalidated. The lawsuit, the latest in a series of legal battles over the Permian Highway Pipeline, was “not unexpected,” Kyle Mayor Travis Mitchell said. “We will confer with our legal team in the coming days and decide the best course of action,” Mitchell said.Last week, Hays County, the Travis Audubon Society and three landowners notified Kinder Morgan that they intend to file a federal lawsuit seeking to stop construction of the Permian Highway Pipeline, a $2 billion project designed to transport natural gas from the Permian Basin to the Gulf Coast.The 60-day notice of a potential lawsuit, required by federal law, argued that Kinder Morgan failed to obtain permits needed under the Endangered Species Act and other U.S. laws to run a 42-inch pipeline — expected to move 2 billion cubic feet of natural gas a day — through environmentally sensitive areas in Central Texas and the Hill Country. In addition, a separate lawsuit filed in state court argued that the pipeline will be dangerous and that the Railroad Commission failed to create a proper permitting process before allowing land to be condemned for the project.

Wisconsin tribe sues Enbridge, claims Line 5 trespassing on reservation - - A Wisconsin tribe wants a federal judge to remove Enbridge Energy’s Line 5 from their reservation on claims the Canadian company is trespassing and endangering their lands. The Bad River Band of Lake Superior Chippewa filed the lawsuit against Enbridge on Tuesday, July 23, in federal court in Madison, Wisconsin. The suit seeks a court order for Enbridge to stop using the pipeline and remove it from their lands. The tribe claims in the suit that Enbridge continues to operate its Line 5 oil and gas pipeline on the reservation with easements that expired in 2013. The 125,000-acre Bad River Reservation is located about 20 miles west of Ironwood, Michigan. Built in 1953, Line 5 runs 645 miles from Superior, Wisconsin, to Sarnia, Canada, by way of Michigan. The potential environmental dangers by its crossing in the Straits of Mackinac has been the continued focus of activists, Gov. Gretchen Whitmer and Attorney General Dana Nessel. In late June, Nessel filed a lawsuit to shut down the Straits’ crossing. In January 2017, Bad River Band leaders passed a formal resolution not to renew Enbridge’s right-of-way easements for Line 5 and called for the pipeline’s removal. The tribe says that 15 right-of-way easements for Line 5 expired in 2013. They own interest in 11 of those 15 properties that the pipeline crosses. Since early 2017, the tribe “has been collecting and reviewing environmental, water and pipeline data to further assess the danger posed by the pipeline,” according to a statement. They also engaged Enbridge in a “failed multi-year mediation process.”The tribe discovered that the Bad River is migrating quickly toward an area where a portion of Line 5 is buried, presenting a “looming disaster." “The river is carving away the banks and soils that stabilize and support the aging pipeline,” the tribe’s lawsuit states. “This relentless process will soon expose Line 5 to the full force of the river’s currents and the load of fallen trees and other debris conveyed by the river.”

PUC asks Minnesota Supreme Court to deny Line 3 challenges (AP) — Minnesota regulators have urged the state Supreme Court to deny challenges by opponents of Enbridge Energy’s proposed Line 3 oil pipeline replacement who say the project’s environmental review was flawed.The Public Utilities Commission told the Supreme Court Tuesday it believes the review was “adequate in all respects.”Enbridge wants to replace its existing Line 3 across northern Minnesota, which dates from the 1960s, because it’s deteriorating and runs at only half its original capacity. The Minnesota Court of Appeals upheld most of the environmental impact statement last month, but sent the case back to the PUC for further proceedings because the review did not address a possible spill in the Lake Superior watershed.

New Study Suggests Living Near Oil Fields Could Cause Birth Defects In Babies - A new study has determined that families living near oil and gas fields have a 40 to 70% higher probability of having their children develop congenital heart defects (CHDs) compared to those living at greater distances, reported CU Anschutz Today."We observed more children were being born with a congenital heart defect in areas with the highest intensity of oil and gas well activity," said the study's lead author Lisa McKenzie, Ph.D., MPH, of the Colorado School of Public Health at the University of Colorado Anschutz Medical Campus. More than 17 million Americans and 6% of Colorado's total population live within one mile of an active drilling rig. The study was published last Thursday in the peer-reviewed journal Environment International, studied 3,324 infants born in Colorado between 2005 to 2011. Researchers studied infants with several types of CHDs.  CHD is one of the most common birth defects in the country and a leading cause of death among infants. Infants with CHD have low rates of survival due to severe developmental problems and are more vulnerable to brain injury.  McKenzie's study comes after a paper that analyzed 124,842 births in rural Colorado between 1996 to 2009 and discovered that CHDs occured near oil and gas drilling facilities.  Another study in Oklahoma studied 476,000 births, found several variants of CHDs near oil wells.  Anschutz Today noted that the studies had several issues, including not being able to identify correctly if an oil and gas facility was in the development or production phase, and researchers didn't confirm specific CHDs by reviewing all medical records."We observed positive associations between odds of a birth with a CHD and maternal exposure to oil and gas the second gestational month," the study researchers said.The new study discovered that rural areas with high active oil and gas activity are the epicenter of CHDs rather than in urban areas. What's not entirely understood by researchers are how toxic chemicals lead to CHDs.   McKenzie said the study doesn't exactly prove a causal relationship between the various stages of an oil and gas drilling rig and that another study will be completed soon.

Cause of pipeline produced water spills unknown (AP) — North Dakota health officials still don’t know the cause of a pair of pipelines spills last week that leaked oilfield wastewater into a tributary of the Missouri River and another that spread over pastureland. high levels of lead, ammonium and other contaminants in surface waters affected by recent wastewater spills in the Bakken oilfield region. (AP Photo/Tyler Bell, File)State environmental scientist Bill Suess (sees) says Tuesday that cleanup of the “produced water” is ongoing at the two spill sites.The spills were reported by Polar Midstream. The company on July 14 reported a 20,000-gallon spill east of Williston and about a mile from Lake Sakakawea, the largest reservoir on the Missouri River.Suess says investigators don’t think the spill reached the river.The second spill leaked more than 12,000 gallons of wastewater, impacting an unknown amount of pastureland. Company spokesman Zak Covar says the cause isn’t known. He says the focus is on cleanup.

Company says work on old well may have caused spill (AP) -- Chevron says an 800,000-gallon oil spill in Central California may have started when crews tried to recap an abandoned well. KQED News says the company held a briefing Friday about the seepage that began in May in a Kern County oil field west of Bakersfield. Chevron says it believes the spill stemmed from efforts to remove aging cement plugs from its non-producing wells and replace them. The company says that the initial flows came from a previously damaged well that was being re-entered. Chevron says more oil spilled in June when crews did pressure tests and later tried to complete the job of replacing cement in the well. Chevron says the oil has only fouled about an acre of land and 90 percent of the spilled material has been recaptured. 

Chevron injected steam near well work before oil leak...- Chevron records show the large, McKittrick-area oil leak that has shone an unflattering light on Kern County petroleum production probably originated with an idle well being worked on at the same time the company was injecting high-pressure steam just 360 feet away, a combination that industry people say should not have been performed simultaneously in such close proximity and which possibly contributed to the release. The San Ramon-based oil producer told state regulators in a recent written analysis that a well it was using to put steam into the Cymric Oil Field was not switched from injections to production mode until 7½ hours after the company noticed oil seeping to the surface at 5:30 a.m. on May 10. Observers within the industry said that timeline suggests steam injection activity was happening at the same time Chevron had opened up and was "re-abandoning," or resealing, a well idled in 2004. The problem with steaming a well near concurrent work on another well, people familiar with local oil fields say, is that there's a chance steam will make its way through uncharted channels underground before coming to the surface in an area not outfitted to receive oil. Several people interviewed said Chevron should have "shut in" — meaning turned off — the steam injection well that state maps show lies 360 feet from the surface of a well the company blames for several thousand barrels of oil ending up in a dry creek bed during a series of uncontrolled releases near McKittrick. "I definitely would say they need a 600-foot shut-in radius if they are doing a re-abandonment," said Bakersfield geologist Burton R. "Burt" Ellison, former district deputy at the California Division of Oil, Gas and Geothermal Resources, the state's primary oil regulatory agency. Others, noting the complexity of subsurface conduits in western Kern oil fields, said it's hard to say what a safe distance would have been in this case, and that additional nearby wells may have played a role in the leak. But they still questioned the wisdom of steaming so close to a well undergoing work.

US Oil Exports Reach New All-Time High  - U.S. crude oil exports reached a new all-time high of 3.3 million barrels per day (MMbpd) in June.That’s according to the American Petroleum Institute’s (API) latest monthly statistical report released Thursday, which highlighted that the record exports helped reduce U.S. net petroleum imports to 1.3MMbpd.Total U.S. petroleum exports for the month were at 8.4MMbpd, according to the report, which noted that this was a record for June. This was said to be an increase of 3.6 percent from May and 7.9 percent from June last year.Record U.S. crude oil production of 12.2 MMbpd was sustained in June “despite less drilling”, according to the report.“The U.S. appears to be making substantive progress towards becoming a net energy exporter in 2020, as projected by the EIA, with production continuing to sustain its upward climb despite oil prices having declined 10 percent between May and June,” API Chief Economist Dean Foreman said in an organization statement.“This trend has been driven in part by increasingly low breakeven prices, strong productivity gains in key production regions and the incremental additions of new pipeline infrastructure needed to bring these resources to market,” he added.Back in June, the API revealed that in May, U.S. petroleum exports and crude oil productionsaw records. In its second quarter industry outlook report, also released in June, the API said the United States was poised for a continuation of record oil production. This report also highlighted that while U.S. crude oil export capacity has been “sufficient”, some capacity estimates suggest “some urgency to plan forward”. The API describes itself as the only national trade association representing all facets of the natural gas and oil industry. The organization, which was formed in 1919, has more than 600 members.

Despite Shale Success US Oil Imports Remain High - U.S. oil demand over the past decade has remained in the 19-21 million b/d range. Crude oil production, meanwhile, has soared 150 percent to ~12.3 million b/d. As such, it would seem safe to assume that U.S. oil imports have plummeted in the shale-era since 2008. Interestingly though, this has not exactly been the case. Although declining, the U.S. still imports huge amounts of oil. In 2018, for instance, the U.S. imported 9.9 million b/d of crude oil and petroleum products from nearly 90 countries, albeit down from ~13 million b/d in 2008. Imports of crude over that time have fallen from 10 million b/d to 7 million b/d so far this year. So despite domestic production continuing to break records, the U.S. still imports 10 percent of the world’s total oil consumption. There are a variety of reasons why the U.S. still imports high volumes of petroleum. The primary reason is that the U.S. shale oil boom has yielded loads of high-quality, light, and sweet oil that has a higher API gravity. The U.S. refining system, however, is generally configured to process the lower quality, heavier, and sourer oil that the country has been importing from Canada, Venezuela, and Mexico for many decades. It would therefore be uneconomical to run refineries solely on the domestic tight oil that has been flowing from U.S. shale plays. In addition, the U.S. needs a variety of oil types to make different products. The boom in domestic oil production is not precisely yielding all those required to make all of the products that Americans use. Further, oil production, access, refining, and demand differ geographically. There are numerous parts across the country that lack pipeline access to the booming U.S. production zones, such as the Bakken play in North Dakota and the Permian in West Texas. They are removed from most of the infrastructure to access oil, as well as refine and transport liquid fuels, located in the mid-continent and Gulf Coast regions. Distant California, for instance, which now imports 60 percent of its crude, retains Saudi Arabia, Ecuador, Colombia, and Iraq supplying nearly 75 percent of imports.

Halliburton's Profits Take a Hit in 2Q - Halliburton Company saw its second quarter profits take a dip as its international operations saw improvements. Net income attributable to the Houston-based oilfield services company dropped to $75 million in the second quarter (equivalent to nine cents per share), down from $511 million one year earlier and $152 million in the first quarter of 2019. Revenues for second quarter were $5.93 billion, down from $6.15 billion one year earlier, but up from $5.74 billion in the first quarter of 2019. North America is Halliburton’s largest market and it had $3.33 billion in revenue for the quarter. This is down from $3.83 billion from one year earlier. Bloomberg reported on Monday that Halliburton cut its North American workforce by eight percent in the second quarter. The company saw revenue gains in the second quarter from its international markets. Revenues for Latin America were $571 million, up from $479 million one year ago; Europe/Africa/CIS revenues were $823 million, up from $726 million one year ago and Middle East/Asia revenues were $1.21 billion, up from $1.11 billion one year ago.

US Drops Eight Oil, Gas Rigs - The U.S. dropped five oil rigs and three gas rigs for a net loss of eight rigs this week. The U.S. dropped five oil rigs this week and three gas rigs for a net loss of eight rigs, according to weekly data from Baker Hughes, a GE Company.This week’s declines bring the nation’s total number of active rigs to 946 – down 102 from the count of 1,048 one year ago.  North Dakota saw the most declines this week, dropping eight rigs. Several other states experienced their rig counts drop. They are:

  • Louisiana (-4)
  • Ohio (-2)
  • Oklahoma (-2)
  • Alaska (-1)
  • West Virginia (-1)

Wyoming added four rigs, while New Mexico added two and California, Colorado, Kansas and Utah each added one rig.  Among the major basins, the Williston led this week in declines with eight rigs. The Marcellus and Utica each dropped two rigs while the Eagle Ford dropped one rig.The Permian added three rigs. Currently, the Permian has 443 active rigs, which accounts for almost half of the nation’s active rigs. The DJ-Niobrara added two rigs while the Ardmore Woodford and Arkoma Woodford added one rig apiece.

CEO of Major Shale Oil Company 'Has Second Thoughts' on Fracking Rush, Wall Street Journal Reports – On Monday, the Wall Street Journal featured a profile of Scott Sheffield, CEO of Pioneer Natural Resources, whose company is known among investors for its emphasis on drawing oil and gas from the Permian basin in Texas using horizontal drilling and hydraulic fracturing, or fracking.Back in 2014, Sheffield told Forbes that he expected Pioneer could produce a million barrels of oil a day from the Permian basin by 2024 — up from 45,000 barrels a day in 2011.Now, Sheffield, who left the helm of Pioneer in 2016 and returned this February, says that those million-barrel-a-day plans are looking increasingly doubtful as the industry has struggled to prove to investors that it’s capable not only of producing enormous volumes of oil and gas, but that it can do so while booking profits rather than losses.“We lost the growth investors,” Pioneer CEO Scott Sheffield told the Journal. “Now we’ve got to attract a whole other set of investors.”Sheffield’s comments on the shale oil industry’s fiscal difficulties come on the heels of a warning from the former CEO of the country’s largest natural gas producer about the shale gas industry’s financial distress.Steve Schlotterbeck, former CEO of America’s largest producer of natural gas, described the impact over a decade of fracking on Marcellus shale drilling companies at a recent petrochemical industry conference.“In a little more than a decade, most of these companies just destroyed a very large percentage of their companies' value that they had at the beginning of the shale revolution,” he said, in remarks reported by DeSmog on Sunday. “Excluding capital, the big eight basin producers have destroyed on average 80 percent of the value of their companies since the beginning of the shale revolution.”Doubts about the shale drilling industry’s financial prospects have simmered nearly as long as the industry has been producing oil and gas. “There is undoubtedly a vast amount of gas in the formations,” the New York Times reported in 2011, citing concerns among industry insiders dating back to 2009. “The question remains how affordably it can be extracted.”In the years since, shale drillers churned out massive volumes of fossil fuels, first shale gas then shale oil, pushing American oil production up 12 million barrels a day, according to Energy Information Administration figures cited by The Journal. At the same time, they have spent hundreds of billions of dollars more than they’ve earned from selling the fossil fuels they drew from the ground.

Shale Drilling's Worst Yet to Come-- America’s biggest owner of drilling rigs fell the most in seven months after the chief of Helmerich & Payne Inc. said he called the bottom too soon. Three months ago, when Helmerich had 220 of its rigs hired out, Chief Executive Officer John Lindsay told investors the second quarter would be the nadir for his fleet. But after the number of Helmerich rigs at work shrank to 214 a few weeks ago, Lindsay says his earlier projection was “premature.” “The full effect of the industry’s emphasis on disciplined capital spending continues to reverberate through the oil field services sector,” he said in a Wednesday statement. “We are reluctant to predict another bottom and see further softening during our fourth fiscal quarter as our guidance would indicate.” The hired hands of the shale patch who drill and frack wells are suffering from a slowdown in North American spending brought on by investor demands for higher returns. The U.S. oil rig count has fallen 11% this year, according to Baker Hughes. Fracking giant Halliburton Co. is eliminating jobs and warehousing equipment no one wants to rent. Superior Energy Services Inc. said earlier this week that it’s looking for ways to cut costs and may sell assets to raise cash. On Thursday, 28 of the 29 oil and gas industry stocks in the S&P 500 Index were falling. The frack market “is a mess,” Brad Handler, an analyst at Jefferies LLC, wrote in a note to clients. “With every passing datapoint/call, there is little to suggest this market gets any better, and so we hack away at numbers again.” Helmerich’s smaller rival Patterson-UTI Energy Inc. also cut its forecast. The Houston-based contractor said in an earnings statement it expects to run 142 rigs on average during the third quarter, down 10% from the previous three-month period.

U.S. Shale Is Doomed No Matter What They Do - With financial stress setting in for U.S. shale companies, some are trying to drill their way out of the problem, while others are hoping to boost profitability by cutting costs and implementing spending restraint. Both approaches are riddled with risk. “Turbulence and desperation are roiling the struggling fracking industry,” Kathy Hipple and Tom Sanzillo wrote in a note for the Institute for Energy Economics and Financial Analysis (IEEFA). They point to the example of EQT, the largest natural gas producer in the United States. A corporate struggle over control of the company reached a conclusion recently, with the Toby and Derek Rice seizing power. The Rice brothers sold their company, Rice Energy, to EQT in 2017. But they launched a bid to take over EQT last year, arguing that the company’s leadership had failed investors. The Rice brothers convinced shareholders that they could steer the company in a better direction promising $500 million in free cash flow within two years. Their bet hinged on more aggressive drilling while simultaneously reducing costs. Their strategy also depends on “new, unproven, expensive technology, electric frack fleets,” IEEFA argued. “This seems like more of the same – big risky capital expenditures.” EQT’s former CEO Steve Schlotterbeck recently made headlines when he called fracking an “unmitigated disaster” because it helped crash prices and produce mountains of red ink. “In fact, I'm not aware of another case of a disruptive technological change that has done so much harm to the industry that created the change,” Schlotterbeck said at an industry conference in June. IEEFA draws a contrast between Schlotterbeck and the Rice brothers. While the latter wants advocates a strategy of stepping up drilling in an effort to grow their way out of the problem, the former argues that this approach has been tried over and over with poor results. Instead, Schlotterbeck said that drillers need to cut spending and production, which could revive natural gas prices. But while the philosophies differ – relentless growth versus restraint – IEEFA argues that “neither of these strategies seem viable.” On the one hand, natural gas prices are expected to stay below $3 per MMBtu, a price that is unlikely to lead to profits, IEEFA says. That is especially true if shale companies aggressively spend and produce more gas. However, a strategy of restraint may not work either. “[E]ven if natural gas producers coordinate their activities and reduce supply—a highly unlikely prospect—Schlotterbeck’s expectation that natural gas prices would inevitably rise is questionable,” IEEFA analysts wrote.

Is a Mature Mexican Gas Market Within Reach? -Once providing over 40 percent of federal revenues, oil production has been cut in half to below 2 million barrels per day since peaking in 2004. Longtime oil-based Mexico is increasingly turning to natural gas to meet its rising energy needs. The goal has been to displace higher cost oil in both the power and industrial sectors. Once providing over 40 percent of federal revenues, oil production has been cut in half to below 2 million b/d since peaking in 2004. Mexico per capita uses just a third of the electricity that OECD partners use, so more generation is a national priority. For example, despite having 40 percent of the population that the U.S. has, Mexico uses just 10 percent of the gas. Mexico already uses gas for nearly 65 percent of its power generation, and the majority of new builds will be gas. Meanwhile, the sudden cancelation of the 4th long-term power auction in February signifies a fading focus on renewables from the AMLO administration that took office in December. With 75 percent of Mexico’s gas production coming as associated to crude, the domestic gas supply has also been plummeting. In turn, excluding that used by state-owned oil company Pemex, over 90 percent of the gas consumed in Mexico is imported, the vast majority of which comes from the U.S. And this can only increase: for a variety of technical, political, and security reasons, the development of Mexico’s 550 Tcf of EIA-reported recoverable shale gas remains many years away.

Venezuela’s Oil Production Could Soon Fall Below 500,000 Bpd - Venezuela, the country sitting on the world’s largest oil reserves, could be pumping as little as below 500,000 bpd of crude oil next year amid the economic and political crisis, IHS Markit said in an analysis on Tuesday.The sweeping sanctions that the United States imposed on Venezuela’s oil industry have failed to result in a regime change nearly six months after opposition leader Juan Guaidó declared himself interim president and won the support of the U.S. and many other western nations.According to IHS Markit, Venezuela’s oil industry has deteriorated so much since 2014 that any recovery would be a long time coming.  The protracted political crisis also means that the military and Maduro’s regime will intensify the stick-and-carrot approach to foreign investors, with whom Venezuela’s state oil firm PDVSA has joint ventures to produce heavy oil, Ford Tanner, a Principal Analyst at IHS Markit, says.“The official use of hostility and inducement toward foreign E&P companies is expected to intensify amid a new phase of collapsing oil production,” Tanner said.The U.S. sanctions on diluents that Venezuela needs to dilute its super heavy crude to make it flow for exports, as well as the U.S. pressure on buyers of Venezuelan oil, are expected to further constrain production, exports, and oil revenues in Venezuela, and crude oil production could drop below 500,000 bpd in 2020, according to Tanner. In the latest Monthly Oil Market Report, OPEC’s secondary sources—the ones the cartel considers the official production figures—point that Venezuela’s crude oil production in June dropped by 16,000 bpd from May to stand at 734,000 bpd. To compare, Venezuela’s crude oil production in 2017 averaged 1.911 million bpd. Despite the economic collapse, Venezuela’s crude oil and refined oil products exports rose by 26 percent in June compared to May, thanks to higher shipments under oil-for-loan deals with China. 

Chevron Gets Approval to Keep Producing Oil in Venezuela -- Chevron Corp. and four oil services companies won U.S. government approval to continue producing oil in Venezuela despite sanctions placed on the crisis-stricken country. The extension of a waiver from sanctions will keep San Ramon, California-based Chevron’s joint venture with state-owned Petroleos de Venezuela SA running for another three months, the U.S. Treasury Department’s Office of Foreign Assets Control said in a statement Friday. The waiver, previously due to end on July 27, will now last until Oct. 25. Oilfield service companies Schlumberger Ltd., Halliburton Co., Baker Hughes and Weatherford International Plc were also allowed to continue their work in Venezuela for three months. While Venezuela only accounted for 1% of Chevron’s global crude production last year, it remains strategically important. The company is the only major U.S. producer still operating in the country, which has the world’s largest oil reserves. In recent months, Chevron made the case to the Trump administration that if it were to leave, its Venezuelan assets could be turned over to another operator. That could mean the state, or even Russian or Chinese interests. The U.S. has refused to recognize Nicolas Maduro as Venezuela’s president after an election last year. Financial sanctions have become its main tool for depriving Maduro of cash and pressuring the military to turn against him. Earlier this week, Venezuela’s opposition-led National Assembly issued a decree that guaranteed Chevron’s assets in the country would be protected under a new government led by Juan Guaido. Oil purchases from Venezuela have become complicated since the U.S. expanded its sanctions regime to include any business done with PDVSA, as the national oil company is also known. Other companies, including Spain’s Repsol SA and Italy’s Eni SpA, continue to do business with Venezuela. Chevron has operated in Venezuela for almost a century, since the discovery of the Boscan field in the 1920s. It has outlasted Exxon Mobil Corp., which left the country after a series of industry nationalizations during Hugo Chavez’s tenure as president.

Petrobras Ordered to Fuel Stranded Iranian Ships-- A Brazilian top court justice ordered Petroleo Brasileiro SA to refuel two Iranian ships stranded off the country’s cost after the state-controlled oil company refused to do so for fear of U.S. sanctions. Petrobras, as the Rio de Janeiro-based oil giant is known, will comply with the decision, a person close to the company said. The producer has said it may face “significant losses” if included under U.S. sanctions. A spokesman for Justice Dias Toffoli, who ruled on the matter, declined to comment because the case was filed under seal. The two ships have been floating since early June off the port of Paranagua, about 450 kilometers (280 miles) south of Sao Paulo, one of them loaded with corn bound to Iran. The Islamic republic, which buys one third of all of Brazil’s corn exports, had threatened to cut its imports from the country unless the ships were refueled. While Brazil has a long history of good relations with Tehran, President Jair Bolsonaro’s commitment to ripping up the country’s traditional foreign policy to side with U.S. President Donald Trump has put those ties in doubt. On Sunday, Bolsonaro told reporters Brazil was “aligned” with the U.S. policies, including on Iran. Iran and the U.S. have been at loggerheads since last year, when Trump withdrew the U.S. from a 2015 nuclear agreement with the Islamic republic, calling it the “worst deal ever.” The fate of the vessels is the latest evidence of how the Trump administration’s policies are affecting other countries and rattling commodities markets across the globe.

YPF Makes Deal to Ship Argentine LNG -- YPF has reached a preliminary agreement with Excelerate Energy L.P. to charter a second liquefied natural gas (LNG) carrier to transport Argentine LNG to the global market, Excelerate reported Thursday. Excelerate stated that its carrier Excalibur will transport LNG from the Tango floating LNG (FLNG) unit – located at the port of Bahia Blanca, Argentina – to the world market. The company added that it will be executing the final agreement with YPF “in the coming days” and that operations should start in early September. “We continue progressing in our ambition to add value to Argentine natural gas and to export surpluses during these months of low local consumption, to fully extract the potential as producer and exporter of Argentine natural gas,” Marcos Browne, executive vice president of Gas and Energy at YPF, said in a written statement distributed by Excelerate. The majority of the natural gas processed by Tango FLNG will originate from Argentina’s Vaca Muerta shale formation. After processing, it will be transported to the Excalibur LNG carrier for export. Excelerate noted that loading YPF’s product onto Excalibur will take approximately 45 days and that the vessel will be in the service of YPF until May 2020.

$7.6B Russia LNG Contract Goes to TechnipFMC - Novatek and its partners in the Arctic LNG 2 project have awarded TechnipFMC an engineering, procurement and construction (EPC) contract for the development on the Gydan peninsula in West Siberia, Russia, TechnipFMC reported Tuesday afternoon. According to a written statement TechnipFMC emailed to Rigzone, the development will comprise three liquefaction trains installed on three gravity-based structure platforms. Each train will be capable of producing 6.6 million tons per annum (mtpa) of LNG, added the company, which will execute the project on a lump sum and reimbursable basis. The consolidated Arctic LNG contract – valued at $7.6 billion – covers the EPC of the three LNG trains and associated topsides, which will be manufactured on a modular basis in Asian and Russian yards, TechnipFMC noted. Novatek owns a 60-percent stake in Arctic LNG 2. The other project parcticipants, each holding a 10-percent interest, include Total, China National Petroleum Corp. (CNPC), CNOOC Ltd. and the Mitsui and Co.-Japan Oil, Gas and Metals National Corp. consortium Japan Arctic LNG, according to Novatek’s website. The website also notes that Arctic LNG 2 will liquefy gas from the Utrenneye field, which under the Russian reserves classification system holds approximately 2 trillion cubic meters of natural gas and 105 million tons of liquids.

The Suez Canal and SUMED Pipeline are critical chokepoints for oil and natural gas trade – EIA - The Suez Canal and the SUMED Pipeline are strategic routes for Persian Gulf crude oil, petroleum products, and liquefied natural gas (LNG) shipments to Europe and North America. Located in Egypt, the Suez Canal connects the Red Sea with the Mediterranean Sea, and it is a critical chokepoint because of the large volumes of energy commodities that flow through it.Chokepoints are narrow channels along widely used global sea routes that are critical to global energy security. Total oil flows through the Suez Canal and the SUMED pipeline accounted for about 9% of total seaborne traded petroleum (crude oil and refined petroleum products) in 2017, and LNG flows through the Suez Canal and the SUMED pipeline accounted for about 8% of global LNG trade. Since 2016, growth in northbound total petroleum flows through the Suez Canal and the SUMED pipeline has slowed, and southbound flows through the canal have risen substantially. In particular, the Suez Canal is gaining importance as a southbound route for U.S. and Russian crude oil and petroleum products to destinations in Asia and the Middle East. Slightly more than half of total petroleum transiting the Suez Canal in 2018 was sent northbound to destinations in Europe and North America. Petroleum exports from Persian Gulf countries, such as Saudi Arabia, Iraq, and Iran, accounted for 85% of Suez Canal northbound traffic. Northbound flows of petroleum products have risen in recent years, particularly as more ultra-low sulfur diesel fuel has been shipped from Saudi Arabia to European countries. Northbound crude oil flows decreased in 2018 for several reasons:

  • Higher U.S. crude oil exports displaced Persian Gulf crude oil that had been historically sent to Europe.
  • Key Middle East producers, mainly Saudi Arabia and Iraq, have been increasing crude oil exports to China and other growing Asian oil markets using eastbound routes rather than the Suez Canal.
  • Renewed U.S. oil sanctions on Iran, imposed in late 2018, contributed to a decrease in Iran’s crude oil exports to Europe.

Southbound crude oil shipments, mainly to Asian markets such as Singapore, China, and India, have more than doubled in the past two years. Petroleum exports from Russia accounted for the largest share (24%) of Suez southbound petroleum traffic. Increases in Libya’s crude oil production and exports in 2018 also contributed to a rise in southbound shipments. In the past two years, increased production and exports of U.S. crude oil and petroleum products—especially liquefied petroleum gas—have also increased southbound traffic through the canal.

Oil Glut Could Worsen As Libya’s Civil War Ends -While the Persian Gulf crisis continues to escalate, oil markets have put Libya’s ongoing civil war on the backburner. This weekend, the shutdown of OPEC producer Libya’s giant Sharara field however put it again in the spotlight. On Saturday July 20, Libya’s National Oil Corporation (NOC) stated that production at its El Sharara oilfield was halted. As a direct result of this, the NOC also has stopped the shipment of crude oil in the Port of Az Zawiyah. The closure on Saturday resulted in the loss of 290,000 bpd production, the oil company indicated. In a reaction to the press, NOC’s chairman Sanallah, said that criminal activities forced the NOC to declare the state of emergency. Production however is reported to have resumed on July 22, while the NOC lifted the force majeure on loadings of its crude oil from the Zawiya terminal. Officials have indicated that an unidentified group shut a valve on the pipeline linking it to Zawiya, 49 km (30.4 miles) west of Tripoli. Production at present is at more than half its peak production. The force-majeure brought official NOC production below the 1 million bpd mark, from a level of around 1.2-1.3 million bpd. Sharara is operated by a joint venture between the NOC and Total SA, Repsol SA, OMV AG and Equinor ASA, known formerly as Statoil ASA. Production at the nearby El Feel oilfield is unaffected, the NOC said. The situation in Libya’s oil and gas sector could however become precarious if rumors about an upcoming new military offensive of the Libyan National Army (LNA), led by strongman general Haftar, against Tripoli will take place. LNA commander Fawzi Al Mansouri stated on Sunday that a military offensive is being prepared. Al Mansouri indicated that LNA forces were preparing to launch a “decisive and lightening” operation to liberate Tripoli. When Haftar will give the orders, the offensive will start, which could be in the next day(s).

Indonesia scrambles to plug undersea oil spill in Java -  Indonesia’s state energy firm Pertamina said it will take weeks to plug an oil spill at its Offshore North West Java (ONWJ) facility, which has reached the northern coast of Java island, a director said yesterday. The incident started on July 12, when natural gas was released during drilling at one of its wells in the ONWJ platform on the Java sea, Pertamina’s upstream director Dharmawan Samsu told a news conference. Three days later the company declared an emergency and on July 16, a layer of oil began to rise to the surface of the sea in addition to the gas bubbles, he said. The oil spill has reached villages on the coast of the Karawang area, West Java, 2km from the facility, he said. It will take an estimated 10 weeks from the declaration of emergency to stop the oil and gas leakage, or another eight weeks from yesterday, he said. “For Pertamina, the most important thing is the safety of our employees and residents (in the affected area) and the environment, to make sure there is as little environmental impact as possible from this,” Samsu said. Twenty-nine ships have been deployed to patrol the area, which are also on standby for firefighting, he said, adding that the firm has put up a 3.5km containment boom at sea and another 3km boom and 700m of fish nets along the shoreline. Boots & Coots, a well control company that handled a similar spill in the Gulf of Mexico, has been hired to help control the situation, Samsu said. Pertamina has set up an emergency centre in Karawang and promised to compensate fishermen, he said. “The cause is still being thoroughly and deeply investigated. Early indications showed pressure anomalies that resulted in gas bubbles, followed by oil spill,” Samsu said. The incident happened at a well that was yet to come into production, which had been expected to produce 3,000 barrels per day (bpd) of crude and over 30mn standard cubic feet per day of natural gas in September, Samsu said. There were two other wells in the field that Pertamina initially wanted to reactivate, but the company has now isolated them awaiting the result of the investigation, he said.

Saudi Arabia has been exporting more crude oil to China, less to the United States - Saudi Arabia’s crude oil production approached a four-year low in May 2019, averaging an estimated 9.9 million barrels per day (b/d), more than 1 million b/d lower than its all-time high in November 2018. Production in Saudi Arabia dropped following a December 2018 agreement by members of the Organization of the Petroleum Exporting Countries (OPEC) to cut crude oil production. Saudi Arabia’s crude oil exports, especially to the United States, have also fallen. However, some countries—in particular, China—have increased their imports of crude oil from Saudi Arabia.Four Asia-Pacific countries that publish crude oil imports by country of origin—China, Japan, South Korea, and Taiwan—collectively imported an average of 3.5 million b/d of crude oil from Saudi Arabia in 2018. China’s, Japan’s, and Taiwan’s 2019 year-to-date crude oil imports from Saudi Arabia are larger than their 2018 annual averages, but South Korea’s have declined slightly, based on data through May 2019.In contrast, U.S. crude oil imports from Saudi Arabia have declined year-to-date through April 2019 compared with the 2018 average by more than 0.2 million b/d, averaging 0.6 million b/d for the first four months of 2019. Weekly estimates through July 12 show continued declines, indicating that U.S. crude oil imports from Saudi Arabia averaged about 0.5 million b/d in May and in June. These recent changes in crude oil trade patterns are partially a result of long-term structural trends within China and the United States and partially a result of recent oil market dynamics. From 2010 through 2018, EIA estimates thattotal Chinese petroleum consumption increased from 9.3 million b/d to 13.9 million b/d and that Chinese domestic production increased from 4.6 million b/d to 4.8 million b/d. As a result, China’s need to meet incremental oil consumption has been met primarily by imports. China’s crude oil imports from Saudi Arabia have gradually increased in recent years, and in March 2019, reached 1.7 million b/d, the highest level for any month since at least 2004. Other countries, including Russia and Brazil, have been exporting more crude oil to China, however, and Russia surpassed Saudi Arabia as China’s largest source of crude oil on an annual average basis in 2016. U.S. crude oil imports, on the other hand, have steadily decreased as domestic crude oil production has increased. In addition, U.S. crude oil imports from OPEC members have declined following increases from other countries, especially Canada. Canadian crude oil can be a substitute for certain OPEC grades and can have lower transportation costs when shipped by available pipeline capacity.

Millions of Barrels of Iranian Oil Are Piled Up in China’s Ports - Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market. The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.” There could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit. Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.

US Sanctions China State Oil Trader - The U.S. has sanctioned a Chinese state oil trader for violating restrictions on Iranian crude, an attempt to tighten restrictions on the Islamic Republic and cut off one of its biggest buyers. Zhuhai Zhenrong Co., the secretive company with links to the Chinese military, has a history of taking Iranian crude and fuel, at times as part of barter deals for goods or services, and then selling it on to refiners in China. The U.S. move comes at a delicate time for relations with Beijing as the two nations attempt to kick-start negotiations aimed at resolving their broader trade conflict. Secretary of State Michael Pompeo announced the decision in a speech Monday, adding that sanctions would also be imposed on the company’s chief executive officer, Li Youmin. “They violated U.S. law by accepting crude oil” from Iran, Pompeo said. “We’ve said all along that any sanction will indeed be enforced.” Specifically, the company “knowingly engaged in a significant transaction for the purchase or acquisition of crude oil from Iran” after restrictions were fully in place on May 2, the state department said in a separate statement. Li declined to comment when reached by Bloomberg News on Tuesday. The trading company merged in 2015 with Macau, China-based Nam Kwong Group, which said Tuesday that it separated from Zhuhai Zhenrong in September. 

China Takes Iran Oil Despite Tougher US Sanctions - China’s still importing oil from Iran weeks after the U.S. imposed sanctions aimed at halting sales of crude from the Persian Gulf nation. Official customs data on Friday showed China imported 855,638 tons in June, the equivalent of about 209,000 barrels a day. While that’s less than in May and the lowest since mid-2010, the data adds to speculation that Beijing may risk running afoul of American sanctions to secure crude supplies from the Islamic Republic. All eyes are on China’s oil purchases as Donald Trump’s administration continues to clamp down on companies and individuals flouting its restrictions. The import-reliant Asian nation is one of the few remaining buyers of Iranian barrels, after other countries such as South Korea and Japan halted flows. The shipments that arrived at Chinese ports in June could nevertheless constitute the “incidental transactions” that U.S. officials had previously said may occur without breaching restrictions. With a three to four-week voyage from Iran to China, it’s possible that some of the oil loaded before May 2 and arrived in China in June. According to industry consultant FGE, about 450,000 barrels a day of Iranian oil were in transit as of early May when the U.S.-issued waivers expired. Still, tankers are hauling millions of barrels of oil from the Islamic Republic towards China, although this hoard of crude may be held in what’s known as “bonded storage” without crossing customs. China imported about 494,000 barrels a day of Iranian crude in the first five months of this year, compared with more than 660,000 barrels a day in the same period in 2018. In June, the Asian nation is expected to ramp up purchases from other major oil-producing countries in the Middle East, West Africa and Russia to make up for the loss of supplies from Iran.

China gas plant blast: death toll rises to 15 as three more bodies found - Authorities in central China said on Sunday that the death toll from an explosion at a gas plant has risen to 15 with another 15 seriously injured.Three people who were previously missing have been found dead, local authorities said.About 270 firefighters and rescuers have completed three rounds of search and rescue since the blast on Friday evening in the city of Yima in Henan province, China’s emergency management ministry said.The blast shattered windows 3km (1.9 miles) away and knocked off doors inside buildings, according to earlier state media reports. Xinhua said the explosion happened in the air separation unit at a factory owned by Henan Coal Gas Group. All production at the plant has been halted, it said.“Many windows and doors within a 3km radius were shattered, and some interior doors were also blown out by the blast,” state broadcaster CCTV said on Weibo, China’s Twitter-like social media platform.  Local media showed amateur videos of a massive column of black smoke billowing from the factory and debris littering the roads.Other images showed the doors and windows of homes blown out and closed shops with dented metal fronts. A bloodied man was seen being helped out of a van in a video posted on social media.

Oil gains as Gulf tanker seizure raises tensions - Oil prices rose on Monday on concerns that Iran’s seizure of a British tanker last week may lead to supply disruptions in the energy-rich Gulf. Brent crude futures climbed 53 cents, or 0.9%, to $63 a barrel. West Texas Intermediate (WTI) crude futures were up 25 cents, or 0.5%, at $55.88 a barrel. Last week, WTI fell over 7% and Brent lost more than 6%. Iran’s Revolutionary Guards said on Friday they had captured a British-flagged oil tanker in the Gulf in response to Britain’s seizure of an Iranian tanker earlier this month. The move has increased the fear of potential supply disruptions in the Strait of Hormuz at the mouth of the Gulf, through which flows about one-fifth of the world’s oil supplies, but no major escalation with Britain or the United States appears imminent. “In the cat and mouse game that Iran is playing with the U.S., it is taking calculated risks," “So far the U.S. is not taking the bait.” Capping gains, force majeure was lifted on loadings of crude on Monday at Libya’s Sharara oilfield, the country’s largest, whose closure since Friday had caused an output loss of about 290,000 barrels per day (bpd). Meanwhile, data late last week showed shipments of crude from Saudi Arabia, the world’s top oil exporter, fell to a 1-1/2-year low in May. Speculative money is flowing back into oil in response to the escalating dispute between Iran, the United States and other Western nations, along with signs of falling supply. The Iranian capture of the ship in the global oil trade’s most important waterway was the latest escalation in three months of confrontation with the West that began when new, tighter U.S. sanctions on Iran took effect at the start of May. Hedge funds and other money managers raised their combined futures and options positions on U.S. crude for a second week and increased their positions in Brent crude as well, according to data from the U.S. Commodity Futures Trading Commission and the Intercontinental Exchange. Goldman Sachs on Sunday lowered its forecast of growth in oil demand for 2019 to 1.275 million bpd, citing disappointing global economic activity.

Oil Advances Most in a Week -- Oil rose the most in more than a week as Iran’s seizure of a British oil tanker fueled concerns about escalating tensions in the Middle East. Futures closed 1.1% higher in New York on Monday after easing some gains during the session. While the U.K. demanded the immediate release of the Stena Impero, taken by Iran’s Revolutionary Guard Corps in the Strait of Hormuz on Friday, British Defense Minister Tobias Ellwood said he wanted to de-escalate the situation. “It seems to be a situation where neither side is trying to force a military solution to these tensions,” said Bob Yawger, director of the futures division at Mizuho Securities USA. “So in situations like this, news of the conflict leads the market to rally strongly and then pull back.” The U.S. benchmark crude rose Friday after the tanker seizure highlighted the risk of flows through the world’s most critical crude choke-point. Nonetheless, prices fell 7.6% last week, the sharpest pullback since May, amid concerns that a slowing global economy will weigh on oil demand. West Texas Intermediate for August delivery, which expires Monday, added 59 cents to settle at $56.22 a barrel on the New York Mercantile Exchange, the largest gain since July 10. The more-active September WTI contract rose 46 cents to end the session at $56.22 a barrel. Brent for September settlement advanced 79 cents to settle at $63.26 a barrel on the ICE Futures Europe Exchange. The global benchmark crude traded at a premium of $7.04 for the same month, the widest since late June. 

Oil Markets Ignore The Tanker War - Oil prices initially traded up on Monday on geopolitical tension in the Middle East, but gave up some of those gains on fears of an oil glut. At the start of Tuesday, oil prices dipped further, weighed down by demand fears.   The tit-for-tat tanker seizures between the UK and Iran has heightened tension, but unlike last month, there appears little chance of and no appetite for a military confrontation. Tension in the Persian Gulf remains elevated, but oil prices have barely budged, not least because of ample global oil supplies. “The response of oil prices to the seizure of a British oil tanker by armed Iranian forces near the Strait of Hormuz has been amazingly muted so far,” Commerzbank said. “It appears that the majority of market participants are convinced that there will be no open conflict between the West and Iran.”  WTI based in Houston fell to its weakest level in almost a year after new pipelines came online, according to Reuters. New lines owned by EPIC Crude Pipeline LLC and Plains All American Partners began filling up in recent days, Reuters reports. The new supply eases bottlenecks and pushed Houston prices lower. “Houston prices should weaken with more supply and limited new storage at refineries,” a trader told Reuters.    Oil prices traded up on Monday, but gains were relatively minor in light of the seizure of a British oil tanker by Iran. The seizure comes as retaliation for the British seizure of an Iranian tanker earlier this month. Oil prices have not spiked, as they might have in the past, but the shipping industry is bearing the brunt of the fallout. “Shipping and insurance costs have already been on the rise and the latest event will only add to that,” Amrita Sen of Energy Aspects told the FT. “Asian refiners in particular will be even keener now to search for alternative oil supplies and ship owners will look for alternative routes where possible, further adding to costs.” On Monday, the Trump administration announcedsanctions on Chinese state-owned oil trader Zhuhai Zhenrong Co. for violating U.S. sanctions on Iran. China has continued to stockpile oil from Iran, despite the U.S. ending waivers in May. The move may also add yet another point of contention between the U.S. and China has they seek to negotiate a resolution to their trade war.

Oil rises 1% to $56.77 per barrel as Middle East tensions linger - Oil prices were up on Tuesday as expectations of lower U.S. crude supplies were offset by weaker demand forecasts and the full restart of Libya’s largest oil field. Libya’s Sharara oil field returned to normal production on Tuesday, pressuring prices that rallied a day earlier on fears the tanker capture could disrupt supplies in the heavily trafficked Strait of Hormuz. Brent crude rose 67 cents to $63.94 a barrel on Tuesday. West Texas Intermediate climbed 1% or 64 cents to $56.77. “The situation with Iran seems contained for now, and Libya’s full supply is coming back,” said Bill Baruch, president at Blue Line Futures LLC in Chicago. In the Middle East, “tensions are ever-present but it hasn’t moved the market much because everyone is waiting on U.S. supply data,” Baruch said. Oil may gain further support if forecasts are correct for another drop in U.S. crude inventories. Analysts expect a 3.4 million-barrel draw in the latest week. 1/8EIA/S 3/8 The American Petroleum Institute, an industry group, releases its inventory report Tuesday at 4:30 p.m. EDT (2030 GMT). The U.S. government’s official figures are due Wednesday morning. A weaker outlook for oil demand because of slowing economic growth also weighed. On Tuesday, the International Monetary Fund cut its forecast for global growth, warning that further U.S.-China tariffs or a disorderly exit for Britain from the European union could weaken investment and disrupt supply chains. 1/8L2N24O0O8 3/8 On Sunday, Goldman Sachs lowered its 2019 oil demand projection, joining other forecasters. 1/8IEA/M 3/8 “Although prices had been driven by supply developments in the first half of the year economic considerations are making oil bulls careful this month,”

Morgan Stanley: Why Tanker Wars Aren’t Causing An Oil Price Spike - The oil market has changed so much over the past five years that fast-growing non-OPEC oil production limits oil price gains from a spike in tensions in the Middle East, where Iran seized a British oil tanker last week, Morgan Stanley says.“There is a difference in the oil market this time around because non-OPEC is simply growing so fast. That is the real game changer and that’s why the price action is relatively benign,” Morgan Stanley’s global oil strategist Martijn Rats told CNBC on Monday, commenting on the muted price reaction to Iran seizing a British tanker in Middle Eastern waters on Friday.If such an incident in the most important oil shipping lane in the world, the Strait of Hormuz, happened just five years ago, oil prices wouldn’t have risen just 1-2 percent, the spike would have been “much, much more significant,” Rats told CNBC.Oil prices were up early on Monday at 08:00 a.m. EDT, with WTI Crude rising 1.11 percent at $56.38 and Brent Crude up 1.25 percent at $63.25. Prices had eased back somewhat by 10:00am.We are in a fundamentally well-supplied oil market, Morgan Stanley’s Rats said, adding that with non-OPEC oil production growing very fast and oil demand somewhat soft, it’s actually “quite remarkable that we’re only at $63 a barrel, despite these concerns.” At the beginning of this month, just after OPEC and its allies rolled over their production cuts into 2020, Morgan Stanley revised down its long-term Brent Crude forecast to $60 from $65 a barrel. Over the next three quarters, the bank sees Brent at around $65 per barrel, a downward revision from a previous forecast of $67.50 a barrel.

WTI Pops'n'Drops After Huge Crude Draw, Gasoline Build - Oil rallied today, surging back up towards $57, as plans for a meeting between the U.S. and China offered a hint of progress in the US-China trade war.“Some of the soft demand numbers we’ve had in the last few months have definitely been the impact of the trade war,” said Leo Mariani, a KeyBanc Capital Markets Inc. analyst. “There’s been reticence in doing much until there’s more clarity on how that will end.”  API:

  • Crude -10.961mm
  • Cushing -448k
  • Gasoline +4.436mm - biggest build since Jan
  • Distillates +1.42mm

A major crude draw (the 6th weekly draw in a row) was offset by a big build in gasoline stocks (biggest rise since January)... WTI spiked above $57 on the big crude draw but quickly fell back as perhaps the ongoing gasoline build continues...

Oil Spikes After API Reports Largest Crude Inventory Draw Of The Year - The American Petroleum Institute (API) reported a huge crude oil inventory draw of  10.961 million barrels for the week ending July 18, compared to analyst expectations of a much smaller—but still significant--4.011-million barrel draw. The inventory draw this week compares to last week’s small draw of 1.401 million barrels, according to the API. A day later, the EIA had estimated an even bigger inventory drawdown of 3.1 million barrels. After today’s extra-large draw—the largest draw this year--the net build is now just 1.20 million barrels for the 30-week reporting period so far this year, using API data.Oil prices were trading up on Tuesday with continuing tensions between Iran and most of the Western world over a series of oil tanker attacks and oil tanker seizures in the eve- important Persian Gulf. Even Libya lifting its force majeure on its largest oilfield, Sharara lacked the teeth to push prices down. The market has grown increasingly tolerant of the tensions in the Middle East, with other metrics having more of an impact on oil prices such production reports out of the shale patch, and force majeures that actually decrease the amount of exportable oil rather than just the threat of decreased oil as is the case with Iran. At 3:24pm EST, WTI was trading up by $0.57 (+1.01%) at $56.79—a dollar under last week’s price. Brent was trading up $0.56 (+0.89%) at $63.82—also almost a dollar under last week’s level. The API this week reported a 4.436-barrel build in gasoline inventories for week ending July 18. Analysts estimated a draw in gasoline inventories of 730,000 barrels for the week. Distillate inventories grew by 1.420 million barrels for the week, while inventories at Cushing fell by 448,000 barrels. US crude oil production as estimated by the Energy Information Administration showed that production for the week ending July 12 slid back this week to 12.0 million bpd, 400,000 bpd off the all-time high hit earlier this year.

WTI Extends Gains On Big Crude Draw, Production Slump - Oil prices held on to gains overnight after the huge API-reported crude draw (but large ghasoline build) and more confidence in a possible US-China trade deal.  A confirmation of the API report in official government figures scheduled to be released Wednesday would “help us confirm an oil-price bottom,” said Phil Flynn, senior market analyst at Price Futures Group Inc., in a note to clients. “If we hold the recent lows and build off of it, it is very possible that crude oil has set a low that won’t be tested for the rest of this year.”Bloomberg Intelligence's Senior Energy Analyst Vince Piazza warns: "Energy investors seem to be paying attention to the wrong things. Escalating tensions in the Persian Gulf are supporting benchmarks, though the modest price boost relative to the risk of bottlenecks is surprising. Weaker petroleum demand should be the larger long-term concern, along with trade issues and resilient U.S. production. Modest aftereffects of storm system Barry still skew industry data." DOE:

  • Crude -10.835mm
  • Cushing -429k
  • Gasoline -226k
  • Distillates +613k

Confirming API's data, DOE reported a massive 10.8mm barrel inventory draw last week (and only marginal product inventory shifts). This is the 6th weekly crude draw in a row. US Crude production crashed down 700k last week but largely due to Gulf stoppages due to storm Barry...

Oil ends lower as support from storm-fueled, 11 million-barrel drop in U.S. crude supplies disappears - Oil futures settled lower on Wednesday, as support from a storm-induced, 11 million-barrel drop in U.S. crude supplies wore off and traders turned their attention back to concerns about weaker energy demand. U.S. crude inventories dropped by 10.8 million barrels for the week ended July 19, according to data from Energy Information Administration Wednesday, and production also edged lower, with analysts citing temporary disruptions caused by a Gulf of Mexico storm earlier this month. “Buyers won’t buy oil futures on the premise of [a] tight third quarter—they are looking longer term,” Tom Kloza, head of energy analysis at the Oil Price Information Service, told MarketWatch. He pointed out that the latest supply data were “heavily impacted” by Hurricane Barry. Also, “the worries about global slowdown thanks to [U.S.-China] trade tensions trump tightening supply,” said Kloza. West Texas Intermediate crude for September delivery fell 89 cents, or 1.6%, to settle at $55.88 a barrel on the New York Mercantile Exchange. Prices had climbed to as high as $57.64. September Brent crude declined by 65 cents, or 1%, to $63.18 a barrel on ICE Futures Europe—down from an intraday high of $64.66. X See 

Oil falls 1.6% despite big draw in crude inventories, Mideast tensions - Oil prices fells on Wednesday, erasing earlier gains, despite the Energy Information Administration data showing a big draw in U.S. crude inventories.Brent crude futures fell 50 cents to $63.33 a barrel, while U.S. West Texas Intermediate crude fell 89 cents at $55.88 a barrel.U.S. crude failed to hold above $57.50 per barrel, a key technical level, before giving back its earlier gains, traders said.Earlier in the session, the front-month Brent contract flipped to trade at a discount to the second-month contract, a market structure known as contango, for the first time since March. Sentiment in the oil market has darkened as investors worry about slowing global economic growth weakening demand for oil.Yet the market was supported by a large drawdown in U.S. crude stockpiles earlier in the session. Crude inventories fell by 10.8 million barrels in the week to July 19, the Energy Information Administration said on Wednesday. Analysts expected a decrease of 4 million barrels.“Hurricane Barry has shaken up the data for a second week, with lower production and stymied imports leading to a near-11 million barrel draw,” said Matt Smith, director of commodity research at ClipperData.U.S. oil companies cut some production in the Gulf of Mexico ahead of Hurricane Barry, which came ashore in Louisiana earlier this month.Meanwhile, some geopolitical risk premium from tensions in the Middle East also helped buoy prices.A U.S. Navy ship took defensive action against a second Iranian drone in the Strait of Hormuz last week, but did not see the drone go into the water, the U.S. military said on Tuesday.Iran’s president, Hassan Rouhani, said on Wednesday his country was ready for “just” negotiations but not if they meant surrender, without saying what talks he had in mind. Also fueling tensions, Britain gained initial support from France, Italy and Denmark for its plan for a European-led naval mission to ensure safe shipping through the Strait of Hormuz following Iran’s capture of a British-flagged tanker.

Oil ends lower as support from storm-fueled, 11 million-barrel drop in U.S. crude supplies disappears - Oil futures settled lower on Wednesday, as support from a storm-induced, 11 million-barrel drop in U.S. crude supplies wore off and traders turned their attention back to concerns about weaker energy demand. U.S. crude inventories dropped by 10.8 million barrels for the week ended July 19, according to data from Energy Information Administration Wednesday, and production also edged lower, with analysts citing temporary disruptions caused by a Gulf of Mexico storm earlier this month. “Buyers won’t buy oil futures on the premise of [a] tight third quarter—they are looking longer term,” Tom Kloza, head of energy analysis at the Oil Price Information Service, told MarketWatch. He pointed out that the latest supply data were “heavily impacted” by Hurricane Barry. Also, “the worries about global slowdown thanks to [U.S.-China] trade tensions trump tightening supply,” said Kloza. West Texas Intermediate crude for September delivery CLU19, +0.46% fell 89 cents, or 1.6%, to settle at $55.88 a barrel on the New York Mercantile Exchange. Prices had climbed to as high as $57.64. September Brent crude BRNU19, +0.44% declined by 65 cents, or 1%, to $63.18 a barrel on ICE Futures Europe—down from an intraday high of $64.66. 

Global oil consumption stagnates leaving prices under pressure - (Reuters) - Global oil consumption has stalled since the middle of 2018, making lower oil prices inevitable despite the best efforts of Saudi Arabia and its allies to reduce production. The world’s top 18 oil-consuming countries, each using more than 1 million barrels per day (bpd) of petroleum products, account for almost two-thirds of world consumption, so they make a useful proxy for global demand. Consumption in the top 18 rose by just 0.7% in the three months to March compared with the same period a year earlier, figures from the Joint Organisations Data Initiative show. Most of these countries report consumption figures with a delay of two months, with data now available through May, but China, India and Thailand report more slowly. (  If late reporters are excluded, consumption in the top 15, accounting for 45% of world consumption, fell 2.2% in the three months to May compared with 2018, the fastest decline since the recession of 2008/09. Since 2006, consumption growth in the top 15 has been a reliable leading indicator for the top 18 and demand more generally, which is not surprising given the interconnectedness of the global economy. Decelerating oil consumption growth since the second and third quarter of 2018 has corresponded closely with the slowdown in global manufacturing activity and freight movements. Given the slackening in oil consumption, a sharp fall in prices was inevitable, notwithstanding action by Saudi Arabia and its allies in the expanded OPEC+ group of oil exporters. Previous decelerations in 2006/07, 2008/09, 2011/12, and 2014/15 were all accompanied by sharp price falls to force consumption and production back to balance. In 2019, production restraint has averted an even sharper fall in prices but could not avert the need for lower prices to help buy back some of the lost consumption growth. Prices will start to rise sustainably if, and only if, the global economy avoids recession and consumption growth starts to accelerate again.

Oil rises 0.3% on US stock decline, but manufacturing slowdown caps gains - Oil prices rose on Thursday amid Middle East tensions and a big fall in U.S. crude stocks, but gains were capped as weak Western manufacturing data indicated slowing economic growth and in turn the potential for reduced fuel demand. Brent crude futures rose 28 cents or 0.4% to $63.46 a barrel, after dropping 1% on Wednesday - the first fall in four sessions. U.S. West Texas Intermediate crude settled up 14 cents, or 0.3%, at $56.02 a barrel, having dropped 1.6% in the previous session. U.S. crude stocks fell by nearly 11 million barrels last week, the Energy Information Administration reported on Wednesday, well above analysts’ expectations for a drop of 4 million barrels. “While that draw was influenced by temporary factors - Hurricane Barry - U.S. crude inventories have plunged by 40 million barrels over the last six weeks, suggesting the oil market is finally rebalancing,” UBS analyst Giovanni Staunovo said. Oil prices have also been under pressure from concerns about global economic growth amid growing signs of harm from the U.S.-China trade war that has rumbled on over the last year. However, the White House said on Wednesday top U.S. and Chinese negotiators would meet next week to continue talks, and global equities edged up on the news. “Despite the bullish supply-side fundamentals and geopolitics that support oil prices, it seems that the market needs a positive economic catalyst to move appreciably higher,” said Harry Tchilinguirian, global oil strategist at BNP. “If we get positive echoes next week from renewed U.S.-China trade talks, then oil can advance noticeably higher.” A series of purchasing manager index (PMI) readings in the United States and Europe were weaker than expected. The German PMI, tracking the manufacturing and services sectors, hit a seven-year low in July, suggesting a deteriorating growth outlook for Europe’s largest economy. The fall was driven by the auto sector on poor sales to China.

Crude Oil Settles Higher, but Fears Over Slowing Global Growth Keep Lid on Gains - – Crude oil prices rose Thursday as traders cheered data from a day earlier showing a fall in U.S. crude stockpiles. But concerns about global growth raised by European Central Bank President Mario Draghi kept a lid on gains. On the New York Mercantile Exchange West Texas intermediate crude futures for September delivery rose 14 cents to settle at $56.02 a barrel, while on London's Intercontinental Exchange, Brent crude, the global benchmark, gained 21 cents to $63.39 a barrel. For the year, WTI is up 23.6%. Brent has risen 17.8%. U.S. gasoline prices were up slightly to an average $2.751 a gallon on Thursday, according to the American Automobile Association, and have climbed 21.4% this year. The threat of a slowing global economy on oil-demand growth was in the spotlight once again as Draghi hinted that the central bank would consider adopting more aggressive monetary policy easing measures, including rate cuts amid worries about slowing global growth. That knocked down some of the optimism on oil prices, which was led by bullish supply-side fundamentals, including data from a day earlier showing a draw in U.S. stockpiles for the sixth-consecutive week. U.S. crude stocks fell by 10.8 million barrels last week, the Energy Information Administration reported on Wednesday, well above's consensus expectations for a draw of 4 million barrels. That was the sixth-straight weekly decline in domestic crude stockpiles amid signs of tightening supplies globally, as OPEC and its allies continue to cut production and sanctions on Iran and Venezuela squeeze output. There was speculation on Wednesday, however, that the drawdown was also a byproduct of Hurricane Barry, which came ashore on the central Louisiana coast earlier this month and forced many oil platforms to shut in their production.

Oil prices nudge up as geopolitical tensions counter sluggish demand - Oil were on track for a weekly increase as geopolitical tensions over Iran remained unresolved, although flagging prospects for global economic growth amid the U.S.-China trade war capped gains. Brent crude futures were headed for a weekly gain of about 1%. They fell 6% last week. West Texas Intermediate crude was on pace to record a 0.2% gain. It fell 7.5% last week. Both Brent and WIT slipped slightly during Friday’s session, however. Tensions remained high around the Strait of Hormuz, the world’s most important oil passageway, as Iran refused to release a British-flagged tanker it seized last week in the Gulf. U.S. Secretary of State Mike Pompeo said Washington had asked Japan, France, Germany, South Korea, Australia and other nations to join a maritime security initiative in the Middle East so oil and other products can flow through the strait. However, oil prices’ reaction to the strains in the Gulf has been relatively muted. “It appears that the majority of market participants do not expect a military conflict that would hamper oil shipments,” Commerzbank analyst Carsten Fritsch said. Prices also drew support from a crude inventory draw in the United States, but gains were limited as the fall appeared to have been largely anticipated. U.S. production in the Gulf of Mexico was still feeling the effects of Hurricane Barry. “Several indicators pointing to a slowdown of global oil demand growth appear to have taken over market sentiment,” Jefferies analyst Jason Gammel said. Reuters polls taken July 1-24 showed the growth outlook for nearly 90% of the more than 45 economies surveyed was downgraded or left unchanged. That applied not just to this year but also 2020.

Oil gains on U.S. economic data, Gulf crude tanker dispute (Reuters) - Oil prices inched up on Friday, ending the week higher after stronger-than-expected U.S. economic data brightened the crude demand outlook and concerns over the safety of oil transport around the Strait of Hormuz threatened supply. Brent crude futures LCOc1 settled at $63.46 a barrel, up 7 cents. They clocked a weekly rise of about 1.7%. U.S. West Texas Intermediate crude CLc1 settled at $56.20 a barrel, rising 18 cents. It gained about 1.2% on the week. U.S. economic growth slowed less than expected in the second quarter with a boom in consumer spending, strengthening the outlook for oil consumption. “The data was net positive,” said John Kilduff, partner at Again Capital Management. “GDP beat expectations... consumer spending was just off the charts, but business spending was nearly as bad as consumer spending was good.” Broader economic slowing, particularly in Asia and Europe, could weaken crude demand outside of the United States and kept prices in check. “There’s a battle in the market right now between those who think we’re going to see slowing economic conditions that will hit demand... and others (focused on) what’s going on in the Persian Gulf as well as lowered output from the producers,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. Next week, top U.S. and Chinese negotiators meet for the first time since trade discussions between the world’s two largest economies broke down in May after nearing agreement. Any positive outcome from the talks is expected to boost oil prices. Reuters polls taken July 1-24 showed the growth outlook for nearly 90% of the more than 45 economies surveyed was downgraded or left unchanged. That applied not just to this year but also 2020. 

Oil Prices Up for the Week - WTI and Brent crude oil futures eked out gains for the day and the week. West Texas Intermediate (WTI) and Brent crude oil futures eked out gains for the day and the week. The September WTI contract gained 18 cents Friday, settling at $56.20 per barrel. The light crude marker traded within a range from $55.68 to $56.57. Compared to the July 19 close, the WTI is up one percent. Also edging upward Friday was the September Brent price, which picked up seven cents to settle at $63.46 per barrel. The Brent is up 1.6 percent week-on-week. Both grades of crudes managed to show slight gains for the week despite trading within a wide range Wednesday, said Tom Seng, Assistant Professor of Energy Business with the University of Tulsa’s Collins College of Business. “Monday’s higher prices were the result of last Friday’s seizure of a British-flagged oil tanker in the Persian Gulf,” said Seng. “Countering that move was a sense of adequate flowing oil supplies and building global inventories and sagging demand going forward.” Seng also noted the International Energy Agency (IEA), OPEC and the U.S. Energy Information Administration (EIA) all lowered their growth forecasts for the remainder of 2019. In addition, he pointed out the American Petroleum Institute (API) reported that U.S. crude exports have hit a record daily average of 3.3 million barrels – helping to offset global supply interruptions from places such as Iran and Venezuela. “It has also been reported that China is stockpiling millions of barrels of Iranian crude at its ports,” said Seng. “Since it is not officially being received as imported crude, so-called bonded crude is not currently being counted but could serve to dampen prices when the world’s largest importer of oil takes ownership.” The EIA’s latest Weekly Petroleum Status Report showed a fifth straight weekly decline in U.S. commercial crude inventories, said Seng. In addition, he pointed out the report revealed:

  • A drop in commercial crude stocks of 10.8 million barrels (Bbl), far higher than the 4.1 million Bbl projected by Wall Street Journal analysts with close to API’s forecast of 11 million Bbl
  • 445 million Bbl of total crude in storage – two percent higher than the five-year average for this time of year
  • A 429,000-Bbl decline in oil stocks at the Cushing, Okla., hub, bringing the total down to 50.4 million Bbl – or 66 percent of capacity
  • 93.1 percent refinery utilization, or 17 million Bbl per day (bpd) – a 1.3-percent decline from the previous week
  • A 14-percent year-on-year drop in oil imports
  • U.S. oil production at 11.3 million bpd, down from the preceding week

OPEC's Fight To End The Oil Glut Is Far From Over - OPEC and its Russia-led non-OPEC allies are in their third year of managing supply to the market, hoping to draw down high inventories and push up oil prices. Early this month, the so-called OPEC+ coalition of partners rolled over their production cuts of a combined 1.8 million bpd into March 2020, as the resurging oil glut threatened to derail their continued efforts to manage the market.  OPEC is now considering using several metrics to assess where global oil (over)supply stands, including taking the five-year average of oil stocks in 2010-2014 instead of the most recent five-year average 2014-2018, which it currently reports in its monthly oil market reports and which the International Energy Agency (IEA) also takes as a benchmark to measure oil inventories.   Analysts warn that the 2010-2014 average metric will not give a correct comprehensive assessment of the oil market.  Fatih Birol, the IEA’s executive director, warns that moving the goalposts doesn’t change the situation in the oil market. The glut is there, regardless of how OPEC wants to measure inventories.   “The important thing is that you can change the methodology but you cannot change the realities of the market,” Birol told Reuters, noting that the 2010-2014 average is a new perspective OPEC proposes to use, while the IEA has its own perspective. On the sidelines of the OPEC+ meeting in Vienna earlier this month, Khalid al-Falih, the Energy Minister of OPEC’s largest producer and de facto leader Saudi Arabia, told Al Arabiya:“With demand rising over the next nine months and the commitments from all the countries, including the Kingdom of Saudi Arabia, we are approaching the normal levels of supplies of 2010-2014. It is one of the options in front of us as a goal." “The rate of the last five years is another option, which we think is unsuitable. We will study the middle options between these two choices. In any case, we will make sure that the market is balanced with proportionate indicators,” al-Falih told the Arab broadcaster.

Kuwait Works with Saudis to Resume Oil Output in Neutral Zone -- Kuwait said it’s working with Saudi Arabia to resume oil production in the neutral zone between them that has been shuttered for at least four years. Saudi Minister of State for Energy Prince Abdulaziz Bin Salman visited Kuwait Wednesday. The two sides will discuss a resumption after the “completion of all technical issues required,” Tareq Al-Mezrem, a Kuwaiti government spokesman, told Kuwait’s state-run KUNA news agency. The zone can produce as much as 500,000 barrels a day, equal to about 4% of the countries’ combined output last month. No timeline for a resumption was given, nor was it clear if the additional production would be offset by lower output elsewhere. Both countries are subject to quotas set by the Organization of Petroleum Exporting Countries. The two sides have resolved the major issues and those outstanding are technical in nature, according to a person familiar with the discussions, who asked not to be identified because the matter is private. The talks are the most advanced they’ve ever been, the person said. Years of negotiations have so far failed to bring about a resolution. The two Gulf nations have held a number of private meetings since 2015, at one point even coming close to signing an agreement before pulling back at the last minute over wording in the final documents regarding contentious sovereignty issues. The neutral zone hasn’t produced anything since fields there were shut down after spats between the two countries in 2014 and 2015. The barren strip of desert straddling the Saudi-Kuwaiti border -- a relic of the time when European powers drew implausible ruler-straight borders across the Middle East -- can pump about as much as OPEC member Ecuador.

Saudi Arabia releases Iranian oil tanker after two and a half months - Saudi Arabia has released an Iranian oil tanker after two and a half months, Iran's semi-official Mehr news agency is reporting. Happyness 1, belonging to the Iranian National Tanker Company (NITC), which was carrying over 1 million barrels of fuel oil, suffered a malfunction in the Red Sea off the coast of Jeddah in Saudi Arabia on April 30. Mehr said Saudi officials had prevented the oil tanker from leaving the Jeddah port despite the fact that Iran had paid all the costs of maintenance and repair that the Saudi authorities had demanded. Saudi authorities released the tanker and all its crew, including 24 Iranians and two Bangladeshis. This comes amid heightened tensions in the region following the seizure of a British-flagged tanker by Iran's Revolutionary Guard. The UK's Foreign Secretary Jeremy Hunt said the seizing of the tanker "raises very serious questions about the security of British shipping and indeed international shipping" in the Strait of Hormuz. Hunt spoke to reporters Saturday evening after an emergency government meeting about the "totally and utterly unacceptable" interception of the Stena Impero and "measures that we are going to take" to guarantee British vessels safe passage. Hunt said that while speaking with Iranian Foreign Minister Javad Zarif on Saturday, he again rejected Iran's assertion that Friday's incident reciprocated for Royal Marines taking part in the July 4 seizure of an Iranian tanker. He said the Iranian tanker, seized off the coast of Gibraltar, violated European Union sanctions by carrying oil to Syria, making its detention in the waters of a British territory legal.

'Floating bomb': Decaying oil tanker near Yemen coast could soon explode, experts warn - An abandoned and decaying oil tanker near the coast of war-torn Yemen could soon rupture or explode, the United Nations (UN) has warned, potentially triggering one of the world’s largest oil spills. The deserted Safer FSO tanker, which is believed to contain approximately 1.14 million barrels of oil, has been anchored and left without maintenance off the Yemeni coast of Al Hudaydah since early 2015, according to the UN. The tanker, which was described in a recent op-ed from The Atlantic Councilas a “floating bomb,” is thought to be eroding fast.There are concerns that following years of inertia in a salty and corrosive maritime environment, volatile gases have built up in the storage tanks — increasing the risk of an explosion.However, UN officials’ plans to inspect the ship in order to assess the scale of the damage has repeatedly been blocked.Matt Lowcock, the UN undersecretary-general for humanitarian affairs, saidin a speech to the Security Council last week that Houthi authorities “continue to delay” any assessment of the tanker.Lowcock pointed out that this was “additionally frustrating” because Houthi authorities had actually contacted the UN in early 2018 requesting assistance with the tanker and promising to facilitate their work.“If the tanker ruptures or explodes, we could see the coastline polluted all along the Red Sea. Depending on the time of year and water currents, the spill could reach from Bab el Mandeb to the Suez Canal — and potentially as far as the Strait of Hormuz,” Lowcock said on July 17.“I leave it to you to imagine the effect of such a disaster on the environment, shipping lanes and the global economy.”

This crisis was entirely predictable, but was it avoidable? - At the start of this month the Gibraltarian authorities - aided by a detachment of Royal Marines - detained a tanker which was believed to be carrying Iranian oil destined for Syria.This would have been a breach of EU sanctions directed against various Syrian entities and individuals. Gibraltar and Britain insist they were acting entirely legally, but Tehran has described the episode as piracy.  And ever since the vessel was detained, the Iranians have been threatening to seize a British-flagged ship in retaliation.Indeed, an earlier effort by Iran's Revolutionary Guard Corps to divert a British tanker into Iranian waters was only averted by the muscular intervention of a Royal Navy warship, the Type 23 frigate HMS Montrose. But there is a limit to what one warship can do. This time it appears not to have arrived on the scene quickly enough and the Stena Impero and its crew are now in Iranian hands. A second ship that was detained by the Iranians was subsequently allowed to go, underlining the fact that this seems to be a direct retaliation for the arrest of the tanker off Gibraltar. So what happens now? Well the first thing to remember is that this specific row between Tehran and London is only one aspect of an already highly volatile situation in the Gulf. The Trump administration's decision to walk away from the international nuclear deal with Iran and to re-apply sanctions is having a hugely damaging impact on the Iranian economy. Iran is pushing back. While it denies some of these actions, the US and its allies believe it was responsible for attacking several vessels with limpet mines. It has also shot-down a sophisticated US unmanned aircraft. And, as if to underline the risk of conflict, the US claims more recently to have shot down an Iranian UAV (drone) that approached one of its vessels. The Iranians deny the loss. So the first order of business is to try to calm tensions and avoid escalation.

Iran says British-flagged tanker was in accident with fishing boat  (Reuters) - The British-flagged tanker Stena Impero was in an accident with a fishing boat before being detained on Friday, Iran’s Fars news agency reported on Saturday, quoting an official. Iran says all 23 crew seized on the tanker are now at Bandar Abbas port and will remain on the vessel until the end of an investigation, according to Fars. “It got involved in an accident with an Iranian fishing boat... When the boat sent a distress call, the British-flagged ship ignored it,” said the head of Ports and Maritime Organisation in southern Hormozgan province, Allahmorad Afifipour. “The tanker is now at Iran’s Bandar Abbas port and all of its 23 crew members will remain on the ship until the probe is over.” Britain said earlier it was urgently seeking information about the Stena Impero, which had been heading to a port in Saudi Arabia and suddenly changed course after passing through the strait at the mouth of the Gulf.

Iran Posts Dramatic Video Showing IRGC Troops Raiding Seized Oil Tanker  Earlier Iran released footage of the detained British-flagged oil tanker Stena Impero, but hours after the first images were revealed, more video was aired on Iranian state TV, this time showing the dramatic IRGC military raid on the vessel. Iranian special forces troops fast-roped down to the deck via helicopter while IRGC boats circled near the vessel.#BREAKING:#IRGC released video of seizure of Stena Impero, the #UK's Oil Tanker in #HormuzStrait yesterday. A Mi-171 transport helicopter of #IRGC Navy Aviation base at #BandarAbbas was used for heliborne & fast-roping of #IRGC Navy Special Forces on the deck of the Oil tanker.— Babak Taghvaee (@BabakTaghvaee) July 20, 2019 Iran's Press TV described:The footage shows Iranian speedboats cruising near Stena Impero tanker as a military helicopter is flying over the vessel.An Iranian marine could be heard communicating with the command center in the southern port city of Bandar Abbas. Masked Iranian comm andos then rappelled on the deck of the tanker from the helicopter. The name of the ship can be seen in the video.

Eye-For-An-Eye- UK Caught As Trump's Useful Idiot In Dangerous Iran Policy -- The UK fell for a US trap when it seized an Iranian ship on July 4. Iran struck back last Friday. Eurointelligence provides interesting commentary of tit-for-tat ship seizures first by the UK, then by Iran in response. The extraordinary story behind the capture of the British-flagged oil tanker Stena Impero is a cautionary tale on many levels. It has the potential of turning into a major diplomatic calamity for both the UK and the EU. Simon Tisdall tells the story in the Observer that this confrontation was masterminded by none other than John Bolton, Donald Trump’s national security adviser. Several weeks ago, US intelligence services tracked an Iranian oil vessel headed for the Mediterranean, bound for a refinery in Syria. The Grace 1 sailed under a Panama flag. As it was too big for the Suez Canal, it undertook the longer journey from Iran around Cape Horn and up the Atlantic towards Spain. Washington alerted the Spanish government 48 hours before the tanker was due to enter the Strait of Gibraltar, but without giving any details that the ship might be in breach of US sanctions. The Spanish Navy escorted the ship but took no action at the time. Spain later said it would have intervened if it had been given information that the ship was in breach of US sanctions. Bolton instead tipped off the British, who felt compelled to intercept the Grace I as it entered the Strait of Gibraltar on July 4, dispatching a force of 30 marines who stormed the ship. The US managed to accomplish three things at the same time: escalating the conflict with Iran; dividing the Europeans by pitching the UK against Spain, which distanced itself from the UK manoeuvre off Gibraltar; and turning the UK once again into the useful idiot of US diplomacy. Not bad for a few days' work. But it is also a clear indication of the EU's total lack of preparedness to deal with a hostile Trump administration. Unsurprisingly, the EU’s response is divided. Spain is furious about the UK’s unilateral action in international waters off the Spanish coast. The EU’s external-action service, soon to be headed by Josep Borrell, Spain’s foreign minister, is silent. Germany and France are backing the UK - at least diplomatically - for now. Russia, Japan and China are with Iran. They do not want to risk oil supplies.

Britain weighs response to Iran Gulf crisis with few good options (Reuters) - Britain was weighing its next moves in the Gulf tanker crisis on Sunday, with few good options apparent as a recording emerged showing that the Iranian military defied a British warship when it boarded and seized a ship three days ago. Prime Minister Theresa May’s office said she would chair a meeting of Britain’s COBR emergency response committee on Monday morning to discuss the crisis. Little clue has been given by Britain on how it plans to respond after Iranian Revolutionary Guards rappelled from helicopters and seized the Stena Impero in the Strait of Hormuz on Friday in apparent retaliation for the British capture of an Iranian tanker two weeks earlier. Footage obtained by Reuters from an Iranian news agency on Sunday showed the tanker docked in an Iranian port — with Iran’s flag now hoisted atop. The British government is expected to announce its next steps in a speech to parliament on Monday. But experts on the region say there are few obvious steps London can take at a time when the United States has already imposed the maximum possible economic sanctions, banning all Iranian oil exports worldwide. “We rant and rave and we shout at the ambassador and we hope it all goes away,” said Tim Ripley, a British defense expert who writes about the Gulf for Jane’s Defence Weekly. “I don’t see at this point in time us being able to offer a concession that can resolve the crisis. Providing security and escort for future ships is a different matter.” A day after calling the Iranian action a “hostile act”, top British officials kept comparatively quiet on Sunday, making clear that they had yet to settle on a response.

Britain calls for European naval mission to counter Iran's 'piracy' - Reuters- Britain called on Monday for a European-led naval mission to ensure safe shipping through the Strait of Hormuz, days after Iran seized a British-flagged tanker in what London described as an act of “state piracy” in the strategic waterway. Foreign Secretary Jeremy Hunt outlined the plans to parliament after a meeting of COBR, the government’s emergency committee, which discussed London’s response to Friday’s capture of the Stena Impero tanker by Iranian commandos at sea. “Under international law, Iran had no right to obstruct the ship’s passage - let alone board her. It was therefore an act of state piracy,” Foreign Secretary Jeremy Hunt told parliament. “We will now seek to put together a European-led maritime protection mission to support safe passage of both crew and cargo in this vital region,” Hunt said. The British announcement signals a potential shift from Washington’s major European allies who so far have been cool to U.S. requests that they beef up their military presence in the Gulf, for fear of feeding the confrontation there. It is unclear how much influence Britain may have in Europe given it is about to have a new prime minister, widely expected to be Boris Johnson, who takes over a country divided over Brexit, its planned departure from the European Union. Hunt made a point of saying that the maritime protection proposal would not involve contributing European military power to back Washington’s hardline stance against Iran. The proposed new maritime protection mission “will not be part of the U.S. maximum pressure policy on Iran because we remain committed to preserving the Iran nuclear agreement”, he said.

Allies Resist US Call For Anti-Iran Naval Force, Fearing It Would Worsen Tensions - As tensions have continued to rise between the US and Iran, American officials continue to try to court allies to join a naval force to safeguard key shipping lanes off the coast of Iran. So far, they don’t have any takers.   The Trump Administration has been keen to have other nations pay for the defense of the Strait of Hormuz, and Trump has argued that the US shouldn’t have to cover the entire cost. The United States is struggling to win its allies’ support for an initiative to heighten surveillance of vital Middle East oil shipping lanes because of fears it will increase tension with Iran, six sources familiar with the matter said. — Reuters  US officials, however, are clear they will be in total control of this foreign fleet of ships they’re trying to recruit.   Some nations are okay with sending a few ships to escort their own tankers, but diplomats say that there is a lot of resistance to being seen as part of a US-formed fleet that would increase tensions even further.  “Nobody wants to be on that confrontational course and part of a US push against Iran,” an official was quoted by Reuters as saying.  Pentagon officials argue that the goal is not to encourage a confrontation, though everyone else seems to notice this is the end-result of US efforts in the area, and doesn’t want to be involved. 

Gulf crisis uniquely difficult strategic moment for UK – BBC  - The Gulf crisis catches the UK at a uniquely difficult strategic moment. Its military means are quite limited, Iran's are greater than many might think, and the option of defaulting into its usual partnership with the US is not straightforward because of disagreements over the wisdom of breaching the nuclear deal. For this reason, on Monday, UK Foreign Secretary Jeremy Hunt suggested that the response to the crisis should include a "European-led maritime protection mission", complimentary but separate to the US effort. The issue, he insisted, was one of freedom of navigation in the Straits of Hormuz rather than increasing pressure on Iran. The UK's options for protecting its merchant shipping in the busy Gulf sea lanes are distinctly limited. The US has suggested opting into a joint system for convoying ships past the Iranian littoral, but British decision makers are reluctant to do so - because they disagree with President Trump's decision to exit the Iran nuclear deal in May 2018 and believe this step prompted the current tensions. The other option for a rapid change to the dynamic would be releasing the tanker Grace I from custody in Gibraltar, where it was detained on suspicion of carrying Iranian oil to Syria. Last week British officials had been upbeat that a solution to that situation could be negotiated, and then the UK-flagged ship Stena Impero was seized by Iran in Omani waters. It may well be that the release of both vessels provides de-escalation. But the longer term questions about UK-US disagreement on Iran policy, and inability to protect shipping, will remain.

UK Oil Tankers Flee Persian Gulf Amid Iran Tensions-- Two weeks ago there were six British-flagged oil tankers in the Persian Gulf going about their business. A week later there were none. Iran’s threat to seize a British ship in retaliation for the arrest of the Grace 1 off Gibraltar has effectively closed the world’s most prolific oil region to U.K. carriers. The tankers in the Persian Gulf on July 9 were all registered in the Isle of Man, a self-governing British crown dependency, but that wasn’t enough to spare them from Iranian harassment. One of them, the British Heritage, left the region without loading its intended cargo of Iraqi crude and needed the Royal Navy frigate HMS Montrose to chase off Iranian patrol boats as it entered Hormuz. At least two others were also escorted out of the Gulf. There are 243 oil tankers -- either listed as crude oil tankers, oil products tankers, or chemical/oil products tankers -- sailing under the flag of the United Kingdom, the Isle of Man, or Gibraltar, according to tanker tracking data compiled by Bloomberg. About half of them are registered in the Isle of Man, with the other half divided roughly equally between Gibraltar and the U.K. Ships usually enter the region, load their cargoes and depart again within a matter of days. What is abnormal, is that no British-flagged oil tankers have arrived in the region in the past two weeks. On any one day, there would normally be three or four of them somewhere in the Persian Gulf. Since July 15, none have been observed. The only British-flagged tanker to try entering the Persian Gulf in the past two weeks, the Stena Impero, was boarded and impounded by Iran’s Revolutionary Guard as it sailed through the Strait of Hormuz, the narrow waterway that connects the Middle East’s major oil and gas export facilities to the open seas, on July 19. Its capture shows just how easy it is for Iran to hinder traffic through Hormuz. Until tensions ease, British tankers are likely to keep away from the Persian Gulf.

Iran's president warns foreign powers to keep naval ships out of the Persian Gulf -- Iranian President Hassan Rouhani has told his cabinet that protecting security around the Persian Gulf is solely the responsibility of countries in the region and that other nations should stay away. The United Kingdom is attempting to form an alliance with other nations to protect ships passing through the Persian Gulf and Strait of Hormuz, a channel that sees 20% of the world’s oil supply pass through it. A U.K. ministry of defense spokesperson confirmed to CNBC Wednesday afternoon that negotiations were ongoing with a number of countries within Europe as well as others including India, the United States and Pakistan. Iranian Revolutionary Guards (IRGC) seized a British Ship traveling through the channel on Friday, an apparent tit-for-tat measure after the United Kingdom had previously impounded an Iranian tanker in the Mediterranean which was suspected of intending to deliver oil to Syria’s Assad regime. Such a move is banned by EU sanctions. Speaking to his cabinet Wednesday, and in a translation subsequently published on Rouhani’s official English language website, Iran’s president said foreign military might from other parts of the world should not send armed ships to the region. “The main responsibility for protecting the Strait of Hormuz and the Persian Gulf is mainly with Iran and neighbouring countries, and is not the others’ business, and the Iranian nation has always been the protector of the Persian Gulf,” Rouhani said. He then praised his military team for taking control of the Stena Impero on Friday, a British flagged tanker traveling through the Strait of Hormuz. “The IRGC courageously seized the British ship because it had refused all the orders and warnings. They did a very accurate, professional and right thing and I believe that the whole world must be grateful to the Revolutionary Guard for ensuring the security of the Persian Gulf,” said Rouhani.

Iran Announces Military Will Secure Contested Strait Of Hormuz - Hopefully it doesn't lead to a let's roll! moment at the White House, where super-hawk national security adviser John Bolton has no doubt been itching for escalation: moments ago Iran's Deputy Foreign Minister announced military forces will "secure" the Strait of Hormuz. Iran will "not allow disturbance in shipping in this sensitive area" Deputy Foreign Minister Abbas Araghchi was quoted as saying in state media, while leading a delegation to Paris, Reuters reports. However, it's unclear at this point how far Iran is willing to go in this escalating game of chicken with the US and UK - both of which have warships and other military assets in the gulf region.  “Iran will use its best efforts to secure the region, particularly the Strait of Hormuz, and will not allow any disturbance in shipping in this sensitive area,” Araqchi told French Foreign Minister Jean-Yves Le Drian during a meeting.The announcement comes amidst threats and counter threats ongoing between London and Tehran, with each demanding the release of their tanker. Early this month the Royal Navy seized the Grace 1, carrying 2 million barrels of oil, off Gibraltar; and in turn Iran last Friday captured the British-flagged Stena Impero in the Strait of Hormuz.  To be sure, this is not the first time Iran has made such a threat: back in April and before that in December Iran warned it would close the global oil chokepoint, when it said that "if someday, the United States decides to block Iran’s oil (exports), no oil will be exported from the Persian Gulf." Meanwhile, Iranian vice-president, Eshaq Jahangiri, said that Iran rejects UK-led attempts to establish a "joint European task force" to monitor and patrol the Persian Gulf in order to protect international shipping, countering that it would only bring "insecurity".

What It’s Like to Steer a Giant Tanker Through the Strait of Hormuz - John Smith is trying to get some rest, but he’s nervous. In a few hours, he’ll navigate his 1,100-foot tanker—a vessel and cargo that together are valued at well in excess of $100 million—through the world’s most important, and lately most dangerous, chokepoint for global energy flows. “There will be six of us on the bridge looking out for ‘fast boats’ approaching,” says Smith, whose name was changed to protect his security, writing by email from his ship. “Not sure six people on the bridge will have any deterrent effect on troops abseiling down onto the ship from a helicopter. All on board are nervous of the situation. Also of course the families at home.” At the time he emailed, Smith’s ship, one of the world’s largest, still had eight hours before it made it through the Strait of Hormuz, a waterway linking the oil-rich Persian Gulf with global markets. A third of the world’s seaborne petroleum, and a huge volume of liquefied gas, pass through the strait every day. On July 19, Iran seized a U.K.-flagged tanker there in an apparent retaliation for Britain’s Royal Marines helping to arrest a vessel transporting Iran’s crude in the Mediterranean earlier in the month in an alleged violation of Syria sanctions. Smith is responsible for 30 crewmen of various nationalities. His fears—perhaps the first time such anxieties have been expressed by a captain of a Gulf tanker since the crisis began—highlight the plight of merchant seafarers who’ve been caught up in tensions between Iran on one side and the U.S. and Britain on the other that have been turning increasingly confrontational in recent weeks. Since mid-May, a half-dozen ships have been attacked in the region, with Washington blaming Iran for the incidents. Iran, which denies the charges, is furious that the Royal Marines helped seize a cargo transporting Iranian crude oil near Gibraltar in the Mediterranean Sea and, before the July 19 seizure, had vowed to retaliate. U.S. and Iranian drones have been getting blown up. On July 22, Iran announced it had rounded up 17 alleged CIA-trained spies and planned to execute them. On Twitter, Trump described the Iranian claim as “totally false” and “just more lies and propaganda (like their shot down drone).”

Libya Seizes Italian Ship In The Gulf Of Sirte - Another vessel has been seized on the high seas...but the parties involved might be surprising to some.  Sputnik reports that Libya has seized an Italian vessel in the Gulf of Sirte.  The seizure comes as tensions between Iran and the UK climb as both countries have seized tankers. Iran captured two British-flagged oil tankers in retaliation for British Royal Marines seizing a Panamanian-flagged tankercarrying a shipment of Iranian crude.  Though the motive for the seizure hasn't yet been made clear, many suspect piracy or some kind of fisherman's dispute (the ship was a fishing trawler).  Rome told Italy's ambassador to Libya to "work promptly with the utmost efficacy to ensure the correct treatment and rapid release of the crew and the vessel...which has been forced to head for Misrata," the ministry told Sputnik. The waters where the Italian ship was seized are denoted as "high risk," mostly because of the instability in Libya, which hasn't had a functioning national government since the NATO-backed ouster of Muammar Gaddafi. However, in Misrata, the part of Libya closest to where the ship was seized, the Government of National Accord, the Italian and UN-recognised Libyan government, is believed to be in control.

The fake Twitter accounts influencing the Gulf crisis - On June 6, 2017, a group of four countries - Saudi Arabia, the United Arab Emirates (UAE),Bahrainand Egypt - cut all diplomatic ties with their Gulf neighbour, Qatar.They cited several reasons for breaking ties, but the main accusations the blockading countries laid out centred on allegations that Qatar supported "terrorism" and was working on "destabilising the region", accusations Doha has consistently denied.What many did not know is that some of the groundwork for the blockade had already been laid on social media platforms like Twitter.An online propaganda battle, which started in the months before the GCC Crisis, continues to this day, Al Jazeera has found. Using a combination of data collection and language processing, Al Jazeera has analysed more than 2.3 million tweets from almost 2,400 accounts, sent between June 2017 and October 2018.The analysis found that bots - Twitter accounts that are either fully or partially automated to amplify certain messages, hashtags or opinions - play a significant role in the online conversation about the blockade. "In the two months before the Gulf Crisis started, a network of Twitter accounts was set up specifically to have anti-Qatar messages in their bios," Marc Owen Jones, assistant professor of Middle East Studies at Hamad Bin Khalifa University in Doha and fellow of the Exeter Institute of Arab and Islamic Studies, told Al Jazeera.Jones has spent the last several years researching how Twitter in the Middle East, and in the Gulf region especially, is being manipulated to spread propaganda.    "The methodology that I use to identify these bots is by looking at account creation dates," Jones said.  "If you see a huge amount of accounts created on the same day tweeting on the same topic and they don’t really interact with people, you can be almost certain they’re bots," he said.

Hundreds Of US Troops Begin Deployment To Saudi Arabia To Counter Iran - The deployment of hundreds of US troops to Saudi Arabia as part of a build-up to counter Iran in the region amid soaring tensions and a dangerously ratcheting "tanker war" has begun, TheWall Street Journal reported Friday night.  The Pentagon first revealed on Wednesday that 500 of the 1000 total troops announced by the White House last month to bolster US presence in the Middle East would be heading to the Prince Sultan Air Base, situated in the desert east of Riyadh. Crucially, Prince Sultan Air Base has been closed to American troops since the rapid fall of Baghdad and overthrow of Saddam at the start of the 2003 US invasion of Iraq. The WSJ report confirms the new deployment is en route within 24 hours after Iran's elite IRGC seized two British tankers in the Strait of Hormuz. One tanker has already released, but the other - British-flagged Stena Impero and its crew - is still being detained.  According to the reportThe military already has begun to deploy more than 500 U.S. service members to Prince Sultan Air Base, about 150 kilometers southwest of Riyadh, officials said. Saudi officials didn’t respond to requests for comment. Officials from U.S. Central Command, which overseas the Middle East, declined to comment.It's the latest sign that the Trump Administration is continuing its military buildup in the region, which has so far included fighter jets, B-52 bombers, an aircraft carrier strike force, Navy destroyers and - of course - more troops.Citing two senior defense officials, CNN had previously reported that a small number of troops were already in the area, and initial preparations were being made for a Patriot missile defense battery as well as improvements to a runway and airfield. US security assessments have determined that the area would be ideal for US troop deployment because it would be difficult for Iran to target with missiles. Satellite images obtained by CNN revealed the initial deployment to the air base in mid-June. Other images showed more preparations were made at the site earlier this month.

Iran's Military Vows Attack On All Regional US Bases If War Starts - Iran has again rejected the prospect of new negotiations with the White House "under any circumstances," according to an interview with Supreme Leader Ayotallah Ali Khamenei’s Military Adviser Hossein Dehghan, cited in Al Jazeera. The Islamic Republic's top military adviser further warned Iran and its regional allies will target all American bases in the region should the US launch war plans, while reiterating Iran's ability to block the vital Strait of Hormuz to global oil transit. Everyone must be able to freely transit the Persian Gulf waterway or no one at all, Dehghan warned.  Yesterday, Iranian vice-president, Eshaq Jahangiri, said that Iran rejects UK-led attempts to establish a "joint European task force" to monitor and patrol the Persian Gulf in order to protect international shipping, countering that it would only bring "insecurity".“There is no need to form a coalition because these kinds of coalitions and the presence of foreigners in the region by itself creates insecurity,” he said. And added, “And other than increasing insecurity it will not achieve anything else.” France, Italy, the Netherlands and Denmark indicated Tuesday they would support a European-led naval mission to ensure international vessels' safe passage in the gulf. Iran's Deputy Foreign Minister further informed France directly while in Paris meeting with top French officials including the president, that Iran's own military forces will "secure" the Strait of Hormuz and will "not allow disturbance in shipping in this sensitive area," Reuters reported earlier.Meanwhile, threats and counter threats have continued to fly between London and Tehran, with each demanding the release of their tanker while accusing the other of "piracy". Early this month the Royal Navy seized the Grace 1, carrying 2 million barrels of oil, off Gibraltar; and in turn Iran last Friday captured the British-flagged Stena Impero in the Strait of Hormuz.  On Wednesday Iran's Hassan Rouhani appeared to offer a new deal that could break the stalemate, suggesting that should the UK release the Grace 1, Iran would reciprocate by releasing the Stena Impero.   "If Britain steps away from the wrong actions in Gibraltar, they will receive an appropriate response from Iran," Rouhani said Wednesday addressing a weekly cabinet meeting. The words came the same day Britain reportedly sent a mediator to Iran seeking the release of the Stena Impero.

The Next U.S.-Iran Flashpoint Could Be Iraq-- Drones have been downed and tankers attacked in the Persian Gulf as U.S.-Iran tensions raise fears of war around a critical oil chokepoint. But any conflict between rivals might actually start in the one country where both sides have forces on the ground: Iraq. After two wars with America since 1990, a brutal civil conflict and the rise of Islamic State more recently, about 5,200 U.S. troops are stationed in Iraq -- amid thousands of Iranian-backed Shiite militias, controlled by officials in Baghdad sympathetic to Tehran. That complicated reality leaves Iraqi officials in a difficult situation as they navigate security ties with the U.S. and their political and religious links to Iran, according to Ali Vaez, director of the Iran Project at the International Crisis Group. “The Iraqi government cannot afford to alienate either side,” Vaez said in a phone interview from Washington. “That is exactly why now it finds itself between a rock and hard place.” So far direct conflict has been avoided, and open warfare is unlikely given greater U.S. firepower, but it’s an uneasy lull. The U.S. pulled non-emergency staff from its embassy in Baghdad -- its largest and most expensive mission in the world -- and closed its consulate in Basra late last year as officials worried that Iran was undermining Iraq’s central authority, as well as Washington’s influence. The consulate remains closed. Exxon Mobil Corp. temporarily evacuated its foreign employees from a camp near the West Qurna-1 oil field in Basra in southern Iraq after a nearby rocket attack. In June, rockets hit an official compound in the northern Iraqi city of Mosul and the Taji Military camp near Baghdad, both of which house American military advisers, according to local press reports. Some “rogue” Iranian-backed militias “plot against U.S. interests and plan operations that could kill Americans, coalition partners and Iraqis,” Joan Polaschik, the acting principal deputy assistant secretary of state for Near Eastern affairs, said at a Senate hearing last week. These groups monitor U.S. diplomatic facilities and “continue to conduct indirect fire attacks,” she said. At the same hearing, Deputy Assistant Secretary of Defense for the Middle East Michael Mulroy said that Iran’s “cynical interference” undermines Iraqi interests and “jeopardizes” stability. ‘Loyal to Tehran’

A mysterious drone attacked 'Iran-backed militia' in Iraq - Israel News  -A drone attacked Iraqi Security Forces on Friday that were deployed 180 km. north of Baghdad, near the city of Tuz Khurmatu. Initially reported as an attack on Iranian-allied forces, including the Islamic Revolutionary Guard Corps (IRGC), the mysterious drone incident is still being investigated, and it is not clear where it came from or who carried out the attack that left several wounded. What we know is that something happened. The US-led anti-ISIS coalition put out a statement on July 19 saying they were aware of reports “of an attack against the Iranians and a Popular Mobilization Force unit in Salah a-Din [governorate]. Coalition Forces were not involved, and we have no further information at this time.” The coalition responded because of rumors circulating on social media and in Iraq seeking to blame the US for the incident. The day of the drone incident was the same day that the US said it used electronic warfare to take down an Iranian drone that was harassing the USS Boxer near the Straits of Hormuz. In another incident on the same day, Iran raided a British-flagged oil tanker, so tensions were already high that day. Different media have reported the incident. Kurdistan 24 wrote that “unidentified drone bombs Iran-allied militia in Iraq.” It said the incident occurred near Amerli, which is south of Tuz Khurmatu, and that the victims were from the “al-Shohada military camp of the Turkmen Brigades, part of the Iraq’s Hashd al-Shaabi militias.” This was according to Iraq’s Security Media Cell, Kurdistan 24 reported. Reports said that the drone “dropped grenades” and injured two people, but also said an ammunition depot was struck and one killed. The Hashd al-Shaabi are called the Popular Mobilization Units (PMU) and are a group of mostly Shi’ite paramilitaries who were raised to fight ISIS, but who became part of the Iraqi security forces in 2018 and are now standardized military units.

Iran’s two armies - On 5 May the US announced it was deploying the USS Abraham Lincoln Carrier Strike Group and a bomber task force to the Gulf. National Security Advisor John Bolton said this was ‘in response to a number of troubling and escalatory indications and warnings’ and told Iran that ‘any attack on United States interests or on those of our allies will be met with unrelenting force.’ Tension in the Gulf and on the Arabian peninsula has continued to rise, and Washington’s allies Saudi Arabia and the United Arab Emirates have, with varying degrees of explicitness, blamed Iran for the sabotage of oil tankers near the Strait of Hormuz and the increase in Houthi rebel activity in Yemen.  Bolton went on to say, ‘The United States is not seeking war with the Iranian regime, but we are fully prepared to respond to any attack, whether by proxy, the Islamic Revolutionary Guard Corps, or regular Iranian forces.’ This ominous statement makes it clear that the possibility of armed conflict between Iran and the US, its Gulf allies and Israel, while still only theoretical, cannot be discounted. It is also a reminder that any belligerent attacking the Islamic Republic of Iran will be met by two distinct military forces: the regular army and the Revolutionary Guards. To understand their origins and assess their capability to withstand a US military intervention, it’s necessary to go back 40 years to the days that followed the fall of the shah.

Israeli Minister Brags That His Country Has Been “Killing Iranians for Two Years” — An Israeli minister boasted on Sunday that his country was the only one that “has been killing Iranians,” after tensions between Britain and Iran rose in the Gulf. Regional Cooperation Minister Tzachi Hanegbi’s comments on public radio were a reference to Israeli strikes in neighbouring Syria against Iranian and Hezbollah military targets. But they came after Iran seized a British-flagged tanker on Friday, adding to tensions between Washington and Tehran linked to a 2015 nuclear deal. Hanegbi accused Iran, Israel’s main enemy, of seeking to create “chaos” and “harm freedom of navigation”.  Asked if he feared that Israel would not receive the backing of the United States in the case of a conflict with Iran, Hanegbi suggested that Tehran would avoid such a scenario.“Israel is the only country in the world that has been killing Iranians for two years,” he said.“We strike the Iranians hundreds of times in Syria. Sometimes we acknowledge it and sometimes foreign reports reveal it.“You can see that the Iranians are very limited in their responses, and it’s not because they don’t have abilities – it’s because they understand that Israel means business.”Israel has carried out hundreds of strikes in Syria against what it says are Iranian and Hezbollah military targets.It has vowed to keep Iran from entrenching itself militarily there.Prime Minister Benjamin Netanyahu spoke in a similar vein last week with cadets at the National Security College.“At the moment, the only army in the world to fight Iran is the Israeli army,” he said.Earlier this month, Netanyahu warned that Israeli fighter jets “can reach anywhere in the Middle East, including Iran”. Iran’s seizure of a British-flagged tanker in the Strait of Hormuz for breaking “international maritime rules” came some two weeks after Britain seized an Iranian tanker at the mouth of the Mediterranean on allegations of breaching UN sanctions against Syria.

Iran Claims IAEA Chief Behind Nuclear Deal Eliminated By Israeli Intelligence -Iran state media has made bombshell sensational claims of a conspiracy assassination of the head of the International Atomic Energy Agency (IAEA), whose death was reported early this week, prompting a firm denial from the powerful UN nuclear watchdog body.  On Wednesday semi-official Tasnim news agency claimed Israeli intelligence "eliminated" Yukiya Amano, who was the Director General of the IAEA and oversaw the singing of the landmark 2015 P5+1 nuclear deal (JCPOA). Iranian sources allege the covert assassination was carried out on the powerful staunch supporter of the JCPOA in order to gain leverage to force Tehran into dealing with the Trump White House's “pressure-talks” scheme, as Tasnim put it. The 72-year old Amano, who was also a career Japanese diplomat, was considered a huge influence in seeing the Iranian nuclear deal through and ensuring its continued survival over and against recent Trump administration pressure. Trump had famously called the 2015 agreement brokered by the Obama administration "the worst deal ever negotiated" before ordering the unilateral US pullout. The UN nuclear watchdog chief died on July 18, with the family only disclosing his passing on late Sunday, but no details as to the cause of death were given; however, a UN statement said he was due to step down next March due to an unspecified illness. Meanwhile Iran provided zero evidence for its wild accusation, nor did the report suggest exactly how the alleged Israeli intelligence plot was carried out. The Iranian allegation made waves inside Israel and at the IAEA Wednesday, as the Times of Israel reportsThe Tehran-based outlet, which defines its mission as “defending the Islamic Revolution against negative media propaganda campaign [sic],” cited unnamed “informed sources” who insisted that Amano, a Japanese diplomat who was extensively involved in negotiations over Iran’s controversial nuclear program, had been “eliminated” after refusing to buckle to “heavy pressure” from Jerusalem and Washington.

Trump’s Peace Plan and the Future of Palestine - Last month, Jared Kushner led a delegation of US envoys to Bahrain for an “economic workshop,” where he outlined his vision for a lasting settlement between Israel and Palestine. Titled “Peace to Prosperity”, the $50 billion plan was effectively a bribe, a one-time payment intended to persuade Palestinians to abandon their core national ambitions. Roundly scorned, Kushner’s deal was rejected before it even emerged.  The central innovation of “Peace to Prosperity” is its attempt to resolve what is essentially a political problem through economic means. “Land for Peace”, the organising framework of the past three decades, has been traded for “Money for Peace”, a Trumpian formula designed to work in lockstep with the increasing neoliberalism of the Palestinian Authority (PA) economic policy. The language of the plan is appropriately corporate: it speaks vaguely of ‘empowerment’ and ‘opportunity’, and leans heavily on the influence of the private sector.  ‘Modern’ is a key buzzword: everything stands to be modernised, from the dilapidated transportation network in Gaza, to the old-school inspection techniques that clog up West Bank checkpoints. Palestinians are envisioned as customers in a vast transnational business deal, rather than political subjects making a moral and historical claim to their land. There is no mention of an occupation, or of a Palestinian state. The plan’s appeal, such as it is, is directed squarely at Palestinian desperation, designed to exploit their powerlessness in a region increasingly dominated by Israel.  Kushner’s deal is not distinguished by its newness – the PA has been trading resistance for economic incentives since at least the Oslo accords – but by its ineptitude. Its specifications are either suspiciously vague, or haphazard and incoherent.  With the economic portion of the deal having been rejected, attention will soon turn to the next chapter of this long, doomed process: the release of Trump’s political plan, the centrepiece of the much-hyped ‘deal of the century’.

Trump Says He Could Kill 10 Million People, Wipe Afghanistan Off Face of the Earth -  — Kabul reacted with outrage and demanded clarification Tuesday after U.S. President Donald Trump said he has military plans that could wipe Afghanistan “off the face of the Earth,” killing millions of people.Following Trump’s remarks, the office of Afghan President Ashraf Ghani said in a statement that Afghanistan “will never allow any foreign power to determine its fate.”“While the Afghan government supports the U.S. efforts for ensuring peace in Afghanistan,” the statement read, “the government underscores that foreign heads of state cannot determine Afghanistan’s fate in absence of the Afghan leadership.”Trump’s comments came during a meeting in the Oval Office Monday with Pakistani Prime Minister Imran Khan. “We’re not fighting a war,” Trump said of the U.S.-led conflict that has lasted nearly 18 years, the longest war in American history. “If we wanted to fight a war in Afghanistan and win it, I could win that war in a week. I just don’t want to kill 10 million people.”“I have plans on Afghanistan that, if I wanted to win that war, Afghanistan would be wiped off the face of the Earth. It would be gone,” the president added. “It would be over in, literally, in 10 days. And I don’t want to do that—I don’t want to go that route.”Watch:The Afghan public expressed revulsion at Trump’s remarks, which came as U.S. envoy to Afghanistan Zalmay Khalizad arrived in the Middle East for talks with the Taliban.Shakib Noori, an entrepreneur based in Kabul, told Reuters that Trump’s comments were “embarrassing and an insult to all Afghans.” Afghan-American author Khaled Hosseini expressed a similar sentiment, calling Trump’s statement “reckless” and “appalling.”

Ukraine Seizes Russian Oil Tanker, Moscow Threatens Consequences --Ukraine’s security services said on Thursday they had detained a Russian oil tanker that had blocked Ukrainian warships near Crimea in November, drawing reaction from Russia which vowed ‘consequences’ should Russians aboard the tanker be taken hostage.   On Thursday, Ukraine’s security service seized Russian tanker Neyma, which Ukraine believes took part in the incident in the Kerch Strait near Crimea in November 2018.  Russia seized at the end of November three Ukrainian ships near Crimea in an incident that risked spilling over into a wider conflict between the two countries, exacerbating the disputes between Moscow and Kiev over oil and gas resources and infrastructure.Russia—which annexed Crimea in 2014, for which the U.S. and the EU imposed sanctions on Moscow—said at the time that three Ukrainian vessels had violated its state border in waters near Crimea.Ukraine, for its part, said that it had informed Russia about the plans for the ship movements and said that the seizing of the vessels was “another act of armed aggression” by Russia. The November 2018 incident was the first open conflict between Russian and Ukrainian militaries in recent years. Tensions had been rising over the access to the Kerch Strait, where the incident took place, and the Sea of Azov.

Turkey Prepared To Reinvade Cyprus If Needed - Erdogan Says Following EU Sanctions - Turkey's military is prepared to reinvade Cyprus “if needed for the lives and security of Turkish Cypriots,” Turkish President Recep Tayyip Erdogan said on Saturday. “The entire world is watching our determination. No one should doubt that the heroic Turkish army, which sees [Northern] Cyprus as its homeland, will not hesitate to take the same step it took 45 years ago if needed for the lives and security of the Turkish Cypriots,” state-run Anadolu News Agency quoted Erdogan as saying. Erdogan issued the statement as the nation marks the 45th anniversary of Turkey's deeply controversial invasion of northern Cyprus in 1974, long condemned by the bulk of UN member countries. But the provocative remarks come amidst what EU-member Cyprus has dubbed a "second invasion" involving illegal Turkish oil and gas drilling, accompanied by Turkish warships, F-16s, and drones to ensure "protection" of its drilling vessels. The EU agreed on Monday to bring financial and political sanctions against Turkey after repeat warnings of the past weeks over Ankara deploying multiple offshore drilling vessels into international recognized Cypriot waters. The European Union announced Monday from Brussels:"Today, we will adopt a number of measures against Turkey — less money, fewer loans through the European Investment Bank, freeze of aviation agreement talks. Naturally, other sanctions are possible."The most serious measure will involve a cut of 145.8 million euros ($164 million) in European funds allocated to Turkey for 2020, according to a prior AFP report.

British Airways, Lufthansa suspend flights to Cairo - British Airways and Lufthansa have suspended flights to Egypt's capital, Cairo, over unspecified security concerns, giving no details about what may have prompted the move. "We constantly review our security arrangements at all our airports around the world, and have suspended flights to Cairo for seven days as a precaution to allow for further assessment," British Airways said in a statement on Saturday. When asked for more details about why flights had been suspended and what security arrangements the airline was reviewing, a spokeswoman responded: "We never discuss matters of security." Meanwhile, a spokesperson from Lufthansa, which operates flights to Cairo from Munich and Frankfurt, said: "As safety is the number one priority of Lufthansa, the airline has temporarily suspended its flights to Cairo today as a precaution, while further assessment is being made. The German airline said it plans to resume its flights on Sunday.