coolest June in 15 years contributes to largest spring natural gas storage injection on record..

oil prices fell for the first time in three weeks as oil traders "sold on the news" that OPEC + Russia had agreed to extend their production cuts for another 9 months, through March of 2020...after rising 2% to $58.47 a barrel on a big drop in US crude supplies last week, the price of US WTI crude for August delivery opened 80 cents higher and traded above $60 for the first time in over 5 weeks on Monday morning after Saudi Arabia, Russia and Iraq all backed an extension of supply cuts ahead of the OPEC meeting in Vienna, but gave up a substantial portion of its early gains in the afternoon to close up just 62 cents, or 1.1%, at $59.09 a barrel...after opening higher on Tuesday, oil prices resumed their late Monday selloff on worries that a weakening global economy would dent demand outweighed the OPEC supply cuts, and then plunged sharply after the pre-OPEC decision price level was breached to end down $2.84, or 4.8%, to $56.25 a barrel on the sense that the OPEC pact was the bare minimum they could have done to control supplies...oil prices recovered part of those losses on Wednesday, first on an API report of a larger-than-expected in U.S. crude oil inventories, and then on a rally in equities and a drop in the oil rig count, with prices finishing $1.09 higher at $57.34 a barrel...oil prices were lower in overseas trading on the 4th of July holiday and that price weakness carried into early US trading Friday, but prices later rose after Iran threatened to seize a British ship after British forces had seized an Iranian tanker in Gibraltar, and closed 17 cents higher at $57.51 a barrel...but despite those gains late in the week, the Tuesday selloff still left prices down 1.6% on the week, following increases over the prior two weeks...

natural gas prices, meanwhile, rose for a second week, as a notably hotter shift in the weather pattern drove out the shorts and promised to increase power burn demand...natural gas for August delivery initially fell 4.1 cents to $2.267 per mmBTU on Monday, as June had finished as the coolest since 2004, and then slipped another 2.7 cents on Tuesday before rising 5 cents on Wednesday with the early release of the natural gas storage report, and then rising 12.8 cents, or nearly 5% to $2.418 per mmBTU on Friday as a broad upper level ridge set up over the central and eastern U.S. and was expected to produce above-average temperatures going well into next week...

the natural gas storage report from the EIA for the week ending June 28th indicated that the quantity of natural gas held in storage in the US increased by 89 billion cubic feet to 2,390  billion cubic feet by the end of the week, which meant our gas supplies were 249 billion cubic feet, or 11.6% more than the 2,141 billion cubic feet that were in storage on June 28th of last year, while still 152 billion cubic feet, or 6.0% below the five-year average of 2,542 billion cubic feet of natural gas that have been in storage after the fourth week of June in recent years....this week's 89 billion cubic feet injection into US natural gas storage was higher than the average consensus estimate for a 79 billion cubic feet injection in an S&P Global Platts survey, and was much higher than the average 70 billion cubic feet of natural gas that have been added to gas storage during the fourth week of June in recent years, the 16th consecutive such above average injection....the 1,283 billion cubic feet of natural gas that have been added to storage over the past 14 weeks has been the largest injection of gas into storage on record for any similar period of the injection season, as the 1,033 billion cubic feet that were added during the same 14 weeks of 2014 (when June was also unusually cool) is the only year that even appears close...as you know, we've been calling this injection pace record setting and unprecedented for several weeks now, and this week the EIA finally jumped on the bandwagon with a blog post saying the same thing, albeit without the first injection in late March that we've been including in our seasonal totals...

we'll include the latest temperature anomaly map from the EIA's natural gas storage dashboard as a preliminary image before showing you a bar graph on natural gas weighted degree days for June, which have contributed to that record setting pace...

as you can see, the above map color-codes the temperature anomalies over the lower 48 states for the week ending June 27th, and with a preponderance of blue coloring, we can tell that most of the US except for the southeast saw below normal temperatures for the week in question.... several times over the past six months​, ​we've included​ a copy of​ the weekly update of this temperature map as a means of indicating the influence that above or below temperatures had on natural gas consumption, and hence on the amount of natural gas left in storage...while everyone probably understands that below normal temperature for the last week of June would mean less use of air conditioning, the implications of such a map haven't been quite so clear earlier in the year, when the northern parts of the country may still have been heating their homes while the southern tier of states might be turning on the air conditioning at the same time....utilities and traders in natural gas follow a much more precise metric to determine the impact of temperature changes on natural gas consumption, which is shown in the bar graph below...

the above graph, copied from the Monday blog post at Bespoke Weather, shows gas weighted degree days (GWDD) for the month of June from 1981 to to 2019, with 2019 on the left and the oldest years oddly on the right....gas weighted degree days, or GWDDs, are a population weighed metric which includes both heating degree days and cooling degree days in the same sum...heating degree days are a measure of how many degrees a given day​ falls below ​a average daily temperature ​at which ​it is figured that ​heating is necessary (typically 65 degrees), while cooling degree days measure how many degrees ​temperatures rise ​above ​a base average temperature whe​rein it's thought cooling ​would be necessary​ on a given day...for example, if the mean daily temperature for a northern US city is 55F, that city would have 10 heating degree days for that date; if, on the other hand, a southern US city experienced a mean temperature of 80F on that same day, that city would show 15 cooling degree days for that day...averaging the number of degrees days of either type for each​ US population center​, weighted by population, and adding them together for the 30 days of June, yields the metric shown on the bar graph above...

thus we can see that for June of 2019, the population weighted GWDDs fell short of 250 and was the lowest since 2004, meaning that the demand for natural gas for both heating and cooling during the month was the lowest in 15 years...while degree days are not an exact science, as both heating and cooling needs are determined by more than just the average outdoor temperature, they give us, and utilities, a reasonable estimate of expected demand for natural gas and electricity on a given day, and by extension, over a given period... 

The Latest US Oil Supply and Disposition Data from the EIA

this week's US oil data from the US Energy Information Administration, reporting on changes over the week ending June 28th, showed that a big drop in our oil exports combined with a jump in our oil imports meant there was a much smaller withdrawal of oil from our stored crude supplies than last week, even as it was just the 6th withdrawal​ of oil​ in 14 weeks...our imports of crude oil rose by an average of 929,000 barrels per day to an average of 7,585,000 barrels per day, after falling by an average of 812,000 barrels per day over the prior week, while our exports of crude oil fell by an average of 780,000 barrels per day to 2,990,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 4,595,000 barrels of per day during the week ending June 28th, 1,709,000 more barrels per day than the net of our imports minus exports during the prior week...over the same period, field production of crude oil from US wells was reported to be 100,000 barrels per day higher at 12,200,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from well production totaled an average of 16,795,000 barrels per day during this reporting week..

meanwhile, US oil refineries were reportedly using 17,290,000 barrels of crude per day during the week ending June 28th, 47,000 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​n average of 155,000 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 340,000 barrels per day short of what our oil refineries reported they used during the week...to account for that disparity between the supply of oil and the disposition of it, the EIA inserted a (+340,000) 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 fell to an average of 7,330,000 barrels per day last week, now 13.1% less than the 8,438,000 barrel per day average that we were importing over the same four-week period last year...the 155,000 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 100,000 barrels per day higher at 12,200,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 200,000 barrels per day higher at 11,800,000 barrels per day, while a 27,000 barrel per day decrease to 427,000 barrels per day in Alaska's oil production then lowered the final rounded national total by 100,000 [sic]....last year's US crude oil production for the week ending June 22nd was rounded to 10,900,000 barrels per day, so this reporting week's rounded oil production figure was roughly 11.9% above that of a year ago, and 44.8% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 94.2% of their capacity in using 17,290,000 barrels of crude per day during the week ending June 28th, unchanged from 94.2% of capacity the prior week, and a fairly normal refinery utilization rate for this time of year....however, the 17,290,000 barrels per day of oil that were refined this week were still 2.1% below the 17,653,000 barrels of crude per day that were being processed during the week ending June 29th, 2018, when US refineries were operating at 97.1% of capacity....

even with ​just a modest decrease in the amount of oil being refined, gasoline output from our refineries was much lower, decreasing by 564,000 barrels per day to 9,948,000 barrels per day during the week ending June 28th, after our refineries' gasoline output had increased by 649,000 barrels per day over the prior four weeks....with that large drop in gasoline output, this week's gasoline production was 3.5% less than the 10,311,000 barrels of gasoline that were being produced daily during the same week last year....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) rose by 31,000 barrels per day to 5,336,000 barrels per day, after our distillates output had decreased by 66,000 barrels per day the prior week....so even with this week's increase, the week's distillates production was still 2.3% less than the 5,463,000 barrels of distillates per day that were being produced during the week ending June 29th, 2018.... 

with the big drop in our gasoline production, our supply of gasoline in storage at the end of the week fell for the 3rd week in a row and for the 15th time in 19 weeks, decreasing by 1,583,000 barrels to 230,642,000 barrels over the week to June 28th, after our gasoline supplies had decreased by 996,000 barrels over the prior week...the draw from our gasoline supplies increased even though our exports of gasoline fell by 376,000 barrels per day to 563,000 barrels per day, as our imports of gasoline fell by 280,000 barrels per day to 536,000 barrels per day, while the amount of gasoline supplied to US markets increased by 26,000 barrels per day to 9,492,000 barrels per day...after our gasoline supplies had reached an all time record high twenty-one weeks ago, they then fell by nearly 13% over the next 10 weeks while US Gulf Coast refineries were crippled by the Venezuelan sanctions, and hence ​they ​are still 3.8% lower than last June 29th's inventory level of 239,691,000 barrels, ​while remain​ing​ near the five year average of our gasoline supplies at this time of the year...

with the increase in our distillates production, our supplies of distillate fuels rose for the 5th time in the past 16 weeks, increasing by 1,408,000 barrels to 126,788,000 barrels during the week ending June 28th, after our distillates supplies had decreased by 2,441,000 barrels over the prior week....our distillates supplies managed to increase this week because our exports of distillates fell by 314,000 barrels per day to 1,405,000 barrels per day and because our imports of distillates rose by 65,000 barrels per day to 98,000 barrels per day, and because the amount of distillates supplied to US markets, a proxy for our domestic demand, fell by 140,000 barrels per day to 3,828,000 barrels per day....after this week's inventory increase, our distillate supplies were 7.9% higher than the 117,557,000 barrels of distillate that we had stored on June 29th, 2018, even as they remained 6% below the five year average of distillates stocks for this time of the year...

however, even with the big drop in our oil exports and a big increase in our oil imports, our commercial supplies of crude oil in storage fell for a third week in a row and for the ninth time in 24 weeks, decreasing by 1,085,000 barrels, from 469,576,000 barrels on June 21st to 468,491,000 barrels on June 28th...​but ​even with that decrease, our crude oil inventories remained roughly 5% above the recent five-year average of crude oil supplies for this time of year, and 36.3% higher than the prior 5 year (2009 - 2013) average of crude oil stocks for the end of June, 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 have generally been rising since this past Fall, after generally falling until then through most of the prior year and a half, our oil supplies as of June 28th were still 12.1% above the 417,881,000 barrels of oil we had stored on June 29th of 2018, but at the same time ​were ​6.8% below the 502,914,000 barrels of oil that we had in storage on June 30th of 2017, and 5.1% below the 493,718,000 barrels of oil we had stored on July 1st of 2016...   

This Week's Rig Count

the US rig count fell for the 17th time in 20 weeks during the week ending July 5th, after being unchanged during the prior week, and is now down by 11% so far this year....Baker Hughes reported that the total count of rotary rigs running in the US fell by 4 rigs to 963 rigs this past week, which was also down by 89 rigs from the 1052 rigs that were in use as of the July 6th report of 2018, and ​less than half of 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 5 rigs to 788 rigs this week, which was also 75 fewer oil rigs than were running a year ago, and ​quite a bit below the recent high of 1609 rigs that were drilling for oil on October 10th, 2014...at the same time, the number of drilling rigs targeting natural gas bearing formations increased by 1 rig to 174 natural gas rigs, which was still down by 13 rigs from the 187 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, 2008...in addition, a rig classified as miscellaneous continued to drill in Sandusky county Ohio this week, ​while there were 2 ​such ​"miscellaneous rig​s​" running a year ago, when Cabot Oil & Gas was drilling 2 exploratory wells into the Knox formation in Ohio...

the rig count in the Gulf of Mexico decreased by 2 to 24 rigs this week, as two rigs that had been drilling off the coast of Louisiana were shut down...that le​ft 22 rigs running offshore from Louisiana and 2 rigs deployed offshore from Texas, still up by 6 rigs from the 18 rigs that were deployed in the Gulf in the same week a year ago, when 17 rigs were drilling in Louisiana waters and one was deployed offshore from Texas...however, a year ago there was also a rig drilling offshore from Alaska, while all of this week's offshore activity was in the Gulf of Mexico...

the count of active horizontal drilling rigs was down by 1 to 839 horizontal rigs this week, which was another 16 month low for horizontal drilling and 91 fewer horizontal rigs than the 930 horizontal rigs that were in use in the US on July 6th of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...meanwhile, the directional rig count was down by 2 rigs to 66 directional rigs this week, and those were down a rig from the 67 directional rigs that were operating during the same week of last year....at the same time, the vertical rig count was down by 1 rig to 58 vertical rigs this week, but those were still up from the 55 vertical rigs that that were in use on July 6th of 2018...

the details on this week's changes in drilling activity by state and by shale basin are included in our screenshot below of that part of the rig count summary pdf from Baker Hughes that shows those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the second table shows the weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of July 5th, the second column shows the change in the number of working rigs between last week's count (June 28th) and this week's (July 5th) count, the third column shows last week's June 28th 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 6th of July, 2018...     

the 4 rig decrease in Louisiana is pretty straightforward; 2 of those were pulled out of the Gulf, while another 2 came out of the Haynesville shale in the northwest quarter of the state...for the 5 rig decrease in Oklahoma, however, there were 4 oil rigs pulled out of the Cana Woodford, while 2 rigs began drillig for natural gas in the same basin, ​in ​the first drilling for natural gas in the Cana Woodford since March of 2018...hence, three more Oklahoma rigs were shut down in basins not tracked separately by Baker Hughes​ which are not shown above​...for New Mexico, it appears that all three rigs were added in the Permian, because 2 horizontal rigs were pulled out of Texas Oil District 8, which would be the core Permian Delaware, while Texas Oil District 7C, ​or ​the southern Permian Midland​,​ saw one rig start up, so for the Permian to show a two rig increase, three had to have been added in New Mexico...this week's natural gas drilling nets out pretty easily too; while two natural gas rigs were shut down in Louisiana's Haynesville, two were started up in the Cana Woodford, and another one began drilling in West Virginia's Marcellus..

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New county gas agreement readies for next shale boom - Mahoning County now has rights to any Utica shale deposits underneath county-owned land in Canfield under a new lease agreement with Ohio Valley Energy. “Under the current old leases, the gas company actually has the rights all the way from the surface to the center of the Earth,” Tim Tusek, the assistant county prosecutor who worked on the arrangements, told county commissioners Tuesday. “The best part is there is a real possibility the Utica development will come back to this area, and when it does, the commissioners will be in a position to be able to benefit from it,” Tusek said. The five shallow Clinton sandstone wells are beneath about 270 county-owned acres along Columbiana-Canfield Road, just west of the Canfield Fairgrounds. That land is also leased by Mill Creek MetroParks for the Mahoning County Experimental Farm. The county’s original lease for the wells was signed in 1984 and is set to expire this month. The new agreement with Ohio Valley Energy extends the lease another 15 years and offers the county rights to any minerals below and a 15-percent royalty payment from each sale of oil and gas Ohio Valley produces there.

JobsOhio commits $30M to potential Belmont County petrochemical plant - The state’s economic development arm has awarded its largest grant ever for site work for a massive, multibillion-dollar petrochemical plant being considered in eastern Ohio.The $30 million JobsOhio grant is another in a series of steps being taken to determine whether Thai chemical company PTT Global Chemical America and its South Korean partner, Daelim Industrial Co., should proceed with the project in Belmont County. The company has committed $65 million to this phase, according to JobsOhio.If the companies go forward, they would build one of the largest economic development projects in state history, one with thousands of construction jobs and probably several hundred permanent jobs once construction is completed.“JobsOhio’s revitalization grant will support initial site-preparation work, which will begin later this month,” said Matt Englehart, JobsOhio spokesman. “While this is an important and positive step for the project, no final investment decision has been made. JobsOhio and our partners will continue closely collaborating with PTTGC America and Daelim as they work toward a final investment decision.”The companies said in a statement, “There is not a timetable for that decision at this point. Obviously, both companies are extremely grateful to JobsOhio for its support.”Economic development officials announced in 2015 that PTT was considering the site along the Ohio River near Shadyside in Belmont County for the project.The plant would take ethane, a component of natural gas, and break it down to produce ethylene, which is used in chemical manufacturing. The county is an attractive site because of its proximity to the plentiful natural gas of the Marcellus and Utica shale formations in Ohio, Pennsylvania and West Virginia. The plant would be built on the site of FirstEnergy’s former R.E. Burger power plant, which closed in 2011.JobsOhio previously spent $14 million to help clean up the 168-acre site that PTT bought in 2017.

Yale Researchers Discuss Controversial Richland Well - Yale University researchers came to Ohio University East to share their thoughts on a proposed injection well in Richland Township, but many local residents in attendance were left with more questions than answers. During the college presentation, crowds gathered to hear presentations from speakers, including Nicole Deziel, assistant professor of epidemiology with Yale University. Deziel conducted an air and water quality study in 2016, and is conducting a study on drinking water in Monroe and Belmont counties, which will conclude in August. They also heard from John Stolz, director of the Center for Environmental Research and Education at Duquesne University. Deziel opened by describing the fracking process, which involves drilling more than a mile below the ground and pumping large quantities of water under high pressure, fracturing it and freeing the oil and gas, along with brine and underground materials such as arsenic, lead and radioactive compounds. Deziel said this wastewater must be managed and disposed of. Deziel said her study was motivated by the fast-paced expansion of the oil and gas industry and the growing number of people living within one mile of a non-conventional well, or with a water source within one mile to such a well, and concerns of contamination and health risks. Deziel added that she was concerned with such issues as spills, leaks and deteriorating casing. During her 2016 study, she analyzed water in 66 homes and observed their proximity to a well. She added that while some chemicals were found in drinking water, all were well below U.S. Environmental Protection Agency standards. She also said she could not be certain of the source of the chemicals.Amanda DeShong of St. Clairsville inquired about other dangers such as skin contact contamination from showers, and inhalation of vapor.  Deziel said standards are set by ingestion, and that while some studies indicate increase skin irritation and respiratory problems among people near such wells, the precise cause could not be determined.

Water quality studied in two counties - Martins Ferry Times Leader— Disease detective work is how the lead researcher studying water in Monroe and Belmont counties this summer describes her field. Nicole Deziel is an assistant professor at Yale University’s School of Public Health and will have a team in place this summer in Ohio to collect data concerning the quality of drinking water surrounding oil and natural gas development. The study began last year with samples taken in Pennsylvania and has now moved to Ohio to tally any health effects on families where homes are served by a private well or spring, and their groundwater is sourced in proximity to oil and gas production.   Deziel’s team is asking for participants to offer one to two hours of their time for a home visit and allow the joint effort from Yale and MIT to collect more data on drinking water, sample and test for more chemicals and potentially influence the national discourse concerning regulations.“The question is whether or not the unconventional oil and gas industry could be impacting the chemistry or quality of the water,” Deziel said. “We’ll be looking at whether people who live near more unconventional oil and gas wells may or may not have elevated levels of certain chemicals. We’ll be doing some chemical analysis of the chemicals to see how likely they are to come from oil and gas or not. Many of the chemicals that we’re measuring have numerous other sources or are naturally occurring. “We are testing for quite a range of environmental chemicals ranging from things like inorganic compounds, which include things like arsenic and lead, to volatile organic compounds like benzene. There are about 100 different entities we are testing for.” The U.S. EPA reported in 2016 that more data is needed to understand if there are any adverse effects from oil and gas development and the chemicals used in hydraulic fracturing, or fracking, on surrounding water tables and ultimately public health. But according to Jeffery Kephart, water superintendent for the city of Marietta, Ohio, many of the volatile organic chemicals Deziel is looking for are found not just in fracking processes, but also in many household products such as gasoline, paint cleaners/thinners, cleaners, cigarettes, soaps, polishes and carpets. Kephart noted that other chemicals the Yale study is looking for can also be byproducts of water treatment processes, including trihalomethanes that come from chlorine used for disinfecting purposes and have measurable levels deemed safe by state and national agencies for consumption.

Fracking in Ohio: Citizens stepped in to protect water when the state did not -Ten years ago, the fracking industry was already booming in Pennsylvania, but people in Ohio were just starting to hear about it. Many were excited that it would help eastern Ohio’s struggling rural economy.But Leatra Harper worried that the tradeoff would be their health and the environment.Harper says her grandfather died from black lung. And his father had worked to unionize coal miners.“I don’t know if this is in my DNA but I was just brought up that right is right and wrong is wrong,” she said.  Harper started the FreshWater Accountability Project, to protect Ohio waters from the next energy industry – natural gas. “If there’s something you can do, that’s on you.”Each fracked well uses millions of gallons of water, mixed with sand and chemicals. Much of this brinewater can flow back to the surface as wastewater. Harper heard that a company, Patriot Water Treatment, had started working with the city of Warren, to send frack waste through their sewage treatment plant. She calls it the beginning of her “…trip down the rabbit hole with the fracking industry.”      Patriot would treat frack wastewater, most of it from Pennsylvania and West Virginia, in its own treatment plant to remove heavy metals, and other pollutants before sending through the city sewers to Warren’s treatment plant, which would essentially dilute the wastewater. From there, it would be released to the Mahoning River. The Mahoning joins the Shenango River in Pennsylvania, and forms the Beaver River – which is the drinking water supply for Beaver Falls and other communities.It wasn’t long into the fracking boom when elevated concentrations of Total Dissolved Solids (TDS) known to be in fracking wastewater were found in the rivers in Western Pennsylvania. One pollutant in particular, bromide, forms chemicals linked with cancers and birth defects when mixed with disinfectants in drinking water treatment plants.In 2011, the state’s Department of Environmental Protection requested that drillers voluntarily stop sending wastewater to public sewage plants and commercial treatment facilities in Pennsylvania. Harper, who had started the FreshWater group, wanted Warren, Ohio to follow Pennsylvania’s lead.

GlobalData: Susquehanna county drives natural gas production in Marcellus Shale in US -- The majority of the drilling and production activity in the Marcellus shale continues to take place in northeast and southwest of Pennsylvania, especially in Susquehanna and Washington counties, according to GlobalData.  The company’s latest report, ‘Marcellus and Utica Shales in the US, 2019 – Gas Shales Market Analysis and Outlook to 2023’ reveals that Marcellus and Utica formations produced around 31 billion ft³/d of natural gas in May 2019 and the production is forecast to reach approximately 35 billion ft3/d by the end of 2023.The major natural gas producing counties in Marcellus and Utica shale plays are Susquehanna, Washington, Bradford and Greene counties in Pennsylvania and Doddridge county in West Virginia.Located in close proximity to the major industrial hubs on the US East Coast, Marcellus and Utica shale plays in the Appalachian basin have witnessed steady natural gas production growth over the last five-six years.Andrew Folse, Oil & Gas Analyst at GlobalData, comments: “Fracking activity in Marcellus and Utica formations is driven by large demand for natural gas from the nearby populated areas. As in the case of other unconventional shale plays, operators in Marcellus and Utica shales continue to drill longer laterals beyond 12 000 ft and some as long as three miles.”The Appalachian has seen a clear trend for larger scale developments by key operators by increasing the surface of contiguous acreage and allowing for more production by well recovery. Folse continues: “Marcellus and Utica plays continue to receive premium for their natural gas compared to the benchmark of Henry Hub. Over the past three years, this region has received an average US$0.40 premium over Henry Hub. At the same time, operators have become more efficient in optimising costs reaching a lower break-even price. With the demand continuing to grow in the region and consistent premiums over Henry Hub, the Appalachian Basin will continue to drive natural gas production in the US.”

The Mariner East Pipeline Battle in Southeastern Pennsylvania -- This newspaper has spent an inordinate amount of time – to say nothing of newsprint – covering what we have come to refer as The Battler of Mariner East. Mariner East is the massive, multi-billion dollar project being built by Texas-based Energy Transfer Partners to move hundreds of thousands of barrels of highly volatile liquid gases such as ethane, butane and propane from the state’s Marcellus Shale regions to a facility in Marcus Hook. ETP is parent company of what used to be Delco’s iconic Sunoco. Sunoco Pipeline is actually constructing the pipeline, which traverses the full 350-mile width of Pennsylvania.That route takes it through densely populated neighborhoods in both Delaware and Chester counties, in close proximity to schools and senior centers.And directly into intense criticism from residents who question the safety of such actions, the wisdom of this routing, and the preparedness and ability to respond in the case of an accident.It’s difficult to straddle the middle ground on a story like this.There is no questioning the economic upside, despite neighbors and foes of the pipeline insistence on doing just that.There also is no doubt about the concern of the neighbors, both on what this project has done to some of their neighborhoods and what might happen in the event of an accident.We certainly have given enough coverage to the critics. That would include a move by Delaware County Council last week to call on Gov. Tom Wolf and the state Department of Environment Protection to issue a moratorium and shut down all Mariner East work in the region.That would include shutting down the lines that are currently up and operating, as well as halting construction. As you might expect, that did not sit especially well with local unions, the folks who are manning those construction projects. A couple hundreds of them showed up this week at the Media Courthouse to vent their feelings, and let council know exactly where they stand.  Yeah, we covered that angle of the story as well. You can read it here.

Dominion cancels gas pipeline, blames FERC - Dominion Energy Inc. on Friday abandoned a pipeline project to bring Marcellus Shale natural gas to market, faulting the Federal Energy Regulatory Commission for its failure to act on the application. "The project has been adversely impacted" by FERC's inaction, Dominion said in a statement, informing the commission that customers for the project had pulled out. FERC's processing of pipeline applications has been bumpy since the agency in May of last year ended its practice of considering the upstream and downstream greenhouse gas impacts of gas projects under the National Environmental Policy Act (NEPA). Dominion's cancellation of the Sweden Valley Project comes days after FERC Chairman Neil Chatterjee said after an agency meeting that the gas industry is "largely satisfied" with the way the agency is moving to advance projects.

TC Energy in $1.3B Deal to Sell Midstream Assets - Canada-based TC Energy Corporation has entered into an agreement to sell its U.S. midstream assets to UGI Energy Services, LLC for $1.275 billion (USD), the company announced Tuesday. The assets are held by TC Energy (formerly known as TransCanada) subsidiary Columbia Midstream Group and will be sold to UGI Corporation’s subsidiary. Columbia Midstream Group operates in the Appalachian Basin and owns four natural gas gathering systems and an interest in a company with gathering, processing and liquids assets. “The sale of Columbia Midstream Group advances our ongoing efforts to prudently fund our industry-leading portfolio of high-quality natural gas pipeline, liquids pipelines and power generation projects, while maximizing value for our shareholders,” TC Energy CEO Russ Girling said in a company statement. Girling added that with other company operations, TC Energy is “well-positioned to fund [its] $30 billion secured capital program in a manner consistent with achieving targeted credit metrics in 2019 and thereafter.”

West Virginia officials remain hopeful about promised $84 billion Chinese investment | S&P Global Platts— West Virginia officials are still hopeful that China Energy will eventually make good on its promise of investing $84 billion in the state's natural gas and petrochemical industries, despite the ongoing US-China trade dispute, the state's secretary of commerce said Monday. Following a visit to Beijing by a group of West Virginia officials last month, "we understand what China Energy is about," Secretary Ed Gaunch said in an interview Monday. "From my standpoint, we've moved the relationship further ahead." This relationship concerns a memorandum of understanding that China Energy had signed in November 2017, during a visit by President Trump to Beijing in the early days of his administration. In that MOU, China Energy had said it hoped to invest up to $83.7 billion in shale gas development and chemical manufacturing in West Virginia over a 10-year period. The terms of that agreement have never been made public, and since that initial announcement, the giant Chinese energy company has not made any discernible moves to make good on its commitment. The possibility of the investment ever taking place has further been called into question by the trade tensions between the US and China that have risen substantially in the months since the deal was first announced. Nevertheless Gaunch was optimistic about the possibility of future Chinese investment in the state's midstream gas and petrochemical industries. "At some point in the not-too-distant future we are hopeful that they will announce a project or more than one project." The visit of the trade delegation to China is just the latest contact between representatives of China Energy and West Virginia's state officials and industry representatives."They've been here 22 times over the last 22 months," he said. Gaunch acknowledged that the MOU does not commit the Chinese energy company to any specific midstream natural gas or petrochemical manufacturing projects, although he said discussions have focused on storage-related projects. "The MOU is so general. It's hard to put a finger on exactly what they're talking about," he said. From the standpoint of the West Virginia delegation, Gaunch said state and industry officials are focused on taking advantage of the state's bounty of "wet gas" to develop a local petrochemical storage and manufacturing industry.

Companies, county officials wait to see fallout from natural gas tax decision - Earlier this month, the West Virginia Supreme Court ruled in a case in which local tax departments and gas companies battled over the way property taxes should be calculated. But the companies and counties are still trying to figure out how they’ll be affected by the court’s decision. “Where we’re at is, we have had a chance to look at it, and we’re not sure that we fully understand it. We haven’t met with the tax department,” said Al Schopp, regional senior vice president and chief administrative officer of Antero Resources, the state’s biggest gas producer.

Landowners ask justices to nix companies' 'quick take' power -- The Supreme Court will soon have a new shot at examining an unusual wrinkle in pipeline land seizures that some legal experts say saps private landowners of their constitutional rights. Unlike standard eminent domain proceedings, which require just compensation in exchange for acquiring land, immediate possession or "quick take" power allows developers to take private property months or years before paying. Although Congress did not convey quick-take authority to pipeline developers in the Natural Gas Act, several appellate courts have interpreted the law to allow those firms to take property to build their projects before landowners ever receive a dime. "The courts seem to think this is inevitable, that eminent domain is one of those things that's going to happen whether the property owner wants it or not," said Robert Thomas, a land-use and appellate lawyer at Damon Key Leong Kupchak Hastert. The distinction is important, legal experts say, because immediate possession of property can rob landowners of their ability to negotiate a fair price, which the condemner then has the option to either pay or decline. Property owners also have no way to recoup lost wages if a seizure interferes with their ability to earn money from their land before the court determines appropriate compensation. Jeffrey Simmons, a partner at the firm Foley & Lardner LLP who has represented pipeline condemners, said the fact that so many appellate courts have agreed with this approach indicates the process is permissible. Any delays in the condemnation process, he said, can cost pipeline builders millions of dollars, which adds urgency to their request. The Supreme Court will soon have the opportunity to review a quick-take case involving the Mountain Valley pipeline through West Virginia and Virginia. Givens v. Mountain Valley Pipeline will challenge a 4th U.S. Circuit Court of Appeals ruling that a lower court properly allowed developers to obtain immediate possession of property in the project's path.

Pipeline protester removed from perch atop MVP excavator — The person clinging to an excavator parked in the construction zone of the Mountain Valley Pipeline was barely visible. A crowd of fellow protesters, blocked from getting any closer to the scene, stood at the edge of Bradshaw Road, yelling, chanting and using megaphones to be heard. “We love you up there,” one person shouted. Others then joined in a refrain: “One, two, three; f--- the MVP,” they chanted. Around midday Friday, Virginia State Police used a mechanized lift to remove Michael James-Deramo from the boom of the excavator, to which he had chained himself about six hours earlier. He was charged with two misdemeanors: entering private property to damage it and preventing the operation of a vehicle. James-Deramo, 26, of Blacksburg, is a former community organizer for the Blue Ridge Environmental Defense League and has been active in fighting the 303-mile natural gas pipeline, which is under construction in West Virginia and Southwest Virginia. In a statement released by Appalachians Against Pipelines, James-Deramo said he grew up in the area, playing in the forests as a child and hiking the mountains as he grew older. “We have watched as this pipeline has wreaked havoc — from Brush Mountain to Peters Mountain, from Four Corners Farm to Bottom Creek — not just havoc on the land, but on the lives and mental well-being of individuals, and the sanctity of place and safety,” he said.

Virginia legislators promoting Atlantic Coast Pipeline have personal investments  -  Virginia State Senator Bill DeSteph is a staunch advocate for the Atlantic Coast Pipeline. He hasn’t just endorsed the project – he’s actively campaigned for it. DeSteph is listed on the pipeline’s website as a supporter. He co-chairs a caucus that in March 2016 sent Virginia’s two U.S. Senators a letter backing the pipeline. In September 2016, he even co-authored an op-ed in the pages of the Virginian-Pilot that promoted the project.But DeSteph has another important tie to the Atlantic Coast Pipeline: he owns more than $250,000 worth of Dominion Energy stock. Dominion is the Atlantic Coast Pipeline’s top owner. It is building the pipeline and will operate it.DeSteph’s decision to use his public platform to advance a controversial pipeline project that he stands to personally profit from reflects a larger trend in Virginia. According to financial disclosures filed with Virginia’s Ethics Council, several other members of the Virginia General Assembly who have strongly advocated for the Atlantic Coast Pipeline also own significant amounts of company stock in the pipeline’s owners.These State Senators and Delegates have written op-eds in support of the Atlantic Coast Pipeline, signed letters backing the pipeline that were sent to U.S. Senators or federal regulators, or are officially listed on the Atlantic Coast Pipeline’s website as endorsers – all this, even as they individually own thousands or even hundreds of thousands of dollars in Dominion stock. Dominion is also a top donor to many of these elected officials. That state legislators, some quite prominent, are invested in the pipeline’s main owners, even as they use their elected offices to advocate for the pipeline, raises serious concerns over conflicts of interests. The legislators are using their platform, given to them by voters, to advance a contentious project that they stand to personally profit from.

Are Investors Finally Waking up to North America's Fracked Gas Crisis? – DeSmog - The fracked gas industry's long borrowing binge may finally be hitting a hard reality: paying back investors.Enabled by rising debt, shale companies have been achieving record fracked oil and gas production, while promising investors a big future payoff. But over a decade into the “fracking miracle,” investors are showing signs they're worried that payoff will never come — and as a result, loans are drying up. Growth is apparently no longer the answer for the U.S. natural gas industry, as Matthew Portillo, director of exploration and production research at the investment bank Tudor, Pickering, Holt & Co., recently told The Wall Street Journal.“Growth is a disease that has plagued the space,” Portillo said. “And it needs to be cured before the [natural gas] sector can garner long-term investor interest.”Hints abound that gas investors are no longer happy with growth-at-any-cost. For starters, several major natural gas producers have announced spending cuts for 2019.After announcing layoffs this January, EQT, the largest natural gas producer in the U.S., also promised to decrease spending by 20 percent in 2019.Such pledges of newfound fiscal restraint are most likely the result of natural gas producers' inability to borrow more money at low rates.As DeSmog has reported, the historically low interest rates following the 2008 housing crisis were a major enabler of the free-spending and money-losing attitudes in the shale industry. Wall Street has funded a decade of oil and gas production via fracking andincentivized production over profits. Those incentives have worked, with record production and large losses.  However, much like giving mortgages to people without jobs wasn’t a sustainable business model, loaning money to shale companies that spend it all without making a profit is not sustainable. Wall Street investors are now worried about getting paid back, and interest rates are rising for shale companies to the point that borrowing more money is too financially risky for them. And because they aren't earning more money than they spend, these companies need to cut spending.

NASA just made a stunning discovery about how fracking fuels global warming -- A new NASA study is one final nail in the coffin of the myth that natural gas is a climate solution, or a “bridge” from the dirtiest fossil fuels to low-carbon fuels like solar and wind. NASA found that most of the huge rise in global methane emissions in the past decade is in fact from the fossil fuel industry–and that this rise is “substantially larger” than previously thought. And that means natural gas is, as many earlier studies have found, not a climate solution.   mNatural gas is mostly methane, a potent greenhouse gas. And methane emissions are responsible for about a quarter of the human-caused global warming we’re suffering today. So scientists have been scrambling to figure out why methane emissions have been soaring in recent years after leveling off around the year 2000. The total methane in the air has been rising by 25 teragrams (27.5 million U.S. tons) a year, which NASA helpfully explains is the weight of some 5 million elephants. Many studies have estimated that leaks from oil and gas production, particularly fracking, are a major driver of rising methane emissions. “A review of more than 200 earlier studies confirms that U.S. emissions of methane are considerably higher than official estimates,” as one 2014 Stanford University analysis explained. “Leaks from the nation’s natural gas system are an important part of the problem.” But, NASA notes, other research groups have estimated that the rise in methane emissions was due to a rise in “microbial production in wet tropical environments like marshes and rice paddies.” The problem was that this estimate was almost “large enough to explain the whole increase by itself” — and so was the estimate of increased methane emissions from oil and gas production.  After a very deep dive into multiple ground and satellite datasets, NASA determined that a third source of methane emissions — global fires — had been declining much more rapidly than previously realized (see animation below). With wildfire emissions way down, it was now possible for both fossil fuel emissions and wetland emissions to be up. Indeed, the researchers found that some 17 teragrams of the 25 teragram annual increase is from fossil fuel production, 12 is from wetlands or rice farming, while fires are decreasing emissions by 4 teragrams (17 + 12 – 4 = 25).

Prices Rise On Anticipation Of Increased Power Burns -Highlights of the Natural Gas Summary and Outlook for the week ending June 28, 2019 follow. The full report is available at the link below.

• Price Action: The spot price rose 12.2 cents (5.6%) to $2.308 on a 16.9 cent range ($2.364/$2.195).
• Price Outlook: After last week witnessed both a new weekly high and low, this week again witnessed a rare inside week on a 16.9 cent range. Of the 1,017 weeks since 2000, there have been 118 with both a new weekly high and low compared to just 99 where neither a new high nor low was established. The July index price of $2.291 may lift temperature adjusted-power demand and physical pipeline data will be closely monitored for indication how this price impacted the supply/demand balance.  CFTC data indicated a (34,566) contract increase in the net short managed money position as longs liquidated and shorts added. This is the largest net short position since November 17, 2015, 2016. This is the lowest long position since ICE data was added in early January 2010. Total open interest fell (114,312) to 3.480 million as of June 25. Aggregated CME futures open interest fell to 1.295 million as of June 28. The current weather forecast is now warmer than 6 of the last 10 years. Pipeline data indicates total flows to Cheniere’s Sabine Pass export facility were at 3.5 bcf. Cove Point is net exporting 0.7 bcf. Corpus Christi is exporting 1.190 bcf. Cameron is exporting 0.500 bcf.
• Weekly Storage: US working gas storage for the week ending June 21 indicated an injection of +98 bcf. Working gas inventories rose to 2,301 bcf. Current inventories rise 227 bcf (10.9%) above last year and fall (172) bcf (-7.0%) below the 5-year average.
• Supply Trends: Total supply fell (0.5) bcf/d to 83.5 bcf/d. US production rose. Canadian imports fell. LNG imports fell. LNG exports rose. Mexican exports fell. The US Baker Hughes rig count was unchanged +0. Oil activity increased +4. Natural gas activity decreased (4). The total US rig count now stands at 967 .The Canadian rig count rose +5 to 124. Thus, the total North American rig count rose +5 to 1,091 and now trails last year by (128). The higher efficiency US horizontal rig count fell (6) to 840 and falls (86) below last year.
• Demand Trends: Total demand rose +0.9 bcf/d to +69.4 bcf/d. Power demand rose. Industrial demand fell. Res/Comm demand fell. Electricity demand rose +4,005 gigawatt-hrs to 81,189 which trails last year by (6,158) (-7.1%) and trails the 5-year average by (5,184)(-6.0%%).
• Nuclear Generation: Nuclear generation rose 512 MW in the reference week to 91,815 MW. This is (2,744) MW lower than last year and (877) MW lower than the 5-year average. Recent output was at 95,220 MW.

The cooling season is beginning. With a forecast through July 12, the 2019 total cooling index is at 1,001 compared to 2,402 for 2018, 1,995 for 2017, 1,909 for 2016, 1,358 for 2015, 1,272 for 2014, 1,835 for 2013, 3,312 for 2012 and 2,067 for 2011.

Lower 48 natural gas injections into underground storage fields have been on a record-setting pace - During the first 12 weeks of the 2019 summer refill season, which traditionally ranges from April 1 to October 31, net injections of working natural gas into underground storage fields in the Lower 48 states have set a record pace. Weekly net injections for the weeks ending April 5 through June 21, 2019 have totaled 1,171 billion cubic feet (Bcf), averaging about 98 Bcf per week. Cumulative net injections have exceeded the five-year average by 41%, reducing the current five-year average deficit by 314 Bcf. As a result, working natural gas stocks narrowed to 171 Bcf lower than the five-year average as of June 21, 2019. Continued strength in natural gas production and relatively mild temperatures throughout most of the Lower 48 states contributed to these gains in natural gas storage stocks. So far this summer, natural gas production is up 7.3 Bcf per day (Bcf/d) compared to last summer at this time. Natural gas consumption (including net natural gas exports to Mexico and LNG feedstock) is up 2.6 Bcf/d, increasing the amount of natural gas available for injection, according to OPIS PointLogic’s July 1, 2019 supply and demand balance data. The figure below compares cumulative net injections into working gas storage for the first 12 weeks of 2019 to the same period for each refill season since 1994, when the history of the weekly data series began.

• At this early stage of the refill season, which typically runs about 31 weeks, cumulative 2019 net injections (red line) exceed all previous refill seasons.
• The next-largest injection up to this point was the 2015 refill season (blue line), which totaled 1,045 Bcf through the first 12 weeks of the year.
• The record-setting refill season of 2014 (yellow line) had reached only 1,002 Bcf at this stage of that refill season.

El Niño: Fluctuating Or Fading Away? - We continue to track the status of our El Niño event, as the direction it takes can influence the temperature patterns in the U.S, and therefore impact demand for natural gas. El Niño in summer generally translates to cooler temperatures and lower gas demand.   This worked out well for the month of June.    Recent weeks have brought about a stark weakening of our El Niño event, however, as seen in the latest NOAA data.   Despite the weakening, we still have warmer than normal sea surface temperatures in the equatorial Pacific out near the Date Line.    Zonal wind anomalies are turning back westerly as well in this region, which simply means a weakening of the trade winds. We have highlighted this in the black box below, as well as the last two times this has occurred in red.  These "westerly wind bursts" often tilt conditions more in the El Niño direction. The following image shows the buildup in heat content with each of the last two westerly bursts that were highlighted above.  As such, one would expect to see some "bounce back" with the El Niño state in the near future. However, subsurface temperatures in the equatorial Pacific have cooled significantly the last few weeks, with a lot of cooler than normal water showing up.  Could that be an indication that impact from this current westerly wind burst will be muted, potentially signaling the end of the El Niño base state? This is an important issue to tackle, as a re-strengthening of El Niño would keep the risk for hotter weather and higher natural gas demand mitigated, while a change in base state would increase the risk for higher late summer heat, and stronger gas demand.

US natural gas in storage set to increase by 79 Bcf: survey - S&P Global — Most analysts expect the US Energy Information Administration will report another above-average gas storage build for the week ended June 28. The EIA is expected to report a 79 Bcf injection for the week ended June 28, according to a survey of analysts by S&P Global Platts. Responses to the survey ranged from an injection of 68 Bcf to 90 Bcf. The EIA plans to release its weekly storage report on Wednesday at 10:30 am EDT. It is releasing the report one day early due to the July 4 holiday. A 79 Bcf injection would be more than the 76 Bcf build in the corresponding week last year, as well as the five-year average injection of 70 Bcf. While the injection still looks to be more than historical norms, it should be much closer to the five-year average and the smallest injection reported since April 5. An injection within expectations would increase stocks to 2.380 Tcf. The deficit versus the five-year average would shrink to 164 Bcf and the surplus to last year would expand to 315 Bcf. The build looks to be less than the week prior, when the EIA reported a 98 Bcf build. It would still mark the fourteenth consecutive above-average build. The EIA is set to announce a bearish injection this Thursday, even as power burn demand has begun to ramp up into the hottest month of the year, according to S&P Global Platts Analytics. Despite US inventories starting out last winter at record lows, the recent boom in production out of the Northeast and associated gas out of the Permian have resulted in a historic build-up through the first half of the summer. This week's build was supported by some of the largest week over week production gains seen through all of 2019, in addition to the balance of imports and exports adding 0.2 Bcf/d to the supply side of the US equation, according to Platts Analytics. Modeled production estimates from the Northeast, Texas and Rockies regions all added around 2 Bcf of supply to the week, softening some of the tightness brought on by population-weighted average US temperatures climbing 3 degrees. An uplift in exports could provide some relief to the oversupplied market, which has led to depressed cash and futures prices at Henry Hub. The remaining summer strip was trading at an average of $2.23/MMBtu on Wednesday afternoon.

'Fairly Neutral' EIA Injection Keeps Natural Gas Futures Steady - The Energy Information Administration (EIA) on Wednesday reported an 89 Bcf weekly injection into U.S. natural gas stocks, slightly higher than consensus, and the futures market mostly took the news in stride. The 89 Bcf injection, covering the week ended June 28, comes in higher than both the 76 Bcf injection EIA recorded for the year-ago period and the five-year average 70 Bcf. The August Nymex futures contract had been trading higher Wednesday morning, up to around $2.276/MMBtu in the lead-up to EIA’s report, which was moved up to 12 p.m. ET because of the July Fourth holiday. In the minutes after the 89 Bcf figure crossed trading screens, the front month traded as low as $2.249 before recovering to around $2.255. By 12:30 p.m. ET, August was back up to $2.274, in line with the pre-report trade and up 3.4 cents from Tuesday’s settlement. Prior to Wednesday’s report, major surveys had pointed to a build in the mid-80s Bcf, with expectations ranging from 76 Bcf to as high as 103 Bcf. Intercontinental Exchange EIA Financial Weekly Index futures settled Tuesday at 85 Bcf, while NGI’s model predicted a build of 88 Bcf. Bespoke Weather Services viewed this week’s EIA report as “fairly neutral.” “Balance-wise, it is a little looser than the balances from last week’s reported 98 Bcf build,” Bespoke said. “We expected to see this slight loosening based on the data last week. This week’s data is mixed, with stronger burns plus higher supply. We also have to consider potential holiday impact as well, so confidence will be lower on next week’s number.” Both production and demand continue to grow, with July potentially on track to set a monthly record for gas burn as liquefied natural gas (LNG) and Mexico-bound exports increase, Genscape Inc. analyst Eric Fell said during a discussion hosted by energy-focused chat platform Enelyst. Total Lower 48 working gas in underground storage stood at 2,390 Bcf as of June 28, 249 Bcf (11.6%) higher than year-ago stocks and 152 Bcf (minus 6.0%) below the five-year average, according to EIA. By region, the Midwest posted the largest weekly build at 30 Bcf, followed by the East, which refilled 27 Bcf. The Mountain region posted a 7 Bcf injection week/week, while the Pacific injected 10 Bcf. In the South Central, 14 Bcf was injected overall for the week, with an 18 Bcf injection into nonsalt offsetting a 4 Bcf pull from salt stocks, according to EIA.

Natural Gas: Volatility Increases After A Strong Rally - The Energy Information Administration (EIA) released its weekly storage report on Wednesday morning. The report revealed an inventory build of 89 BCF for the week ending June 28, which fell within the trading range of 76 BCF to 103 BCF, but fell slightly more than consensus estimates of 85 BCF. The build of 89 BCF for the week ending June 28 is compared to the 76 BCF build from a year ago and the five-year avg. build of 70 BCF. Despite the bearish report with injection being above last year, consensus, and the five-year average, the bigger story on Wednesday was the shift to a hotter weather pattern in the 8-15 day time period. Stockpiles stand at 2,390 BCF vs. 2,141 BCF a year ago and the five-year avg. of 2,542 BCF. That's 249 BCF higher than last year and 152 BCF less than the five-year avg. Figures 1 and 2 below are both depictions (table and graph) of Thursday's EIA natural gas storage report for the week of June 24-28.  Natural gas futures jumped over 6% or nearly 20 cents over the past couple of trading sessions amid a hotter weather outlook  On Wednesday, the front-month August natural gas futures contract settled higher nearly 2%, or 5 cents ($0.050), to $2.290. The September contract also settled higher 4.6 cents ($0.046) to $2.263.  On Wednesday, the United States Natural Gas ETF (UNG), which is the unleveraged 1x ETF that tracks the price of natural gas, finished up 1.82% to $19.61.  UNG's leveraged exposure ETFs, the VelocityShares 3x Long Natural Gas ETN (UGAZ) and the ProShares Ultra Bloomberg Natural Gas ETF (BOIL), were seen higher Wednesday 5.87% and 3.45% at $15.68 and $13.50, respectively. Meanwhile, UNG's high-beta leveraged inverse ETFs, the VelocityShares 3x Inverse Natural Gas ETN (DGAZ) and the ProShares UltraShort Bloomberg Natural Gas ETF (KOLD), were seen lower 5.32% and 3.38% at $166.03 and $31.46, respectively. The front-month August natural gas futures contract finished Friday up 4.85%, or 12.8 cents ($0.128), to $2.418. The September contract also settled higher 12.6 cents ($0.126) to $2.389. Figure 3 below is a chart depicting the price trend of the front-month August contract over the past 24 hours.

Hotter Weather Trends Send Natural Gas Prices Soaring Higher - Natural gas prices are ending the week with a very strong rally, as the August contract currently is up a whopping 13 cents on the day.  What is causing such a rally in prices? The answer is a notable hotter shift in the weather pattern, as seen in our early morning GWDD outlook / changes.  Looking at the maps, while the most persistent heat lies out west in the 6-15 day period, there is a lack of cooler anomalies anywhere, which is keeping national demand elevated.  Zooming in on the chart at the bottom right of that image shows that the projected GWDD total for this July is getting close to the levels seen in July 2018, which was one of the hottest / highest demand Julys on record.  While this definitely represents a hotter July than the market was prepared for last week, or even to start this week, the magnitude of the rally was exaggerated due to the large short position that had built up in the market in recent weeks.  Many of these new shorts have had to cover heading into the weekend. This sets the market up for potentially another very interesting week next week, as we see if the weather pattern can hold these hotter changes, add to them, or revert back somewhat cooler.

Analysis: Every US storage region continues to inject natural gas at above-average pace -  Natural gas in underground storage to could continue filling at an above-average pace throughout the remainder of the summer in nearly all regions, keeping prices down at multiple hubs across the US. Since the beginning of this year’s injection season, Northeast storage facilities have posted substantial weekly inventory builds, largely erasing running inventory deficits relative to historical averages. This has been aided both by strong regional production and weak seasonal demand, and comes despite dismal seasonal spreads that traditionally provide the price signal to inject now and withdraw later. Starting with Week 14 of this year, and extending through the most recent Week 25, both the Dominion Transmission and Columbia Gas Transmission systems have seen storage inventories rise at a much faster clip than usual. In the case of Dominion, inventories have risen by a cumulative 102 Bcf, which is 23% greater than the five-year average cumulative build of 83 Bcf at Dominion’s storage facilities, and 46% greater than the 70 Bcf added to storage over the same period in 2018, . Likewise, on Columbia, storage inventories grew 82 Bcf from Week 14 through Week 25 this year, which is 23% more than the average 67 Bcf inventory increase on the system in the previous five years, and 40% more than the 59-Bcf inventory increase over the same period in 2018. Pacific Gas and Electric storage inventories started summer at a 10-year low of 64 Bcf, which at the time was 45 Bcf below 2018 levels, according to Platts Analytics. The large deficit to the previous year’s already low inventory level left PG&E with a low likelihood of closing the 45 Bcf gap this summer. But with below-average demand this spring and well above average pipeline receipts, PG&E has been able to close the original deficit to just 1 Bcf. While inventories are still 27 Bcf below the five-year average, the PG&E city-gate forwards for both the balance of summer and upcoming winter have fallen 36 cents/MMBtu and 35 cents/MMBtu, respectively, since April 1. Some upside risk to prices may materialize in the third quarter as PG&E has historically withdrawn gas during July and August to meet peak summer cooling demand. The Midwest, currently sitting with 497 Bcf in storage, has injected an average of 3.3 Bcf/d so far this summer, which is 126% above the five-year average, according to Platts Analytics. If the region keeps injecting this much more than the five-year average, it will reach the five-year maximum by mid-October, well before the November 6 average end of injection season. In fact, since 2011, October 31 is the earliest the Midwest has ever ended injection season. Elevated Rockies production coupled with nearly flat regional demand to last year has allowed the Rockies to average storage injections of 590 MMcf/d so far this summer, 130 MMcf/d stronger than last year, according to Platts Analytics. Southeast storage inventories have surged since the start of the injection season, assisted by maintenance at Sabine Pass, helping inventories surpass 2018 levels and shrinking the deficit to the five-year average. At the start of injection season, storage inventories sat at 208 Bcf, trailing the five-year average by 106 Bcf and 88 Bcf behind 2018 levels, prior to making significant gains. Inventories were able to build by 100 Bcf in April, ending at 305 Bcf, passing up 2018 stocks that sat near 294 Bcf.

Pa. refinery: Who will clean up decades of pollution? -- -   The explosions that destroyed part of the historic oil refinery on Philadelphia's south side have thrown a wrench into the ongoing effort to clean up decades' worth of soil and water pollution at the site.Sunoco Inc., the plant's former owner, agreed to clean up the contamination in the early 2000s, and it agreed to continue that effort after it sold the operation to a partnership known as Philadelphia Energy Solutions in 2012.The blasts on June 21 did so much damage that the new owners announced they'll likely close the refinery, the biggest on the East Coast (Greenwire, June 26).That leaves city, state and federal officials to oversee what will likely become a two-track cleanup involving two different companies. For now, Sunoco's effort to clean up the historical pollution is on hold because of the fire and explosions.Officials at EPA and the state Department of Environmental Protection (DEP) were scrambling last week to figure out what responsibility Philadelphia Energy Solutions and other parties bear for environmental problems caused by the fire. The U.S. Chemical Safety Board said the site is so unstable that its investigators haven't been able to inspect the damage (Greenwire, June 28).The outcome is crucial because the legacy pollution is already affecting a drinking water aquifer that stretches under the Delaware River into New Jersey. The cleanup could also shape Philadelphia's future by determining whether the refinery, which sits on 1,300 acres near the intersection of the Schuylkill and Delaware rivers, can be reused for something besides heavy industry."No one ever kind of reimagined what could be at that site," said Christina Simeone, a senior researcher fellow at the University of Pennsylvania's Kleinman Center for Energy Policy who wrote a paper about the refinery's problems.

Refinery explosion: How Philly dodged a catastrophe -- The alarm sounded around 4 a.m. and the plant dispatcher began broadcasting across every channel at the sprawling Philadelphia Energy Solutions refinery in South Philadelphia. There was a leak. In Unit 433. “As soon as they said Unit 433, we’re coming out of our chairs,” said an operator at the refinery who was working that shift. “That’s the unit you don’t want to leak.” The reason: 433 uses highly toxic hydrofluoric acid.. A major accidental release could suddenly send a dangerous cloud of hydrogen fluoride drifting over South Philadelphia and other heavily populated neighborhoods.  “He was still transmitting the script when the first explosion rattled our blockhouse," recalled the operator, who asked not to be named. “You heard the tone of his voice change and he stumbled and then he changed it to a report of a fire, instead of a leak. It was like a fireball and there was smoke and vapor and horrendous noises and debris.”  At 4:05 a.m., the Philadelphia Fire Department struck the first alarm. That wouldn’t be the only explosion at the refinery that morning. In the end, it was the most serious refinery accident here in decades. The June 21 explosion and fire caused no deaths but had the potential to have been catastrophic. In a bitter irony, the only fatality to result from the fire appears to be that of the facility itself, which is now set for permanent closure. What follows is a reconstruction of that event as experienced by refinery workers on the scene that morning as well as firefighters and city officials charged with responding to it.

Another One Bites The Dust - Market Impacts Of Philadelphia Energy Solutions' Refinery Shutdown - Philadelphia Energy Solutions (PES) announced last week (on June 26) that it was shutting down its 335-Mb/d refinery in Philadelphia, PA. This announcement came just five days after a major fire destroyed a portion of the refinery, which turned out to be the last straw for the facility that has been struggling financially for many years. Today, we consider the various market impacts that will likely follow the closure of the PES refinery, including its effect on fuel supply, where the closure leaves refinery production capacity in the region and how the refined product supply will need to adjust in response.  While fires can occasionally occur at refineries, this incident apparently caused significant damage to the alkylation unit and ultimately forced the entire facility to shut down. Whether the incident caused damage to other process units or infrastructure at the refinery — or whether it was more of a containment problem for alkylation feedstock — is not known at this time. The fire in the alkylation unit provides evidence of just how important every process unit is in a refinery.  Refineries function as a system, and without key process units and logistics in place, an interruption on one process unit can cause major ramifications to other processes that are dependent on that unit. In the case of the PES alkylation unit, it causes a reaction between volatile pressurized liquids isobutane and butylene (“mixed C4 streams”; note some refineries also use propylene feed) to make the premium gasoline blendstock, alkylate. Isobutane and butylene are both contained within mixed C4 streams produced inside the refinery by process units that crack molecules, such as fluid catalytic crackers (FCCs), cokers, hydrocrackers, etc.; these components are individually worth much less than gasoline. Without an alkylation unit, PES would be forced to either sell these mixed C4 streams at a significant loss or perhaps reduce refinery throughput due to limited storage capacity. In other words, those streams must go somewhere and without the logistics in place, the operation of the refinery is compromised.

Contamination from Philadelphia refinery that exploded could pollute New Jersey groundwater. Here’s how.The Philadelphia Energy Solutions refinery operations, part of which exploded and burned June 21 in South Philadelphia, has for decades sat atop plumes of underground water lurking beneath the sprawling 1,400-acre site and beyond.Although the groundwater is contaminated, it is not viewed as a direct threat to the city’s drinking-water supply. Philadelphia pulls its drinking water from the Schuylkill and Delaware Rivers, upstream from the refinery. And no one can withdraw groundwater without city approval. But could the polluted plumes migrate to New Jersey underground? Christina Simeone posed the question in her detailed look at the PES facility in September for the Kleinman Center for Energy Policy at the University of Pennsylvania. The PES refinery complex sits at the confluence of the Schuylkill and Delaware, and close to where the huge aquifer flows just under the surface.Simeone’s report was referenced widely after the fire. Now a doctoral student in Colorado, she is the former director of policy and external affairs at Kleinman. She is also a former director of the PennFuture Energy Center for Enterprise and the Environment, and a former official at the state Department of Environmental Protection.“I think there’s enough here to be asking questions,” Simeone said in a phone interview. Simeone’s report contained a section on the refinery’s historic impact on the Potomac-Raritan-Magothy underground aquifer system, which holds billions of gallons of fresh water. Known as PRM, the aquifer runs under the refinery complex — and under the Delaware River, eastward into New Jersey. The aquifer’s outcrop — where it is closest to the surface — is at the Delaware River. The aquifer is a main supply for drinking water in Gloucester and Salem Counties. Gloucester County is directly across the river from the refinery. With increased population growth and development in the counties, withdraws are expected to increase, according to the USGS. The PRM aquifer — composed of upper, middle, and lower aquifers separated by rock or earth — is also a source of drinking water in Camden County.

Michigan AG sues to shut down Enbridges oil pipeline in Great Lakes - Michigan Attorney General Dana Nessel sued on Thursday Enbridge to shut down the dual oil pipelines running under the Straits of Mackinac because, she said, the 66-year-old pipelines “present an unacceptable risk to the Great Lakes.” Nessel, a Democrat, also filed on Thursday a motion to dismiss Enbridge’s lawsuit from early this month that seeks to enforce agreements between the company and the administration of the previous Michigan Governor, Republican Rick Snyder, which had authorized Enbridge to build a tunnel and continue operating Line 5.    The new Governor of Michigan, Gretchen Whitmer, however, ordered in March the suspension of all work on the tunnel. The order followed an opinion by the new AG Nessel, who said the bill that allowed the construction of the tunnel violated the state constitution because “it went beyond what the bill’s title reflected.” Nessel threatened in April to “use every resource available” to shut down Enbridge’s Line 5 oil pipeline, and made good on that promise today.  “I have consistently stated that Enbridge’s pipelines in the Straits need to be shut down as soon as possible because they present an unacceptable risk to the Great Lakes,” Nessel said in a statement on Thursday. “Governor Whitmer tried her best to reach an agreement that would remove the pipelines from the Straits on an expedited basis, but Enbridge walked away from negotiations and instead filed a lawsuit against the state,” Nessel added. “The continued operation of Line 5 presents an extraordinary, unreasonable threat to the public because of the very real risk of further anchor strikes, the inherent risks of pipeline operations, and the foreseeable, catastrophic effects if an oil spill occurs at the Straits,” said the Michigan AG. “We were extraordinarily lucky that we did not experience a complete rupture of Line 5 because, if we did, we would be cleaning up the Great Lakes and our shorelines for the rest of our lives, and the lives of our children as well,” she noted. 

Oil spill still leaking into Gulf of Mexico 15 years later, study finds — For 15 years, oil from one particular spill has been leaking into the Gulf of Mexico. A new federal study estimates that each day, about 380 to 4,500 gallons of oil are flowing at the site where a company’s oil platform was damaged after a hurricane. That’s about a hundred to a thousand times worse than the company’s initial estimate, which put the amount of oil flowing into the ocean at less than three gallons a day. The report, released this past week and written by scientists at the National Oceanic and Atmospheric Administration and one at Florida State University, also contradicted assertions from the Taylor Energy Company about where the oil was coming from. The leak started in 2004, when an oil platform belonging to the Taylor Energy Company was damaged by a mudslide after Hurricane Ivan hit the Gulf of Mexico. A bundle of pipes and wells sank to the ocean floor and became partially buried under mud and sediment. To respond to the leak, Taylor Energy tried to cap nine of the wells and place containment domes over three of the plumes in 2008.But after local activists observed more oil slicks near the site of the Deepwater Horizon Spill in 2010, the Taylor oil spill started getting national attention. And last May, the U.S. Coast Guard installed a containment system that has been collecting 30 barrels, or about 1,260 gallons, a day to help catch the oil that’s continuing to surge in the ocean.Taylor Energy liquidated its oil and gas assets and ceased production and drilling in 2008, and says on its website that it exists solely to respond to the spill. It maintains that any oil and gas now leaking at the site is coming from oil-soaked sediment and bacterial breakdown of the oil. The federal government’s study suggests otherwise. “This shows it is in fact coming from the reservoirs, from these oil pipes, and not from the remnant oil at the bottom of the ocean,” Andrew Mason, one of the study’s authors, told CNN.

Cost Overruns Threaten Offshore Development - Even with funding based on a thorough engineering definition, operators could still see a cumulative $111-billion cost overrun. The prospect of oil prices remaining at about $60 a barrel, combined with impressive cuts in development and operational costs since 2014, have encouraged E&P companies to accelerate development of their offshore projects including Mad Dog Phase 2 in the Gulf of Mexico, the Azeri–Chirag–Gunashli in the Caspian Sea and the Tortue and Bonga Southwest field off the coast of West Africa. Indeed, Rystad Energy expects sanctioning of offshore field projects to rise to around $100 billion a year over the next four years, or double the annual average of 2015-18. But, rushing the final investment decision, especially for tailor-made designs, can increase uncertainty over the final cost by as much as 20 percent either way. Consequently, “for offshore operators, that means the expected variation for projects to be sanctioned during the period from 2019 to 2023 could be as high as $220 billion” according to a June 2019 study by Rystad Energy. Quite naturally, the success rate of sanctioned projects around the world varies widely. As Rystad Energy demonstrates, even taking into account funding based on a thorough engineering definition, operators could still see a cumulative $111 billion cost overrun. Indeed, Rystad has found cases in which accelerating a sanctioning decision without proper engineering definition can often result in actual costs exceeding target costs by up to 50 percent. Matthew Fitzsimmons, VP, Cost Analysis at Rystad Energy, notes that “even if oil prices stay above $60 per barrel over the next five years, final investment decisions could take longer to reach” to allow for sufficient time to mature the engineering definition and “ this will lower the uncertainty that their funding estimates will carry.” He warns that “failure to do so will not only have an adverse impact on the operator’s ability to control cost overruns but also the minority share owners of the field.” For example, the cost estimate for Shell’s huge Prelude FLNG project was $11 billion back in 2011. Nonetheless, due to the unforeseen mega engineering and fabrication challenges posed by this pioneering venture, development costs ballooned to around $15 billion – an increase of more than 36 percent. The scale of this cost overrun caused the major to cancel its order for another three FLNG units worth around $4.6 billion from Samsung Heavy Industries.

Weatherford Starts Voluntary Chapter 11 Process - Weatherford International plc, Ltd and LLC revealed Monday that they have initiated financial restructuring by commencing voluntary cases under chapter 11 of the U.S. Bankruptcy Code to “effectuate” a "pre-packaged plan of reorganization”. Financial restructuring implemented through the pre-packaged chapter 11 process will reduce Weatherford’s long-term debt by more than $5.8 billion, according to Weatherford. The proposed restructuring contemplates $1.75 billion in new financing and up to $1.25 billion in additional post-emergence financing. Weatherford’s other entities and affiliates are not included in the chapter 11 cases. Weatherford expects to file Bermuda and Irish examinership proceedings collectively with the chapter 11 cases in the coming months. Company operations are continuing without interruption and with no expected impact on customers, vendors, partners or employees, Weatherford revealed. Back in May, Weatherford announced that it had executed a restructuring support agreement with a group of its senior noteholders that collectively held, or controlled, approximately 62 percent of the company's senior unsecured notes. In its fourth quarter results statement released back in February, Weatherford reported a net loss of $2.1 billion. During the same period in 2017, the company reported a net loss of $1.9 billion. Weatherford has not yet released financial results for 2019.

Shell Reports Two Deaths at GOM Platform - Shell reported that two fatalities occurred Sunday morning at the company’s Auger Tension Leg Platform (TLP) in the U.S. Gulf of Mexico (GOM) approximately 214 miles (340 kilometers) south of New Orleans. One of the inviduals was a Shell employee and the other worked for the oilfield services firm Danos, according to a Shell written statement emailed to Rigzone. A second Shell employee sustained a non-life-threatening injury and was treated at a nearby hospital and released, the company added. Shell said the incident occurred at approximately 10 a.m. Central time during a routine and mandatory test of its lifeboat launch and retrieval capabilities at the platform. The U.S. Coast Guard and the Bureau of Safety and Environmental Enforcement (BSEE) are investigating the incident and are receiving full cooperation from Shell, the company stated. Moreover, Shell noted that it will conduct a separate internal probe. According to Shell, company representatives have informed family members of individuals involved and are providing support. The company also stated that names are not being released out of respect for the families and their privacy.

Two killed at Shell deepwater platform, investigation underway - Two workers were killed Sunday during a training exercise gone wrong at Royal Dutch Shell's Auger platform in the deepwater Gulf of Mexico, and a federal investigation is already underway.  The accident occurred Sunday morning during a routine safety exercise of the platform's lifeboat launch and retrieval capabilities, Shell said, although the company isn't discussing how the incident occurred. But there was no leak or release of oil involved.One of those killed was a Shell employee and the other was a contractor with the Louisiana-based Danos oilfield services firm. Another Shell worker was injured, treated at a local hospital and released.  The U.S. Coast Guard and the federal Bureau of Safety and Environmental Enforcement said they have launched an investigation into the matter. Shell will conduct an internal investigation as well.

Nearly $3B Raised for Louisiana LNG Projects - Venture Global LNG, Inc. reported Thursday afternoon that it has raised $675 million of additional capital from institutional investors, bringing total committed capital raised for its South Louisiana LNG export projects to more than $2.8 billion. Venture Global will earmark most of the new funding toward its Plaquemines LNG liquefaction terminal south of New Orleans, the company noted in a written statement emailed to Rigzone. The facility, which will be located along the Mississippi River in Plaquemines Parish, La., will be capable of producing 20 million tonnes per annum (mtpa) of LNG. The latest capital infusion builds upon $855 million Venture Global had already raised as well as the $1.3 billion equity commitment the firm received in May from Stonepeak Infrastructure Partners for its Calcasieu Pass LNG project in Cameron Parish, La. In a joint statement, Venture Global Co-CEOs Mike Sabel and Bob Pender said that early works at the Plaquemines facility should start later this year. As Rigzone reported earlier this month, Polish Oil and Gas Co. (PGNiG) has signed an agreement with Venture Global to buy more LNG over two decades from the Plaquemines and Calcasieu Pass terminals. Construction is underway for the Calcasieu Pass project. Venture Global is awaiting a final order for Plaquemines from the U.S. Federal Energy Regulatory Commission. The company stated that it expects to clear that regulatory hurdle by Aug. 1, 2019.

US May Become Third Largest Seller of LNG - This year, the U.S. will surpass Malaysia to become the world’s third largest seller of LNG. The country could even eclipse Qatar and Australia to take the top spot by 2024. This is truly staggering growth considering that LNG exports from the contiguous 48 just began in February 2016, when Cheniere Energy’s flagship Sabine Pass terminal in Louisiana first came online. U.S. LNG has thus far reached over 30 nations, with South Korea, Mexico, Japan, and China receiving the most. By the end of 2019, the U.S. will have doubled its export facilities to six. And the country will have expanded its capacity to ~9 Bcf/d, more than 20 percent of current LNG demand. Although China has now put a 25 percent tariff on U.S. LNG, the expectation is that the trade war will eventually be worked out, reopening the door to the world’s most vital incremental customer.  The EIA expects annual U.S. output to grow non-stop at 1-2 percent for decades to come, double the domestic consumption rate. U.S. LNG is expanding the short-term, spot market, now accounting for just 30 percent of global trade. This is helping to increase flexibility and liquidity in the market, importantly giving the less wealthy nations a better chance to participate. While it still represents just 12-14 percent of global gas usage, LNG is the fastest growing traded commodity. Trade has been rising 8-10 percent per year in recent years and growth will remain in the 4-7 percent range for as far out as current modeling goes. As for U.S. gas users, LNG exports are a bullish factor and will put a floor under domestic prices. However, numerous studies indicate that a coming U.S. LNG export surge of 15-20 Bcf/d would likely only increase domestic prices 10-15 percent in the mid-term, and perhaps even less in the long-term. Exports will actually keep price increases in check because they beget more gas production. The comparison that some U.S. industrial groups make to Australia, where an LNG export boom led to domestic gas shortages and spiked prices, is a faulty one. Australia has been exporting over 60 percent of its production, while the U.S. should top out at below 20 percent. . Ultimately, if U.S. LNG exports do increase domestic prices too much, they will simply limit themselves by pushing buyers to look for cheaper sellers.

America's liquefied natural gas boom may be on a collision course with climate change - America's liquefied natural gas boom has a climate change problem, according to a report released on Monday. The US energy industry is scrambling to build dozens of expensive export terminals that can be used to ship cheap natural gas to China and other fast-growing economies that want to move away from coal. While those investments make sense today, they will likely be derailed in the longer run by a combination ofplunging renewable energy costs and rising climate change concerns, according to the Global Energy Monitor, a network of researchers tracking fossil fuel projects.Those dual forces will make many LNG projects "unprofitable in the long term," putting much of the $1.3 trillion of investments in the sector at risk, the report said.The problem is that the LNG boom will create harmful methane emissions — a greenhouse gas that is roughly 30 times more harmful than carbon dioxide emissions. Both coal and natural gas produce CO2 emissions, though natural gas creates far less than coal. If the proposed LNG expansion goes forward, the climate impact would be twice as damaging as the current installed base of coal in the United States, the Global Energy Monitor told CNN Business. "We know that LNG is not a good answer climate-wise," Ted Nace, founder and director of the Global Energy Monitor, said in an interview. "It might even be pretty foolish financially — for all the reasons that coal turned out to be a bad investment 10 years ago." Nace said that natural gas can no longer credibly be viewed as a bridge fuel between coal and renewables because of methane leaks. These accidental emissions occur during drilling, in the pipelines or during delivery.He said that's why the United Nations' Intergovernmental Panel on Climate Change has called for reducing natural gas in the coming decades in order to limit global warming to 1.5 degrees Celsius above pre-industrial levels."If you have leakage of methane along any step of the way, you can really undermine your case for this being a good solution carbon-wise,"

Ineos Selects Chocolate Bayou for New EO Unit - INEOS Oxide reported Tuesday that it will build a new ethylene oxide (EO) unit and associated downstream ethylene oxide derivatives (EOD) facility at the company’s Chocolate Bayou Works manufacturing site south of Houston. In a written statement, INEOS noted that adding the EO and EOD capacity at Chocolate Bayou will reinforce on-site integration. Moreover, the company also stated that the availability of additional land near the new unit will allow third parties to co-locate and consume EO via pipeline. INEOS Olefins and Polymers USA already operated two olefin crackers, two polypropylene units and two cogen facilities at Chocolate Bayou, a 2,400-acre complex that INEOS’ website notes boasts the second-largest hydrocarbons cracker in the United States. Also, INEOS Oligomers is building a new linear alpha olefins unit and an associated downstream poly alpha olefins unit at the site.

US E&P Workers Getting Paid More in 2019 - Engineering technicians/analysts, reservoir engineers and workers in geoscience disciplines are enjoying higher salaries in 2019, according to a report from CSI Recruiting. Crude production in the U.S. has continued to break records this year as drillers find ways to be more efficient. And at the end of 2018, industry recruiters expressed that they planned on recruiting more in early 2019, according to a survey conducted by Rigzone. With the exception of places like the Permian Basin, exploration and production (E&P) workers haven’t always fared as well as their counterparts in other sectors (i.e. midstream, downstream) regarding employment following the downturn. But CSI Recruiting’s 2019 E&P Salary Report reveals a positive hiring outlook for upstream workers in 2019. The report, now in its 15th year, analyzes data from more than 3,200 full-time, salaried E&P workers currently employed in the U.S. CSI Recruiting president Jeff Bush said for the first several weeks of January, the phones at their Colorado and Texas offices began to ring and companies who were actively hiring during that time period found “strong candidates across skill sets with reasonable compensation expectations and a willingness to make a change.” Still, he cautioned that the hiring process would be slow in 2019. “We are anticipating periods of time – weeks, perhaps a month or two – where little hiring occurs, as the industry pauses over a pricing dip or summer vacations impact decision-making,” he said. “We’re optimistic for 2019, although battle-tested enough to know it will be another year of swings in sentiment and activity level.”

Increasing uncertainty leads to flat oil and gas market  - Energy sector activity was flat in the second quarter after three years of growth, according to a press release by the Federal Reserve Bank of Dallas on their energy survey. The statement said the business activity index, a measure of conditions among Eleventh Federal Reserve District energy firms, indicates activity levels were largely unchanged from the prior quarter. Exploration and production and oilfield services firms drove the decline. “Results from this quarter’s survey indicate a further slowdown in the oil and gas sector, with employment and business activity essentially unchanged from last quarter,” said Michael Plante, Dallas Fed senior research economist, in a prepared statement. “Increasing pessimism and a surge of uncertainty suggest a potentially challenging near-term outlook, especially for oil field service firms.” Oil and gas production increased but at a slightly lower rate, the statement said. Meanwhile, the index for capital expenditures indicated a slight reduction in capital spending among exploration and production firms. In the 2019 Dallas Energy Survey, Plante said the Federal Reserve Bank of Dallas asked a question to see how budgets for 2019 may have been revised since the start of the year. “Many firms are under pressure to maintain capital discipline for various reasons,” Plante said in a statement. “By and large, companies are maintaining budget discipline, with most reporting either no change or slight adjustments up or down.” The survey also found that services firms saw operating margins decline, the employment index dropped, executives were more pessimistic about future conditions and that expectations for oil and gas prices are slightly lower than expected.

U.S. diesel consumption hit by economic slowdown (Reuters) - U.S. consumption of diesel and other middle distillate fuels is decelerating in line with the wider slowdown in manufacturing and construction activity. Consumption of distillate fuel oil was up by 3% in the three months from February to April compared with the same period a year earlier, according to data from the U.S. Energy Information Administration. Consumption growth has fallen from more than 5% year-on-year in the three months from August to October and the trend is slowing despite short-term volatility (“Petroleum Supply Monthly”, EIA, June 28). Distillate fuel oils are mostly used in manufacturing, freight transport, construction, mining, oil and gas production, and farming - as well as small amounts for home and commercial heating, especially in the U.S. northeast. Distillate consumption is therefore most heavily exposed to the business cycle and the recent slowdown is consistent with business surveys and government data showing the rate of economic growth is decelerating. Farm diesel consumption has been hit by heavy rains and flooding across the Midwest which has delayed or even cancelled the traditional planting season. Midwest distillate consumption was up by just 2% in February-April compared with the same period a year earlier, down from peak growth of more than 4% in August-October. But the distillate slowdown cannot be wholly or mainly attributed to the farm sector’s severe weather problems (https://tmsnrt.rs/2FPNnDi). Fuel consumption has slowed even more sharply in the states along the East Coast to less than 1% in February-April down from almost 7% in August-October. Gulf Coast and West Coast consumption growth also shows signs of levelling off or slowing after accelerating for much of last year. Slowing distillate consumption growth is consistent with a broad range of other indicators pointing to a sharp slowdown in manufacturing and a downturn in construction and freight transportation. 

Keystone XL pipeline opponents pursue new legal challenge(AP) — Environmentalists asked a federal judge on Monday to cancel approvals issued by the U.S. Army Corps of Engineers for the Keystone XL oil pipeline from Canada, opening another front in the legal fight over a long-delayed energy project that President Donald Trump has tried to push through to completion. Attorneys for the Northern Plains Resource Council, Sierra Club and other groups filed the latest lawsuit against the $8 billion tar sands pipeline in Montana, where they’ve previously won favorable rulings in related cases. First proposed in 2008, Keystone XL was rejected by President Barack Obama but revived under Trump. An appeals court last month lifted an injunction that had blocked construction. That came after Trump issued a new permit for the project, in a bid to nullify a legal challenge that had been based on a previous permit from his administration. A separate lawsuit challenging the president’s actions on the permit is pending in federal court. Monday’s lawsuit gives pipeline opponents another avenue to delay or stop it should Trump’s permit be upheld. Both cases are assigned to Judge Brian Morris in Great Falls — the same judge who issued the injunction recently overturned by the 9th U.S. Circuit Court of Appeals.

Green groups sue to stop Keystone XL construction - Various environmental groups on Monday sued the federal government over allowing the construction of the Keystone XL pipeline, arguing the project violates environmental law. The Sierra Club, Northern Plains Resource Council, Bold Alliance and other groups filed a suit against the U.S. Army Corps of Engineers, saying that it violated the Clean Water Act and the National Environmental Policy Act when it issued a nationwide permit to allow the construction of the TransCanada Corp. gas pipeline. The suit argues specifically that the federal government’s permit to allow the construction of the pipeline between Canada and the U.S. was done “without assessing its significant direct, indirect, and cumulative environmental effects and by using the Permit to approve most of Keystone XL’s water crossings without analyzing its project-specific impacts.” “Incredibly, the EA [environmental assessment] does not evaluate the risks or impacts of oil spills into waterways at all,” the suit reads. A federal court ruled last winter that the U.S. State Department violated environmental laws by failing to supplement its 2014 environmental impact statement in light of a new pipeline route through Nebraska. Another ruling placed a stay on construction from going forward. But the Trump administration in late March rescinded that 2017 Keystone permit, issuing a new one in its place. The administration argued the new permit, which aimed to circumvent the environmental impact statement issues, nullified the construction moratorium. A White House spokesperson told The Hill at the time that the new permit "dispels any uncertainty."

As Local Control of Fracking Dawns Colorado Towns Become Battlegrounds - The image that Dr. Maureen Barrett displayed on the projector screen looked a bit like paint splatter, a splotch of red against a green background. It took a moment for her audience — a crowd of about sixty residents of east Boulder County, packed into the small conference room of a rural fire station late last month — to process what they were seeing. When they did, some gasped. “That’s downtown Longmont,” said an alarmed voice. The map on the screen showed some of the results of an air-quality modeling study that Barrett, an atmospheric scientist and engineer from Evergreen, performed for the residents of Niwot and Gunbarrel, two small communities that could be impacted by a massive fracking project planned along the far eastern edge of Boulder County. Using emissions and meteorological data recorded at other fracking sites along the Front Range, Barrett modeled the levels of nitrogen dioxide (NO2), a hazardous air pollutant, that surrounding areas could experience during the drilling process. “The shaded area is the area that the model shows, for any one hour, that the concentrations will exceed the level of the ambient air-quality standard,” Barrett told the crowd. “We’re looking at basically an eight-mile extent of violations of the NO2 one-hour ambient air-quality standard, just from drilling.”The audience, full of people who live within or just beyond the map’s shaded area, had gathered at the headquarters of the Boulder Rural Fire Protection District to hear the results of Barrett’s research. And while she noted caveats to some of her findings, there wasn't much good news in the presentation.

State puts an end to oil leases off Carpinterias beaches - Local environmental groups are celebrating the end of four oil and gas leases in state waters directly offshore of the city of Carpinteria, terminated by the California State Lands Commission on June 28. The leases were purchased by Carone Petroleum Corporation in 1997, at which time Carone proposed to develop the leases by slant drilling from federal Platform Hogan. For more than 20 years, the Environmental Defense Center (EDC), a public interest environmental law firm, has been representing the Carpinteria Valley Association, Get Oil Out! and Sierra Club Los Padres Chapter in opposition to this proposal, as well as a similar proposal by Venoco, to develop the Paredon project. With the termination of the Paredon leases offshore Carpinteria and the Venoco leases offshore Ellwood, the Carone leases were the last active leases in state waters offshore Santa Barbara County. “The coast of Santa Barbara County is finally free from the threat of oil drilling in state waters,” said Linda Krop, Chief Counsel of EDC. “The termination of state oil leases also sends a strong message to the federal government that our communities are doing everything in our power to prevent oil and gas development off our coast.” The Carone leases were located immediately adjacent to the city of Carpinteria, in close proximity to the public open space at Carpinteria Bluffs, the seal rookery and near homes and agricultural fields. An oil spill from development of these leases would have had a devastating impact on the community, wildlife and public beaches. The termination of the leases means that this area will never be at risk for oil development.

State budget funds study on cutting petroleum supply, demand - In a clear threat to one of Kern County's economic pillars, California took a tentative first step toward cutting in-state oil and gas production with Gov. Gavin Newsom's signature last week on a budget that includes $1.5 million for finding ways to reduce petroleum supply and demand.The budget bill signals Newsom may take a more aggressively anti-oil approach than did his predecessor, former Gov. Jerry Brown. Recent state initiatives have set ambitious goals for weaning California off oil and gas, but despite pleas from environmental activists, none have directly limited production.The bill's language suggests the administration wants to tread lightly on places like Kern that rely on oil production for jobs and tax support, saying the study should identify ways to manage "the decline of fossil fuel use in a way that is economically responsible and sustainable." Workforce training and enhanced economic diversification programs are among Sacramento's ideas for accomplishing those goals.Environmental activist groups welcomed the budget item as potentially leading to climate change protections and help for communities they say suffer physical harm from living near petroleum production. Others urged Newsom to take more immediate steps to curtail oil production in the state."It’s good that Governor Newsom is interested in doing a study on how to move the state off of fossil fuels. It is important, and it should happen," Alexandra Nagy, California director at Food & Water Watch, said in a news release. "But it also should not be a reason to delay action now on several things that Governor Newsom has the power to do right now."

The Fracking Industry's Flaring Problem May Be Worse Than We Thought – DeSmog - In 2018, the oil and gas industry operating in North Dakota’s Bakken Shale burned off record amounts of natural gas, largely obtained via hydraulic fracturing (fracking). This process, known as flaring, costs the industry money — it literally burns one of the products being pumped out of the ground — but more importantly, the resulting release of globe-warming emissions of carbon dioxide and methane spells disaster for the climate.And a new analysis of satellite evidence indicates the industry is likely underreporting how much gas it is actually flaring in the Permian Shale, with implications for other oil fields.According to the Bismarck Tribune, the amount of gas flared in North Dakota in October was enough to heat 4.25 million homes in America. And while the fracking industry in North Dakota is flaring the most gas in the nation, it's not the only place this is a growing issue. Flaring reportedly also doubled in 2018 in the booming Permian Shale in Texas and New Mexico, with an estimated $1 million a day of gas burned off. In addition, the Environmental Defense Fund (EDF) recently analyzed satellite data and concluded that the industry is likely underreporting the actual volumes of gas flared in the Permian. EDF says that the real numbers are closer to double what the industry reports. This increase in flaring is just one more example of how the oil and gas industry has recklessly pushed forward with the so-called “shale revolution,” producing record amounts of oil while losing money and showing blatant disregard for the environment and climate along the way. It is also an excellent example of how federal and state regulators are allowing this to happen.  Flaring has alway been a part of oil production, conventional or otherwise. Natural gas often is found with oil reservoirs and when adequate infrastructure doesn't exist to capture both the oil and gas, the gas is flared, or burned, while the oil is captured and sold. (Natural gas is primarily methane, a powerful greenhouse gas, and burning it transforms the methane to water and carbon dioxide, which is perhaps the best-known greenhouse gas.) A new report from the Energy and Environmental Research Center (EERC) at the University of North Dakota suggests that North Dakota should capture the gas and store it underground, a common method of storing gas. But as the Aliso Canyon disaster made clear when an uncontrolled leak spewed methane from a gas storage facility in southern California for several months, the approach is not without its risks. However, it is the cheapest option.

ND oil spill --The North Dakota Department of Environmental Quality (NDDEQ) has been notified of a crude oil release resulting from a fire on a well pad in Bottineau County. The fire is believed to have started from a lightning strike. The well is operated by RIM Operating, Inc. The incident occurred approximately 5 miles northwest of Lansford. A mist of crude oil sprayed off the pad due to one of the tanks exploding. Initial estimates indicate less than 300 barrels of crude oil were released, with the majority contained on the pad.  Personnel from the NDDEQ have inspected the site and will continue to monitor the investigation and remediation.

US Drillers Drop Five Rigs -- The U.S. dropped five oil rigs and gained one gas rig for a net loss of four rigs this week, according to weekly data from Baker Hughes, a GE Company. This brings the nation’s overall rig count to 963, which is 89 less than the count of 1,052 one year ago. New Mexico led all states, adding three additional rigs this week. Alaska added two rigs and West Virginia added one rig. Oklahoma led all states in declines with a drop of five rigs this week. Louisiana dropped four rigs and Texas dropped one rig. Texas has now dropped rigs seven out of the last eight weeks. Among the major basins, the Cana Woodford and the Haynesville each dropped two rigs while the Permian added two rigs and the Marcellus added one. Currently, the Permian has 443 active rigs, which accounts for almost half of the nation’s total rig count.

As oil drilling nears in Arctic refuge, 2 Alaska villages see different futures -  David Smith Jr. opposes oil drilling in the Arctic National Wildlife Refuge. He's worried about harm that could come to the Porcupine caribou herd. Nathan Gordon Jr., says development can be done responsibly, and that drilling and caribou can, and do, co-exist on the North Slope. These are decades old arguments often heard in Washington, D.C., but they've moved from hypothetical to urgent since Congress legalized oil development in the northern slice of the refuge in 2017. The Trump administration is pushing to let oil companies bid on land there by the end of the year. And for Smith and Gordon, that drilling would happen, essentially, in their backyard. Smith lives in Arctic Village, an indigenous Gwich'in community of about 150 just south of the refuge. Residents say the caribou herd that often gives birth in the refuge is essential to their way of life. Gordon is from Kaktovik, an Inupiat town of 250 and the only village surrounded by the coastal area where drilling could take place. Residents have already benefited from oil development elsewhere on the North Slope and some see more drilling as an opportunity. Arctic Village has long been the face of opposition to drilling in the Arctic National Wildlife Refuge, often called ANWR, and no one is ready to admit defeat.

We're fracking the hell out of the U.S.A. Can a president slam on the brakes? -- U.S. Route 285, cutting through the Texas-New Mexico border, is perilous. People die. The remote highway is bustling, often dangerously so, because the U.S. fracking revolution is in high gear, and nearly-endless bounties of liquid gold lie beneath the West Texas ground. Overall, U.S. crude oil production andexports have both hit record highs. America is also now the world leader in natural gas production. Meanwhile, carbon dioxide — a major product of burned fuel — is now rising at rates that are unprecedented in historic and geologic time. Already, levels of the heat-trapping gas are the highest they've been in at least 800,000 years — though it's probably millions of years. Earth, understandably, is feeling the heat. Eighteen of the 19 warmest years on record have occurred since 2000.  Jay Inslee — the presidential candidate running a climate change-focused campaign — proposed an ambitious solution on Monday: rapidly phasing out the extraction of fossil fuels in the U.S., which includes ending fossil fuel drilling on federal land, terminating "outrageous" taxpayer-footed subsidies to fossil fuel business (at the tune of some $26 billion a year), and pursuing a complete, nationwide ban on fracking."American fossil fuel production is stepping on the accelerator at just the moment that it should be hitting the brakes," reads Inslee's "Freedom from Fossil Fuels" proposal.A fracking ban, or a significant curbing of fracking — which involves injecting a high-pressure mixture of water, sand, and chemicals into the ground to break open hard-to-reach pockets of oil — is meaningful because the prohibition would keep bounties of carbon-rich oil buried. But can any president, however influential, truly outlaw the practice, or diminish its climate impact?

Fracking Creates A Glut Of Fossil Fuels & A Mountain Of Debt -- To hear officials in the Trump administration tell it, fracking is a fantastic gift to the American people because it allows the US to be the largest oil and gas producer in the known universe.  Steve Schlotterbeck, former chief executive of EQT, one of the largest shale gas fracking companies in the US, has a different perspective. At a petrochemicals conference in Pittsburgh recently, he shocked his audience by telling them that fracking has been an “unmitigated disaster” for shale companies.“The shale gas revolution has frankly been an unmitigated disaster for any buy-and-hold investor in the shale gas industry with very few limited exceptions. 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. While hundreds of billions of dollars of benefits have accrued to hundreds of millions of people, the amount of shareholder value destruction registers in the hundreds of billions of dollars. The industry is self-destructive.”Writing for Oil Price.com, Nick Cunninham says, “The message is not a new one. The shale industry has been burning through capital for years, posting mountains of red ink. One estimate from the Wall Street Journal found that over the past decade, the top 40 independent U.S. shale companies burned through $200 billion more than they earned. A 2017 estimate from the WSJ found $280 billion in negative cash flow between 2010 and 2017. It’s incredible when you think about it — despite the record levels of oil and gas production, the industry is in the hole by roughly a quarter of a trillion dollars.“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,” Schlotterbeck said. “It’s frankly hard to imagine the scope of the value destruction that has occurred. And it continues. Nearly every American has benefited from shale gas, with one big exception — the shale gas investors.”’

Shale Fight Makes OPEC Accept Lowest Market Share Since 1991 - For almost three decades, OPEC has always pumped at least 30% of the world’s crude oil, creating an informal floor for Saudi Arabia and its allies in the cartel. The level has survived everything from wars and economic crises to terrorist attacks and diplomatic spats. Yet, with OPEC set to extend output cuts for the rest of the year and potentially into early 2020, its share of the oil market is all but certain to drop below 30% for the first time since 1991, according to Bloomberg News calculations. The sliding market share of the Organization of Petroleum Exporting Countries, which meets in Vienna on Monday, highlights how the cartel keeps giving ground to rising U.S. shale production in pursuit of higher prices.  Saudi Arabia and Russia agreed on Saturday to push for an extension of the current OPEC+ production cuts for the rest of the year and potentially all the way to March 2020, making the outcome of next week’s gathering in Vienna of OPEC and non-OPEC oil ministers all but a foregone conclusion. As Saudi Arabia pursues a policy of higher oil prices, it and the rest of the OPEC cartel are giving up market share to rivals including U.S. shale producer.   OPEC nations are bearing the burden of the market-share loss unevenly. Under U.S. sanctions, Tehran and Caracas have seen their production collapse, lightening the effort other members had to make to support high oil prices. Since December, Iranian and Venezuelan output has fallen by almost 1 million barrels a day, hitting its lowest level in about 40 years, according to Bloomberg News estimates. Other OPEC nations have avoided trouble by simply flouting the rules, virtually pumping at will. Iraq, for example, produced 4.7 million barrels a day in May, matching a record it set in December. But Saudi Arabia, the group’s most important member, is having to make deeper cuts than initially planned, reducing output recently to 9.7 million barrels a day, well below the level of 10.3 million a day it agreed with its OPEC partners.

THE UNITED STATES A NET OIL EXPORTER?? The Dirty Little Secret - The United States became a net oil exporter for the first time in 75 years, or so they say.  While the U.S. may indeed be exporting more petroleum than it imports from time to time, there’s a dirty little secret behind the data.  And one of those secrets overlooked by some energy analysts and the press is that the U.S. still imports 7 million barrels per day of oil. So, why would the United States continue to import 7 million barrels per day (mbd) of oil if it is indeed… a Net Oil Exporter??  Good question.   According to the EIA, the U.S. Energy Information Agency, the U.S. first became a net oil exporter during the week of Nov 30th, 2018 by exporting 211,000 barrels per day more than it imported.   ”  As we can see, the U.S. had an even higher amount of net oil exports this past week at 675,000 barrels per day.  Regardless, the U.S. has been a net exporter for three weeks out of the past seven months. However, if we look into the details of this data, we will find out that the United States isn’t exporting this oil and petroleum because it “WANTS” to, but because it’s “FORCED” to. There’s a big difference.   Let’s start with the growth of U.S. oil production.  While U.S. shale oil production first began to ramp up in 2008, this chart shows the increase in total oil production since 2014  :U.S. crude oil production increased by 3.6 million mbd, or 42% in the past five years.    However, while our domestic oil production has increased significantly, our usage of petroleum in the transportation sector is only up 5% during the same period:  If we are producing a great deal more oil than we did in 2014, then why are U.S. crude oil imports nearly the same as they were five years ago? Here we can see that total U.S. crude oil imports currently average 7.1 mbd (2019) versus 7.4 mbd in 2014. If we consider that U.S. oil production has surged by 3.6 mbd since 2014, then why haven’t our crude oil imports DECLINED more significantly???  Well, part of the answer can be found in the following chart: The main increase of U.S. oil production comes from a very light grade of shale oil.  Extremely light tight shale oil has an API Gravity rating of 40-50 degrees.  And in the past three years, the production of U.S. 40-50 API oil has increased by 2.1 mbd.  And where does the majority of this extra light tight shale oil come from?   It comes from North Dakota, Texas and New Mexico, via the Bakken, Eagle Ford, and Permian Shale Oil Fields (the chart is shown in thousand barrels per day):  These three states are producing 4.5 mbd of the very light tight shale oil (40-50 API) produced in the United States.  To understand the different oil grades, simply put, the lower the API rating, the heavier the oil.  Heavy Canadian oil sands have an API rating of 20-25, while medium grade conventional is 30-35 API, and much of the shale oil is very light at 40-50 API. Unfortunately, U.S. refineries are set up for a much lower grade conventional oil of 31-33 API Gravity:

'Don't get used to it': OPEC's free pass for US shale will be short-lived, JP Morgan says - A gradual fall in oil prices over the coming years could prompt Saudi Arabia and OPEC to reclaim some of its market share from the U.S., according to the head of EMEA oil and gas research at J.P. Morgan. Saudi Arabia and OPEC are “there to support oil while they are effectively pregnant with all this economic growth and capital they have got to deliver. But, having said that, what we are saying to the bulls is: Don’t get used to it,” J.P. Morgan’s Christyan Malek told CNBC’s “Squawk Box Europe” on Thursday. Earlier this week, OPEC and 10 other allied producing partners agreed to keep 1.2 million barrels a day off the market for another nine months. The energy alliance, sometimes referred to as OPEC+, has been reducing output since 2017 as part of a sustained bid to prop up crude prices. The Middle East-dominated group has succeeded in keeping crude futures near $60 a barrel, albeit five years after oil prices last traded above $100. But, a protracted period of production cuts has seen its share of the global oil market sink to the lowest level in almost three decades. Meanwhile, the U.S. shale industry has expanded at such a rapid rate that it threatens to overwhelm OPEC-led efforts to mitigate demand concerns, swamping the global oil market with supply. When asked whether he believed OPEC kingpin Saudi Arabia could change this dynamic and eventually outlast the U.S. shale industry, Malek replied: “I think, at the moment, with OPEC and Saudi focusing on fiscal (and) economic policy, they are absolutely two feet in the value camp.” “This value proposition, the fact they are giving shale a free pass so to speak is short-lived… I mean three of four years ago, who would have thought that they would be happy with $60 to $70?” “The bar keeps falling, it is just very gradual. In a few years’ time I expect $50 to be an okay oil price, at which point that could see Saudi and OPEC reclaim that market share and then it becomes more competitive,” Malek said.

Shale Patch Struggles 5 Years After Crude Collapse - It’s been five years since crude started a precipitous drop that eventually saw it hit a low of $26 a barrel. While prices have recovered some of the lost ground, shale producers are still feeling the pain. Oil’s 76% collapse from almost $108 a barrel in June 2014 was the worst plunge since the financial crisis of 2008. Below are some data points on how the industry has fared since. In 2014, oil and gas companies made up almost 11% of the S&P 500 Index. Now, that’s just over 5% as some investors appear to have given up on the sector. Shareholder antipathy stems at least in part from questions over the profitability of shale drilling. While the five big, publicly traded integrated major producers -- BP Plc, Chevron Corp., Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA -- resumed generating free cash flow as a group in 2017, independent U.S. drillers only became cash-flow-positive (based on an average of 12 such companies compiled by Bloomberg) in 2018 -- and they were back in the red in the first quarter of 2019. One fundamental difference is that independents get most, if not all, their crude from shale wells, which go through a much quicker drop-off in production than conventional wells. That compels them to constantly spend on new prospects to keep growing. After oil prices dropped at the end of last year, investors doubled down on their demands for drillers to slash capital budgets. It’s not just capital spending, though. Shareholders are now asking independent producers to trim the fat. General and administrative costs, the bulk of which come from salaries, have been creeping up in the last couple of years. While the larger players have been able to weather the 2014 crude collapse and another price downturn late last year, some smaller companies weren’t so lucky. The energy sector has made up almost a quarter of all U.S. bankruptcies in the past year.

Oil sector cutting spending as Wall Street turns its back -- Rising production. Weakening demand. Skeptical investors. The U.S. energy sector, while not entering a downturn, is facing an extended period of lower oil prices, lower profits and tighter spending, ultimately leading to slower growth, fewer companies and fewer jobs in Houston and across the oil and gas industry. In less than a year, the fundamentals of energy markets have shifted dramatically, from forecasts of looming shortages to worries about mounting supplies. Even with OPEC’s agreement this week to extend production cuts into next year, oil markets remain worried about deteriorating global energy demand and record U.S. production. Crude has struggled to break out of the $50-to-$60-a-barrel range, despite heightened tensions in the Middle East and the output reductions by the Organization of the Petroleum Exporting Countries. Some companies can still make money at those levels, but not enough to fuel significant expansions or satisfy increasingly impatient investors. Wall Street already has turned its back on the sector, unhappy with its lackluster returns but also increasingly focused on challenges to the industry— and earnings — from climate change, renewable energy and electric vehicles. The S&P Energy index is down more than 16 percent in the past 12 months even as the broaders S&P 500 index has gained 9 percent. After the the recent oil crash that ended in 2016, the door for funding oil and gas companies was wide open as banks and investors became eager to finance the land rush in West Texas’ booming Permian Basin and get in on the rebound. But the land rush proved costly, and many companies, loaded with debt, have yet to turn a meaningful profit. “We’ve done pretty much a 180-degree turn,” said Brian Lidsky, senior director at the Austin-based research firm Drillinginfo. “That door started to shut in 2018 and now the lock has been put on.”

Drillers Fighting for New Life  - For the oilfield services industry, it’s no longer about merely navigating a downturn. It’s now about survival. Five years after crude began its plunge to less than $30 a barrel from more than $100, the companies that drill and frack wells are living in a new world. The producers they work for have become increasingly efficient and cost-conscious, reacting to shareholder demands for payback and a crude market that’s recovered only part of that brutal decline. Meanwhile, the service companies that handed out discounts in the downturn are barely holding on. Schlumberger Ltd. and Halliburton Co., the two biggest, have each fallen by more than 65% since crude started tumbling, and Weatherford International Plc on Monday filed for bankruptcy. Contrast that with the oil producers, collectively down less than 50%. When crude began recovering in March 2016, the servicers started refortifying. But with their customers keeping a lid on spending, the gear began to pile up. In February, Rystad Energy, an industry consultant, estimated that supplies of U.S. fracking gear -- the pumps that blast water, sand and chemicals underground to release crude in what has become the most expensive part of drilling -- will exceed demand by about 68% by year’s end. At the same time, producers have enjoyed an output boom in recent years, doing more with less by using new methods and technology. Shortened horizontal drilling times and longer laterals that require fewer wells to be drilled are taking a toll on servicers. In June 2014, the U.S. pumped 8.4 million barrels of crude using 1,545 drilling rigs. Last month, it produced about 12.2 million barrels, 45% more, with just 788 rigs. 

U.S. Oil Companies Find Energy Independence Isn't So Profitable -  Oil companies are producing record amounts of crude oil and natural gas in the United States and have become major exporters. Yet the companies themselves are finding little to love about this seeming bonanza. With a global glut driving down prices, many are losing money and are staying afloat by selling assets and taking on debt. The value of oil and gas stocks as a proportion of the S&P 500 over the last six years has dropped to about 4.6 percent, from 8.7 percent. “It’s really a psychological punch in the gut,” said Matt Gallagher, chief executive of Parsley Energy, which has productive shale fields in the Permian Basin of Texas and New Mexico and has tripled output over the last three years. His company’s shares have tumbled to about $19 a share, from $38 in late 2016. Domestic oil production has increased by more than 60 percent since 2013, to over 12 million barrels a day, making the United States the biggest producer of oil and natural gas in the world and slashing imports.  Oil executives say the United States is set to become an even bigger factor because a further five million or so barrels of daily crude oil production are on the way in the next few years.  In years past, investors might have celebrated Occidental Petroleum’s proposed acquisition of Anadarko Petroleum, which has some of the most lucrative oil fields in the country. Instead, Occidental’s shares have fallen by about 10 percent since that deal in early May. In the last four years, roughly 175 oil and gas companies in the United States and Canada with debts totaling about $100 billion have filed for bankruptcy protection. Many borrowed heavily when oil and gas prices were far higher, only to collectively overproduce and undercut their commodity prices. At least six companies have gone bankrupt this year, and Weatherford International, the fourth-leading oil services company, which owes investors $7.7 billion, is expected to file for bankruptcy protection on Monday.   Weatherford’s chief executive, Mark A. McCollum, seemed exasperated. “I don’t waste a lot of time thinking or planning how to fail,” he said. “The elephant in the room for the entire sector is we’re not generating returns that our investors expect.” One concern is that the industry will be forced to leave oil and gas in the ground as climate change prompts environmental restrictions on drilling or a shift to alternative fuels. “The psychology has turned,” “When you talk to investors they are concerned about oil companies spending money on something that will be in decline. There are more concerns that electric cars and hybrid cars are going to get more and more popular.”

U.S. oil production growth slows but OPEC+ should be wary (Reuters) - The once booming expansion rate of U.S. oil production has begun to slow in response to the downturn in prices since the end of the third quarter of 2018, government production figures show. U.S. crude and condensates production rose to a record 12.16 million barrels per day (bpd) in April, an increase of 1.69 million bpd or 16% compared with the same month a year earlier. But the growth rate has slowed since peaking in the third quarter of 2018, according to monthly output data from the U.S. Energy Information Administration ("Petroleum Supply Monthly", EIA, June 28). Total crude and condensates production was up by just 1.52 million bpd year-on-year in the three-month period from February to April, down from a peak growth rate of almost 1.97 million bpd in August-October 2018. Onshore production from the Lower 48 states, most of it from shale plays, grew by just 1.34 million bpd year-on-year in February-April down from 1.81 million bpd in August-October. Slowing output growth is evident across all major oil-producing shale plays as firms ease the rate of new drilling and well completions in response to lower prices (https://tmsnrt.rs/2FNNj76 ). In the Permian Basin's Spraberry shale play, annual production growth has slowed to 300,000 bpd in March-May from 425,000 bpd in August-October. Also in the Permian, Wolfcamp shale play production growth has slowed to 380,000 bpd from 490,000 bpd, while Bonespring growth is down to 130,000 bpd from 190,000 bpd. Further north, in the Bakken, growth has slowed to 190,000 bpd from closer to 230,000 bpd, according to EIA estimates based on state agency figures. Lower prices are gradually dampening the frenzied drilling and fracking boom in 2017 and 2018 and helping eliminate the forecast over-production in the global oil market. Across the United States, the number of rigs drilling for oil has fallen by 95 or almost 11% since November and is down by 65 or 8% since the same point last year, according to oilfield services company Baker Hughes. The slowdown in drilling is the worst since the slump in oil prices between 2014 and 2016, confirming the pressure on U.S. shale producers. Employment in oil and gas drilling was still rising in May, according to preliminary data from the U.S. Bureau of Labor Statistics, which could be revised in the coming months. But employment in support activities along the supply chain has been drifting down steadily since September 2018 ("Current employment survey", BLS, June 2019). Changes in oil prices generally filter through to drilling with a lag of three to four months and start affecting production with a total lag of nine to 12 months. 

The Plastics Backlash has Some Oil Giants Worried - Recycling and bio-plastics are set to impact the future of global oil and gas demand. Faced with sooner than anticipated peak demand from transportation, industry, buildings and the power sector, BP Plc, Total SA and Exxon Mobil, amongst others, are investing in factories and refineries that convert fossil fuels into plastics and chemical feedstocks--a sector that is, according to the BP Energy Outlook 2019 “the single-largest projected source of oil demand growth in the next twenty years.” Indeed, the EIA expects U.S. demand for feedstock to increase from 40 million metric tons a year today to 60 million by 2040. Royal Dutch Shell PLC is thought to have invested at least $6 billion in a chemical processing plant to produce ethane and polyethylene feedstocks in Western Pennsylvania. Similarly, Exxon Mobil plans to spend $20 billion over the next decade on a series of petrochemical complexes and refineries on the Gulf Coast. Likewise, traditional crude oil producers and refiners see a bright future in chemicals and plastics. For example, Saudi Aramco, is planning to invest some $100 billion over a decade, aiming to convert about 2-3 million barrels of crude oil per day directly into petrochemical products. Indeed, Saudi Aramco recently forked over $70 billion to acquire Sabic, a Saudi petrochemical giant, to help it become “the leader in energy and chemicals” according to Amin Nasser, Aramco CEO. It is not just oil companies that see a future in chemicals. Oil refineries are being built to focus on chemical products rather than fuel. For example, China’s Hengli Petrochemical Co. and Rongsheng Petrochemical Co. will devote as much as half of their capacity to chemicals, mostly paraxylene, a material that China imports to make polyester and plastic bottles. That’s a sharp increase from the 10 percent chemical production at a typical refinery and as much as 20 percent at modern refineries integrated with chemical plants. Black Swan Event?Quite unexpectedly, the oil industry's recent investments into increasing plastic and chemical feedstock capacity is not looking as bright, as this strategy is threatened by the worldwide consumer response to plastic polluting oceans and clogging rivers as highlighted by government discussions in Europe, India, China and some U.S. states to ban single-use plastics.

New Shipping Fuel Rules Rocking the Oil Market-- They may still be six months away, but new rules on marine fuels are already sending shock-waves through the little-known world of refinery feedstocks. The price of these low-sulfur, heavier oils -- that refineries make and then reprocess into transport fuels like gasoline and diesel -- has jumped in Europe in recent weeks because the shipping industry is starting to drive up demand for the products. The surge benefits some refineries while hurting others. "We’re moving from an old norm to a new norm," said Steve Sawyer, senior analyst at energy consultant Facts Global Energy. "The market is paying a higher premium for low-sulfur material than it did before because people are looking to stockpile low-sulfur bunker fuel." Refiners typically run feedstocks -- in particular straight-run fuel oil and vacuum gasoil -- through upgrading units, converting them into more valuable transport fuels. That means there’s historically been a link with prices for the finished fuels. That relationship is now being disrupted by the need to produce cleaner marine fuels before a 0.5% sulfur cap stipulated by the International Maritime Organization that starts in January. Straight run fuel oil with 0.5% sulfur recently turned more expensive than Brent crude in northwest Europe for the first time in five years, according to Jan-Jaap Verschoor, director of Oil Analytics, a firm that tracks margins across the global refining industry. The price hike for the feedstock makes sense as refiners buy up the product in preparation for ramping up production of next year’s marine fuel, he said. The market for very low sulfur fuel oil, or VLSFO, is already heating up in Europe. Along with Italy’s Saras SpA, Israel’s ORL Refineries Ltd. has already sold its first cargoes while tanker owner Euronav NV has been buying up 0.5% product for storage in the Mediterranean Sea on one of the world’s biggest vessels. At least one company has also switched its holding tanks to low-sulfur fuel oil from high sulfur.

Latest Weapon Of US Imperialism- Liquefied Natural Gas - One of the most important energy battles of the future will be fought in the field of liquid natural gas (LNG).Suggested as one of the main solutions to pollution, LNG offers the possibility of still managing to meet a country’s industrial needs while ameliorating environmental concerns caused by other energy sources. At the same time, a little like the US dollar, LNG is becoming a tool Washington intends to use against Moscow at the expense of Washington’s European allies. To understand the rise of LNG in global strategies, it is wise to look at a graph (page 7) produced by the International Gas Union (IGU) where the following four key indicators are highlighted: global regasification capacities; total volumes of LNG exchanged; exporting countries; and importing countries.  From 1990 to today, the world has grown from 220 million tons per annum (MTPA) to around 850 MTPA of regasification capacity. The volume of trade increased from 20-30 MTPA to around 300 MTPA. Likewise, the number of LNG-importing countries has increased from just over a dozen to almost 40 over the course of 15 years, while the number of producers has remained almost unchanged, except for a few exceptions like the US entering the LNG market in 2016. There are two methods used to transport gas. The first is through pipelines, which reduce costs and facilitate interconnection between countries, an important example of this being seen in Europe’s importation of gas.  The second method of transporting gas is by sea in the form of LNG, which in the short term is more expensive, complex and difficult to implement on a large scale.  This process adds 20% to costs when compared to gas transported through pipelines. Less than half of the gas necessary for Europe is produced domestically, the rest being imported from Russia (39%), Norway (30%) and Algeria (13%). In 2017, gas imports from outside of the EU reached 14%. Spain led with imports of 31%, followed by France with 20% and Italy with 15%. The construction of infrastructure to accommodate LNG ships is ongoing in Europe, and some European countries already have a limited capacity to accommodate LNG and direct it to the national and European network or act as an energy hub to ship LNG to other ports using smaller ships.

Is This The Beginning Of A New Oil Crisis In Canada? - Canada is desperately trying to build the much-delayed Trans Mountain Expansion, but even as it tries to advance the ball on one front, another pipeline has found itself in the crosshairs. Enbridge’s Line 5 pipeline carries more than a half a million barrels of oil and products per day from Alberta, across the border into the U.S., and ultimately to refineries back in Canada at the major refining and petrochemical hub of Sarnia, Ontario. The 540,000-bpd pipeline may be in trouble, however. The state of Michigan just launched a lawsuit, which could force Enbridge to shut the pipeline down. Michigan is concerned about the possibility of a leak from the aging pipeline, which crosses under the Straits of Mackinac. A leak could threaten drinking water and spoil the scenic Great Lakes. Governor Gretchen Whitmer promised to stop the “flow of oil through the Great Lakes as soon as possible.” Enbridge has been trying to build a replacement for the pipeline, which is nearly 70 years old. But the replacement proposal has been a huge point of contention. Michigan’s attorney general is hoping to shut it down. The risk the state most fears is an anchor strike. “The location of the pipelines...combines great ecological sensitivity with exceptional vulnerability to anchor strikes,” Michigan AG Dana Nessel said. An anchor strike occurred in 2018 and was viewed as a near disaster. “This situation with Line 5 differs from other bodies of water where pipelines exist because the currents in the Straits of Mackinac are complex, variable, and remarkably fast and strong.” Enbridge argues that it inked a deal with the former Michigan governor last year, which would have allowed Enbridge to build a tunnel underwater to house the pipeline and allow the system to continue to operate. The new Democratic administration has tossed that agreement aside.

Canada aboriginal pipe dream might end Trudeau's Trans Mountain nightmare (Reuters) - An indigenous-led group plans to offer to buy a majority stake in the Trans Mountain oil pipeline from the Canadian government this week or next, a deal that could help Prime Minister Justin Trudeau mitigate election-year criticism from environmentalists.  Redmond The group, called Project Reconciliation, aims to submit the C$6.9 billion ($5.26 billion) offer as early as Friday, managing director Stephen Mason told Reuters, and start negotiations with Ottawa two weeks later. Project Reconciliation said the investment will alleviate First Nations poverty, a watershed for indigenous people who have historically watched Canada’s resources enrich others. Expansion would triple capacity of the pipeline carrying crude from Alberta to British Columbia’s coast, helping resuscitate an industry depressed by low prices and congested pipelines. Trudeau’s government, which bought the pipeline last year after its owner, Kinder Morgan Canada, gave up on trying to get the expansion approved, has already been touting First Nations participation. A deal ahead of an October election could ease criticism from voters who have complained of broken promises on the environment and aboriginal rights. Still, not all First Nations groups are on board. Some in British Columbia have pledged to keep fighting expansion of Trans Mountain, even with blockades and protests, saying ownership makes no difference to the risk of oil leaks.

Some BP Oil Won't See Light of Day-- Oil companies are under increasing pressure to bring fuel to market faster and cheaper, leading BP Plc to conclude some of its resources “won’t see the light of day,” according to its head of strategy. Some of the “more complicated to extract” resources in the British oil major’s portfolio may have to be sold or stay in the ground, said Dominic Emery, the company’s group head of strategy. They’re going to be too expensive and too time-consuming to get out, and the industry is under pressure to shorten the duration and size of projects, he said. Part of the shift is due to climate change, which has caused investors to pressure BP to stick to lower-carbon projects. It’s also due to an oil price that’s half what it was five years ago, meaning some projects “simply don’t make money.” “There are classes of resources that are kind of much further out and more complicated to extract,” Emery said in an interview. “There’s no doubt that some of those resources won’t come out the ground.” Emery didn’t quantify the volume of BP’s resources that may stay put. The oil major said in an investor presentation last year it has 25 billion barrels of resources, 40% of which have been “booked and proved.” Emery said only unproved oil resources are at risk of being stranded. While he also didn’t clarify which resources are the most complicated to extract, research from consultants Rystad Energy AS and Wood Mackenzie Ltd. tend to point to ultra-deepwater, remote or extremely carbon-heavy projects, such as oil sands, as the longest-term and most expensive.

Anti-fracking activists breached injunction, judge rules - Three anti-fracking protesters have been found to have breached an injunction designed to stop them demonstrating outside a fracking site in Lancashire, which they say has a “chilling effect on the right to peaceful protest”.The trio were taken to court by Cuadrilla, which last year became the first firm to start large-scale fracking in Britain. The energy firm said it took legal action to prevent “dangerous, disrespectful and illegal activity” at its Preston New Road site near Blackpool.Katrina Lawrie, Lee Walsh and Christopher Wilson were found in contempt of court at Manchester high court on Friday after taking part in a “lock-on” at the site on 24 July last year. It took police six and a half hours to separate the protesters as they sat locked together at the entrance to the site.  Lawrie was found to have breached the injunction on one further occasion, in August last year. The lock-on came less than a fortnight after a judge granted an injunctionpreventing “persons unknown” from trespassing on the shale gas exploration site and surrounding farmland, as well as prohibiting unlawful obstruction of the site entrance and adjacent main A583 road.  “There can be no doubt that the respondents breached the injunction. It is beyond reasonable doubt that they intended to slow or stop the traffic,” said Pelling, who granted the original Cuadrilla injunction last year. He adjourned sentencing for the three protesters and the environmental group Friends of the Earth to seek a variation of the terms of the injunction. They argue it is strikingly similar to a “draconian and anti-democratic” injunction taken out by Ineos, one of Cuadrilla’s rivals, which was subsequently overruled by judges as it was found to be “too wide and insufficiently clear”.

Cuadrilla Using Shale Site to Explore Hydrogen - Cuadrilla Resources Ltd. is looking at ways to produce hydrogen from its stalled shale gas exploration site in northwest England to benefit from U.K. policy pushing the green fuel. The firm said it will study how hydrogen can be produced from its wells to heat homes and power public transport to help develop a commercial use of the greener gas that a key climate report highlighted as crucial to hitting the net zero climate target by 2050. “The north of England can become both a major gas producer and a major hydrogen hub – perhaps the center of the hydrogen revolution in the U.K.,” Francis Egan, Cuadrilla’s chief executive officer told Bloomberg News in an email. Still in its infancy, the aim of the project is to make shale gas more cost competitive and a lower emissions source of hydrogen than imported liquefied natural gas, he said. The U.K. government’s climate advisers said in their landmark report earlier this year that hydrogen will need to be used in heating systems instead of natural gas in order to dramatically cut emissions to net zero. The government is fully behind the development and deployment of hydrogen into its networks with several funding schemes available. However, a commercially viable way to produce hydrogen is yet to emerge.

Ineos Awards Wood Contract for Belgium Cracker -- INEOS has awarded Wood a contract for its landmark project to build a propane dehydrogenation (PDH) unit and ethane cracker at Antwerp, Belgium, Wood reported Monday. Under the contract, Wood will act as program management partner for the duration of the project and oversee the execution of the new petrochemicals complex, the company stated. Wood added that the contract will be delivered effectively immediately by the company’s multidisciplinary capital projects team in Reading, U.K. and onsite in Antwerp. “We are delighted to support INEOS as part of an integrated project management partnership to deliver this strategically important development for the European petrochemicals industry,” Dave Stewart, CEO of Wood’s Asset Solutions unit in Europe, Africa, Asia and Australia, commented. “We will bring our renowned project management capability in delivering large-scale capital projects and extensive track record of providing engineering, procurement and construction services globally, to this contract.” According to a Jan. 14, 2019, announcement from INEOS, the 3 billion-euro Antwerp facility represents the largest investment the company has ever made and will be Europe’s first new cracker in two decades. INEOS has also stated the complex could be a “game-changer” for Belgium’s economy and reverse a years-long decline in Europe’s petrochemicals sector.

Venezuela Plans on Shutting Fields to Boost Oil -- Venezuela’s state-owned oil company is taking an unusual step to try and increase production: shut fields. Starting in July, Petroleos de Venezuela SA will prioritize 13 fields in the Faja, a 55,000 square-kilometer (21,235 square-mile) strip north of the Orinoco River containing heavy crude oil that former president Hugo Chavez turned into the nation’s oil flagship project, according to a document seen by Bloomberg. The other 20 fields -- many producing less than 500 barrels a day -- will be considered inactive, the document showed. PDVSA is struggling to turn around a slide in Venezuela’s oil production that has only steepened after the U.S. imposed sanctions on sales of naphtha, a compound needed to help tar-like crude from the Orinoco Belt move through pipelines. The restructuring follows PDVSA’s decision to turn oil upgraders into blending facilities in May. Output has fallen to 741,000 barrels a day, after bring further hobbled in March by a series of blackouts. “This is an emergency plan as a result of the lack of naphtha and light crude,” said Antero Alvarado, managing partner of consultant Gas Energy Latin America. “This will affect total production output, as some fields will be shut temporarily.” PDVSA declined to comment.

Mysterious Trader Dodges US Sanctions To Buy Maduro's Oil - A new report from Bloomberg exposes how international traders can skirt around US sanctions to buy and sell Venezuelan oil, which allows the Maduro regime to remain in power. Dragoslav Ilic, a Serb with a Panamanian trading company, trades Venezuelan oil and avoids US sanctions in global markets by bartering oil and reselling to third parties. MS Internacional Corporation exchanges crude for gasoline and gasoline components, allowing the Maduro regime to supply heavily subsidized fuel to his faithful supporters.   Bloomberg notes, until the last several months, no one in the business has ever heard of Ilic or his company.  Francisco Monaldi, a professor at Rice University's Baker Institute, said the emergence of new traders reminds him of those who helped the Venezuelan government survive the strike of 2002–2003. "These tiny trading houses are doing the same, helping out the regime to either get cash or gasoline or dilutents to produce crude oil," Monaldi said. Along with new trading houses, Russia's state-controlled oil company Rosneft, Indian refiners and China are supporting Petróleos de Venezuela, SA (PDVSA) with billions of dollars in loans for the chance to purchase oil. The mystery trader has been in the headlines: Ilic was accused -- and acquitted in a drug-trafficking scandal in Argentina about a 12 years ago. The scheme was known as Vinas Blancas, or White Vineyards, in which drug runners would smuggle Colombian cocaine to Europe in wine bottles.

Colombia calls temporary halt on fracking - Colombia’s State Council dismissed much of a report of mainly oil industry representatives and ordered a new study of the risks and opportunities of fracking. President Ivan Duque appointed the commission of experts in December last year to investigate whether the controversial oil extraction technique is desirable, according to Colombia Reports.

Peru LNG Facility Hits Milestone  -- Okra Energy, LLC on Wednesday reported the small-scale natural gas liquefaction facility in Peru that applies the company’s technology has achieved a liquefied natural gas (LNG) production milestone. The modular and scalable LNG plant in Colan, Piura province – Peru’s first such facility and one of only five such plants in Latin America – has produced and delivered more than 3 million gallons of LNG, Okra noted in a written statement emailed to Rigzone. The company added the technology enables the northwestern Peruvian region to tap and utilize its natural gas reserves, even when no pipeline infrastructure exists. According to Okra, the LNG plant can service off-grid markets via a “virtual pipeline” of shipments. Andrea Ravenat, Okra's chief operating officer, told Rigzone that LNG - taking up just one-six hundredth the volume of natural gas - is easy to transport to destinations without pipeline access. "ISO (intermodal) containers enable the transport of LNG via truck, rail and/or ship, enabling the convenient and affordable delivery and storage of energy for factories, power grids and industries," she said. Okra also stated that all of the Colan plant’s LNG output – nearly 20 percent of Peru’s available LNG supply – has been presold for manufacturers and gas distributors and that subsequent liquefaction trains are under contract. The firm also noted that pending contracts for additional plants demonstrate the demand for natural gas in Latin America’s manufacturing sector. 

Oil Giants Shell and Exxon Mobil Eye Somalia - Royal Dutch Shell and Exxon Mobil are looking to return to Somalia ahead of an oil block bid round later this year, the oil ministry said. Shell and Exxon Mobil had a joint venture on five offshore blocks in Somalia prior to the toppling of dictator Mohamed Siad Barre in the early 1990s. The country has experienced instability since Barre left and is battling Al Shabaab, an Islamist group that frequently carries out bombings in the country. The exploration and development of the five offshore blocks was suspended in 1990 under what is known as a "force majeure", but Shell and Exxon have accrued rentals to the government since then, Shell said in a statement. Exxon declined to comment and referred inquiries to Shell. The troubled country currently does not produce any oil but production could transform the economy as early stage seismic data has shown there could be significant oil reserves offshore. "(An) agreement was signed in Amsterdam, Netherlands, on June 21, 2019 and settles issues relating to surface rentals and other incurred obligations on offshore blocks," the ministry said.

Nigeria's Crude Oil Export Drops By 1.6 Million Barrels in May- Nigeria's crude oil export fell by 1.6 million barrels in May, representing a 6.8 per cent decline from data for April export, according to figures obtained from the Central Bank of Nigeria (CBN). The CBN, in its economic report for May, put oil export for the period at 1.37 million barrels per day (mbd) or a cumulative of 42.5 million barrels, as against 1.47 mbd or 44.1 recorded the preceding month, The allocation of crude oil for domestic consumption was 0.45 mbd or 13.5 million barrels in the review month, according to the report obtained yesterday. In addition, Nigeria's crude oil production, including condensates and natural gas liquids, was 1.82 mbd or 56.4 million barrels (mb) in the reviewed month. This also represented a decline of 0.01 mbd or 5.2 per cent compared with 1.92 mbd or 57.6 million barrels (mb) produced in the preceding month. The average spot price of Nigeria's reference crude oil, the Bonny Light (37° API) rose to $73.70 per barrel in the reviewed period, compared with $73.03 per barrel recorded in April 2019. This represented an increase of 0.9 per cent, in contrast to the level in the preceding month. The rise in crude oil price was attributed largely to the growing tensions across the Middle- East, which threatened crude oil supply; escalating trade war between the US and China; supply losses from Venezuela, Libya and Iran and compliance with supply-cut pact by most OPEC member countries. The UK Brent at $72.05/b and the Forcados at U $73.90/b exhibited similar trend as the Bonny Light, while the price of WTI at $58.32/b declined

Nigeria's Aiteo Eastern to Spend $5B to Boost Output - Nigeria’s largest independent oil producer plans to spend as much as $5 billion to boost its oil and natural gas production in the next five years. Aiteo Eastern E&P Co. plans to drill new oil wells and re-open existing ones as it seeks to raise production, Chief Executive Officer Victor Okoronkwo said Tuesday in an interview in Abuja, Nigeria. It will also seek to increase its stake in a joint venture with Nigeria’s state oil company. “We have a development plan which has been submitted to our joint venture partner NNPC,” he said. The Nigerian government has made changes to how operators can raise funds, moving away from the so-called cash call model whereby partners contribute in line with their stake in a joint venture. That gives operators more freedom to secure financing. Nigeria is also cutting its holdings in joint ventures in order to raise cash. “Our expectation is that in line with the joint venture agreement between us and the federal government, the existing partner will have the right of first refusal,” Okoronkwo said. Aiteo has a share of 45% in Oil Mining Lease 29, with state-owned Nigerian National Petroleum Corp. holding the remainder. Aiteo is among Nigerian producers that bought oil leases from majors such as Royal Dutch Shell Plc when overseas operators curbed operations in the West African nation due to oil attacks on infrastructures. The repeated halting of its Nembe Creek Trunk Line, which runs to Shell’s export terminal for Bonny crude, has cost Aiteo and the government at least $2 billion in revenue over the last two years, Okoronkwo said.

Oil spill found in Walvanit River  - The pumping of water at Padosem Water treatment plant was halted for some time on Sunday morning after oil spill was found in Walvanit River.    Officials later found that the oil spill occurred at Sanquelim.  The authorities immediately stopped pumping water to the Padosem water treatment plant. Later, pumping of water resumed.

Russia agrees with Saudi Arabia to extend OPEC+ oil output deal (Reuters) - Russia has agreed with Saudi Arabia to extend by six to nine months a deal with OPEC on reducing oil output, Russian President Vladimir Putin said, as oil prices come under renewed pressure from rising U.S. supplies and a slowing global economy. Saudi Energy Minister Khalid al-Falih said on Sunday that the deal would most likely be extended by nine months and no deeper reductions were needed. Putin, speaking after talks with Saudi Crown Prince Mohammed bin Salman, told a news conference the deal - which is due to expire on Sunday - would be extended in its current form and with the same volumes. The Organization of the Petroleum Exporting Countries, Russia and other producers, an alliance known as OPEC+, meet on July 1-2 to discuss the deal, which involves curbing oil output by 1.2 million barrels per day (bpd). The United States, the world’s largest oil producer ahead of Russia and Saudi Arabia, is not participating in the pact. “We will support the extension, both Russia and Saudi Arabia. As far as the length of the extension is concerned, we have yet to decide whether it will be six or nine months. Maybe it will be nine months,” said Putin, who met the crown prince on the sidelines of a G20 summit in Japan. Falih, arriving in Vienna for the OPEC+ talks, told reporters when asked about Saudi preferences: “I think most likely a nine-month extension.” Asked about a deeper cut, Falih said: “I don’t think the market needs that.”

Russia Completes Its OPEC Takeover With Deal With Saudis - The trouble with bringing new people into your club, especially if they are bigger than you, is that they might just take over. OPEC is learning that lesson. Three years ago, suffering a collapse in oil prices, OPEC sought outside help to cut oil supplies in order to drain excess inventories that had built up over the previous two years. It eventually succeeded in securing the help of a group of non-OPEC countries. Most of them added little to this new OPEC+ club. The output cuts they offered were, in many cases, going to happen anyway, as a result of natural declines through a lack of investment or dwindling reserves. The one big exception was Russia. President Vladimir Putin -- and make no mistake, the decision was his, not the oil minister’s -- pledged that Russian oil companies would reduce output by 300,000 barrels a day. Russia’s participation did more than add real barrels to the output curbs. It also brought the country that was then the world’s largest oil producer into the supply-management club. But there was a price to pay and it was one that OPEC members might have foreseen. Russia was never going to accept being told how much oil it could produce by outsiders. That simply didn’t fit with Putin’s view of his country’s place in the world. Russian Rules Move on three years and Russia’s takeover of OPEC is almost complete. Output decisions are no longer negotiated between the group’s oil ministers in suites in Vienna’s luxury hotels and announced to the waiting world from the OPEC headquarters around the corner. They’re thrashed out in advance by Putin and Saudi Arabia’s crown prince. Putin’s announcement from Osaka on Saturday that he and Prince Mohammed Bin Salman had agreed to extend the current output deal to at least the end of the year has made the forthcoming gathering in Vienna almost redundant.

OPEC set to extend oil production curbs by nine months - OPEC and its allies looked all but certain to extend oil supply cuts by nine months, after several members of the Middle East-dominated producer group endorsed a policy designed to support oil prices amid a weakening global economy. Saudi Arabia’s Energy Minister Khalid al-Falih reportedly said most OPEC members would like to see a nine-month deal extension. A deal is now subject to approval from non-OPEC allies at a meeting on Tuesday, with Iraq’s oil minister saying he did not anticipate any complications. Earlier in the day, Iranian Oil Minister Bijan Zanganeh told reporters he had “no problem” with supporting oil supply cuts by nine months. Tehran, which had been OPEC’s third-largest producer prior to the re-imposition of U.S. sanctions, has previously objected to policies put forward by arch-rival Saudi Arabia. “It is going to be an easy meeting as my stance is very clear,” Zanganeh told reporters in Vienna, Austria. OPEC is set to debate an extension of oil production cuts during its meeting on Monday, before getting the deal endorsed by non-members, such as Russia, on Tuesday. The producer group and its allies have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the U.S. — which has become the world’s top producer this year ahead of Russia and Saudi Arabia. The U.S. is not a member of OPEC, nor is it participating in the supply pact. Washington has demanded Riyadh pump more oil to compensate for lower exports from Iran after slapping fresh sanctions on Tehran over its nuclear program. Oil prices rose sharply, with international benchmark Brent crude trading at $66.28 per barrel, up around 2.4%. Meanwhile, U.S. crude futures stood at $59.95 per barrel, more than 2.5% higher.

Oil jumps over 2% as Saudi Arabia, Russia back supply cuts -(Reuters) - Oil prices rose more than $1 a barrel on Monday after Saudi Arabia, Russia and Iraq backed an extension of supply cuts for another six to nine months ahead of an OPEC meeting in Vienna.  Front-month Brent crude futures for September touched an intraday high of $66.44 a barrel and were up $1.57, or 2.4%, at $66.31 a barrel by 0436 GMT. U.S. crude futures for August rose $1.36, or 2.3%, to $59.83 a barrel after earlier hitting a peak of $60.10, the highest in over five weeks. The Organization of the Petroleum Exporting Countries (OPEC) and its allies look set to extend oil supply cuts until the end of 2019 after top producers on Sunday endorsed a policy aimed at propping up the price of crude. OPEC, Russia and other producers, an alliance known as OPEC+, meet on Monday and Tuesday to discuss supply cuts. The group has been reducing oil output since 2017 to prevent prices from sliding amid a weakening global economy and soaring U.S. output. Russian President Vladimir Putin said on Sunday he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day (bpd) by six to nine months. Saudi Energy Minister Khalid al-Falih said the deal would most likely be extended by nine months and no deeper reductions were needed. “While this needs to be ratified by the remaining members of the OPEC+ group, this appears to be a fait accompli,” ANZ analysts said in a note. Stephen Innes, managing partner at Vanguard Markets in Bangkok, said oil prices could also be supported in the medium term because of geopolitical tensions in the Middle East and as China’s central bank eases monetary policy to offset the impact from U.S. tariffs.

US oil surges above $60 as OPEC+ poised to extend supply cut - Oil prices surged on Monday as OPEC and its allies looked on track to extend supply cuts until at least the end of 2019 at their meeting in Vienna this week. U.S. crude futures for August climbed $1.65, or 2.8% to $60.12 a barrel, after earlier hitting their highest in over five weeks at $60.28. Iran - under U.S. sanctions alongside OPEC ally Venezuela - on Monday joined top producers Saudi Arabia, Iraq and Russia in supporting a policy aimed at propping up the price of crude amid a weakening global economy. The Organization of the Petroleum Exporting Countries, Russia and other producers, an alliance known as OPEC+, meet on Monday and Tuesday to discuss supply cuts. The group has been reducing oil output since 2017 to prevent prices from sliding amid a weakening global economy and soaring U.S. production. Russian President Vladimir Putin said on Sunday he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day (bpd) by six to nine months. Saudi Energy Minister Khalid al-Falih said the deal would most likely be extended by nine months and no deeper reductions were needed. “If Russia, Saudi Arabia and the other key OPEC members keep production at the levels they produced in H1-19 they will ensure that the global oil market is not flowing over. They will only have to pay a small restraint while reaping a nice oil price of $60-70 a barrel,” said SEB’s Bjarne Schieldrop. “OPEC as a whole is losing market share. But this burden is not evenly distributed as it is Venezuela and Iran who are taking almost all the pain.”

OPEC extends oil cut to prop up prices as economy weakens (Reuters) - OPEC agreed on Monday to extend oil supply cuts until March 2020 as the group’s members overcame their differences in order to prop up the price of crude amid a weakening global economy and soaring U.S. production. The move will likely anger U.S. President Donald Trump, who has demanded OPEC leader Saudi Arabia supply more oil and help reduce prices at the pump if Riyadh wants U.S. military support in its standoff with arch-rival Iran. Benchmark Brent crude LCOc1 has climbed more than 25% so far this year after the White House tightened sanctions on OPEC members Venezuela and Iran, slashing their oil exports. OPEC and its allies led by Russia have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the United States, which has overtaken Russia and Saudi Arabia to become the world’s top producer. Fears about weaker global demand as a result of a U.S.-China trade spat have added to the challenges faced by the 14-nation Organization of the Petroleum Exporting Countries. “Saudi Arabia is doing its best to achieve oil prices at $70 per barrel despite what Trump wants. But they haven’t accomplished that even with Iranian and Venezuelan oil exports dropping. And the reasons for that are weak demand and U.S. shale growth,” 

Oil Futures End Higher As OPEC Decides To Extend Output Cuts -- Crude oil futures ended notably higher on Monday, despite giving up a substantial portion of its earlier gains. Oil's surge was due to OPEC's decision to extend its current 1.2 million barrel per day output cuts for another nine months instead of the expected six month extension. Final details will be out after the cartel's meeting with Russia and other top nonmember producers on Tuesday, the second day of the meeting in Vienna. West Texas Intermediate crude oil futures ended up $0.62, or 1.1%, at $59.09 a barrel, after hitting a high of $60.28 a barrel earlier in the session. Brent Crude oil futures moved past $65.00 a barrel mark. On Friday, WTI crude oil futures for August ended down $0.96, or 1.6%, at $58.47 a barrel. WTI oil futures gained 1.8% last week, and climbed up more than 9% in June. Want to stay ahead of FDA Decisions, Rulings, Recalls ? Signup for our Newsletter. Oil prices rose sharply Monday morning, reacting to reports that the Organization of Petroleum Exporting Countries (OPEC) may continue to cut production till 2020 in order to bolster oil prices. Reports also suggested that Russia and Saudi Arabia will likely agree with the decision. Saudi Arabia's Energy Minister Khalid al-Falih reportedly said most OPEC members would like to see a nine-month deal extension. Reports about Iran breaching its nuclear agreement played a role as well in lifting oil prices. Reuters quoted Iran's Foreign Minister Mohammad Javad Zarif as saying that Iran breached the limit of its enriched uranium stockpile set in 2015. Zarif reportedly confirmed that Iran had gone over the relevant limit of 300 kg of uranium. Oil's uptick was also supported by the U.S.-China trade truce that came about after the U.S. President Donald Trump and the Chinese President Xi Jinping met on the sidelines of the G20 summit on Saturday.

Oil prices get a lift from short-covering- Kemp - (Reuters) - Hedge fund managers have started to cover some of the bearish short positions in oil they established since late April, amid hopes for interest rate cuts and a trade truce between China and the United States. Hedge funds and other money managers increased their net long position in the six major petroleum futures and options contracts by 19 million barrels in the week to June 25. Last week’s rise was the first after money managers cut their combined net long position by 389 million barrels over the previous eight weeks, a significant turnaround (https://tmsnrt.rs/2FKYmOv ). Position changes were driven by short-covering. Portfolio managers sold 2 million barrels of former long positions, but they also bought back 21 million barrels of previous shorts. Hedge fund long positions outnumbered shorts by a ratio of 3.69:1 on June 25, up from just 3.31 two weeks earlier, though still down from a recent high of 8.68 on April 23. Hedge funds continued to sell Brent (-17 million barrels) but were net buyers of NYMEX+ICE WTI (+11 million), U.S. gasoline (+11 million), U.S. heating oil (+11 million) and European gasoil (+3 million). Benchmark U.S. crude futures prices have risen by almost $8.70 per barrel (17%) since touching a recent low on June 12. The catalyst for fund buying has been a combination of rising expectations for interest rate cuts; a U.S./China trade truce; threats to tanker traffic; and indications OPEC+ will extend output cuts through the end of 2019. However, the main reason is that the hedge fund community had become very bearish over the previous two months – reversing its earlier bullishness since the start of the year. 

Oil price 'could easily be $75' if trade truce boosts demand, expert says - The success, or failure, of trade talks between the U.S. and China will be a decisive factor in the oil price outlook this year, despite OPEC’s decision to extend production cuts, oil market expert Amrita Sen told CNBC on Tuesday. “I know (Saudi Arabian Oil Minister Khalid) Al Falih said that the second-half of the year (demand) outlook looks better but so much depends on the trade deal, on the truce between the U.S. and China, and global demand has slowed down considerably,” Sen who is a chief oil analyst at Energy Aspects told CNBC Tuesday. “China (demand for oil) hasn’t collapsed at all, it’s still growing slower, but it’s just that lack of confidence, companies have just stopped investing and placing orders and we’ve seen very weak numbers out of other parts of Asia and Europe as well,” she added. Sen hoped that a “truce” between the U.S. and China on its trade dispute reached at the weekend by President Trump and President Xi, in which they agreed to hold off on any new trade tariffs on each other’s imports while trade talks resume, could restore confidence that would fuel oil demand. “But if that doesn’t come back quickly, all of the second half (of 2019) and into 2020 things will be weak,” Sen told CNBC’s Dan Murphy in Vienna, where oil producing group OPEC and its non-member allies like Russia are meeting currently. A potential interest rate cut by the U.S. Federal Reserve this year and the incentive to forge strong economic growth in the U.S., ahead of the 2020 presidential election, could provide extra impetus for oil market demand, Sen said. “There will be some momentum to solve some of these trade wars. If demand is good I think oil prices have a lot of upside here and into next year,” she said. “If demand growth is even 1 million barrels per day I think we could easily be $75 (the price per barrel) if not slightly higher because the physical crude market is still tight.” In its last June monthly report, OPEC predicted oil demand growth to rise by 1.14 million barrels per day in 2019. The majority of oil demand growth is projected to come from India, followed by China.

The Big Minus at the Heart of OPEC-Plus - “OPEC+” is now the accepted nomenclature of the cobbled-together club of oil producers that has been trying to bolster prices since late 2016. As a brand, it has the advantages of a certain familiarity, expansiveness and positivity. It also rather oversells the product. Monday’s meeting of the OPEC bit of things ran very late (the pluses are due to meet Tuesday). This is notable for two reasons. First, the delay reportedly stemmed largely from haggling among delegates about a proposed OPEC+ charter to enshrine cooperation among them. Second, the most salient decision, about whether or not to extend supply cuts, had been taken already by Saudi Arabia and Russia at the weekend’s G-20 gathering in Japan. Once Prince Mohammed Bin Salman and President Vladimir Putin – representing almost half the group’s output between them – had agreed on extending supply cuts, the wider meeting was just a formality. Having everyone schlep to Austria anyway does help with oil demand, one supposes. But there’s something inescapably farcical about a meeting convened after the main decision has been publicized, but which then runs late because the delegates can’t agree on a declaration of harmony. The second iteration of the OPEC+ supply cuts, which got underway in January, called on 21 countries – including 10 OPEC members – to keep about 1.2 million barrels a day off the market. Iran, Libya, and Venezuela – beset by sanctions, civil conflict and economic collapse, respectively – are exempt. When you look at the actual breakdown of cuts since then, however, it reinforces the sense that the group’s meetings are more theater than anything else at this point. Consider that half the members subject to the agreement are tasked with the equivalent of a cover-charge to get into the club: cutting output by just 20,000 barrels a day or less. Having more countries sign up no doubt makes for a better group photograph. But the idea that anyone is actually tracking South Sudan’s compliance with its commitment to keep all of 3,000 barrels a day offline tends to detract from the vaunted seriousness of the operation. (Reader, South Sudan isn’t complying.) The group as a whole has done better, keeping an average of 1.33 million barrels a day off the market through May, for compliance of 111%. But the burden falls very unevenly. Saudi Arabia accounts for more than half the total barrels withheld, with compliance of 216%. Trusted partner Russia, on the other hand, has met only 64% of its (smaller) pledge – and even that’s partly due to contamination problems on a major pipeline. But it’s the exempted countries – OPEC-minus? – that really show up the whole project. No quotas are enforced for Iran, Libya and Venezuela, of course. But taking 3% off their October 2018 output – which is roughly how the others were set – provides a proxy for what they might have been expected to contribute. On that basis, these three really punch above their weight:

OPEC's Barkindo says warmer ties with Russia haven't changed decision-making on oil supplies - OPEC Secretary-General Mohammed Barkindo said Tuesday that while his relationship with Russia is “strong,” the decision-making process at OPEChasn’t fundamentally changed.The oil-producing cartel has officially agreed to extend production curbs until March 2020 and has also formalized a charter to strengthen its alliance with non-OPEC producers — most notably Russia.The deal appears to have been rubber-stamped before OPEC’s Vienna meeting when Russian President Vladimir Putin and Saudi Arabian Crown Prince Mohammed Bin Salman met at the G-20 summit in Osaka, Japan, over the weekend.That has led to some suggestion that OPEC’s new charter is now ignoring the voice of original member countries in order to keep Moscow happy. Barkindo told CNBC’s Dan Murphy in Vienna on Tuesday that in fact member countries were pleased by Moscow’s interventions.“The Russian federation has been a reliable and dependable bridge between OPEC and non-OPEC,” Barkindo said.The OPEC leader said his organization had worked with Russian officials to “literally rescue” the oil industry from a downturn and many had doubted that oil supply caps could ever hold. “There is now a very strong working bond between us and Russia, and this goes right up to the top, to the leadership,” he said.

OPEC head: Climate activists are the ‘greatest threat’ to oil industry - What’s one of the world’s most powerful cartels afraid of? A bunch of meddling kids.Climate activists and their “unscientific” claims are “perhaps the greatest threat to our industry going forward,” said Mohammed Barkindo, the secretary general of OPEC (the cartel representing 14 countries with 80 percent of the world’s oil reserves) earlier this week.He might have been talking about protesters more broadly, but the rest of his statement suggests that young people are being particularly irksome. Barkindo said some of his colleague’s children are asking them about the future because “they see their peers on the streets campaigning against this industry.” (I guess the birds and the bees isn’t the most uncomfortable conversation parents are having with their kids in OPEC households.) This is, of course, heartening news for climate activists. Greta Thunberg, the 16-year-old Swede famous for starting a movement of youth strikes calling for climate action, thanked OPEC for the compliment.Barkindo is right that climate advocates are winning over the hearts and minds of the people. Surveys show that 57 percent of Americans now think fossil fuel companies are at least partially responsible for climate change. Meanwhile, support for policies that would cut into fossil fuel companies’ bottom lines, like transitioning to renewable energy infrastructure, is increasing as approval for expanding fossil fuel infrastructure and offshore drilling declines. As for climate activists’ “unscientific claims,” it’s unclear if Barkindo had a particular statement in mind, but the science pretty unequivocally supports demands for urgent change. Global emissions need to be drastically cut by 2050 to avoid more than 1.5 degrees C of warming, and to do that we need to use way less fossil fuels. It’s not just public opinion that’s turning against the fossil fuel industry —insurance companies and investors are increasingly opting to put their money elsewhere. But that’s not the fault of some upstart kids: It’s because science and common sense are showing fossil fuels are a bad investment, especially in the long run. Recent figures estimate that climate change could cost the world economy as much as $69 trillion by 2100.

Oil prices slip as demand worries outweigh OPEC supply cuts - Oil prices slipped on Tuesday as worries that a weakening global economy would dent demand for the commodity outweighed OPEC’s decision to extend supply cuts until next March. Brent crude futures for September delivery had dropped 33 cents, or 0.5%, to $64.73 a barrel by 0034 GMT. They climbed more than $2 a barrel on Monday before paring gains later in the day. U.S. crude futures for August had fallen 48 cents, or 0.8%, to $58.61 a barrel, after touching their highest in over five weeks on Monday.“After 2-1/2 years of production cuts, the effects of rolling over production cuts is losing steam,” said Edward Moya, senior market analyst at OANDA in New York, adding that markets remained nervous on how demand will pan out over the next few months.“The trade war is not likely to get resolved any time soon and while central banks globally are expected to deliver fresh stimulus in the coming months, economic activity is continuing to trend lower.”The U.S.-China trade conflict has pressured global markets, stoking worries about demand for commodities such as crude oil.The Organization of the Petroleum Exporting Countries (OPEC) agreed on Monday to extend oil supply cuts until March 2020 as the group’s members overcame their differences in order to try to prop up the price of crude.OPEC is slated to meet with Russia and other producers, an alliance known as OPEC+, later on Tuesday to discuss supply cuts amid surging U.S. output.Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to extend global output cuts of 1.2 million barrels per day, or 1.2% of world demand, until December 2019 or March 2020. Russia reduced oil production in June by more than the amount agreed in a global deal to cut output, the energy minister and industry sources said on Monday, as the sector still felt the impact of a contaminated crude crisis that crippled exports.

US oil plunges 4.8% on demand worries even as OPEC, allies extend cuts - Oil prices fell about 3% on Tuesday, even after OPEC and allies including Russia agreed to extend supply cuts until next March, as weak manufacturing data had investors worried that a slowing global economy could dent oil demand.  Brent crude futures fell $2.61, or 4.01%, to $62.45 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $2.84, or 4.8%, to $56.25 a barrel, after touching their highest in more than five weeks on Monday.The Organization of the Petroleum Exporting Countries and other producers such as Russia, a group known as OPEC+, agreed on Tuesday to extend oil supply cuts until March 2020 as members overcame differences to try to prop up prices.The extension comes after Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to prolong the pact and continue to cut combined production by 1.2 million barrels per day, or 1.2% of world demand.   “There seems to be some disappointment that OPEC didn’t make a larger production cut. Or a sense that demand is really bad,”  Signs of a global economic slowdown, which could hit oil demand growth, means OPEC and its allies could face an uphill battle to shore up prices by reining in supply.   “It was the bare minimum OPEC could agree on in order to prevent a major meltdown in prices. Member countries noted that global oil demand growth for this year has fallen to 1.14 mbpd (million barrels per day) whilst non-OPEC supply is expected to grow by 2.14 mbpd,”  “It appears that the supply side of the oil equation is supportive for oil prices but demand concerns are forcing oil bulls to keep at least part of their gunpowder dry.”

Bigger-Than-Expected Crude Draw Fails To Revive Oil's Worst OPEC Reaction Since 2014 -- (graphs) Oil suffered its worst reaction to an OPEC meeting since 2014 today, plunging almost 5% prompting OPEC Secretary-General Mohammad Barkindo to tell reporters in Vienna that, "the drop in crude prices on Tuesday was an 'anomaly'."  Not everyone agreed.“There are concerns that demand might slow to where it overpowers supply,” Bart Melek, head of commodity strategy at Toronto’s TD Securities, said in an interview. The “gloomy” data, especially from China, “is very much part and parcel of what we’re seeing.”  API

• Crude -5mm (-3mm exp)
• Cushing +882k (-1.26mm exp)
• Gasoline -387k (-2.2mm exp)
• Distillates -1.7mm (=1.0mm exp)

After last week's huge crude draw, expectations were for another decent-sized draw and API reported a bigger than expected crude draw…   WTI rolled over at a key trendline level... But was unable to hold a modest rebound after the API print…

Oil Continues Freefall Despite Large Crude Oil Inventory Draw - The American Petroleum Institute (API) reported another large crude oil inventory draw of 5 million barrels for the week ending June 27, a more ambitious draw than analysts had predicted, at 2.484-million barrels.Last week, the API reported a draw of 7.55-million barrels. A day later, the EIA estimated that US inventories had drawn down by a much larger 12.8 million barrels. The net build is 21.69 million barrels for the 27-week reporting period so far this year, using API data. Oil prices were trading down significantly on Tuesday despite OPEC’s success at pulling a deal together to extend the production cuts into 2020. The hard-fought battle won, OPEC was unable to offset the dampened mood brought on by grim oil demand prospects and an unsettled US-China trade row.   At 12:56pm EST, WTI was trading down by $1.92 (-3.25%) at $57.17—just $1.00 over last week’s levels. Brent was trading down $1.69 (-2.60%) at $63.37—also up roughly $1 over this time last weekThe API this week reported a 387,000-barrel draw in gasoline inventories for week ending June 27. Analysts estimated a larger draw in gasoline inventories of 2.175-million barrels for the week.Distillate inventories fell by 1.7 million barrels for the week, while inventories at Cushing rose by 882,000 million barrels.US crude oil production as estimated by the Energy Information Administration showed that production for the week ending June 21 fell again this week to 12.1 million bpd, the third such drop in as many weeks, and 300,000 bpd off the all-time high. By 4:41pm EST, WTI had fallen nearly 5% on the day to $56.29 while Brent traded at $62.59.

Oil prices unimpressed by new OPEC cuts agreement - Crude prices weakened on Tuesday and Wednesday despite a deal by oil producing countries to continue with production curbs.The 14-nation energy cartel, the Organisation of Petroleum Exporting Countries (OPEC), and non-members which support its aims agreed a nine-month extension to output limits first imposed at the end of 2016.But key crude benchmarks turned downwards, with Brent losing 0.46% to $64.76 a barrel and West Texas Intermediate (WTI) losing the same percentage, 0.46%, to $58.82.This morning, Brent was down 0.18% at $62.29 a barrel, and WTI closed last night at $56.25.Both are markedly lower than they were three months ago. On 2 April, Brent traded at $69.37, while WTI changed hands at $62.58.A squeeze on prices is coming from two directions – the slowing of the world economy and the rising output of America’s shale oil industry.This presented a sombre backdrop for the two-day summit in Vienna held Monday and Tuesdayinvolving OPEC and the so-called NOPEC group of oil producers.In a statement after the meeting, OPEC said: “It was noted that economic bearishness is now increasingly prevalent, with major challenges and mounting uncertainties related to ongoing trade negotiations, monetary policy developments, as well as geo-political issues. “It was also observed that oil demand growth for 2019 has been revised down.”

Oil prices steady on extended supply cuts, US stocks draw - Oil prices edged higher on Wednesday after a steep fall in the previous session, supported by extended output cuts by OPEC and its allies despite concerns that a slowing global economy could crimp demand. An expected large draw in U.S. crude oil inventories also underpinned sentiment after a bigger-than-expected stocks fall in a private survey. Brent crude futures for September delivery were trading up 36 cents, or 0.6%, at $62.76 a barrel by 0244 GMT. U.S. crude futures for August were up 29 cents, or 0.5%, at $56.54 a barrel. Both benchmarks fell more than 4% on Tuesday as worries about a slowing global economy overshadowed OPEC supply cuts. The Organization of the Petroleum Exporting Countries and other producers such as Russia, a group known as OPEC+, agreed on Tuesday to extend oil supply cuts until March 2020 as members overcame differences to try to prop up prices. “The OPEC+ meeting showed the members sticking together in tough times, characterized by weakening global demand outlook, aiming for a more balanced oil market, despite clear market share implications,” said Amarpreet Singh, analyst at Barclays Commodities Research in a note. “This is supportive of oil prices, in our view, even as the market remains squarely focused on weak macro signals.” Ahead of government data due later on Wednesday, industry group the American Petroleum Institute (API) said that U.S. crude inventories fell by 5 million barrels last week, more than the expected decrease of 3 million barrels. The OPEC+ agreement to extend oil output cuts for nine months should draw down oil inventories in the second half of this year, boosting oil prices, said analysts from Citi Research in a note. “Keeping cuts through the end of 1Q aims to avoid putting oil into the market during a seasonal low for demand and refinery runs, as well as providing time to assess the impacts of IMO 2020,” they said.

WTI Tumbles After Smaller-Than-Expected Crude Draw -  Oil prices are up modestly overnight, after yesterday's worst post-OPEC reaction since 2014, as API's notable crude draw sparked optimism for this morning's official inventory data.“Clearly, there is no getting away from economic bearishness and cooling demand fundamentals,” PVM Oil Associates Ltd. analyst Stephen Brennock wrote in a report.“This morni ng, however, has provided a reprieve from the selling frenzy as those searching for a bullish catalyst pin their hopes on another drawdown in U.S. oil inventories.” DOE:

• Crude -1.085mm (-3.5mm exp)
• Cushing +652k (-1.26mm exp)
• Gasoline -1.583mm (-2.2mm exp)
• Distillates +1.408mm (+1.0mm exp)

After last week's massive crude draw (and API's overnight draw), expectations were for a notable draw from DOE but it disappointed with only a 1.09mm draw (-3.5mm exp). US crude production has been the talk of the global energy markets this week as OPEC+ desperately try not to admit their impotence and rose modestly last week...

Oil Markets Not Impressed By Small Crude Draw - A day after the American Petroleum Institute’s estimated a 5-million-barrel crude oil inventory draw and failed to reverse oil prices’ fall, the Energy Information Administration failed at that, too by reporting only a moderate draw.The authority reported a draw of 1.1 million barrels for the week to June 28, after a draw of 12.8 million barrels for the previous week—an inventory change of such magnitude it strengthened prices for the rest of the week. At 468.5 million barrels, U.S. crude oil inventories were 5 percent above the upper limit of the five-year average, the EIA also said, adding refineries processed 17.3 million bpd last week, unchanged from the previous week’s daily processing rate.Gasoline inventories shed 1.6 million barrels last week, with production averaging 9.9 million bpd. This compared with an inventory draw of 1 million barrels the week before and average daily production 10.5 million bpd.In distillate fuels, the EIA reported an inventory build of 1.4 million barrels for the last week of June, with production standing at 5.3 million bpd. A week earlier, distillate fuel inventories fell by 2.4 million barrels and production was the same at 5.3 million bpd.Last week, the EIA said U.S. crude oil production had surged to 12.16 million bpd during May, a record-high cementing the country’s place as the world’s top crude oil producers. While in line with the Trump administration’s energy dominance strategy and in favor of drivers, the news is not particularly good for the companies that made this level of production possible. Most shale oil companies are burning cash with only a handful of them generating a positive cash flow. This casts a shadow over the long-term sustainability of the industry, which basically needs to keep pumping to pay its debts right now, according to some industry insiders.

Oil prices fall on signs of slowing US demand, economic concerns - Oil prices fell on Thursday, weighed down by data showing a smaller-than-expected draw on U.S. crude stockpiles and worries about the global economy. Front-month Brent crude futures, the international benchmark for oil prices, were down 49 cents or 0.77% at $63.33 per barrel by 0830 GMT. Brent closed up 2.3% on Wednesday. U.S. West Texas Intermediate (WTI) crude futures were down 47 cents or 0.82% at $56.87 per barrel. WTI closed up 1.9% on Wednesday. Markets appeared unmoved by the detention in Gibraltar by British Royal Marines of a supertanker possibly carrying Iranian crude oil bound for Syria, as tensions between Iran and the United States have flared over mysterious attacks on tankers in the Gulf of Oman in recent months. “Gains were capped by the Energy Information Administration (EIA) reporting a weekly decline of 1.1 million barrels in crude stocks, versus the 3 million barrels forecast by analysts and 5 million barrels reported by the API a day earlier,” Cantor Fitzgerald Europe said. “Also providing headwinds were signs of a recovery in oil exports from Venezuela in June and growth in Argentinian output in May,” it added. U.S. inventories fell less than expected as U.S. refineries last week consumed less crude than the week before and processed 2% less oil than a year ago, the EIA data showed, despite being in the midst of the summer gasoline demand season. That suggests oil demand in the United States, the world’s biggest crude consumer, could be slowing amid signs of a weakening economy. New orders for U.S. factory goods fell for a second straight month in May, government data showed on Wednesday, adding to the economic concerns. The weak U.S. data followed a report of slow business growth in Europe last month as well.

US oil rises, but gain kept in check amid weak economic data -- U.S. benchmark crude prices rose slightly on Friday, but its gains were capped by weak economic indicators while Brent oil jumped, supported by tensions over Iran and this week’s decision by OPEC and its allies to extend a supply cut deal until next year. U.S. West Texas Intermediate (WTI) crude futures were up 28 cents, or 0.5% at $57.65 per barrel. There was no settlement price on Thursday because of the Independence Day holiday in the United States. Front-month Brent crude futures were up $1.05, or 1.7%, at $64.36per barrel. Both benchmarks were set for their biggest weekly falls in five weeks. In a protracted trade war between the United States and China that dampened prospects of global economic growth and oil demand, representatives of both countries are resuming talks next week to resolve the deadlock. “The truce between the United States and China is not translating into anything in the real economy in the short term,” said Olivier Jakob, Petromatrix oil analyst. “The negotiations still have to happen and until then we will be still looking at very weak manufacturing PMIs,” he said referring to Purchasing Managers’ Indices which indicate companies’ optimism about their sector. German industrial orders fell far more than expected in May, and the Economy Ministry warned on Friday that this sector of Europe’s largest economy was likely to remain weak in the coming months. In the United States, new orders for factory goods fell for a second straight month in May, government data showed on Wednesday, stoking economic concerns. The U.S. Energy Information Administration on Wednesday reported a weekly decline of 1.1 million barrels in crude stocks, much smaller than the 5 million barrel draw reported by the American Petroleum Institute earlier in the week and analyst expectations.

Oil prices rise on Iran tensions, OPEC output cuts –   Brent crude futures settled at $64.23 a barrel, up 93 cents, or 1.47%. U.S. West Texas Intermediate (WTI) CLc1 settled at $57.51 a barrel, up 17 cents. The U.S. market was closed on Thursday for a national holiday. Both benchmarks were down for the week as concerns about a slowing global economy outweighed risks to supply. Brent recorded a 3.3% weekly loss and WTI shed roughly 1.8%. The U.S.-China trade war has dampened prospects of global economic growth and oil demand, but talks resume next week in a bid to resolve the deadlock. “The complex is maintaining a heavy feel that was set into motion earlier this week by mounting expectations of a global economic slowdown that will be impacting oil demand,” German industrial orders fell far more than expected in May, and the Economy Ministry said this sector of Europe’s largest economy was likely to remain weak in coming months. The U.S. Labor Department said nonfarm employers added 224,000 jobs last month, the most in five months. However, new orders for U.S. factory goods fell for a second straight month in May, government data showed, stoking economic concerns. The Organization of the Petroleum Exporting Countries and allied producers such as Russia, known as OPEC+, supported prices by extending their deal on supply cuts. Tension in the Middle East also offered support, particularly to Brent. “Brent is pricing in more of the geopolitical risk than WTI,” said Phil Flynn, an analyst at Price Futures Group in Chicago. Iran threatened to capture a British ship after British forces seized an Iranian tanker in Gibraltar over accusations the ship was violating EU sanctions on Syria. [nL8N2461KI] “If Britain does not release the Iranian oil tanker, it is the authorities’ duty to seize a British oil tanker,” a Revolutionary Guards Commander wrote on Twitter.

US oil prices edge higher, but still end lower for the week - U.S. oil futures edged higher on Friday, but still marked their first weekly loss in three weeks as upbeat monthly U.S. jobs data failed to ease worries about a slowdown in energy demand. August West Texas Intermediate oil rose 17 cents, or 0.3%, to settle at $57.51 a barrel on the New York Mercantile Exchange. It was up a second straight session, but posted a weekly loss of roughly 1.6%, following two consecutive weeks of gains.

Iran says it has breached 2015 nuclear deal’s stockpile limit - Iran has breached the limit of its enriched uranium stockpile set in a 2015 deal with major powers, Foreign Minister Mohammad Javad Zarif said on Monday, according to the ISNA news agency, defying a warning by European co-signatories to stick to the deal despite U.S. sanctions. Zarif confirmed that Iran had exceeded the relevant limit of 300 kg of uranium hexafluoride (UF6), but Foreign Ministry spokesman Abbas Mousavi said Iran’s steps to decrease its commitments to the nuclear deal were “reversible.” The International Atomic Energy agency (IAEA) said that its inspectors were verifying whether Iran had accumulated more enriched uranium than allowed. “Our inspectors are on the ground and they will report to headquarters as soon as the LEU (low-enriched uranium) stockpile has been verified, a spokesman for the U.N. agency said. Enriching uranium to a low level of 3.6% fissile material is the first step in a process that could eventually allow Iran to amass enough highly-enriched uranium to build a nuclear warhead. Last Wednesday, the IAEA verified that Iran had roughly 200 kg of low-enriched uranium, just below the deals 202.8 kg limit, three diplomats who follow the agencys work told Reuters. A quantity of 300 kg of UF6 (uranium hexafluoride) corresponds to 202.8 kg of LEU. After talks on Friday in Vienna, Iran said European countries had offered too little in the way of trade assistance to persuade it to back off from its plan to breach the limit, a riposte to U.S. President Donald Trump’s decision last year to quit the deal and reimpose economic sanctions.

Iran breaches uranium stockpile limit set by nuclear deal (AP) — Iran has broken the limit set on its stockpile of low-enriched uranium by its 2015 nuclear deal with world powers, international inspectors and Tehran said Monday, marking its first major departure from the unraveling agreement a year after the U.S. unilaterally withdrew from the accord.The announcement by Iran’s Foreign Minister Mohammad Javad Zarif and later confirmation by the U.N. nuclear watchdog puts new pressure on European nations trying to save the deal amid President Donald Trump’s maximalist campaign targeting Tehran. Iran separately threatened to raise its uranium enrichment closer to weapons-grade levels on July 7 if Europe fails to offer it a new deal.It also further heightens tensions across the wider Middle East in the wake of Iran recently shooting down a U.S. military surveillance drone, mysterious attacks on oil tankers that America and the Israelis blame on Tehran, and bomb-laden drone assaults by Yemen’s Iranian-backed rebels targeting Saudi Arabia. Those rebels claimed a new attack late Monday on Saudi Arabia’s Abha airport that the kingdom said wounded nine people, including one Indian.The European Union urged Iran to reverse course and Israeli Prime Minister Benjamin Netanyahu called the action “a significant step toward making a nuclear weapon.” Iran long has insisted its nuclear program is for peaceful purposes, despite Western fears about it.At the White House, Trump told reporters Iran was “playing with fire,” and U.S. Secretary of State Mike Pompeo called on the international community to require Iran to suspend all enrichment, even at levels allowed under the nuclear deal. “The Iranian regime, armed with nuclear weapons, would pose an even greater danger to the region and to the world,” Pompeo said in a statement.

Iran breached its uranium stockpile limit under the nuclear deal. Here's what that actually means – Iran has now exceeded its internationally-agreed stockpile limit of low-enriched uranium, Foreign Minister Mohammad Javad Zarif and the International Atomic Energy Agency confirmed Monday, breaching a key tenet of the 2015 nuclear deal that the President Donald Trumpadministration abandoned last year. Zarif said Iran has surpassed 300kg (661 pounds) of uranium hexafluoride (UF6), the equivalent of 202.8kg of low-enriched uranium, Iran's limit under the nuclear deal. Uranium enriched to the low level of 3.67% fissile material, allowed under the deal, is the initial step in a complex process that could, over time, enable Iran to accumulate enough highly-enriched uranium to build a nuclear warhead, according to experts. Foreign Ministry spokesman Abbas Mousavi, however, said that Iran's breaches of the deal were "reversible".But what does exceeding a certain amount of low-enriched uranium actually mean? How much closer does this bring Iran to nuclear bomb-making capability? Nuclear experts interviewed by CNBC say this is far less threatening than it sounds."Even once Iran crosses the 300kg threshold, they are still a long way off from having a stockpile sufficient to produce a bomb," Anne Harrington, professor of international relations and a specialist in nuclear nonproliferation at Cardiff University in Wales, told CNBC in an email.That's because low-enriched uranium is only 3.67% U-235 ⁠— the uranium isotope needed to create a nuclear weapon ⁠— and is impractical for use in a weapon, Harrington explained. "At 3.67% they would need to stockpile approximately three times the current limit to have enough material for one bomb, and that material would need to be further enriched." You still need to fit it into a device, you need precision engineering to design the core, you also need

Iranian president says Iran to drop more of nuke commitments (Xinhua) -- Iranian President Hassan Rouhani said here Wednesday that the Islamic republic will abandon more of its nuclear commitments in the coming days if the parties to the Iranian 2015 international nuclear deal fail to observe their commitments. Iran will increase the percentage of its enriched uranium to higher purity from July 7 on, Rouhani was quoted as saying by Tasnim news agency. "As of July 7, our uranium enrichment will not be limited to 3.67 percent of purity," he said. "We will increase it based on our needs." After one year of U.S. unilateral exit from the Iranian landmark nuclear deal, Iran withdrew from implementing part of the nuclear deal on May 8 and threatened to take more actions in case Tehran's interests under the pact cannot be guaranteed. At that time, Iran set a 60-day deadline for the Europeans to help the Islamic republic reap the economic benefits of the deal. Rouhani, who was talking in a cabinet meeting on Wednesday, also said that Iran's Arak heavy water nuclear reactor, which was agreed to be redesigned under the 2015 nuclear agreement, will resume its previous activities after July 7 if the other signatories to the deal fail to uphold their end of the deal, according to Press TV. Under the Iranian nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), Iran agreed to redesign the 40-megawatt Arak research reactor to cut its potential output of plutonium. Rouhani said Iran's imminent move concerning the Arak reactor could only be reversed "if they (the other signatories) act on all of their commitments concerning the facility." Moreover, the Iranian president slammed the EU-designed payment channel as an "empty" mechanism. "Empty Instrument in Support of Trade Exchanges (INSTEX) is of no use to us ... it is void and nothing is in it" to protect Iran's interests under the 2015 nuclear deal, he said.

”Maximum Pressure” Campaign Fails To Kill Off Iran’s Oil Exports -  U.S.-Iran tensions are once again heating up, even as Iran has so far managed to stabilize oil exports at lower levels.Iran has officially breached the limits of low-enriched uranium as part of the 2015 nuclear deal, according to inspectors with the International Atomic Energy Agency. A few weeks ago Iran announced its intention to increase uranium stockpiles, stating that it no longer made sense to remain in an agreement that the U.S. has already pulled out of. There is also little to gain for Iran to continue to adhere to the nuclear deal if it nonetheless faces crippling U.S. sanctions.As a result, the Trump administration’s stated desire of its “maximum pressure” campaign – to constrain Iran’s nuclear ambitions – is predictably having the opposite result. On Monday, the White House issued a statement, calling Iran’s decision “a mistake,” before bizarrely claiming that there “is little doubt that even before the deal’s existence, Iran was violating its terms.” Then, the statement went on to say: “We must restore the longstanding nonproliferation standard of no enrichment for Iran,” which, to be clear, was not the standard in years past. Iranian foreign minister Javad Zarif mocked the statement on Twitter. For his part, President Trump has gone back and forth, warning last month that Iran faced “obliteration” if the two went to war, while also saying that he was willing to meet and negotiate with Iran without any preconditions. He also notably pulled back from a military strike last month, to the chagrin of some hardliners in Washington. On Monday, as Iran breached uranium stockpile limits, Trump said Iran was “playing with fire.” Notably, China and some officials from Europe were not pleased with Iran’s decision to breach limits of the nuclear agreement. French President Emmanuel Macron expressed “his attachment to the full respect of the 2015 nuclear accord and asks Iran to reverse without delay this excess, as well as to avoid all extra measures that would put into question its nuclear commitments.” Last week Macron warned Iran’s President that violating the terms of the nuclear agreement would be unwise. The UK voiced similar concerns. Europe has tried to offer enticements to keep Iran within the terms of the nuclear deal, setting up a special financial entity to allow European companies to continue to do business with Tehran. But Iranian foreign minister Zarif said that the efforts are insufficient, especially since it does not allow Iran to continue to export oil.   On Monday, he went further. “Our next step will be enriching uranium beyond the 3.67% allowed under the deal,” he said. “The Europeans have failed to fulfil their promises of protecting Iran’s interests under the deal.” However, he also noted that Iran’s actions were “reversible,” suggesting that Iran could pullback if European efforts proved more fruitful.

Stopped Clocks: The European Union Gets War With Iran Exactly Right - Regular readers of my contributions to this site may have noticed that I am in no way a fan of the European Union. Yet even with the EU, the stopped clock principle applies: they have to be right sometimes. And when Federica Mogherini, high representative of the EU for foreign affairs and security policy,said that everyone should tread carefully when it came to the attack on the oil tankers near the Strait of Hormuz, she was absolutely correct.Mogherini stated: “We are living in crucial and delicate moments, where the most relevant attitude to take—the most responsible attitude to take—is, and we believe should be, maximum restraint, and avoiding any escalation on the military side.”This month, one of the EU’s top advisors on security questions declared that no military intervention from the European side should take place. This echoes French President Emmanuel Macron saying that France had no place in such interventions, as well as German Chancellor Angela Merkel calling for a peaceful solution to the Iran problem. Seventy-four percent of German opposed a military intervention in Syria last year. In 2002, 71 percent of Germans opposed the war in Iraq, as did 64 percent of the French. During anti-Iraq war protests that took place on February 15, 2003, 100,000 people demonstrated in Brussels, 75,000 in Amsterdam, between 100,000 and 200,000 in Paris, between 300,000 and 500,000 in Berlin, 150,000 in Athens, 60,000 in Budapest, and well over 600,000 people in Rome. And in the United Kingdom, more than one million showed up to protest in London. The UK’s participation in the Iraq war dragged the reputation of Prime Minister Tony Blair and his Labour Party through the mud. A subsequent inquiry made the former UK leader subject to public prosecution because the legal basis for military action was “far from satisfactory.” Blair’s involvement in Iraq has made it difficult for any party in Westminster to legitimate any war to its constituents, most of whom feel that the unholy coalition of Blair and Bush tricked them into a war they should never have been a part of. This is a major reason why the British House of Commons voted down David Cameron’s 2013 attempt to intervene militarily in Syria.

Iran Bitcoin Miners Set Up Shop In Mosques Amid Gov't Crackdown -  Iranian bitcoin miners are moving into mosques as the government launches an energy crackdown, social media users revealed on June 25. CoinTelegraph's William Suberg reports that Iran, which offers free energy to mosques, now has around 100 miners occupying places of worship, generating much-needed income of around $260,000 a year. “This money goes a long way in Iran’s choked sanctioned economy,” Oxford University researcher Mahsa Alimardani explained on Twitter. Despite its increasingly troubled economic situation, Iran remains uncoordinated when it comes to cryptocurrency policy. Last year, the central bank officially forbade lenders from servicing crypto businesses, at the same time as officials said they would consider launching their own digital token. Now, after bitcoin mining allegedly contributed to a 7% spike in power consumption in June, 1,000 miners have been seized, Cointelegraph reported on Tuesday. “Two of these bitcoin farms have been identified, with a consumption of one megawatt,” Reuters additionally quoted Arash Navab, an official from the energy industry in Yazd province, as telling state television. Tehran had previously recognized domestic cryptocurrency mining as an industry. However, as CoinTelegraph's Ana Alexandre notes, an Oxford researcher told the BBC that Iranians are increasingly turning to cryptocurrencies like bitcoin as a means of skirting sanctions.

The wife of the Emir of Dubai has run away to London, reportedly after learning disturbing details about a failed escape attempt by another princess -- The wife of Dubai Emir Sheikh Mohammed al-Maktoum has fled the country and is hiding in London, reportedly driven away by chilling details about the capture of a princess who tried to flee in 2018.Princess Haya bint al-Hussein fled to her $107 million (R1.5 billion) town house in Kensington Palace Gardens in mid-June. She is now bringing a case for divorce against her husband, the vice president of the United Arab Emirates, sources close to the princess told the BBC. She has brought her son Zayed, aged 7, and daughter Al Jalila, aged 11, to London with her, the Daily Beast reported.That the princess had escaped the royal household was first alleged by senior Jordanian journalist Osama Fawzi on his YouTube channel on June 22.A spokesman for the UAE government told Business Insider: "The UAE government does not intend to comment on allegations about individuals' private lives."According to the BBC, Princess Haya, the daughter of King Hussein of Jordan, fled after learning details about the disappearance of one of her husband's 23 daughters last year.   Princess Latifa reportedly spent seven years planning her escape from Dubai, enlisting the help of a former French spy, her Finnish martial arts teacher, and an escape boat flying a US flag to deter pursuers.  The princess, aged 32 at the time, got within touching distance of Goa, 1,200 miles (1,900 km) away on India's west coast, but was chased down by Emirati commandos and returned to Dubai in March 2018. She has not been heard from since, with activists fearing she has been jailed indefinitely.  Before she fled Princess Latifa made a video detailing alleged abuse and trauma at the hands of her 69-year-old father. She entrusted the tape to her lawyer, who was instructed to release it if her escape attempt went wrong, (embedded here)

Saudi Arabia holds Iranian oil tanker in Jeddah – Saudi Arabia is holding an Iranian oil tanker in the port of Jeddah, sources in Tehran said yesterday. The tanker docked in Jeddah for emergency repairs following “engine failure and the loss of control” two months ago. Now the Saudi authorities are demanding that Iran should pay $200,000 for every day that the vessel has been in dock, Russia Today has reported. Iranian Oil Minister Bijan Namdar Zanganeh told reporters on Wednesday that officials at the National Iranian Oil Tanker Company are following up on the matter. The problem, he insisted, will be solved soon. “The issue has financial implications for Iran,” the minister added, “but we are more concerned about a possible environmental disaster in the region.” A number of Iranian officials have criticised the Saudi demand, which they describe as “illegal”.

Saudi-led coalition airstrikes kill all eight members of family in Yemen - A pair of airstrikes by the Saudi-led coalition on Monday killed at least eight civilians — all members of a single family — in Yemen’s northwestern Amran province near the capital, Sanaa, security officials said. The airstrikes, which hit sites in the al-Barid neighborhood in the city of Amran, also wounded over 20 people, the officials said. Also Monday, the Saudi-led coalition claimed that one of their airstrikes killed at least 41 Shiite rebels, known as Houthis, including eight Lebanese Hezbollah members who were fighting with them, in Yemen’s northern Saada province. Meanwhile, in the port city of Hodeida, officials and witnesses said hundreds of families have been forced to leave their homes in the surrounding province, about two weeks after the coalition launched an assault to take Hodeida from the Houthis. A convoy of at least 50 vehicles, carrying hundreds of people, has left the city, heading to the southwestern city of Taiz, they said. All the officials spoke on condition of anonymity because they were not authorized to talk to the media while the witnesses feared for their safety. The Saudi-led coalition launched the campaign to retake Hodeida earlier this month, with Emirati troops leading the force of government soldiers and irregular militia fighters backing Yemen’s exiled government. Saudi Arabia has provided air support, with targeting guidance and refueling from the United States. Hodeida, home to 600,000 people, is some 150 kilometers (90 miles) southwest of Sanaa. The campaign to take Hodeida threatens to worsen Yemen’s humanitarian situation as it’s the main entry point for food, humanitarian aid and fuel supplies to the country. Aid groups fear a protracted fight could force a shutdown of the port and potentially tip millions into starvation. Some 70 percent of Yemen’s food enters via the port, as well as the bulk of humanitarian aid and fuel supplies. Around two-thirds of the country’s population of 27 million relies on aid and 8.4 million are at risk of starving,

Yemen's Houthis attack Saudi's Abha airport, injuring civilians - A Yemeni rebel attack on a civilian airport in southern Saudi Arabia wounded nine civilians on Tuesday, a Riyadh-led coalition said, the latest in a series of attacks on the airport. "The terrorist attack on Abha airport  ... led to the injury of nine civilians, including eight Saudi citizens and one carrying an Indian passport," the military coalition said in a statement carried by the official Saudi Press Agency. Earlier, the Iran-aligned Houthi rebels said they "launched a wide operation aimed at warplanes at Abha international airport" with drones, according to their Almasirah television channel.Abha airport has come under repeated missile and drone attacks in the past several weeks. On June 12, a rebel missile attack on Abha airport wounded 26 civilians, drawing promises of "stern action" from the Saudi-Emirati coalition.And on June 23, another rebel attack on Abha airport killed a Syrian national and wounded 21 other civilians, according to the coalition. The Houthis have stepped-up attacks in recent weeks against Saudi Arabia, which has been running a bloody military campaign in the Middle East’s poorest country since 2015.The Houthi rebels took control of vast swaths of the country, including the capital Sanaa, in late 2014, forcing the internationally recognised government of President Abd-Rabbu Mansour Hadi from power.The raids come amid heightened regional tensions after Washington - a key ally of Riyadh - accused Iran of shooting down a US drone over international waters and of carrying out attacks on oil tankers in the strategic Gulf of Oman. Saudi Arabia has repeatedly accused Iran of supplying sophisticated weapons to Houthi rebels, a charge Tehran denies.

Israel Ready to Join a US War Against Iran — Israel has spent decades talking up the potential for a war against Iran, and invested heavily in lobbying the US to be hostile toward Iran. Recent talk of the US attacking Iran and starting such a war has Israeli hawks, unsurprisingly, crossing their fingers.Israeli Foreign Minister Israel Katz says the country is continue to encourage Trump to “press ahead” against Iran, but is also concerned Iran might “accidentally” stumble out of a limited war into a full “military conflagration.”Since Israel will definitely be involved in that war, Katz says that Israel “continues to devote itself to building up its military might” for the event that they are drawn into a US-Iran War, a war that to be clear Israel has been trying to con the US into starting for many years.  European nations are still trying to prevent such a war, and trying to save the P5+1 nuclear deal, which the US has withdrawn from, and which Israel has opposed from the start. Iranian officials express hope for such a deal, so long as the Europeans can ensure sanctions relief.

Netanyahu Says Israel Preparing Large-Scale Gaza Military Operation -  With his political campaign continuing to be built on him being the farthest right-wing, and most hawkish candidate, Israeli Prime Minister Benjamin Netanyahu confirmed a meeting of the security cabinet in which the army was told to prepare for a wide-scale military campaign inside the Gaza Strip. It’s unlikely that such an instruction to the Israeli Army has any meaning at all, since Israel is seemingly always on the verge of invading the Gaza Strip for some reason or other, and probably is never not making such preparations. Netanyahu said policy toward the Gaza frontier is to either invade Gaza or “restore the calm.” Despite talk of “difficult situations,” it’s not clear anything is really going on in Gaza beyond what usually is. Indeed, it’s not clear what Netanyahu’s “Gaza situation” is, beyond another opportunity for him to talk up the idea of a massive military offensive, a threat which tends to be politically popular within Israel, and which officials feel the need to bring up as a possibility every so often.

Israel’s Supreme Court Throws Out Petition for Palestinian Child Prisoners to Call Parents— Israel’s Supreme Court has refused to hear a petition filed by a human rights organisation which requested that Palestinian child prisoners be allowed to call their parents while in detention.  Israeli non-profit “HaMoked: Center for the Defence of the Individual” filed the petition to the Supreme Court, arguing against Israeli procedures which subject those Palestinian minors classified as “security prisoners” to the same restrictions as adult prisoners. This includes refusing them permission to call their parents while in detention, which HaMoked argues can cause severe psychological damage to the children. However, the Supreme Court on Monday dismissed the petition, claiming the case should have first been brought to a lower court on behalf of one or more specific prisoners.  Israel’s treatment of child prisoners has long been criticised by human rights organisations. HaMoked argues that the IPS’ handling of Palestinian minors is “contrary to the language and spirit of Israeli law relating to minors in custody […] and contravenes international law, primarily the Convention on the Rights of the Child [UNCRC], to which Israel is signatory”.

Stray Syrian Missile Slams Into Northern Cyprus Following Israeli Raid --An unexpected and rare result of the overnight Israeli airstrikes on Syria, which left as many as six Syrian civilians and an equal number of troops dead, via the BBC: A stray Russian-made missile apparently launched by Syria hit the self-declared Turkish Republic of Northern Cyprus overnight, officials say. Foreign Minister Kudret Ozersay said the air defence missile was thought to have been launched during suspected Israeli air strikes on Syria. The projectile struck a mountainside north of Nicosia, 225km (140 miles) from the Syrian coast, sparking a fire. During the middle of the night air raid which involved Israeli jets reportedly firing from over Lebanese airspace in what's being considered the largest Israeli attack this year, the Syrian military said it intercepted multiple inbound missiles. Footage from the resulting fire after the errant missile slammed into a mountainside in Cyprus: Reports suggest it was a Soviet-era S-200 surface-to-air missile previously supplied by Moscow that struck some 12 miles north of Nicosia in the Turkish-occupied part of the country, or the Turkish Republic of Northern Cyprus.  According to a breaking AFP report:  Syria said Israeli jets attacked several military sites near the capital Damascus and the central city of Homs early Monday, killing several people. State news agency SANA said that Syrian air defense had intercepted several of the incoming missiles that were fired from Lebanese airspace. Syria reported its aerial defense systems were active during the assault, which further caused damage to multiple civilian homes in the Damascus suburb of Sahnaya, according to SANA.

Russian Military Intervenes After Deadly Clashes Between Syrian & Turkish Armies - The Russian military quickly intervened to prevent a deadly confrontation between the Syrian and Turkish forces on Saturday.The Syrian Arab Army (SAA) first opened fire on the militant-held Sheir Magher area after the Turkish-backed rebels fired several artillery shells towards their positions in northwestern Hama. The Sheir Magher area is where the Turkish observation post is located in northwestern Hama. Following the Syrian Army attack on the Turkish observation post area, the Russian Armed Forces quickly intervened to prevent further hostilities, a source near the front-lines told Al-Masdar News.The source added that the Russian Armed Forces are currently present in the northwestern countryside of Hama, with many of their soldiers deployed to the towns of Mhardeh and Al-Sqaylabiyeh.  Earlier this week, the Syrian Army killed a Turkish soldier in the Sheir Magher area after the former was responding to an attack by the militants in northwestern Hama. The Turkish Armed Forces later retaliated by shelling the Syrian Army checkpoints near Sheir Magher – no casualties were reported. That prior deadly incident involved the Syrian Army striking a Turkish observation post in the same area, resulting in the death of one soldier and hospitalization of three others. In retaliation, the Turkish military attacked a couple of the Syrian Army checkpoints in northwestern Hama. Following the incident, the Turkish authorities summoned the Russian military attache in Syria and demanded that they control the Syrian Army in northwestern Hama.

Syria & Iran To Defy Sanctions By Building Railway From Tehran To Mediterranean - Iran is preparing to begin construction on a large railway that links their capital city of Tehran to the Syrian coastal city of Latakia, the Director of Syrian Railways Najib Al-Fares said on Wednesday.According to Fares, the new railway will promote regional trade between Syria, Iraq, and Iran. The new project is expected to be funded by the Iranian government, with support from both Syria and Iraq. The Director of the Iraqi Railway Company, Jawad Kazim, said that Iraq had previously signed contracts to implement projects with Iranian companies, but most were delayed.For Syria, the new railway system is expected to help ease their economic issues that have derived from the U.S.-led sanctions on the Levantine nation.During the signing of the minutes, [Iranian Deputy Minister and Chairman of Roads Maintenance and Transport Organization] Shahram Adamnejad said that the tripartite meeting resulted in positive outcomes among the three sides, affirming that the goal of the negotiations is to activate the Iranian-Iraqi-Syria load and transport corridor as a part of a wider plan for reviving the Silk Road as the three countries have an old experience in the international trade. — Syria's SANAWhile this should be beneficial for all parties, this new railway system will face heavy criticism and possibly military attack from the U.S. and its allies, most notably Israel.Tripartite meeting of Iran, Iraq, Syria on railways coop. https://t.co/LAzXqnLOzJ — Mehr News Agency (@MehrnewsCom) July 1, 2019 Israel has paid close attention to the Iranian developments in Syria and has often acted when they suspect weapons are being transported across borders.

British Marines Seize Oil Tanker Suspected of Bringing Iranian Oil to Syria— British Royal Marines seized an oil tanker in Gibraltar on Thursday. They suspected the tanker was headed to Syria, which would be a violation of US and EU sanctions. The Grace 1 oil tanker was believed to have started its journey in Iran.“That refinery is the property of an entity that is subject to European Union sanctions against Syria,” Gibraltar Chief Minister Fabian Picardo said. “With my consent, our port and law enforcement agencies sought the assistance of the Royal Marines in carrying out this operation.”About 30 Royal Marines boarded the tanker, some descended down on ropes from a helicopter, others came alongside the tanker in a speedboat. The U.S. and EU have imposed a series of sanctions against the Syrian government, resulting in an acute fuel shortage this past winter. Syrians struggled to heat their homes, the Assad government had to set up oil rationing and any country that tried to relieve them of the shortage was threatened with U.S. sanctions.

Memo to the US – The Winds Are Shifting  -- Ilargi: The ‘official’ storyline : at the request of the US, Gibraltar police and UK marines have seized an oil tanker in Gibraltar. The super-tanker, 1000 feet (330 meters) long, carrying 2 million barrels, had stopped there after sailing all around the Cape of Good Hope instead of taking the Suez canal on its way, ostensibly, from Iran to Syria. And, according to the storyline as presented to and in the western press, because the EU still has sanctions on Iran, the British seized the ship. Another little detail I really appreciate is that Spain’s acting foreign minister, Josep Borrell, said Madrid was looking into the seizure and how it may affect Spanish sovereignty since Spain does not recognize the waters around Gibraltar as British. That Borrell guy is the newly picked EU foreign policy czar, and according to some sources he’s supportive of Iran and critical of Israel. Them’s the webs we weave. He’s certainly in favor of Palestinian statehood. But we’re wandering…why dock in Gibraltar? Because no problems were anticipated there. However, the US had been following the ship all along, and set this up. A trap, a set-up, give it a name. I would think this is about Iran, not about sanctions on Syria; that’s just a convenient excuse. Moreover, as people have been pointing out, there have been countless arms deliveries to Syrian rebels in the past years (yes, that’s illegal) which were not seized. The sanctions on Syria were always aimed at one goal: getting rid of Assad. That purpose failed either miserably or spectacularly, depending on your point of view. It did achieve one thing though, and if I were you I wouldn’t be too sure this was not the goal all along. That is, out of a pre-war population of 22 million, the United Nations in 2016 identified 13.5 million Syrians requiring humanitarian assistance; over 6 million are internally displaced within Syria, and around 5 million are refugees outside of Syria. About half a million are estimated to have died, the same number as in Iraq.  And Assad is still there and probably stronger than ever. But it doesn’t even matter whether the US/UK/EU regime change efforts are successful or not, and I have no doubt they’ve always known this. Their aim is to create chaos as a war tactic, and kill as many people as they can. How do you define terror, terrorism? However you define it, ‘we’ are spreading it.

Iran threatens British shipping in retaliation for tanker seizure - (Reuters) - An Iranian Revolutionary Guards commander threatened on Friday to seize a British ship in retaliation for the capture of an Iranian supertanker by Royal Marines in Gibraltar. “If Britain does not release the Iranian oil tanker, it is the authorities’ duty to seize a British oil tanker,” Mohsen Rezai said on Twitter. The Gibraltar government said the crew on board the supertanker Grace 1 were being interviewed as witnesses, not criminal suspects, in an effort to establish the nature of the cargo and its ultimate destination. U.S. President Donald Trump, while not specifically mentioning the supertanker incident, repeated a warning to Tehran: “We’ll see what happens with Iran. Iran has to be very, very careful,” he told reporters at the White House. British Royal Marines boarded the ship off the coast of the British territory on Thursday and seized it over accusations it was breaking sanctions by taking oil to Syria. They landed a helicopter on the moving vessel in pitch darkness. The move escalates a confrontation between Iran and the West just weeks after the United States called off air strikes on Iran minutes before impact, and draws Washington’s close ally into a crisis in which European powers had striven to appear neutral. A U.S. State Department spokeswoman said, “We welcome international partners’ resolve in upholding and enforcing these sanctions.”

UK shouldn’t be ripping off the people of Libya by spending Gaddafi’s billions – Prof. Richard Wolff -The British government wants to start spending the money earned in taxes from frozen assets of late Libyan leader Muammar Gaddafi. Professor Richard Wolff insists it’s the Libyan people who should get their money back. British lawmakers proposed handing over £17 million earned in taxes from the frozen assets to the victims of the Irish Republican Army (IRA) attacks. This follows a parliamentary report disclosure last month that the UK Treasury took millions of pounds in tax over the past three years from £12 billion of Libyan assets linked to Gaddafi. While lawmakers are trying to clarify if it’s legal to receive money in taxes from the frozen funds of another state, Professor Richard Wolff says the money belongs to the Libyan people and must be returned. “They deserve every bit of the wealth they created and they ought to have that wealth available to them as soon as it possibly can be turned over… because that’s how we run this world. We don’t give over to other countries the wealth produced in our country,” the economist and co-founder of ‘Democracy at Work’ told RT. According to him, the “British should be the most sensitive to all of this because they had the British Empire which for a century or more and in some cases for several centuries ripped off the wealth of vast parts of the world – India, Africa, and so on.” Wolff said “they [the UK] should not be doing this again, especially since they have been involved in some of the political maneuvers that overthrew Gaddafi in Libya, and that threatened the government in Venezuela.”

Libya: Haftar bans flights, boats from Turkey  - Libya's renegade military commander Khalifa Haftar has banned commercial flights from Libyato Turkey and ordered his forces to attack Turkish ships and interests in the country, spokesperson Ahmed al-Mismari has said.Turkey supports Libya's United Nations-recognised Government of National Accord (GNA) in Tripoli which on Wednesday retook Gharyan, a strategic town south of the capital, from Haftar's self-styled Libyan National Army (LNA)."Orders have been given to the air force to target Turkish ships and boats in Libyan territorial waters," al-Mismari said on Friday, adding that "Turkish strategic sites, companies and projects belonging to the Turkish state (in Libya) are considered legitimate targets by the armed forces".Al-Mismari said Turkish aircraft "provided air cover" and bombed LNA positions in the fight for Gharyan."All flights to and from Turkey are also stopped and any Turkish (nationals) on Libyan territory will be arrested," he said. Turkey has supplied drones and trucks to forces allied to Tripoli-based Prime Minister Fayez al-Sarraj, while the LNA has received support fromFrance, the United Arab Emirates and Egypt, according to diplomats. The LNA, which is allied to a parallel government in the east, has failed to take Tripoli but it has commanded air superiority. It has several times attacked Tripoli's functioning airport. The capture of Gharyan this week has been seen as a major setback for Haftar's forces and their campaign to capture the capital. Al-Mismari said his forces had lost 43 soldiers in the battle for Gharyan.

Deadly attack hits Tripoli migrant detention centre: Official - At least 40 people have been killed in an air raid at a detention centre for refugees and migrants in the Libyan capital, Tripoli, according to health and emergency officials. Malek Mersek, a spokesman for the state emergency medical services, said 80 others were wounded in the attack late on Tuesday, which hit the centre located next to a military camp in the eastern suburb of Tajoura. The United Nations-recognised Government of National Accord (GNA) blamed the raid on the forces of Libyan renegade General Khalifa Haftar, whose forces have been fighting to seize Tripoli for the past three months. Speaking to state radio al-Wasat, Interior Minister Fathi Bashagha blamed Haftar's forces, saying that the GNA did not have an aircraft such as the one that carried out the bombing. "This crime came after the statements of the air force commander of Haftar's Libyan National Army, Muhammad al-Manfour, and therefore it is he who bears its legal and moral responsibility." On Monday, Manfour said aerial bombardment will be stepped up because "traditional means" to "liberate Tripoli" had been exhausted, and urged residents to stay away from what he called "confrontation areas". Reporting from the scene after the air raid, Al Jazeera's Mahmoud Abdelwahed said rescuers were searching for survivors as ambulances rushed in to transfer those wounded to medical centres. "It's very tragic here, dead bodies are still under the rubble," he said.

Air strike hits Libya migrant detention center -  At least 44 people were killed and 130 more were wounded in an attack on a migrant detention center in a suburb of Libyan capital Tripoli late on Tuesday, according to the United Nations mission. United Nations Libya envoy Ghassan Salame condemned the strike, saying it "clearly amounts to the level of a war crime." Doctors Without Borders said the detention center in the eastern suburb of Tajoura held 126 migrants. Pictures from the scene showed many bodies strewn among rubble on the ground and African migrants undergoing emergency surgery after the strike. "The absurdity of this ongoing war has today reached its most heinous form and tragic outcome with this bloody, unjust slaughter," Salame said in a statement. United Nations Secretary General Antonio Guterres has called for an independent investigation into the circumstances of the air strike. UN's human rights chief Michelle Bachelet said the attack could amount to a war crime because the fighting sides knew that civilians were detained inside the building.

U.S. Considers Allowing China To Import Oil From Iran  -The U.S. Department of State is discussing allowing China to import oil from Iran as payment for a Chinese company’s investment in an Iranian oilfield, Politico reported on Wednesday, citing U.S. officials and sources.  The Trump Administration is discussing issuing China a waiver to a 2012 U.S. act on Iranian sanctions that would allow Beijing—Iran’s single biggest oil customer—to import oil from Iran, three U.S. officials told Politico. The discussions revolve around giving China a waiver to import Iranian oil in exchange for investments that China’s Sinopec has made in an oilfield in Iran. U.S. administration officials have offered Sinopec to grant a waiver for the repayment in oil in official correspondence between the Chinese company and the U.S. Department of State, a source familiar with the matter told Politico.   The report that the U.S. is mulling over a kind of lenient treatment of Chinese imports of Iranian oil comes days after numerous media reports pointed to China already receiving Iranian oil cargoes despite the U.S. sanctions on Iran’s oil, while the official U.S. position continues to be driving Iran’s oil exports down to zero as soon as possible.Now that there are no sanction waivers for Iranian oil buyers, the United Stateswill sanction any imports of crude oil from Iran, the U.S. Special Representative for Iran, Brian Hook, said on Friday, reiterating comments he made last month amid reports that China has already imported its first crude oil cargo from Iran that breaches the U.S. sanctions.“We will sanction any illicit purchases of Iranian crude oil,” Hook said. Hook added that the U.S. would be looking to check reports that Iranian crude oil tankers have departed and arrived in China after the U.S. removed all sanction waivers for all Iranian crude oil customers. Last week, an analysis of TankerTrackers showed that Iran had delivered the first crude oil to a Chinese refinery complex since the United States removed as of May the sanction waivers for Iran’s oil buyers. 

China separating Muslim children from families - China is deliberately separating Muslim children from their families, faith and language in its far western region of Xinjiang, according to new research. At the same time as hundreds of thousands of adults are being detained in giant camps, a rapid, large-scale campaign to build boarding schools is under way. Based on publicly available documents, and backed up by dozens of interviews with family members overseas, the BBC has gathered some of the most comprehensive evidence to date about what is happening to children in the region. Records show that in one township alone more than 400 children have lost not just one but both parents to some form of internment, either in the camps or in prison. Formal assessments are carried out to determine whether the children are in need of "centralised care". Alongside the efforts to transform the identity of Xinjiang's adults, the evidence points to a parallel campaign to systematically remove children from their roots. China's tight surveillance and control in Xinjiang, where foreign journalists are followed 24 hours a day, make it impossible to gather testimony there. But it can be found in Turkey. In a large hall in Istanbul, dozens of people queue to tell their stories, many of them clutching photographs of children, all now missing back home in Xinjiang. "I don't know who is looking after them," one mother says, pointing to a picture of her three young daughters, "there is no contact at all."