oil prices finished the week lower despite being up 4 out of 5 days, as Trump's surprise Thursday tweet of new tariffs on China shook financial markets and sent crude tumbling to its largest single day loss in over 4 years....after rising less than 1% to $56.20 a barrel on a big US oil inventory withdrawal last week, prices of US crude for September delivery initially slipped lower on Monday after reports of 'constructive' talks with Iran, but turned higher as the prospect of an interest rate cut by the Fed overshadowed concerns about slower global economic growth, with prices finishing the session 67 cents higher at $56.87 a barrel...expectations of a Fed rate cut and a US crude supply drawdown pushed prices higher again on Tuesday, with the WTI contract for September delivery rising $1.18 to settle at $58.05 per barrel, with those gains extended in after hours after the API reported a larger-than-expected crude draw...hence, oil prices opened higher on Wednesday and moved even higher after the EIA confirmed the big draw of crude and lower supplies of gasoline and distillates, rising for the fifth consecutive day to $58.58 a barrel, as traders awaited the widely expected first cut in interest rates in more than 10 years...however, oil prices fell on Thursday morning after the Fed cut rates but signaled further rate cuts might be limited, and then nosedived by as much as 8% after Trump said he'd impose another 10% tariff on $300 billion more of Chinese imports, as US crude went on to end the day $4.63 lower at $53.95 a barrel, the largest single-day decline since February 2015...oil prices rebounded more than $1 from that oversold level early on Friday and continued higher to close up $1.71 at $55.66 per barrel, but still ended down 1% on the week that saw the U.S./China trade war overshadow both the Fed rate cut and a bullish inventory report...
natural gas prices also ended lower, falling for a third week in a row and ending the week below the multi-year low set in June...after falling 4% to a hair above a 3 year low at $2.169 per mmBTU last week, prices of natural gas for August delivery tumbled 2.8 cents to $2.141 on the final day of trading for the August natural gas contract on Monday, largely on a weekend trend toward cooler medium range weather forecasts; at the same time, the natural gas contract for September delivery fell 3.4 cents to $2.116 per mmBTU, a 38 month low...however, September gas rebounded 2.1 cents on Tuesday and then rose 9.6 cents to $2.233 per mmBTU on Wednesday, as the trend toward cooler weather lifted, while stronger power burns improved the fundamentals....however, a bearish storage report sent prices 3.1 cents lower on Thursday, and the week ended with another 8.1 cent selloff on Friday to send the September natural gas contract price back to $2.121 per mmBTU, just a half a cent above that 38 month low set Monday...
with natural gas prices still ending at their lowest weekly close in 38 months, we'll include a graph of natural gas prices over the past 3 1/2 years to show you how we got here...
the above graph is a Saturday afternoon screenshot of the interactive US natural gas price graph at Daily FX, an online platform that provides trading news, charts, indicators and analysis of the markets...each bar on the above graph portion above represents natural gas prices for a week of trading between the start of 2016 and this past week, wherein the green bars represent the weeks when the price of natural gas went up, and red bars represent the weeks when the price of natural gas went down...for green bars, the starting natural gas price at the beginning of the week is at the bottom of the bar and the price at the end of the week is at the top of the bar, while for red or down weeks, the starting price is at the top of the bar and the price at the end of the week is at the bottom of the bar...also barely visible on this scaled-down "candlestick" style graph are the very faint grey "wicks" above and below each bar, to indicate trading prices during the week that were above or below the opening to closing price range for that week...(the lighter red & green bars at the bottom of the graph represent the trading volume for each week, not a concern for us today)...as you can see, natural gas prices have been falling steadily since approaching $5 per mmBTU in November, when it appeared that natural gas supplies might be inadequate for the coming winter, and have now been testing these 3 year lows for the past 6 weeks, and first established a new three year low in the middle of June...average breakeven prices for drilling new natural gas wells are now down to near $3, so a drilling slowdown is to be expected....when gas prices first fell below $2.50 in early 2016, drilling new wells for natural gas virtually dried up, with the national natural gas rig count falling to as low as 81 rigs the following summer, which was the lowest natural gas rig count over the entire time Baker Hughes had been keeping records...
the natural gas storage report for the week ending July 26th from the EIA indicated that the quantity of natural gas held in storage in the US increased by 65 billion cubic feet to 2,634 billion cubic feet by the end of the week, which meant our gas supplies were 334 billion cubic feet, or 13.2% greater than the 2,300 billion cubic feet that were in storage on July 26th of last year, while still 123 billion cubic feet, or 4.5% below the five-year average of 2,757 billion cubic feet of natural gas that have been in storage as of the 26th of July in recent years....this week's 65 billion cubic feet injection into US natural gas storage was quite a bit more than the consensus expectations of analysts surveyed by S&P Global Platts for a 53 billion cubic feet injection , and it was much above the average 36.6 billion cubic feet of natural gas that have been added to gas storage during the fourth week of July over the past 5 years, the 18th above average storage build in the last 20 weeks... the 1,456 billion cubic feet of natural gas that have been added to storage over the 18 weeks of this injection season has been the largest injection of gas into storage on record for any prior similar period of the gas injection season...
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending July 26th, indicated the 10th decrease in crude inventories in 18 weeks, despite a big drop in our oil exports and a rebound in our crude oil production, which was manifest as a major shift of unaccounted for crude from the supply side to the demand side of the oil balance sheet....our imports of crude oil fell by an average of 365,000 barrels per day to an average of 6,663,000 barrels per day, after rising by an average of 194,000 barrels per day over the prior week, while our exports of crude oil fell by an average of 718,000 barrels per day to an average of 2,574,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 4,089,000 barrels of per day during the week ending July 26th, 353,000 more barrels per day than the net of our imports minus exports during the prior week...over the same period, the production of crude oil from US wells was reported to be 900,000 barrels per day higher than the prior week 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 16,289,000 barrels per day during this reporting week..
meanwhile, US oil refineries were reportedly using 16,991,000 barrels of crude per day during the week ending July 26th, 43,000 fewer barrels per day than the amount of oil they used during the prior week, while over the same period the EIA reported that a net of 1,213,000 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 512,000 barrels per day more than 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 (-512,000) 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"....since last week's unaccounted for crude was on the supply side at +450, that means there was a week over week swing of 962,000 barrels per day in the unaccounted for portion of the oil balance sheet, rendering this week's week over week comparisons meaningless (for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....
further details from the weekly Petroleum Status Report (pdf) indicated that the 4 week average of our oil imports fell to an average of 6,956,000 barrels per day last week, which was 13.1% less than the 8,004,000 barrel per day average that we were importing over the same four-week period last year...the 1,213,000 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 900,000 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 1,000,000 barrels per day higher at 11,800,000 barrels per day, largely due to resumed production in the Gulf of Mexico, while a 14,000 barrels per day decrease to 444,000 barrels per day in Alaska's oil production lowered the final rounded national production total by 100,000 barrels per day (EIA"s math, not mine)...last year's US crude oil production for the week ending July 27th was rounded to 10,900,000 barrels per day, so this reporting week's rounded oil production figure was 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 93,0% of their capacity in using 16,991,000 barrels of crude per day during the week ending July 26th, down from 93.1% of capacity the prior week, a utilization rate that's a bit lower than normal for mid summer....the 16,991,000 barrels per day of oil that were refined this week were also 2.8% below the 17,480,000 barrels of crude per day that were being processed during the week ending July 27th, 2018, when US refineries were operating at 96.1% of capacity....
even with the small decrease in the amount of oil being refined, gasoline output from our refineries was quite a bit higher, increasing by 327,000 barrels per day to 10,416,000 barrels per day during the week ending July 26th, after our refineries' gasoline output had increased by 234,000 barrels per day the prior week....but even with those big increases in gasoline output, this week's gasoline production was still fractionally lower than the 10,483,000 barrels of gasoline that were being produced daily during the same week last year....on the other hand, our refineries' production of distillate fuels (diesel fuel and heat oil) fell by 55,000 barrels per day to 5,164,000 barrels per day, after our distillates output had decreased by 142,000 barrels per day the prior week....but even after those decreases, the week's distillates production was a bit more than the 5,159,000 barrels of distillates per day that were being produced during the week ending July 27th, 2018....
despite the increase in gasoline production, our supply of gasoline in storage at the end of the week still fell for the sixth time in 7 weeks and for the 18th time in twenty-three weeks, falling by 1,791,000 barrels to 230,735,000 barrels over the week to July 26th, after our gasoline supplies had slipped by 226,000 barrels over the prior week....our gasoline supplies decreased this week because our exports of gasoline rose by 251,000 barrels per day to 809,000 barrels per day, and while our imports of gasoline rose by 132,000 barrels per day to 1,117,000 barrels per day, and while the amount of gasoline supplied to US markets decreased by 114,000 barrels per day to 9,559,000 barrels per day...after our gasoline supplies had reached an all time record high twenty-five weeks ago, they then fell by nearly 13% over 10 weeks while US Gulf Coast refineries were crippled by the Venezuelan sanctions, and as a result they are still fractionally lower than last July 27th's inventory level of 230,968,000 barrels, while just 2% above the five year average of our gasoline supplies at this time of the year...
with the decrease in our distillates production, our supplies of distillate fuels fell for the 12th time in the past 20 weeks, decreasing by 894,000 barrels to 135,922,000 barrels during the week ending July 26th, after our distillates supplies had increased by 613,000 barrels over the prior week...our distillates supplies decreased this week because our exports of distillates rose by 538,000 barrels per day to 1,510,000 barrels per day while our imports of distillates fell by 2,000 barrels per day to 103,000 barrels per day, and while the amount of distillates supplied to US markets, a proxy for our domestic demand, decreased by 379,000 barrels per day to 3,885,000 barrels per day....but even after this week's inventory decrease, our distillate supplies were still 9.4% higher than the 124,193,000 barrels of distillates that we had stored on July 27th, 2018, but around 3% below the five year average of distillates stocks for this time of the year...
finally, even with our oil production returning to normal after tropical storm Barry and our oil exports falling, our commercial supplies of crude oil in storage fell for a seventh week in a row and for the thirteenth time in 28 weeks, decreasing by 8,496,000 barrels, from 445,041,000 barrels on July 19th to 436,545,000 barrels on July 26th...after that big decrease, our crude oil inventories slipped back to near the five-year average of crude oil supplies for this time of year, while remaining more than 30% higher than the prior 5 year (2009 - 2013) average of crude oil stocks for the 4th week of July, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...since our crude oil inventories had generally been rising since this past Fall until the recent 7 weeks, after generally falling until then through most of the prior year and a half, our oil supplies as of July 26th were still 6.8% above the 408,740,000 barrels of oil we had stored on July 27th of 2018, but at the same time were 9.4% below the 481,888,000 barrels of oil that we had in storage on July 28th of 2017, and 11.3% below the 491,914,000 barrels of oil we had stored on July 29th of 2016...
since it's probably been a half year that we've been explaining that this year's crude inventories are above last years but below the two years before that, it might be useful if we included a picture of that...so below we have a graph that shows total US crude oil inventories weekly since the beginning of 2016, oddly labeled as a fraction of a billion barrels....the graph below comes from the Zero Hedge summary of this week's Petroleum Status Report, but ignore the sidebar "M", as it should indicate billions; everything else on the graph is accurate...as the red arrow that Zero Hedge includes indicates, our crude oil inventories are now at their lowest since November 2nd, 2018...
This Week's Rig Count
the US rig count fell for the 21st time in 24 weeks during the week ending August 2nd, and is now down by more than 13% year to date....Baker Hughes reported that the total count of rotary rigs running in the US fell by 4 rigs to a new 18 month low of 944 rigs this past week, down by 102 rigs from the 1044 rigs that were in use as of the August 3rd report of 2018, and quite a bit below the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC announced their attempt to flood the global oil market...
the count of rigs drilling for oil fell by 6 rigs to 770 rigs this week, which was also a 18 month low for oil rigs, 89 fewer than were running a year ago, and less than half of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014...at the same time, the number of drilling rigs targeting natural gas bearing formations increased by 2 rigs to 171 natural gas rigs, which was still down by 12 rigs from the 183 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 this week, which was one less than the 2 "miscellaneous" rigs drilling a year ago...
the rig count in the Gulf of Mexico was down by 1 to 22 rigs this week, as the only rig which had been drilling offshore from Texas was shut down...that still left 22 rigs drilling offshore from Louisiana, an increase of 6 Gulf of Mexico rigs from the 16 rigs that were deployed in the Gulf in the same week a year ago, when 14 rigs were drilling in Louisiana waters and two were deployed offshore from Texas...in addition, there continues to be two rigs deployed off the coast of Alaska this week, up from the one rig drilling off the Alaskan shore a year ago...combining those, the total US offshore rig count is thus at 24, 7 more offshore rigs than were deployed a year ago..
the count of active horizontal drilling rigs was down by 4 to 819 horizontal rigs this week, which was the least horizontal rigs deployed since February 2nd, 2018 and hence also a new 18 month low for horizontal drilling...it was also 93 fewer horizontal rigs than the 912 horizontal rigs that were in use in the US on August 3rd 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 unchanged at 67 directional rigs this week, but those were more than the 64 directional rigs that were operating during the same week of last year... in addition, vertical rig count was also unchanged at 56 vertical rigs this week, but that was down by 12 from the 68 vertical rigs that were in use on August 3rd 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 August 2nd, the second column shows the change in the number of working rigs between last week's count (July 26th) and this week's (August 2nd) count, the third column shows last week's July 26th 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 3rd of August, 2018...
as you can see, this week's drilling pullback was concentrated in Oklahoma, which was down 5 rigs, but it's not immediately obvious where those 5 rigs came from; obviously, the rig that was shut down in the Cana Woodford had been drilling in Oklahoma, and it also appears that as many as 3 rigs could have been pulled out of the Granite Wash in Oklahoma, since Texas Oil District 10 in the panhandle region where the Granite Wash is located actually added a rig...but we still have to figure that at least 1 of the Oklahoma rig cutbacks came out of an area not included in the major Oklahoma basins listed by Baker Hughes...elsewhere in Texas, we have 2 rigs pulled out of Texas Oil District 8, or the core Permian Delaware, and a single rig pulled out of Texas Oil District 7C, or the southern Permian Midland basin, while Texas Oil District 8A, or the northern part of the Permian Midland, saw 4 additional rigs start up...hence, that means that the 2 rigs that were shut down in New Mexico had been drilling in the western Permian Delaware...the natural gas rig that was started up in the Haynesville also appears to have been added in Texas, since the rig count in northern Louisiana was unchanged while Texas Oil District 6, which includes the western reaches of the Haynesville, also saw a rig added this week...meanwhile, the other natural gas rig that was added this week was in a basin not tracked separately by Baker Hughes, as none of the other basins shown above had a change in their natural gas rig count this week..
+++++++++++++++++++++++++++++
New nuke- and coal-friendly Ohio law said to disadvantage gas generation | S&P Global Platts— Opponents of a new law designed to prop up Ohio's imperiled nuclear and coal-fired power plants say it likely will slow construction of new natural gas-fired generation in the state. Register Now Representatives of Ohio's gas industry may be joining other groups opposed to the law, signed last week by Governor Mike DeWine, to launch a statewide referendum effort to reverse it. A newly formed group, Ohioans Against Corporate Bailouts, will try to launch a statewide petition to get the new law overturned, Gene Pierce, a spokesman for OACB, said in an interview Monday. Pierce said he could not release the names of members of the group, but said it included energy companies, as well as numerous other organizations and individuals opposed to the new law. "Many, many people testified against the bill," Pierce said. "It props up inefficient and expensive nuclear plants and undercuts Ohio's renewable energy industry." The law would slow the growth of gas-fired power generation in the state, to the detriment of ratepayers, he said. "Nuke plants are much more inefficient and expensive than natural gas," Pierce said. The law financially supports two nuclear power plants owned by FirstEnergy Solutions -- the 908-MW Davis-Besse and 1,268-MW Perry plants -- as well as and two Ohio Valley Electric Corp. coal plants -- the 1,300-MW Clifty Creek Generating Station on the Ohio River in Jefferson County, Indiana, and the 1,086-MW Kyger Creek Generating Station in Gallia County, Ohio. The law also scales back the state's existing alternative energy portfolio standard. Todd Snitchler, president and CEO of the Electric Power Supply Association, which advocates for renewable energy resources, said he expects many member companies to join the legislative recall effort. "EPSA is not participating directly but our members are evaluating participation and evaluating what the next steps are going to be," Snitchler said Friday. The American Petroleum Institute, which had opposed the passage of HB 6, has not committed to joining the effort to overturn the new law. However, in a statement following the bill's passage, API Ohio Executive Director Chris Zeigler said the organization was "disappointed in the legislature for passing this corporate bailout for nuclear and coal-burning power plants." He said the law would disadvantage "other electricity generation sources, particularly affordable natural gas."
Has fracking helped, or harmed eastern Ohio? - Six years ago, oil and gas company Antero Resources showed up in Belmont County, promising money to a struggling community in exchange for rights to drill on residents’ land. Oil and gas companies promised thousands, and in some cases millions, in an area where an estimated 14 percent of county residents live below the federal poverty level.Many in the community signed on.In Barnesville, a village of about 4,000 people, 80 percent of landowners signed leases to allow Antero to drill for natural gas on or under their land. Schools have received an influx of money, and about 150 oil and gas jobs have been created in the county. But now a growing number of residents in eastern Ohio are wondering whether they are paying too high a price for the fracking bonanza.People “just heard money and they were lined up, you know, clear around the (Barnesville) high school. Hundreds and hundreds of people (were) waiting to get in to sign up. That was very alarming to me just to see how blindly everyone embraced the industry,” said Jill Hunkler, a 44-year-old Barnesville resident who says she has suffered health problems because of the drilling.Amid the drilling boom, environmentalists and health experts have descended upon Belmont and neighboring Appalachian counties in an effort to measure the impact of hydraulic fracturing, known as fracking, on water quality, air emissions and even emotional health. “The evidence is strengthening and growing,” said Nicole Deziel, an assistant professor at the Yale School of Public Health, who has traveled to the region for three years to study air and water quality. More than 4 million Americans live within a mile of unconventional oil and gas wells, which could subject them to toxic releases, according to a study released last year by Deziel and a team of Yale researchers. More than 9 million Americans have drinking water sources within a mile of oil and gas wells.In a study released last year by Yale researchers, 66 Belmont County residents were interviewed about health effects since the oil and gas boom. Many reported respiratory symptoms, general stress and fatigue and headaches, with 92% of people reporting at least one symptom.
Owner of Ohio-Based Oil, Gas Trucking Company Sued Over Health Benefits - The owner of an Ohio-based oil and gas trucking company is being sued by former employees who say he canceled their health insurance without telling them but for months continued to deduct money that ostensibly was going toward the premiums. The 16 plaintiffs named in a complaint filed Monday in Washington County Court of Common Pleas in Pennsylvania were working for Mustang Oilfield Services LLC as of Aug. 1, when the company ended the health, vision and dental coverage it had been offering. The nonunion employees allegedly continued forfeiting money for their share of the insurance premiums. Their attorney, John Egers, said he doesn’t know where that money went instead. “They were taking these deductions, and weren’t applying them to insurance,” said Egers, who’s with the Julian Law Firm in Washington. “We’re going to find out where this money went.” Egers said in an interview the deductions from his clients’ weekly paychecks ranged from $47 to $145. They’re trying to recover that money and other losses they suffered as a result of the insurance cancellation. For example, Egers said many of his clients who received medical bills wouldn’t have had to pay on their own if their coverage had been left in place. Those who couldn’t pay the unexpected bills found themselves on the hook for late fees, too. The complaint also says eight of the former workers are still owed wages despite leaving the company at least two months ago.
Report: State to order cleanup of some injection-well storage pits - Athens NEWS - The Ohio Department of Natural Resources has ordered operators of non-operating injection well storage pits to take steps toward draining them of residual fracking wastes and shutting them down. One of them is the Ginsberg Well, an open-air cement storage pit located on Ladd Ridge Road in Athens County’s Alexander Township (see accompanying photo). Roxanne Groff, a member of the Athens County Future Action Network (ACFAN, also known as the Athens County Fracking Action Network), said in a news release announcing the state's move that a declaration of “final victory” won’t happen “until these pits and wells are closed.”However, she added, “Drilling holes and injecting toxic radioactive waste in our ground must stop. We hope that this long overdue ODNR mandate will result in operators shutting down their dangerous waste dumps.” The oil and gas industry uses injection wells to deposit waste materials from the hydraulic fracturing method of oil and gas drilling deep underground. While the industry says the process is safe if properly handled and regulated, critics say the waste materials are hazardous, with some of them radioactive, and can threaten the health and well-being of nearby residents. The news release recounted a recent meeting that Groff and Teresa Mills, director of the Buckeye Environmental Network, attended with ODNR Deputy Director Brittney Colvin and four representatives of the agency’s Division of Oil and Gas Resources Management. At that meeting, the release said, Groff and Mills “learned that ODNR has issued a mandate to operators of Ohio injection-well open cement pit ‘temporary storage’ facilities to clean up their pits for inspection by ODNR.” The release noted that environmental activists, including ACFAN, have been exerting pressure on the ODNR for seven years to shut down and plug the no-longer-in-use Ginsberg injection well. The open cement storage pit is within 50 feet of Ladd Ridge Road, and has no fenced barrier other than a chain to keep vehicles out.
Prospects poor for mega petrochemical project east of Athens County - In late 2013, The Athens NEWS published several stories about plans for a major petrochemical plant near Parkersburg, West Virginia, 32 miles east of Athens. The project, an ethane cracker plant complex, raised substantial economic hopes and environmental fears. Project ASCENT now appears on life support, with the company behind the plant, petrochemical producer Braskem, reportedly no longer interested in pursuing the project and instead marketing its 360-acre site along the Ohio River for sale. That’s a far cry from the reception the project received in late 2013 when West Virginia government and economic development leaders framed it as an economic game-changer of almost unprecedented scale. In a story in the Charleston Daily Mail on Nov. 14, 2013, then West Virginia Commerce Secretary Keith Burdette declared that the ethane cracker project “represents the largest single industrial project in the history of the state of West Virginia.”People concerned about the environmental issues arising from a major ethane cracker facility along the Ohio River raised significant concerns about the proposed complex’s potential to increase water and air pollution in the Ohio River corridor. Athens area anti-fracking advocates also voiced concerns that having the cracker plant so close might finally spur the deep-shale fracking/oil and gas development – and its associated environmental hazards – that had yet to come to Athens County (and still hasn’t made an appearance six years later). According to an article in the Parkersburg News & Sentinel on July 25, West Virginia Development Office Executive Director Mike Graney indicated in a legislative committee meeting two days before that Braskem no longer plans to build the cracker plant and related facilities and is now marketing the property.“It’s my understanding that Braskem is not prepared to move forward on the cracker plant,” Delegate John Kelly, R-Wood said Wednesday (according to the News & Sentinel). “They’re just not going to be able to do it.”
West Virginia Bets Big on Plastics, and on Backing of Trump Administration - West Virginia’s industrial might has faded, but as 2020 approaches, the state has two resources that could be crucial to President Donald Trump as he seeks reelection and tries to make good on his pledge of “American energy dominance” — Republican votes and abundant natural gas. It was a stretch of rural counties along the Ohio River in West Virginia, Ohio and Pennsylvania that form the largest natural gas field in the world and helped Trump win the states in 2016.West Virginia’s elected leaders see the vast reserves as a path to renewed political and economic relevance for the Mountain State, which they envision rivaling the Gulf Coast as a center for processing natural gas and producing plastics.And to make that a reality, the state’s top officials have lined up behind a plan to spend as much as $10 billion to build a mammoth underground storage facility — big enough to hold the U.S. Capitol complex, or 10 million barrels of the liquid byproducts used in plastics manufacturing. By providing a sizable and stable storehouse for ethane and other so-called gas liquids, the facility would, its proponents say, encourage the expansion of a chemical production corridor that is emerging along the upper Ohio River and would help bring thousands of jobs to a region that has seen its industrial moorings slip away over the past two generations. The prospect of an energy jobs bonanza in a politically vital state stirred the interest of the White House. A senior Energy Department manager has been assigned to work on the project, known as the Appalachian Storage and Trading Hub. In April, the president issued an executive order on energy that encouraged “opportunities, through the federal government or otherwise, to promote economic growth of the Appalachian region, including growth of petrochemical and other industries.” And the president’s newest budget proposal includes funds to study the region’s gas-related industrial potential. But a ProPublica examination has found that the proposed storage facility would be far larger than the region could support and that questions about its cost, its viability and its environmental risks have been overshadowed by a public relations strategy heavy on the politics of jobs and light on the economics of energy policy.
Tug Hill Unlocks the Deep Utica in West Virginia - The management team behind Tug Hill, which helped pioneer the Marcellus shale more than a decade ago, now says it has cracked the code to economic development of the dry gas Utica in West Virginia. The Fort Worth company’s upstream business, THQ Appalachia I LLC, has been quietly building a highly contiguous acreage position in the state’s Panhandle region and deploying innovative technologies for co-development of the Marcellus and Utica, with backing from private equity firm Quantum Energy Partners. These advancements have made THQA the first operator east of the Ohio River to move beyond appraisal into full pad development of the Utica, with “the lowest-breakeven dry gas in the entire Appalachian Basin,” COO Evan Radler told Drillinginfo. At the same time, Tug Hill’s midstream business, XcL Midstream, has been working with Quantum over the last two years to build a greenfield system to link southwest Appalachian gas production to every major long-haul pipeline in the region. It has now brought online its Appalachia Connector system, which will connect with East Coast, Midwest, Midcontinent, Gulf Coast, and West Coast markets. Radler said in an interview that the pipeline offers significant market price optionality and premium netbacks for dry gas production by providing access to nearly every major price point in the region. Multiple companies, including Gulfport Energy, Ascent Resources and Rice Energy (before its acquisition by EQT Corp.), have established producing operations on the Ohio side of the Utica. But the shale deepens as it moves eastward into West Virginia and southwest Pennsylvania, driving typical well costs much higher. Some West Virginia operators have been able to achieve well costs of $15-18 million, but most have reported costs exceeding $20 million, according to Tug Hill. Thus, spectacular wells like Range Resources’ 59 MMcf/d Claysville Sportsman’s Club-1 in 2014 and EQT’s 73 MMcf/d Scotts Run 591340 in 2015 have remained isolated occurrences rather than launching full-scale development programs. In contrast, THQA’s use of high-spec walking rigs to drill large multi-well pads and proprietary drilling practices have helped the company achieve well costs of $10.5 million or better, engineering and development SVP Sean Willis told Drillinginfo.
PGC approves energy agreements - The Pennsylvania Board of Game Commissioners approved two five-year and one 10-year non-surface agreements to develop natural gas and oil beneath three state game lands on Tuesday, July 23. Southwestern Energy, with a local office in Lemon Township, would develop natural gas reserves beneath 4,224 acres of State Game Lands 35 in Great Bend and Oakland townships, Susquehanna County. The agreement would result in a two-year option to develop an additional 1,691 acres and a bonus payment of about $6,336,000, as well as future rental and royalty payments. Snyder Brothers Inc., of Kittanning, would develop oil and natural gas reserves under a 10-year agreement beneath 452.3 acres on State Game Lands 247 in North Buffalo Township, Armstrong County. The agreement would result in a bonus payment of about $904,000, as well as future rental and royalty payments. Snyder Brothers Inc. also would develop natural gas reserves beneath 95.81 acres of State Game Lands 287 in Boggs Township, Armstrong County. The agreement would result in a bonus payment of $383,240 for each well bore, as well as future royalty payments. All bonus, rental and royalty payments will be added to the agency’s Game Fund.
Pennsylvania Court Invalidates Natural Gas Site Restoration Rule. What Happens Now? - On July 22, 2019, Pennsylvania’s Commonwealth Court invalidated a natural gas well site restoration requirement set by the Department of Environmental Protection in 2016, ruling it is unenforceable. In 2016, the Pennsylvania Department of Environmental Protection (PADEP), through the Environmental Quality Board, updated its regulations related to unconventional natural gas wells (i.e., wells drilled into a shale formation below the base of the Elk Sandstone or its geologic equivalent stratigraphic interval). The Marcellus Shale Coalition filed suit challenging a number of the new requirements in October 2016, and in the almost three years that have followed, Pennsylvania courts have generally upheld the regulations with some exceptions. On July 22, 2019, the Pennsylvania Commonwealth Court issued a 91-page opinion addressing cross motions for summary relief filed by the parties. The opinion, available here, generally addressed whether the 2016 rules fell within the scope of authority granted to PADEP under state law, and whether the regulations were consistent with state law. The Commonwealth Court ruled invalid and unenforceable PADEP’s regulation that requires operators to restore sites “to approximate original conditions” within nine months of drilling. See 25 Pa. Code § 78a.65(a)(1) and (b)(1). The court ruled that this provision conflicts with the post-drilling site restoration requirements set forth in Pennsylvania’s Oil and Gas Act (frequently referred to as Act 13). The court reasoned that the General Assembly chose to require prompt post-drilling site restoration (within nine months), while also allowing PADEP to extend the time for post-drilling site restoration, “but only if the well operator agreed to meet a heightened site restoration standard—i.e., [approximate original conditions].” While the court invalidated this requirement, its immediate impact may be limited because the ruling focused only on restoration that occurs within nine months of drilling. Operators routinely seek an extension of the nine-month restoration period. Further, the ruling does not impact PADEP’s stormwater control regulations. This means that operators that restore well sites within nine months of drilling have the flexibility to restore portions of the site not needed for production in any way that ensures compliance with stormwater regulations, even if the restoration results in contours that vary from pre-construction conditions. The ruling could form the basis for future challenges to the post-production restoration requirement.
Delaware County pipeline foe thought he’d get PUC information on Mariner East risk. But now he’ll have to fight for it in court - An opponent of the Mariner East project says he will ask an appeals court to order the Public Utility Commission to disclose documents containing its calculations on the effects of an accidental release of natural gas liquids from the pipelines. The PUC last week appealed to Commonwealth Court a decision by the state’s Office of Open Records that said Eric Friedman of Delaware County should get some documents he requested under Pennsylvania’s Right to Know Law. Friedman said he plans to contest the commission’s appeal in court. In a request filed in February, Friedman asked PUC to produce records related to a “blast radius” or “buffer zone” regarding accidents or releases from highly volatile liquids pipelines such as Sunoco’s Mariner East lines. The PUC refused to release the records, saying in part that they contain confidential security information, whose disclosure could jeopardize public safety. Friedman appealed that decision to the open records office, which in late June partially sided with him, saying the PUC had failed to prove that some of the records contain confidential security information, and so they were not exempt from a disclosure requirement in the open records law. The OOR said PUC and Sunoco had failed to produce evidence to support their conclusion that the records were confidential security information. Although the commission produced statements from Paul Metro, the PUC’s head of pipeline safety, asserting the confidentiality of the records, the statements were “conclusory,” which means they are not sufficient to justify exemption from disclosure, the OOR said.
Limited Impacts Seen From MVP Southgate Gas Pipeline Project -- Regulators see minimal environmental impacts from a conduit that is planned to connect to the Mountain Valley Pipeline and deliver natural gas to North Carolina. The Federal Energy Regulatory Commission released its draft impact assessment for the MVP Southgate project July 26 for public comment. In its review, the commission said that the project would result in some adverse environmental impacts, but they would be reduced to “less-than-significant levels” with certain recommended adjustments. MVP Southgate would run about 74 miles from southern Virginia to central North Carolina. The conduit would deliver some 375 million cubic feet per day..
Pipeline vital for current and future customers of Roanoke Gas, company says - Natural gas from a pipeline being built through Southwest Virginia is needed to reliably serve the customers of Roanoke Gas Co. and to meet future demand, the company says. Without drawing from the Mountain Valley Pipeline, company President Paul Nester said in pre-filed testimony with the State Corporation Commission, the utility is concerned that it could not provide gas to all of its customers on the coldest days of the year. The company’s defense of its involvement with the controversial pipeline — made as it proposes a rate increase to the SCC — is also based on providing an energy infrastructure that will help draw new industries to the region. “Southwest Virginia has more than enough constraints on economic growth without its premier MSA [metropolitan statistical area] flat-lined due to a lack of reliable and affordable energy supply,” John Williamson, chairman of the company’s board, wrote in a January letter to Gov. Ralph Northam that was included in nearly 200 pages of documents filed Tuesday with the SCC. “MVP is critical to that adequate energy supply.” The arguments come one month after a staff analysis by the regulatory agency questioned whether the growth of Roanoke Gas’ customer base is strong enough to support an investment by its sister company in the 303-mile pipeline. Roanoke Gas is a subsidiary of RGC Resources. Another subsidiary of the company, RGC Midstream, is a 1% partner in Mountain Valley, a $5 billion project that its partners say will provide a needed supply of gas to the Mid-Atlantic and Southeastern regions of the country.
Federal Court Tosses Atlantic Coast Pipeline's Key Endangered Species Permits -A federal court has thrown out two key permits for the 600-mile Atlantic Coast Pipeline. U.S. 4th Circuit Court Chief Judge Robert Gregory said in an opinion issued Friday that the U.S. Fish and Wildlife Service didn't adhere to its mandate to protect endangered species when it fast-tracked re-issuing two permits to the natural gas project proposed to go through West Virginia, Virginia and North Carolina. "In fast-tracking its decisions, the agency appears to have lost sight of its mandate under the ESA: 'to protect and conserve endangered and threatened species and their habitats,' " Gregory wrote. In 2018, the 4th Circuit suspended the pipeline’s Incidental Take Statement after it was challenged by environmental groups. That permit defines how much harm may come to endangered species during a project. Following that ruling, and once the formal consultation process began, the agency reissued the permits in 19 days. This is not the first time the court has reprimanded federal agencies for their work issuing permits for the Atlantic Coast Pipeline. Last December, the 4th Circuit ruled the U.S. Forest Service improperly granted permits for the pipeline to cross national forest lands. The judge in that case quoted Dr. Suess’ “The Lorax.” The court Friday sided with environmental groups who argued the hastily reissued permits could harm species like the rusty patched bumble bee and Indiana bat. In a statement, Patrick Hunter, an attorney with the Southern Environmental Law Center, one of the environmental groups that challenged the permits, praised the ruling. “In its rush to help this pipeline company, the agency failed to protect species on the brink of extinction – its most important duty," he said. "This pipeline would blast through some of the last populations of these rare animals. For the sake of these rare species and its customers’ wallets, it’s time for these utilities to walk away from this badly planned boondoggle.” After a number of regulatory setbacks, construction of the Atlantic Coast Pipeline has been stalled since December 2018.
W.Va. AG Morrisey, 15 other states file brief requesting U.S. Supreme Court to hear, overturn pipeline delay— West Virginia Attorney General Patrick Morrisey and 15 other state leaders are asking the U.S. Supreme Court to overturn a ruling that stopped construction of the Atlantic Coast Pipeline.The 4th Circuit Court of Appeals ruled in February the pipeline cannot continue on its current path, which would result in crossing the Appalachian Trail in Virginia.The pipeline, if completed, would carry natural gas from West Virginia to North Carolina.“The court’s decision was completely wrong,” Morrisey said. “This decision, if it holds, will stand in the way of economic diversification, education and public safety. Continued delays negatively impact the livelihoods of our working-class families and the services they receive.” Other states involved in the brief are Alabama, Alaska, Georgia, Idaho, Kansas, Louisiana, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Texas, Utah and Wyoming.
PSC Issues 400+ Citations for Gas Pipeline Damages Over Year — A year after taking over enforcement of the state’s call-before-you-dig statute as it relates to natural gas or hazardous liquid lines, the Kentucky Public Service Commission has issued more than 400 citations for violations of the law.The PSC assumed responsibility for enforcing the law on July 14, 2018. Since then, the PSC has received nearly 1,000 reports of excavation-caused damage to natural gas lines in Kentucky. “This level of excavation damage to natural gas lines is unacceptable and poses a significant threat to public safety,” PSC Chairman Michael Schmitt said. “The PSC hopes that consistent enforcement, combined with a comprehensive effort at educating stakeholders and the public, will start reducing the number of dig-in incidents in Kentucky.”Last year’s changes to the underground facility protection statute require operators of natural gas lines to file reports with the PSC on all incidents of excavation damage. The PSC then evaluates the reports, conducts any needed additional investigation, and assesses financial penalties if violations are uncovered. Of the 966 gas line damage reports filed with the PSC through June 29, 557 have been reviewed and closed, with 146 requiring no further action and penalties imposed in 411 cases. The other incidents remain under review. About 44 percent of the violations thus far involve contractors who either failed to call 811 to have gas lines located or didn’t follow the statutory requirements for excavation near gas lines; 42 percent involve natural gas operators who did not locate lines accurately or properly; 8 percent involve people doing excavation on their own property and either not calling 811 or not following proper excavation practices; the remaining 6 percent involve a variety of entities.
Enbridge Pipeline Explodes in Kentucky - Enbridge Inc. reported Thursday morning that it was responding to a rupture and explosion on its Texas Eastern gas pipeline system near Danville in Lincoln County, Ky.The blast occurred at approximately 1 a.m. local time Thursday in the community of Moreland, according to a Lexington CBS-TV affiliate. Citing Lincoln County officials, the media outlet reported at 12:45 p.m. that the explosion claimed one victim and injured five individuals. In addition, it stated that a number of houses had been damaged or destroyed and 75 or more people had been evacuated.“Our teams are coordinating with first responders to secure the site,” Enbridge said in a written statement. “We have isolated the affected line and are working closely with emergency responders to manage the situation. We will provide more information as it becomes available.”A public affairs officer with the Kentucky State Police has posted photographs of the explosion site on Twitter.A National Transportation Safety Board spokesperson confirmed to Rigzone that the agency was evaluating the situation and had not yet determined whether it would send investigators to the site. Enbridge’s Texas Eastern gas pipeline system extends from the Gulf Coast to the Northeast and can transport up to approximately 11.7 billion cubic feet (Bcf) of gas per day, according to a description on the company’s website.
At least 1 killed in possible gas explosion in Kentucky, authorities say – At least one person was killed in a massive explosion in Kentucky's Lincoln County on Thursday in the early morning hours, authorities said. A 30-inch gas pipeline exploded in the area around 1:30 a.m. local time, causing a tremendous amount of damage, according to officials with Lincoln County Emergency Management. One person died at the scene and at least five others were transported to a local hospital with non-life-threatening injuries. Multiple people are unaccounted for, officials said.At least six structures caught fire and were destroyed in the blast. About 75 residents were evacuated from the area while firefighters worked to douse the flames, officials said. The explosion occurred in Lincoln County's Moreland community, between Junction City and Hustonvile, according to the Perryville Kentucky Fire Department, which urged the public to steer clear of the scene and to not travel nearby. Witnesses photographed the aftermath of the explosion, which sent a fireball high into the dark sky. Images and video showed bright orange flames and thick clouds of smoke on the horizon. "It was just a big roar and fire going all the way up the sky as far as you can see," a resident told local news station WKYT. "Our windows were shaking really bad, you can hear the ground just moving and tumbling and rolling. Then we got to feeling the heat from the fire, so we got in our vehicle and took out."
One dead in Kentucky, at least five injured after gas line explosion shoots fireball into sky - One person is dead and at least five were injured in central Kentucky after a gas line ruptured and produced a fireball that could be seen around the region early Thursday.The 30-inch gas line in Lincoln County breached around 150 feet from a mobile home park around 1:40 a.m., Don Gilliam, director of Lincoln County Emergency Management, said early Thursday. One person was killed, at least three were transported to hospitals with injuries, and at least six mobile homes caught fire, Gilliam said. "We still have an active scene," Gilliam said, but added that the fire at the breach site was out.He said when he arrived, flames were around 300 feet in the air. The emergency management agency told residents to steer clear from the Hustonville area. Emergency officials said the cause of the explosion is under investigation, NBC affiliate WLEX of Lexington reported. The blast caused six structures to catch fire, officials said. It also damaged train tracks that run through the area, officials said, and Norfolk Southern had dozens of railcars backed up awaiting a workaround or fix.Video posted to social media showed what appeared to be a large fireball and flames. Witnesses told WLEX that they heard a loud sound and saw a ball of fire."It felt like an atomic bomb went off," Jerry Sinkhorn told the station."And I knew what it was — it was a gas line," he said. Sue Routin told WLEX that she was woken up by “a big roar and fire going all the way up in the sky as far as you could see.”
An Unusual Development In Natural Gas Markets - Despite the growing importance of environmentalism and the public scrutiny concerning the fossil fuel industry, natural gas has maintained its importance in the global energy mix. Rising power demand and installation of renewables such as wind and solar have strengthened the need for on-demand energy production, for which gas is the only alternative currently. Resource-rich countries are reaping the rewards of an expanding industry with ever-larger volumes being exported. The largest importers of natural gas remain Europe and East Asia due to their large markets and few domestic options. This year, however, the fundamentals of the market have been upset due to unusual developments. Historically the spread between Asian and European gas hubs has been in favour of the former, which has been able to attract more cargoes due to higher prices. A combination of factors is making the task of traders harder as the apparent destination with the highest rewards is becoming less straightforward. Historically, natural gas prices in Asia tended to be higher due to low regional production, a large domestic market, and political decision-making that has favoured LNG over competing sources. The nuclear disaster at Fukushima in Japan led to the shutdown of the country’s nuclear facilities, which increased demand for super-cooled natural gas, making the Asian country the largest importer of LNG. In neighbouring China, the coal-to-gas policy has had a similar effect. Ever larger volumes of LNG are imported to clean the skies over its cities. Another reason for producers preferring the Asian markets over Europe is the inter-basin freight differential between the route East of Suez and West of Suez. The costs of shipping LNG to Europe and returning the vessels are higher than for the eastern way to Asia. Finally, Europe enjoys more alternatives regarding the import of natural gas. Competition between piped and shipped natural gas has a depressing effect on LNG prices as consumers can switch to fixed infrastructure energy resources from Russia, Algeria, and Norway.
Natural Gas Glut Is Crushing US Drillers - The outlook for natural gas producers is not great. They are getting clobbered by low prices today, amid a glut. But the medium- and long-term looks even worse, with renewable energy increasingly taking market share. The gas industry has drilled itself into this predicament. Gas production continues to ratchet higher, rapidly replenishing inventories, which had plunged to a 15-year low heading into this past winter season. Inventories are still below the five-year average, but have climbed quickly in recent months. If the natural gas industry had hoped that a stunning heat wave sweeping over a large swathe of the East Coast would rescue prices, they are surely now disappointed. Natural gas prices continue to fall, despite the heat, and there is little prospect of a rebound. On Friday, spot natural gas prices fell by another 3 percent, dipping below $2.20/MMBtu.Record production from the Marcellus is one of the main reasons. But oil drillers are also to blame. The frenzied pace of drilling in the Permian – which, to be sure, has been slowing as of late – has produced a wave of natural gas so large that the industry is flaring enormous volumes of gas because of the lack of pipelines. Texas regulators seem unwilling to regulate the rate of flaring over fear of hurting the industry, so the flaring continues.Still, record levels of associated gas production from the Permian are dragging down prices. New midstream capacity later this year from the Gulf Coast Express pipeline will bring more gas to market, adding to supply woes. More pipelines are in the offing for 2020 and 2021.Even the increasing volumes of gas exported overseas is not enough to tighten up the market. “We expect the current oversupply to persist as production growth, mainly associated gas from oil basins, matches LNG export growth over the next year,” Bank of America Merrill Lynch wrote in a note. While some of this is not new news, the surprising thing is that the outlook does not seem to improve the further out one looks. There is little reason to expect things to turn around. Gas production is still rising and inventories will be well-stocked next winter. “[T]oo much gas past peak winter keeps pressure on next summer and allows us to maintain our $2.6/MMbtu price projection for the 2020 strip,” Bank of America said.
Natural Gas: are new lows on the horizon? -We are currently in the heart of the off-season for natural gas demand. The shift from coal-fired power generation to natural gas is increasing the demand for the energy commodity during the hot summer months. At the same time, LNG is now flowing from US ports to consumers around the world via ocean vessels. However, the massive reserves of natural gas in the Marcellus and Utica shale regions of the US and technological advances in hydraulic fracking have combined to push output to record levels. Over the recent weeks, Hurricane Barry approached the Louisiana Coast, home to the Henry Hub, the delivery point for NYMEX natural gas futures. The storm did not drive the price of the energy commodity above the critical level of technical resistance at just above the $2.50 per MMBtu level. In the aftermath of the storm, the price dropped. More recently, warmer than average temperatures descended on vast areas of the US, but the increased demand for cooling did not provide any support for the price of natural gas. The last triple-digit injection into storage in the natural gas market across the US came on the week ending on June 14. The injections have been declining steadily over the weeks that followed. On July 26, the Energy Information Administration reported that stockpiles rose by only 36 billion cubic feet for the week ending on July 19. The latest injection was the lowest since April 5.While the falling rate of injections should have supported the price of natural gas, the futures market declined late last week. As the daily chart shows, August futures fell to a low at $2.165 and closed last Friday at $2.169 per MMBtu. The price closed just 3.5 cents above the June 20 low at $2.134. Hurricane Barry could not even push the price to a level that would have triggered buy stops in the natural gas futures. Rising temperatures and falling stocks did nothing to inject any support into the futures market. When the price of a commodity falls in the face of bullish fundamental events, it tends to be a bearish sign.
Natural Gas Prices Hit New Multi-Year Lows -- Today was the final day of existence for the August natural gas contract, with September taking over as prompt month starting tomorrow. The story today, however, was the setting of new multi-year lows. The August contract rolled off the board down 2.8 cents on the day, settling just over the $2.14 level. Part of the reason for the decline was the continued trend toward cooler medium range weather forecasts over the weekend, a risk that clients were alerted to in Friday afternoon's "Pre-Close" Update. The area of below normal temperatures forecast in the 11-15 day period was more expansive this morning thanks to a large upper level trough projected to move through the eastern half of the nation. This translates into a period of weaker demand for natural gas, as measured by our "Gas-Weighted Degree Days" (GWDDs). The astute reader may notice that demand appears to be rebounding back higher at the end of the forecast period, indicating the chance that this cooler period, much like last week's, will be rather brief with temperatures rebounding quickly in its wake. But with normal temperatures starting to decline from their summer peak, would it be enough to help support natural gas prices even if that is the case? Also complicating matters is the reality that weather is just part of the equation when it comes to price impact.
Hotter Weather Forecasts And Strong Burns Send Natural Gas Prices Much Higher - Weather and fundamentals are tag-teaming to send natural gas prices significantly higher so far today, with the September contract up 9 cents on the day as of this writing. The signs of a rally have been growing since the week started. We began to alert clients back on Monday of the risk for at least a temporary low to be put in, with data unlikely to get any worse, though the background was not yet "bullish" By yesterday afternoon it became clearer that cooler momentum had stopped on the weather side, and stronger burns had improved the fundamentals side, pushing our sentiment to the bullish side. Sure enough, we wound up getting the test of the 2.18 level and then some in the September contract. Weather forecasts moved hotter in the last 24 hours, with both the GEFS and ECMWF models moving more toward an above normal GWDD (demand) regime. The stronger cooling advertised a few days ago has fizzled out. This shows up nicely when looking at the GEFS model for today's 6-10 day forecast compared to what it showed five days ago for the same period. New: Old: While there is still a weak trough passing through the eastern U.S, it is much weaker than the model showed a few days ago, and is followed by hotter conditions across the southern U.S. in the 11-15 day, as illustrated in our forecast. Of course, weather is not the only factor in today's rally. Yesterday's gas burns were the strongest of the summer in absolute terms per our data, despite less heat than what we saw a couple of weeks ago. From a technical perspective, prompt month prices have moved above the 2.18 resistance level, which can now be support, with the next resistance level in the 2.24-2.25 zone.
NYMEX September natural gas settles 3.1 cents lower on bearish storage report — The NYMEX September natural gas futures contract fell Thursday after the US Energy Information Administration announced a larger-than-expected build in storage inventories. The front-month contract settled 3.1 cents lower at $2.202/MMBtu after trading in a $2.187/MMBtu to $2.333/MMBtu range. In addition, the December and January contracts fell 3.2 cents and 2.4 cents to $2.488/MMBtu and $2.617/MMBtu, respectively. The EIA reported an estimated 65 Bcf injection into storage facilities in the week that ended July 26. The consensus expectations of analysts surveyed by S&P Global Platts were for a 53 Bcf build. The five-year average build was 36.6 Bcf. The cumulative amount of gas in storage at the end of the most recent reporting period was estimated at 2.63 Tcf, a 14.5% surplus to the year-ago level, but a 4.5% deficit to the five-year average of 2.76 Tcf, EIA data show. Looking forward, analyst John Woods of JJ Woods Associates said: "The market is poised to make a bull run. I'm expecting gas to rise on a weekend change as summer isn't over yet." The National Weather Service's most recent eight- to 14-day forecast calls for warmer-than-average temperatures for much of the South, balancing the cooler-than-average temperatures expected in much of the Northeast and Midwest. US demand is expected to total 75.3 Bcf Thursday and to average 73.1 Bcf/d over the next week, before rising to an average of 75.2 Bcd/d in the period eight to 14 days hence, according to S&P Global Platts Analytics. Dry production is expected to rise from Thursday's expected 88.3 Bcf to an average of 88.8 Bcf/d in the period eight to 14 days out, which could put pressure on prices, Platts Analytics data show.
Shale oil and gas: Destroying capital one well at a time – Recently, the former CEO of the largest shale gas producer in the United States told a roomful of conference goers what any competent financial analysis would have revealed many years ago: the shale oil and gas industry as a whole has been destroying capital since its inception.“The fact is that every time they put the drill bit to the ground, they erode the value of the billions of dollars of previous investments they have made,” said Steve Schlotterbeck, former head of natural gas behemoth EQT, at a petrochemical industry conference. “It’s frankly no wonder that their equity valuations continue to fall dramatically.”But, the real news here is not that the shale oil and gas industry has from its beginning been destroying capital one well at a time. It’s that a major industry insider freed from the constraints of his former job has admitted it.Schlotterbeck calculates that the industry as a whole has destroyed 80 percent of its value since 2008. It turns out that the so-called shale revolution is a revolution as much in investor stupidity as it is in technology, a technology that can’t seem to produce actual industry profits. The former CEO added that there have been 172 bankruptcies among exploration and production companies engaged in the shale oil and gas business just since 2015. Now the significance of this message is as much where it was said as who said it. Schlotterbeck was addressing attendees of the Northeast Petrochemical Exhibition & Conference in Pittsburgh in mid-June. The predominant buzz at the conference was a plan to turn Pennsylvania and Ohio, which sit above large shale gas resources, into a petrochemical and plastics center similar that which exists on the U.S. Gulf Coast.
As Risky Finances Alienate Investors, Fracking Companies Look to Retirement Funds for Cash - The stock markets and banks have become increasing unfriendly places for shale drilling companies as the oil and gas industry has under-performed compared to other parts of the economy. This has left drilling companies hunting for capital to fund continued drilling — and they are increasingly turning to so-called private equity — a category covering both private investors like Warren Buffett and asset managers like pension funds. Drilling companies plan to source 40 percent of their capital for 2019 from private equity funds, according to a recent survey by Haynes and Boone, compared to 26 percent from selling the oil and gas they produce, 21 percent borrowed from banks, and 12 percent in debt and equity from capital markets like Wall Street. Privately held companies like Encino are more opaque than publicly traded oil and gas companies because they generally are not required to make their financial information public. That means there’s little publicly available information about how private shale drilling companies have performed over the past decade. And every shale drilling company has unique financial prospects, based on a broad array of factors that include the amount it spent to acquire drilling rights, its drilling and fracking costs, and the amount of oil, gas, and natural gas liquids it can tap. Encino did not respond to questions sent by DeSmog. “Our assets generate strong cash flow, we have modest debt, and we support our development activities with a robust commodity hedging program,” the company says on its website.Canada’s pension fund praised Encino’s acquisition of Chesapeake Energy’s acreage in Ohio when that deal was announced. “We are pleased to support EAP’s [Encino Acquisition Partners’] acquisition of these highly attractive Utica shale assets, which provides CPPIB with meaningful exposure to a leading North American natural gas play and aligns with the growing focus on energy transition,” said Avik Dey, managing director and head of energy and resources at the CPPIB. Others saw the deal as carrying a significant degree of risk. Moody’s Investor Services rated debt associated with Encino’s Utica deal at B2. “A B2 rating is deep into junk status and means there’s a very significant chance you’ll end up in default,” Axios explains. Moody’s rated the overall probability of default one notch higher at B1.
Perilous trend for combined-cycle gas plants - Institute for Energy Economics & Financial Analysis - Nearly one in seven U.S. combined-cycle power plants fewer than 20 years old are little-used, according to an S&P Global Market Intelligence analysis.The more than 33,000MW of generating capacity is concentrated in California, Texas and the northeastern and mid-Atlantic U.S., but units are also in places such as Missouri and Wyoming. Some units are being used less because of older designs that leave them less efficient compared to others, while other units are challenged by market conditions that favor zero-emission resources such as solar, wind and batteries.Some combined-cycle units in California are facing additional challenges now that state law targets 100% zero-carbon electricity by 2045.Wholesale power prices in the California ISO market, pushed lower by the growth of solar and zero-emission alternatives, have also made it harder for less-flexible gas plants to earn enough revenues. The 1,028-MW La Paloma Generating plant in Kern County faced bankruptcy in 2016 after running for just 13 years, and it had a capacity factor of 11.8% in 2018. More: 1 in 7 newer combined-cycle plants are little-used, analysis finds
Columbia Gas reaches $143 million settlement for Merrimack Valley explosion (AP) — A series of class action lawsuits stemming from the natural gas explosions in Massachusetts have been settled for $143 million, the utility blamed for the disaster and lawyers for the plaintiffs announced Monday. The settlement is subject to the approval of a judge, according to Columbia Gas of Massachusetts, and its parent NiSource Inc. The explosions and fires in the Merrimack Valley communities of Lawrence, Andover and North Andover on Sept. 13 killed one, injured about 25 other people and damaged or destroyed more than 100 buildings. Many people were forced into temporary shelter and thousands of homes and businesses went without natural gas service for weeks or even months during the winter. “Families suffered for months in the gripping cold. Businesses shuttered, and lives were upended,” Elizabeth Graham, co-lead attorney for the plaintiffs, said in a statement. “To this day, the people most impacted by the explosions are not fully back on their feet, but we believe this settlement is the quickest and most just method to ensure that residents and businesses are made whole again.” The explosions were blamed on an over-pressurization of gas transmission lines during routine replacement. The National Transportation Safety Board is continuing its investigation.
A Storm Brews Over South Portland’s Oil Industry and Fumes From Its Tank Farms - The email arrives on a Wednesday afternoon. "I am writing to let you know that your air quality sample 'grab canister' will be available for pick up," writes the city manager. I instantly feel like I've won the lottery. This is what I have been waiting for—word that it's my turn to sample the air where I live. And then I think about it, and realize this is a lottery I'd rather not have a ticket for. As a parent in South Portland, Maine, it's been hard not to worry about the air here. We always knew it stunk—an industrial stench would occasionally fill the skies outside our home, and especially near my kids' daycare, and we sensed that it might have something to do with the 120 petroleum storage tanks around the city. But we focused more on the appeal of living here: proximity to Portland, to beaches, to good schools and a strong community. Then we found out that some of those tanks had been issued violations by the EPA because they had the potential to emit twice their permitted limit of volatile organic compounds, or VOCs. Those nasty pollutants can trigger asthma attacks and cause headaches, and the worst of them can cause cancer. Once we learned about that, I started worrying less about the smell as a nuisance and more about whether it might be making people sick. Many of those tanks are close to homes and schools. Maine has some of the highest rates of asthma in the country—11.7 percent of adults here have asthma compared to 8.9 percent nationally. In kids, that's 9.1 percent compared to 8.1 percent nationally. Maine sits as the end of what's known as the "tail-pipe" of the United States—the Gulf Stream carries airborne pollutants from elsewhere and dumps them here on our rocky shores, contributing to the high asthma rates. Add the industrial presence here in South Portland, and who knows what we're being exposed to. Earlier this summer, the city and state launched two air-monitoring programs to try to figure that out. Like dozens of others, I signed up. And now it's my turn.
Oil, Gas Employment Moves from Shale to Offshore -- Anticipated demand for offshore services brings with it an increased demand for workers as oil and gas employment shifts from shale to offshore, according to new analysis by energy research firm Rystad Energy. Looking at the oilfield services industry sectors with the highest percent change of employment, Rystad found the main driver of employment is moving from shale to offshore. “This is a clear effect of the increase in offshore sanctioning,” Matthew Fitzsimmons, vice president on Rystad’s oilfield services team, said in a report sent to Rigzone. “We expect offshore commitments to nearly double from 2018 to 2020 and sustain high levels of spending over the next five years.” While onshore basins like the Permian have been a hotbed of activity in recent years – holding US employment in the services sector steady in 2016 and 2017, offshore has now taken the lead, contends Rystad. Source: Rystad EnergyEarlier this month, Rystad forecasted a massive year for offshore project sanctioning in 2019. Now, it’s expecting offshore services demand to reach $442 billion in 2025, a 45 percent increase from 2018. Rystad said there was a cumulative workforce reduction of 31 percent due to reduced activity in 2015-2017, which greatly affected companies exposed to the offshore industry. But now the offshore market is gaining momentum as four out of the five top oilfield services companies with the largest workforce change from 2017 to 2018 were primarily exposed to the offshore industry. Still, there will be challenges. “Our informal interviews with oilfield services company leaders across the offshore industry all echoed a common challenge: how to bring experienced personnel back into the industry amidst current growth, and how to attract new talent,” said Fitzsimmons. “History would show that to bring back experienced professionals into an industry, higher wages will be required.”
Federal agency to assess oil and gas development's impact on endangered species in the Gulf --A federal lawsuit filed last year calling on the National Marine Fisheries Service to assess the impacts of oil and gas development on federally protected species and critical habitat in the Gulf of Mexico ended last week with a settlement agreement under which the service agreed to finish an assessment by November. Under the Endangered Species Act, the fisheries service is required to gauge the impacts of federally authorized oil and gas operations on species listed as threatened and endangered, as well as habitat designated as critical. It has been 12 years since the fisheries service did such an analysis of energy development in the Gulf, called a “biological opinion.” That opinion was intended to cover the five-year period from 2007 to 2012. After the Deepwater Horizon drilling rig explosion in 2010, the Department of Interior requested that the fisheries service update its 2007 opinion, taking the huge resulting oil spill into consideration. The assessment process began in 2013, but an updated opinion still hasn’t been issued. In 2018, three environmental groups sued the fisheries service over the delay. The 2018 lawsuit was filed in federal court in Florida by Earthjustice on behalf of the Center for Biological Diversity, the Sierra Club and Healthy Gulf, formerly known as the Gulf Restoration Network. A new biological opinion is necessary because the Deepwater Horizon spill likely made federally protected species more vulnerable by decreasing their populations, said Chris Eaton, senior attorney for Earthjustice. In addition, new scientific findings have come out in the 12 years since the last biological opinion, such as the impact of seismic surveys on whales. The settlement agreement was filed on July 19. The fisheries service agreed to finish the assessment and issue an updated biological opinion by Nov. 5. The agency also agreed to pay the conservation groups’ attorney’s fees, about $26,000.
Japanese Firm Bets Big on US Shale Boom-- Osaka Gas Co. is deepening its bet on the American energy boom, making the first purchase of a U.S. shale gas driller by a Japanese company. The company will acquire closely held Sabine Oil & Gas Corp., a unit of Sabine Oil & Gas Holdings, for $610 million. That will give Osaka Gas 175,000 net acres of shale-gas-producing land in East Texas, including wells in the Haynesville and Cotton Valley formations. It owned a 35% working interest in a shale field being developed by Sabine, which emerged from bankruptcy as a private company in August 2016. Osaka Gas also owns a 25% equity stake in the planned Freeport LNG export facility in Texas, according to an April filing from the Japanese company. The Sabine purchase is Osaka Gas’s biggest purchase, according to data compiled by Bloomberg, surpassing the $532 million it contributed to the purchase of APA GasNet Australia Investment Ltd. that closed in December 2008.
U.S. LNG exports to Europe increase amid declining demand and spot LNG prices in Asia - U.S. exports of liquefied natural gas (LNG) have been growing steadily and reached a new peak of 4.7 billion cubic feet per day (Bcf/d) in May 2019, according to the latest data published by the U.S. Department of Energy’sOffice of Fossil Energy. This year, the United States became the world’s third-largest LNG exporter, averaging 4.2 Bcf/d in the first five months of the year, exceeding Malaysia’s LNG exports of 3.6 Bcf/d during the same period. The United States is expected to remain the third-largest LNG exporter in the world, behind Australia and Qatar, in 2019–20. U.S. LNG exports have increased as four new liquefaction units (trains) with a combined capacity of 2.4 Bcf/d—Sabine Pass Train 5, Corpus Christi Trains 1 and 2, and Cameron Train 1—came online since November 2018. Although Asian countries have continued to account for a large share of U.S. LNG exports, shipments to Europe have increased significantly since October 2018 and accounted for almost 40% of U.S. LNG exports in the first five months of 2019. LNG exports to Europe surpassed exports to Asia for the first time in January 2019. A warm winter in Asia and declining price differentials between European and Asian spot natural gas prices led to increased volumes of U.S. LNG exports delivered to Europe. Europe’s total LNG imports in the winter of 2018–19 averaged 10.2 Bcf/d, 60% higher than in the previous two winters and the highest winter average since at least 2013, according to CEDIGAZ LNG data. LNG imports to Europe have been relatively low in recent years, but they are expected to grow as new LNG supply comes online and European countries continue to increase natural gas consumption as part of their decarbonization initiatives. Total LNG imports in the three largest global LNG markets—Japan, China, and South Korea—started to decrease in February 2019 amid a milder-than-normal winter and, in Japan, the restart of nuclear power plants. China, which became the world’s second-largest LNG importer in 2017 (surpassing South Korea) and the world’s largest importer of total natural gas in 2018 (surpassing Japan and Germany), continued to increase LNG imports. Its LNG imports were 20% (1.3 Bcf/d) higher in the first five months of 2019 compared with the same period last year as the country continued to expand LNG import capacity and implement coal-to-gas switching policies.
Enterprise Products in deal with Chevron to develop crude oil port - (Reuters) - Pipeline operator Enterprise Products Partners signed long-term agreements with Chevron Corp that advance its proposed offshore crude project in the U.S. Gulf of Mexico, the companies said on Tuesday. Enterprise’s Sea Port Oil Terminal, or SPOT, is one of at least eight similar projects off the Texas and Louisiana coasts proposed to export oil from the region’s shale fields. It would compete with projects under development by commodities trader Trafigura Ltd, private equity firm Carlyle Group (CG.O), and pipeline operators Magellan Midstream Partners (MMP.N), Tallgrass Energy LP (TGE.N), and Phillips 66 (PSX.N). All the projects aim to carry rising shale production from the Permian Basin of West Texas and New Mexico to overseas markets. A total of 2.3 million additional barrels per day of shale is expected to reach the U.S. Gulf Coast in the next year as volumes rise and new pipelines begin operation. Enterprise declined to say whether Chevron would take a financial stake in the project, or whether Chevron would become a customer for a Permian crude pipeline that it calls Midland-to-Echo 3. Chevron was unavailable to comment. The value of the agreements was not disclosed. Enterprise is due to release its second-quarter results on Wednesday and could provide more details then, spokesman Rick Rainey said. Chevron agreed to use Enterprise’s crude oil transportation, marine terminals and storage facilities, which include its Houston storage facilities, the companies said.SPOT is planned for a site in 115 feet (35m) of water, about 40 miles (64 km) off the coast of Houston. Up to two very large crude carriers (VLCCs) could moor at the site and load up to 2 million barrels per day.
New US Oil Makes Inroads into Asia -- A new grade of American light crude is making its way to oil-starved buyers in Asia, giving relief to some of the region’s biggest plastics makers as they seek alternatives to feedstock from Iran. South Korean refiners and petrochemical makers are purchasing West Texas Light crude, a new American grade that’s produced in the Permian Basin of west Texas and New Mexico. Hyundai Oilbank Co. and S-Oil Corp. most recently bought the grade for delivery in September and October. The oil, which is light and sweet in nature, yields a high proportion of naphtha and other distillates when processed, with low levels of impurities such as sulfur. Processors across Asia have been keen to find substitutes for Iranian crude and an ultra-light oil known as condensate, after the U.S. pared back waivers permitting purchases from the Persian Gulf state. In South Korea, companies with purpose-built units that break down condensate into the building blocks of plastics, however, have been the worst hit due to a halt in Iranian South Pars flows. That prompted buyers to snap up alternative supplies from Qatar, and haul replacements from as far away as Nigeria, Norway and the U.S. Hyundai Oilbank purchased the West Texas Light crude for delivery in October, while S-Oil bought 1 million barrels of the grade for September delivery, according to traders with knowledge of the matter who asked not to be identified as the information is private. For S-Oil, the West Texas Light grade will replace costlier supplies of Qatari condensate, since the company doesn’t typically buy Iranian oil. West Texas Light, which makes up 20% of production in the Permian, is being marketed to North Asian refiners as a petrochemical feedstock and refinery input that’s an alternative to Iranian condensate, Macquarie Research said in a report in May. The grade with an API gravity reading of 45-50 is lighter than the more often exported WTI Midland crude with API gravity of 38-42. South Korea’s monthly crude imports from the U.S. has averaged about 10 million barrels in the first six months of this year, compared to about 2.35 million barrels in the same period last year. While some U.S. Eagle Ford oil cargoes were rejected due to contamination earlier this year, the North Asian nation was the second-biggest buyer of U.S. oil in May,
Pipeline operator EPIC to begin U.S. crude export operations by year-end: executive - (Reuters) - EPIC Midstream Holdings LP has begun filling a new 400,000 barrel per day (bpd) oil pipeline that stretches from the Permian Basin to the U.S. Gulf Coast and will start exporting from its own South Texas terminal by the end of this year, President Brian Freed said in an interview on Monday. The San Antonio pipeline operator has also begun construction on a second dock at its export terminal in Corpus Christi, Texas, that next year will be capable of loading tankers that carry up to 1 million barrels, known as Suezmax tankers, Freed said. In the third quarter, EPIC will make the first deliveries into Corpus Christi on the new pipeline, one of three new pipelines helping to ease a crude oil bottleneck that has weighed on prices in the Permian of West Texas and New Mexico for more than a year. Freed said the second dock would be completed in 2020 but did not say exactly when. He did not disclose the terminal’s expected export and storage capacity once it is completed. EPIC will begin loading smaller Aframax tankers, which carry around 500,000 barrels, in Corpus Christi later this year. “We anticipate it will clear all the barrels that we have directed at the facility right now and we have the ability to expand,” Freed said.
Permian Output Getting Unwieldy for Gulf Coast Ports - A new study from the University of Houston (UH) concludes that U.S. refiners and other domestic customers will be unable to absorb growing Permian Basin production. It also finds most Gulf Coast ports are not ready to handle the largest – and most cost-effective – ships for exporting crude oil. Prepared by UH Energy and the UH Department of Industrial Engineering, the study finds that the Port of Houston likely will be unable to handle very large crude carriers (VLCCs). UH researchers cite the relatively shallow depth of the Houston Ship Channel and air quality considerations as key limitations to introducing VLCCs at the port. UH also noted that the Port of Corpus Christi – destination for much export-bound Permian crude – is expanding and adding VLCC handling capabilities. Currently, the only Gulf Coast port that can fully load VLCCs is the Louisiana Offshore Oil Port (LOOP), the university added. The authors maintain that delays in expanding export capacity will slow Permian production – a particularly burdensome development for independents, who already face pressure from the majors’ expanding operations there. “The independents are relatively inexperienced with exports, and if they can’t build that expertise, they could become targets for acquisition,” UH Chief Energy Officer Ramanan Krishnamoorti said in a written statement. “They also face additional stress because of the flight of capital from the Permian.”
TEXAS: Watchdog: Oil and gas regulator not tracking cash -- Wednesday, July 31, 2019 - Texas' top oil and gas regulator has a hard time keeping track of the cash it collects in fines and penalties, and needs to tighten up its management of pipeline fees and other revenue, according to an audit released yesterday.
Baytown Exxon Mobil explosion, fire at Texas refinery injures 37– An explosion and fire at an Exxon Mobil oil refinery in Texas on Wednesday left 37 people with minor injuries, in the latest of a series of petrochemical industry blazes this year in the Houston area. The fire began after an explosion at approximately 11:07 a.m. at an Exxon Mobil plant in Baytown, about 25 miles east of Houston. The facility processes light hydrocarbons including propane and propylene, materials used to make plastic and industrial products. Jason Duncan, the plant manager, said many of those hurt suffered minor burns and all were being treated at a local clinic. Earlier, Exxon Mobil had said in a statement that six people were injured. All employees at the plant had been accounted for, officials said. Right after the explosion, the fire sent large plumes of black smoke into the sky. By Wednesday afternoon, the smoke had lessened. Duncan said the fire had been isolated and contained but had not yet been extinguished.The city of Baytown issued a shelter in place for residents living west of the plant shortly after the fire. It remained in place for about three hours before being lifted Wednesday afternoon.
Exxon fights fire at Baytown, Texas, petrochemical plant; 37 injured - Exxon Mobil said it was fighting a fire that erupted on Wednesday at its Baytown, Texas, refining and chemical plant complex, injuring 37 workers and sending nearby residents indoors. More than three dozen people were treated for minor burns, none requiring hospitalization, said plant manager Jason Duncan in an afternoon media briefing. The company was still working to shut down the olefins unit which processes propane and propylene - a plastics building block - and isolate the fuel keeping the fire burning, he said. Duncan declined to comment on the fire’s impact on production at Exxon’s adjacent 560,500 barrels-per-day oil refinery. Two people familiar with its operations, however, said Exxon reduced some production at the refinery, which provides feedstocks to the unit that caught fire. The fire, which was being fought by the company’s employees, sent black smoke into the air over the complex in the Houston suburb. Firefighters and equipment from the city entered the plant at midday to assist, an official said. Residents around the plant were told to close windows and doors, turn off air conditioning and remain in their homes or offices. Schools in several communities in the area kept summer students indoors. The city of 75,000 people is located about 30 miles east of Houston. “We are cooperating with regulatory agencies. We deeply regret any disruption or inconvenience that this incident may have caused the community,” Exxon spokeswoman Sarah Nordin said in a statement. Available air monitoring information from the inside the Baytown Olefins Plant’s grounds and outside monitoring sources recorded no adverse impacts, Duncan said. The fire was continuing to burn residual fuel contained in a large column on Wednesday afternoon. The Baytown complex that includes the olefins plant where the fire occurred employs about 7,000 people among four manufacturing sites that cover 3,400 acres (13.8 square kilometers). It sits along the Houston Ship Channel, the nation’s largest and busiest energy port. Aerial footage showed flames and heavy smoke emanating from a large column at the facility, which Exxon identified as part of its production of olefins, a component of plastic. Emergency vehicles and people were massing around the edge of the complex.
Fire Burns at Exxon Plant in Baytown- Firefighters are working to put out a fire that began Wednesday morning at an ExxonMobil plant in Baytown, Texas. Exxon first posted on Twitter that a fire had occurred at the company’s Baytown Olefins Plant and the company’s fire team was working to extinguish the fire. Exxon said that the fire was in the unit containing polypropylene material. The unit which was affected processed light hydrocarbons including propane and propylene. The City of Baytown issued a “Shelter in Place” for areas west of the Exxon plant and south of Spur 330. Essentially, this means residents should remain indoors, seal the room and turn off air conditioning. Exxon tweeted earlier that care was being provided for six people who sustained non-life-threatening injuries in the fire. During an afternoon press conference, an Exxon spokesperson said 37 people sustained non-life-threatening injuries in the fire, which he described as minor, first-degree burns. The company is also working to shut down units to isolate the source of the fire. Exxon said it was a propane and propylene mixture that was burning. Exxon, the City of Baytown and other agencies are conducting air monitoring. At this time, there are no adverse or environmental effects from the fire, Exxon said. “At this time, it is difficult to gauge the full impact of the fire on the greater ExxonMobil Baytown complex,” John Maselli, senior research analyst for Wood Mackenzie said in a statement emailed to Rigzone. “The duration and magnitude of the market impact will be determined by the extent of the damage and what units and chemical value chains are affected.” Wood Mackenzie estimates about 45 percent of ExxonMobil’s installed USA chemical capacity is in Baytown.
Texas shale pioneers struggle to appease investors - (Reuters) - Seven years ago, Diamondback Energy Inc went public with a modest parcel of drillable land in the Permian Basin of West Texas. Like dozens of other Permian startups, the firm then pursued a classic wildcatter’s strategy - borrowing to buy up acreage, acquire competitors and quickly boost output in the booming shale field. Today, Diamondback is the 7th largest producer in the top U.S. oil region, according to researcher Wood Mackenzie. But Diamondback differs from most of its peers in a crucial way - it’s poised to make more cash than it spends. It started paying shareholders a dividend last year and raised it by 50% this spring. “That’s a big pivot for our industry, living within cash flow and not being part of that ‘drill, baby, drill’ crowd,” Diamondback Chief Executive Travis Stice said in an interview. Only a handful of independent shale firms collect more than they spend. Total overspending by a group of 29 such firms totaled $6.69 billion in 2018, according to Morningstar data provided to Reuters by the Sightline Institute and the Institute for Energy Economics and Financial Analysis. Diamondback was among the outspenders, but Morningstar projects it will produce free cash flow this year. The stark challenges facing the companies that pioneered the Permian signals a seismic shift in the shale economy - driven by investor demands for returns and a flood of investment from major oil firms including Chevron, Exxon Mobil, BP and Royal Dutch Shell with their boundless budgets and integrated operations stretching from the oilfield to the service station.
Study Links Birth Defects With Nearby Oil And Gas Activity - Texas Standard - A recently-published health study indicates expectant mothers living near extensive oil and gas development run a higher risk of having children with birth defects.The study from the Colorado School of Public Health found that mothers living near intense oil and gas activity have a 40 to 70 % higher chance of birthing children with congenital heart defects. Roughly 4.5 million Texans live within a mile of active oil and gas facilities, according to a 2017 study by the nonprofit Physicians, Scientists and Engineers for Healthy Energy. Dr Lisa McKenzie is an assistant research professor at the Colorado School of Public Health and the study’s senior author. McKenzie says the study analyzed 3,300 infants born in Colorado between 2005 and 2011 to arrive at its conclusion.“What we observed is that more children were being born with a congenital heart defect in areas with the highest intensity of oil and gas well activity,” McKenzie says.The reason for the connection between birth defects and oil activity is outside the scope of the study, McKenzie says, but it still supports a larger breakthrough.“It does provide more evidence that there may be something about oil and gas development or some emission associated with oil and gas development that is putting children at higher risk,” McKenzie says.These dangers are posed from any oil and gas activity, McKenzie says, which includes well-drilling, hydraulic fracturing and production procedures.“In addition to the density of the wells, you have to account for the intensity of activity on those well sites,” McKenzie says. “Not every well site looks like another well site.”
Drilling Down- Saltwater disposal wells make up nearly one-third of well permits - Water management continues to be big issue in the oilfield where one in three of all drilling permits filed in Texas over the past week were to develop new saltwater disposal wells. Of the 286 drilling permits filed for projects in Texas, 95 of them were filed by 50 companies seeking to develop new injection wells to store oilfield wastewater deep underground. The largest number came from the Permian Basin where oil wells produce more water than oil. Houston water recycling company and disposal well operator Solar Water Midstream led the pack with seven drilling permits for projects in five counties. The Houston office of BP filed for six injection well permits in the Permian, as did the Austion company PearlSnap Midstream, which was formed last year and filed its first-ever drilling permits to develop saltwater disposal wells on six leases in Martin County. Midland exploration and production company Summit Petroleum is preparing to drill six new horizontal wells in Upton County. The wells target the Spraberry formation on the company’s Rachael lease about 12 miles north of Rankin at total depths ranging from 9,400 to 10,100 feet. The Woodlands oil company Geosouthern Energy is planning to drill a pair of Austin Chalk wells in the eastern end of the Eagle Ford Shale. The company filed for permission to drill the horizontal wells on its Dahmann lease about 9 miles northwest of Brenham in Washington County. The wells target the Giddings field of the Austin Chalk formation at total depths of 14,000 feet. Frisco oil company Comstock Resources is seeking permission to drill the three horizonatl natural gas wells on two leases in Harrison County. The wells target the Carthage field of the Haynesville Shale to a total depth of 13,000 feet. No horizontal drilling permits were filed in the Barnett Shale of North Texas this past week, but Dallas natural gas company Atmos Energy is preparing to recomplete an underground storage well. Located about 4.5 miles south of Henrietta in Clay County, the vertical well targets the La-Pan field of the Mississippian formation to a depth of 6,500 feet.
Wastewater injection could trigger earthquakes along a Texas fault system, UT researchers find | KXAN— Last week, a study led by researchers at the University of Texas at Austin found that the majority of faults under the Fort Worth Basin are sensitive to changes in stress, which could cause them to slip. Researchers with UT’s Bureau of Economic Geology, along with researchers at Stanford University, and Southern Methodist University in Dallas have created a comprehensive map of more than 250 faults which — in total — run more than 1,800 miles. Some of those faults extend under highly populated areas in the Dallas- Fort Worth region. The study found that the faults are relatively stable if they are left undisturbed, but that wastewater injection significantly increases the potential of faults to slip if they are not managed properly. Wastewater injection is a common practice in the oil and gas industry. A release from UT Austin noted the Fort Worth Basin saw “a major increase in seismic activity from 2008 to 2015 as oil and gas operations increased, but a significant reduction in earthquakes the last four years as injection has slowed.” UT researchers said that people should know this fault system is susceptible to possibly hosting earthquakes. They explained that if oil and gas production increases and also comes with an uptick in deep wastewater disposal, that could lead to more earthquakes if it is not managed properly. For this study, UT Austin developed the new fault map and led the research, SMU pulled together the earthquake history of the region to update the fault map, and Stanford worked on a map of the tectonic stress in the area.
Concho Resources joint venture to boost water recycling in Permian Basin - Midland oil company Concho Resources has entered into a joint venture with Houston-based Solaris Water Midstream in a business move that is expected to boost oilfield water recycling in Permian Basin. Financial terms were not disclosed but in a Wednesday afternoon statement, Concho Resources reported that it is providing 13 of its saltwater disposal wells and 40 miles of produced water pipelines to the joint venture to cover a 1.6 million-acre area in Eddy County, New Mexico. Produced water is the wastewater that comes to the surfance alongside oil and natural gas. Solaris Water Midstream is already the top independent recycler of produced water in New Mexico but the joint venture is expected to boost that rapidly growing industry. Solaris Water Midstream's Pecos Star System in New Mexico includes more than 300 miles of produced water gathering pipelines in addition to disposal, storage, recycling and blending facilities. Under the joint venture, Solaris Water Midstream will deliver blended and reused water to Concho Resources, enabling the oil cmopany to significantly increase in the use of recycled water on the New Mexico side of the Permian Basin.
Cleanup continues at Walloon Lake oil spill site — Following the discovery of a fuel oil leak along Walloon Lake’s south shore in late June, the ongoing cleanup effort has expanded to address leakage from a second tank discovered on the same property. The problem was first reported June 25 by a neighbor near a home under demolition on Ellis Road. The neighbor called authorities to report a diesel fuel-like smell and a sheen on the surface of the lake in the area. Emergency crews initially responded and took steps to contain the spill. Officials from the Michigan Department of Environment, Great Lakes and Energy (formerly the Michigan Department of Environmental Quality) responded the following day. Melissa Kendzierski, an environmental quality analyst with the Michigan Department of Environment, Great Lakes and Energy said the oil came from a old 250-gallon fuel oil storage tank that was found in the basement of a 100-year-old lodge on the property that crews were demolishing. Previously, Kendzierski said she received information indicating that as crews were trying to lift the tank out of the basement, “there was some kind of mishap” and an estimated two to three gallons of fuel oil spilled on the floor. She said the floor of the basement contained a drain that routed discharges to a nearby embankment about 50 feet from the lake. Officials believe the tank had been leaking for some time and that the pipe leading away from the floor drain had become clogged, Kendzierski added. She said it’s likely that the demolition work at the site dislodged the clog in the drainpipe, allowing oil that had been inside to spill out of the embankment.
Enbridge open to rerouting Line 5 around tribal land (AP) — Enbridge Inc. says it’s willing to consider rerouting a major oil pipeline around the Bad River Reservation in northern Wisconsin. Members of the Bad River Band of Lake Superior Chippewa sued Enbridge on Tuesday in hopes of forcing the Calgary, Alberta-based company to remove sections of its Line 5 pipeline that run across their reservation. They say it’s increasingly likely the 66-year-old line will rupture and cause catastrophic damage. The tribe decided in 2017 not to renew easements that allow the pipeline to cross its swampy reservation on Lake Superior. Enbridge said in a statement Thursday it’s “surprised and disappointed.” The company says it has considered rerouting Line 5 around the reservation and remains open to that as a solution. Line 5 carries Canadian crude and propane to eastern Michigan.
Sanders backs Line 5 shutdown — Bernie Sanders on Thursday joined environmental activists calling for a shutdown of Enbridge’s controversial Line 5 pipeline in the Straits of Mackinac. The Vermont senator is the second Democratic presidential hopeful to speak out against the 66-year-old pipeline and renewed his proposal to ban on all new fossil fuel infrastructure. Washington Gov. Jay Inslee called for a shutdown two weeks ago and urged other candidates to join him ahead of the second round of presidential debates Tuesday and Wednesday in Detroit. He also criticized a $500 million Enbridge plan to move Line 5 into a protective tunnel beneath the Straits. Sanders announced his position on the nine-year anniversary of a separate Enbridge pipeline rupture near Marshall that dumped more than 1.2 million gallons of oil into the Kalamazoo River. It was the worst in-land spill in U.S. history and resulted in a $177 million fine from federal officials and a $75 million settlement with the state of Michigan. Like Inslee, Sanders did not specify how he would ensure adequate propane supplies to the Upper Peninsula and other parts of Michigan if Line 5 is shut down. The pipeline carries up to 540,000 barrels a day of light crude oil and natural gas liquids Enbridge insists the dual pipeline is secure, but the Canadian firm wants to move Line 5 into a new $500 million tunnel beneath the Straits, which it had pledged to pay for as part of an agreement with Republican former Gov. Rick Snyder. But new Democratic Gov. Gretchen Whitmer and Attorney General Dana Nessel have effectively blocked the project. The future of the tunnel and pipeline are now tied up in court after Whitmer and Enbridge were unable to negotiate a faster construction timeline.
Though the Illinois fracking boom has fizzled, legal saga drags on — Just a few years ago, Illinois was bracing for a fracking boom — particularly in southern parts of the state. State leaders set the stage when they passed a 2013 law to allow high-volume fracking using horizontal drilling techniques. Within a year, fossil fuel companies bought hundreds of lease rights in certain Southern Illinois counties. Lawsuits opposing the practice emerged, and communities waged divisive fightsabout what the activity could mean for local economies and environmental quality. But despite the hoopla, a rush on oil and natural gas failed to materialize. But still, at least one legal fight surrounding Illinois fracking drags on — as was the case in a Metro East courtroom last week. Around the country, the practice has ignited fierce debate as it has risen to prominence over the past decade, often centering on health concerns from groundwater impacts, but also touching on other matters, including mineral rights and property rights. In Illinois, a collection of individual citizens and a nonprofit group called Southern Illinoisans Against Fracturing Our Environment are plaintiffs in ongoing litigation that, since 2014, has voiced broad legal opposition to fracking in the state, on multiple grounds. The group’s latest court proceedings, heard in Madison County Circuit Court last week, argued that certain fracking information from the state should be made public. The information in question contains details about examples of forced integration, or forced pooling — the term for when oil or gas extraction is allowed to go forward even in areas where certain property owners disapprove of it, as long as a majority of owners with applicable mineral rights want to allow it. In other words, if there is a desirable deposit that extends beneath someone’s land, companies could make a play on it without their permission — as long as enough of the neighbors say yes.
US Crude Oil Inventories Drop 8.5 Million Bbls -- EIA -- July 31, 2019 -- Link here. From EIA:
- weekly US crude oil inventories: decreased by a whopping 8.5 million bbls; corroborates API's data from yesterday
- weekly US crude oil inventory: at 436.5 million bbls, at the five-year average for this time of year; [I don't know, but I believe the EIA recently changed the way it calculated US crude oil inventory -- by removing crude oil in pipelines from the storage number -- could be wrong]
- refineries operating at 93.0% capacity; near high end; unchanged from last week
- crude oil imports, four-week average: about 13% less than same four-week period one year ago
- total product supplied: 21.1 million bbls; up 1.2% from same period last year
- gasoline supplied, four-week-average: less than 10 million bbls per day (9.6 million b/d)
- distillate fuel product supplied average: less than 4 million bbls per day (3.8 million b/d)
- jet fuel production supplied average: up 3.3% over same four-week period last year
US Drops Six Oil Rigs - The nation offset a loss of six oil rigs with an addition of two gas rigs. The U.S. rig count declined by a net total of four rigs this week, according to weekly data by Baker Hughes, a GE Company. The nation offset the loss of six oil rigs with a gain of two gas rigs. This brings the total number of active rigs in the U.S. to 942, down 102 from the count of 1,044 a year ago. Oklahoma led all states in declines, with a loss of five rigs. New Mexico and Louisiana dropped two rigs and one rig, respectively. Alaska added three rigs and Texas added one rig. Among the major basins, the Haynesville was the only one to add rigs this week, tacking on one additional rig. Meanwhile the Granite Wash lost two rigs while the Cana Woodford and Permian dropped one rig apiece. The Permian now has 442 active rigs, which still accounts for almost half of the nation’s active rigs
Whiting Cuts 33 Percent of its Workforce - U.S. independent Whiting Petroleum Corporation cut one-third of its workforce as it executes a restructuring of its business. The company, which has headquarters in Denver, Colorado, expects the restructuring to result in $50 million in annual cost savings. A total of 254 positions were cut with 94 of those being executive and corporate positions. “We aim to be as efficient as possible and that is why we made the difficult decision to reduce our workforce in order to realize significant annualized cost savings,” Whiting CEO Bradley Holly said in a company statement. “As the oil and gas industry landscape continues to evolve and investor focus shifts to prioritize predictable capital returns, we see a tremendous opportunity to transform Whiting into a leading, value-focused developer of unconventional assets with a commitment to safety, cost-efficiency, disciplined capital expenditure and maximizing returns. The decision to reduce headcount is always a difficult one as it impacts talented colleagues and friends, but it is a necessary step in our company’s transformation.” In a separate announcement on Wednesday regarding the company’s second quarter earnings, Whiting reported an adjusted net loss of income of $25.7 million from $57.3 million a year ago. Whiting operates primarily in the Rocky Mountains region of the U.S. The company’s largest projects are in the Bakken and Three Forks plays in North Dakota and Montana and the Niobrara play in northeast Colorado.
Keystone XL inches forward. -- TC Energy Corp.’s $8 billion Keystone XL crude oil pipeline is inching forward after a court injunction that stopped work on the project has been lifted. An order issued by a Montana judge barring certain pre-construction activities was dissolved on Monday, according to the Canadian company. That followed a June ruling from the U.S. Court of Appeals for the Ninth Circuit that a new presidential permit negated challenges to the project’s earlier approval, TC Energy said Thursday in its second-quarter earnings statement. The victory is only a partial win for TC Energy and the Keystone XL project, which would ship more crude from Canada’s oil sands to refineries on the U.S. Gulf Coast. TC Energy said in May it was already too late to start major construction activity this year. The project also still faces a legal challenge in Nebraska, and a decision on that matter is due this quarter, TC said Thursday. The 1,200-mile (1,900-kilometer) conduit is seen as a key project for the Canadian oil industry, which has been hampered by a lack of pipeline space. It’s also become a target of environmentalists, who argue that it would enable increased development of Alberta’s oil sands, thus raising global greenhouse gas emissions.
Opponent of nations public lands is picked to oversee them - Akron Beacon Journal — A conservative lawyer and writer who argues for selling off the nation’s public lands is now in charge of a nearly quarter-billion acres in federally held rangeland and other wilderness.Interior Secretary David Bernhardt on Monday signed an order making Wyoming native William Perry Pendley acting head of the Bureau of Land Management. The bureau manages nearly 250 million acres of largely wild public lands and their minerals and other resources in vast holdings across the U.S. West.Pendley, a former midlevel Interior appointee in the Reagan administration, for decades has championed ranchers and others in standoffs with the federal government over grazing and other uses of public lands. He has written books accusing federal authorities and environmental advocates of “tyranny” and “waging war on the West.” He argued in a 2016 National Review article that the “Founding Fathers intended all lands owned by the federal government to be sold.” In tweets this summer, Pendley has welcomed Trump administration moves to open more federal land to mining and oil and gas development and other private business use, and he has called the oil and gas extraction technique known as hydraulic fracturing, or fracking, “an energy, economic, AND environmental miracle!”The Interior Department appointed Pendley as the policy director at BLM, which manages one out of every 10 acres in the United States and 30% of the nation’s minerals, in mid-July. It confirmed his appointment as acting head on Monday night.A conservation group called Pendley an “ideological zealot” and pointed to the federal agency’s announcement earlier this month that it planned to move the BLM’s headquarters from Washington and disperse the headquarters staff among Western states. Pendley’s “ascending to the top of BLM just as it is being reorganized strongly suggests the administration is positioning itself to liquidate our shared public lands,” said Phil Hanceford, conservation director for The Wilderness Society conservation advocacy group.
Congenital Heart Defects Linked to Area Fracking Operations: Study - Researchers from the University of Colorado say children born in near fracking operations face a higher risk of congenital heart defects (CHDs). The findings were published online in the journal Environment International on July 18, indicating that higher rates of pulmonary artery and valve defects, aortic defects and other heart malformations at rates 40% to 70% higher among children near oil and gas extraction operations in Colorado. More commonly referred to as “fracking”, hydraulic fracturing involves drilling and fracturing of shale rock to release oil and gas. Fracking results in the injection of water, sand and chemicals into wells at high pressures, to crack the surrounding rock, thus releasing the natural gas underground and allowing it to flow to the head of the well. Problems from fracking have previously been linked to negative environmental effects to the surrounding communities, due the impact on drinking water, as well as increased dust and exhaust from drilling rigs, compressors and the transportation of the water, sand and chemicals. The process has also been linked to increased earthquake activity. The extent of the potential harm to humans living close to these fracking sites has yet to be determined. In this latest study, researchers conducted a nested case-control study of 3,324 infants born in Colorado between 2005 and 2011. They looked at monthly intensities of oil and gas activity at the mother’s residences from three months before they got pregnant through the second month of their pregnancy. Overall, they determined that congenital heart defects were 40% to 70% times more likely among medium and high intensity fracking exposure groups, respectively.
North Dakota oil spill affects Williams County grassland— A pipeline leak on a Williams County well pad resulted in oil being spilled on nearby grassland, the North Dakota Department of Environmental quality said Friday, Aug. 2.Initial estimates indicate 10,080 gallons of oil spilled on the north side of Williston Thursday, with less than 5,880 gallons making its way onto grassland south of the well pad, said Brian O'Gorman, environmental scientist for the DEQ.The well pad and pipeline are operated by Samson Oil and Gas USA, Inc.The spill has been contained and 4,200 gallons have been recovered. Remediation of the area is ongoing, and DEQ personnel are monitoring the incident. O'Gorman said a specific cause hasn't been pinpointed, but they weren't aware of any water sources being affected.
State, oil industry look to study lightning at saltwater disposal sites in oil patch - State officials and oil industry leaders want to commission a study of lightning strikes at saltwater disposal sites. Lightning has hit saltwater facilities in western North Dakota at least four times since June. The strikes have caused fires, as well as spills of oil and brine. Salty water known as brine comes up to the earth’s surface alongside oil and gas at well sites, and it’s carried by pipeline or truck to disposal wells where it’s processed through tanks and injected back underground for storage. People familiar with the facilities say tanks made of fiberglass seem to be particularly susceptible to fires when lightning strikes. The North Dakota Oil and Gas Research Council last week took an initial step to commission a study of the issue, deciding to pursue a request for proposals. The council, made up of state officials and representatives from the energy industry, identifies oil- and gas-related research projects to pursue. Up to $10 million in oil taxes fund its activities each biennium. The state’s Industrial Commission, chaired by the governor, will need to grant approval to move forward. Industrial Commission Executive Director Karlene Fine said that could happen at its next meeting Aug. 28. Lightning-related fires at disposal sites present a safety issue in the oil fields, according to Ron Day, a member of the research council who works for Marathon Petroleum. He supports studying the issue further. “It’s really just to try to understand, is there a connection to fiberglass tanks, is there a way to lightning-proof or reduce the threat of lightning to those facilities?” he said.
is the Bakken heading towards a crude oil pipeline overbuild? Part 2 -- Bakken crude oil production surpassed 1.4 MMb/d this spring and has maintained a level near that since, even posting a new high just shy of 1.5 MMb/d in April 2019. The rising production volumes have filled any remaining space on the Dakota Access Pipeline (DAPL) and prompted midstream companies to step up expansion efforts to alleviate the pressure, even as questions linger about the possibility of a pipeline overbuild if all of the announced capacity gets built. Specifically, the market is weighing the need for the recently announced Liberty Pipeline and a DAPL expansion. Today, we look at these two new projects and what their development means for the supply/demand balance in one of the U.S.’s biggest shale basins. As we highlighted in Part 1 of this series, Energy Transfer’s Dakota Access Pipeline (orange line in Figure 1) to Patoka, IL, fixed a lot of the crude takeaway problems in the Bakken after its start-up in June 2017. Prior to DAPL’s completion, there was a big gap between growing Bakken output and less-than-adequate pipeline capacity out of the basin. Producers and traders in the area were forced to rely upon slower — and more expensive — crude-by-rail capacity in order to move barrels to sales markets. With its initial capacity of 525 Mb/d, DAPL served as a relief valve to area producers, and gave them the ability to connect directly to Gulf Coast markets via DAPL’s sister system, the Energy Transfer Crude Oil Pipeline (ETCOP; yellow line) from Patoka to Nederland, TX. DAPL, which was later expanded to 570 Mb/d, also allows producers to reach Midwest refiners if they choose to off-ramp at Patoka.
ONEOK announces another gas plant expansion - Add another 200 million cubic feet per day to the new gas processing capacity scheduled to come online in the next 12 to 18 months for North Dakota’s natural gas. ONEOK announced late Thursday afternoon that it will expand gas processing capacity by that much at its existing Bear Creek facility in Dunn County. Pipeline Authority Justin Kringstad told the Williston Herald the expansion will provide much needed gas processing capacity in that area. The Bear Creek expansion will cost an estimated $405 million. It’s expected to be finished in the first quarter of 2021. The expansion is supported by acreage dedications with primarily fee-based contracts. “The Bear Creek plant expansion in North Dakota will provide needed processing capacity for producers actively developing the high-growth area of Dunn County while also helping to address natural gas flaring in the state,” Terry K. Spencer, ONEOK president and chief executive officer said in the company’s media release. The Bear Creek expansion was one of three new projects announced late Thursday afternoon by ONEOK. The company is also expanding its Mid-Continent NGL fractionation facility by 65,000 barrels per day, as well as additional NGL infrastructure to increase the capacity between the Elk Creek and Arbuckle II pipelines. And it is adding 40,000 barrels per day in NGLs to the West Texas LPG pipeline in the Permian. “Continuing to expand our West Texas LPG pipeline system underscores ONEOK’s Permian Basin strategy to provide needed NGL transportation capacity to producers in the highly productive Delaware and Midland basins,” Spencer said. The Mid-Continent expansion is estimated to cost about $150 million and will be completed in two stages by the first quarter of 2021.
Exxon Mobil beats earnings estimates - Exxon Mobil reported second-quarter results on Friday that beat analyst expectations. Here’s how the energy giant’s results fared relative to Wall Street expectations:
- Earnings: 73 cents per share vs. 66 cents expected by Refinitiv
- Revenue: $69.091 billion vs. $65.202 billion expected
- Upstream income: $3.261 billion vs. $3.15 billion forecast by StreetAccount
- Downstream income: $451 million vs. $626.7 million forecast
- Chemicals income: $188 million vs. $356.5 million expected.
“We continue to make significant progress toward delivering our long-term growth plans,” CEO Darren Woods said in a statement. “Our new U.S. Gulf Coast steam cracker is exceeding design capacity by 10 percent, less than a year after startup. Our upstream liquids production increased by 8 percent from last year, driven by growth in the Permian Basin, and we are preparing to startup the Liza Phase 1 development in Guyana, where the estimated recoverable resource increased to more than 6 billion oil-equivalent barrels.” The company’s bottom line also got a boost from a tax-rate change in Alberta, Canada.Exxon’s net production of natural gas liquids, crude oil, bitumen and synthetic oil hit 2.4 million barrels per day, up from 2.212 million barrels per day in the year-earlier period. The company added its upstream business — which includes oil and natural gas exploration — got a boost from higher average oil prices in the second quarter relative to the first period of the year.However, crude prices have recently stumbled. They have fallen more than 5% this quarter. Exxon shares are also down around 5% in the third quarter. Strength in Exxon’s upstream business was able to offset weaker-than-expected results from the energy giant’s downstream and chemical divisions.
BP second-quarter profits beat expectations despite lower oil prices - Energy giant BP reported better-than-expected second-quarter net profits on Tuesday, saying it is “right on target” at the midpoint of its five-year plan. U.K.-based BP posted second-quarter underlying replacement cost profit, used as a proxy for net profit, of $2.8 billion, versus $2.5 billion expected in a Reuters poll. That compared with a profit of $2.8 billion over the same period a year earlier and $2.4 billion in the first three months of 2019. BP said the quarter’s result largely reflected continued good operating performance, offset by oil prices lower than in the second quarter of 2018. International benchmark Brent crude stood at $64.15 Tuesday morning, down more than 14% when compared to the end of the second quarter in 2018. Meanwhile, U.S. West Texas Intermediate (WTI) was trading at $57.25 during morning deals, almost 20% lower from a year earlier. The FTSE 100 giant said its upstream and downstream divisions performed strongly in three-month period through to July 30. Production rose 4% to average 3.8 million barrels of oil equivalent per day. Total revenue for the second quarter came in at $73.75 billion, down 4.1% from a year earlier. BP said Gulf of Mexico oil spill payments of $1.4 billion on a post-tax basis in the second quarter were primarily the scheduled annual payments.
Oil Has a Millennial Problem - Oil companies have a problem, and his name is Robert Paver. This 22-year-old graduate, along with his fellow students of earth sciences at the University of Oxford, should be natural recruits for an industry that has a long and lucrative history in the U.K. But instead of contemplating a career at an offshore driller, he’s planning to become a management consultant. Out of Paver’s cohort of 28 students, only one is going into the oil and gas industry. “Twenty or thirty years ago, oil was definitely very popular for students, but there seem to be a lot fewer people going into it these days,” Paver said in a phone interview. “A lot of alumni went into BP and Shell in the past, more than currently.” For decades, science and engineering graduates have followed a well-worn path from top U.K. universities into the oil and gas industry, supplying the skilled workforce that’s needed to discover and develop resources all over the world. In recent years, the flow of talent has slowed to a trickle, raising fundamental questions for an industry that remains a vital cog in the global economy. The decline began in earnest after 2014, when the price of oil went into freefall and the petroleum industry hemorrhaged jobs. Companies slashed graduate recruitment, with the number of hires halving in two years. Yet that’s not the whole story. Crude prices have recovered and the industry has found its feet again, but the number of British graduates going into the sector has continued falling to the lowest since records began in 2012. There are growing signs that the once-desirable industry isn’t the employer it used to be. “People are worried that there aren’t going to be as many jobs in the future, especially geology-related jobs because of a movement away from fossil fuels,”
California's biggest oil spill in decades brings more defiance than anger from locals - Hardly a day goes by without reports of the growing oil leak in nearby Cymric oil field. So far, more than 900,000 gallons of oil and brine have oozed from a Chevron Corp. well, and filled a dry creek, creating a hazardous black lagoon. The residents of McKittrick, population 145, understand why people are upset by the images. Also, there’s no avoiding the worry that prolonged exposure to crude oil might one day trigger health issues. But judging from the rowdy talk over cold beers and a blaring jukebox at Mike and Annie’s Penny Bar — a watering hole for thirsty oil field hands that has over a million pennies glued to the bar, floors, walls, television and entrance — the locals see a different story playing out. “Environmentalists have it all wrong,” argued Troy Smith, 46, an oil field worker who grew up in the area. “Compared with the catastrophic Exxon Valdez oil spill in Alaska and BP’s deep-sea spill in the Gulf of Mexico, our little outbreak is nothing. Yet, they’re using it as an excuse to shut down California’s oil industry and wipe us out.” “What more do they want?” he asked no one in particular. “We already work under the strictest standards imaginable, and adhere to them tooth and nail.” Smith, like many others in McKittrick, was more worried about how the largest California spill in nearly three decades would affect election campaigns and new oil industry legislation in Congress and the state Legislature. When Gov. Gavin Newsom, who has taken a more anti-oil stance than his predecessor, former Gov. Jerry Brown, ventured to the spill site for a firsthand look on Wednesday, the sarcastic response heard across town was, “There goes the neighborhood.” But the future of California’s billion-dollar oil industry was already being shaped by shifting political winds, building concerns about toxic emissions from oil and natural production, development of alternative energy facilities and a recent overhaul of the California Division of Oil, Gas and Geothermal Resources, or DOGGR, the state’s primary oil regulatory agency. “California can put a stop to the inevitability of oil spills by intentionally transitioning away from oil extraction,” said Kathryn Phillips, director of Sierra Club California. “The state must prioritize our public health and our environment over corporate polluters’ profits.”
Crews clean up oil spill after tugboat sinks at Railway Marina— Washington Ecology, the Coast Guard, and the Navy responded to a sunken 60-foot tugboat with 300 gallons of diesel at the Port Orchard Railway Marina on Monday afternoon. According to Ecology, a small oil skimmer was used and cleanup material was applied, gathering a large amount of spilled diesel fuel. The Navy placed hard boom around the sunken ship. Overnight Monday, the Coast Guard’s contractors plugged the boat’s fuel vents, which allow fuel to flow out when submerged. Upon finding additional fuel in the boom on Tuesday morning, the contractors searched for where the leak was coming from to try to close it, said Larry Altose, communications manager for Ecology. Crews will also pump out any remaining fuel and engine lube to prevent further spillage.“While the boom appears to be effective at containing the spill, the Coast Guard will have a helicopter fly over the area, as that's the best way to see if any oil has escaped containment,” Altose said. The Coast Guard used the federal oil spill contingency fund to hire Global Diving and Salvage to replace cleanup material and assess the vessel, Altrose said
Sunk tugboat spills oil into Port Orchard marina — Multiple agencies were working on an oil spill after a 65-foot tugboat sank at the Port Orchard Railway Marina Monday afternoon. Divers recovered 250 gallons of diesel fuel and hydraulic oil from the boat. Global Salvage and Diving was brought in to clean up and prevent any further pollution. The Coast Guard says it’s working closely with the state and ecology groups to keep potential impact to the environment as minimal as possible.
How Science Got Trampled in the Rush to Drill in the Arctic -- Tucked into the Tax Cuts and Jobs Act was a brief two-page section that had little to do with tax reform. Drafted by Alaska Senator Lisa Murkowski, the provision opened up approximately 1.6 million acres of the vast Arctic National Wildlife Refuge to oil and gas leasing, a reversal of the federal policy that has long protected one of the most ecologically important landscapes in the Arctic. A variety of species such as polar bear and caribou depend on the coastal plain of the Arctic National Wildlife Refuge to give birth to their young. The plain is also believed to sit atop one of the largest untapped reserves of oil in the United States. The only thing standing in the way of establishing an oil and gas leasing program is the environmental review process, which includes an assessment of the proposed seismic surveys and an evaluation of the impacts of leasing and future development on the refuge. Environmental reviews are a standard part of oil and gas drilling elsewhere in Alaska, and normally, such impact statements for ecologically sensitive and undeveloped land would take at least two to three years—or even longer, according to three former DOI officials interviewed for this article. Instead, the administration is compressing it into just over one year. The environmental impact statement for leasing commenced in April 2018, and the final results, already publicly available in draft form, are expected to be published next month. According to interviews with more than a dozen current and former employees at the Fish and Wildlife Service and the Bureau of Land Management in Alaska, that speed has come at a significant cost to the reliability and comprehensiveness of the overall environmental review. They describe a process that has been confusing and “off the rails,” according to one BLM employee.Documents leaked to POLITICO Magazine and Type Investigations reveal that the work of career scientists has at times been altered or disregarded to underplay the potential impact of oil and gas development on the coastal plain. Moreover, DOI has decided it will undertake no new studies as part of the current review process, despite scientists’ concerns that key data is years out of date or doesn’t exist.
The U.S. Might Sanction a Russian Pipeline to Germany. That’s a Terrible Idea. - Don’t just sit there, sanction someone” should be the motto for U.S. foreign policy these days. Let’s impose more sanctions on Iran for violating the agreement from which the Trump administration withdrew unilaterally. Let’s hit Russia with sanctions not only for its 2016 interference in U.S. elections, but for future interference it has yet to commit, instead of passing billsto enhance election security. Now the House and Senate are considering legislation to impose sanctions on companies involved in building the Nord Stream 2 gas pipeline from Russia to Germany. On Wednesday the Senate Foreign Relations Committee passed the sanctions bill 20-2. Ostensibly intended to protect Europe from Russia’s malign influence by halting pipeline construction, this legislation will do nothing of the sort. It is far more likely to undermine U.S. relations with Germany and push Russia even closer to China. In fact, if U.S. lawmakers really want to undercut Russia’s leverage against Europe, they should support the pipeline project. There is much to criticize about Nord Stream 2. It is yet another example of the cozyrelationship between Russian and German business elites. Gazprom, the Russian state-controlled natural gas monopoly and Nord Stream’s majority shareholder, is known for its business practices skewed to benefit Kremlin insiders, many of whom are under U.S. sanctions. The Kremlin has also used Gazprom as a foreign policy tool to bully its neighbors dependent on Russian gas. But the proposed legislation will not change Gazprom, its German and other European partners, or the Kremlin’s bullying habits. Nor will it stop the pipeline, which has the necessary financing and is more than two-thirds completed. Even if the proposed sanctions deter some companies from participating in the project, others will step in. The German government has rejected the Trump administration’s threat of unilateral extraterritorial sanctions against German companies involved in the pipeline project. True, as the pipeline’s critics charge, once it is built, Nord Stream 2 could—theoretically, if Russia develops new supply sources—deliver as much as 55 billion cubic meters more Russian gas annually to Europe. These critics fear that Europe is becoming too dependent on Russian gas, and a new pipeline would make the problem only worse. But in fact, Russia’s share of Europe’s gas imports has been decreasing. In 1980, during the Cold War, Russia supplied 80 percent of Europe’s natural gas imports; in 2018, that share was 40 percent.
Russian Gasoline Makes Long Trek to Venezuela -- Russian oil products are making their way to sanction-stained Venezuela, affording a reprieve for the Latin American nation as it battles persistent fuel shortages. Venezuela received at least 616,000 barrels of gasoline and 500,000 of vacuum gas oil, a feedstock used to produce gasoline, in June and July. The cargoes sailed from the Black Sea port of Taman to Malta, where they were transferred to other vessels heading to Venezuela, according to people familiar with the cargoes and ship-tracking data compiled by Bloomberg. More Russian cargoes could be coming as the vessel Commander, which loaded VGO in Taman in late July, is also heading for Malta, one of the people said. Tanker-tracking data confirm the movement. The fuel shipments could help Venezuela ease its gasoline crisis. Once an exporter of gasoline to the Caribbean and the U.S. East Coast, the country now must import almost of all of its fuel amid breakdowns at its domestic refineries. Before sanctions imposed by U.S. president Donald Trump, Venezuela imported most of its gasoline from the U.S. and India, but recently switched to supplies from Turkey, Latvia, Greece and now Russia. It’s a long trip. Gasoline vessels from Russia take 30 days to Venezuelan shores, while supplies from the U.S. arrive in a little over than a week, according to data compiled by Bloomberg. “Russia is probably charging a premium for these cargoes because of sanctions,” said Andy Lipow, president of Lipow Oil Associates LLC. “It’s unusual that Black Sea gasoline is making its way over to this side of the Atlantic,” he said in a phone interview from Houston. Russia froze domestic gasoline prices in the first half of this year, making fuel exports a more attractive option. From July, the government removed the cap but reached an informal agreement with producers to keep retail and wholesale prices growing in line with inflation, according to Vedomosti.
10,000 Gallons of Oil Spills Into Chile’s Pristine Patagonia - Forty-thousand liters (approximately 10,600 gallons) of diesel oil have spilled into the waters of Chile's Patagonia, a biodiversity hotspot at the tip of South America. The Chilean navy confirmed the oil spill Saturday after receiving a call from CAP, a mining company, informing it of a spill from its terminal on Guarello Island, The Guardian reported. The oil spilled from the island, where CAP mines limestone, and out into the South Pacific Ocean, Reuters reported. Oceana Chile tweeted a map showing the affected area, along with the hope that the spill would not be of unspeakable proportions. Greenpeace Chile also expressed concern over the potential damage, warning it could be "devastating.""It's an extremely grave situation considering the pristine nature of the waters in which this environmental emergency has occurred," Greenpeace Chile Director Matías Asun said in a statement reported by CNN. "It must be considered that the zone is extremely difficult to access and that it is an area of great richness of marine mammals, like whales and dolphins, which could see themselves seriously affected in their habitat given that when coming to the surface to breathe they could meet this layer of oil."The navy sent ships to control the damage and launched an investigation into its cause."The marine pollution control centre was activated," Third Naval Zone commander Ronald Baasch told local media, according to The Associated Press.The navy announced that around 15,000 liters (approximately 4,000 gallons) had been contained as of Sunday, CNN reported.
Chile continues its mission to clean 40,000 liters of oil spilled at sea - The spill occurred near a remote island on the south coast of the country The Chilean Navy seeks to control the spill of 40,000 liters of diesel oil in Chilean Patagonia , in the south of the country. The accident occurred on Saturday on the island of Guarello, on the Chilean side of Patagonia, the southernmost region that constitutes the tip of Argentina and Chile. The spill would have devastating impacts on the environment in the area. “It is an extremely serious situation considering the pristine nature of the waters in which this environmental emergency has occurred,” said the national director of Greenpeace Chile, Matías Asun. “It should be considered that the area is extremely difficult to access and that it is an area of great wealth of marine mammals, such as whales and dolphins, that could be seriously affected in their habitat, since when they surface to breathe they could encounter this layer of oil, ”added the expert. Several units of the Navy were sent to the site as part of the efforts to contain the contamination. The authorities also initiated an investigation to determine the cause of the spill. Matías Asun also asked the Chilean mining company CAP, which exploits natural resources on the island, to provide as much information as possible to clarify what happened.
Indonesian energy giants oil spill affects 10 villages, seven beaches - At least 10 villages and seven beaches in West Java have been affected by the oil spill from state energy giant Pertamina's Offshore North West Java (ONWJ) block that has been polluting the sea for more than two weeks. The Energy and Mineral Resources Ministry's acting director general for oil and gas Djoko Siswanto said in Jakarta on Monday that the affected villages were spread across Karawang and Bekasi regencies. "According to data [from Pertamina], the oil spill has now followed the wind to the west, about 84 kilometres [from the source of the spill]. There are eight effected villages in Karawang and the rest are in Bekasi," he said. Djoko further said the US well control company Boots & Coots, which is affiliated to the US well service contractor Halliburton, had arrived and was expected to start the process of closing down the damaged well with a cement injection. Halliburton is Pertamina's subcontractor for the operation of the YY project, one of its three wells or known as the YYA-1 well. It is the source of the oil and gas spill that began on July 12. Dwi Soetjipto, the Upstream Oil and Gas Regulatory Task Force (SKK Migas) chairman, said Monday that the government's priorities were to minimise its environmental impact and close the damaged well soon.
Environmentalists call Pertamina out on Karawang oil spill, prepare lawsuit - State energy company Pertamina has come under fire for allegedly failing to take proper action to clean up a large oil spill off the coast of Karawang in West Java. The Indonesian Forum for the Environment (Walhi) said an estimated 3,000 barrels of oil have been seeping into the ocean each day since July 12, when a well-kick occurred at a freshly drilled well about 2 kilometers offshore. The oil spill had already spread over an area of more than 45 square kilometers by July 18, resulting in fishermen and shrimp farmers suffering major economic losses. Some of them are now preparing to file a lawsuit against Pertamina. "Our records from the ESA Sentinel 1 satellite can be accessed publicly. We are using a foreign-owned satellite and more data will become available on Aug. 2," said Dwi Sawung, manager for energy and urban affairs at Walhi. The environmental group claims that Pertamina has so far made no attempts to clean up the spill, which is spreading fast due to strong winds in the area. "The last report we received from people was that it had reached Untung Island in the Thousand Islands," Sawung said, referring to a group of islands off the coast of Jakarta. "Pertamina has not told the public about the management progress and the spread of the oil, which spilled from their drilling location," he added. Sawung said the oil giant's emergency procedures are inadequate, especially on informing the worst affected parties. The result is that people do not know how to deal with the situation, or how severe the impact is.
Oil spill across 150 meters of Ras Ghareb amid oil pollution - Oil stains covered a distance of 150 meters in the Dai al-Qamr area of Ras Ghareb in the Red Sea governorate on Tuesday amid warnings of the spots extending to other areas and impacting beaches and maritime life on the Red Sea. The Operations Room in the Ministry of Environment decided to form a committee of environmental researchers who will inspect the stains and dispatch samples to the laboratories of the Environmental Affairs Agency in Suez to determine the source and perpetrator of the spots before filing a lawsuit and determining the value of financial compensations expected for the affected marine environment. Red Sea Governor Ahmed Abdallah said that he met representatives of several oil companies to set a new mechanism for eliminating oil leakage and controlling leakages before they extend to the beaches of Hurghada. Abdallah noted that the government pays a lot of money to combat oil pollution, which damages health, economy, and the tourist environment in the governorate. He also stressed the importance of cooperation between the oil companies and the governorate in managing the crisis through a modern scientific method and contact with a company specialized in combating oil pollution. The Environment Ministry announced July 5 that it spotted a crude oil spill covering 1,500 meters off the coastal area of Ras Ghareb in the north of the Red Sea governorate and declared a state of emergency while cooperating with the Petroleum Ministry to determine the spill’s source. Crude oil spill pollution has covered the coastal area of Ras Ghareb five times, causing severe damage to the beaches and marine life of the Red Sea.
Increasing warnings of environmental disaster in the Red Sea - There are growing warnings of a potential environmental disaster as a result of an oil spill from a floating tank in the Red Sea. The Government of Yemen government and the Houthi group have been reciprocally accusing each other in this regard.Yemeni President Abdrabbuh Mansur Hadi has warned of a possible environmental disaster in the Red Sea because the Houthis have prevented a UN technical team from accessing the Tanker.“The “Safar” tanker is worn out, and its explosion or the leakage of its loads will result in one of the most significant oil leaks in history,” said the Information Minister of Hadi’s government, Muammar Mutaher Al-Eryani, in a series of tweets. He said that environmental disaster will affect marine life in the Red Sea and maritime traffic in the Strait of Bab-el-Mandeb and the Suez Canal, which are two of essential waterways in the world.The minister called on the world to stop the persistent intransigence of the Houthi group that prevents the United Nations team from maintaining the tanker.Al-Eryani revealed that the Houthis demand the tanker’s revenues – estimated at $80 million. He also warned of an environmental disaster that could spread to Saudi Arabia, Eritrea, Sudan, and Egypt.In contrast, the leader of the Houthi group, Mohammed Ali Al-Houthi, held Hadi’s government, the Arab Coalition, and the United Nations responsible for the environmental disaster that may be caused by the oil spill from the Safar oil tanker.The leader, who is a member of the Supreme Political Council of the Houthis authority in Sana’a, said via Twitter that his group “is not preventing the tanker’s maintenance” and is constantly asking the United Nations to intervene.
OPEC oil output hits lowest since 2011 on Saudi cut, sanctions: Reuters survey - (Reuters) - OPEC oil output hit an eight-year low in July as a further voluntary cut by top exporter Saudi Arabia deepened losses caused by U.S. sanctions on Iran and outages elsewhere in the group, a Reuters survey found. The 14-member Organization of the Petroleum Exporting Countries pumped 29.42 million barrels per day (bpd) this month, the survey showed, down 280,000 bpd from June’s revised figure and the lowest OPEC total since 2011. The survey suggests Saudi Arabia is sticking to its plan of voluntarily restraining output by more than called for by an OPEC-led supply deal to support the market. OPEC renewed the supply pact this month, shrugging off pressure from U.S. President Donald Trump to pump more. Despite lower OPEC supplies, crude oil has fallen from a 2019 high above $75 a barrel in April to $65 on Wednesday, weighed down by concern about slowing economic growth. OPEC, Russia and other non-members, known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from Jan. 1 this year. OPEC’s share of the cut is 800,000 bpd, to be delivered by 11 members and exempting Iran, Libya and Venezuela. In July, the 11 OPEC members bound by the agreement, which now runs until March 2020, achieved 163% of pledged cuts, the survey found. All three exempt producers also pumped less oil.
Column: Iran's crude exports are down, but estimates of how much vary wildly - (Reuters) - Iran’s crude oil exports last month were either less than two supertankers’ worth, or as much as one of the giant vessels every two days, depending on who has the most accurate data. The huge discrepancy between industry experts and analysts on the true volume of Iran’s exports shows just how difficult it has become to get accurate figures since the United States ended sanctions waivers for the country’s top eight buyers. Iran’s exports were down to as little as 100,000 barrels per day (bpd) in July, not even enough to fill two very large crude carriers (VLCCs), which carry around 2 million barrels each, according to an industry source who tracks oil flows. Refinitiv - which monitors shipments based on vessel-tracking, port and other data - also estimates Iran exported about 120,000 bpd in July, if shipments of condensate, a type of light crude are included. If these numbers are accurate, it would represent a major drop from at least 400,000 bpd exported in June, and an even more dramatic plunge from the 910,000 bpd Iran exported in April, the month before the U.S. waivers expired. Iran is capable of shipping far more, with the 2.6 million bpd it exported in April 2018, the month before U.S. President Donald Trump withdrew the United States from the multi-lateral deal with Tehran to limit its nuclear programme, indicative of the nation’s potential. The problem is that there are also numerous industry sources who believe Iran’s exports are substantially higher than what can be seen by ship-tracking data or confirmed by port officials. Vessels are supposed to keep their Automatic Identification System (AIS) tracking signals active at all times, but it is well known that many tankers used by Iran turn these systems off to mask their loadings and unloadings. Satellite tracking can help monitor activities like ship-to-ship transfers done on the open seas, but it’s also impossible to cover every square metre of ocean.
OPEC Sees Oil Surplus in 2020 Amid Shale Surge - OPEC forecasts that supplies from the cartel's rivals will grow by more than twice as much as global oil demand. At the start of July 2019, OPEC plus Russia decided to continue the agreement struck last year for at least another nine months, and daily production will remain 1.2 m barrels below last October’s level. In response, Brent crude rose to $67 per barrel (bbl) but has since drifted to $63.46 /bbl, a level which is below what many OPEC members require to finance their budgets. For example, the Saudi economy needs oil prices of around $80 a barrel to balance its budget, reports Al Jazeera in July. OPEC’s July Oil Market Report sees global GDP growth of 3.2 percent continuing into 2020 and world demand rising by 1.4 (million barrels per day (mb/d) year-on-year to around 100 mb/d. At the same time the report sees non OPEC member producers' output growing by 2.4 mb/d; more than twice as much as global oil demand. U.S. shale oil output reached a record 12 mb/d in April and OPEC‘s report notes that, “U.S. tight crude production is anticipated to continue to grow as new pipelines will allow more Permian crude to flow to U.S. Gulf coast export ports.” Consequently, the report forecasts a decline in demand for OPEC crude of 1.3 mb/d to 29.3 mb/d and a global glut of crude in 2020, implying a further cut of 560,000 barrels per day (bp/d) to maintain prices. What Next?The coming months could be marked by extreme turbulence and uncertainty in the oil market and within OPEC itself. America and Iran, an OPEC member, are flirting with war, as U.S. sanctions on Iran bite and Iran threatens the passage of tankers through the Straits of Hormuz. Venezuela’s oil exports have collapsed through a combination of domestic mismanagement and U.S. sanctions against Petróleos de Venezuela, S.A, its national oil company. Production in Libya is vulnerable from the escalating conflict and Nigeria’s output is uncertain. These threats could ensure a further decline in OPEC’s market share from 39.2 percent in March as distinct from OPEC’s self-imposed production cuts. There is also uncertainty as to how long the OPEC alliance will be willing to lose market share to America. In 2018 America became the world’s largest crude producer and this year America will pump 1.2 m more barrels of crude a day. At December’s next scheduled OPEC meeting, participants face a problem of what to do next, especially if the world economy begins to slow and in particular, demand from OPEC’s largest customers China and India, falters. If crude prices remain low OPEC and Russia will face a difficult choice: let prices dip or cut production more steeply than envisaged--sacrificing market share and supporting U.S. shale.
Iraq Uses Old Trick To Get US Involved In Major Gas Hub - Last week saw two apparently independent major events occur in Iraq centred on its gas sector but a senior oil and gas industry source who works closely with Iraq’s Oil Ministry told Oilprice.com they were a lot more connected than they seemed. The first was a statement by the Secretary General of the Iran-Iraq Joint Chamber, Seyed Hamid Hosseini, that Iran’s gas and electricity exports to Iraq are expected to reach US$5 billion by the end of the current Iranian calendar year, ending on 21 March 2020. The second was an announcement by Iraq’s Oil Minister, Thamir Ghadhban, that a U.S. consortium led by Honeywell has signed a memorandum of understanding for a huge deal that would reduce the country’s current level of gas flaring by nearly 20%. “Iraq under the auspices of Moqtada al-Sadr – the real power behind the [Adil] Abdul-Mahdi government is very good at playing the U.S. with the Iran card, so every time there is a hint that Iraq will continue with its historically close relationship with Iran, the U.S. comes in to offer the services of one of its companies at beneficial terms to Iraq,” the source said. The deal itself involves U.S. giant, Honeywell, partnering with another U.S. heavyweight, Bechtel, and Iraq’s state-owned South Gas to build the Ratawi gas hub In the first stage that is expected to last for three years this project will process up to 300 million standard cubic feet per day (scf/d) of ‘associated gas’ (generated as a by-product of crude production) at five southern Iraqi oil fields: Majnoon, Gharib al-Qurna, al-lhiss, al-Tubba, and al-Siba. It comes shortly after the granting of a new waiver from the U.S. for Iraq to import electricity from Iran, first awarded last November and subsequently renewed in December, March, and June, each time for 90 days. At the same time, Iraq has been steadily importing around one third of its total energy supplies from Iran, which equates to around 28 million cubic feet (mcf) of gas to feed its power stations. With peak summer power demand in Iraq perennially exceeding domestic generation, Iraq’s dependence on Iran is acute – a highly troubling situation for the U.S. in all circumstances, let alone the current impasse – and made worse still for its capacity to cause major civilian unrest in the country.
Tehran Urges China To Buy More Iranian Oil As It Feasts On Saudi Crude - Following China's crude imports from Iran plunging this summer, sinking almost 60% in June compared to a year earlier - which corresponded to Washington shutting down the waiver program in May - leaders in Tehran are urging China to buy more Iranian oil. China's crude shipments from Iran totaled 855,638 tons last month, which averages to 208,205 barrels per day (bpd), compared with 254,016 bpd in May, according figures from the General Administration of Customs, cited in a recent Reuters report.Iran's Vice President Jahangiri made the appeal to Beijing and "friendly" countries to up their Iranian crude purchases in statements Monday. “Even though we are aware that friendly countries such as China are facing some restrictions, we expect them to be more active in buying Iranian oil,” Jahangiri reportedly told visiting senior Chinese diplomat Song Tao.He said this while also on Monday issuing a statement saying Iran stood ready to "confront" American aggression in the region and that multilateralism must be upheld. “The foreign policy of the Islamic Republic of Iran is to protect multilateralism and confront American hegemony,” Jahangiri said, according to the IRIB news agency.He added that Iran's recent move to breach uranium enrichment caps could be reversed should other parties return to upholding their side of the nuclear agreement. Simultaneously, China's oil purchases from Iran's rival Saudi Arabia have soared to record volume, totaling 1.89 million barrels a day last month, according to numbers cited in Bloomberg. "Shipments from the OPEC producer made up almost a fifth of its total oil purchases in June and was 64% higher than the previous month," while at the same time "Imports from Iran fell to the lowest since May 2010," according to Bloomberg.
Millions of barrels of Iranian crude are sitting in Chinese ports — and could disrupt oil markets - Iranian oil tankers have been quietly offloading their supply into Chinese ports, according to ship tracking data, despite U.S. sanctions on crude from the Islamic Republic. These flows, which experts say show no sign of stopping, could seriously disrupt U.S.-China trade talks as well as oil markets if Beijing decides to actually use them. Estimates as to the volume of Iranian crude that’s made its way to China between last January and May vary from 12 million to 14 million barrels, an amount that market watchers say could dramatically impact the price of oil. “If China were to aggressively purchase Iranian crude oil and/or draw down on these stored volumes, oil prices would likely fall by $5.00 to $7.00 per barrel,” “It would be a meaningful outlet for Iranian supplies that have been severely crimped by the sanctions.”. “It would also likely trigger a harsh response from the (President Donald) Trump administration.” But there is at least one reason Washington hasn’t sounded the alarm over these Persian barrels. China keeps them in what’s called “bonded storage,” which means the oil has not been cleared through Chinese customs and is not being used, therefore not actually violating U.S. sanctions. Kilduff estimates that another 20 million barrels are “en route, likely headed for this bonded storage.” This benefits both Iran and China in a few ways. Iran’s onshore and floating storage is rising in inventory due to reduced exports — but it can’t just stop pumping oil because its export capacity has plummeted. That’s because leaving the oil underground could lead to permanent damage to its oil wells. Putting it in Chinese bonded storage offers Iran a convenient solution, and one that means it doesn’t have to use so many of its tankers as floating storage facilities. The setup also advantages Iran, “because it gets its oil pre-positioned in the key Asian market, ready for sale, if sanctions get eased, a financial work-around is struck, or via barter transactions, where the oil is traded for goods.” Meanwhile, the situation advantages China because it gets a major discount on the oil and it functions as payment for work that Chinese companies are doing in Iran, analysts say.
Oil prices slip after 'constructive' talks on Iran's nuclear deal - Oil edges up on prospect of US interest rate cut - Oil prices edged higher on Monday as the prospect of an expected interest rate cut by the U.S. Federal Reserve overshadowed pessimism over U.S.-China trade talks and worries about slower global economic growth. Brent crude rose 16 cents to $63.62 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were up 51 cents to $56.71 a barrel. “Prices appear to be treading water ahead of this week’s events,” said John Kilduff, partner at Again Capital Management. Traders and investors are watching the Fed this week, with U.S. central bankers expected to lower borrowing costs for the first time since the depths of the financial crisis more than a decade ago. U.S. President Donald Trump said a small Fed rate cut “is not enough.” Economic growth in the United States slowed less than expected in the second quarter, strengthening the outlook for oil consumption. Elsewhere, growth is slowing faster, partly because of the U.S.-China trade war over the past year. U.S. and Chinese negotiators meet this week for their first in-person talks since a G20 truce last month, but expectations are low after Trump said China might not want to sign a trade deal until after the 2020 U.S. election. “On the trade front, expectations may be low ahead of renewed Sino-U.S. talks, but any positive echoes this week will lift market sentiment,” said BNP Paribas global oil strategist Harry Tchilinguirian. Crude prices were also supported by supply risk as tensions remained high around the Strait of Hormuz, through which about a fifth of the world’s oil passes. Tensions have spiked between Iran and the West after Iranian commandos seized a British-flagged oil tanker in the Gulf this month in apparent retaliation for the seizure of an Iranian tanker by British forces near Gibraltar. Britain told Iran that if it wants to “come out of the dark” it must follow international rules and release the British-flagged tanker.
Oil Markets On Edge Ahead Of Big Week - Oil prices seem trapped between supply outages on the one hand, and fears of weak demand on the other. WTI and Brent moved up slightly in early trading on Tuesday.. The oil majors will report earnings this week. Total and Equinorstarted things off a few days ago, reporting disappointing results. However, BP beat analysts’ expectations on Tuesday. Royal Dutch Shell reports on Thursday, while Chevron and ExxonMobil report on Friday. As the Wall Street Journal reports, “The overriding challenge for large oil companies this period—and into the foreseeable future—will be how well they negotiate the transition to cleaner forms of energy and future-proof their businesses against changing public sentiment and policies that could add a surcharge on carbon emissions.” . As sanctions cut into Iranian oil exports, more oil is diverted into both onshore and floating storage. According to Kpler, storage has climbed above 110 million barrels. . Colorado Department of Public Health and Environment proposed new regulations on air pollution from the oil and gas industry. The rules would require mandatory inspections on leaks, close a loophole that allows companies to begin drilling without air permits, and an array of other regulations on emissions from pipelines, storage tanks and truck unloadings. “We’re going to reduce statewide emissions by 80% by 2030,” John Putnam, the state health department’s environmental programs director, said at a public meeting. “We’re still trying to figure out exactly how to get there. We cannot do it without regulating this oil and gas sector.” U.S. electric utilities are set toincrease capital expenditures as they shut down coal and turn to other forms of generation, according to CFRA Equity Research. Spending for the S&P 1500 Electric Utilities Index could grow by 5.5 percent in 2019 and 4.5 percent in 2020.
Oil jumps 1.5% on expectations of Fed rate cut, supply drawdown - Oil prices rose on Tuesday, on track to close at a two-week high, on optimism the U.S. Federal Reserve will cut interest rates this week for the first time in more than 10 years, boosting demand expectations in the world’s biggest oil user. Meanwhile, ahead of weekly data, crude oil inventories in the United States were also forecast to have dropped for a seventh straight week. Analysts also noted the market was up on optimism over U.S.-China trade talks, which could boost oil demand around the world. On its second to last day as the front-month Brent crude for September delivery were up $1.27, or 2.0%, at $64.98 a barrel by 2:22 p.m. EDT, while U.S. West Texas Intermediate crude was up $1.40, or 2.5%, to $58.27. That put both contracts on track to rise for a fourth day in a row to what would be their highest closes since July 15. “WTI spiked in late trade after passing through $57.50 a barrel, which was a psychological resistance, and $57.64, which was a recent trading high,” said Phil Flynn, an analyst with Price Futures Group in Chicago. For the month, however, both contracts were still set to decline due to lingering worries about oil demand with Brent down over 2% and WTI down almost 1%. “Crude oil moved higher today partly due to anticipation of another meaningful inventory draw this week along with tensions that remain escalated in the Strait of Hormuz,” said Brian Kessens, senior portfolio manager at energy investment manager Tortoise, noting “the prospect of lower rates and U.S.-China trade talks are buoying economic prospects.” U.S. central bankers will begin their two-day meeting later on Tuesday and were expected to lower borrowing costs for the first time since the depths of the financial crisis more than a decade ago.
Oil Prices Up More Than $1 - Both the WTI and Brent contracts rallied Tuesday amid Fed speculation. West Texas Intermediate (WTI) and Brent crude oil futures rallied Tuesday, buoyed by speculation that the U.S. Federal Reserve will announce a quarter-percentage-point cut in a key interest rate Wednesday. The WTI for September delivery rose $1.18 Tuesday to settle at $58.05 per barrel. The contract peaked at $58.32 and bottomed out at $56.96. The September Brent price settled at $64.72 per barrel, reflecting a $1.01 gain. Barani Krishnan, senior commodities analyst with Investing.com, told Rigzone that a price bump from a Fed interest rate cut could soon be erased by ongoing oil market considerations. “It’s supposed to be the week when assets from stocks to commodities get supercharged from ‘rate cut excitement,’” said Krishnan. “Yet, there’s a nagging feeling that whatever gains oil tacks on could be diminished by the end of the week as demand worries continue to tug at the market’s underbelly. Demand worries are continuing to haunt oil despite prospects of the first U.S. rate cut in a decade that could be a boon for commodities.” In addition, Krishnan pointed out that – despite oil’s recent positive momentum – dissipating Iran-related tensions could be the antidote for any crude rally. “If tensions over Iran ease further or if Tehran manages to strike a new nuclear deal with the Trump administration to suspend sanctions on its oil, there are concerns that up to 2 million barrels per day more of crude could enter the market, negating OPEC production cuts and adding to current oversupply,” said Krishnan. Krishnan added that the above supply scenario warrants serious market consideration.
WTI Extends Gains Above $58 After Bigger-Than-Expected Crude Draw -- Oil rallied notably today as traders anticipated a growth jolt from The Fed tomorrow and tensions remain in the MidEast as Iran threatened to choke supplies. “The crude oil market loves trade headlines,” “Even if they were negative earlier in the day, at the end of the day the countries are trying to make a deal happen. They’re not there to fail, and that supports oil.” API
- Crude -6.024mm (-2.75mm exp)
- Cushing -1.449mm
- Gasoline -3.135mm
- Distillates -890k
After the prior week's shockingly large draw, crude inventories were expected to modestly drop further but once again surprised to the downside with a bigger-than-expected 6mm drop in stocks (and big draw in gasoline also)... WTI had surged back above $58 ahead of the API print and extended gains after the surprise API Print
WTI Extends Gains After Across-The-Board Inventory Draws - Oil prices extended gains overnight off the back of API inventory data and a drop in Libya production“I expect draws in crude stockpiles, but not as big as we’ve seen in the last few weeks,” says Mark L Waggoner, president at commodity brokerage Excel Futures. “Refinery run rates will be ramping up a bit because we’re still in the middle of summer and driving season” DOE:
- Crude -8.50mm (-3.25mm exp)
- Cushing -1.533mm
- Gasoline -1.791mm
- Distillates -894k
Crude inventories have fallen - significantly - for seven straight weeks, but last week saw stocks dropping across the entire energy complex as Barry-driven shut-ins came back online. This streak pushes US Crude inventories to their lowest since Nov 2018... After the prior week's collapse in crude production (thanks to Storm Barry shut-ins), production rebounded as expected...WTI hovered around $58.50 ahead of the DOE print and extended gains after the big draws...
Oil prices rise for fifth day after US stocks decline - Oil prices rose for a fifth day on Wednesday, buoyed by a bigger-than-expected drop in U.S. inventories and as investors awaited a widely expected cut in interest rates by the Federal Reserve, the first in more than 10 years. Brent crude was up 44 cents, or 0.7%, at $65.16 a barrel by 0324 GMT. U.S. West Texas Intermediate crude gained 41 cents, or 0.7%, to $58.46 a barrel. “The market is quite optimistic leading into what the Fed is going to do on interest rates and as a result of that we’ll see more demand,” Jonathan Barratt, chief investment officer at Probis Group in Sydney, said by phone, referring to the widely expected cut. Central bankers in the United States began their two-day meeting on Tuesday and were expected to lower borrowing costs for the first time since the depths of the financial crisis more than a decade ago. U.S. consumer spending and prices rose moderately in June, pointing to slower economic growth and benign inflation that cemented expectations of Fed rate cuts. U.S. President Donald Trump on Tuesday reiterated his call for the Fed to make a large interest rate cut. That would be an unlikely move by the central bankers, Barratt said. Despite the gains in prices, Brent is set to ease in July due to ongoing worries about demand, heading for a decline of about 2%, while WTI is down 1 cent. Still, U.S. inventories have been falling in recent weeks suggesting demand concerns are overstated. Crude stockpiles fell again last week, along with gasoline and distillate inventories, data from industry group the American Petroleum Institute (API) showed on Tuesday. “There is a definitive seasonal trend emerging as inventory draws continue to beat analysts’ expectations by a mile suggesting analysts have grossly underestimated consumption and the breadth of seasonal demand this year,” VM Markets Pte said in a note. Crude inventories fell by 6 million barrels in the week ended July 26 to 443 million barrels, compared with analysts’ expectations in a Reuters poll for a decrease of 2.6 million barrels, the API data showed. If confirmed by U.S. government data on Wednesday morning, the decline would put crude stocks down for a seventh week in a row. That would be longest stretch since they fell for a record 10 consecutive weeks ending in January 2018.
Oil drops as Fed signals rate cuts may be limited - Oil dropped on Thursday, declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of interest rate cuts and as rising U.S. output helped keep the market well supplied.The Federal Reserve reduced rates on Wednesday, but against expectations the head of the U.S. central bank said the move might not be the start of a lengthy series of cuts to shore up the economy against global economic weakness.Brent crude, the international benchmark, fell $1.49 to $63.56 a barrel. U.S. West Texas Intermediate (WTI) crude was down $1.77, or 3% at $56.81.“A relatively upbeat mood in risky assets took a spectacular U-turn after last night’s Fed decision,” Tamas Varga of oil broker PVM said. “The dollar started to strengthen and equities and oil went into a kind of meltdown mode.” A rising dollar makes oil more expensive for holders of other currencies and tends to weigh on commodities priced in the U.S. currency. The dollar hit a two-year peak against the euro on Thursday after the Fed decision. 1/8USD/ 3/8Oil’s drop came despite a bigger-than-expected decline in U.S. inventories and a fall in OPEC production in July, typically bullish drivers for prices. But U.S. output rose in a market that analysts say is well supplied.“Supply is plentiful and demand growth is showing signs of weakening globally because of trade conflicts, Brexit and other events that tend to potentially weaken economic growth and, hence, oil demand,” Victor Shum, senior partner at IHS in Singapore, said.“There’s a lot of oil out there. U.S. output is growing strongly.”
Oil prices nosedive 8% on Trump tariff threat -- worst day in more than 4 years - US oil prices collapsed Thursday after President Donald Trump fired another shot in the US-China trade war. Trump's vow to impose a 10% tariff on another $300 billion of US imports from China is worrying investors that a severe economic slowdown could eat into demand for oil and other commodities. The escalation also raises the risk that China will retaliate byimposing tariffs on US oil.Crude tumbled 8% to $53.95. That's the biggest single-day decline since February 2015. Oil was already in the red prior to Trump's tweet, which then accelerated those losses. "This is heightening fear of a major slowdown," said Ryan Fitzmaurice, energy strategist at Rabobank.US stocks and Treasury bond yields also fell sharply on the news, underscoring the worry on Wall Street.Investors were already on high-alert for signs of weakness in the economy, especially after the Federal Reserve lowered interest rates this week for the first time in nearly 11 years."Prices were weak prior to the tweet. And then once it came out, it really snowballed," Fitzmaurice said. Earlier on Thursday, the Institute for Supply Management said American manufacturing activity tumbled in July to the weakest level in nearly three years. Economists had anticipated a slight improvement in factory activity.
Oil falls most in 4 years as Trump imposes more tariffs on China -Oil prices plummeted more than 7% on Thursday, with the U.S. benchmark posting its worst day in more than four years, after President Donald Trump said he would impose additional tariffs Chinese imports starting Sept. 1. The drop in Brent crude was the steepest in more than three years, undoing a fragile oil rally built on steady drawdowns in U.S. inventories even as global demand looked shaky due to the U.S.-China trade dispute. Trump's announcement of an additional 10% levy on $300 billion worth of Chinese goods undermined hopes that the world's two largest economies had reached a detente in a year-long conflict that has weakened growth worldwide. Brent crude fell $4.55, or 6.99%, to settle at $60.50 a barrel, after having dropped to $60.02, its lowest level since June 13. The international benchmark's decline on Thursday was its biggest daily percentage drop since February 2016. "The U.S.-China trade war has damaged the energy demand outlook greatly, already, and this will only add to those concerns, " said John Kilduff, partner at Again Capital Management. "The trade war is clearly far from over." Wall Street abruptly reversed its gains following Trump's tweets, after spending most of the session on track for the best day since June. Bond prices also rose, causing yields to drop as investors sought out safe assets. Oil prices were already weak on continued reaction to the Federal Reserve on Wednesday. The Fed cut rates as expected, but market sentiment turned negative after Fed Chairman Jerome Powell said the move might not be the start of a lengthy series of cuts to shore up the economy against global weakness.
Oil just had its worst day in years—here's how experts are playing energy stocks - Oil prices saw their worst trading day in four years on Thursday after the Trump administration said it would put further tariffs on Chinese goods. Energy stocks, already under pressure from a dramatic quarterly profit miss at exploration and production company Concho Resources, fell further, with theEnergy Select Sector SPDR Fund, or XLE, dropping more than 2%. And although market watchers often see drops like these as chances to buy high-quality names that have been overly punished, “it’s hard to call it a contrarian opportunity right now” in the energy sector, said Matt Maley, chief market strategist at Miller Tabak.“This group has really been dead money most of this year,” he said Thursday on CNBC’s “Trading Nation,” referencing the XLE. “It’s been a rough ride. And ... we see the XLE has formed what’s called a symmetrical triangle pattern.” That pattern tells Maley two things: that if the XLE can break out of the triangle soon, it could make for a big move; and that the longer it trades within the triangle’s boundaries, the smaller that breakout move will be. All in all, for Maley, “it’s hard to make a compelling bet to the upside right now,” he said.But that wasn’t the case for Mark Tepper, president and CEO of Strategic Wealth Partners.Despite the fact that “energy’s just in a death spiral,” Tepper still saw buying opportunities in the space, which he agreed has been “dead money” for years.“In our opinion, if you’re investing in energy stocks, it’s all about being selective and finding that right entry point, and there’s lots of companies today that are being unfairly punished,” he said in the same “Trading Nation” interview. “FANG’s one of them, Diamondback Energy. And, with the pullback today, I would view that as a buying opportunity. ”As the lowest-cost producer in the oil-rich Permian Basin area of western Texas, Diamondback’s advantage is that it “can actually make money when oil’s below [$]50 bucks a barrel,” Tepper said.
Oil prices rebound after Trump trade tariffs trigger plunge - Oil prices rose more than $1 on Friday, rebounding from their biggest falls in years after U.S. President Donald Trump imposed more tariffs on Chinese imports, intensifying the trade war between the world’s two biggest economies and crude consumers. Brent crude futures slumped more than 7% on Thursday, their steepest drop in more than three years. U.S. West Texas Intermediate (WTI) crude futures fell nearly 8%, posting its worst day in more than four years. The collapse ended a fragile rally built on steady drawdowns in U.S. inventories, even as global demand looked shaky because of the trade dispute. Brent futures rose $1.53, or 2.6%, to $62.03 a barrel by 0220 GMT, while WTI futures gained $1.02, or 1.9%, to $54.97 a barrel. Trump said on Thursday he would impose a 10% tariff on $300 billion of Chinese imports from Sept. 1 and could raise tariffs further if China’s President Xi Jinping fails to move more quickly to strike a trade deal. The announcement extends Trump’s tariffs to nearly all of China’s imports into the United States and marks an abrupt end to a temporary truce in a trade war that has disrupted global supply chains and roiled financial markets. Brent and U.S. crude are heading for their first weekly declines in three, on track for falls of more than 2%. “Global growth estimates have been under pressure from the tariff war and the move by the U.S. erases all the goodwill gained earlier in the week when U.S. negotiators were in Shanghai to kick start trade talks,” There have been mounting signs this week of the economic toll of the trade dispute between the United States and China, which reported this week slowing manufacturing activity in July. U.S. manufacturing activity also slipped last month, dropping to a near three-year low, and construction spending fell in June as investment in private construction projects tumbled to its lowest level in 1-1/2 years. The economic slowdown has translated into falling oil demand in the United States, the world’s biggest oil consumer.
Oil Set for Weekly Loss as Trade War Worsens-- Oil is set for a weekly loss after the steepest one-day drop in more than four years as President Donald Trump abruptly escalated the trade war with China, stoking concerns over slowing growth. While futures in New York rebounded on Friday, prices are still far from recovering the 7.9% slump on Thursday, the most since February 2015. Trump said 10% levies will be imposed Sept. 1 on $300 billion in Chinese goods after a round of trade talks on Wednesday ended without a breakthrough. The threat compounded fears about declining American manufacturing activity after the Federal Reserve dashed prospects for serial rate cuts to boost growth. Oil last month capped its smallest monthly move since 1991 as it was caught between concerns global demand may slow and fears crude flows from the Middle East may be disrupted. OPEC’s output slid in July to the lowest in five years as U.S. sanctions on Iran crimped exports from the Persian Gulf nation. Trump’s “latest comment definitely raised the prospect of the dispute extending for longer,” said Kim Kwangrae, a commodities analyst at Samsung Futures Inc. “Given the wider concern over slowing growth has already been reflected in prices, it remains to be seen whether oil will fall further from here as we have geopolitical risks still lingering in the Middle East.” West Texas Intermediate oil for September delivery added 84 cents, or 1.6%, to $54.79 a barrel on the New York Mercantile Exchange as of 8:01 a.m. in London. The contract slid $4.63 on Thursday and is down 2.5% this week. Brent for October settlement gained $1.16 to $61.66 a barrel on the ICE Futures Europe Exchange. Front-month prices are down 2.8% this week. The benchmark global crude traded at a premium of $6.81 to WTI for the same month.
Oil Prices Rebound but Down for the Week- The West Texas Intermediate (WTI) and Brent crude oil contracts on Friday regained some of the value that they lost the previous day. September WTI futures, which lost nearly 8 percent on Thursday, added $1.71 Friday to settle at $55.66 per barrel. The contract peaked at $56.05 and bottomed out at $54.15. Compared to the July 26 close, the WTI is down 1 percent. Brent crude oil for October delivery ended the day at $61.89 per barrel, reflecting a $1.39 gain. The contract is down 2.5 percent for the week. Tom Seng, Assistant Professor of Energy Business with the University of Tulsa’s Collins College of Business, told Rigzone that both the WTI and Brent advanced early in the week on positive economic news only to be “trashed” Thursday on news that the Trump administration plans to impose new tariffs on Chinese imports effective next month. He added, however, that Friday’s price movements represented something of a realization. “Today’s higher prices are the result of retracement from a fall that was ‘too far, too fast’ as well as profit-taking by those who shorted the market on the way down yesterday,” Seng said. “Heading into yesterday, oil prices had climbed steadily higher from last week in anticipation of, and the actual announcement that, the Fed was lowering interest rates for the first time since 2008.” Seng added that investors were disappointed, however, that the U.S. Federal Reserve’s outlook suggested no future rate cuts in the short term. Consequently, the U.S. dollar strengthened and supported crude oil’s initial decline Thursday, he said. “The final blow occurred with the announcement of the new 10 percent tariffs to be placed on Chinese imports as trade talks between the U.S. and China are not progressing,” he said. “Today, prices have rebounded about three percent. The U.S./China trade situations overshadowed a very bullish weekly inventory report.”
Iran calls European fleet in the Gulf ‘hostile’ and ‘provocative’ -- Iran denounced as "provocative" and "hostile" a British proposal for a European-led naval mission to escort tankers in the Gulf amid soaring tensions over the seizure of ships.The condemnation on Sunday came as a Royal Navy warship arrived in the Gulf to accompany British-flagged vessels passing through the vital Strait of Hormuz.The HMS Duncan joined the Frigate HMS Montrose in the Gulf to defend freedom of navigation, Britain's Ministry of Defence said on Sunday."We heard that they intend to send a European fleet to the Persian Gulf, which naturally carries a hostile message, is provocative, and will increase tensions," said Iranian government spokesman Ali Rabiei. Britain said on Monday it was planning a European-led force to escort tankers through the world's busiest oil shipping lane, the Strait of Hormuz, in response to Iran's seizureof a United Kingdom-flagged vessel on July 19. The capture of the Stena Impero came two weeks after British authorities detained an Iranian tanker - the Grace 1 - off its overseas territory Gibraltar over allegations it was breaching EU sanctions on Syria.
Iran Slams Hostile Message As 2nd UK Warship Arrives In Crowded Gulf - On the same day the large British warship HMS Duncan arrived in the Persian Gulf to assist the MHS Montrose in providing safety escorts to UK-flagged ships against the threat of Iranian seizure in the vital oil transit waterway, Tehran has again slammed the UK-led initiative of a joint European fleet patrolling the region. An Iranian government spokesman warned on Sunday that a joint European task force operating so close to Iran's coast “sends a hostile message” and is “provocative and will increase tensions,” according to semi-official Fars News Agency. The rhetoric is nothing new; however what is new and poses immense danger for the prospect of stumbling toward major conflict is the frequency of US and UK warships' movement in the increasingly "crowded" narrow Strait of Hormuz. Britain's controversial call for a “European-led maritime protection mission” quickly gained the support last week of key EU nations France and Germany, with Denmark and The Netherlands also joining the initiative. The BBC reports that the HMS Montrose has thus far escorted 35 vessels through the strait, according to the Ministry of Defence (MoD). The larger HMS Duncan frigate will further join what Britain has dubbed "freedom of navigation" operations not just for UK vessels but "also our international partners and allies," according Defence Secretary Ben Wallace. This as London has kept up pressure for the release of the still impounded Stena Impero, and after Iran's leaders last week appeared to offer an "exchange" of vessels of sorts, demanding the release of the Grace 1, which had been seized by Royal Marines early this month off Gibraltar. Iranian Government Spokesman Ali Rabiyee said further on Sunday that Iran "welcomes" the mediation of certain countries, but that ultimately "seizure of the British tanker was based on legal principles but Britain should release our oil tanker as soon as possible."
Iran not to allow US, UK to take control of Hormuz Strait - Mohsen Rezaei made the remarks on Sunday in a meeting with a Chinese delegation headed by Song Tao, head of the International Department of the Central Committee of the Communist Party of China (CPC), who arrived in Tehran on Sunday. In the meeting, Rezaei expressed his appreciation to Song Tao for the good cooperation of China’s ruling party with the Iranian Expediency Council (EC). The EC secretary also referred to the Iranian Parliament speaker’s visit to China as indicating the start of a new phase in strategic relations between Iran and China. He further attached great importance to the Chinese delegation’s visit to Tehran, expressing hope that the level of the two countries’ relations would increase to a considerable extent after their visit. Rezaei also pointed to the new developments in the region, saying “we live in the energy region of the world. Any kind of insecurity and conflict in this region would carry harm to global peace and security.” He added “Americans and Britain have been fanning the flames of war in the Persian Gulf region and they want to pretend they have control over the Strait of Hormuz and the movement of vessels. Of course, we do not allow this to happen. In the meantime, we expect cooperation from our friends in China.” Rezaei added that Iran is not seeking war but will defend itself, while saying that the Americans want conflict and seek to increase the tensions.
Tanker Seizures & The Threat To The Global Economy From Resurgent Imperialism - The British seizure of the Iranian tanker off Gibraltar was illegal. There is no doubt of that whatsoever. The Iranian response to the seizure of its tanker in the Strait of Gibraltar, by the seizure of a British Tanker in the Strait of Hormuz, was also illegal, though more understandable as a reaction. The implications for the global economy of the collapse of the crucial international law on passage through straits would be devastating. It may seem improbable that the UK and or France would ever seek to close the Dover Strait, but in the current crazed climate it is no longer quite impossible to imagine the UK seeking to mess up access to Rotterdam and Hamburg. It is still easier to imagine them seeking to close the Dover Strait against the Russian Navy. Yet the essential freedom of navigation through the Kerch strait, respected by Russia which controls it, is necessary to the survival of Ukraine as a country. For Turkey to close the Bosphorus would be catastrophic and is a historically recurring possibility. Malaysia and Indonesia would cause severe dislocation to Australia and China by disrupting the strait of Malacca and the Suharto government certainly viewed that as an advantage from which it should have the right to seek to benefit, and was a continued nuisance in UN Law of the Sea discussions. These are just a few examples. The US Navy frequently sails through the Taiwan Strait to assert the right of passage though straits. Keeping the Strait of Hormuz open is perhaps the most crucial of all to the world economy, but I hope that the above examples are sufficient to convince you that the right of passage through straits, irrespective of territorial waters, is an absolutely essential pillar of international maritime law and international order. The Strait of Gibraltar is vital and Britain has absolutely no right to close it to Iran or Syria. If the obligation on coastal states to keep maritime straits open were lost, it would lead to economic dislocation and even armed conflict worldwide.
No Quid Pro Quo - UK Rejects Iran's Offer To Swap Seized Tankers - Britain this week has rejected an Iranian offer to swap each other's captured tankers, as the crisis involving the British-flagged Stena Impero and the Iranian oil filled Grace 1 previously captured by Royal Marines off Gibraltar on July 4 has remained deadlocked. Most observers agree it's virtually a "foregone conclusion" that the tankers will ultimately be traded for one another, however, UK officials are still stalling over what they say are the norms of international law. “There is no quid pro quo,” Foreign Secretary Dominic Raab asserted on BBC radio. “This is not about some kind of barter. This is about the international law and the rules of the international legal system being upheld and that is what we will insist on.” In boarding the Grace 1 on July 4 just as it sought to enter the Mediterranean, British authorities claimed to have thwarted illegal EU sanctions busting related to Syria, as the Grace 1 was reportedly bound for the Syrian port of Baniyas to offload some 2 million barrels of oil to the fuel-starved, war-torn country. Leaders in Tehran accused the UK of simply doing America's bidding, however. Last Wednesday Iran's president initially suggested an equal good faith swap of sorts. He proposed that should the UK release the Grace 1, Iran would do likewise and immediately release the Stena Impero. "If Britain steps away from the wrong actions in Gibraltar, they will receive an appropriate response from Iran," Rouhani said Wednesday addressing a weekly cabinet meeting. The words came the same day Britain had reportedly sent a mediator to Iran seeking to negotiate the ship's return and its 23 detained crew members.
Iran, Russia Planning Joint Naval Drill In Contested Gulf Waters - Russia and Iran are planning a joint naval exercise scheduled within the next year, commander of Iran's Navy Rear Admiral Hossein Khanzadi announced Monday, according to state media. Semi-official Fars has reported it will take place by March 2020 in the Indian Ocean, and will be staged as far north as the strategic and increasingly tense Strait of Hormuz. “A coordination meeting will be held between the two sides in this regard,” he said while on a three day visit to Russia. “When we speak of the Indian Ocean, perhaps the most important part of which is the northern region where it’s linked to the Sea of Oman, the Strait of Hormuz and also the Persian Gulf,” Khanzadi said from Saint Petersburg. . The Iranian naval chief is in Moscow to sign a 'memorandum of understanding' with the Russian Ministry of Defense for expanded mutual ties, and to observe a Russian naval parade. "This is the first MoU of its kind and can be regarded as a turning point in Tehran-Moscow military relations," Khanzadi said of the largely symbolic agreement.This is expected to include further development of military cooperation in the Caspian Sea, though nothing specific was indicated regarding the world's largest inland body of water between Europe and Asia. Iran is also trying to shore up the support of powerful allies as it's preparing to resist US and UK military pressures in the vital Strait of Hormuz, and as it attempts to weather Washington's economic and energy sanctions storm.This comes further as a weekend report in UK media said London is mulling offering Russia a seat at the table on its European-led maritime coalition to safeguard tankers from Iranian attacks, something Moscow would likely rebuff, or alternately Moscow could actually consider such a proposal in order to have a hand in ensuring the avoidance of escalation. Iran and Russia have going years back held joint naval drills in the Caspian Sea, however, wide-ranging drills in the Indian Ocean stretching up through the Persian Gulf would certainly gain the Pentagon's attention and hold the potential for conflict as the region gets increasingly crowded with western naval assets to protect international shipping lanes.
Oil Tankers’ Tracking Signals Are Vanishing in the Strait of Hormuz - Oil tanker owners are finding a way to reduce the risks of navigating the Strait of Hormuz, the world’s most important -- and lately most dangerous -- energy chokepoint: vanish from global tracking systems. Copying from Iran’s own playbook, at least 20 ships turned off their transponders while passing through the strait this month, tanker-tracking data compiled by Bloomberg show. Others appear to have slightly altered their routes once inside the Persian Gulf, sailing closer than usual to Saudi Arabia’s coast en route to ports in Kuwait or Iraq. Before the latest increase in tensions with Iran, ships were more consistent about signaling their positions as they passed through a waterway that handles a third of seaborne petroleum. Once inside the Gulf, shipping routes took them fairly close to the Iranian coast, skirting the offshore South Pars/North gas field shared by Iran and Qatar. Most still do, but a growing number appear to be trying something new. It’s little surprise that ships are doing everything possible to minimize risk. The Gulf region has witnessed a spate of vessel attacks, tanker seizures and drone shoot-downs since May, all against the backdrop of U.S. sanctions aimed at crippling Iran. War-risk insurance soared for tanker owners seeking to load cargoes in the region. Two British warships are now situation in the waters around Hormuz where they were recently escorting the nation’s ships. The U.S. 5th Fleet also permanently operates in the region. On Wednesday, the Norwegian Maritime Authority advised the country’s flagged vessels to minimize transit time in Iran’s territorial waters. Tanker captains have become increasingly nervous about the risks of getting caught up in the conflict. See QuickTake on the Strait of Hormuz At least 12 vessels loaded in Saudi Arabia and shut off their transponders while passing through the strait within the past month. They include the supertanker Kahla, which turned off its signal on July 20 before passing through the strait. It reappeared two days later on the other side of the waterway. Likewise, at least eight vessels that loaded in Iraq and Kuwait went dark while leaving the Strait of Hormuz. A vessel shipping from the U.A.E. also dropped off tracking systems. The apparent shutdown of signals coincides with a slew of disruptions in the region. On July 11, the Royal Navy intervened to prevent Iran from impeding a tanker operated by BP Plc from passing through Hormuz. Three days later, Iran seized a Panama-flagged vessel. On July 19, Iranian forces took control of a British-flagged tanker in retaliation for similar action by U.K. authorities. The vessel, the Stena Impero, remains impounded.
U.A.E. Sends Coast Guard Delegation to Tehran, Mehr Reports -- The United Arab Emirates sent a seven-member delegation from its coast guard for a meeting with counterparts in the Iranian capital Tehran, Iran’s state-run Mehr news agency reported without citing anyone. Illegal trafficking and shared maritime borders are among the topics to be discussed, according to the report. The meeting is the first between the coast guards of the two nations since 2013, Mehr said. It comes after the confrontation between Iran and the U.S. sent tensions in the Persian Gulf soaring, with American officials blaming Iran for recent attacks on oil tankers off the U.A.E. coast.
Turkey Mulling (Another) Military Operation in Northeastern Syria– Turkey’s top military brass and Defense Minister Hulusi Akar held a security meeting on Thursday and discussed a potential military operation in northeastern Syria, immediately after three days of talks with a US delegation over setting up a safe zone along the Turkish-Syrian border.The Anadolu news agency reported that the meeting took place under the leadership of Minister Akar and with the participation of Chief of General Staff Gen. Yaşar Güler as well as commanders of the land, naval and air forces.It said the meeting was focused on Turkish-US talks on the safe zone and Turkey’s potential unilateral military operation in the eastern Euphrates region in a bid to end the presence of the Kurdish People’s Protection Units (YPG) along the border. James Jeffrey, the US special envoy for Syria, had meetings with Minister Akar, Presidential Chief Foreign Policy Advisor İbrahim Kalın and Deputy Foreign Minister Sedat Önal earlier this week. The talks concentrated on the details of the safe zone, an idea that was put back on the agenda by President Donald Trump in mid-January 2019.The fresh ideas on the modalities of the safe zone tabled by Jeffrey did not satisfy Turkey.“We have conveyed our views and proposals to them. We are awaiting an immediate reply,” Akar was quoted as saying by Anadolu on Thursday. “We have once again underlined that we have no tolerance for any delay and that we’ll take action when necessary.”
Israel Fought Behind The Scenes To Drop Turkey From US F-35 Program- Report - A new bombshell report making headlines in Israeli media alleges Tel Aviv went to great lengths to exert pressure on Washington to block the sale of US F-35 stealth fighter jets to Turkey."Israel worked behind the scenes to ensure the United States blocked the sale of its F-35 stealth fighter jets to Turkey as part of its efforts to preserve its military qualitative edge in the region," The Times of Israel revealed Thursday, citing a prior Israeli Channel 12 report."Israel in recent months lobbied Washington to drop Ankara from the F-35 program after President Recep Tayyip Erdogan went ahead with a purchase of a Russian-made missile defense system that would give Turkey advanced air capabilities," the report continued. Though neither US nor Israeli officials have commented on the alleged lobbying campaign, it's consistent with the fact that Israel has seen growing Russian-Turkish defense ties as a significant threat to both its anti-Iran policy and actions in Syria. And further, Ankara and Tel Aviv have a long history of clashing over Palestinian related issues. Last month the White House announced Turkey has been effectively booted from the F-35 program for procuring Russia's S-400 anti-air defense system, further entrenching Moscow's growing influence and security arc in the Middle East. Crucially, both Israel and Turkey were set to be the only countries outside the United States which possessed the advanced Lockheed-made fighter. But it appears Israel did its best to ensure it'd be the only one, as The Times of Israel noted: Israel has agreed to purchase at least 50 F-35 fighter jets from the US defense contractor Lockheed Martin. So far, 16 aircraft have been delivered, and the remaining planes are slated to arrive batches of twos and threes until 2024. Israel is the second country after the US to receive the F-35 from Lockheed Martin and one of the few allowed to modify the state-of-the-art aircraft, known in Israel as the Adir.
Mystery Airstrikes On Iraqi Camp Were Israeli Stealth Jets In Anti-Iran Escalation --Regional experts had immediately suspected the possibility of an Israeli air raid after a pro-Iranian militia arms depot in Iraq was obliterated during a mysterious attack on July 19, and another reported follow-up attack this past Sunday.The attack happened around 80 km from the Iranian border and 40 km north-east of Baghdad at Camp Ashraf, former home to the Iranian exile group Mojahedin-e Khalq, but now reportedly in the hands of Iranian intelligence and paramilitaries. Speculation was rampant in the days that followed as to the source of the 'mysterious' air strikes - or what was also initially reported as a drone strike - however, some pointed the finger at an American operation targeting Iranian militants inside Iraq. But now Israeli and regional media, citing western diplomats, have confirmed it was a nearly unprecedented Israeli operation on Iraqi soil — representing a major escalation and expansion of Israel's anti-Iran operations. Israel reportedly launched a total of two separate air strike operations on the camp using its US-supplied F-35 stealth fighter jets. According to the Israeli newspaper Haaretz: Israel has expanded the scope of its anti-Iranian attacks and struck targets in Iraq, the London-based Arabic newspaper Asharq Al-Awsat reported Tuesday. According to the report, which cites anonymous Western diplomats, Israel struck Iranian warehouses storing arms and missiles at Camp Ashraf, north-east of Baghdad, twice in the past month. On July 19, the base was struck by an Israeli F-35 fighter jet, the sources added. The base was allegedly attacked again on Sunday.
The UN Just Rebuked Two Close US Allies For Shocking Child Death Tolls - As US diplomatic officials around the globe are no doubt lecturing 'official enemies' over human rights, and enforcing crippling sanctions from Caracas to Damascus to Tehran to Moscow, they might pause for a moment and look closer to home, as days ago the United Nations slammed key American allies Saudi Arabia and Israel for killing an appalling high number of children. Not unrelated, as we've noted before, the two countries have also grown closer in their relationship over the past years in common cause against Iran and related to Syria regime change policy. First the Saudis, which found themselves for the first time under unprecedented international scrutiny following the December 2018 Jamal Khashoggi killing in Istanbul. Reuters reported Friday: A Saudi Arabia-led military coalition fighting in Yemen killed or injured 729 children during 2018, accounting for nearly half the total child casualties, United Nations Secretary-General Antonio Guterres said in a report to the Security Council on Friday that blacklisted the coalition for a third year. It should be noted that this is a very conservative estimate among the some 100,000 total number of people believed killed as a result of the four-year long Saudi coalition bombing campaign over Yemen, as a recent report in The Guardian tallied. And of the Israelis, Reuters related the following concerning the UN censure: Guterres also reported that the highest number of Palestinian children had been killed or injured last year since 2014, mainly by Israeli forces, though no parties were blacklisted in the annex to the annual Children in Armed Conflict report, seen by Reuters. The UN report indicated 56 Palestinian children killed by Israeli forces in 2018, which is the highest since the 2014 war in Gaza. Perhaps more astounding though, UN Secretary General Antonio Guterres told the Security Council in his report that Israeli troops injured nearly 2,700 children “in the context of demonstrations, clashes and search and arrest operations.”
Facebook Dismantles Saudi-Linked Network of Fake Accounts — Facebook said on Thursday it had dismantled a network of fake accounts and pages linked to the Saudi government that promotes propaganda and targets Riyadh’s adversaries. More than 350 accounts and pages with some 1.4 million followers had been taken down, the social media site said. It is the first time such action has been linked to the Saudi government. Like Russia and Iran, Saudi Arabia has sought to influence public opinion through social media. Under the direction of Saud al-Qahtani, a close aide to Crown Prince Mohammed bin Salman who has been heavily implicated in the murder of journalist Jamal Khashoggi, a network of pro-Saudi social media accounts known as “the flies” has been set up in recent years. The accounts on platforms such as Facebook and Twitter seek to laud the crown prince and pour scorn on the kingdom’s adversaries and detractors. Many target Qatar, a neighbouring emirate that Riyadh and its allies have placed under a blockade in an attempt to alter its policies. The accounts were also responsible for spreading disinformation following Khashoggi’s murder by a team of Saudi agents in Istanbul in October. “For this operation, our investigators were able to confirm that the individuals behind this are associated with the government of Saudi Arabia,” said Nathaniel Gleicher, Facebook’s head of cybersecurity policy. “Any time we have a link between an information operation and a government, that’s significant and people should be aware.”
Bahrain Follows U.S. Lead on Executions -- Citing the existence of the death penalty in the United States as justification, Bahrain’s government executed political prisoners Ali al-Arab and Ahmed al-Malali by firing squad on the morning of Saturday, July 27. Another man was also executed in a separate, non-political case. The killings came two days after the Trump administration announced it was reinstating the federal death penalty after an absence of nearly two decades.The two political prisoners had been convicted of killing a police officer in 2017 in a trial that involved over 50 defendants. I’ve been in Bahraini courtrooms and seen how these mass, sham political trials work, how defendants’ claims of tortured confessions are dismissed, and fabricated evidence permitted. The process doesn’t much resemble anything recognisable as a fair hearing that would meet international legal standards. In May, five United Nations experts called for the executions to be stopped “amid serious concerns that [the two men] were coerced into making confessions through torture and did not receive a fair trial.” The day before the executions, Agnes Callamard, UN Special rapporteur onextrajudicial, summary or arbitrary executions, urged that the men be spared. “I remind Bahrain that the only thing that distinguishes capital punishment from an arbitrary execution is full respect for the most stringent due process and fair trial guarantees,” she said.
Dubai Ruler's 'Escaped' Wife Seeking Forced Marriage Protection Order In UK Court - A dramatic legal battle between the ruler of Dubai, Sheikh Mohammed bin Rashid al-Maktoum, and his estranged wife, Jordanian princess Haya bint al-Hussein, over their children’s custody began this week in a London court and has already witnessed a "non-molestation order" and a "forced marriage protection order" brought against the powerful Emirati sheikh by his wife. She's reportedly been hiding out in London and says she's "afraid for her life."It was first reported weeks ago that the 45-year-old daughter of late King Hussein had fled the UAE with her two children, seeking to escape her billionaire (and allegedly abusive) husband, which drove speculation as to whether Dubai would invoke diplomatic powers to try and force her back to the UAE. She fears she could be abducted and rendered back to Dubai, similar to what happened in the case of Sheikha Latifa — daughter of the Dubai ruler who mounted her own "escape" attempt last year, only to be captured later by Emirati forces on a yacht attempting to flee.The family is said to be worth over $4 billion and exercises huge influence in other countries where they maintain substantial assets and real estate, such as the UK. The protection orders are being considered by the court in response to Sheikh Mohammed's seeking a legal order for the summary return of their children to Dubai. The 70-year old sheikh was absent from the proceedings but is represented by his legal team.
Libya’s Grim Civil War Escalates - Barely eight years after Libyan dictator Moammar Gadhafi was toppled and the militias in Misrata put his corpse on display in a butcher's fridge, the country is in the throes of a third civil war. According to the United Nations, around 1,000 people have been killed and 5,000 injured in the fighting south of Tripoli. More than 100,000 residents have been forced to flee their homes. Libya now has two governments and has long since ceased to be a state. One in the east, in Tobruk, supports Haftar, a 75-year-old former colonel who once helped Gadhafi organize the coup that brought him to power. After falling out of favor with Gadhafi, Haftar lived in the United States for nearly two decades and is rumored to have occasionally worked for the CIA. After Gadhafi's fall, Haftar returned to Libya and since 2016 has given himself the title of field marshal.The rival government in the west, the Government of National Accord (GNA), is led by Prime Minister Fayez Sarraj in Tripoli. It's recognized by the United Nations and the European Union, but not by the elected parliament, which has fled to the east. The GNA is largely powerless, relying on the support of the militias, who are the de facto rulers of Tripoli.Amid all this chaos, thousands of migrants from sub-Saharan Africa are stranded here on their long trek to Europe. Many have been interned by the militias in brutal torture camps, kept in slave-like dependency and are in some cases conscripted into military service. More than 50 people died during an air raid on a refugee prison in Tripoli on July 3. It is the tragedy of a country that could be the richest on the continent, with the world's ninth largest oil deposits. But after Gadhafi bled the country dry for 42 years, he left behind a power vacuum that imploded after he was killed, and an ongoing struggle erupted among cities, tribes and their militias over power and access to wealth.
Air strike on Libya hospital kills five doctors - An air strike has killed five doctors in a hospital in the southern outskirts of Libya's capital Tripoli, an official from the UN-backed government says. A warplane belonging to Khalifa Hafta, the rogue general who commands the Libyan National Army, carried out the attack, the health ministry spokesman added. The LNA has not commented. Libya has been roiled in conflict since the fall of long-time leader Muammar Gaddafi in 2011. Fighting between the UN-backed Government of National Accord (GNA) led by Prime Minister Fayez al-Sarraj, and Mr Haftar's LNA, has claimed 1,100 lives since April, according to the World Health Organization (WHO). The fighting has remained deadlocked on the outskirts of the capital, with both sides resorting to air strikes, news agency AFP reports. Saturday's bombing also wounded seven people, including some rescuers, Lamine al-Hashem, the spokesman from the health ministry, said. "It was a direct hit against the field hospital which was packed with medical teams," Mr Hashemi added. The attack was the third to target a hospital in the capital's south, AFP reports. African migrants who use Libya as a key crossing point to Europe have also been caught up in the fighting. The GNA blamed the LNA for last month's air strike on a detention centre that killed at least 50 migrants.
Mass protests erupt after Sudan’s military junta guns down school children - Tens of thousands of students and youth took to the streets this week after Sudan’s armed forces opened fire on a youth rally Monday over bread and fuel shortages in El-Obeid, the regional capital of North Kordofan. Six people were killed, including four school children, and more than 60 injured. The military junta has now closed down all the nation’s schools. Videos on social media show security forces in El-Obeid firing a truck-mounted machine gun against protesters from close range. The truck is marked with a skull and crossed swords insignia and a windscreen sticker reading, “Playing with the big guys is tough.” It has rocket-propelled grenades hanging on the side. According to the Sudanese Doctors Committee, some of the protesters were shot by snipers. Demonstrators accused the Rapid Support Forces (RSF), the paramilitary group led by one of the leading members of Sudan’s military junta, Mohammed Hamdan Dagolo, also known as Hemeti, of the killings. The governor of Northern Kordofan ordered a statewide closure of schools and a 9 p.m. to 6 a.m. curfew in four towns and cities in a bid to quell the unrest. But outrage provoked by the killings could not be contained. One of the main protest groups, the Sudanese Professionals Association (SPA), called for nationwide demonstrations “to denounce the El-Obeid massacre and demand the perpetrators be brought to justice.” Tens of thousands of students and youth responded in the capital Khartoum on Tuesday and in El-Obeid on Wednesday in a rising tide of opposition to the Transitional Military Council (TMC), which ousted long-term dictator President Omar al-Bashir in April to prevent the overthrow of the entire regime. Some protesters in Khartoum wore school uniforms and chanted, “Killing a student is killing a nation.” Security forces used tear gas and live ammunition to disperse the crowds. As the unrest continued, the nationwide shutdown of schools was ordered.
No comments:
Post a Comment