oil falls back to pre-Saudi attack price; natural gas supplies increase by most in any Fall week in 4 years

oil prices retreated this week after reports that Saudi Arabia's oil production had been completely restored after the crippling September 14th drone strike, with prices briefly falling below their September 13th closing low...after rising 6% to $58.09 a barrel in volatile and record trading volume last week in the wake of the attacks on Saudi infrastructure, prices of US light sweet crude for November delivery, which had moved in tandem with the expiring October oil contract last week, opened 2% higher on Monday following reports that full recovery of Saudi Arabia’s oil fields hit by the drone attack might take many months and held on for a 1% increase to $58.64 a barrel, even though the Saudis reportedly restored much of their lost output, as prices were supported by growing tensions in the Persian Gulf...however, the bottom fell out of oil prices on Tuesday after Trump accused China of unfair trade practices, “massive” market barriers, currency manipulation and intellectual property theft, rekindling fears that the U.S.-China trade war would dampen global economic activity, with US oil futures closing $1.35 lower at $57.29 a barrel...oil prices then opened 1% lower at $56.70 a barrel on Wednesday after a Tuesday evening American Petroleum Institute report of a unexpected crude oil inventory increase, and extended those losses after the EIA reported an even larger inventory increase, with oil ending down 80 cents at $56.49 a barrel, as Trump said he saw a path to peace with Iran, further cooling the risk premium that had built into oil prices...oil prices then fell for the third straight day on Thursday, as Saudi Arabia’s moves to quickly restore their output after the attacks on their oil infrastructure promised yet more oil supply, with US crude ending down 8 cents at $56.41 a barrel, having fallen 2% to $55.41 a barrel earlier in the day...prices fell further again on Friday on news that Saudi Arabia had declared a partial cease-fire in Yemen, further dialing down the tension that had prompted the Yemeni attack, with oil falling to as low as $54.75 a barrel on claims by Iranian President Rouhani that the U.S. had offered to lift all sanctions if Iran was willing to negotiate, but pared those losses after Trump denied that any such offer had been made, and ended just 50 cents lower at $55.91 a barrel, thus finishing the week with a loss of 3.6%, its steepest drop since mid-July, as prior fears about supply shortages waned...

natural gas prices also fell this past week, closing lower each day, with most of the drop coming after the EIA reported a surprisingly large injection of natural gas into storage...after falling after falling more than 3% to $2.534 per mmBTU on a bearish storage report last week, the price of natural gas for October delivery slipped seven-tenths of a cent on Monday and 2.4 cents in volatile trading on Tuesday, as traders speculated as to whether the weather would turn bullish or bearish in October, with the possibility that cooling might still be needed in the South if the month stayed warm simultaneously reducing the need for heating in the northern tier of states...natural gas prices slipped another tenth of a cent in quiet trading on Wednesday, and then fell 7.4 cents to close at $2.428 per mmBTU after the EIA reported the first triple digit storage addition of natural gas to storage of the season as trading in the October gas contract expired...at the same time, contracts for November delivery of natural gas, which had ended last week priced at $2.555 per mmBTU, fell 7.5 cents to 2.443 mmBTU on Thursday, and then another 3.9 cents on Friday to end the week at $2.404 per mmBTU, a 5.9% drop from where that contract had ended the prior week (note that natural gas valuations vary seasonally, so we can't compare the nominal price of one month's contract to another's) 

the natural gas storage report for the week ending September 20th from the EIA indicated that the quantity of natural gas held in storage in the US increased by 102 billion cubic feet to 3,205 billion cubic feet by the end of the week, which meant our gas supplies were 444 billion cubic feet, or 16.1% more than the 2,761 billion cubic feet that were in storage on September 20th of last year, while still 47 billion cubic feet, or 1.4% below the five-year average of 3,252 billion cubic feet of natural gas that have been in storage as of the 20th of September in recent years....this week's 103 billion cubic feet injection into US natural gas storage was somewhat more than the forecast for an 93 billion cubic feet injection by analysts surveyed by S&P Global Platts, while it was well above the average 82 billion cubic feet of natural gas that have been added to gas storage during the third week of September over the past 5 years, the 26th such average or above average storage build in the last 28 weeks...the 2,027 billion cubic feet of natural gas that have been added to storage over the 26 weeks of this year's injection season is the second most for the same period in the modern record, eclipsed only by the record 2093 billion cubic feet of natural gas that were injected into storage over the same 26 weeks of the 2014 natural gas injection season, a coolish summer when there were no injections below 76 billion cubic feet…. 

what's most interesting about this week's 102 billion cubic feet of surplus natural gas is that it came during a week when temperatures over most of the country were above normal, as you can see in the map below of the reporting week’s temperature anomalies:

the above temperature anomaly map came from the EIA's weekly interactive natural gas storage dashboard, and as you can gather, it shows how much the temperature in each of several hundred regions of the country varied from the norm, with the brown shading showing above normal temperatures...one would have thought with temperatures in that broad area in the middle of the country 5 to 9 degrees above normal, air conditioning demand would have also been above normal....but if you go to the natural gas storage dashboard and scroll down to the interactive graph showing the daily requirements of natural gas for electrical generation, you can see by mousing over it that natural gas for electricity averaged a billion cubic feet per day less than a year ago, despite a 10% year over year increase in gas driven generation capacity...& as a result of that inexplicable low demand for natural gas generated electric power, natural gas storage saw its first Autumn 100 billion cubic feet injection into storage since 2015..

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending September 20th showed that despite of a big drop in our oil imports, we were still left with surplus oil to add to storage for the second time in 5 weeks, essentially due to a big jump in unaccounted for crude...our imports of crude oil fell by an average of 672,000 barrels per day to an average of 6,378,000 barrels per day, after rising by an average of 326,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 192,000 barrels per day to an average of 2,983,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,395,000 barrels of per day during the week ending September 20th, 480,000 fewer 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 100,000 barrels per day higher at a record 12,500,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from well production totaled an average of 15,895,000 barrels per day during this reporting week..

meanwhile, US oil refineries were reportedly processing 16,513,000 barrels of crude per day during the week ending September 20th, 193,000 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 average of 344,000 barrels of oil per day were being added to 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 and from oilfield production was 962,000 barrels per day less than what was reportedly added to storage and what our oil refineries reported they used during the week....to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA inserted a (+962,000) 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"....with that great a quantity of oil unaccounted for once again this week, it calls into question all the other oil metrics that the EIA has reported and that we have just transcribed (for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....  

further details from the weekly Petroleum Status Report (pdf) indicated that the 4 week average of our oil imports rose to an average of 6,764,000 barrels per day last week, still 13.1% less than the 7,783,000 barrel per day average that we were importing over the same four-week period last year...the 344,000 barrel per day increase in our total crude inventories was all added to our commercially available stocks of crude oil, while the amount of oil stored in our Strategic Petroleum Reserve remained unchanged......this week's crude oil production was reported to be 100,000 barrels per day higher at a record 12,500,000 barrels per day even though the rounded estimate of the output from wells in the lower 48 states was unchanged at 12,000,000 barrels per day, because a 49,000 barrels per day increase to 472,000 barrels per day in Alaska's oil production added 100,000 barrels per day to the final rounded national production total (EIA's math, not mine)...last year's US crude oil production for the week ending September 21st was rounded to 11,100,000 barrels per day, so this reporting week's rounded oil production figure was 12.1% above that of a year ago, and 48.3% 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 89.8% of their capacity in using 16,513,000 barrels of crude per day during the week ending September 20th, down from 91.2% of capacity the prior week, & somewhat below the normal refinery utilization rate for a non-hurricane week in mid-September...nonetheless, the 16,513,000 barrels per day of oil that were refined this week were not much changed from the 6,514,000 barrels of crude per day that were being processed during the week ending September 21st, 2018, when US refineries were operating at 90.4% of capacity....

even with the decrease in the amount of oil being refined, gasoline output from our refineries was quite a bit higher, increasing by 789,000 barrels per day to 10,240,000 barrels per day during the week ending September 20th, after our refineries' gasoline output had decreased by 909,000 barrels per day to a nine month low the prior week...with that big increase in gasoline output, this week's gasoline production was 4.1% higher than the 9,832,000 barrels of gasoline that were being produced daily over the same week of last year....on the other hand, our refineries' production of distillate fuels (diesel fuel and heat oil) fell by 109,000 barrels per day to 5,000,000 barrels per day, after our distillates output had decreased by 232,000 barrels per day the prior week....but even with those decreases, our distillates production was still pretty close to the 4,995,000 barrels of distillates per day that were being produced during the week ending September 21st, 2018.... 

with the big jump in our gasoline production, our supply of gasoline in storage at the end of the week increased for the 6th time in 15 weeks but for just the 7th time in thirty weeks, increasing by 519,000 barrels to 230,204,000 barrels during the week to September 20th, after our gasoline supplies had increased by 781,000 barrels over the prior week....the increase in our gasoline supplies was limited this week because the amount of gasoline supplied to US markets increased by 407,000 barrels per day to 9,346,000 barrels per day, and because our exports of gasoline rose by 113,000 barrels per day to 805,000 barrels per day, while our imports of gasoline rose by 299,000 barrels per day to 800,000 barrels per day....but even after this week's increase, our gasoline supplies were still 2.3% lower than last September 21st's inventory level of 235,680,000 barrels, while remaining roughly 4% above the five year average of our gasoline supplies for this time of the year...

with the decrease in our distillates production, our supplies of distillate fuels fell for the 16th time in the past 28 weeks, decreasing by 2,978,000 barrels to 133,685,000 barrels during the week ending September 20th, after our distillates supplies had increased by 437,000 barrels over the prior week...our distillates supplies decreased this week because our exports of distillates rose by 297,000 barrels per day to 1,623,000 barrels per day, while our imports of distillates fell by 58,000 barrels per day to 94,000 barrels per day, while the amount of distillates supplied to US markets, a​n indicator ​​of our domestic demand, increased by 38,000 barrels per day to 3,897,000 barrels per day....after this week's inventory decrease, our distillate supplies were 3.0% less than the 137,881,000 barrels of distillates that we had stored on September 21st, 2018, and fell to around 7% below the five year average of distillates stocks for this time of the year...

finally, even though our oil imports were much lower, our commercial supplies of crude oil in storage still rose for the fourth time in fifteen weeks and for the nineteenth time in 36 weeks, increasing by 2,412,000 barrels, from 417,126,000 barrels on September 13th to 419,538,000 barrels on September 20th...that increase brought our crude oil inventories back to near the five-year average of crude oil supplies for this time of year, and to more than 25% higher than the prior 5 year (2009 - 2013) average of crude oil stocks after the second week of September, 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 over the past year up until the most recent fifteen weeks, after generally falling until then through most of the prior year and a half, our oil supplies as of September 20th were still 5.9% above the 395,989,000 barrels of oil we had stored on September 21st of 2018, but at the same time were 10.9% below the 470,986,000 barrels of oil that we had in storage on September 22nd of 2017, and 11.1% below the 472,084,000 barrels of oil we had in commercial storage on September 23rd of 2016...    

This Week's Rig Count

the US rig count fell for the 28th time in 32 weeks over the week ending September 27th, and is now down by 20.6% since the beginning of the year....Baker Hughes reported that the total count of rotary rigs running in the US fell by 8 rigs to a 29 month low of 860 rigs this past week, which was also down by 194 rigs from the 1054 rigs that were in use as of the September 28th report of 2018, and well less than half of the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began their attempt to flood the global oil market...

the count of rigs drilling for oil decreased by 6 rigs to 713 rigs this week, which was a 28 month low for oil rigs and 150 fewer oil rigs than were running a year ago, and quite a bit below the recent high of 1609 rigs that were drilling for oil on October 10th, 2014...at the same time, the number of drilling rigs targeting natural gas bearing formations fell by 2 rigs to 146 natural gas rigs, a 30 month low for gas rig drilling activity and down by 43 rigs from the 189 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 September 7th, 2008...in addition, a vertical rig classified as miscellaneous continued to drill on the big island of Hawaii this week, down by one from the miscellaneous rig count of a year ago, when 2 miscellaneous rigs were deployed..

Gulf of Mexico offshore drilling activity was down by 1 rig to 22 rigs running this week, as a platform offshore from Louisiana was shut down...​however, the 22 rigs left drilling offshore from Louisiana was still 4 more than the 18 Gulf of Mexico rigs deployed a year ago, when 17 rigs were drilling in Louisiana waters and one was drilling offshore from Texas...in addition to the Gulf, two rigs continue to drill offshore from the Kenai Peninsula in Alaska, one targeting oil at 5,000 to 10,000 feet and the other targeting natural gas at a depth of more than 15,000 feet, which matches the offshore Alaska count of a year ago...hence, the national total of 24 offshore rigs is up by 4 rigs from the 20 rigs that were deployed offshore a year ago...

the count of active horizontal drilling rigs was down by 4 rigs to 752 horizontal rigs this week, which was the least horizontal rigs deployed since May 12th, 2017 and hence is a 28 month low for horizontal drilling...that was also 170 fewer horizontal rigs than the 922 horizontal rigs that were in use in the US on September 28th of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...at the same time, the directional rig count was down by 4 to 57 directional rigs this week, and those were down by 12 from the 69 directional rigs that were operating during the same week of last year...meanwhile, the vertical rig count was unchanged at 51 vertical rigs this week, and those were also down by 12 from the 63 vertical rigs that were in use on September 28th of 2018...

the details on this week's changes in drilling activity by state and by major 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 table below that 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 September 27th, the second column shows the change in the number of working rigs between last week's count (September 20th) and this week's (September 27th) count, the third column shows last week's September 20th 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 28th of September, 2018...  

the five rig decrease in Texas included all three of the Permian basin tear-downs, as one rig was pulled out of Texas Oil District 8, or the core Permian Delaware, and 2 more rigs were shut down in Texas Oil District 7C, or the southern part of the Permian Midland...the rig pulled out of the Eagle Ford in the southern part of the state was a natural gas rig, leaving the Eagle Ford with a deployment of 56 rigs targeting oil and 6 rigs targeting natural gas; it seems likely that rig came of out of Texas Oil District 2, which was down by two rigs, because the Eagle Ford gas trend is closer to the Gulf coast...in addition, the rig pulled from the Granite Wash was also a natural gas rig, but it appears to have come out of the area of Oklahoma bordering the Texas panhandle, since the rig count in Texas Oil District 10 was unchanged at one; the 2 Granite Wash rigs that remain​ ​are targeting oil...meanwhile, drilling in all three of the major natural gas basins - Ohio's Utica, the Marcellus of Pennsylvania and West Virginia, and the northwest Louisiana Haynesville - was unchanged for the 2nd week in a row..

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Fracking Health Registry To Track The Effects Of Drilling In Ohio –  (NPR podcast) The U.S. is a top producer of natural gas and crude oil, mostly due to the growth in fracking. But many people who live near fracking sites are concerned about possible health issues ⁠— issues that aren't being tracked by states or the federal government. In Ohio, residents have taken matters into their own hands and started their own fracking health registry, Julie Grant (@JulieIGrant) of The Allegheny Front reports. This story is part of The Allegheny Front's special series "Who's Listening?" investigating fracking in Ohio. This segment aired on September 26, 2019.

Barnesville resident concerned about air quality -A resident asked Village Council to pay for air quality monitoring after voicing concerns that state and local regulatory agencies are failing to do their part to protect the public from the hazards of natural gas and oil fracking in the area. Jill Hunkler addressed council during a regular meeting held Sept. 16, saying that after her family and others smelled “strong hydrocarbon odors” on Sept. 4 and 9, she spoke with Trevor Irwin of the Ohio Environmental Protection Agency. She said he told her they were smelling methyl mercaptan resulting from a problem with a safety valve on a nearby pipeline. Hunkler said Irwin told her they were in no danger from the chemical and that she should contact her local fire chief when she requested that the air in the area be tested for contaminants. Hunkler further said that Dave Ivan, Belmont County Emergency Management Agency director, contradicted Irwin’s claim, telling her that local authorities do not have the ability perform those tests.  “I think we ought to keep the county involved in this. I mean if we’ve got an EMA director, I would like to think that the county would have something set up and not just us,” Councilman Scott Gallagher said before confirming with Fire Chief Tim Hall that Barnesville Fire Department does not have the equipment needed to conduct the air monitoring.  Hall said department members were out on the dates in question in the vicinity of The Flower Gardens on Gardner Street where they did notice the reported odor, but said that it dissipated quickly.“We did what we could do,” he said. Mayor Dale Bunting expressed dismay that news of the problem was spread widely through social media and stressed the importance of going through the proper channels to report and deal with potentially hazardous situations. “It’s the EPA’s problem. I don’t want you getting on Facebook and telling people we have an issue when we ain’t even sure we’ve got an issue. We have a Belmont County Emergency Management unit. If there’s a hazard, why wouldn’t they get in touch with us? If there’s an issue with the public, that’s our job, the safety of the community, and we need to know this stuff, but we don’t need to catch it from there,” Bunting said, referring to a printed copy of a Facebook page where Hunkler had posted about the situation.

Settlement Reached Over Proposed Ohio Cracker Plant Air Permit - Environmental groups have reached a settlement agreement with a petrochemical company in Ohio to beef up air pollution controls at a proposed petrochemical plant along the Ohio River.Thailand-based PTT Global Chemical America and South Korea-based Daelim Industrial Co. have proposed building a multi-billion dollar ethylene cracker plant on a 500-acre tract of land in Belmont County, Ohio, just a few miles from Moundsville, West Virginia.The plant would crack apart ethane — which is produced during natural gas fracking — into smaller molecules used in plastics and chemical manufacturing. The plant would produce an estimated 1.5 million tons of ethylene annually.An air permit issued by the Ohio Environmental Protection Agency last December allowed the plant to emit 400 tons of volatile organic compounds and produce the equivalent carbon dioxide emissions of putting about 365,000 cars on the road annually.Three environmental groups, the Sierra Club, Freshwater Accountability Project, and Earthworks, challenged the air permit in January arguing pollution from the plant could harm communities and that the air pollution controls mandated by Ohio EPA were not sufficient. The settlement signed Monday requires the company to use technology to find pollution leaks and repair them. The company would also install a weather station on site and create a website available to the public with emissions data.In a statement, environmental groups praised the improvements, but remained opposed to the plant, which would be the second such facility in the region. About 30 miles northwest of Pittsburgh, Shell Chemical’s Monaca cracker plant is under construction. It’s slated to produce 1.6 million tons of ethylene each year and permanently employ about 600 workers when done, according to the company.

WV's U.S. representatives introduce resolution to promote creation of Appalachian Storage Hub — West Virginia’s three representatives in the U.S. House have introduced legislation that would promote the creation of a proposed Appalachian Storage Hub. Rep. David McKinley was the lead sponsor while Reps. Alex Mooney and Carol Miller, all R-W.Va., cosponsored House Resolution 4433, the Appalachian Regional Energy Hub Initiative Act. If passed, the resolution would direct the Appalachian Regional Commission to provide funds to help in the hub’s creation. Long advocated for by representatives and experts in and around West Virginia, the proposed facility would be used to store large amounts of natural gas liquids for future use. In a news release announcing the resolution, McKinley pointed to Hurricane Harvey, which two years ago slammed the Gulf Coast in Texas and Louisiana, where a wide majority — about 95 percent — of the country’s ethylene production is located. Advocates such as Sen. Joe Manchin have listed this as a concern of national security, arguing that an attack or natural disaster in the area could cripple U.S. energy infrastructure, a point with which McKinley agrees. “Investing in our energy infrastructure will help grow our economy and make America more secure,” McKinley said. “The development of a storage and distribution hub for natural gas liquids in Appalachia would create tens of thousands of good-paying jobs, spark new investments and bring billions of dollars in revenue to the region. “Through American ingenuity and research, we have emerged as a leading producer of energy. We need to use our resource to attract value added manufacturing. We must make this project a priority so that we can ensure that our domestic supply is not at risk.” McKinley also noted that the project has seen support from U.S. Department of Energy Secretary Rick Perry.

Energy Giants Spend Big on Lobbying to Clear Pipeline Path Through National Forests Appalachian Trail - A trio of utility giants building a natural gas pipeline that would cut across the Appalachian Trail has spent more than $109 million lobbying federal lawmakers and officials since the $7.8 billion project was unveiled five years ago, according to a MapLight analysis.The controversial 600-mile-long project, which is being compared to the Dakota Access Pipeline because of its stiff opposition from Native and local communities, would bisect the fabled trail, as well as the Blue Ridge Parkway and a pair of national forests. Appeals courts have thrown out seven separate permits for the project, with sentiment running so high that one judge wrote an opinion using a quote from The Lorax to blast the U.S. Forest Service for its failure “to speak for the trees, for the trees have no tongues.”Despite the setbacks, the utilities have continued to press their case, hoping the rulings can be overturned by the U.S. Supreme Court or Congress. The companies -- Dominion Energy, Duke Energy, and Southern Co. -- have described the Atlantic Coast Pipeline as “a critical infrastructure project that will strengthen the economic vitality, environmental health, and energy security of the Mid-Atlantic region.” The U.S. Chamber of Commerce, which separately has spent almost $361 million lobbying since the project was announced, estimates economic losses of $91.9 billion and 730,000 lost jobs if the pipeline isn’t built.The battle over the pipeline highlights the shifting landscape for power companies, which have been presenting natural gas as an energy source that can serve as a bridge fuel during the transition from fossil fuels to renewable energy sources, even while the effects of climate change become more apparent. The Atlantic Coast Pipeline would transfer as much as 1.5 billion cubic feet of gas daily from West Virginia, Ohio, and Pennsylvania shale fields to facilities in Virginia and North Carolina. Opponents, however, warn that a pipeline leak or rupture would present potentially calamitous risks for large parts of Appalachia and add the pollution equivalent of 14 million additional cars. The project also has drawn criticism for its use of eminent domain to acquire land for the pipeline and its route, which would include a terminus in Robeson County, N.C., home to the largest Native tribe east of the Mississippi River. “This isn’t just a bad idea,” Jonathan Jarvis, former National Park Service director, wrote in a Politico opinion piece last month. “It’s an unprecedented one.”

West Virginia Emerging as a Natural Gas Powerhouse  | Rigzone - As it turns out, Pennsylvania is not the only Marcellus shale state with amazing production results. Long a mainstay of U.S. coal production, neighbor West Virginia has quickly become the 7th largest U.S. natural gas producer. Since the shale revolution took flight in 2008, gas output in the state has boomed more than sevenfold to 1.8 Tcf in 2018. West Virginia’s gas production has reached a record for 10 straight years and now accounts for 5-6 percent of total U.S. output. Ranked fourth nationally, West Virginia today holds around 35 Tcf of proven gas reserves. Overlying the Utica play as well, shale now accounts for 95 percent of West Virginia’s gas output. In particular, two of the state’s largest producers, Southwestern Energy and EQT, have impressively responded to a lower priced environment in the shale-era by deploying constantly evolving technologies and operational efficiencies.  New pipelines have come online to ship West Virginia’s gas to markets in the Northeast, Midwest, southern Canada, and the Gulf Coast. The state now has over 4,000 miles of interstate and intrastate gas pipelines. Per EIA, West Virginia has 31 underground natural gas storage fields that have a storage capacity of 535 Bcf that accounts for almost 6 percent of the nation’s total. The proximity of this gas to high demand markets makes West Virginia a key supplier to surrounding areas during the winter months when usage peaks 40-60 percent.  Indeed, West Virginia still gets 90-95 percent of its electricity generation from coal, with only 2 percent coming from gas. This is in contrast to fellow Appalachian shale giants Ohio and Pennsylvania, two longtime coal states that seek to displace with more gas. This lower domestic reliance on gas will allow West Virginia to remain critical in supplying gas to other states and even LNG export facilities to nations abroad.

''Too Much Too Fast'' Gas Glut Crushes Shale Drillers-  Appalachian shale drillers are getting squeezed by low prices, and a supply glut may mean that there is little prospect of a pricing rebound anytime soon.Earlier this month, IHS Markit put out a press release entitled, “U.S. Natural Gas Price Will Fall to Levels Not Seen Since 1970s.” The firm said that persistent oversupply from the Marcellus would be “reinforced” by a surge in associated gas production from the Permian basin. That could keep average natural gas prices below $2/MMBtu next year, which would nominally be the lowest since 1995, but in real terms it would be the lowest since the 1970s.The market is set to see falling prices despite structural increases in demand from new gas-fired power plants and LNG export facilities. IHS noted that U.S. demand has climbed by 14 billion cubic feet per day (Bcf/d) in annual consumption since 2017, but supply has expanded by even more than that amount since the start of 2018.“It is simply too much too fast,” Sam Andrus, executive director of IHS Markit, said in a statement. “Drillers are now able to increase supply faster than domestic or global markets can consume it. Before market forces can correct the imbalance, here comes a fresh surge of supply from somewhere else.” The bust in gas prices create significant dangers for gas-focused shale companies. “With the news from IHS Markit that natural gas prices in the United States will drop below $2 MMBtu in 2020 and remain low through at least 2024, if not longer, heads must be exploding in the board rooms of oil and gas producers throughout the U.S. and Canada,” Tom Sanzillo and Kathy Kipple wrote in a commentary for the Institute for Energy Economics and Financial Analysis (IEEFA).

Natural Gas Seasonality: Bullish Or Bearish? - The start of the fall season has often been a happy time for natural gas bulls, as traders look ahead to the upcoming winter, pushing prices higher as the market prices in risk premium in the event of a colder than normal winter. This shows up well in our seasonality chart, which shows a long-term tendency for rallies from late September into October. But there is one contrarian item that jumps out on that chart. Notice the trend just over the last 5 years actually favors a *lower* move in prices from now through late October, bucking the long-term seasonal trend. Why the change in trend? Some of it is tied into the weather patterns, as an average of the last five October months is quite warm. While the start of October can contain enough CDDs to be marginally bullish if the South is hot, warmth in October quickly becomes bearish, as HDDs become more important to the demand picture, and a warmer pattern can significantly reduce the HDD count. Will this year follow the path of the last five years, or follow the more bullish longer-term seasonal trend? So far, the market has gotten a head start on selling, as prices have moved more than 15 cents off last week's highs. The weather pattern also remains in warm mode in the key natural gas consumption regions, seemingly following along with the bearish trend in recent years. It is important to note, however, that day 15 is October 8th, meaning that we do not yet "see" much of October in the modeling. While there is no imminent turn colder on the way, we only need to look back at last year to find a pattern that quickly flipped from very warm in key areas to very cold in the middle of October. 

Natural-Gas Prices Slide After Storage Data. Front-month natural-gas futures drop 3% to a three-week low.  Natural-gas prices fell Thursday after government data showed U.S. stockpiles rose more than analysts expected.  Front-month natural-gas futures declined 3% to $2.428 per million British thermal units, a three-week low, after the Energy Information Administration, or EIA, reported that natural-gas inventories last week surged by 102 billion cubic feet, compared with the 89 billion cubic feet that analysts surveyed by The Wall Street Journal had predicted. “We had thought the number would be smaller because a lot of the country has been experiencing unusual, late-season heat,” said Kent Bayazitoglu, director of market analytics at Gelber & Associates. Natural-gas demand tends to rise when more people use their air conditioners in the summer and heaters in the winter.

NYMEX October natural gas plummets on expiry day on bearish storage report — The NYMEX October natural gas futures contract settled 7.4 cents lower Thursday, rolling off the board at $2.428/MMBtu, following a larger-than-expected US storage draw. The front-month contract traded in a range of $2.39/MMBtu to $2.54/MMBtu Thursday. "It's getting hit right now because of the high natural gas storage injection. This [should not] be unexpected. [We] have to realize natural gas has had a terrific percentage run in shoulder season," said Jay Levine, an independent analyst and principal at EnerJay. C "August lows fell to [around] $2.04/MMBtu and went up to $2.71/MMBtu in October, which is a significant percentage run. We had a very substantial move off of the lows in a shoulder period - for not much of any reason. I know we're falling at around $2.40 today, but that's still up 20% higher than in August. Obviously, the 102 Bcf storage injection doesn't help," Levine said. The US Energy Information Administration reported a bearish injection of 102 Bcf into US storage facilities in the week that ended September 20. The consensus expectations of an S&P Global Platts survey of analysts were for a build of 93 Bcf. The most recent week's total is the largest storage injection in September in the past three years. US dry gas production is expected to continue to increase as the shoulder season begins, rising from 89.2 Bcf on Thursday to an average of 90.1 Bcf/d in the period eight to 14 days hence, according to S&P Global Platts Analytics. "Looking into winter, [we] shouldn't be discouraged. I think natural gas is acting appropriately. I'm not surprised that we've come down considerably from the recent highs, because we went up so high from recent lows when natural gas dropped to $2.04/MMBtu in August." said Levine.

Natural Gas Prices Decline For The Second Straight Week - It was another down week for natural gas prices, with the new prompt month November contract barely settling over the 2.40 level in today's session, down more than 30 cents from its high trade early last week. natural gas commodity weather The bulk of this week's decline came yesterday, with the biggest push lower coming in the wake of another very bearish EIA report, the second in as many weeks. This one showed that we injected a massive 102 bcf for the week ending 9/20. The number reflected supply / demand balances that were looser than any of the last 10 weeks. In fact, the two loosest numbers in this 10 week span were in the most recent two reports. Isolating the same gas week in prior years shows very loose balances as well. With two bearish misses in a row, one wonders if there is more production coming out of Texas than is currently showing up in the data, possibly related to the Gulf Coast Express pipeline coming into service. It certainly has not been due to lack of weather demand, as the week ending 9/20 was easily still hot enough to drive demand to above normal levels, thanks to some record heat in the South. In the near-term, demand will remain at elevated levels as well, with more record heat expected in the South, and some early season cold in the West, adding in some HDDs. Notice in the 11-15 day portion of that chart that demand lowers to normal / slightly below normal levels. That is not something bulls want to see. But will it last? Recall just last year we saw a very warm pattern flip cold in the middle of October and hold for six weeks, so we will be monitoring the signals closely.

'Smart' Appalachian Operators Can Handle Sub $2 Natural Gas -  The Appalachian Basin is one U.S. hydrocarbon prospection patch that just keeps on giving natural gas – be it via conventional or unconventional means. It’s what the U.S. Energy Information Administration (EIA) describes as the ‘Appalachia Effect.’For the number crunchers in the market that effect has translated into an uptick in production from 7.8 Bcf/day in 2012 to 23.8 Bcf/day in 2017. That’s a higher natural gas yield than any other OPEC producer, and the primary reason the U.S. has been propelled up the market leaders’ board, with the Appalachian Basin accounting for nearly 50 percent of headline American production. And there’s more on the way, for the EIA’s latest outlook projects the region’s production to rise to 50 Bcf/day by 2050, with a veritable who’s who of the industry wanting in on the act. Conventional production aside, rising shale gas output from the basin’s Marcellus and Utica shales combined is already lending credence to the projection.Everyone from Range Resources to Chesapeake, EQT Production to CNX Gas Co., is vying for hydrocarbon molecules in the basin that stretches from Ohio to Pennsylvania. But while reference cases and projections are one thing, operating reality is quite another. Anecdotal and empirical evidence suggests many players are worried about possible sub-$2 MMBtu Henry Hub prices, thus cutting production and divesting assets; a pricing prospect the region faced back in 2012 for broadly similar reasons – oversupply and difficulty in moving the product to market courtesy of pipeline access and capacity issues.What’s more, natural gas power burn demand across the U.S. Northeast is expected to dip by around 10 percent over the coming months, going by S&P Global Platts’ projections. This could add further seasonal pressure to already existing headwinds. According to Moody’s, many regional players will cut growth investment and manage their businesses within operating cash flow. This has only become visible in recent months after slower activity in the fourth quarter of 2018 meant the likes of CNX built a backlog of inventory that kept investment up in the first quarter of 2019.

WV budget shortfalls result of downturn in coal exports, gas prices, pipeline jobs - Sharp downturns in coal exports and natural gas prices, along with court actions halting construction of two major natural gas pipelines, have pushed the 2019-20 West Virginia budget into a deficit early on, Deputy Revenue Secretary Mark Muchow told legislators Monday. Muchow said the budget assumed a 1.2 percent downturn from record tax collection of $4.75 billion in 2018-19, but finished the first two months of the budget year down 6.8 percent from the same point last year. Muchow blamed the current $49.8 million budget shortfall on a 50 percent drop in coal exports, a 48 percent drop in natural gas prices and the loss of 4,000 gas pipeline construction jobs. “The energy sector is pretty soft right now,” Muchow told the interim Joint Committee on Finance. Most of the year-to-date revenue shortfall comes down to severance taxes missing estimates by $26.8 million and personal income tax collection coming up $21.78 million short, because of the downturn in high-paying construction jobs, he said. He also said steel production has dropped nationally, reducing demand for metallurgical coal.

Natural gas royalties projected to jump in Pennsylvania - Last year's double-digit increases in production and higher prices for the region's natural gas combined for larger royalties for Pennsylvania landowners in 2018, according to a new state report. The Independent Fiscal Office estimated residents' income from natural gas royalties rose by double digits for the second year in a row for a total of $1.64 billion, which is the highest in the nine-year period of the Marcellus Shale boom. The estimate released Monday said that was higher than the $1.05 billion for the 2017 tax year, which itself was up 64 percent from 2016's $645 million. The 2016 total had been the lowest point since 2010 and two years of declines due to lower natural gas prices and the previous slowdown in the industry. "Compared to 2017, the average spot price (for natural gas) at major Pennsylvania hubs increased by more than one-third, while total output increased by 14 percent," the IFO said in its report. "If those gains were passed through to landowners, then royalty payments would increase by roughly 50 to 55 percent." It's an estimate because the IFO doesn't get actual data from either the companies or the landowners themselves about the amount of royalty payments, which by law have to be at least 12.5 percent and are an average 13.5 percent. Royalty income are along with copyright and patent income so it has to be estimated. In 2017, the county with the highest amount of royalty payments was Washington County, with an estimated $264 million. It was followed by Susquehanna ($204 million), Greene County ($129 million) and Butler County ($115 million).

Natural gas driller announces name change - A small but growing natural gas producer based in Southpointe is changing its name to better reflect the future of its business. Huntley & Huntley Energy Exploration LLC, which was formed in 2012 by traditional natural gas company Huntley & Huntley and majority owned by private equity firm Blackstone, will announce Wednesday that it has changed its name to Olympus Energy. The rebranding doesn't change the fundamentals of the company but it makes sense for the stage of growth the natural gas producer is in today, President and CEO Christopher Doyle told the Business Times. The company doesn't have the scale of better known publicly traded companies like EQT Corp. and Range Resources Corp. But Olympus Energy has, mostly under the radar, acquired 100,000 acres of Marcellus and Utica shale acreage and drilled and completed 10 Marcellus wells, in the eastern suburbs of Pittsburgh. The company isn't drilling right now but it expects to restart in the fourth quarter of 2019.

Chester County amps up pressure on Sunoco, calls Mariner East pipeline a nuisance - The Chester County prosecutor, amping up pressure on Sunoco’s Mariner East pipeline, said on Tuesday his office plans to sue the $5.1 billion project as a public nuisance.  Chester County District Attorney Thomas P. Hogan notified the pipeline’s owner, Energy Transfer LP, that his office plans to file a civil nuisance action in 60 days unless the company corrects several problems, including exposed underground pipes and leaks, or “inadvertent returns,” of drilling fluid during the pipeline’s construction. Most of the incidents mentioned by the DA were already cited in 98 violations notices filed by the Pennsylvania Department of Environmental Protection (DEP) against the cross-state project, which aims to carry Marcellus Shale natural gas liquids by several underground pipelines to Sunoco’s export terminal in Marcus Hook.  Energy Transfer, in a statement, said it believes it was already “well on our way" to resolving the issues cited by the district attorney. “To that end, we have completed all required remediation as a result of inadvertent returns or other construction related discharges from the Mariner East 2 project in Chester County consistent with our approved permits,” the company said. "We also have resolved associated claims with the DEP through agreed upon consent agreements. In addition, the company is under an order issued by the DEP to cover any exposed areas of pipes, including the two pipes in Chester County, which is subject to a schedule of work.”

Sunoco still needs DEP approvals to restart pipeline work at Lisa Drive, Chester County - Sunoco overcame one roadblock to completion of its controversial Mariner East pipelines when the Public Utility Commission recently lifted an injunction against construction in a Chester County township, but the company still needs environmental officials to end a statewide ban on new permits and to approve permit modifications at the site. Sunoco must obtain clean-water approvals from the Department of Environmental Protection before it can resume construction at Lisa Drive in West Whiteland Township where sinkholes along the pipeline route prompted the PUC to halt construction in 2018.The DEP has yet to approve two requested permit modifications and a “re-evaluation plan” for the site, as ordered by a court in an effort to prevent any more drilling mud spills, or “inadvertent returns,” dozens of which plagued the project during 2017 and 2018.The company’s work at Lisa Drive is also affected by DEP’s ban on new clean-water permits for the project, imposed in February this year after the explosion of a western Pennsylvania pipeline operated by Sunoco’s parent, Energy Transfer, in 2018.A DEP spreadsheet shows 32 sites across the state, including Lisa Drive, where the department has yet to give final approval for Sunoco’s re-evaluation plans, which take a fresh look at local geology to assess whether the pipelines can be built safely. None of the missing approvals will be given until the permit ban is lifted, said DEP spokeswoman Elizabeth Rementer. She did not immediately respond to questions on what might lead DEP to lift its ban, or when that could happen.

Philly fire department personnel no longer at PES site 24/7 - The site of a refinery explosion and fire that rocked South Philadelphia in June and led to the refinery’s shutdown is now under control. That means Philadelphia Fire Department personnel will no longer remain on site 24/7.Fire Commissioner Adam Thiel said Tuesday that only trace amounts of thedangerous chemical hydrofluoric acid remain at the damaged Philadelphia Energy Solutions refinery. “It was a very novel event so we were dealing with a lot of unknowns, and I’m happy we can place this under control,” said Thiel. “Although it remains a dynamic and fluid situation.”

NJ’s decision deadline on Transco gas pipeline pushed back a month - The state Department of Environmental Protection has extended the application deadline another month for permits related to the 26.8-mile Northeast Supply Enhancement of the Transco natural gas pipeline in Old Bridge, Sayreville and the Raritan Bay.The decision comes just days after protests of a worldwide youth movement that demands leaders address climate change.According to opposing environmentalists, the project would bring the natural gas process of hydraulic fracturing, also known as fracking, into the Raritan Bay. The enhancement also includes a compressor station that would emit carbon-dioxide, one of the main suspected causes of climate change.   The Oklahoma-based Williams natural gas supplier requested the extension for applications concerning waterfront development and coastal land use permits. The deadline had been Wednesday and now is Oct. 25.A third permit involving flood hazards is due Oct. 29 and one for freshwater wetlands work has no deadline, the DEP said. The state previously had denied Williams all the permits but allowed the company to reapply.

Gas Pipeline Gains OK To Burrow Beneath Chesapeake And Ohio Canal - Running an 8-inch diameter natural gas pipeline beneath Chesapeake and Ohio Canal National Historical Park has been given the go-ahead from the National Park Service, which said the pipeline shouldn't cause an impact to the park. The permit authorizes Columbia Gas to run 553 feet of 8-inch-diameter natural gas transmission pipeline under the national historical park. The pipeline is to be placed via horizontal directional drilling at a depth between 116 and 148 feet below the ground surface of the park near Hancock, Maryland. The proposed pipeline is part of Columbia Gas’s Eastern Panhandle Expansion Project, an approximately 3.37-mile natural gas transmission pipeline that runs through Fulton County, Pennsylvania, Washington County, Maryland, and Morgan County, West Virginia. A right-of-way permit is required to authorize Columbia Gas to construct the pipeline under Park Service land. The Park Service says it will issue the permit once Columbia Gas completes an appraisal of the property that is accepted by the Interior Department. The National Park Service's finding of no significant impact determination was made based on an environmental assessment performed by the Federal Energy Regulatory Commission. 

Doctors' group says compressor station would be unsafe - — A group of physicians says no “regulatory framework” can make Weymouth’s proposed 7,700-horsepower natural gas compressor station safe for residents due to soil contamination at the site and expected air and pollution from the facility. Greater Boston Physicians for Social Responsibility released a report Tuesday assessing health concerns related to existing soil and groundwater contamination at the proposed site and exposure to air and noise pollution from the compressor station proposed by Algonquin, a subsidiary of Spectra Energy-Enbridge. Algonquin received initial approval for the compressor station in January 2017 from the Federal Energy Regulatory Commission. The company still needs several state permits. The state issued an air-quality permit for the project in January, a week after the Metropolitan Area Planning Council released a health-impact assessment that found the compressor station would be unlikely to affect health and noise in the area. Gov. Charlie Baker ordered the study in July 2017 amid strong local opposition from officials and residents who said the plant would vent pollution and toxic gases and that it could explode in the densely populated neighborhood. Martin Suuberg, commissioner of the state Department of Environmental Protection, upheld the air-quality permit in August and rejected an earlier appeal from the four communities and a citizens group, which together had argued that the proposed station would worsen air pollution in the Fore River Basin and endanger the lives of nearby residents. Greater Boston Physicians for Social Responsibility echoed those concerns in its report, which challenged many of the findings in the health-impact assessment and concludes that the project is dangerous to human health.

Michigan AG: Utility self-dealing with pipeline will cost ratepayers millions --The Michigan attorney general’s office is putting its weight behind a legal challenge alleging improper self-dealing by the state’s largest electric utility. The appeals were filed in March by the Sierra Club and Michigan Environmental Council. They claim that DTE Energy is using a planned natural gas power plant to bolster a natural gas pipeline co-owned by a subsidiary company.DTE has denied any improper conflict of interest, and state regulators have concluded the contracts are not a violation. The environmental groups’ case asks the Michigan Court of Appeals to review that decision.The intervention by Attorney General Dana Nessel lends credibility to the groups’ appeals and could complicate DTE Energy’s efforts to expand its natural gas infrastructure in the state. The office filed briefs in support of the environmental groups on Aug. 30. In 2012, DTE Gas first identified plans to contract with the then-anticipated Nexus Gas Pipeline, a 255-mile connection to move natural gas from eastern Ohio to southeastern Michigan and Ontario, Canada. The pipeline is co-owned by affiliates of DTE Energy and Enbridge. In 2017, DTE Energy filed plans with state regulators to build the Blue Water Energy Center, a 1,100-megawatt natural gas-fired power plant aimed at powering 850,000 homes in southeastern Michigan. As Nexus sought financing for the pipeline, DTE was recruited as an “anchor shipper,” meaning it’s a primary off-taker of the gas and can secure lower prices for supply. DTE Gas and DTE Electric account for a combined 10% of the pipeline’s capacity. That amounts to a conflict of interest, environmental groups said. They filed a challenge before the Michigan Public Service Commission in late 2017.

Enbridge to install 54 underwater steel supports for controversial Line 5 - -- Enbridge Energy is beginning a project to install 54 underwater steel supports to help protect the controversial Line 5 pipeline under the Straits of Mackinac. Enbridge announced Tuesday, Sept. 24 that a U.S. Army Corps of Engineers permit had been granted to install the supports. The supports are intended for areas of Line 5 that do not rest directly on the lake bed. Enbridge in early August self-reported that a span of unsupported pipeline had grown beyond a 75-foot limit as outlined in an easement agreement with the state. Enbridge officials say the supports are not new. Since 2002, the company has installed 147 supports that, according to Enbridge, “have performed well in enhancing the safety of the line.” Work on the new supports comes as Enbridge continues a legal battle over planned construction of a tunnel under the Straits of Mackinac that would house a rebuilt Line 5. Enbridge is suing the state over the validity of 2018 agreements with the then-Gov. Rick Snyder administration that approved tunnel construction. Meanwhile, state Attorney General Dana Nessell in June filed a lawsuit to shut down Line 5 as a public nuisance that violates environmental rules.

OIL AND GAS: 'A muddy mess.' Ill. landowners fight FERC over pipeline -- Farmers in Illinois are battling the Federal Energy Regulatory Commission over a new gas pipeline they say is destroying their land. FERC Chairman Neil Chatterjee says the agency is "properly resolving" the issue.

Wisconsin weighs felony for actions against pipelines (AP) — A bipartisan proposal making it a felony to trespass or damage oil or gas pipelines in Wisconsin is moving through the state Legislature, despite complaints Thursday from opponents that it would violate free speech rights. The bill heard by a state Assembly committee builds upon a 2015 state law that made it a felony to intentionally trespass or cause damage to the property of an energy provider. The latest proposal expands the definition of energy provider to include oil and gas pipelines, renewable fuel, and chemical and water infrastructure. Those found guilty could face up to $10,000 in fines and six years in prison. The Wisconsin measure has broad support from both Republican and Democratic lawmakers, organized labor unions, utilities, the state chamber of commerce and a variety of trade groups representing farmers, restaurants, the paper industry and others. Supporters downplayed its intent, calling it the fix to an oversight from the earlier law. Democratic state Rep. Jason Fields, of Milwaukee, is a co-sponsor of the bill and gave a passionate defense of the measure against critics who say it stifles free speech rights and will make it more difficult to combat climate change. Fields, who is black, said to be effective protesters need to follow the non-violent model set by Martin Luther King, Jr., Mother Theresa, Ghandi and others. “I don’t like the Ku Klux Klan but I don’t have the right or option to go destroy their property," Fields testified.... I don’t care who you are. Destruction of property is a no-no.”

Minnesota regulators to chart next steps for Enbridge Line 3 project — State regulators next week are set to decide what steps they should take next in weighing the construction of a crude oil pipeline across northern Minnesota. The Minnesota Public Utilities Commission on Tuesday, Oct. 1, will take up the environmental impact statement for the Enbridge Line 3 pipeline replacement project and consider what additional hearings might be needed to revise the statement. The Minnesota Court of Appeals in June ruled the environmental review of the proposed pipeline project was "inadequate" because it did not consider the effects of an oil spill in Lake Superior’s watershed. But the court said many other points disputed in the final environmental impact statement, including the pipeline’s impact on tribal resources, met required standards. Tribal and environmental groups asked the state Supreme Court to review the other disputed points, but the court last week denied the request to take up the case. The move sends the proposal back to state regulators at the Public Utilities Commission for revisions. Briefing documents filed Tuesday, Sept. 24, note the commission could ask the state Department of Commerce to revise its environmental assessment of the project to include the potential impact of an oil spill into the Lake Superior watershed and submit that to the commission within 60 days or agree to another appropriate action. The Public Utilities Commission in 2018 approved the $2.6 billion project that would replace Enbridge's existing 50-year-old Line 3 and carry 760,000 barrels of oil per day from Alberta to the Enbridge terminal in Superior, Wis.

One killed in Wayne County oil tank explosion - One person was killed when two oil storage tanks exploded Friday morning in Wayne County, according to Sheriff Jody Ashley. Capt. Lance Chancellor, with Powers Fire and Rescue, said the explosion was reported at 8:22 a.m. at an oil operating site near the intersection of Fred West Road and Gatlin Road. Chancellor said the site is run by Tellus Operating Group, a Ridgeland-based company that operates hundreds of oil and gas wells in Louisiana and Mississippi, according to the company’s website. Chancellor said there were five workers at the site when the tanks exploded, including two TOG subcontractors. Wayne County Coroner David Pugh said Randy Ducksworth Sr., 59, was killed in the blast. Chancellor said Ducksworth was one of the TOG subcontractors working at the site. Once firefighters arrived on the scene, it took them about 30 minutes to extinguish flames that sparked during the explosion. Chancellor said the fire also spread to a nearby wooded area. The investigation into what caused the explosion is ongoing. Clarke Thomas, Health, Safety and Environmental Compliance Manager with TOG, said the company will cooperate fully as the investigation moves forward.

MDEQ cleaning oil spill at site of deadly explosion in Wayne Co. . (WDAM) - The Mississippi Department of Environmental Quality is working to clean up an oil spill that happened when two storage tanks exploded in Wayne County on Friday, killing one man. Officials with MDEQ said they discovered Saturday that some oil did escape from containment as a result of the explosion that killed 59-year-old Randy Ducksworth Sr. MDEQ said no water sources have been affected by the spill and cleanup is expected to be complete in a few days. While MDEQ crews are cleaning up, the investigation into what led to the explosion at the oil operating site is ongoing. Capt. Lance Chancellor, with Powers Fire and Rescue, said the tanks exploded around 8:22 a.m., killing Ducksworth and sparking a fire that spread to a nearby wooded area. It took firefighters about 30 minutes to extinguish the flames after arriving on scene. Chancellor said there were four other workers at the site when the explosion happened. No other injuries were reported. The site is run by Tellus Operating Group, a Ridgeland-based company that operates hundreds of oil and gas wells in Louisiana and Mississippi, according to the company’s website. Ducksworth was a subcontractor working for TOG.

Landowners appeal 'blank check' for La. pipeline -- Monday, September 23, 2019 --Landowners in Louisiana are asking a federal appeals court to review how the state handles eminent domain in oil pipeline projects, after a judge last year allowed a pipeline to cross through their land without their prior consent.

Residents concerned about pipeline for new LNG export facility, but others see economic driver -- A proposed 283-mile pipeline that would cross 14 parishes from Richland to Plaquemines to feed a planned natural gas export facility has raised concerns from more than 120 residents and one Indian tribe. About a dozen proponents, ranging from business owners to local politicians, have sent letters to the Federal Energy Regulatory Commission in favor of the project as an economic development driver, while concerns were focused on the environment, impact on tribal land and African American communities, the potential use of state legal provisions that allow land to be taken from opposing owners at market rates and the market saturation of LNG projects. Venture Global LNG, which has two other liquefied natural gas export facilities planned in Louisiana, said the construction of the 283-mile Delta Express Pipeline would enable subsidiary Delta LNG to export up to 24 million tons of natural gas each year by 2024 from Plaquemines Parish. The project is expected to cost $8.5 billion, support 2,000 temporary construction jobs and create about 250 full-time permanent jobs once completed. The 42-inch wide pipeline also would include four compressor stations in Richland, Concordia, Pointe Coupee and Lafourche parishes. The Delta Express would begin in Alto, southeast of Monroe, near a natural gas pipeline intersection then head south, disturbing about 6,000 acres of land along the way. The company said it plans to restore about 2,700 acres after the project is built. That concerns representatives of Healthy Gulf, an environmental activist organization in New Orleans, in particular the possible destruction of wetlands deep in south Louisiana that offer a physical barrier during hurricanes and tropical storms. The organization also was skeptical of potential market saturation for LNG, with a half-dozen export terminals competing with each other for customers. "There's no market for all of these projects being built," Scott Eustis, community science director of Healthy Gulf, said during the Belle Chasse community meeting where FERC collected public comments. "They are all in a race to see who can build it first."   The federally recognized Tunica-Biloxi Indian Tribe in Avoyelles Parish hired an attorney to voice concerns about the pipeline crossing tribal lands. The tribe wants FERC to expand its review of the pipeline to include impacts on archeological surveys, future tanker traffic and remediation if an explosion or spill or spill were to happen.

Group alleges permit violations during pipeline construction through Atchafalaya Basin - The Atchafalaya Basin is one of the many areas that has helped Louisiana earn its name as the Sportsman’s Paradise. Helping to protect the Basin - Dean Wilson and the Atchafalaya BasinKeepers. “We have more life around us right now than any other place you can go in North America,” said Wilson. ”We are entrusted, and we are so lucky to have one of the most beautiful wetlands in the entire world, the most {sic} swamps in the world is protecting millions from flooding and then we allow these companies to come in and do this." Wilson is talking about the pipelines that are running through the heart of the basin. "You’re not supposed to block waterways, not even under construction,” Wilson said. Specifically, he has set his sights on the recently finished Bayou Bridge Pipeline. "Every 500 feet, you've got to put a 50 feet gap to keep the water flowing north to south.” On a tour of the Basin, Wilson pointed out what he said are permit violations by Energy Transfer, the main subsidiary of the pipeline. He primarily focused on the buildup of land, which he said was left behind by the construction of the pipeline and is now damming off several the bayous. “Any fish you have in there is trapped in there. So they can’t get out,” said Wilson. “And also, it is, you block water flow. Water flow, you ruin water quality, water quality affects fish. It can kill fish.” Wilson said if these alleged violations are not fixed, he plans to take the company to court. “It’s completely illegal,” said Wilson. “It’s very, very upsetting.”

When the Ground Gives Way - The sinkhole that led residents to abandon the Louisiana town of Bayou Corne first opened on August 3, 2012, as a “slurry hole” the size of a tennis court. The cave-in announced itself with a massive burp of diesel oil coming from below the earth. Seven years later, residents I spoke with remember waking to the diesel smell, which gave them headaches and made them vomit. Over the course of the next several years, the hole grew steadily as the ground continued to subside, belching oil and swallowing whole trees like a subterranean monster in a bad science-fiction movie. It became a 40-acre expanse of polluted water, its surface big enough to fit the roof of the New Orleans Superdome four times over. A mile-deep cavern had given way, after decades of industrial salt mining had enlarged it past the point of structural integrity. The odor came from the layer of diesel known as a “fluid blanket” that is routinely used  to protect cavern roofs from groundwater erosion — although this cavern failed not at its roof, but far underground. The sinkhole’s ruthlessness, as it shook the ground and sucked down trees, leaving an oily mess behind, still seems to some observers like a parable for the shoddy way that industry has treated Louisiana’s fragile wetlands and the banks of Mississippi River, which over the past century have become one of America’s major energy corridors. “It’s what we have allowed for years: manmade pollution and destruction of natural resources in Louisiana,” Lt. General Russel Honoré told me. In 2012, outraged by what was happening in Bayou Corne, Honoré founded an environmental alliance called the GreenARMY, seeking to address not only the sinkhole but pollution, along with saltwater intrusion caused by the lattice of oil-company canals dug into coastal zones. According to Honoré, the company that operated the Bayou Corne mine, Texas Brine, should never have begun work; their permit was approved despite an initial determination that the site was risky. “The state of Louisiana told them they didn’t have confidence in them drilling there. But they drilled anyway. How can an LLC from Texas find a way around a drilling permit? It goes to show how industry can come to Louisiana and we don’t hold them accountable.”

In first for energy industry, Freeport-McMoRan to settle Louisiana lawsuits aimed at restoring coast - Lawyers representing coastal Louisiana parishes have negotiated their first settlement with one of the oil and gas companies accused in court of damaging the state’s coast, a potentially ground-breaking move in the effort to find funds for coastal restoration. The settlement, with mining giant Freeport-McMoRan Inc. and its subsidiaries, will result in payments totaling up to $100 million in cash and environmental credits over many years, according to John Carmouche, an attorney with the Baton Rouge-based firm of Talbot, Carmouche & Marcello. The deal represents a possible breakthrough in the years-long push by coastal parishes, and the lawyers representing them, to force oil and gas companies to contribute toward restoring land lost to the Gulf of Mexico over the past century. The lawsuits charge that oil and gas firms failed to follow state law in drilling wells, building canals, disposing of waste and restoring the land and wetlands to the condition they were in before oil and gas operations began. It's unclear whether other oil and gas firms might follow Freeport's lead. The company's wells account for only 4% of the wells drilled in the coastal zone since 1911, Carmouche said, suggesting that the $100 million could be just a fraction of any broader settlements, should they come to pass.

Chevron Okays GOM Waterflood -- Chevron Corp. reported Thursday that it has sanctioned a waterflood project in the St. Malo field, located in the Gulf of Mexico (GOM) approximately 280 miles (451 kilometers) south of New Orleans, La. “The St. Malo field is a world-class asset that is positioned for highly economic brownfield development,” According to Chevron, the waterflood project should boost recovery from St. Malo by more than 175 million barrels of oil equivalent. The company added the brownfield development – its first such project to extend the life of a field in the deepwater Wilcox trend – calls for two new production wells, three new injector wells and topsides injection equipment for the Jack/St. Malo floating production unit. St. Malo is located in 6,900 feet (2,103 meters) of water and began production in December 2014, according to Murphy’s website. Chevron estimates the field will be productive for another 30 years. St. Malo was developed along with the nearby Jack field. In 2018, the fields produced 139,000 total barrels per day of liquids and 21 million total cubic feet per day of natural gas, Chevron’s website states. 

Top offshore regulator's calendar shows oil and gas ties -- Scott Angelle, President Trump's chief offshore oil and gas regulator, had dozens of meetings and phone conversations with oil and gas interests after joining the Trump administration in 2017, according to documents viewed by E&E News

Equinor struggles to clean up oil spill - Equinor CEO Eldar Sætre told newspaper Aftenposten on Monday that the company remains unsure how much oil spilled out of the tanks that collectively held 1.8 million barrels when the hurricane hit the South Riding Point terminal on Grand Bahama. A company statement issued on Tuesday reported that more than 6,000 barrels have been recovered so far. Sætre said that most of the oil spilled was lying in the containment area around the tanks. He confirmed that oil was also flung into the surrounding area “where we have less of an overview” in terms of how much oil is involved and “how the picture looks.” Aftenposten’s reporter was at the scene nine days after the hurricane, before any clean-up operations had begun. She reported how trees were covered with oil, and that there were “dams of oil all over.” A forested area around the terminal area was “completely black, covered with oil,” and the ground was covered with oil as far as 400-500 meters outside the tank area. After delays in procuring clean-up equipment and getting it shipped to the site from the US mainland, Equinor reported that more than 250 people and “large-scale equipment” are now involved in oil recovery efforts. “The terminal area is currently on track to be cleaned from free-standing oil within two to three weeks,” Equinor stated. Plans for “how to address the outside area” were being developed “in dialogue with local authorities.” Both local employees, others hired in from the local area and international workers were engaged in the clean-up this week, with work due to continue using vacuum trucks, absorbents and other equipment. The spill has raised alarm among local environmentalists who fear the oil lying on the ground will seep into the groundwater. That would set off the second recent major environmental disaster caused by a Norwegian company, following the contamination of drinking water around Norsk Hydro’s aluminum plant in Brazil, which also suffered damage from a severe storm.

Major GB oil spill- 75 million gallons of oil spilled - An estimated 1.9 million barrels of crude oil or 75 million gallons of oil was spilled from Equinor’s oil facility in Grand Bahama, according to Minister of the Environment and Housing Romauld Ferreira. While speaking to reporters yesterday, Ferreira added that 6,000 barrels or 252,000 gallons of oil has been recovered. “Of the 6,000 barrels collected, some of it can be reused. But of course, it’s going to have to be reprocessed because it may be mixed with water and other debris,” he said. “There is about 12,000 cubic meters of sludge so that will be shipped out of the country for disposal to the United States pursuant or under the Basel Convention because under the convention, we have to confirm what we are actually sending to the U.S. and they have to agree to accept it. But it will be disposed of out of the country. “There is about 750 cubic yards of contaminated soil and rock aggregate because the Bahamas doesn’t have much soil. So anytime you scrape soil, you always scrape rock. “That mixture will be treated by way of delusion injection of microbes and aeration and disposed of at the Grand Bahama landfill.” Ferreira added that Equinor has quadrupled its staff to address the issue. “They went from having a staff of about 50. Now they have 200 plus persons on the ground involved in recovery and remediation,” he said. “Those persons are housed in two offshore vessels that are on site. The equipment that has been mobilized, in addition to booms and skimmers, they have about 13 vacuum trucks, two helicopters and of course, two boats. So that’s ongoing. “The ambient air, there in order to protect the recovery team, is being monitored for benzene. “Benzene is a compound that’s not safe to breathe. That’s being monitored by an external third party for independent modification.” In terms of cleanup costs and just how much Equinor has lost, that’s still being calculated. 

Texas LNG to face three opponents in contested case hearing - Houston liquefied natural gas company Texas LNG will face three opponents in an upcoming hearing to obtain a state air pollution permit and build an export terminal at the Port of Brownsville. The State Office of Administrative Hearings held a preliminary hearing for the case in downtown Brownsville on Thursday morning. An official overseeing the hearing ruled that the City of Port Isabel, the retirement community of Long Island Village and the Laguna Heights community group Vecinos Para el Bienestar de la Comunidad Costera will all have legal status to testify against and oppose the company's permit application during a Nov. 20 contested case hearing in Brownsville.Texas LNG is seeking permission from the Federal Energy Regulatory Commission and the Texas Commission on Environmental Quality to build an export terminal capable of producing up to 4 million metric tons of LNG per year along the northern shore of the Brownsville Ship Channel. Texas LNG is the smallest of three liquefied natural gas export terminals proposed to be built at the Port of Brownsville. The projects represent nearly $40 billion of investment, thousands of construction jobs, hundreds of permanent jobs and an opportunity to boost U.S. exports. Citing safety and environmental concerns. a coalition of shrimpers, fishermen, environmentalists, neighbors and community groups working under the banner Save RGV From LNG opposes the projects. Texas LNG and the two other projects are still waiting on federal permit decisions, but environmental reviews expressed concern about the cumulative traffic, noise and habitat fragmentation they would have on the endangered ocelot, jaguarundi and aplomado falcon when combined with other projects in the area. FERC officials wrote in an environmental review that the impacts of Texas LNG could be overcome as a single project through the proper mitigation efforts.

Activists Say New Laws To Protect Critical Infrastructure Aim To Silence Them | WAMU Greenpeace activists in Texas recently rappelled off a key bridge over the Houston Ship Channel, unfurling streamers and hanging in midair in a scene that looked kind of like high-rise window washers meets Cirque de Soleil. Their aim was to protest the oil and gas that funnels through the waterway every day by disrupting bridge and water traffic.“The reason we’re here is because the era of fossil fuels needs to end,” said protester Rico Sisney in a Facebook Live video he recorded as he swung from a wire off Houston’s Fred Hartman Bridge.  The Houston channel stretches from the city to the sea, and is home to refineries from global oil companies such as Exxon Mobile and Shell. More oil is exported through it than anywhere else in the country. The group had intended to stay for 24 hours to block that flow. But before the day was over, sheriff’s deputies rappelled down, tied themselves to the activists, and forcibly lowered them to waiting police boats where they were arrested. In all, 31 of the climate activists are now the first to be charged under a new law aimed at protecting the state’s pipelines, ports, refineries and other facilities deemed “critical infrastructure.” At least nine states have recently enacted similar laws in the name of safety to protect oil, gas and other energy projects. But critics say their real aim is to curb direct action protest in the era of climate change.The protesters face federal charges, but the state law they’re accused of breaking carries even steeper prison time — up to two years. Their case could test the law’s constitutionality not only in Texas, but in other states that have adopted similar rules. According to the National Conference of State Legislatures, nine states have adopted similar laws over the last few years. The laws that increases penalties for certain crimes, making trespassing on and disrupting critical infrastructure a felony.

Documentary “Blowout” Follows Climate Cost of Oil Boom from Fracking to Exports - naked capitalism - (video and transcript) Jerri-Lynn here: Timely reminder that Trump didn’t create the climate crisis – although he’s certainly making it worse. As the RNN touts this interview, “ [t]he new film follows the U.S. oil supply chain, covering health, climate and environmental justice impacts. And it points to the president who was central to creating the current reality: Barack Obama.”

Like fine whisky, Texan oil exporters tout unblended crude (Reuters) - The United States is selling more oil overseas than ever, and refiners in Europe and Asia are scrutinizing the quality of that oil after some shipments of U.S. crude contained impurities or contaminants that made it difficult for overseas refiners to process. Two U.S. shipments were even refused by South Korea last year. Overseas buyers are demanding barrels that travel directly from wells to export terminals with little blending, to minimize problems introduced when crude passes multiple transport systems. Like that single malt Scotch, the biggest sellers of U.S. crude are touting so-called “neat” barrels, delivered direct from the shale patch to the Gulf, as a way of boosting the allure of the country’s flagship Midland, Texas crude. “What we’re hearing from our customers around the world is they want pure Midland WTI blend,” said Ben Luckock, co-head of oil trading at Trafigura. The United States has become a top exporter of crude after ending a 40-year ban on exports in 2015, shipping more than 3 million barrels per day to buyers in China, South Korea, and across Europe. To combat concerns about quality, producers and merchants are marketing barrels that come direct from the Permian Basin in West Texas and New Mexico, and pass from the wellhead through a pipeline straight to export facilities, as a way of distinguishing from barrels that first go north to the U.S. primary storage outpost in Cushing, Oklahoma. “Quality reputation is crucial. Buyers ask about how well quality has been managed,” 

City of Kyle Considers Settlement With Kinder Morgan -- A multi-billion dollar natural gas pipeline could soon be one step closer to coming to Central Texas. In July, Kinder Morgan filed a lawsuit against the City of Kyle for passing an ordinance regulating how pipelines can be installed in the city. The ordinance would impact the installation of the Permian Highway Pipeline, which is set to cut through the city. “We asked them to bury the pipeline 13 feet deep, which will allow for us to put our wastewater lines or water lines and our streets over the top of their pipeline,” said Kyle Mayor Travis Mitchell. Mitchell said that Kinder Morgan’s lawsuit against the city argues that the City of Kyle doesn’t have the authority to pass that ordinance because the federal Pipeline Safety Act specifically prohibits cities from regulating pipelines on the basis of safety. Mitchell disagrees, saying the ordinance is necessary to ensure the city can provide basic city services to its residents. “This ordinance is not designed to stop them. It's designed to regulate them in such a way that we can at least continue moving forward as a city with our infrastructure planning,” said Mitchell.

Kinder Morgan starts natural gas pipeline to Corpus Christi ahead of schedule - Houston pipeline operator Kinder Morgan is starting a new pipeline to move natural gas the from the Permian Basin to Corpus Christi ahead of schedule. In a statement, Kinder Morgan said its 448-mile Gulf Coast Express Pipeline will begin full commercial service on Wednesday. Fully booked under long-term contracts, the natural gas transmission will move 2 billion cubic feet of natural gas per day from the Waha hub in West Texas to the Agua Dulce hub in South Texas. Midstream Moves: Kinder Morgan exits Canada in deal valued at $2.5 billion The 42-inch diameter pipeline was designed to move natural gas from the Permian Basin to the Agua Dulce hub, where it can either be exported on other pipelines to Mexico or liquefied natural gas export terminals along the Gulf Coast.

Railroad Commission of Texas shuttering 1,700 abandoned wells in fiscal 2019 - The Railroad Commission of Texas shuttered 1,700 abandoned oil and gas wells over the past year, up from 1,300 over the same period last year, the Railroad Commission reported Friday. The number of wells plugged exceeds the goal of 979 set by the Texas Legislature for fiscal 2019, according to a statement released by the Railroad Commission, whose fiscal year runs from Sept. 1 to Aug. 31. The commission spent $34.9 million plugging the wells, compared to $23 million last year, spokeswomen Ramona Nye told the Business Journal. Industry permitting and regulatory fees are used to pay for plugging wells. The funds to clean up the oil fields surrounding those wells are generated by suing operators that have failed to plug their wells and through sales of equipment on abandoned sites. No taxpayer money is used, according to the commission. The agency's 2018 oil field cleanup report showed more than 13,700 wells were inactive and unplugged as of August 2018. Of that number, more than 4,600 were in Eagle Ford Shale counties. That report was released in January 2019. A new report showing the locations of wells closed during fiscal 2019 will be released next January, Nye said. While the commission beat its well closure targets for fiscal 2018 and 2019, the number of wells waiting to be plugged hit a 10-year high in 2018. Not all those wells were considered abandoned, and some may still be plugged by their operators. As of fiscal 2018, there were nearly 6,300 abandoned wells reported by the commission. There are also an unknown number of abandoned wells for which the state has no records.

Texas rig count lowest level in over two years as industry sheds jobs - The number of active oil and gas rigs in the U.S. fell again this week as an energy slowdown takes hold and Texas energy employers shed jobs. The number of active rigs fell by 18 to 868 nationwide, the lowest level since May 2017, according to the Baker Hughes North America rig count. Across Texas, operators took a net seven rigs out of service, bringing the number of operating rigs to 423, the state's lowest level in more than two years. At the same time, the Texas energy sector is also shedding jobs. The mining and logging industry, which in Texas is dominated by the oil and gas industry, shed 1,800 jobs last month, cutting back its workforce for the third consecutive month, according to seasonally adjusted data reported by the Texas Workforce Commission on Friday. Oil prices were little changed on Friday, at about $58.96 per barrel at 12:00 p.m. central.

Texas oil and gas activity declines in third quarter - Activity in Texas' oil and gas sector declined in the third quarter, according to a survey of oil and gas executives by the Federal Reserve Bank of Dallas. A measure of business activity in the sector fell deeper into negative territory, indicating a contraction in the industry. The business activity index fell to -7.4 in the third quarter from -0.6 in the second . Negative survey readings indicate contracting activity. Oilfield service firms drove the decline, with executives reporting activity in the industry has significantly contracted to -24 in the third quarter, after reporting an expansion in the prior quarter. Still, oil and gas producers continue to pump. Production increased for the 12th consecutive quarter, though oil production eased up a bit. On average, executives surveyed expect oil prices will be $56.92 per barrel by year-end 2019.

Dallas Fed Energy Survey - Dallasfed.org -- Activity in the oil and gas sector declined in third quarter 2019, according to oil and gas executives responding to the Dallas Fed Energy Survey. The business activity index—the survey’s broadest measure of conditions facing Eleventh District energy firms—fell to -7.4 in the third quarter from -0.6 in the second quarter. Oilfield services firms drove the decline, with their business activity index slumping to -21.8 from 6.6. Negative survey readings indicate contraction; those above zero suggest expansion. Oil and gas production increased for the 12th consecutive quarter, according to exploration and production executives. The oil production index was at 15.7 in the third quarter, a tick down from the second-quarter reading of 17.4. Meanwhile, the natural gas production index fell to 6.5 from 13.4. Among oilfield services firms, the equipment utilization index plummeted 27 points to -24.0 in the third quarter, its lowest reading since 2016 and suggestive of a large contraction in equipment utilization. Input costs continued rising but at a significantly slower pace, with the index plunging to 5.6 from 27.1. Meanwhile, the prices received for services index fell further into negative territory, to -18.5 from -12.1, suggesting a further decline in oilfield services prices. The operating margins index remained negative but less so, rising to -24.0 from -32.8. The aggregate employment index slid to -8.0 from -2.5, suggesting employment declined modestly for a second quarter in a row. Meanwhile, the aggregate employee hours worked index declined to -2.4 from 3.1. The index for aggregate wages and benefits, which fell to 6.2 from 14.5, shows a further slowing of wage growth. The aggregate company outlook index improved to zero from -4.5; the zero reading suggests outlooks remained unchanged during the third quarter after worsening during the second quarter. However, company outlooks for oilfield services firms remained negative at -14.8. While uncertainty continues to intensify, slightly fewer firms noted rising uncertainty this quarter than last, and the index fell 12 points to 38.

Secret Survey: U.S. Shale In A State Of 'Deep Anxiety' -- The financial stress sweeping over the U.S. shale sector has led to a sharp contraction in activity. Oil and gas activity in Texas and parts of New Mexico declined in the third quarter, with the Dallas Fed’s business activity index reporting a reading of -7.4, down from -0.6 in the second quarter. A negative reading signals contraction while a positive reading indicates expansion. Falling deeper into negative territory indicates that shale drillers in the Permian further cut drilling activity over the last three months. A slowdown in drilling is an even larger problem for oilfield services companies, who provide the equipment, manpower and drilling services that oil companies need. A producer may be able to do more with less, but that “less” falls on the service providers, who have been hit hard. The Dallas Fed said that the business activity in the oilfield services sector fell to -21.8 in the third quarter, down from 6.6 in the second.Another reading demonstrated the pain for oilfield services. The Dallas Fed’s “equipment utilization index” plunged to -24 from 3, and the figure for the third quarter was the lowest since the oil market’s nadir in 2016.Problematic for shale drillers is that costs still grew, although at a much slower rate. The “input cost” index stood at 5.6 in the third quarter, an indication of slowing cost increases compared to the 27.1 reading in the second quarter. But the bad news for the industry is that the reading was still in positive territory.Employment is also weakening. The employment index fell to -8.0 from -2.5, meaning that the Permian likely saw job losses for the second quarter in a row. When surveyed by the Dallas Fed, 42 percent of the executives from 142 oil and gas firms said that low prices was their most significant constraint on growth. Another 20 percent said the lack of access to capital, followed by 13 percent of which said investor pressure to generate free cash flow. Only a small percentage of respondents said that infrastructure bottlenecks and labor shortages were the top constraint on their growth.

Permian Child Wells May Cut Oil Recovery By 20% - Oil producers drilling so-called parent-child wells in the Permian Basin are risking the loss of 15% to 20% of the crude that can ultimately be recovered from those wells by spacing them too close together, according to a Houston-based investment bank. The analysis from Houston-based investment bank Tudor, Pickering, Holt & Co. -- contained in a 61-page presentation seen by Bloomberg -- is the latest salvo in the debate on the spacing of so-called parent-child wells in the Permian, the most prolific oil patch in the U.S. When drilled too close to the initial “parent” well, output from a “child” can be much less prolific. But producers risk leaving oil in the ground if the spacing is excessive. In much of the Permian, a region that stretches across West Texas and New Mexico, the amount of oil that can be recovered from child wells is on average about 20% to 30% lower than that of the parent, the analysis shows. That means overall production from a particular area could be some 15% to 20% lower than projections made by producers. “Child wells get progressively worse relative to their parent well with tighter spacing,” according to the analysis. In a note to clients Friday, Sanford C. Bernstein analyst Bob Brackett said parent-child interference could end up decreasing overall production by a million barrels a day. “But it’s back end loaded,” he said. 

EIA releases latest international energy outlook, predicting rise in Texas natural gas production - World energy consumption is projected to grow 50% by 2050 and, with it, natural gas production in Texas, according to a new report by the U.S. Energy Information Administration.Economic growth in Asian countries, particularly China and India, is projected to account for more than half the rise in energy consumption worldwide over the next 30 years, according to a report released by the EIA Tuesday. The industrial sector — which includes agriculture, manufacturing and construction — is and will remain the largest consumer of energy globally, increasing its consumption 30% by 2050, the EIA projects.With the increased consumption will come increased production and generation from nearly every energy source. Fossil fuels will continue to meet most of the world's energy needs, though renewable energy is predicted to be the fastest-growing source of new energy, according to the report. Among fossil fuels, natural gas consumption is predicted to increase the most.The U.S. will remain the top natural gas producer through 2050, increasing production by 50% through rising extractions in the shale plays of Appalachia and Texas, according to the EIA. Though the report doesn't specify which of Texas' three major plays will account for most of that rising production, an earlier report from the agency indicates that West Texas production will continue to rise well past 2021 even while production in South and East Texas flattens.Texas-based liquefied natural gas plants could also play a role in increased natural gas consumption worldwide. America's rise as a net exporter of gas will be driven mostly by LNG export facilities, according to the report. Many of those facilities are awaiting federal permits and will lie along the Gulf Coast, including in Brownsville and Corpus Christi. The predicted rise in natural gas, petroleum and coal consumption would also lead to increased carbon dioxide emissions. Emissions of CO2, a greenhouse gas, will increase 0.6% per year starting in 2018 if energy consumption follows the path predicted by the EIA. That's lower than the yearly 1.8% increase from 1990 to 2018 but not enough to stop global temperatures to increasing beyond 1.5 degrees Celsius, according to the Intergovernmental Panel on Climate Change.

Fracking natural gas, oil produces waste water. Solutions in U.S. vary - The extraction of oil and natural gas through hydraulic fracturing — or fracking ¹— from the plains of southeast New Mexico and West Texas takes water. A lot of water. It also produces a lot of waste water ². This waste water, called produced water ³ in the energy industry, is high in salt and toxic for human consumption. It can also contain heavy metals and chemicals that could contaminate New Mexico and Texas' scarce and depleting freshwater supplies. What are oil and gas companies in southeast New Mexico and the Permian Basin ⁴doing with this waste water? Mostly, injecting it back into the ground via disposal wells in areas where researchers say it's relatively safe from causing harm.But as fracking activity in the Permian Basin continues to grow amid calls to strengthen domestic energy resources, so too does the need for more disposal wells today and long-term solutions tomorrow. “If you look at the geology in southeast New Mexico, there’s a lot of optimism that there’s a lot of capacity to store this water,” said Matthias Sayer, vice president of legal for NGL Energy Partners, which operates more than 100 saltwater disposal (SWD) ⁵facilities in the Permian. “I don’t think it’s fully understood. These volumes are unprecedented."  The Permian Basin’s growth was driven by fracking, which uses a combination of water and sand pumped into underground formations to break up rocks known as shale ⁶ and extract oil and natural gas.For every barrel of oil — about 45 gallons per barrel — produced through the practice, half a barrel of produced water is generated, per a 2015 study by Duke University. Experts estimated that ratio could have increased in recent years to up to four or five barrels of water per barrel of oil as wells age and deeper shale is targeted. “Production is not going away right now. That water-oil ratio will only grow,” Sayer said. “There’s definitely a connection between the economics and the environment. For now, Sayer said SWDs are the “easy answer,” but new solutions will be needed in the future to conserve water and address a growing industry.

SCOOP/STACK drilling activity tumbles to three-year low: Enverus— Drilling activity in the SCOOP/STACK - a play once considered to be the next Permian Basin - slowed this week to a pace not seen in nearly three years. Rig count across the neighboring central Oklahoma shale basins dipped by another four, falling to just 57, data published Thursday by Enverus/DrillingInfo showed. The recent slowdown in drilling there has accompanied weaker oil prices this year, which in recent months have averaged around $55-$57/b at the benchmark WTI. Those prices are down from late 2018 highs at nearly $75/b, S&P Global Platts data shows. In 2019 alone, the number of active drilling platforms in the SCOOP/STACK has declined by nearly 44%, falling from a January high of 105 rigs. The pace of drilling in central Oklahoma had already reached its zenith in the second quarter 2018 when the rig count there briefly hit 116. This year, though, higher well costs, varying rock quality and increasingly unpredictable, often disappointing, rates of return have seen major acreage holders, such as Chesapeake, Cimarex, Devon, Marathon and others, move in droves to pause their drilling activity - particularly in the STACK of Kingfisher County. In September, half-cycle internal rates of return in the STACK were estimated at 17% and in the SCOOP at less than 11%, data from S&P Global Platts Well Economic Analyzer shows. Of particular concern for many operators is the rock formations. Although many pilot wells drilled in central Oklahoma at first appeared similar to those found in the Permian Basin, upon deeper exploration, those formations have been weighted more heavily toward gas. In the STACK, gas comprises about 42% of the production mix. In the SCOOP, gas accounts for about 47% of the recoverable resources, Platts Analytics data shows. The downshift in SCOOP/STACK drilling activity was accompanied by a broader pullback from the US oil and gas industry, which saw the total nationwide rig count fall by nine to a 29-month low at 945. As has typically been the case in recent weeks, oil-directed drilling accounted for most of this week's decline, with oil rigs falling by a net seven and gas rigs dropping by three. Along with the SCOOP/STACK, the Eagle Ford also witnessed a notable slowdown this week with rig count there also declining by four to 75 rigs. Drilling activity there is now hovering just above a 30-month low of 73 rigs seen in early September. Among the other major oil basins, rig counts in the Bakken of North Dakota and the Denver-Julesburg of Colorado were both down by two this week, falling to 56 and 22 rigs, respectively.

2 earthquakes rattle Kansas, Oklahoma Saturday - Two earthquakes rattled Oklahoma and Kansas early Saturday morning. The U.S. Geological Survey confirms a:

• 2.7-magnitude quake at 3:25 a.m. 12 miles west of Perry, Okla.
• 3.0-magnitude quake at 3:31 a.m. 4 miles north of Caldwell, Kan.

No significant damage has been reported. Kansas has seen an uptick in earthquake activity this past month, especially in Reno County.  The Cosmosphere will host a free public presentation with the U.S.G.S. regarding a recent string of local earthquakes and if oil and gas production are connected to it. For more details,click here.

Digging Deeper: Eight Questions About Southern Red Sands — A proposed mine for sand used in oil and gas extraction has stirred tensions and spurred questions in this small town just north of the Arizona border since the City Council voted in July to provide water to the project. The mine’s opponents say local officials did not fully evaluate the mine’s potential impact on the area’s water, air and traffic. They also argue that the mine, which would produce at least 700,000 tons of sand per year, could threaten the city's aquifer and Best Friends Animal Society, a neighboring animal sanctuary that is the city’s largest employer. Meanwhile, speculation and distrust have surrounded the company behind the mine, Southern Red Sands. The company, which has described itself as a start-up, has the financial backing of Gardner Company, the Salt Lake City-based real estate developer. Its chief executive, Chad Staheli, says his company is complying with all regulations. With the protest period for the city’s water service agreement ending on October 2, KUER looks at the origins of the company.  Southern Red Sands has two full-time employees. The rest of the team consists of consultants and contractors, CEO Chad Staheli said in an interview with KUER.  The company began, however, in February 2018 with a different name, Integrated Logistics, according to business records filed with the state. The organizer of the company was J.T. Martin, a former Salt Lake City Council member and high-ranking executive of Integrated Energy Companies. Known as IEC, the energy company provides services to oil and gas companies in the Uintah Basin, among other functions. The company’s chairman is Kem C. Gardner.  The principal investor in Southern Red Sands is Gardner Company. The company describes its real estate portfolio as one of the largest in the state. Staheli said the only other investor is Vere Capital — a small investment management company he helped start seven months before he joined Southern Red Sands.

Grand Junction BLM will share a building with oil, gas companies -— The Bureau of Land Management’s new headquarters here will share an office building with oil and gas groups, provoking strong criticisms from environmentalists and a defense from the senator who orchestrated the headquarters move to Grand Junction. The Interior Department announced Friday it has leased part of a four-story building at 760 Horizon Drive in this Western Slope city. According to online records, the building’s other tenants include Chevron and Laramie Energy — oil and gas companies that the BLM could provide leases to and regulate.“To say it’s concerning is an understatement,” said Jim Ramey, state director for the Wilderness Society. “It really struck me that on the same day as an international climate change strike, the BLM has no shame announcing that it’s going to set up shop with fossil fuel companies.”The announcement also came a day before Interior Secretary David Bernhardt and U.S. Sen. Cory Gardner, an architect of the BLM’s headquarters move, arrived in Grand Junction and spoke to Club 20, a western Colorado business group. The club’s annual fall gathering had many oil and gas sponsors, including Chevron, the Colorado Petroleum Council, the American Petroleum Institute, Caerus Oil and Gas and Trapper Mining. Environmentalists protested outside.Gardner touted the BLM’s move to Grand Junction during his prepared remarks Saturday, reiterating his claims that it will lead to better and faster decision-making within the Interior Department. In comments to reporters after the event, he defended the BLM’s new office space.

Boulder county commissioners plan to appeal fracking cases (AP) — Boulder County commissioners say they intend to appeal a Colorado district court decision dismissing the county’s legal claims against an oil and gas drill company. The Daily Camera reports that the county filed three lawsuits aimed at blocking planned fracking operations by Crestone Peak Resources. However, a Boulder County District Court judge dismissed the lawsuits. Commissioners on Tuesday said they intend to appeal. In addition, the county plans to use new regulatory authority that requires oil and gas companies obtain approval from county commissioners before the Colorado Oil and Gas Conservation Commission can green-light the drilling permit. Crestone spokesman Jason Oates says the company remains confident the project to drill 140 wells in unincorporated Boulder County will be approved.

Revealed: how the FBI targeted environmental activists in domestic terror investigations -  Helen Yost, a 62-year-old environmental educator, has been a committed activist for nearly a decade. She says she spends 60 to 80 hours a week as a community organizer for Wild Idaho Rising Tide. She’s been arrested twice for engaging in non-violent civil disobedience. Yost may not fit the profile of a domestic terrorist, but in 2014 the FBI classified her as a potential threat to national security. According to hundreds of pages ofFBI files obtained by the Guardian through a Freedom of Information Act (Foia) lawsuit, and interviews with activists, Yost and more than a dozen other people campaigning against fossil fuel extraction in North America have been identified in domestic terrorism-related investigations. The investigations, which targeted individual activists and some environmental organizations, were opened in 2013-2014, at the height of opposition to the Keystone XL Pipeline and the expansion of fossil fuel production in North America. In its July 2014 file on Yost, the FBI cited federal anti-terrorism legislation prohibiting “attacks and other violence against railroad carriers” as the primary justification for opening the investigation. Violation of the law can lead to up to 20 years in prison. Activists who engage in non-violent civil disobedience and are charged with minor offenses such as trespassing are typically released within 48 hours. The FBI characterized Yost as being driven by a “desire to stop fossil fuels which, in her political view, are destroying parts of the US, specifically Montana, Idaho and Washington”. In addition, the FBI discussed the case with the US attorney’s office in Idaho, local law enforcement, and BNSF Railway, which operates the main rail line delivering coal and oil to export terminals in the Pacific north-west. According to the FBI file, the bureau opened the investigation based on information that Yost “was organizing and planning on conducting illegal activities against railroad companies from Montana into Idaho and Washington”.  Yost said Wild Idaho Rising Tide (WIRT) never organized direct action protests to disrupt oil train traffic passing in the region.  WIRT did participate in a series of community-led events and workshops in July and August 2014 opposing the transport of oil and coal by rail. “Investigators may have conflated several community events to assume such fictitious allegations,” Yost said in an email. Yost, who was contacted by an FBI agent when the case was still active, said she was not surprised by the agency’s actions. Surveillance was a form of suppression, she said, and this was another attempt to criminalize the actions of “normal people” working to protect natural resources. But she remains undeterred.

California tells SoCalGas to boost gas in storage before winter (Reuters) - The California Public Utilities Commission (CPUC) has told Southern California Gas Co (SoCalGas) to take immediate steps to increase the amount of gas it has in storage to maintain reliable service this winter. "To maintain reliable delivery to ... customers during the winter, SoCalGas should take immediate action to increase injections at all available storage facilities," CPUC Executive Director Alice Stebbins said in a letter to SoCalGas made available on Friday. Officials at SoCalGas, a unit of California energy company Sempra Energy, were not immediately available for comment. Gas supplies have been tight in Southern California for years due to pipeline limitations and reduced availability of SoCalGas' biggest storage field at Aliso Canyon in Los Angeles, following a leak at the underground cavern between October 2015 and February 2016. The CPUC "continues to be concerned about the current status of (SoCalGas') storage inventory, system operations, and ability to provide natural gas this winter," Stebbins said. SoCalGas had about 72.1 billion cubic feet (bcf) of gas in storage on Monday, compared with 80.5 bcf at this time last year and a five-year (2014-2018) average for Sept. 23 of 84.9 bcf. One billion cubic feet of gas is enough to supply about 5 million U.S. homes for a day. In July 2018, the CPUC increased the amount of gas SoCalGas could store in Aliso to 34 bcf from 24.6 bcf. That is well below Aliso's peak capacity of 86.2 bcf. Before the Aliso leak, SoCalGas' four storage facilities - Aliso, Honor Rancho, Playa Del Rey and La Goleta - could hold about 135.3 bcf. But with limitations on Aliso, the four fields can hold around 83 bcf. Moreover, the low amount of gas in storage is being exacerbated by ongoing pipeline maintenance.

Oil Giants, Under Fire From Climate Activists and Investors, Mount a Defense – NYTimes - From the deck of a boat in New York harbor, the chief executive of Equinor squinted toward a stretch of sea where his oil company will soon build a giant wind farm. “We are doing all we can” to fight climate change, said the executive, Eldar Saetre. Hours later, at a hotel where Mr. Saetre and fellow oil executives were gathering to defend their industry — a major contributor to global warming — climate protesters weren’t buying it. Using lights, they projected “MAKE BIG OIL PAY” on the facade. On Monday, as world leaders gathered at the United Nations climate summit and discussed the urgency of slashing carbon dioxide emissions from burning fossil fuels, 13 of the world’s biggest fossil fuel companies presented their defense at a forum across town. But most of their proposals appeared designed to perpetuate the use of oil and gas for decades to come, rather than transition quickly to cleaner options. The companies promised a program to invest in technologies to scrub carbon dioxide from the air, although big questions remain about scaling up that technology. They also promised to cut down on leaks of methane, a potent greenhouse gas, from wells and pipes, and reaffirmed support of a tax on the burning of oil, gas and coal. “The change that needs to take place — the trillions of dollars of investment — is only going to come from companies with resources and scale,” said Ben van Beurden, chief executive of Shell.“This is certainly a first step. It’s a down payment. But this is a time we need a Hail Mary pass, not these modest steps,” said Andrew Logan, senior director for oil and gas at Ceres, whichworks with investors to address the impact of climate change on their holdings.According to the United Nations, oil and gas production needs to fall by about 20 percent by 2030 and by almost 55 percent by 2050 in order to stop Earth’s temperature rising by more than 1.5 degrees Celsius above preindustrial levels. That is the target set by the 2015 Paris Accord, a landmark agreement among most of the world’s nations to fight global warming. However, new data from the financial think tank Carbon Tracker indicates that, since 2018, major oil companies have invested at least $50 billion in fossil fuel projects — like Shell’s $13 billion liquefied natural gas project in Canada and BP, Chevron, Exxon Mobil and Equinor’s $4.3 billion deepwater oil project in Azerbaijan — that would not be financially viable if the world were to meet the 1.5-degree target.

Oil May Still Be Needed for Decades Despite Climate Push-- While global leaders meet in New York to discuss solutions to climate change, the U.S. government has offered a sober assessment of the world’s ability to wean itself off fossil fuels. Although renewables will be the fastest-growing energy source through 2050, oil consumption will still be key to meeting energy demand for decades, according to a report released Tuesday by the Energy Information Administration. Fossil fuel use will keep climbing for the next 30 years, the report said. “Even though you see a very aggressive change in renewables uptick, it is just not growing fast enough to meet the demand and we don’t see demand tapering off,” EIA Administrator Linda Capuano said in Washington. Petroleum and other liquids will see their use increase through 2050, even as their share of global energy demand declines to 27% from 32% over that period. Natural gas, meanwhile, is seen as the fastest growing fossil fuel, increasing by 1.1% a year. After initially falling, coal’s use will pick up towards 2050. “Global energy consumption continues to outpace renewables growth and, while their shares decline, fossil fuel consumption, including coal, are projected to increase to meet demand,” Capuano said at an event held by the Center for Strategic and International Studies. The agency’s International Energy Outlook 2019 contains modeled projections rather than forecasts and assumes current laws and regulations remain unchanged.

When it comes to acknowledging humans’ role in climate change, oil and gas industry lawyer says ‘that ship has sailed’ -- In a closed-door meeting of oil and gas executives this summer in Colorado Springs, industry lawyer Mark Barron offered a bold proposal: Energy companies must accept that fossil fuels are helping to drive climate change.“It doesn’t matter whether it’s real, or not real, or what the issues are,” said Barron, who heads the energy litigation arm of Baker Hostetler. “That ship has sailed from a political perspective.”Barron added that any American younger than 40 had grown up learning that climate change is “an existential crisis that we need to address.” The recording of the June 24 meeting of the Independent Petroleum Association of America (IPAA), which was obtained by The Washington Post, highlights a growing schism between the Trump administration and key players in the fossil fuel industry. Even as Trump officials work to repeal federal restrictions on greenhouse gas emissions, some oil and gas executives say they have no choice but to press forward with plans to address climate change.As world leaders and activists converged in New York City this week for an international climate summit, the Oil and Gas Climate Initiative — whose members account for 30 percent of global petroleum production — highlighted their investments in technology to curb greenhouse gas emissions.Last month, three energy giants — BP, ExxonMobil and Shell — said they would continue to cut emissions of methane, a potent greenhouse gas, even though the Environmental Protection Agency announced that the government would no longer require them to do so. The month before, four automakers struck a deal with California pledging to reduce their vehicles’ carbon footprint for the next several years even if the administration eases federal mileage standards.The burning of petroleum accounted for 45 percent of the United States’ energy-related carbon emissions last year, according to the Energy Information Administration, while natural-gas burning contributed 31 percent.

Fracking Ban Proposed By 2020 Dems Would Kill Millions of Jobs - Washington Free Beacon - A proposed fracking ban put forward by leading Democratic presidential candidates would have a devastating impact on U.S. jobs, energy independence, and even national security, according to several studies.  Reports from the American Petroleum Institute, Independent Petroleum Association of America, and U.S. Chamber of Commerce painted a stark picture of the economic fallout from ending fracking, a process which has transformed the United States into the top oil and natural gas producer in the world. Sen. Elizabeth Warren (D., Mass.), Sen. Bernie Sanders (I., Vt.), and Sen. Kamala Harris (D., Calif.) are among eight remaining 2020 candidates who have called for an all-out ban on fracking, despite the fact that the drilling method has put the United States on a path to energy independence. The practice has also led to cleaner energy alternatives and lower carbon emissions, a key goal of climate change activists.  Environmental opponents argue fracking's positives are offset by issues such as contamination of drinking water, air pollution, methane leaks, links to causing earthquakes, and the lowering of proximate property value.  ‘A ban … would destroy more than 14 million jobs'   A 2016 report from the U.S. Chamber of Commerce found the economy would suffer dramatically if lawmakers banned fracking.  "A fracking ban would be a disaster for the U.S. economy, exceeding the economic harm caused by the financial crisis, the housing bust, and the Great Recession—combined," the report said. "Those concurrent events cost the United States around 8 million jobs. A ban on fracturing would destroy more than 14 million jobs, all while raising costs for families and considerably reducing American energy security." The spike in energy prices would raise the cost of living by $4,000 a year, and household incomes would drop by $873 billion. The report concluded the U.S. gross domestic product would be reduced by $1.6 trillion. Texas (1,499,000 jobs lost), Pennsylvania (466,000), Ohio (397,000), and Colorado (215,000) would see more than a combined 2.5 million jobs lost from a fracking ban alone over that span, the report said, taking into consideration its effect on energy prices, incomes, manufacturing, and energy security.

Millennials Really Do Ruin Everything, And Big Oil Is Next -- It sounds harsh, but it’s true: millennials really do ruin everything. And the oil industry will be no exception. From talent acquisition to courting investors, to finding new end uses for petroleum, the oil industry is facing a whole new set of challenges—one that extends far beyond geopolitical risk premiums and barrel prices.  Oil companies who are quicker to adapt to this changing of the guard will have first pick of investment dollars and top talent, while those who are slow to change will get the leftovers.   Read some headlines (or some memes if that’s more your speed). There are hundreds of headlines and one-liners that tell of the serial killing nature of millennials. The death knell has tolled so far for straws, napkins, diamonds, home buying, cable television, stock trading, and even breakfast cereal—at least as we once knew it.   Some of those on the dead-to-me list are there simply because they have been replaced with new technology that is simply more convenient, like the shift from cable TV to Netflix. Others wound up on the list because they were shunned by the generation that likes to take the high ground. And it is this high ground that has placed the oil industry in the millennial crosshairs. The image, quite simply, of the oil industry can be summed up with a single word: “dirty”. Oil companies wishing to woo the millennial workforce and investment dollars will have to work overtime to shed this moniker. Millennials are not just about taking the high ground. If you look at their buying and investment choices, it’s not just about shunning things that are bad for the environment, bad for things or people who are exploited, or detrimental to their health. Much of the time, millennials are about what’s practical or convenient. Online shopping, grocery delivery, next-day delivery, Uber Eats, Peloton, etc., are all great examples of goods and services that have met millennials where they are, instead of banging their head against the wall and trying to convince millennials they have what they want.  Companies who fail to live up to the generation’s lofty moral ground may still be able to meet their expectations for ease of use and convenience. For oil, this is tricky, because end use is multifaceted and intertwined in the transportation, plastics, and asphalt sectors—all of which the oil industry should be helping to prop up by meeting millennial needs within these sectors.

Rio Cobre oil spill leads to shutdown of NWC treatment plant - An oil spill in the Rio Cobre Valley in St. Catherine has resulted in the National Water Commission (NWC), shutting down the Spanish Town Treatment Plant. A news release from the NWC says contaminated raw water did not enter its facility or pipelines. The Water Commission says it is monitoring the situation and will make adjustments to supply the affected areas. Several communities will experience no water or low water pressure until conditions are favourable to restore inflows to the plant. They include Spanish Town, Westmore, Hampton Green, Lakemore Gardens, Job Lane, White Water Meadows, Sydenham Gardens and the Willowdene Housing Scheme.

Colombian fracking moratorium does not block 'investigative' projects: court - (Reuters) - Colombia’s top administrative court on Tuesday clarified that a moratorium on fracking it upheld last week does not prevent “investigative” pilot projects, surprising both oil companies and environmental activists. Magistrates from the Council of State, which rules on administrative matters, had maintained a temporary moratorium on the use of hydraulic fracturing, known as fracking, amid ongoing arguments in a wider case about the technique. “The court advises that the reach of this decision does not impede the development of comprehensive investigative pilot projects ... made by the expert commission convened by the national government,” the council’s president, Lucy Bermudez, said in a statement. An expert commission in February recommended that three pilot projects be strictly monitored before the country decides whether non-conventional techniques for extracting oil and gas can be widely used. Regulations for development of non-conventional deposits were suspended in Colombia late last year as part of the lawsuit, filed against the energy ministry by an environmental lawyer. State-run oil company Ecopetrol (ECO.CN), which is a co-defendant in the suit and had asked the court to lift the suspension, saw its request to start a pilot project paused in July pending the court’s decision.

Four Colombia fracking projects could bring $5 billion in annual investment - (Reuters) - Four fracking pilot projects in Colombia could bring in $5 billion annually in investment once they are in the production phase, industry leaders said on Tuesday, as the country awaits regulation that will allow the projects to begin. The potential use of fracking in the Andean country has sparked impassioned debate, with environmental groups saying it could damage water supplies and cause earthquakes, while supporters say it is a key to energy self-sufficiency. The top administrative court, the Council of State, is hearing a case on whether hydraulic fracturing, which breaks up rock formations with pressurized liquid, should be allowed but it has said pilot projects recommended by an expert commission can go ahead. Four pilot projects — one run by coal company Drummond [DRMND.UL] and the others by oil companies Ecopetrol, Exxon Mobil and Conoco Phillips — will generate billions of dollars in investment over the next few years, the head of the private Colombia Petroleum Association, or ACP, said. “In the first phase of the four pilots they will require investments of around $600 million per year - so we’ll surely have two, even up to three years, with investment of that amount and once we pass to the production phase they will require investments of around $5 billion per year,” Francisco Lloreda told journalists.

Buyers of Venezuelan Oil Need to Go to Panama City-- Buyers of Venezuelan crude used to visit the building across from Petroleos de Venezuela SA’s headquarters in Caracas. Not anymore. Now, the place to go is a helix-shaped skyscraper popularly known as “The Screw,” in Panama City that houses a Rosneft Oil Co PJSC office, according to people with knowledge of the situation. The office, staffed by three oil traders, two of whom used to work for PDVSA, helped Rosneft to handle 70% of all oil exported by Venezuela in August, data compiled by Bloomberg show. Rosneft has taken on a more active role in trading Venezuelan oil after the U.S. tightened sanctions earlier this year against the South American nation in a bid to oust President Nicolas Maduro. As China National Petroleum Corp.’s subsidiary PetroChina Co. Ltd., the biggest taker of Venezuelan crude prior to sanctions, halted loadings in August and September, Rosneft was allocated larger shares of Venezuelan crude, and so has Cuba and PDVSA’s subsidiary Nynas AB, which owns refineries in Europe. Client ComplaintsPDVSA and Rosneft have been partners in oil-producing ventures in Venezuela and since 2014 Rosneft has loaned about $6.5 billion to PDVSA in exchange for oil. After initial delays, PDVSA caught up with payments and reduced the outstanding debt to $1.1 billion in the second quarter. The crude loaded as payment is being resold to refiners in China and India. Rosneft-backed Nayara Energy Ltd., based in Mumbai, has adjusted its diet and is taking more Venezuelan barrels. 

Brazil says oil in spill along northeast beaches not Brazilian - (Reuters) - Brazil’s environmental agency Ibama said on Thursday that an analysis of a vast oil spill along the country’s northeastern beaches showed the spilled crude did not originate in the country. Ibama said in a statement that it had been investigating the spill in several beaches in some northeastern states since Sept. 2. Local media showed pictures of sea turtles coated in black tar by the slick. The spill spans over 1,500 kilometers (932 miles) of Brazil’s northeast coast, affecting wildlife and polluting some of the postcard beaches in one of the nation’s top touristic destinations, such as Praia do Futuro, in the state of Ceara, and Maragogi, in Alagoas state. Brazil’s state-controlled oil company Petroleo Brasileiro SA said in a statement that it had concluded after a molecular analysis of the oil that the crude spilled was not produced nor sold by the company. Crude oil is tested before export to make sure it complies with the standards of the refinery it is being shipped to. Crude oil from different fields can be identified according to a series of chemical signatures, including levels of sulfur and nitrogen, acidity and viscosity. . An ANP statement said there were no reports of spills by any operator of oil drilling rigs in the country.  Ibama said that beaches in the states of Rio Grande do Norte, Maranhao, Ceara, Paraiba, Pernambuco, Alagoas and Sergipe were affected. Some marine turtles were contaminated by the oil. They were rescued alive in the state of Rio Grande do Norte and sent to rehabilitation centers. Other animals were found dead, Ibama said, without disclosing species or numbers.

Govt to impose heavier penalties for sea pollution - THE Ministry of Works and Transport has introduced stricter measures to control ocean pollution to effectively manage potential oil spills. Works minister John Mutorwa tabled amendments to the Prevention and Combating of Pollution of the Sea by Oil Act in the National Assembly last Tuesday. The amendments include the introduction of a new, broadened definition of “harmful substance” to include any oil-based substances, an expansion of the Exclusive Economic Zone (EEZ) prohibited area, and increased penalties for illegal activities within that area. “This act is no longer sufficient to effectively manage the current oil pollution risk scenarios, which are primarily driven by the growth and significance of the port of Walvis Bay [and] increasing offshore gas and oil exploration activities in Namibian waters,” Mutorwa stated. The last amendment to the act was enacted in 1991, and saw increased fines imposed for certain offences. The new amendment proposes even stricter fines and prison sentences, with some increasing five-fold. The bill proposes that offences such as failing to report the discharge of harmful substances into the ocean, or operating within the prohibited area without a pollution safety certificate, carry a maximum fine of N$40 000, a jail term of not more than a year, or both. Currently, these offences carry a fine of N$10 000, imprisonment for no longer than six months, or both. More severe offences – such as discharging harmful substances within the prohibited area – would attract a maximum fine of N$1 million, imprisonment for not more than two years, or both.

Offshore Senegal Discovery Could Support LNG Project - Kosmos Energy reported Monday that the Yakaar-2 appraisal well offshore Senegal confirms a world-scale natural gas resource.Drilled to approximately 15,748 feet (4,800 meters) in roughly 8,202 feet (2,500 meters) of water with the Valaris DS-12 drillship, Yakaar-2 encountered approximately 98 feet (30 meters) of net gas pay in high-quality Cenomanian reservoir similar to that of the Yakaar-1 exploration well, Kosmos stated. The company added that Yakaar-2, drilled approximately nine kilometers from Yakaar-1, proved up the southern extension of the field.“The Yakaar-2 appraisal well demonstrates the scale and quality of the Yakaar resource base,” Kosmos Chairman and CEO Andrew G. Inglis said in a written statement.Kosmos stated the Yakaar-2 results underpin the company’s view that the Yakaar-Teranga resource base has the potential to support an LNG project for domestic and export markets. BP operates the project, which includes Kosmos and PETROSEN. A Yakaar-Teranga LNG project would represent the companies’ second such development off the Senegal-Mauritania border. They also plan to produce LNG from their Greater Tortue Ahmeyim project.

Indonesias Pertamina stops oil spill off Java - Indonesia's state oil and gas company PT Pertamina said on Monday it had stopped an underwater leak from an oil well off West Java over the weekend after more than two months of spillages. The company aims to permanently plug the leak next week, but the clean-up effort for beaches nearby is expected to last until at least March next year. The spill, from the YYA-1 well in Pertamina's Offshore North West Java (ONWJ) block, started on July 12 and was declared an emergency three days later. An environmental group said the spill has affected at least 13 villages, threatening the livelihoods and health of thousands of people. On Monday, Dharmawan Samsu, Pertamina's upstream director, told reporters that Pertamina had connected a relief well, which should contain the leak, and aimed to permanently plug the leaking well by Oct 1. "With this completion, we can soon focus on recovery efforts for the affected area," he said. "We will renovate public infrastructure and clean the environment to restore the ecosystem." More than 42,000 barrels of oil have been recovered offshore since the spill, Taufik Adityawarman, a Pertamina official said, as well as 5.7 million bags of mixed sand and oil from beaches. Pertamina has promised to compensate residents affected by the spill, mostly fishermen from villages near the well. Adityawarman said so far only 30% of the compensation money has been distributed. The company has estimated output from the ONWJ block this year of 29,000-30,000 barrels of oil per day and 110 million standard cubic feet of natural gas per day.

Leaking oil well to be plugged next week- Pertamina - Upstream oil and gas company Pertamina Hulu Energi (PHE), a subsidiary of state-owned energy company Pertamina, says it expects to permanently seal its leaking offshore oil well near Karawang regency, West Java, early next month. “We estimate that by 10 a.m. on Oct. 1 – inshallah [God willing] – the well will be cemented and locked. If our drilling team works ahead of schedule, then alhamdulillah (thank God), but this is our hourly timeline,” said oil spill incident commander Taufik Adityawarman. He told reporters in Jakarta on Monday that PHE’s relief well intercepted the leaking well on Sept. 21 and was pumping, up to Monday, a heavy liquid to suppress spurting fluids. Over the next eight days, PHE is to pump a second liquid into the leaking well that cements the heavy liquid and, thus, permanently plug the leak. Taufik added that PHE had collected 42,000 barrels of oil from the sea and 5.74 million sacks of oil-and-sand mix from the shore by Sunday. The recovered oil is being stored in containers in Marunda subdistrict, North Jakarta. “As technical experts, we want the oil to be recycled into the system but the ones who decide whether the substance is oil or toxic waste are our friends at the Environment and Forestry Ministry,” he said. Pertamina upstream director Dharmawan Samsu said that the company spent between US$7.5 million and $10 million to drill the relief well. The oil spill was caused by a gas well kick – the release of gas caused by low pressure in a wellbore – on July 12 that worsened two days later.

Aramco’s Repairs Could Take Months Longer Than Company Anticipates, Contractors Say – WSJ  - The Saudi Arabian Oil Co. is in emergency talks with equipment makers and service providers, offering to pay premium rates for parts and repair work as it attempts a speedy recovery from missile attacks on its largest oil-processing facilities, Saudi officials and oil contractors said. It may take many months—rather than the maximum 10 weeks company executives have promised—to restore operations to full working order, they said.

Saudi switches crude grades, delays oil supplies to buyers in Asia (Reuters) - State oil giant Saudi Aramco has switched crude grades and pushed back crude and oil products deliveries to customers by days after the attacks on its supply hub severely reduced its light oil production and led to output cuts at its refineries. Crude oil loading delays were widespread as most buyers have received Aramco’s request to push back shipments in October by 7-10 days, several sources with knowledge of the matter said, giving the producer more time to maintain exports by adjusting supplies from inventories and its refineries. At least three supertankers that loaded crude in Saudi Arabia this week for China and India had their crude grades switched from light to heavy oil while more buyers in Asia have been asked to delay shipments and switch grades in September and October, according to sources with knowledge of the matter and data from Refinitiv and Kpler. Unipec, the trading arm of Asia’s largest refiner Sinopec , will lift Arab Heavy crude instead of Arab Light and Arab Extra Light onboard Very Large Crude Carriers (VLCCs) Caribbean Glory and Xin Lian Yang this month. Sinopec declined to comment. VLCC Kalamos will also load Arab Heavy instead of mostly Arab Extra Light for Indian Oil Corp. IOC does not comment on commercial matters. The sources declined to be named as they were not authorised to speak to media. Saudi Aramco is drawing down Arab Heavy crude from its inventories to replace oil grades, said an oil analyst who also declined to be named. “Saudi always destocks oil in July and August. So the current inventory level would be around 170 million to 175 million barrels,” the analyst said. “This could last 25 days in theory. In practice, it may be even less.”

China has enough oil inventories to last about 80 days: NEA (Reuters) - China has around 80 days of oil in storage, including those in its strategic petroleum reserve (SPR), oil storage at oil firms and commercial stocks, a National Energy Administration (NEA) official said on Friday. China, the world’s biggest importer of crude oil, will complete building the second phase of its strategic oil storages in 2020, Li Fulong, NEA’s head of development and planning, told a news conference. Li said China had enough oil to last about 80 days, slightly less than the 90 days recommended by International Energy Agency for its members. Beijing has not joined the IEA. Based on January-August import levels, 80 days’ worth of oil imports by China would equate to about 788 million barrels, according to Reuters calculations. China rarely releases oil inventory information. It last gave an update on its emergency oil stockpile in December 2017. NEA director Zhang Jianhua told the same news conference that recent attacks on oil facilities in top exporter Saudi Arabia would not impact China’s oil supply. “It is not that we depend on one certain country or region. Looking at the current situation, even if Saudi Arabia is attacked, it will not affect China’s crude oil supply,” Zhang said, adding China could “import large amounts of oil and gas” from the United States if there was no trade war.

"Suspiciously Well Placed": First Images Of Crippling Damage To Giant Khurais Oil Field Revealed  - Much of the attention concerning the crippling damage to Saudi Aramco facilities struck in last week's aerial attack ultimately blamed on "Iranian sponsorship" by US and Saudi officials has focused on Abqaiq processing plant, but on Friday the first on the ground images from the kingdom's giant Khurais oil field — the country's second largest — have been revealed, showing scorched infrastructure, ruptured pipelines, and "a mess of oil melted to asphalt, twisted and charred metal grates" according to an on site Bloomberg report. And yet Aramco has remained insistent that the field will return to pre-attack output levels this month, after the company reported losing half its daily output in the aftermath of the early Saturday attacks, impacting a whopping 5% of total global supply. Per Bloomberg, Khurais has a capacity of 1.45 million barrels a day, processing all oil on site; however the attack took out four 300-foot towers essential to the production process.  Like at the Abqaiq processing plant nearer the coast, the strikes — whether by drones or ballistic missiles (debris showed by the Saudi Defense Ministry this week featured both) — appeared remarkably precise. The Saudis have counted a total of twenty-five drones and missiles used in the twin attacks, after statements by Yemen's Houthi rebels claimed ten drones were used.  Bloomberg reports of the recovery progress at Khurais: The Khurais field and processing plant resumed 30% of production within 24 hours of the strike and will produce 1.2 million barrels a day by the end of September, Fahad Al Abdulkareem, general manager for Aramco’s southern area oil operations, said at a briefing on Friday. Workers are at the site 24 hours a day to speed the repairs, according to the company. The precision nature of the strikes, which Washington has claimed can only point to Iranian involvement given the level of sophistication needed to conduct such an operation, is even more evident at the Abqaiq facility.  Given the sheer distance the drones would have to travel, whether from Yemen or possibly Iran, combined with 18 precision strikes on the 70-year old but state of the art Abqaiq facility, a number of analysts are questioning whether the operation had inside the kingdom help.

Clear Risk of Slower Saudi Output Restart - There is clear risk of a slower restart of Saudi Arabian oil production despite the optimistic guidance by Saudi Aramco. That’s according to Rystad Energy Chief Oil Market Analyst Bjornar Tonhaugen, who made the statement in a post published on Rystad’s website on Wednesday. “In our view, there is a clear risk of a slower resumption towards full capacity,” Tonhaugen stated. “Repairs to the damaged spheroids and stabilization towers involve, to our understanding, access to expertise and spare parts which would take time to procure,” he added. Unless repairs happen much quicker than Rystad expects, the company estimates that the Abqaiq processing facility will only reach 90 percent capacity by mid-November, Tonhaugen revealed. “The outage would then be reduced to 0.5 million barrels per day (MMbpd) for the month of November at 5.2 MMbpd production. For now, we expect production to remain slightly below full capacity for December,” the Rystad representative continued. Saudi Aramco President and CEO Amin Nasser announced Tuesday that the company’s production capacity would be fully restored by the end of September.

Is Aramco Lying About Its Damaged Oil Infrastructure? -Repairs at the Khurais field and the Abqaiq processing facility may take several months rather than the ten weeks tops that Aramco had initially estimated, the Wall Street Journal reports, citing foreign contractors working with the Saudi state giant. Aramco, the contractors told the WSJ, is in urgent talks with equipment manufacturers and service providers and is willing to pay premium rates for faster delivery and installation. Still, the repairs work could last months because the equipment has to yet be manufactured, delivered and installed, and this could take as long as a year, the WSJ’s Summer Said noted, quoting Saudi officials.The report suggests initial expectations by Aramco may have been overoptimistic. As a result, we could see another spike in prices soon: the attacks on Khurais and Abqaiq took off a combined 5.7 million bpd from global oil markets.Last week, Energy Minister Abdulaziz bin Salman tried to reassure traders as hetold media more than half of the lost production had been restored. By the end of September, bin Salman said, Saudi Arabia would have 11 million bpd in production capacity and by the end of November, it would have 12 million bpd.Yet, according to the Wall Street Journal’s sources, this is not likely to be the case as the equipment that will replace the one destroyed by the attacks would have to be made to measure, and this takes time.Bloomberg estimated earlier this month that Saudi Arabia has about 50 million barrels of oil in storage at home plus another 80 million barrels stored abroad. This will be enough to keep its exports going at regular rates, but some expect a supply gap to open up late next month. Uncertainty is growing as a result of conflicting reports: first media reported Saudi Arabia had asked Iraq for light crude to insulate itself from a supply gap, and then Riyadh said it had never done that. Now, the official position continues to be that repairs will take a few weeks, with the WSJ report suggesting that this might not be the case.

Risk of Further Saudi Attacks High - The risk of further high-impact attacks against Saudi energy infrastructure is high. That’s according to Torbjorn Soltvedt, principal MENA analyst at Verisk Maplecroft, who made the statement in an analysis piece sent to Rigzone on Thursday. “For Saudi Arabia, the bottom line is that the risk of further serious attacks will persist even if the situation does not escalate,” Soltvedt said in the report. “Only a significant reduction in regional tensions or a neutralization of Iran’s asymmetrical capabilities can meaningfully reduce the threat level. Unfortunately, prospects for either are poor,” he added. The recent attack highlighted a vulnerability at the heart of Saudi Arabia’s oil infrastructure that cannot be easily remedied, according to Soltvedt, who added that the cost of inaction and poor conditions for diplomacy leave a militarized response as the most likely next step. “The severity of the 15 September attack and the problems associated with inaction make it likely that Saudi Arabia will lean towards some form of military response, most likely in coordination with the United States,” Soltvedt stated. “The cautious approach taken over the last few months means that Saudi Arabia now faces the challenge of changing course rapidly and jumping several rungs on the escalation ladder,” he added. Soltvedt went on to say that the Saudi political leadership will want to avoid a full-blown war with Iran “at all cost”. Saudi Aramco revealed over the weekend that emergency crews contained fires at the company’s plants in Abqaiq and Khurais, “as a result of terrorist attacks with projectiles”. The company confirmed that these attacks resulted in a production suspension of 5.7 million barrels of crude oil per day. Saudi Aramco President and CEO Amin Nasser announced Tuesday that the company’s production capacity would be fully restored by the end of September. According to Rystad Energy Chief Oil Market Analyst Bjornar Tonhaugen, however, there is clear risk of a slower restart of Saudi Arabian oil production despite the optimistic guidance by Saudi Aramco. 

Oil prices could go much higher if there is a military escalation after Saudi attack The growth of the U.S. as both oil producer and exporter is helping cap a spike in crude prices following attacks on Saudi Arabian oil facilities, but the price could go sharply higher, depending on the duration of the disruption and whether it escalates into a military conflict. The weekend attack on Saudi Aramco’s Abqaiq processing facility and another plant knocked 5.7 million barrels of Saudi production off line and underscores a new realization of vulnerability in world oil production. That is 5% of global oil output and about half of Saudi’s production, but Saudi Arabia has sufficient supplies to maintain its current export level for about a month. Oil prices initially spiked nearly 20% in trading Sunday evening but were up just about 14.5% in U.S. trading Monday, the biggest one-day move since February 2016. Brent was trading at $68.45 per barrel in late trading. “What the market is pricing is geopolitical risk premium and tail risk. Something like this has never happened before. There have been attempts, but those were foiled,” said Amarpreet Singh, Barclays energy analyst. “Something like this to Saudi supply has absolutely never happened, even during the Gulf War.” Houthi rebels, aligned with Iran, claimed responsibility for the attack, but Secretary of State Mike Pompeo said Iran was responsible. Saudi Arabia’s foreign ministry said an investigation into the incident shows Iranian weapons were used in the attack. President Donald Trump presided over a national security meeting at the White House Monday morning on the topic of Iran, NBC News reported from sources. Trump told reporters Monday afternoon that he was in no rush to respond to the attacks on Saudi oil facilities. He also said “it was a very big attack” that could be met with a much larger attack. Trump said Pompeo is going to Saudi Arabia, and the U.S. has been in touch with European countries including France, which is still a party to the nuclear agreement with Iran.

Saudi oil disruption could hit China hardest - Saudi Arabia claims its oil production infrastructure, 60% of which was knocked off-stream in a pre-dawn drone attacks on September 14, will be running at full throttle again by month’s end, an assessment few energy industry analysts view as feasible. While the Middle East waits to see how the US and Saudi Arabia ultimately respond to the attacks blamed on Iran, the impact on Asia’s oil markets is coming into clearer view, with China looking the most vulnerable to any prolonged disruption to Saudi supplies. Saudi Arabia is the world’s largest oil exporter, the de facto leader of the Organization of Petroleum Exporting Countries (OPEC) cartel and the world’s third largest crude oil producer after the US and Russia. The Asia-Pacific, home to some of the world’s largest net oil-importing nations, is increasingly dependent on Saudi oil to fuel their fast-growing economies. Last year, China imported 459.3 million tons (mt) of crude oil, a 10.1% year on year rise worth a record-breaking US$239.2 billion. That represented a 20.2% share of total global consumption, according to China’s National Bureau of Statistics (NBS). In 2018, the US imported 247.8 mt of crude oil, while India was the third largest crude oil importer at 226.6 mt, followed by Asian industrial heavyweights South Korea (151.3 mt), and Japan (149.3 mt), according to industry data. But the attacks have put China’s reliance on Saudi Arabian crude oil exports into particularly sharp relief. In 2018, Saudi Arabia was China’s second largest oil supplier, providing 12.4% of its imports at a value of around $30 billion.

Europe gasoline exports to Mideast surge after Saudi attacks – (Reuters) - Gasoline exports from Europe to the Middle East and Asia are set to surge this week after recent attacks on Saudi Arabia’s oil facilities crippled output at the kingdom’s refineries. Over 400,000 tonnes of gasoline and gasoline blending components have been booked in the past week for loading between Sept. 21 and Sept 26 out of northwest Europe with Mideast Gulf delivery options, shipping data shows. The flow is the equivalent of around 500,000 barrels per day. It is unclear where the cargoes will end up, but traders said that Saudi Arabia’s state-run oil company Aramco is seeking to buy large volumes of refined oil products. Europe’s exports of gasoline and blending components to Saudi Arabia averaged 60,000 bpd in the first five months of the year, according to data analytics firm Vortexa. “A flurry of gasoline bookings that emerged this week for Europe to Middle East voyages could see more European gasoline make its way to Saudi Arabia,” Vortexa said in a note. Traders said the rise in shipping bookings was related to a sharp increase in demand following attacks on Saudi Arabia’s oil infrastructure on Sept. 14, which knocked out around 1 million bpd of Saudi Arabia’s refining capacity.

Saudi Arabia to restore full oil output by next week: source - (Reuters) - Saudi Arabia has restored more than 75% of crude output lost after attacks on its facilities and will return to full volumes by early next week, a source briefed on the latest developments told Reuters on Monday. Saudi oil production from its Khurais plant is now at more than 1.3 million barrels per day, while current production from its Abqaiq plant is at about 3 million bpd, the source said. The Sept. 14 attacks on the two giant plants caused raging fires and damage that halved the crude output of the world’s top oil exporter, by shutting down 5.7 million barrels per day of production.Saudi Energy Minister Prince Abdulaziz bin Salman and the chief executive of state oil company Aramco, Amin Nasser, have said output will be fully back online by the end of September.The attacks sent oil prices up 20 percent although they came off after the kingdom pledged to bring back output swiftly. On Monday, prices stabilized at $64 per barrel, paring earlier gains, following comments by the source.The kingdom has managed to maintain supplies to customers to the levels they were at prior to the attacks by drawing from its huge oil inventories and offering other crude grades from other fields, Saudi officials said.Saudi said it would ensure full oil supply commitments to its customers. The kingdom ships more than 7 million bpd to global destinations every day, and for years has served as the supplier of last resort to markets.No casualties were reported at the sites even though thousands of workers and contractors work and live in the area.The Wall Street Journal reported on Monday repairs at the plants could take months longer than anticipated.Thousands of employees and contractors have been pulled from other projects to work around the clock in bringing production back. Aramco is shipping equipment from the United States and Europe to rebuild the damaged facilities, Aramco officials told reporters on Friday.

Saudi attacks leave hedge funds unmoved despite battle of the bots (Reuters) - Hedge fund managers remain cautious about the outlook for oil prices despite a short-term surge following the recent attacks on Saudi Arabia’s oil installations. Amid record trading volumes, oil prices posted a record one-day rise on Sept. 16, the first trading day after the attacks. However, most of this was probably attributable to short-term computerised market-making programmes ("bots") taking intra-day positions rather than fund managers shifting their strategic view. Prior to the attacks, hedge fund managers had increased their bullish positioning in petroleum significantly as hopes rose for a trade truce between China and the United States. But the attacks themselves have not added much to this economy-driven relief rally with the oil price rise flushing out some of the weaker bearish shorts but doing little to encourage the creation of new bullish long positions (https://tmsnrt.rs/2moI4Uz). Hedge funds increased their net long position in petroleum futures and options by just 23 million barrels in the week to Sept. 17, an unexceptional amount and down from an increase of 122 million barrels the previous week. Across the six most important petroleum futures and options contracts, portfolio managers reduced short positions by 17 million barrels but added just 5 million barrels of new long positions. Funds were net sellers of ICE Brent (-9 million barrels) but buyers of NYMEX and ICE WTI (+11 million barrels), U.S. gasoline (+8 million), U.S. diesel (+5 million) and European gasoil (+8 million). For each of the five contracts with net buying, short covering was a more important factor than establishing fresh long positions in contributing to the increase in net length. In Brent, the contract with the most direct exposure to any loss of production caused by the attacks on Saudi Arabia, fund managers actually sold 9 million barrels of previous long positions. For oil bears who remained downbeat about the economic outlook, the surge in prices proved painful, forcing some to close out positions which accelerated the price spike. Most oil bulls, however, saw the price surge as temporary and no reason to increase long positions, while a small minority found a reason to realise profits on positions already accumulated before the attacks. 

Oil prices struggle amid economic despond- Kemp  (Reuters) - Oil prices are sinking again as concerns about the health of the global economy and petroleum consumption replace fears about the vulnerability of Saudi Arabia’s infrastructure as the main focus for traders. Recent economic data has painted a mixed picture about whether the global economy is flatlining or pulling out of the slowdown that hit during the second half of 2018 and the first half of this year. But the broadest indicators of business activity and investor sentiment continue to suggest an economy growing well below trend. Investors are positioning themselves defensively in case growth slows further. Global manufacturers reported that new export orders fell in August for the 12th month running and the decline is accelerating. (https://tmsnrt.rs/2l9Yksy) The JPMorgan purchasing managers’ sub-index for new export orders last month fell to its lowest since the mid-cycle slowdown in 2012 and before that the recession of 2009. World trade volumes fell during the second quarter compared with the same period last year at the fastest rate since the post-crisis recession, according to the Netherlands Bureau for Economic Policy Analysis. Oil consumption among the top 18 consuming countries, each using more than 1 million barrels per day, rose by just 0.9% in the second quarter compared with the same period in 2018. Oil consumption by the top consumers was growing well below the trend rate of 1.5% per year that prevailed between 1998 and 2018, data from the Joint Organisations Data Initiative showed. In the United States, new orders for non-defence capital goods excluding aircraft, a proxy for business investment, were up less than 0.5% in the May-July period versus a year earlier. Business investment spending was growing at the slowest rate since the mid-cycle slowdown or mini-recession of 2015/16 and well below the average rate over the last 20 years. 

Oil Prices Rise as Reports Suggest Saudi Needs More Time to Recover - Oil prices rose on Monday in Asia following reports that full recovery of Saudi Arabia’s oil fields hit by the drone attack may take many months. U.S. Crude Oil WTI Futures gained 1.0% to $58.69 by 11:30 PM ET (03:30 GMT). International Brent Oil Futures also rose 1.0% to $64.95. The Wall Street Journal reported that complete recovery from the attack earlier this month, which knocked out half the nation’s out output, will take more than the 10 weeks Saudi previously promised. Citing an unnamed Saudi official, the report said the kingdom is “still in a frantic search for spare parts.” The situation is not “as rosy as you might think,” the official said. Meanwhile, state oil company Saudi Aramco reassured the market on Friday that it will have 11 million bpd of capacity back online by November, well above its current actual output level. Aramco also named UBS Group, Deutsche as bookrunners for its initial public offering (IPO), Reuters reported citing sources familiar with the matter. Reuters added that the company planned meetings with analysts this week ahead of its expected IPO in late November.

Oil ends higher as Middle East tensions outweigh pressure from Saudi output recovery  -Crude-oil futures ended higher on Monday, finding support from growing tensions in the Middle East even as Saudi Arabia has reportedly restored much of the output lost to attacks over a week ago that damaged its oil facilities.Late last week, the U.S. said that it would deploy more troops to Saudi Arabia following the Sept. 14 attacks on oil facilities. Also last week, President Donald Trump tweeted that he had ordered the U.S. Treasury to “substantially increase” sanctions on Iran.Tensions in the Middle East are “at risk of rising once more, and that should keep prices lively throughout this week,”   “Geopolitical instability to a historically volatile region would risk additional shocks higher to the value of oil.”   West Texas Intermediate crude for November delivery CLX19, -0.54%  on the New York Mercantile Exchange rose 55 cents, or 1%, to settle at $58.64 a barrel, while November Brent crude BRNX19, -0.71%, the global benchmark, climbed by 49 cents, or 0.8%, to $64.77 a barrel on ICE Futures Europe. Oil prices found earlier support from news that the Saudis restored around 75% of the crude production lost in the attacks on its oil facilities, Reuters reported, citing a source briefed on the latest developments. The damage had initially disrupted 5.7 million barrels a day of Saudi oil production, or about 5% of world output. Early Monday, however, a report by The Wall Street Journal that said it may take the Saudi Arabian Oil Co., popularly known as Aramco, several months to fully restore operations. Prince Abdulaziz bin Salman, the Saudi energy minister, had said last week that his country would resume normal production of 9.8 million barrels by the end of this month, though some Aramco officials pointed to a 10-week timeline for full recovery.The market has been “getting mixed messages about how fast Saudi’s oil production can recover from last weekend’s attack,” said Phil Flynn, senior market analyst at Price Futures Group.“We are also getting mixed messages on the state of the global economy with weak manufacturing data coming out of Europe,” he said. Data Monday showed that manufacturing sentiment in the eurozone, the purchasing managers index, fell to an 83-month low of 45.6 in September, from 47 in the prior month. Economists polled by FactSet expected a 47.3 reading, with any reading below 50 indicating worsening conditions.

Oil drops to lowest since Aramco attacks after Trump scolds China (Reuters) - Oil prices plunged more than 2% on Tuesday to their lowest since the Sept. 14 attacks on Saudi Arabia’s key oil facilities, after U.S. President Donald Trump rekindled fears the U.S.-China trade conflict that has crimped energy demand is far from over. In a United Nations address, Trump accused China of unfair trade practices, including “massive” market barriers, currency manipulation and intellectual property theft, a few days after officials from the world’s two largest oil-consuming economies held inconclusive trade talks in Washington. “Hopefully we can reach an agreement that will be beneficial for both countries,” Trump said. “As I have made very clear, I will not accept a bad deal.” Brent crude futures LCOc1, the international standard, settled $1.67, or 2.6%, lower at $63.10 a barrel, while West Texas Intermediate futures CLc1 ended at $57.29 a barrel, down $1.35, or 2.3%. Trump “ratcheted up the U.S.-China trade war again,” said John Kilduff, a partner at Again Capital LLC in New York. “It wasn’t a constructive tone in trying to get that resolved, and we know how sensitive oil prices are to the back and forth.” The U.S. president’s address left the oil market with the grim impression that “it’s not a deal that’s going to get done quickly,” which could continue to hamper global oil demand growth, said Robert Yawger, director of energy futures at Mizuho in New York. U.S. stocks fell, with the S&P 500 and the Nasdaq poised for the biggest declines in a month, as calls for impeachment of Trump gained momentum, while weak consumer confidence data added to worries over the prolonged Sino-U.S. trade war. [.N] .DJI A private sector report showed U.S. consumer confidence fell by the most in nine months in September.

Oil falls 2.2% after Trump ratchets up US-China trade war -Oil prices fell 2% on Tuesday as U.S. President Donald Trump fanned market fears that Sino-American trade tensions are far from settled amid ongoing negotiations, a grim sign for oil demand growth. Trump sharply criticized what he called China’s unfair trade practices in a speech at the United Nations General Assembly, saying he would not accept a “bad deal” between the United States and China. “He ratcheted up the U.S.-China trade war again,” said John Kilduff, a partner at Again Capital LLC in New York. “It wasn’t a constructive tone in trying to get that resolved, and we know how sensitive oil prices are to the back and forth.” Brent crude futures fell $1.35, or 2%, to $63.42 a barrel. U.S. West Texas Intermediate futures were down $1.12, or 1.9%, at $57.52 a barrel. “Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping technology transfers and the theft of intellectual property and also trade secrets on a grand scale,” Trump said. U.S. stocks fell, as well, reversing earlier gains following Trump’s comments and a private sector report showing U.S. consumer confidence fell by the most in nine months in September. 1/8.N 3/8 <.DJI> Sluggish economic data in leading European economies and Japan also weighed on crude prices, analysts said. “We continue to see a constant revision downward for 2019 oil demand,” with many forecasters predicting demand to grow around 1 million barrels per day (bpd) or less

Oil prices fall after an unexpected rise in inventories - Oil prices fell for a second day on worries that fuel demand could fall after U.S. President Donald Trump doused recent optimism over China-U.S. trade talks, at a time of rising U.S. crude oil stockpiles. Brent crude futures were down $1.72 to $61.38 a barrel on Wednesday, erasing all gains made after an attack on Saudi oil facilities sent the benchmark up around 20% last week. U.S. West Texas Intermediate crude dropped to $55.71 a barrel, down $1.58. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.4 million barrels from the previous week, according to the Energy Information Administration. “Focus will return to faltering oil demand concerns as there is unlikely to be any quick resolution to U.S.-China trade differences to positively shift economic expectations,” global oil strategist at BNP Paribas Harry Tchilinguirian told the Reuters Global Oil Forum. “Barring a repeat attack on Saudi infra-structure, oil will weaken further.” Trump criticised China’s trade practices at the United Nations General Assembly on Tuesday and said he would not accept a “bad deal” in U.S.-China trade negotiations. China is the world’s largest oil importer and second-largest crude user. The United States is the largest consumer of oil. Trump also said he saw a path to peace with Iran even as he denounced Iran for “bloodlust”, cooling other risk premiums built into oil prices. Others, like OCBC economist Howie Lee, saw more potential upside, pointing to the possibility that buyers of Saudi crude could be made to look for supplies in the spot market and push prices higher again if Saudi stocks run out.  

WTI Extends Losses After Big Build In Crude, Cushing Stocks Soar Most Since Feb -- WTI has accelerated its losses overnight following API's surprise crude build and Saudi Arabia's claims that it has now restored production at the Abqaiq and Khurais oil processing facilities to the levels they were operating at before recent attacks.“With the oil market reassured that no material disruption to Saudi supply to its customers has occurred following the drone attacks on the Abqaiq processing facility, the oil price pursues its retreat from last week’s highs,” said Harry Tchilinguirian, head of commodities strategy at BNP Paribas SA. Putting inventories back in the spotlight - although the impact of Storm Imelda is likely to make the numbers a little more noisy than normal...

API

• Crude +1.38mm (-600k exp)
• Cushing +2.3mm - first build in 13 weeks
• Gasoline +1.9mm
• Distillates -2.2mm

DOE

• Crude +2.41mm (-600k exp)
• Cushing +2.256mm - biggest build since Feb 2019
• Gasoline +519k
• Distillates -2.978mm

A bigger than expected crude build and major rise in stocks at Cushing dominated the inventory data in the last week (though Storm Imelda may confuse numbers)… US Crude Production rose back to record highs as the rig count continues to crater...

Oil falls 1.4% on surprise US crude build, Trump’s China trade comments Oil prices dropped about 2% on Wednesday, logging a second straight day of losses after U.S. crude inventories unexpectedly rose and on worries that demand could fall after U.S. President Donald Trump’s comments about trade talks with China. A rally in the dollar, which moves inversely with oil, also weighed on oil as a Democratic-led chamber was launching an official presidential impeachment inquiry. Brent crude futures shed 1.03%, to $62.45 a barrel, while U.S. West Texas Intermediate crude fell 1.4%, to $56.49 a barrel. “The complex is seeing significant downside pressure today off further reduction in risk appetite related to lack of progress on the U.S.-China trade front as well as the impeachment inquiry that appears poised to reduce appeal for risky assets,” “Adding to the mix was some bearish ... data featured by a counter seasonal U.S. crude build.” U.S. crude inventories unexpectedly rose 2.4 million barrels last week, the Energy Information Administration said, instead of declining 249,000 barrels as analysts forecast. Trump said on Wednesday that a deal to end a nearly 15-month trade war with China could happen sooner than people think. Global markets had weakened on Tuesday after Trump criticized China’s trade practices at the United Nations General Assembly and said he would not accept a “bad deal” in U.S.-China trade negotiations. China is the world’s largest oil importer and is second-largest crude consumer after the United States. Trump also said he saw a path to peace with Iran, cooling other risk premiums built into oil prices, particularly after the Sept. 14 attack on Saudi Arabia’s oil facilities that halved its output. Both the kingdom and the United States have blamed Iran for the attack. “The geopolitical risk premium has all but vanished and bullish catalysts suddenly appear in short supply across the oil market,” 

Oil slides as Saudi supply rebound weighs - Oil fell on Thursday for the third straight day as Saudi Arabia’s moves to restore output quickly after attacks on its oil installations promised yet more oil supply. Brent crude futures were down 72 cents, or 1.1%, at $61.67 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 79 cents, or 1.4 percent, to $55.70 a barrel. “There has been not much joy for oil bulls in recent days as either sluggish stock market performance, recovering Saudi oil production or unexpectedly disappointing U.S. inventory data hindered any attempt to push prices higher,” Tamas Varga of oil brokerage PVM said. Prices were weighed down by the faster-than-expected recovery of Saudi output after the drone and missile strikes on two of its oil-processing plants, as well as a surprise 2.4-million-barrel build in U.S. crude inventories last week. The world’s top oil exporter has restored its production capacity to 11.3 million barrels per day, sources briefed on Saudi Aramco’s operations told Reuters. But U.S. President Donald Trump on Wednesday signalled that a resolution to the trade dispute with China might be near, which could eventually boost fuel demand. A day after delivering a stinging rebuke to China over its trade policies, Trump said Beijing wanted to make a deal and it “could happen sooner than you think”. Trump and Japanese Prime Minister Shinzo Abe also signed a limited trade deal that would open Japanese markets to $7 billion of U.S. products annually. “The oil market has seemingly returned to business as usual,” said Norbert Ruecker, head of economics and next-generation research at Julius Baer. “Instead of the attack-related fallout including disruption and geopolitical risks, the soft economy and stagnant oil demand are back in focus.” Crude futures were pressured by sluggish economic data in leading European economies and Japan. A firmer dollar, which registered its sharpest daily gain in three months overnight and held steady in Asian trade, also weighed on oil as it makes dollar-traded fuel imports more costly for countries using other currencies.

Oil prices head for big weekly loss as supply fears wane - Oil prices fell on Friday and were heading for a weekly loss on a faster than expected recovery in Saudi output while slowing Chinese economic growth dampens the demand outlook. Brent fell 93 cents to $61.81 a barrel, while U.S. crude slipped by 65 cents to $55.76. Both were down almost 4% over the week, representing WTI’s biggest weekly loss in 10 weeks and Brent’s biggest in seven. Brent and WTI were also hit by a Wall Street Journal report citing unnamed sources saying that Saudi Arabia had agreed a partial ceasefire in Yemen, said analysts in the Reuters Global Oil Forum. Brent is just above its level before attacks on Saudi facilities on Sept 14, which initially halved the kingdom’s production. Sources told Reuters this week that Saudi Arabia had restored capacity to 11.3 million barrels per day. Saudi Aramco has yet to confirm it is fully back online. “The risk premium is deflating further,” said Saxo Bank’s Ole Hansen. The International Energy Agency (IEA) said on Friday that it might cut its estimates for global oil demand for 2019 and 2020 should the global economy weaken further. “If the global economy weakens, for which there are already some signs, we may lower oil demand expectations,” IEA Executive Director Fatih Birol told Reuters. In China, the world’s second-largest economy and biggest importer of crude oil, industrial companies reported a contraction in profits in August. A surprise 2.4 million-barrel build in U.S. crude inventories last week also weighed on prices. Key oil freight rates from the Middle East to Asia rocketed as much as 28% on Friday in the global oil shipping market, spooked by U.S. sanctions on units of China’s COSCO for alleged involvement in ferrying crude out of Iran. The COSCO vessels are equal to about 7.5% of the world’s fleet of supertankers, Refinitiv data showed.

Oil Slides As Middle East Tensions Fade -- Oil is set to close out the week with the largest weekly loss in months. Crude fell on news that Saudi Arabia has declared a partial cease-fire in Yemen, raising hopes that several years of war could come to an end. It would also dial down tension with Iran.   Saudi Aramco has promised to restore production at the Abqaiq and Khurais facilities by Monday, but oil traders are not so sure. “I would like to see real evidence that they are going to resume [production] in the coming weeks,” a Middle East oil company official, told S&P Global Platts. Middle East-based petroleum engineer Einstein Millan Arcia added: “I seriously doubt Saudi Aramco's capability to recommission such facilities [by September 30] considering the depth of the damage and all the associated testing protocol needed prior to restart.”  After some reports suggested that Saudi officials were considering delaying the IPO of Aramco, it now appears that the government is pressing forward and even accelerating the effort. The offering could come as soon as November.. Despite assurances that there would be little interruption in exports, a report from Petro-Logistics, reported on by Reuters, estimates that Saudi oil exports averaged 5.875 mb/d in the 10 days after the Abqaiq attack, down 1.494 mb/d from prior.  Low oil prices and a slow but unfolding energy transition is cutting into the returns for the oil industry. ExxonMobil’s return on invested capital (ROIC) was 25 percent in 2011, but was less than 10 percent last year, according to the Wall Street Journal. Meanwhile, the ROIC for Vestas Wind Systems was negative 5 percent in 2011, but averaged 22 percent over the last five years.

Oil settles lower, loses nearly 4% for the week - Oil futures finished lower Friday, as news reports tied to Iran sanctions, a cease-fire between Saudi Arabia and Yemen, and the U.S. considering limits on investor portfolio flows into China pressured prices, contributing to a loss of nearly 4% for the week.Oil prices had been trading lower as The Wall Street Journal reported Friday that Saudi Arabia had moved to impose a partial cease-fire in war-torn Yemen, as Riyadh and Houthi militants try to bring an end to a four-year war that is become a flashpoint in a regional confrontation with Iran.“Soon after, prices dropped sharply again on claims by Iranian President [Hassan] Rouhani that the U.S. has offered to lift all sanctions if Iran is willing to resume negotiations,” said Balint Balazs, commodity analyst at Schneider Electric. Reuters reported that Rouhani said the U.S. sent a message to European leaders that it was willing to lift all sanctions, but that he rejected talks with Washington while the sanctions remained in plac. However, Brian Hook, the U.S. special representative for Iran, was quoted as calling Iran’s claims “baseless.” Trump also tweeted: “Iran wanted me to lift the sanctions imposed on them in order to meet. I said, of course, NO!” Prices for oil fell closer to session lows after Rouhani’s reported comments, then pared those losses after Trump’s denial.

Oil prices post weekly loss as supply fears wane (Reuters) - Oil prices fell on Friday and posted a weekly loss on a faster-than-expected recovery in Saudi output, while investors also worried about global crude demand amid slowing Chinese economic growth. During a volatile session, Brent crude LCOc1 futures fell 83 cents, or 1.3%, to settle at $61.91 a barrel, after dropping to a session low of $60.76 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 50 cents, or 0.9%, to settle at $55.91 a barrel. It hit a session low of $54.75 a barrel. Brent fell 3.7% for the week, its biggest weekly loss since early August. WTI lost 3.6%, its steepest loss since mid-July. Crude futures fell along with other higher-risk assets after news the U.S. government is considering the possibility of delisting Chinese companies from U.S. exchanges, a source briefed on the matter said on Friday. The move would be a radical escalation of trade tensions between the U.S. and China. Earlier in the session, futures fell after Iranian President Hassan Rouhani said the United States offered to remove all sanctions on Iran in exchange for talks. However, U.S. President Donald Trump then said he had refused the request by Tehran. “We’ve really been following headline to headline,” said Phil Flynn, an analyst with Price Futures Group in Chicago. Also weighing on prices, a Wall Street Journal report citing unnamed sources said Saudi Arabia had agreed a partial ceasefire in Yemen, said analysts in the Reuters Global Oil Forum.

The Reason Saudi Is Switching From Sweet Oil To Sour Oil To Meet Export Contracts -- September 26, 2019 There has been at least one post on Saudi switching from sweet oil to sour oil to meet its export contracts, and folks on twitter noted that fairly early on. Japan was one of the first countries to be affected according to tweets.  Today from a reader, a comment posted elsewhere:The Abqaiq refinery... https://en.wikipedia.org/wiki/Abqaiq The 250-hectare complex can process 7 million barrels of oil a day. The chief purpose of Abqaiq is to remove hydrogen sulfide from crude oil and reduce the vapor pressure, making the crude safe to be shipped in tankers. Abqaiq is the world's largest facility for this stabilization. Hence, damage to that fits in with their switch from sweet to sour crude exports.

Saudi Arabia prepares to offer its first ever tourist visas two weeks after terror attacks DUBAI ⁠— Saudi Arabia will for the first time offer tourist visas to a range of nationalities as it pushes ahead with plans to make tourism a pillar of its economy. The announcement of the visa regime, scheduled for Friday and the details of which are forthcoming, comes just two weeks after terror attacks claimed by Yemen’s Houthi rebels shut down half of the kingdom’s oil production. “For the first time we are opening up the adventure, heritage, and history for people who will visit KSA as tourists,” Ahmad Al-Khateeb, chairman of the Saudi Commission for Tourism and National Heritage, told CNBC’s Hadley Gamble in an interview before the plan’s unveiling. The kingdom’s goals, as part of its Vision 2030 agenda, include increasing the economic contribution of tourism from a current 3% to 10% of GDP by 2030 and bringing international and domestic visits to 100 million annually by the same time. Currently Saudi Arabia’s foreign tourism market relies almost exclusively on religious pilgrims coming to the country for Hajj. The government expects those numbers to reach 30 million annually by 2030. While the plan is a milestone in the kingdom’s efforts toward diversifying its hydrocarbon-dependent economy, its announcement comes at a precarious time. Tensions between Saudi Arabia and its regional Shia archrival Iran have reached the boiling point, with Riyadh accusing Tehran of being behind the Sept. 14 drone and missile attack on some of its largest oil facilities, a charge Iran denies.

Beneath Contempt - Craig Murray -- The ruling caste of Saudi Arabia present the most striking example in world history of the extreme combination of avarice and personal cowardice. They are gagging for a war with Iran so long as somebody else fights it for them. Due to a dispute over who ought to have been Caliph 1400 years ago they are absolutely champing at the bit for somebody to massacre the Shia in the Shia heartland, provided they don’t have to do the massacring. It is not that they object to blood on their pure white robes, they often get that when executing a bound prisoner or raping the housemaid. But the thought of their own blood being spilt is an abomination. Let some helpful young Israelis or Americans risk fighting the Iranians, while the Saudi rulers sniff their cocaine in their London penthouses.It is not that Saudi does not have its own military – bombing civilian Shia Houthis from a great height with no chance of retaliation is great sport. And there were some actual Saudis in some of the tanks sent in to massacre the unarmed democracy demonstrators of Bahrain. But the world’s greatest spender per capita on weapons systems has no intention that its own elite should do any fighting. No matter how relentlessly Israel, abetted by the United States, persists in the slow genocide of the Palestinian people, Saudi will always remain a firm US and Israeli ally, because the biggest coward always hides behind the biggest bully. From that position Saudi Arabia will use all its money and influence to promote military action against Iran – by others.The British government, having armed, supplied, trained and lent special forces to the enduring Saudi massacre of Houthi civilians in Yemen, is horrified and full of condemnation that the Houthis have the temerity to hit back at an oil facility. The attack by drones was a brilliant bit of assymetric warfare that shows money is not everything in war. For US Vice President Mike Pence, after meeeting Mohammed Bin “Chopper” Salman, to denounce this attack as “An act of war” is pretty otiose. There are many thousands of mutilated or orphaned Houthi children who could have told him there was a war on, had he bothered to talk to them rather than their oppressor. It is an act of massive folly for the West to get drawn in to the Sunni/Shia small wars that rage across the Middle East and risk blowing them into something much larger. We do not have a “side” in an Islamic sectarian divide which everybody should be seeking to heal, not to exacerbate.  The demonisation and crippling by sanctions of Iran, with its profound and ancient culture and massive human capital and economic potential, is a major mistake.

Saudis Pound Yemen After Houthis’ Truce Offer - — Officially, Saudi Arabia expressed surprise and a little caution over Friday’s offer by Yemen’s Houthi movement of a joint truce. The weekend, however, left little doubt as to the Saudi answer to this overture.At least 27 Saudi airstrikes were reported against targets in northern Yemen in just the last 24 hours. The Houthis described the attacks as a “dangerous escalation,” and reiterated they’d meant to get everyone together for a peace process.Yemeni media reports the airstrikes as chiefly hitting farms, as well as telecommunications sites in Yemen’s far north, damaging communications and further crippling the very limited agriculture industry of Yemen, a nation that imports almost all of its food. The Houthi offer for a truce puts the Saudis in a difficult position, as recent Saudi actions are clearly informed by major Houthi drone attacks on Saudi oil sites, but the Saudis officially are blaming those attacks on Iran, meaning they’d just as soon not acknowledge that the Houthis, or the war, are a thing at all while trying to drum up support for moves against Iran.

Five civilians killed in air strikes by Saudi-led coalition in Yemen   (Reuters) - Yemen’s Houthi movement said early on Monday that five civilians from one family were killed in air strikes by the Saudi-led coalition in Omran province in Yemen, according to the Houthi owned Al-Masirah TV. Yemen’s Iran-aligned Houthis said the Saudi-led coalition carried out air strikes on a mosque that the family went to when the strikes began. Two children from the same family are missing, with searches for them going on under the rubble of the targeted mosque, the TV report said. There was no immediate confirmation from Saudi Arabia.

US-made bomb used in deadly strike in Yemen: Amnesty  - The international human rights group Amnesty International has denounced that a US-made precision-guided munition was used in a Saudi and Emirati-led air strike carried out on a residential home in Yemen’s southwestern city of Ta'izz. The air strike killed six civilians – including three children in Warzan village in the directorate of Khadir in late June this year. Among the six civilians killed in the attack were a 52-year-old woman. Amnesty International says it has investigated tens of sites affected by Saudi-led coalition’s airstrikes since the beginning of war on Yemen in March 2015. The international human rights group it has frequently discovered U.S. munitions amongst the rubble of civilian markets, homes and hospitals in the war-ravaged Yemen. According to Amnesty International, the munition used in the Warzan attack was a Paveway laser-guided bomb manufactured in the US by a company called Raytheon. The London-based organization has argued that arms-supplying states cannot bury their heads in the sand and pretend they do not know their weapons are used to carry out attacks against civilians or civilian objects. The United Nations Human Rights council estimates that the conflict in Yemen will have killed over 233,000 Yemenis by year end both as a result of the fighting and the humanitarian crisis. 

How Yemen’s Houthis are bringing down a Goliath - Pepe Escobar - “It is clear to us that Iran bears responsibility for this attack. There is no other plausible explanation. We support ongoing investigations to establish further details.” The statement above was not written by Franz Kafka. In fact, it was written by a Kafka derivative: Brussels-based European bureaucracy. The Merkel-Macron-Johnson trio, representing Germany, France and the UK, seems to know what no “ongoing investigation” has unearthed: that Tehran was definitively responsible for the twin aerial strikes on Saudi oil installations. “There is no other plausible explanation” translates as the occultation of Yemen. Yemen only features as the pounding ground of a vicious Saudi war, de facto supported by Washington and London and conducted with US and UK weapons, which has generated a horrendous humanitarian crisis.   So Iran is the culprit, no evidence provided, end of story, even if the “investigation continues.” Hassan Ali Al-Emad, Yemeni scholar and the son of a prominent tribal leader with ascendance over ten clans, begs to differ. “From a military perspective, nobody ever took our forces in Yemen seriously. Perhaps they started understanding it when our missiles hit Aramco.” Al-Emad said: “Yemeni people have been encircled by an embargo. Why are Yemeni airports still closed? Children are dying without treatment. In this current war, the first door [to be closed against enemies] was Damascus. The second door is Yemen.” Al-Emad considers that Hezbollah’s Secretary-General Sayed Nasrallah and the Houthis are involved in the same struggle. I talked and broke bread – and hummus – with Al-Emad, in Beirut, during the New Horizon conference among scholars from Lebanon, Iran, Italy, Canada, Russia and Germany. Although he says he cannot get into detail about military secrets, he confirmed: “Past Yemeni governments had missiles, but after 9/11 Yemen was banned from buying weapons from Russia. But we still had 400 missiles in warehouses in South Yemen. We used 200 Scuds – the rest is still there [laughs].” Al-Emad breaks down Houthi weaponry into three categories: the old missile stock; cannibalized missiles using different spare parts (“transformation made in Yemen”); and those with new technology that use reverse engineering. He stressed: “We accept help from everybody,” which suggests that not only Tehran and Hezbollah are pitching in.

The drone attacks in Saudi Arabia have changed the nature of global warfare -  Patrick Cockburn - The devastating attack on Saudi oil facilities by drones and missiles not only transforms the balance of military power in the Middle East, but marks a change in the nature of warfare globally. On the morning of 14 September, 18 drones and seven cruise missiles – all cheap and unsophisticated compared to modern military aircraft – disabled half of Saudi Arabia’s crude oil production and raised the world price of oil by 20 per cent. This happened despite the Saudis spending $67.6bn (£54bn) on their defence budget last year, much of it on vastly expensive aircraft and air defence systems, which notably failed to stop the attack. The US defence budget stands at $750bn (£600.2bn), and its intelligence budget at $85bn (£68bn), but the US forces in the Gulf did not know what was happening until it was all over. Excuses advanced for this failure include the drones flying too low to be detected and unfairly coming from a direction different from the one that might have been expected. Such explanations sound pathetic when set against the proud boasts of the arms manufacturers and military commanders about the effectiveness of their weapons systems. Debate is ongoing about whether it was the Iranians or the Houthis who carried out the attack, the likely answer being a combination of the two, but perhaps with Iran orchestrating the operation and supplying the equipment. But over-focus on responsibility diverts attention from a much more important development: a middle ranking power like Iran, under sanctions and with limited resources and expertise, acting alone or through allies, has inflicted crippling damage on theoretically much better-armed Saudi Arabia which is supposedly defended by the US, the world’s greatest military super-power.If the US and Saudi Arabia are particularly hesitant to retaliate against Iran it is because they know now, contrary to what they might have believed a year ago, that a counter-attack will not be a cost-free exercise. What happened before can happen again: not for nothing has Iran been called a “drone superpower”. Oil production facilities and the desalination plants providing much of the fresh water in Saudi Arabia are conveniently concentrated targets for drones and small missiles. The trump card for the US, Nato powers and Israel has long been their overwhelming superiority inairpower over any likely enemy. Suddenly this calculus has been undermined because almost anybody can be a player on the cheap when it comes to airpower.

Saudi Arabia vows to respond to oil attacks with ‘necessary measures’ - Saudi Arabia says it will respond with "necessary measures" to attacks on two oil facilities as it reiterated the accusation that Iran was behind them. Minister of State for Foreign Affairs Adel al-Jubeir said the weapons used were Iranian and vowed to release the full findings of the investigation. Iran denies involvement in the attacks. Earlier, a senior Iranian military official said Iran was ready to destroy any aggressor after the US announced it was sending troops to Saudi Arabia. Iranian-backed Houthi rebels in Yemen have said they were responsible for the drone and missile strikes on 14 September that affected the global oil supply. Tensions between the US and Iran have escalated since US President Donald Trump abandoned a deal limiting Iran's nuclear activities last year and reinstated sanctions. Speaking to reporters in Riyadh, Mr Jubeir said Saudi Arabia was in consultation with its allies and would take necessary and suitable measures after its investigation was complete, without giving details of possible actions. He repeated that the strikes targeting the Abqaiq oil facility and the Khurais oil field had come from the north and not from Yemen but did not give a specific location, and urged the international community to take a stand. "The kingdom calls upon the international community to assume its responsibility in condemning those that stand behind this act, and to take a firm and clear position against this reckless behaviour that threatens the global economy," he said.

Iran says it will destroy any aggressor (Reuters) - Iran will pursue any aggressor, even if it carries out a limited attack, and seek to destroy it, the head of the elite Revolutionary Guards said on Saturday, after attacks on Saudi oil sites which Riyadh and U.S officials blamed on Tehran. “Be careful, a limited aggression will not remain limited. We will pursue any aggressor,” the head of the Guards, Major General Hossein Salami, said in remarks broadcast on state TV. “We are after punishment and we will continue until the full destruction of any aggressor.” U.S. President Donald Trump on Friday approved sending American troops to bolster Saudi Arabia’s air and missile defences after the Sept. 14 attacks. Iran denies involvement in the attack, which was claimed by Yemen’s Houthi movement, a group aligned with Iran and currently fighting a Saudi-led alliance in Yemen’s civil war.Trump’s move drew fire in Washington on Saturday from U.S. House of Representatives Speaker Nancy Pelosi, who called it his “latest outrageous attempt” to circumvent Congress. “These unacceptable actions are cause for alarm,” Pelosi said in a statement accusing Trump of turning “a blind eye” to Saudi violence against innocent Yemenis, human rights abuses and the murder of journalist Jamal Khashoggi. “The United States cannot enable more brutality and bloodshed,” she added. “Congress will do our job to uphold the Constitution, defend our national security and protect the American people.” Meanwhile, Amirali Hajizadeh, who heads the Revolutionary Guards’ aerospace branch, said any attacks on Iran would receive “a crushing response”, the official news agency IRNA reported.

Iran’s Ultimate Middle East Power Play - There was little doubt by late September 2019 that Iran’s clerical leadership was truly in command of the dynamic of the transformation of the Persian Gulf region. The crux of the Iranian regional strategy – including the Iran-sponsored rôle of the Houthi pre-dawned unmanned aerial vehicle strikes on Saudi Arabian oil facilities on September 14, 2019 –became increasingly clear as the shock of those strikes began to be absorbed.Tehran was playing a masterful game, delicately balancing between its publicized confrontation with the US in the Persian Gulf and its real quest for a regional power status. The Iran-proxy strike on Saudi Arabia and the ensuing threats to the US served both as a demonstration of the impotence of Saudi Arabia and its guardians, and as a diversion of attention away from the crucial and successful Iranian surge westward to the Mediterranean.The Iranian declaratory threats of escalation remained focused on the Persian Gulf and particularly on warning the US against intervention. The Houthi strike reiterated anew the inherent vulnerability of Saudi Arabia, as well as its inability and unwillingness to act unilaterally against Iran. Tehran has long insisted that the US is reluctant to act against Iran, and every passing day reinforces the veracity of the Iranian message. Hence, Tehran argues, all regional states and entities should take notice of the inherent power of Iran and Iran’s proxies, as well as of the absence of US protection. Iran urges these states and entities to use the Houthi strike as an excuse to bring the current crisis to an end under conditions favorable to Iran.

Iran accuses foreign forces of raising Gulf ‘insecurity’ - President Hassan Rouhani said at an annual military parade that Iran would put foward a peace plan to the United Nations President Hassan Rouhani on Sunday denounced the presence of foreign forces in the Gulf and said Iran will present a peace plan, after its arch-foe Washington ordered reinforcements to the tense region."Foreign forces can cause problems and insecurity for our people and for our region," Rouhani said before a military parade commemorating the Iran-Iraq war.Rouhani also said Iran would present a peace plan to the United Nations within days."In this sensitive and important historical moment, we announce to our neighbours that we extend the hand of friendship and brotherhood to them," he said.Rouhani and top military brass saluted as row after row of soldiers marched past them in tight formation, followed by an array of homegrown military hardware. Rouhani called on the foreign powers to "stay away" from the Gulf. "If they're sincere, then they should not make our region the site of an arms race," he said.

Iran President Warns of Persian Gulf Region 'on the Edge of Collapse' - Iran's president warned world leaders Wednesday that security in the energy-rich Persian Gulf could collapse quickly with a "single blunder," and he accused the United States of engaging in "merciless economic terrorism" against his country. On the same day as President Hassan Rouhani spoke, the U.S. ramped up oil-related sanctions on Iran, imposing penalties on six Chinese companies and their chief executives for continuing to transport Iranian crude. Rouhani said in his speech to the annual United Nations General Assembly that the U.S. was engaging in "international piracy" against his country by re-imposing economic sanctions after Washington withdrew from the 2015 nuclear deal with world powers. Iran "will never negotiate with an enemy that seeks to make Iran surrender with the weapon of poverty," Rouhani said in his highly anticipated speech. "Stop the sanctions so as to open the way for the start of negotiations." Iranian state television broadcast Rouhani's speech live across the country of 80 million people, many of whom are struggling under the weight of crippling U.S. sanctions that have sent the Iranian economy into freefall and limited Tehran's ability to sell its oil abroad. U.S. Secretary of State Mike Pompeo and the Treasury Department announced the latest sanctions, which freeze any assets the firms may have in U.S. jurisdictions and bar Americans from doing business with them, "We're telling China and all nations, know that we will sanction every violation of sanctionable activity," Pompeo said at an event for United Against Nuclear Iran, a lobby group opposed to the nuclear deal. 

British tanker Stena Impero free to leave: Iran ambassador to UK  (Reuters) - The detained British-flagged tanker Stena Impero is “free to leave,” Iran’s ambassador to the United Kingdom, Hamid Baeidinejad, said on Twitter on Monday. “The British-flagged tanker ‘Stena Impero’, pursuant to the completion of the judicial and legal process, is now free to leave,” he wrote. The seizure on July 19 of the ship, two weeks after Britain detained an Iranian tanker off Gibraltar, ratcheted up tensions in the region in the wake of attacks on other merchant vessels that Washington blamed on Tehran.Iran denied responsibility for those attacks, which took place along a vital international oil shipping route.An Iranian government spokesman said on Monday that all legal steps had been completed for the release of the detained tanker but that he did not know when the vessel would be released, Iranian media reported. “The legal work and administrative procedures for the release of the English tanker have been completed but I have no information on the time of the release,” said government spokesman Ali Rabiei, according to semi-official news agency ILNA.

17 killed in US airstrike in southern Libya -At least 17 people have been killed in a US airstrike in southern Libya in the third such air raid in the North African state in a little more than a week.The US Africa Command (AFRICOM) claims Daesh terrorists were targeted by the Thursday airstrike.These US airstrikes over the last eight days are the first in Libya in over a year.An earlier US air raid had killed 11 on Tuesday, and a September 19 attack killed eight. The US military says all those killed were affiliated with Daesh militants.The United States has been carrying out such airstrikes in several Muslim countries under the pretext of fighting militant groups.In a Friday statement, the AFRICOM said it did not believe that the recent attack left any civilian casualties, but reports on the ground indicate that civilians are usually the main victims of such attacks.Scores of Libyans protest against a new US airstrike on a desert area in the country’s southwestern town of UwaynatThe Libyan Government of National Accord, based in the northwest of the country, is currently fighting forces led by Khalifa Haftar, a strongman and US citizen who rose to prominence in the northeast of the country amid the civil war that followed the death of former Libyan leader Muammar Gaddafi. The recent US airstrikes, however, have been confined to the sparsely-populated southwest, away from the conflict between Haftar and the Government of National Accord.

'US calls anyone it kills in Libya a suspected militant' -- (video) Political commentator Ian Williams says the deadly US drone strike in Libya could be another attack on civilians that Washington misrepresents as suspected militants.

Afghan forces kill up to 40 wedding guests during raid - An airstrike has killed a large number of civilians, with some reports saying as many as 40, as they celebrated a wedding in Afghanistan’s southern Helmand province, Afghan officials have said. The group were hit during commando raids by Afghan and foreign forces in Musa Qala district, that the Afghan defence ministry said targeted “foreign terrorists”. Details filtered out slowly because the area is under Taliban control, but Abdul Majid Akhundzada, a member of the Helmand provincial council, said that the majority of the dead from the 11pm airstrike were women and children. Many of the dead were in a car and minibus carrying wedding guests. In addition over a dozen wounded victims were taken to the provincial capital, Lashkar Gah. “Some 40 people were killed and 18 others were wounded and were brought to the hospital, all the victims were civilians,” he told Agence France-Presse. He described it as “joint airstrike operation by Afghan and foreign forces.” The latest deaths come after months of rising civilian casualties caused by Afghan forces and their international allies, as they intensified military efforts against the Taliban. In the first half of this year, the United Nations found that pro-government forces killed more civilians than the Taliban and other militant groups.

Air Force testing vegan napalm — The U.S. Air Force is testing an improved,vegan version of the classic Cold War throwback weapon napalm, according to Air Force officials. The new weapon is expected to be able to burn the enemies of the United States to death while assuaging serious moral and environmental concerns. “Napalm is just a mix of a gelling agent and a volatile petrochemical,” said Louie Fleischer, a supervisory technical support specialist with the 96th Test Wing. “Historically, we’ve used animal-based gels. But now that the Department of Defense systemically rejects the commodity status of animals,  we are testing plant-based alternatives. They’re working out pretty well.”   U.S. use of napalm has been limited since President Barack Obama signed the UN Convention on Certain Chemical Weapons in 2009, but former Obama administration officials predict that the Air Force’s new version will be used more often in the future. “Obama’s real concern about napalm was how it oppressed animals who had never voluntarily enlisted,” said Ben Rhodes, Obama’s former foreign policy vizier. “I think the country will have fewer qualms about napalm now that it’s plant-based.”

A Half-Decade Late, New York Post Admits is ISIS Run by NATO Member Turkey — It’s that time once again: over the weekend Turkish President Tayyip Erdogan for perhaps the twentieth time warned his army is making preparations to act on its southern border with Syria, saying it will take unilateral steps to create a “safe zone” amid accusations the US is dragging its feet implementing agreements to push Syrian Kurdish forces from the border. This as yet another ‘conspiracy theory’ gets belatedly confirmed as conspiracy fact by the mainstream. The New York Post asks “Why isn’t the media covering Turkish President Erdogan’s ties to ISIS?” — well, it’s at least been endlessly reported here and other places for about the past half decade. Better late than never, we suppose. The report details:The evidence of Erdogan’s direct, personal and institutional support for ISIS and related jihadi groups is so extensive, the wonder is why the American media is not paying more attention to it.The report doesn’t merely stop at saying NATO-member Turkey had an indirect or remote relationship with ISIS, but points out that Turkish intelligence service (MIT) while under the immediate oversight of Erdogan has been directly weaponizing and funding the terror group. Barely surveying the tip of the iceberg in terms of the total mountain of evidence to have emerged over the years, the NY Post asserts:  It’s Erdogan’s commitment to global jihad, and specifically, to ISIS terrorists. Since 2012, the Turkish intelligence service, MIT, under Erdogan’s direction, has been providing resources and material assistance to ISIS, while Turkish Customs officials turned a blind eye to ISIS recruits flowing across Turkey’s borders into Syria and Iraq. Scores of ISIS fighters captured by pro-U.S. Kurdish forces in northern Syria showed Turkish exit stamps on their passports, and otherwise boasted of the direct assistance they had received from Turkish authorities. The report further cites a recently captured ISIS fighter, who told his Kurdish captors, “Turkish intelligence knows everything.”

Jordan, Egypt, Iraq Reject Any Annexation Plan in Palestine - King Abdullah, Egyptian President Abdel Fattah El Sisi, and Iraqi President Barham Saleh held a trilateral summit in New York on Sunday that focused on the importance of bolstering coordination among the three countries. The summit, attended by senior officials from the three countries, covered means to enhance economic, trade and investment cooperation to serve mutual interests and Arab causes, a Royal Court statement said. King Abdullah welcomed holding the next ministerial meeting among the three countries in Amman to follow up on progress in cooperation. The summit was held on the sidelines of The King's visit to New York to attend the 74th Session of the General Assembly of the United Nations (UNGA). At the conclusion of the summit, the three countries issued a joint communiqué, which highlighted the topics discussed by the three leaders, including means to bolster cooperation and coordination, as well as regional challenges, according to the statement. The three leaders reaffirmed their support for a comprehensive political solution to the Palestinian cause that guarantees the rights of the Palestinian people, foremost of which is their right to an independent, viable Palestinian state with East Jerusalem as its capital, based on the two-state solution, international law and relevant UN resolutions, and the Arab Peace Initiative.

Arab parties throw support behind Gantz as they seek to block Netanyahu — In a historic move, an alliance of Arab Israeli parties recommended a prime ministerial candidate to President Reuven Rivlin for the first time in almost three decades, saying in consultations Sunday that it would support a bid by former army chief of staff Benny Gantz to replace Benjamin Netanyahu. The process of selecting Israel’s next prime minister has entered its second stage, with eyes firmly on the country’s largely ceremonial president as he looks for a way out of a deadlocked election result to avert a third vote. Arab parties traditionally refrain from recommending a candidate during consultations as an ideological protest of Israel’s ongoing military occupation of the Palestinians. The last time an Arab party backed a candidate during consultations was in 1992, when Yitzhak Rabin became prime minister. Rabin later signed the historic Oslo accords with Palestinian leader Yasser Arafat. “We will recommend Benny Gantz as prime minister,” Joint List leader Ayman Odeh said during a meeting with Rivlin on Sunday. “We want to return to be legitimate political actors and bring an end to the Netanyahu government.” Rivlin held consultations with representatives of four of the nine political blocs that make up Israel’s parliament, the Knesset. He is scheduled to meet with the rest of the factions Monday and then decide whether Netanyahu or Gantz will get the first chance to form the next government. Also breaking with precedent was Avigdor Liberman, the hawkish former defense minister. He has been loyal in the past to Netanyahu but said he could not support the long-serving leader this time because Netanyahu has aligned himself closely with religious and right-wing parties. Liberman said he wouldn’t recommend Gantz, either, after he was supported by the Joint List.

Netanyahu Tapped By Israel's President To Form Government After Deadlocked Election - It looks like he's held on after last week's deadlocked election, prior rumors of his political death notwithstanding. Longtime Prime Minister Benjamin Netanyahu has been tapped by Israeli President Reuven Rivlin on Wednesday to form a new government.The longest serving prime minister in Israel's history has now been given 42 days to form the country's next government; and if he fails, the opportunity will fall to his rival - Blue and White Party centrist Benny Ganz. Rivlin said that Israel doesn’t want more elections, something which could theoretically happen for a third time in only a year should neither Netanyahu nor Ganz be successful.  Facing three different allegations of corruption, Netanyahu is fighting for more than just his political future — but serious potential criminal charges which can go away only if he remains in the prime minister's seat.The president tapped the Likud leader after talks with Gantz to form a broad unity government broke down in the wake of the inconclusive election, and after both failed to agree on a power-sharing pact.Netanyahu will have to cobble together 61 seats in order to form a majority government, even as he faces a pretrial hearing next week related to the attorney general's bribery and fraud allegations.

Israel bans entry for most players on Gaza soccer team - — Israel has denied travel permits to most players on a Gazan soccer team which had hoped to cross through Israel and into the West Bank to play a local championship final against a rival Palestinian club.Khadamat Rafah is set to play Balata FC in the West Bank on Wednesday. But without the hard-to-obtain Israeli travel permits, the game is unlikely to take place as scheduled.“We think that this is clear evidence that this Israeli occupation is cruel but from our side we keep raising it at all the levels of FIFA. We insist that this is our right and we’ll continue exerting every effort to allow this team to do this match,” the head of the Palestinian Football Association, Jibril Rajoub, told The Associated Press. The soccer team’s predicament highlights the daily difficulties Gazans face under an Israeli-Egyptian blockade, imposed after the Islamic militant group Hamas seized control of the territory in 2007. Citing security grounds, Israel has greatly restricted movement of Gazans and requires travelers such as students and medical patients to obtain permits to leave. Critics say these are increasingly harder to come by and are withheld arbitrarily. Israel disputes this and says it grants tens of thousands of permits for Gazans with no militant ties. Under the Palestinian Football Association’s terms, the winners of the Gaza league play the West Bank champions in a two-leg final, one in the Gaza Strip and one in the West Bank. The Gaza game took place earlier this year and this week’s game, which had already been delayed for two months over access to permits, was to take place near the West Bank city of Nablus. The winner of the final game goes on to compete in the Asian Champions League.

Clashes in Egypt's Suez on second day of protests against el-Sisi - Security forces in Egypt have clashed with hundreds of protesters in the port city of Suez, according to media reports, firing tear gas and live rounds to disperse crowds calling for President Abdel Fattah el-Sisi to quit. The unrest on Saturday came a day after thousands of people took to the streets in several Egyptian cities in a rare show of dissentagainst el-Sisi, who has overseen a broad crackdown on dissent including the jailing of thousands of dissidents and the effective banning of protests. A protester in Suez told the AFP news agency about 200 people headed to the city's central area for a second night in a row, where they were met by security forces and armoured vehicles. "They [security force] fired tear gas, rubber and live bullets and there were injuries", the man who declined to be named told the AFP. Another resident, who also preferred to remain anonymous, said the tear gas was so thick it had reached her apartment block a few kilometres away. "My nose started burning up. The smell was seeping through the balcony. I also saw some youth run and hide in our street", the woman said. Protests were also reported in Giza, the capital Cairo's twin city, and in the northern town of Mahalla. Al Jazeera is banned from reporting inside Egypt. Meanwhile, a heavy security presence was maintained in Cairo's Tahrir Square, the epicentre of Egypt's 2011 revolution that toppled longtime leader Hosni Mubarak. Egypt's stock exchange also suspended trading for 30 minutes on Sunday after the EGX 100 index fell by 5 percent.

‘Leave, Sisi!’: All you need to know about the protests in Egypt  -Thousands of protesters have taken to the streets across several cities in Egypt, in a rare show of dissent against President Abdel Fattah el-Sisi. Gathering in Cairo's Tahrir Square late on Friday, the demonstrators chanted slogans such as "the people demand the fall of the regime" and "leave Sisi", echoing the chants that rang out in the same place more than eight years ago and which brought down longtime leader Hosni Mubarak. In Alexandria, hundreds marched to the waterfront, chanting "rise up, fear not, Sisi must go", while in the port city of Damietta, protesters tore down a large poster of the president, a former general who has presided over a broad crackdown, jailing thousands of dissidents and banning protests. The protests came as el-Sisi headed to the United States to attend the United Nations General Assembly (UNGA). Protests were reported in at least eight cities, with the largest crowds gathering in Cairo, Alexandria and Suez. Videos and photos of the protests were shared on social media with the hashtag #Tahrir_Square, which was trending worldwide on Friday. Unauthorised protests are not allowed in Egypt and police cracked down swiftly, firing tear gas at protesters in Cairo's Tahrir Square. At least four people were arrested in the capital, while a journalist was arrested in the city of Mahalla, according to the Egyptian Commission for Rights and Freedoms. The AFP news agency, citing a security source, said at least 74 people were arrested. No casualties were reported. Al Jazeera is banned from reporting from inside Egypt. 

Protests in Egypt shake al-Sisi’s bloody military dictatorship --The recent events in Egypt bring back memories of the revolutionary uprisings that brought down the long-standing imperialist-backed Egyptian dictator, Hosni Mubarak, in 2011. Numerous demonstrations reportedly took place throughout Egypt last weekend. This time, they are directed against General Abdel Fatah al-Sisi, who seized power in 2013 and has brutally subjugated the country ever since. Chants of “Irhal, Irhal” [Leave, Leave], “The people want the overthrow of the regime” or “Say it! Don't be afraid! Sisi must go” echoed through numerous Egyptian cities over the weekend. The protests began in the capital, Cairo, where on Friday evening several hundred demonstrators gathered on Meidan al-Tahrir, the central square of the Egyptian Revolution. They quickly spread to other regions, far from the capital. Thousands of mostly young demonstrators took to the streets in the coastal cities of Alexandria and Damietta, in Mansoura and in Suez, the metropolis at the entry of the Suez Canal. So far, there have been no reports of the strikes or factory occupations that spread like wildfire eight years ago. But there were also protests in important industrial cities such as Mahalla al-Kubra, the centre of the Egyptian textile industry in the Nile delta.  The regime reacted nervously and brutally. In Cairo, heavily armed security forces dispersed the demonstrators on Saturday morning, and armoured vehicles sealed off Tahrir Square. In other cities, too, protests were broken up by force. According to the limited reports that are available, there were over two hundred arrests. Videos on social media showed emergency forces hunting down peaceful demonstrators and attacking them with tear gas and rubber bullets. In Suez, where demonstrators gathered again in the central Arbaeen Square during the night of Saturday to Sunday despite massive police violence, the security forces even used live ammunition. “They (security forces) fired tear gas, rubber and live bullets and there were injuries,” a man who took part in the demonstration and did not want to be identified told AFP. Another resident reported that the tear gas was so thick that it had reached her apartment a few kilometres from the city centre: “My nose started burning up. The smell was seeping through the balcony. I also saw some youth run and hide in our street.” The immediate trigger for the protests was a series of videos published by Egyptian actor and contractor Mohamed Ali, who lives in Spain, on his Facebook account. In them he accuses Sisi of embezzling public money for personal purposes and of building expensive palaces for his family, while the mass of the population lives in bitter poverty. It is time for the Egyptian population to rise up, he said, as it is “numerically stronger than the army and police.”