SPR at a 34 year low, total US oil at a 17 year low, total oil+products supplies at a 13½ year low; record low DUCs

Strategic Petroleum Reserve at a 34 year low, total US oil supplies at a 17 year low, total oil + oil products inventories at a 13½ year low; record low DUCs, completions are 17% below the prepandemic average, 4.5 month DUC backlog is lowest in 7 years​…

oil prices rose for the fifth time in six weeks as fuel prices hit record highs on tight supplies and pulled crude prices higher...after finishing 0.7% higher at $110.49 a barrel last week as fears of product shortages outweighed concerns about slowing demand, the contract price for US light sweet crude for June delivery opened higher on Monday following an overnight rally triggered by growing signs of a deepening global squeeze on refined products, but pared those early gains to trade lower as traders took profits following the surge in the Friday session, but rallied again late on optimism that China would see significant demand recovery after signs that the​ir​ coronavirus surge was receding, and closed $3.71 higher at a two month high of $114.20 a barrel, amid heightened geopolitical tensions in Europe after Sweden and Norway made a formal decision to join NATO...​but ​oil prices turned lower on Tuesday, as EU countries failed to agree to ban Russian oil exports in the face of opposition from Hungary. and then fell more than 2% in market-on-close trading in reaction to reports suggesting the Biden administration was prepared to lift sanctions on Venezuelan oil exports amid tightening global ​supplies, and settled $1.80 lower at $112.40 a barrel....oil prices rose overnight after the American Petroleum Institute (API) reported a 2.5 million barrels draw on crude supplies against analyst​s'​ predictions of a 1.5 million barrel build and opened 1% higher on Wednesday, and rallied further in preinventory trading after the release of upbeat data on consumer spending and industrial production for April showed continued momentum for the U.S. economy, but turned lower after EIA data showed U.S. refiners ramped up output, easing worries of a supply crunch, and as traders took a cues from a drop in the stock market and oil fell $2.81 or 2.5% to $109.59 a barrel.....oil dropped more than 1.5% early Thursday, extending its decline ​after ​the ​brutal sell-off ​of equities ​in the previous session, as traders worried over the risk of a recession as the Fed moved to aggressively tighten monetary policy, but recovered from early losses to move higher as lingering fears over tight global supplies outweighe​​d fears over slower economic growth, and then rallied​ late​ to settle Thursday's session with a gain of $2.62 to $112.21 a barrel as traders refocused on tightening fuel supplies in the US & globally, with US distillate inventories drawn down to their lowest level in 14 years....oil prices continued higher early Friday, as US stock markets rebounded after a three-session selloff, rising as loosening of COVID-19 restrictions in China helped fuel demand, and settled $1.02 higher at $113.23 a barrel, thus logging a 2.5% increase on the week, as demand for motor fuels and shrinking inventories ahead of the summer driving season underscored a fundamentally tight supply situation, eclipsing the concerns about an economic slowdown that roiled global financial markets...

natural gas prices also finished higher, for the eighth time in ten weeks, as output slipped while demand for power generation and ​for ​exports remained high... after falling 4.7% to $7.663 per mmBTU last week as domestic production recovered and weather forecasts moderated, the contract price of natural gas for June delivery bounced back on Monday as traders mulled reports of robust power burns and lighter production, and settled 29.3 cents​,​ or more than 4% higher at $7.956 per mmBTU​,​ as higher European prices kept demand for US LNG exports strong...lower gas output and new forecasts for early summer heat sent ​US ​natural gas prices higher again on Tuesday. rising another 34.8 cents to $8.304 per mmBTU, and ​they ​then see-sawed in a narrow range through much of trading Wednesday before closing 6.4 cents higher at $8.368 per mmBTU, as demand continued to outstrip supply...the rally finally fizzled on Thursday​,​ as gas prices slipped 6.0 cents to $8.308 per mmBTU on a slow increase in output as some forecasts called for milder weather over the next two weeks, and then saw their second day of losses on Friday, falling 22.5 cents to $8.083 per mmBTU, as sellers took control of the market in a wave of profit taking...despite those Thursday​ and Friday losses, natural gas prices ended 5.5% higher on the week, more than recouping their losses of the previous week...

The EIA's natural gas storage report for the week ending May 13th indicated that the amount of working natural gas held in underground storage in the US rose by 89 billion cubic feet to 1,732 billion cubic feet by the end of the week, which still left our gas supplies 358 billion cubic feet, or 17.1% below the 2,090 billion cubic feet that were in storage on May 13th of last year, and 310 billion cubic feet, or 15.2% below the five-year average of 2,042 billion cubic feet of natural gas that have been in storage as of the 13th of May over the most recent five years....the 89 billion cubic foot injection into US natural gas working storage for the cited week was a bit more than the average forecast for a 87 billion cubic foot injection from an S&P Global Platts survey of analysts, and it was also a bit more than the average injection of 87 billion cubic feet of natural gas that ha​d typically been added to our natural gas storage during the same week over the past 5 years, while it was somewhat more than the 71 billion cubic feet that were added to natural gas storage during the corresponding week of 2021...

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending May 13th indicated that after a jump in our oil exports, another oil withdrawal from the SPR, and an increase in demand that could not be accounted for, we had to pull oil out of our stored commercial crude supplies for the 2nd time in 7 weeks, and for the 25th time in the past 42 weeks …our imports of crude oil rose by an average of 299,000 barrels per day to an average of 6,568,000 barrels per day, after falling by an average of 62,000 barrels per day during the prior week, while our exports of crude oil rose by 641,000 barrels per day to 3,520,000 barrels per day during the week, which together meant that our trade in oil worked out to a net import average of 3,048,000 barrels of oil per day during the week ending May 13th, 342,000 fewer barrels per day than the net of our imports minus our exports during the prior week…over the same period, production of crude oil from US wells was reportedly 100,000 barrels per day higher at 11,900,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have totaled an average of 14,948,000 barrels per day during the cited reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,935,000 barrels of crude per day during the week ending May 13th, an average of 239,000 more barrels per day than the amount of oil than our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that a net of 1,201,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US….so based on that reported & estimated data, this week’s crude oil figures from the EIA appear to indicate that our total working supply of oil from storage, from net imports and from oilfield production was 214,000 barrels per day more than 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 just inserted a (-214,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been an error or omission of that magnitude in this week’s oil supply & demand figures that we have just transcribed..... moreover, since last week’s EIA fudge factor was at (+719,000) barrels per day, that means there was a 933,000 barrel per day difference between this week's balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the week over week supply and demand changes indicated by this week's report are completely worthless....however, since most everyone treats these weekly EIA reports as gospel, and since these figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably accurate by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

week's 1,201,000 barrel per day decrease in our overall crude oil inventories left our total oil supplies at 958,804,000 barrels at the end of the week, our lowest oil inventory level since February 4th, 2005, and thus a 17 year low….this week's oil inventory decrease came as 485,000 barrels per day were being pulled our commercially available stocks of crude oil, while 716,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve at the same time....that draw on the SPR would now include the initial emergency withdrawal under Biden's "Plan to Respond to Putin’s Price Hike at the Pump", that is expected to supply 1,000,000 barrels of oil per day to commercial interests from now up to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising further up until that time, as well as the previous 30,000,000 million barrel release from the SPR to address Russian supply related shortfalls, and the administration's earlier plan to release 50 million barrels from the SPR to incentivize US gasoline consumption....since both the press releases from the administration on the SPR releases and the news coverage of them have been less than clear, we'll again include here a copy of the SPR release schedule that the Congressional Research Service prepared for members of Congress, so that they'd be able to front-run Energy Department oil releases in their own trading accounts...

the Biden administration's releases from the SPR fall under 3 categories, as shown above...the initial Biden SPR release was a combination of a mandatory sale and an exchange, wherein the oil companies receiving oil from the SPR would be expected to pay it back, while the most recent SPR release was all categorized as an emergency sale, meant to replace the Russian oil lost due to sanctions in the wake of the Ukraine situation....including other withdrawals from the Strategic Petroleum Reserve under recent release programs, a total of 118,165,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 22 months, and as a result the 537,984,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since November 27th, 1987, or at a 34 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs has already drained those supplies considerably over the past dozen years....furthermore, the total 180,000,000 barrel drawdown over the next six months will remove almost a third of what remains in the SPR, and leave us with what would be less that a 20 day supply of oil at today's consumption rate..

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 6,276,000 barrels per day last week, which was 4.7% more than the 5,961,000 barrel per day average that we were importing over the same four-week period last year….this week’s crude oil production was reported to be 100,000 barrels per day higher at 11,900,000 barrels per day because the EIA's rounded estimate of the output  from wells in the lower 48 states was 100,000 barrels per day higher at 11,500,000 barrels per day, while Alaska’s oil production was unchanged at 447,000 barrels per day and had no impact on the final rounded national total....US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 9.2% below that of our pre-pandemic production peak, but was 41.2% above the interim low of 8,428,000 barrels per day that US oil production had fallen to during the last week of June of 2016...

US oil refineries were operating at 91.8% of their capacity while using those 15,935,000 barrels of crude per day during the week ending May 13th, up from the  90.0% utilization rate of the prior week, and close to the historical utilization rate for mid May refinery operations…the 15,935,000 barrels per day of oil that were refined this week were 5.4% more barrels than the 15,116,000 barrels of crude that were being processed daily during week ending May 14th of 2021, and 23.5% more than the 12,903,000 barrels of crude that were being processed daily during the week ending May 15th, 2020, when US refineries were operating at what was then a much lower than normal 69.4% of capacity during the first wave of the pandemic, but still 4.4% less than the 16,676,000 barrels that were being refined during the prepandemic week ending May 10th 2019, when refinery utilization was at a bit below normal 90.5% for the second weekend of May...

Even with the increase in the amount of oil being refined this week, gasoline output from our refineries was a somewhat lower, decreasing by 142,000 barrels per day to 9,574,000 barrels per day during the week ending May 13th, after our gasoline output had increased by 27,000 barrels per day over the prior week.…this week’s gasoline production was 1.8% less than the 9,753,000 barrels of gasoline that were being produced daily over the same week of last year, and 3.4% below our gasoline production of 9,912,000 barrels per day during the week ending May 10th, 2019, ie, the year before the pandemic impacted gasoline output....at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 2,000 barrels per day to 4,880,000 barrels per day, after our distillates output had increased by 163,000 barrels per day over the prior week…and after recent increases, our distillates output was 7.2% more than the 4,553,000 barrels of distillates that were being produced daily during the week ending May 14th of 2021, but still 4.1% less that the 5,264,000 barrels of distillates that were being produced daily during the week ending May 10th, 2019...

With the decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the thirteenth time in fifrteen weeks, decreasing by 4,779,000 barrels to 220,189,000 barrels during the week ending May 13th, after our gasoline inventories had decreased by 3,607,000 barrels over the prior week....our gasoline supplies decreased again this week because the amount of gasoline supplied to US users increased by 325,000 barrels per day to 9,027,000 barrels per day, while our imports of gasoline rose by 181,000 barrels per day to 876,000 barrels per day and while our exports of gasoline rose by 15,000 barrels per day to 957,000 barrels per day....but even with 14 inventory drawdowns over the past 15 weeks, our gasoline supplies were still only 6.0% lower than last May 14th's gasoline inventories of 234,226,000 barrels, and 8% below the five year average of our gasoline supplies for this time of the year…

However, even with our distillates production little changed, our supplies of distillate fuels increased for the 4th time in eightteen weeks and for the 11th time in thirty-seven weeks, rising by 1,235,000 barrels to 105,264,000 barrels during the week ending May 13th, after our distillates supplies had decreased by 913,000 barrels to a 17 year low during the prior week….our distillates supplies rose this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 39,000 barrels per day to 3,816,000 barrels per day, because our exports of distillates fell by 355,000 barrels per day to 1,357,000 barrels per day, while our imports of distillates fell by 8,000 barrels per day to 114,000 barrels per day....but.after forty-one inventory withdrawals over the past fifty-eight weeks, our distillate supplies at the end of the week were 20.3% below the 132,095,000 barrels of distillates that we had in storage on May 7th of 2021, and about 22% below the five year average of distillates inventories for this time of the year…

Meanwhile, with this week's increase in our oil exports and an increase in unexplained demand, our commercial supplies of crude oil in storage fell for the 15th time in 25 weeks and for the 33rd time in the past year, decreasing by 3,394,000 barrels over the week, from 424,214,000 barrels on May 6th to 420,820,000 barrels on May 13th, after our commercial crude supplies had increased by 8,487,000 barrels over the prior week…with this week’s decrease, our commercial crude oil inventories fell to about 14% below the most recent five-year average of crude oil supplies for this time of year, but were still about 18% above the average of our crude oil stocks as of the second weekend of May over the 5 years at the beginning of the past decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had jumped to record highs during the Covid lockdowns of spring 2020, and then jumped again after last year's winter storm Uri froze off US Gulf Coast refining, our commercial crude oil supplies as of this May 13th were 13.4% less than the 486,011,000 barrels of oil we had in commercial storage on May 14th of 2021, and were also 20.8% less than the 531,476,000 barrels of oil that we had in storage on May 15th of 2020, and 10.8% less than the 472,035,000 barrels of oil we had in commercial storage on May 10th of 2019…

Finally, with our inventories of crude oil and our supplies of all products made from oil remaining near multi year lows, we are also continuing to keep track of the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR....the EIA's data shows that the total of our oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, and thus including everything from gasoline and jet fuel to propane/propylene and residual fuel oil, fell by 7,939,000 barrels this week, from 1,699,318,000 barrels on May 6th, 1,691,379,000 barrels on May 13th, after our total inventories had risen by 2,898,000 barrels during the prior week....that left our total liquids inventories down by 97,054,000 barrels over the first 18 weeks of this year, and at the lowest since Nov 14, 2008, or at a 13 1/2 year low... 

This Week's Rig Count

The number of drilling rigs running in the US increased for the 74th time over the prior 86 weeks during the week ending May 20th, but still remained 8.3% below the prepandemic rig count.....Baker Hughes reported that the total count of rotary rigs drilling in the US increased by fourteen to 728 rigs this past week, which was also 273 more rigs than 455 rigs that were in use as of the May 21st report of 2021, but was still 1,201 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global market with oil in an attempt to put US shale out of business….

The number of rigs drilling for oil was up by 13 to 576 oil rigs during this week, after rigs targeting oil had increased by 6 during the prior week, and there are now 220 more oil rigs active now than were running a year ago, even as they still amount to just 35.8% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are still down 15.7% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations rose by 1 to 150 natural gas rigs, which was the most natural gas rigs deployed since September 13th, 2019, up by 51 natural gas rigs from the 99 natural gas rigs that were drilling during the same week a year ago, even as they were still only 9.3% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008…in addition to rigs targeting oil and gas, Baker Hughes continues to show two "miscellaneous" rigs active; one is a rig drilling vertically for a well or wells intended to store CO2 emissions in Mercer county North Dakota, and the other is also a vertical rig, drilling 5,000 to 10,000 feet into a formation in Humboldt county Nevada that Baker Hughes doesn't track...a year ago, there were no such "miscellaneous" rigs running...

The offshore rig count in the Gulf of Mexico remained at seventeen rigs this week, with all of this week's Gulf rigs drilling for oil in Louisiana waters....that's three more than the count of offshore rigs that were active in the Gulf a year ago, when all 14 Gulf rigs were drilling for oil offshore from Louisiana…in addition to rigs drilling in the Gulf, there's also an offshore rig drilling in the Cook Inlet of Alaska, where natural gas is being targeted at a depth greater than 15,000 feet....a year ago, there were no offshore rigs other than those deployed in the Gulf of Mexico....in addition to rigs offshore, we also have a water based directional rig, drilling for oil at a depth between 10,000 and 15,000 feet, inland in the Galveston Bay area, while during the same week of a year ago, there was also one such "inland waters" rig deployed...

The count of active horizontal drilling rigs was up by 13 to 664 horizontal rigs this week, which was also 252 more rigs than the 412 horizontal rigs that were in use in the US on May 21st of last year, but still 51.7% less than the record 1,374 horizontal rigs that were drilling on November 21st of 2014....at the same time, the directional rig count was up by 1 to 39 directional rigs this week, and those were up by 11 from the 28 directional rigs that were operating during the same week a year ago…meanwhile, the vertical rig count was unchanged at 25 vertical rigs this week, while those were up by 10 from the 15 vertical rigs that were in use on May 21st of 2021….

The details on this week’s changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us 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 May 20th, the second column shows the change in the number of working rigs between last week’s count (May 13th) and this week’s (May 20th) count, the third column shows last week’s May 13th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same 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 21st of May, 2021...

as you can see, this week's increase was led by Texas, which ​comes on the heels of an unusual four week period when Texas activity had actually netted a one rig decrease..,,so we'll start by checking the Rigs by State file at Baker Hughes for the changes in Texas Permian, where we find that two rigs were added in Texas Oil District 8, which is the core Permian Delaware, and that three rigs were added in Texas Oil District 7C, which includes the northernmost counties in the Permian Midland, and that two more rigs were added in Texas Oil District 8A, which covers the southern counties in the Permian Midland....since the national Permian rig count was up by eight and there were no additions in New Mexico, that means the rig that was added in Texas Oil District 7B, which includes a county in the easternmost Permian Midland, was also a Permian basin addition...elsewhere in Texas, we find that two rigs were added in Texas Oil District 1, that a rig was added in Texas Oil District 3, and that another rig was added in Texas Oil District 4; three of those four account for the three oil rig increase in the Eagle Ford shale, while the other is targeting a basin that Baker Hughes doesn't track, possibly the Austin Chalk formation, which sits atop the Eagle Ford shale in parts of its range...Texas also had a rig added in Texas Oil District 6, which accounts for one of the rigs added to the Haynesville shale, and a rig pulled out of Texas Oil District 10, which accounts for the rig lost in the Granite Wash basin in the panhandle region...the only changes outside of Texas were an oil rig addition in Oklahoma's Ardmore Woodford, and a rig added in Louisiana's Haynesville shale...one of the Haynesville shale additions was a natural gas rig, the other was targeting oil, and there are now three oil directed rigs running in the mostly gassy Haynesville....if anyone needs to know ​where those Haynesville ​shale ​oil rigs are, that can be determined by tediously checking the individual well records in the North America Rotary Rig Count Pivot Table (Feb 2011 - Current)..

DUC well report for April

Monday of this week saw the release of the EIA's Drilling Productivity Report for May, which included the EIA's April data on drilled but uncompleted (DUC) oil and gas wells in the 7 most productive shale regions (shown under the report's tab 3)....that data showed a decrease in uncompleted wells nationally for the 23rd consecutive month in April, as both completions of drilled wells and drilling of new wells increased in April, but remained well below average pre-pandemic levels...for the 7 sedimentary regions covered by this report, the total count of DUC wells decreased by 70 wells, falling from 4,293 DUC wells in March to 4,223 DUC wells in April, which was the lowest number of US wells left uncompleted on record, and also 36.1% fewer DUCs than the 6,611 wells that had been drilled but remained uncompleted as of the end of April of a year ago...this month's DUC decrease occurred as 874 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during April, up from the 825 wells that were drilled in March, while 944 wells were completed and brought into production by fracking them, up by 7 from the 937 well completions seen in March, and up by 146 from the 798 completions seen in April of last year....at the April completion rate, the 4,223 drilled but uncompleted wells remaining at the end of the month represents a 4.5 month backlog of wells that have been drilled but are not yet fracked, down from the 4.6 month DUC well backlog of a month ago, and the lowest backlog since December 2014, despite a completion rate that is still roughly 20% below 2019's pre-pandemic average...

only the oil producing regions saw a net DUC well decrease April, since the natural gas producing Haynesville shale saw an increase in DUCs that was greater than the Appalachian DUC decrease....the number of uncompleted wells remaining in the Permian basin of west Texas and New Mexico decreased by 46, from 1,302 DUC wells at the end of March to 1,256 DUCs at the end of April, as 388 new wells were drilled into the Permian basin during April, while 434 already drilled wells in the region were being fracked....in addition, the number of uncompleted wells remaining in Oklahoma's Anadarko basin decreased by 12, falling from 740 at the end of March to 728 DUC wells at the end of April, as 55 wells were drilled into the Anadarko basin during April, while 68 Anadarko wells were completed....at the same time, DUC wells in the Niobrara chalk of the Rockies' front range decreased by 8, falling from 317 at the end of March to a record low of 309 DUC wells at the end of April, as 96 wells were drilled into the Niobrara chalk during April, while 104 Niobrara wells were completed....meanwhile, there was a decrease of 7 DUC wells in the Bakken of North Dakota, where DUC wells fell from 426 at the end of March to a record low of 419 DUCs at the end of April, as 69 wells were drilled into the Bakken during April, while 76 of the drilled wells in the Bakken were being fracked.....in addition, DUCs in the Eagle Ford shale of south Texas decreased by 6, from 642 DUC wells at the end of March to a record low of 636 DUCs at the end of April, as 100 wells were drilled in the Eagle Ford during April, while 106 already drilled Eagle Ford wells were being fracked....

among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 3 wells, from 471 DUCs at the end of March to a record low of 468 DUCs at the end of April, as 92 wells were drilled into the Marcellus and Utica shales during the month, while 95 of the already drilled wells in the region were fracked....on the other hand, the uncompleted well inventory in the natural gas producing Haynesville shale of the northern Louisiana-Texas border region rose by 12, from 395 DUCs in March to 407 DUCs by the end of April, as 73 wells were drilled into the Haynesville during February, while 61 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of April, DUCs in the five major oil-producing basins tracked by this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) decreased by a total of 79 wells to 3,348 DUC wells, while the uncompleted well count in the major natural gas basins (the Marcellus, the Utica, and the Haynesville) increased by net of 9 wells to 875 wells, although as this report notes, once into production, more than half the wells drilled nationally will produce both oil and gas...

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Shale Academy shows off career options — Some students at Southern Local got a chance to see some of the offerings at the Utica Shale Academy last week and the careers they could prepare for as the school In Demand Jobs Week.The days held in the rain at the Utica Shale Academy included a chance for students in grades 8th, 9th and 10th to see the virtual welder in action and the operation of the large backhoe and forklift behind the building in the park, picking up tires and pallets.Looking on were some of the board members from Southern Local, the three county commissioners and two people running for state office who have spent time in the past helping schools like the Utica Shale Academy find funding for projects to teach students about job skills for those not going to college.“This is a celebration of the top jobs in Ohio,” said Monica Robb Blasdel, running for State Rep. for the area, once the Ohio maps are finalized. “Bill and his team are doing a great job right here in Salineville.”Blasdel was involved with a task force for workforce development for the former Lt. Governor Mary Taylor starting in 2011 and said it is important for students to realize with credentials they can find a job right out of high school making $50,000 per year or more. State Senator Michael Rulli was involved in getting the school $400,000 in funding toward the construction of an indoor/outdoor welding lab. Rulli points out there are jobs here without going $100,000 in debt for college and he is honored to be part of helping with the growth of the Utica Shale Academy.

OH Utica Landowners Leased for Oil Benefit from High Crude Price - Marcellus Drilling News - While virtually all of the Marcellus/Utica drilled in Pennsylvania produces either dry natural gas or wet gas (NGLs), the Utica in certain places of Eastern Ohio produces crude oil. Landowners in Ohio who lease their property and have crude gushing out of the ground may feel like Jed Clampett with bubblin’ crude prices fetching north of $100 per barrel. However, Bidenflation is eating away at the higher royalties those landowners receive. The cost of everything has gone up–from gasoline and diesel fuel to livestock feed, fertilizer, and groceries.

MWCD negotiates oil and gas lease with Encino — The Muskingum Watershed Conservancy District has completed negotiations for an oil and gas lease for Utica Shale development for nearly 7,300 acres, the largest land lease to date on MWCD property, at Tappan Lake in Harrison County.The lease agreement with Encino Energy was approved by the MWCD Board of Directors for review during their meeting May 20.“The lease for property at Tappan Lake continues our tradition of balancing our desire to upgrade our operations and infrastructure for public enjoyment, renew and increase our focus on improving the watershed and water quality and protecting our resource by requiring enhanced environmental protections,” said Gordon Maupin, president of the MWCD Board of Directors.Revenues from past leasing have allowed MWCD to invest and target nearly $200 million to upgrade facilities through a master plan redesign. Phase one of the master plan is now complete, totaling about $130 million in new project funding.New campgrounds were constructed, and aging areas were renovated. Atwood, Charles Mill, Piedmont, Pleasant Hill, Seneca and Tappan Lake campgrounds now offer campsites with full hook-up, and 50-amp power service with level pads. Each camp area also has new, Americans with Disabilities Act-compliant restroom and shower facilities with laundry.

10 Years Later: No Gusher of Jobs - – One by one, the plants shut down in quick succession. Companies that relocated to the Mahoning Valley to support shale exploration – an industry many projected would be the next economic boom for the region – closed their doors as the promise of big oil and gas returns faded. Texas-based Exterran Energy Solutions, a fabricator of high-end oil and gas components, opened a new plant to great fanfare in 2013 with a $13.2 million investment at Salt Springs Road Business Park in Youngstown, only to close three years later and taking with it more than 75 jobs. Other companies and jobs related to the oil and gas supply chain followed. Legacy Management Solutions, a Texas-based oil field equipment supplier that opened a fabrication division in Brookfield Township in 2015, shut its doors in early 2019, eliminating about 100 jobs. Texas-based Weatherford LP, another oil field supplier, drastically downsized its operations at Performance Place Park in Youngstown about three years ago. According to Dun & Bradstreet, 250 were employed at the location shortly after it opened. Today it employs fewer than 10. Almost as quickly as they arrived, large oil and gas exploration companies abandoned the northern Utica. BP Exploration sold all of its assets in Trumbull County after spending tens of millions of dollars to secure lease agreements. Halcon Energy Resources did the same, blaming the poor performance of its wells in Trumbull County. Projections delivered a decade ago by an industry-funded study envisioned the oil and gas business creating more than 200,000 jobs in Ohio by 2015. The report was touted by then-Gov. John Kasich as the basis to move full-speed ahead on developing shale resources across the state, which would draw billions of dollars in new investment, he projected. Initially, investments poured in. Led by Chesapeake Energy Corp., big exploration companies that specialized in hydraulic fracturing and horizontal drilling descended on eastern Ohio, gobbling up leases and initiating drilling programs to extract natural gas or oil from the relatively thin strata of shale 6,000 feet beneath the ground. Between 2011 and 2020, it’s estimated that more than $90 billion in drilling programs, leasehold agreements, pipeline construction, processing stations, refueling stations, natural-gas power plants, and other shale-related operations had taken root across the state, according to JobsOhio, the state’s private economic development arm. “These last 10 years of shale development have had a dramatic and positive effect on Ohio’s economy, workforce and energy portfolio,” the Ohio Oil and Gas Association said in a statement.“While the last decade has been exciting and challenging, we know that there is more development, growth and build-out ahead of us to fully realize the Utica and its benefits. Continued use of essential natural gas is both powering our lives and businesses and it is also leading to an overall cleaner environment.” But the picture isn’t as bright when it comes to new jobs and overall impact to local economies, say researchers who have challenged the economic viability and benefits of the oil and gas industry in Ohio, West Virginia, and Pennsylvania. “In Ohio, it’s had either no net impact or perhaps a negative impact,” says Sean O’Leary, senior researcher with the Ohio River Valley Institute, a think tank established a year ago that conducts policy research to tackle economic challenges in Appalachia. This year, the organization produced two reports showing that shale development across 22 major gas-producing counties in Ohio, Pennsylvania and northern West Virginia between 2008 and 2019 has not delivered the promises hyped by the oil and gas industry a decade ago. In Ohio, the report focused on seven counties where natural gas and oil production is strongest: Carroll, Jefferson, Harrison, Belmont, Noble, Guernsey and Monroe. “These counties produced more than 95% of gas coming out of Ohio and actually suffered a net loss in employment,” O’Leary says. According to the think tank’s first report, issued in February, the seven Ohio counties ranked best among those in West Virginia and Pennsylvania in terms of gross domestic product growth when compared to the state and nation. They also, however, were among the worst- performing in terms of personal income, jobs and population. Collectively, these counties experienced an 8.4% decline in jobs – a loss of 6,777 positions – between 2008 and 2019, the report shows. Statewide, jobs grew at a rate of 3.9%.

Shale jobs won't top pre-pandemic levels until 2027 — The recovery of the shale patch workforce is still years in the making despite the frothy profits that rallying crude prices are generating for U.S. oil companies and their contractors. Employment in the U.S. oil and gas industry is expected to jump 12.5% this year to 971,000, according to Rystad Energy. But it will take another half decade before employment in the region tops pre-pandemic levels, according to new research from the industry consultant. Workers will have to wait until 2024 to see double-digit annual wage hikes. Pay this year is expected to climb 2.9%, according to Rystad. Oil companies are hesitant to boost wages dramatically as they seek to keep a lid on skyrocketing costs. As a result, rig workers look elsewhere for a higher pay, with renewables being the most popular landing spot. Workers in Midland, Texas, the heart of the Permian Basin, are battling a 10% jump in prices in the world’s busiest shale patch, and America’s No. 1 spot for inflation over the past year.

Ohio, Kentucky and Indiana are in a heated national competition to land a hydrogen hub --A total of $8 billion is up for grabs to states chosen to start one of four hydrogen hubs. The money is part of the infrastructure law, which in this project, hopes to assess the viability of a hydrogen economy from production to processing, delivery, storage and end use. Ohio, Kentucky, Indiana and dozens of other states are vying to be part of it. The Ohio Clean Hydrogen Hub Alliance has many partners; Kentucky has started a hydrogen work group; and Indiana considers itself a hydrogen leader. The U.S. government is encouraging all to apply. Applications will open this summer. At least two of the hydrogen hubs will involve blue hydrogen, which uses natural gas — something Ohio has a lot of. CEO of the Ohio Chamber of Commerce Steve Stivers thinks the state has a good chance of being selected.“For us, here at the Chamber, it’s about making the world greener. Natural gas burns cleaner than almost any other fuel — not quite as clean as green hydrogen. There’s going to happen somewhere, why not have them happen in Ohio?” he asks.To make blue hydrogen, you combine fossil fuels with steam and heat them up. This produces carbon dioxide and hydrogen. The two gases are separated, and the CO2 is captured and then stored underground. But there are methane gas leaks in the process. It's different from green hydrogen, which is cleaner. It uses electrolysis where electricity splits hydrogen from oxygen molecules in water. Ohio wants a blue hydrogen hub to use its natural gas. Researchers at Cornell and Stanford, in the publication Energy and Engineering, say the carbon footprint to create blue hydrogen is more than 20% greater than using either natural gas or coal directly for heat, or about 60% greater than using diesel oil for heat. Exactly, says Ohio River Valley Institute Senior Researcher Sean O'Leary. He says it's a bad idea for a number of reasons but he's focusing on the economic ones.“Hydrogen is too expensive and inefficient for use in mass consumption applications like automobiles, home heating and generating electricity, and the so-called clean hydrogen that hub supporters talk about is even more costly than conventional hydrogen,” he says.He says the cleaner alternatives are electric vehicles, electric heat pumps and wind and solar power. The Chamber's Stivers has a counter to that.“The difference between hydrogen and solar and wind is the wind doesn’t always blow in Ohio and the sun doesn’t always shine in Ohio. You can make hydrogen in Ohio every minute of every day,” he says.

Federal legislation introduced aimed at preventing oil spills in the Great Lakes -- Democratic Michigan Senator Gary Peters has introduced legislation to strengthen federal pipeline safety measures and mandate better oil spill cleanup methods. The new legislation is called Preventing Releases of Toxic Environment Contaminants Threatening Our Great Lakes Act – called PROTECT for short. It would require better oil spill detection, more preparation, and allows external funding for a recently created center in expertise on oil spills to be headquartered in Michigan. Peters said these are all needed. “To prevent a spill from occurring, or at least mitigating if one starts, to be able to shut off the pipeline as quickly as possible to minimize the impact, also the cleanup afterwards.” Almost twelve years ago an Enbridge oil pipeline burst and spilled oil into a tributary of the Kalamazoo River near Marshall. The U.S. Environmental Protection agency said the spill amounted to more than one million gallons. Enbridge operators did not shut down the line for hours because they didn’t believe the sensor alarms. It was among the nation's worst inland oil spills. Peters said it showed how fresh water systems are at risk and it could happen elsewhere. Currently there's concern among environmentalists, some business groups, and others about Enbridge's Line 5, the nearly 70-year-old twin pipelines sitting on the lake bed of the Straits of Mackinac which connects Lakes Michigan and Huron. Ship anchors have twice hit Line 5. Studies indicate an oil spill could spread along Michigan's coasts for miles, harming wildlife and fish and damaging tourism. Peters said his legislation goes further than concern about Line 5. “This is legislation that’s focused on all of the pipelines in the Great Lakes Basin. All of them could potentially cause a significant ecological disaster,” Peters said. In the aftermath of the Kalamazoo River oil spill, the National Academy of Sciences made recommendations on methods to clean up oil in a fresh water system. “There are a number of best practices that should be used when cleaning up a spill in freshwater. And we're going to put those into statute, not just make them recommendations, but actually make them law,” Peters said.

Airport authority brokers new deals with CNX to incentivize drilling and, possibly, make fuel from natural gas - When the airport and the company now known as CNX Resources signed their Marcellus Shale gas agreement in 2013, there was the potential to drill as many as 45 wells on the campus of Pittsburgh International Airport. The Cecil-based gas firm drilled 14, then stopped. On Friday, the airport authority approved two new agreements with CNX that would incentivize more drilling, including in the deeper and drier Utica Shale layer. Over the next five years, the airport will act as a marketing agent for CNX to secure customers for the gas that would come from yet-to-be drilled Utica wells. In order to be burned as airline fuel or in vehicles, that gas would need to be either compressed or liquefied — that is, cooled to a point where it turns into a liquid. That would also require the vehicles and/or plane engines to be retrofitted. All of this will take time and money, Christina Cassotis, CEO of the Allegheny County Airport Authority, acknowledged. But she believes that with an increasing number of transportation and aviation companies pledging to reduce their carbon emissions, natural gas — which burns cleaner than diesel and gasoline — might be a short-term draw. “Given the carbon commitments that are out there, how can we be part of helping the industry and airlines start to decarbonize immediately,” she said, invoking natural gas as a bridge fuel until cleaner fuels become available. Both the airport authority and CNX framed this as a path to hydrogen — the subject of billions in federal funding and a focus of the natural gas industry, which envisions using its product to make hydrogen with the resulting carbon dioxide emissions captured and sequestered in a massive Appalachian storage hub. CNX plans to build a liquefaction plant, according to spokesman Brian Aiello, with the timing yet to be determined. He also said it would produce a “naturally, not mechanically” compressed natural gas product, but the company declined to provide technical details, saying it’s proprietary. In a fact sheet, the company referenced its “unique autonomous ultra-high-pressure separation technology, which performs consistently in harsh and high-pressure conditions, manages gas streams to be used to generate electricity and power — as well as hydrogen — in the immediate proximity of the wells.”

Why Diversified Energy is beefing up its well-plugging capacity and expertise - At the end of last year, Diversified Energy had one well-plugging crew. Now, through two high-profile acquisitions and its own internal expansion, the big Appalachian natural gas producer has eight and will have nine working by the end of June. Diversified is one of the largest gas producers in Pennsylvania, although its portfolio is a lot different than Marcellus and Utica Shale drillers. Instead of drilling for natural gas, Diversified has amassed thousands of wells in Pennsylvania, Ohio and West Virginia in a series of acquisitions of legacy oil and gas wells. The attention that Diversified gives not only creates a stream of low-flow but scalable natural gas and oil but also cleans up emissions from the wells, some of which are decades old. Beyond the shale business, Diversified has intentionally built up the well-plugging business. It has plans to plug at least 200 wells a year in its footprint and will be scaling that up, both among its own wells as well as opportunities for other companies and governments with the hundreds of millions of dollars available now for projects through the federal infrastructure bill. Earlier this year, Diversified acquired NextLVL Energy, a Pittsburgh-based well plugging company. Monday, it announced that it acquired Nick's Well Plugging, a Warren, Ohio-based firm. Diversified's well-plugging division has grown to 60 employees in less than six months, from the one internal crew to four added with NextLVL, two others they were growing internally and then two with Nick's. "With the combination of internal growth and these two acquisitions, we've grown from one to nine crews," One potential area of growth: The money that the states are receiving from the federal infrastructure bill to go toward cleaning up abandoned oil and gas wells. Pennsylvania, where oil and natural gas drilling was invented in the 19th century, has hundreds of thousands of abandoned wells just on its own. The infrastructure bill will give $400 million to Pennsylvania for the well plugging, along with at least $256 million in Ohio and at least $141 million in West Virginia. Diversified, with its big footprint in a business sector that is fragmented, is poised to capture some of that funding. Gray said that the company was talking to state governments throughout Appalachia. Diversified plugged 136 wells in 2021, including 33 that were done internally. It has 200 on the books to be plugged this year and have an internal goal of between 350 and 400 a year in the future with between 10 and 12 Diversified teams. That would be a mixture of at least 200 already committed along with between 150 and 200 more that would be done beyond Diversified's operations, according to a company presentation released Monday. Gray said most well plugging projects are short-term, between one and four days. The major cost, beyond labor, is the cement that is used for the most part in plugging old oil and gas wells, although it can also be used with cast-iron plugs. The wells themselves are between 1,500 and 4,000 feet deep, which are not anywhere near as deep as the Marcellus and Utica shales.

Environmentalists petition feds to dump LNG by rail – - Environmental groups are urging the Biden administration to reverse a Trump-era rule that allows rail shipments of liquified natural gas (LNG). The groups say the war in Ukraine, and the subsequent plans by the White House to increase LNG exports, should not derail the Department of Transportation’s proposal to reinstate limits on LNG-by-rail. “We cannot let an energy crisis that comes out of Ukraine turn into a blanket thrown over the climate crisis,” said Tracy Carluccio, of the Delaware Riverkeeper Network, during a virtual press conference Wednesday. “The climate crisis is the fight of our lives, it’s the fight of our time.” The Delaware Riverkeeper Network, along with half a dozen other advocacy groups, petitioned the Department of Transportation on Wednesday to follow through on their plan to suspend a Trump-era rule that opened up the nation’s railways to LNG. While industry advocates say rail transport is safe, a leak of LNG carries risk of explosion. The petition also urges the Biden administration to outright ban any LNG-by-rail due to both safety hazards, and the climate impacts of expanding fossil fuel infrastructure and development.Carluccio says the groups are against all forms of LNG production and transport, including pipelines. “We leave it in the ground, that’s basically the answer,” Carluccio said. “We’re not going to be able to ever safely move it, process it, or export it.” Prior to a new Trump administration rule enacted in 2020, LNG rail transport permits faced steep hurdles, and only a few were approved through a “special permit,” including a plan to send LNG via rail across the Delaware River to Gibbstown, New Jersey. But in an effort to encourage natural gas infrastructure and expand LNG transportation beyond pipelines, the Department of Transportation under Trump reversed long-standing practice to allow a regular permitting procedure. No permits have been issued for LNG-by-rail since that 2020 rule change.The Biden administration decided to study the safety and environmental impacts of LNG-by-rail and has proposed rescinding the new rule. Public comment ended in December and the Pipeline Hazardous Material Safety Administration (PHMSA), a division of the Dept. of Transportation, is expected to issue a decision at the end of June. But the advocates worry the administration’s push to expand LNG exports as European countries seek to halt use of Russian natural gas, could mean it changes its decision on LNG-by-rail.

Mineral interest owners sue Gov. Justice over new forced oil and gas well unitization law - Senate Bill 694 is sweeping legislation that takes e ect June 7, 90 days from its passage. Over 40 pages, the new law sets application requirements for horizontal well unit controllers seeking to combine oil and gas tracts to drill wells, expands the state body that regulates deep well drilling and gives options for compensation to nonconsenting owners entitled to lease an oil and gas estate. SB 694 changes the share of oil and gas production to which a royalty owner is entitled. State code had held that royalty owners and well operators each should obtain their “just and equitable share of production” from a pool of oil and gas. SB 694 deønes a pool as an underground accumulation of gas or petroleum in a reservoir. The new law changes state code to hold that royalty owners may get their share of production from a unit or unconventional oil or gas reservoir, in addition to a pool. SB 694 deønes a unit as the acreage on which wells may be drilled and an unconventional reservoir as any geologic formation that yields oil or gas that can’t be produced economically except by horizontal or multilateral well-boring or hydraulic fracturing, also known as fracking. Brian Corwin and fellow plainti Scott Sonda, 50, say that’s a crucial change that will result in gas companies taking gas from mineral owner tracts and never paying for it without running afoul of the new law. The bill establishes a mechanism for unitizing wells without 100% support from mineral interest owners in a given formation. Unitization is the combination of two or more oil and gas tracts or tract portions to form a consolidated well unit. The bill requires applicants who control a horizontal well unit seeking to unitize tracts to have agreement from royalty owners of 75% or more of net acreage in the target formation proposed to be included in the horizontal well unit with respect to the royalty interest. For oil and gas interests with no lease, owners entitled to lease an oil and gas estate could surrender the oil and gas underlying the tract to participating operators, including the applicant, proportionate to their interest in the horizontal well unit. If not agreed upon, that total would be the weighted average amount paid, per net mineral acre, by the applicant to the owners in third-party transactions for acquiring the oil and gas mineral estate in the same target formation underlying the horizontal well unit. For royalty owners of leased tracts who have not consented to unitization, the West Virginia Oil and Gas Conservation Commission would require that unitization consideration be paid to royalty interest owners totaling 25% of a weighted average monetary bonus amount on a net mineral acre basis, and a production royalty percentage of 80% of the weighted average production royalty percentage paid to other owners of leased unit tracts in the same target formation.

Natural Gas Production Growth to Continue in May, Driven by Haynesville, Appalachia, Permian - The Energy Information Administration (EIA) is modeling sizable natural gas production increases from several major plays next month, including the Appalachian Basin and the Haynesville Shale.Total natural gas production from seven key onshore regions is set to climb 750 MMcf/d from May to June, reaching 91.750 Bcf/d, the agency said in its latest Drilling Productivity Report (DPR), published Monday. The Haynesville is set to lead growth among the seven regions from May to June, adding 239 MMcf/d to reach 15.102 Bcf/d, while Appalachian production is set to grow 194 MMcf/d month/month to 35.670 Bcf/d, the agency said. Along with the Haynesville and Appalachia, the DPR tracks production trends across the Bakken, Eagle Ford and Niobrara shales, as well as the Anadarko and Permian basins. The oily Eagle Ford and Permian are expected to post natural gas production gains of 131 MMcf/d and 169 MMcf/d, respectively, from May to June, according to EIA. Smaller natural gas production increases are expected out of the Bakken (up 27 MMcf/d) and the Niobrara (up 8 MMcf/d) for the period. Only the Anadarko (down 18 MMcf/d) is expected to see declining output from May to June, the DPR data show. The latest DPR arrives at a time when supply adequacy concerns have fueled outsized volatility in natural gas futures trading. This month’s forecast production gains are largely in line with the growth rate modeled for the month-earlier period. A look back at recent DPR data shows overall natural gas output from the seven regions increasing at a quickening pace so far in 2022. Meanwhile, crude oil production among the seven regions is expected to grow by 142,000 b/d from May to June, reaching 8.761 million b/d, according to the DPR. EIA modeled an 88,000 b/d increase for the Permian, with the Eagle Ford adding 27,000 b/d and the Bakken chipping in 17,000 b/d of incremental output. Smaller crude oil production gains were predicted for the Anadarko (up 4,000 b/d), Appalachia (up 3,000 b/d) and Niobrara (up 3,000 b/d) regions. Total drilled but uncompleted (DUC) wells declined by 70 units from March to April, falling to 4,223, the latest DPR data show. The Permian DUC backlog saw the largest decrease at 46, leaving the play with 1,256 DUC wells as of April. Declines were also recorded in the Anadarko (down 12), Appalachia (down three), Bakken (down seven), Eagle Ford (down six) and Niobrara (down eight) regions. The Haynesville added 12 DUC wells to its backlog between March and April, according to EIA.

US natural gas prices retake $8.00 as additional European exports secured -Henry Hub (NG1:COM) natural gas traded above $8.00 Monday, and futures prices for gas delivered from June 2022 through March of 2023 now sit above the $8.00 level.

• Monday, Poland's PGNiG signed an agreement to purchase 3 million tons per year of liquified natural gas from Sempra (SRE); the news comes less than one year after PGNIG terminated an agreement with Sempra (SRE) to purchase 2 million tons per year.
• While rising natural gas prices have been well received by energy investors, the President of the Industrial Energy Consumers of America trade group said Sunday, "the manufacturing sector cannot invest and create jobs without assurances that our natural gas and electricity prices will not be imperiled by excessive LNG exports."
• As with crude oil production (USO), US natural gas production (UNG) has missed growth estimates so far in 2022; pipeline constraints out of the Marcellus, supply chain challenges and producer discipline have all contributed to slowing growth, as reflected in official production statistics from the EIA:
• With oil product shortages popping up, and multi-fold price increases in nearly all energy commodities, investors are likely to focus on Washington's reaction to the burgeoning energy crisis.

Natural gas prices have already doubled this year. A hot summer could push them even higher - U.S. natural gas prices more than doubled since the start of the year, and this summer's air-conditioning season could send them soaring by at least another 25%. In the futures market, gas prices rose 4.4% Tuesday as hot spring weather in the Southern U.S. pressured a market that has already been concerned about tight supplies. The warmer weather is forecast to continue across the region. "In the last month, there has not been a meaningful uptick in U.S. lower 48 states production," said Matt Palmer, senior director North American natural gas at S&P Global Commodity Insights. "You're seeing exports running full out on LNG; power burn from the power sector is really strong and layer in the heat we're seeing and the expectation that the southern tier of the continent in May and June will see well above normal temperatures. That's a recipe for higher prices." Natural gas futures for June settled at $8.30 per million British thermal units (MMBtu), up 123% for the year. A heat wave is expanding in the South, with temperatures above 100 degrees in some places. According to the National Weather Service, high temperature records are forecast to be tied or broken this week in Texas, Oklahoma and Louisiana. The higher natural gas prices are hitting U.S. businesses and consumers at a time when gasoline and record diesel fuel are at record levels. Palmer said utilities that normally switch to coal for power when natural gas prices surge are finding that coal is even more expensive — the equivalent of gas at $9 to $10 MMBtu. "The likelihood of prices in the double digits this summer is getting stronger by the day," Palmer said. While Russia's invasion of Ukraine has sent Europe's gas prices sharply higher, U.S. prices have edged up as well. Russia was supplying about a third of Europe's gas. U.S. prices, however, are not directly linked to the global market, even as the country sends about 15% of its gas production overseas in the form of liquified natural gas. European prices are about four times higher for LNG. U.S. production fell sharply during the pandemic, and while it has restarted, it's been growing slowly. In February, monthly production was 115.2 billion cubic feet per day, down from 118.7 BCF in December, according to the latest government monthly data. Supply is tight in the U.S. market. The amount of gas in storage has been at an unusually low level, and cold spring weather followed by the heat wave has created more demand than normal at this time of year. That has made it more difficult to build inventories. Some of the gas that would be set aside for next winter is being used.

Natural Gas Futures Rebound Amid Smoldering Supply/Demand Imbalance Threats - Following a loss last week, natural gas futures bounced back on Monday as traders mulled reports of robust power burns and lighter production. The June Nymex contract gained 29.3 cents day/day and settled at $7.956/MMBtu. July rose 28.8 cents to $8.053. NGI’s Spot Gas National Avg. jumped 41.5 cents to $7.740 on Monday, with stout gains across most regions of the Lower 48. Production dipped slightly below 95 Bcf to start Monday after climbing above that threshold briefly last week, according to Bloomberg’s estimate. Output remained well below the 97 Bcf peak of the past winter, amplifying already simmering concerns about adequate storage supplies. The U.S. Energy Information Administration (EIA) most recently reported an injection of 76 Bcf natural gas into storage for the week ended May 6. The print fell shy of the five-year average increase of 82 Bcf and left inventories at a deficit to recent norms. Total Lower 48 working gas in underground storage stood at 1,643 Bcf, 312 Bcf below five-year average levels, according to EIA. At the same time, European demand for U.S. liquefied natural gas (LNG) has held at solid levels amid Russia’s ongoing war in Ukraine. Countries across Europe are calling for LNG to gradually replace supplies of Russian natural gas. Rystad Energy also noted the threat of Russia preemptively cutting off pipeline exports of gas to parts of Europe in retaliation of Western sanctions and recent steps by Finland and Sweden to join the North Atlantic Treaty Organization, aka NATO. Russian President Vladimir Putin, in a first move, cut electricity supply to Finland over the weekend. He did not follow up with restrictions on gas flows, but “the likelihood remains in the near future,” said Rystad analyst Wei Xiong. Domestic demand is holding at elevated levels by May standards. Bespoke Weather Services cited strong power generation demand so far this month, driven by heat in the southern United States and lower wind generation over the weekend. Temperatures have eclipsed 100 in parts of Texas and the Southwest in May, and exceptional highs in the mid-90s were reported last week in the northern Plains. “Given the strength in power burns we are seeing, we still feel the risk to prices is skewed to the upside, and our lean is that we probably have not seen the highs in prices for the year, especially if our hotter forecast ideas pan out as we move into the meat of the summer season,” the firm said. Bespoke joined a chorus of other forecasters – from AccuWeather to the Farmer’s Almanac – in predicting above average heat for the Lower 48 this summer. This, the firm said, is likely to keep air conditioners cranking through the months ahead.

U.S. natgas futures rise 4% on output drop, warmer forecasts (Reuters) - U.S. natural gas futures rose about 4% on Tuesday to a one-week high on a preliminary drop in daily output and lifted forecasts for warmer weather and more air-conditioning demand over the next two weeks. Another spring heat wave in Texas boosted power demand, which was expected to hit a monthly record on Tuesday as homes and businesses cranked up air conditioners. U.S. front-month gas futures for June delivery rose 34.8 cents, or 4.4%, to settle at $8.304 per million British thermal units (mmBtu), their highest close since May 5 when the contract settled at a 13-year high of $8.783. Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 94.8 billion cubic feet per day (bcfd) so far in May from 94.5 bcfd in April. That compares with a monthly record of 96.1 bcfd in November 2021. On a daily basis, output was on track to drop 1.9 bcfd to a near three-week preliminary low of 93.5 bcfd on Tuesday due mostly to declines in Pennsylvania. Preliminary data is often revised, but if that drop stands, it would be the biggest one-day decline since freeze-offs shut wells in early February. Refinitiv projected average U.S. gas demand, including exports, would slide from 89.6 bcfd this week to 88.7 bcfd next week. Those forecasts were higher than Refinitiv's outlook on Monday. The amount of gas flowing to U.S. LNG export plants held at 12.2 bcfd so far in May, the same as April. That compares with a monthly record of 12.9 bcfd in March. The United States can turn about 13.2 bcfd of gas into LNG. Russian gas exports to Europe slid to around 7.9 bcfd on Monday from about 8.2 bcfd on Sunday on the three mainlines into Germany: North Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route. That compares with an average of 11.9 bcfd in May 2021. Gas stockpiles in Northwest Europe - Belgium, France, Germany and the Netherlands - were about 14% below the five-year (2017-2021) average for this time of year, down from 39% below the five-year norm in mid-March, according to Refinitiv. Storage was currently about 36% of full capacity. That is healthier than U.S. inventories, which were around 16% below their five-year norm.

U.S. natgas futures rise 1% on output drop, higher demand forecasts (Reuters) - U.S. natural gas futures edged up about 1% on Wednesday to a fresh one-week high on a drop in daily output over the past few days and forecasts for more demand next week than previously expected. Traders noted prices were also supported by soaring power demand in Texas, which hit a monthly record high on Tuesday and was on track to break that on Wednesday as homes and businesses keep their air conditioners cranked up to escape a spring heatwave. U.S. front-month gas futures for June delivery rose 6.4 cents, or 0.8%, to settle at $8.368 per million British thermal units (mmBtu), their highest close since May 5 for a second day in a row. On May 5, the front-month settled at a 13-year high of $8.783. U.S. gas futures have gained about 124% since the start of the year as higher global prices kept demand for U.S. liquefied natural gas (LNG) exports strong since Russia's Feb. 24 invasion of Ukraine. Gas was trading around $28 per mmBtu in Europe and $21 in Asia. The U.S. contract rose to a 13-year high near $9 on May 6. U.S. gas futures lag far behind global prices because the United States is the world's top producer, with all the gas it needs for domestic use while capacity constraints inhibit exports of more LNG. Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 94.8 billion cubic feet per day (bcfd) so far in May from 94.5 bcfd in April. That compares with a monthly record of 96.1 bcfd in November 2021. On a daily basis, however, output was on track to drop 1.6 bcfd over the past three days to a three-week preliminary low of 93.7 bcfd on Wednesday. Refinitiv projected average U.S. gas demand, including exports, would hold near 89.7 bcfd this week and next. The forecast for next week was higher than Refinitiv's outlook on Tuesday. The amount of gas flowing to U.S. LNG export plants held at 12.2 bcfd so far in May, the same as April. That compares with a monthly record of 12.9 bcfd in March. The United States can turn about 13.2 bcfd of gas into LNG.

US working natural gas in underground storage increases by 89 Bcf: EIA | S&P Global Commodity Insights - US natural gas working stocks increased by 89 Bcf in the week ended May 13, narrowing the deficit to the five-year average slightly, but not by enough to calm supply concerns in the futures market. Storage inventories rose to 1.732 Tcf for the week ended May 13, the US Energy Information Administration reported May 19. The build was 2 Bcf more than an S&P Global Commodity Insights' survey of analysts calling for an 87 Bcf injection, but in line with S&P Global's supply-demand model's prediction of 89 Bcf. The injection was more than the 71 Bcf build reported during the corresponding week in 2021 as well as the five-year average build of 87 Bcf, according to the EIA data. As a result, stocks were 358 Bcf, or 17.1%, less than the year-ago level of 2.09 Tcf and 310 Bcf, or 15.2%, less than the five-year average of 2.042 Tcf. Week-over-week, the most recent storage report showed the deficit to the five-year average narrowing by 4 Bcf. The NYMEX Henry Hub June contract hovered near $8.19/MMBtu in the first five minutes of trading following the weekly storage report, down around 18 cents from May 18's settlement of $3.368/MMBtu, but subsequently climbed to trade at $8.35/MMBtu by 1pm ET. Market watchers have cautioned that although recent weekly storage builds have been in line with seasonal norms, refilling storage will require larger-than-average builds to compensate for starting this injection season at a sizeable deficit. Strong gas demand and comparatively lackluster production gains have stymied the market from realizing substantially above-average net injections. The main driver of gas demand growth so far this May has been gas-fired power demand. Unseasonably hot temperatures and limited fuel switching optionality have pushed US gas-fired power burn far above year-ago levels. Power burn has averaged 29.5 Bcf/d so far this May, up 3.4 Bcf/d, or 13%, from the same time last year, data from S&P Global showed. LNG feedgas demand also continues to outpace year-ago levels, with S&P Global data showing month-to-date demand averaging 12.4 Bcf/d, up from 10.6 Bcf/d last May. On the supply side, US gas production has averaged 93.6 Bcf/d so far this month, up 1.1 Bcf from last May, data from S&P Global showed. For the week ended May 13, production averaged 94 Bcf/d, up nearly 800 MMcf/d from the prior seven days (April 30 – March 6). A forecast by S&P Global's supply and demand model calls for a smaller build of 82 Bcf for the week ending May 20, which would widen the deficit to the five-year average to 325 Bcf. The corresponding week in 2021 saw a 102 Bcf build. Expectations for a smaller build into storage for the week ending May 20 are supported by lower supply and higher demand observed for the week in progress. Gas production averaged just 93.6 Bcf/d for May 14-19, down 400 MMcf/d from the previous seven days. Inflows from Canada have also fallen week-over-week, as pipeline constraints limit West Canada-to-Pacific Northwest flows. Gas-fired power burn averaged 31.8 Bcf/d so far in the week in progress (May 14-19), up from averaging 29 Bcf/d for May 7-13. A heat wave in Texas and the Midcontinent has brought highs into record-setting ranges, spiking cooling demand.

U.S. natgas futures ease on rising output, mild forecasts (Reuters) - U.S. natural gas futures eased about 1% on Thursday on a slow increase in output and some forecasts calling for milder weather over the next two weeks. That small futures decline came despite a jump in spot power and gas prices in many parts of the country as consumers in California, Texas, Louisiana, Pennsylvania and elsewhere crank up air conditioners to escape an early spring heatwave. Traders also said the market largely ignored a federal report showing a weekly storage build that was near normal levels for this time of year, as expected. The U.S. Energy Information Administration (EIA) said utilities added 89 billion cubic feet (bcf) of gas to storage during the week ended May 13. That was close to the 87-bcf build analysts forecast in a Reuters poll and compares with an increase of 71 bcf in the same week last year and a five-year (2017-2021) average increase of 87 bcf. U.S. front-month gas futures for June delivery fell 6.0 cents, or 0.7%, to settle at $8.308 per million British thermal units (mmBtu). Despite the decline, U.S. gas futures were still up about 120% since the start of the year as higher global prices have kept demand for U.S. liquefied natural gas (LNG) exports strong since Russia's Feb. 24 invasion of Ukraine. Gas was trading around $28 per mmBtu in Europe and $22 in Asia. The U.S. contract rose to a 13-year high near $9 on May 6. Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 94.9 billion cubic feet per day (bcfd) so far in May from 94.5 bcfd in April. That compares with a monthly record of 96.1 bcfd in November 2021. Refinitiv projected average U.S. gas demand, including exports, would hold near 90.0 bcfd this week and next, higher than its outlook on Wednesday. The amount of gas flowing to U.S. LNG export plants held at 12.2 bcfd so far in May, the same as April. That compares with a monthly record of 12.9 bcfd in March. The United States can turn about 13.2 bcfd of gas into LNG. On a daily basis, however, LNG feedgas was on track to hit a six-week high of 13.1 bcfd on Thursday as some Gulf Coast plants exit maintenance outages.

NYMEX gas futures mark second day of losses amid profit-taking, cooler outlook - Following a bullish first half of the week for NYMEX front-month natural gas futures, sellers took control of the market toward the latter part of the week with prices seeing losses May 19 and 20. At the end of trading on May 20, the NYMEX June 2022 natural gas futures contract shed 22.5 cents to close at $8.083/MMBtu but still managed to tack on 42 cents for the week when weighed against the May 13 closing price. The downside action stemmed from profit-taking based on a cooler temperature outlook for the central portion of the US over the next several days, including Texas, which is the largest natural gas consuming state in the US. With the expiration of the NYMEX June gas futures contract coming up the week of May 22, gas market players will be mainly focused on early June temperatures, which appear to be evolving toward less hot conditions, according to the major weather forecast models. The Energy Information Administration (EIA) reported a gas storage build of 89 Bcf for the week ended May 13, which was perceived as generally neutral compared to market expectations, the upcoming storage report for the week ending May 20 should come in more bullish. This is because the storage injection will be reflective of sweltering temperatures across key demand areas of the nation. Gas market participants are projecting a storage build ranging from as little as 69 Bcf to as much as 80 Bcf due to exceptionally warm temperatures across the Great Plains and the southern tier of the US for the reflective storage week. In the spot market, physical natural gas prices were mixed to higher in the eastern portion of the US as widespread above-average temperatures move into the region over the weekend, while cash prices saw losses virtually everywhere else across the nation due to cooler conditions. Spot at Tennessee Zone 6, delivered North was the high price leader, averaging $9.745/MMBtu for the May 20 and 21, up $1.39/MMBtu. Algonquin, city-gates, which serves the Boston market, rose 58 cents to average $8.48/MMBtu. Meanwhile, cash prices at the NYMEX-sensitive Henry Hub shed 19.5 cents at $7.975/MMBtu. Katy came off 21.5 cents to average $7.79/MMBtu as the weather forecast models show the potential for heavy rainfall to move into the Lone Star State and linger in place for a few days, which will take a Texas-sized bite out of recent scorching temperatures in the region. Despite an impressive very late-season snowstorm that is taking aim at cities such as Denver, Colorado, spot prices at nearby hubs saw losses in the Rockies. The Cheyanne Hub went down 25 cents to average $7.54/MMBtu, while the White River Hub came off 27.5 cents to $7.505/MMBtu. It was much of the same story further West, with SoCal Gas losing 38 cents to average $7.60/MMBtu, while PG&E city-gate eroded 15 cents to $9.58/MMBtu. On the Redwood Path, PG&E Malin was down 12 cents to average $7.66/MMBtu. Meanwhile, dry gas production remains sluggish at around 95 Bcf/d, while power burn demand is averaging over 6 Bcf/d compared to year-ago data. Gas market bears are pointing to near-term cooler temperatures and the potential dry gas production to finally gain traction in the weeks ahead, owing to the robust increase in active oil and gas rigs in recent months.

Chevron Sanctions Ballymore Gulf Of Mexico Project - U.S. oil and gas supermajor Chevron has sanctioned the Ballymore project in the deepwater U.S. Gulf of Mexico. Chevron said that the project, with a design capacity of 75,000 barrels of crude oil per day, would be developed as a three-mile subsea tieback to the existing Chevron-operated Blind Faith platform. “Chevron’s U.S. Gulf of Mexico production is some of the lowest carbon intensity production in our portfolio at around 6 kg CO2 equivalent per barrel of oil equivalent and is a fraction of the global industry average,” said Steve Green, president of Chevron North America Exploration and Production. “Once complete, Ballymore is expected to add a reliable supply of U.S. produced energy to help meet global demand. The project is designed to lower development costs by using a subsea tieback approach, standardized equipment, and repeatable engineering solutions – leveraging existing operated infrastructure,” Green added. Ballymore will be Chevron’s first development in the Norphlet trend of the U.S. Gulf of Mexico. The project will be in the Mississippi Canyon area in around 6,600 feet of water, about 160 miles southeast of New Orleans. According to the supermajor, potentially recoverable oil-equivalent resources for Ballymore are estimated at more than 150 million barrels. The project, which involves three production wells tied back via one flowline to the nearby Blind Faith facility, will require an investment of approximately $1.6 billion. Oil and natural gas production will be transported via existing infrastructure. First oil is expected in 2025. Chevron subsidiary Chevron U.S.A. Inc. is the operator of the Ballymore project with a 60 percent working interest. Co-owner TotalEnergies has a 40 percent interest.

Canceled lease sales raise new questions for offshore drilling - The cancellations of three offshore drilling lease sales this week have injected a degree of uncertainty into the future of offshore drilling. The canceled auctions mean there are no sales now scheduled, and it’s unclear precisely when that will change. The Interior Department is working on a new leasing plan, but it has not said when that will be issued. The decision to cancel the sales comes as the nation is focused on high gasoline prices. Republicans, who hope to win back congressional majorities this fall, have seized on the price hikes to blast the administration for its energy policies. The administration is conscious of those political attacks, even as it separately gets the squeeze from the left to uphold President Biden’s campaign pledge to ban new oil and gas permitting on public lands and in public waters. It’s all created an uncertain outlook for energy firms, which don’t feel positive about the future of lease sales under the Biden administration. “It’s clearly not very optimistic as we look to the near term,” said Erik Milito, president of the National Ocean Industries Association, an energy trade group. The administration announced late Wednesday that it was canceling the three scheduled auctions that would have opened up space in Alaska’s Cook Inlet and the Gulf of Mexico for drilling. Spokeswoman Melissa Schwartz said in an email that the sale near Alaska was being canceled because of a “lack of industry interest,” while the Gulf of Mexico sales would not be held because of factors including “conflicting court rulings.” This cancellations don’t impact any activities related to current oil production, but they do block the industry from getting new leases, which kick off the lengthy process for getting fuel out of the ocean. The announcement erased the only offshore sales the department had on its agenda.. The Interior Department is now putting together a new five-year plan. Asked for an update, Schwartz said that the department is “actively developing its five-year plan for the offshore program” and noted that the industry is already leasing 10.9 million acres in federal waters. The law governing the offshore leasing requires the Interior secretary to “prepare and periodically revise, and maintain an oil and gas leasing program.” It specifies that the program should include a “schedule of proposed lease sales” and should be based on the country’s “national energy needs.” Sara Rollet Gosman, an environment and energy law professor at the University of Arkansas, said that if the Biden administration didn’t want to schedule any lease sales in the forthcoming plan, it could argue that because of climate change, new sales would not be in the nation’s energy needs. “I think the federal government can make a good argument that our national energy needs have changed, and that renewable energy should be our focus and that therefore we do not need to have a schedule of proposed lease sales,” she said. Gosman described it as a “viable” argument, though it would surely face legal challenges. She said the administration could also take a more “cautious” approach of having “a five-year schedule of just a few lease sales.” One possible clue to the department’s plans for at least the near future might be found in its budget request for fiscal 2023 — which projects a 94 percent drop in bonuses and rents the department would collect from offshore oil and gas leasing. Milto, of the National Ocean Industries Association, said he reads this as the department not planning to hold any oil and gas lease sales during that fiscal year, which ends in October 2023.

USA Lease Sale Cancellation Leaves Industry in Limbo -The cancellation of lease sales 258 (Cook Inlet) and 259, 261 (Gulf of Mexico) that were planned under the 2017-2022 National Outer Continental Shelf Oil and Gas Leasing Program elevates regulatory uncertainty for oil and gas investors. That’s what Dominika Rzechorzek, an oil and gas analyst at Fitch Solutions, told Rigzone, adding that the move leaves the industry in limbo as the new five-year leasing program has not been published yet, “despite the rapidly approaching deadline of June 30”. “Thus, it remains uncertain if and when the Department of Interior (DOI) will hold future offshore leasing auctions,” Rzechorzek said. The Fitch Solutions analyst noted that the suspension of offshore lease sales in the Gulf of Mexico will have much broader implications as compared to the Cook Inlet lease sale, “given the much stronger interest in the acreage off U.S. southern states”. “The offshore Alaska lease sales have struggled to gain much interest and many have been cancelled before, for example Lease Sale 242 (Beaufort Sea) or 237 (Chukchi Sea) originally planned for 2015,” Rzechorzek said. The Fitch Solutions analyst outlined that the last Gulf of Mexico sale, conducted in November 2021 and later annulled in Judge Contreras’ verdict, attracted a number of bidders, “with the level of bids generated in this lease reflecting a heightened interest in the offshore Gulf of Mexico”. “Thus, despite growing regulatory uncertainty, we expected that the upcoming Gulf of Mexico leases would gain relatively strong interest, especially as the uncertainty over future of offshore lease sales has grown given lack of details on 2022-2027 Program,” Rzechorzek said. “We note that suspension of lease programs in the Gulf of Mexico will limit the ability of upstream companies to secure new acreage and pursue new developments to sustain level of oil and gas production despite natural decline in production from mature fields,” Rzechorzek added. “Should the suspension of lease sales be sustained, Gulf of Mexico would see a more rapid decline in output over the long term, as companies would struggle to replace output from mature fields with production from new developments. However, the near-term production outlook would not be affected to a large extent given a robust project pipeline announce by key oil and gas companies for the near future,” Rzechorzek continued. Rigzone showed this article to the DOI asking if the organization would like to send over a comment for inclusion. The DOI’s statement can be seen below:“Due to lack of industry interest in leasing in the area, the Department will not move forward with the proposed Cook Inlet OCS oil and gas lease sale 258. The Department also will not move forward with lease sales 259 and 261 in the Gulf of Mexico region, as a result of delays due to factors including conflicting court rulings that impacted work on these proposed lease sales”. In its response, the DOI also highlighted that, as of May 1, of the 10.9 million offshore acres under lease, the industry is not producing on 8.26 million acres, or 75.7 percent, and of the 24.9 million onshore acres under lease, the industry is not producing on 12.3 million acres, or 49.4 percent. There are also over 9,000 onshore permits that have been approved and are waiting to be used, the DOI outlined.

Manchin blasts Biden energy policies at budget hearing - Senate Energy and Natural Resources Committee Chairman Senate Energy and Natural Resources Committee Chairman Joe Manchin (D-W.Va.) claimed the Biden administration’s oil and gas leasing policies have “put America’s energy security at risk” during testimony by Interior Secretary Deb Haaland on Thursday. In a hearing on the Interior Department’s fiscal 2023 budget request, Manchin pushed back on the administration’s repeated references to the industry’s 9,000 unused leases to explain the energy crisis, arguing the administration has the power to pressure industry to use them. “If the administration’s argument is that industry is sitting on these leases … why don’t they do something about it?” Manchin said. “For example, if the concern is that too many leases are not being developed in a timely manner, the department could increase the rental rates over time to provide a financial disincentive against holding leases for speculation alone.” Manchin conceded that “new lease sales would not immediately increase production,” but claimed the administration’s focus on current production “puts America’s energy security at risk.” The White House said in a March fact sheet that President Biden “is calling on Congress to make companies pay fees on wells from their leases that they haven’t used in years and on acres of public lands that they are hoarding without producing.”Although Manchin at the time expressed openness to raising leasing fees, he said at the Thursday hearing that he believed the Interior Department could do so without legislation. Republicans and the energy industry have blamed soaring gas prices in part on the Biden administration’s policies on oil and gas leasing, including a since-ended freeze on lease sales on public lands. However, the full process of selling leases and drilling takes years and would not provide any immediate relief at the pump for consumers. In her testimony, Haaland addressed the Interior Department’s five-year schedule for offshore oil and gas leasing, saying the department will release its proposal by June 30, when the current program expires. “The previous Administration stopped work on the new five-year plan in 2018, so there has been a lot to do to catch up. Varying, conflicting litigation has also been a factor,” Haaland said. “As we take this next step, we will follow the science and the law, as we always do.” The hearing comes the week after the department canceled three planned lease sales in Alaska’s Cook Inlet and the Gulf of Mexico, citing lack of industry interest and conflicting court rulings, respectively. Separately, a federal court barred the administration from holding a different planned lease sale in the Gulf, which the administration has not appealed.

U.S. will propose new offshore oil and gas plan by June 30 (Reuters) - The Biden administration will propose a new five-year plan for offshore oil and gas development by June 30, the date when the current plan expires, Interior Secretary Deb Haaland said on Thursday. The announcement comes as the administration has faced pressure from Republican lawmakers to expand domestic drilling to address soaring fuel costs. President Joe Biden, however, wants to reform the federal government's oil and gas program to consider its impacts on climate change. Haaland testified before the Senate energy committee to answer questions on the administration's 2023 budget proposal, but was grilled by Republican senators and Democrat Joe Manchin about her department's limited offering of new oil and gas leases on federal lands and waters and its failure to finalize a new five-year plan before the expiration of the current plan. "We are working expeditiously to move this forward," Haaland told the committee. The Interior department is required by law to produce a five-year schedule of offshore oil and gas auctions. The administration earlier this month scrapped the current plan's last three planned sales, in Alaska and the Gulf of Mexico. The department will issue a draft proposal by June 30, and according to its timeline, could finalize a plan by Nov. 30. Interior cannot hold any lease sales without a final program in place. The department last held an oil and gas auction for the Gulf of Mexico in November, but a court order later vacated that sale, saying the administration had failed to properly account for its impact on climate change. Manchin, during the hearing, said he is concerned that Interior's new five-year plan proposal for energy development in the U.S. outer continental shelf will not result in new oil and gas leasing.

Senators unload on Haaland, Granholm over gasoline prices - While Russian President Vladimir Putin has received much of the blame for rising gas prices, Sen. John Barrasso yesterday suggested the finger should instead be pointed at Interior Secretary Deb Haaland. As the national average for a gallon of unleaded gas hit a record high of $4.59 yesterday, lawmakers were working to spin the issue to their political advantage ahead of the summer travel season and the midterm elections. Energy Secretary Jennifer Granholm got a similar scolding from Republicans. Barrasso (R-Wyo.), the Senate Energy and Natural Resources ranking member, told Haaland during a budget hearing, “It seems like it’s Secretary Haaland’s price hike here, not Putin’s.” The administration’s dramatic reduction in new leasing and its promise to reform the federal oil and gas program in light of climate change has attracted scrutiny from oil and gas supporters. That’s only increased in recent months as Russia’s war against Ukraine, supply chain bottlenecks and global supply constraints roil oil and gas markets. Some of the strongest criticism aimed at Haaland came from her fellow Democrat, West Virginia Sen. Joe Manchin, the committee’s chair, who often breaks with his party on energy and environmental issues. “We are holding this hearing during trying times,” Manchin told Haaland, adding that his frustration had hit “an all-time high” as the U.S. seeks to increase oil production in Iran and Venezuela in an attempt to replace Russian energy “while we are at the same time blocking increased energy production at home.” Manchin told Haaland that he backed the Interior Department’s decision last year to “pause” energy lease sales while the Biden administration conducted a review of the federal oil and gas program. But he added: “Almost a year and a half into the administration, and as the world begs for North American oil and gas, we still have no leases. … I’m sorry to say it has become crystal-clear that the pause is in fact a ban.”

How the courts have shaped Biden's leasing strategy - President Joe Biden is walking a fine line between taking aggressive climate action and promoting new oil and gas leasing — and some observers say his latest approach could be a winning strategy in court.After a federal judge last year blocked Biden’s pause on new lease sales as part of his climate Executive Order 14008, the administration has moved forward with some leasing while canceling other planned auctions.Legal experts say selective lease offerings may be a more defensible approach for Biden’s Interior Department, which is facing pressure from environmental groups that say the agency has discretion to place an outright ban on future oil and gas leases on public lands and federal waters. Last year’s ruling by Judge Terry Doughty of the U.S. District Court for the Western District of Louisiana that struck down Biden’s leasing pause was a win for red states that had argued Interior had an obligation under the Mineral Leasing Act and Outer Continental Shelf Lands Act to continue to make areas available for onshore and offshore oil and gas drilling. Interior is fighting the ruling and made its case for its authority to implement a pause before a federal appeals court last week, but in the meantime, the agency says it is taking steps to comply with the decision by Doughty, a Trump appointee. Interior’s most recent action on oil and gas leasing came late last week, when the agency announced it would cancel the remaining offshore lease sales in the Bureau of Ocean Energy Management’s current five-year plan — Lease Sale 258 in Alaska’s Cook Inlet and two other sales in the Gulf of Mexico (Energywire, May 12).The decision came as a relief for climate activists who have been working to block any new offshore oil and gas leasing. But energy industry groups and Republican lawmakers warned that the loss of Lease Sale 258 — not long after the U.S. District Court for District of Columbia axed the 80 million-acre Lease Sale 257 in the Gulf of Mexico — would harm the United States.Pulling back on domestic production would have harmful consequences, supporters of new leasing said, and U.S. offshore drilling is less risky than fossil fuel production abroad.

Report: Southwest Indiana oil refinery could impact long-term health of residents nearby --Twelve oil refineries in the U.S. put unsafe levels of benzene gas into the air last year — including a refinery in Mount Vernon west of Evansville. That’s according to a new report by the Environmental Integrity Project. Over time, exposure to benzene can cause anemia and leukemia as well as damage your nervous system and immune system. CountryMark Refining and Logistics in Mount Vernon had benzene emissions last year that exceeded the level at which the federal government requires companies to take action. Benzene emissions from the CountryMark refinery dropped from 2006 to 2013. There has been a recent uptick in these emissions as tracked by the EPA's Toxic Release Inventory. CountryMark said an “upset” at the Mount Vernon facility in July caused the emissions to spike — but didn’t say what the upset was. “Who knows maybe there was some incident with those tanks or the equipment associated with them. But it's only about a quarter of a mile to a residential neighborhood in Mount Vernon — so it's really pretty close to where people are living," he said. Pelton said because of high oil prices, companies like CountryMark are making a lot of money right now. “This is the right time for refineries to use some of that money — not just as profit, but to reinvest in your physical plant to make it into better and safer shape," he said. The report by the Environmental Integrity Project shows about half of all U.S. oil refineries had benzene levels last year that the state of California says can cause long-term health risks. California has some of the most stringent environmental rules in the country. The report said many oil refineries are located near low-income and minority communities. The Environmental Integrity Project wants the Biden administration to enforce laws on benzene emissions and make good on its commitment to environmental justice.

US Gasoline Prices Hit New Record Amid Refinery Bottlenecks And Tight Supplies -- US retail gasoline prices soared to another record on Monday as global refineries struggled with adding new capacity ahead of the driving season. Before diving into Goldman Sachs' new commodity note explaining how global refining will be tight for the foreseeable future, last week, Saudi Energy Minister said, "the bottleneck is now to do with refining ... many refineries in the world, especially in Europe and the US, have closed." Goldman's commodity analyst Neil Mehta outlines a rash of refinery retirements, reduced Russian energy exports, recovering jet fuel demand, and tight global inventories for products, particularly diesel, have supported higher retail fuel prices. Mehta points out US product inventories are below a 10% five-year average, refining utilization rates are below normal, global natural gas prices are high, and demand for diesel remains robust. US product and total inventories are well below a five-year average. US refining utilization struggles to increase as the driving season begins. "We believe the oil market needs to price to demand destruction, which will drive the least elastic prices, such as those for distillate, higher," he said, adding tight inventories could last through this year and well into 2023. While the demand destruction has not begun yet (from what we have seen in the data), the price adjustments for refined products is starting to reprice drastically (in barrel equivalents below for easy comparisons)... A lack of refinery capacity is the culprit of rising fuel prices. The average cost of US gas prices at the pump on Monday morning is $4.483 and $5.56 for diesel. Today's refinery bottlenecks may suggest that even higher prices are ahead this summer as the driving season begins.

U.S. diesel shortages lift refining margins to a record: Kemp - (Reuters) -Global stocks of refined petroleum products have fallen to critically low levels as refineries prove unable to keep up with surging demand especially for the diesel-like fuels used in manufacturing and freight transportation.The result has been a surge in prices refiners receive for selling fuels compared with prices they pay for buying crude and other feedstocks, boosting their profitability significantly.In the United States, refiners currently receive roughly an average of more than $150 per barrel from the sale of gasoline and diesel at wholesale prices, while paying only around $100 to purchase crude. The indicative 3-2-1 margin of $50 per barrel is based on the assumption a refinery produces two barrels of gasoline and one barrel of diesel from refining three barrels of crude.The margin is meant to be representative for an “average” refinery and is a gross figure out of which refiners have to pay for labour, electricity, gas, hydrogen, catalysts, pipeline transport and the cost of capital.Net margins are narrower and refinery costs have been rising rapidly as result of widespread inflation ripping through the economy following the coronavirus pandemic.Nonetheless, even allowing for rising input costs, gross margins have more than doubled from $20 at the end of 2021, ensuring refiners have a strong financial incentive to maximise crude processing and fuel production.Gross margins are currently higher for making diesel (almost $60 per barrel) than for gasoline ($45 per barrel) reflecting the relative shortage of middle distillates (tmsnrt.rs/3PdSJdC).U.S. distillate fuel oil stocks are 31 million barrels (23%) below the pre-pandemic five-year average compared with a deficit of only 6 million barrels (3%) in gasoline.The squeeze on fuel inventories and refinery capacity is compounding already high prices for crude caused by sanctions on Russia and output restraint by OPEC+ and U.S. shale producers.The resumption of international passenger aviation as quarantine restrictions are lifted is tightening the fuel market even further because jet fuel is broadly similar to diesel and gas oil.The effective wholesale price of diesel has climbed to over $160 per barrel while gasoline is trading at over $150, based on futures for delivery in New York Harbor.Once distributors’ and retailers’ margins and taxes are included, the average price at the pump paid by motorists has climbed to $236 per barrel for diesel and $186 per barrel for gasoline.The refining margins and fuel prices cited in this column are all for the United States but the same shortage of refining capacity and fuel inventories is boosting diesel prices in Europe, and dragging up gasoline prices with them.There is scope for refiners to increase fuel production by postponing non-essential maintenance and running refineries flat out into the early autumn. But any increase in diesel production is unlikely to be able to reverse the depletion of inventories fully and return them to pre-pandemic levels. Prices will therefore have to continue rising until they begin to restrain consumption or the economy enters a cyclical downturn.

High Gasoline And Diesel Prices Are Here To Stay - U.S. gasoline and diesel prices are soaring to record highs nearly every day these days, as crude oil prices hold above $110 a barrel, the Russian invasion of Ukraine upends global crude and refined product trade flows, and refinery capacity globally is now lower than before the pandemic after some refineries—including in the United States—closed permanently after COVID crippled fuel demand in early 2020. There isn't a quick fix for all-time high fuel prices in America— or elsewhere — analysts say. The quickest fix is actually not one American consumers would want — a recession that would lead to job losses. Despite the Biden Administration's months-long efforts to lower gasoline prices — including massive releases of crude from the Strategic Petroleum Reserve (SPR) and blaming oil companies for price gouging — U.S. refineries cannot catch up with demand. Not that demand has soared so much. It's the capacity for supply, globally and in the U.S, that is now a few million barrels per day lower than it was before the pandemic. Some 1 million barrels per day (bpd) of refinery capacity in America has been shut permanently since the start of the pandemic, as refiners have opted to either close losing facilities or convert some of them into biofuel production sites. Globally, refinery capacity is also stretched thin, especially after Western buyers — including in the U.S. — are no longer importing Russian vacuum gas oil (VGO) and other intermediate products necessary for refining crude into gasoline, diesel, and jet fuel. The fuel market is extremely tight in Europe, too, considering that many refiners refuse to stock Russian crude and suppliers shun Russian diesel, even if the EU is still struggling to reach a common stance on an embargo on Russian oil imports. In the U.S., refinery operable capacity was at just over 18 million bpd in 2021, the lowest since 2015, per EIA data. "As you well know, 1 million barrels of distillation capacity has exited the system since pre-pandemic," Distillate refining margins are sky high due to a shortage of refined product, he added. "How long that persists? I don't see any signs of it ending soon or well," Jennings said. Rising demand since economies reopened and people returned to travel, combined with lower refining capacity and very tight distillate markets have drawn down U.S. product inventories to below seasonal averages and at multi-year lows, with record-low inventories reported on the East Coast. Distillate fuel inventories fell by 900,000 barrels in the week ending May 6 and are about 23% below the five-year average for this time of year, the EIA said in its latest weekly inventory report. At 104 million barrels, distillate inventories — which include diesel — are at their lowest since 2008. On the East Coast, they are at their lowest ever, as the refinery capacity in the region has halved over the past decade to just 818,000 bpd now.Globally, around 3 million bpd of refining capacity has been shut down since early 2020, according to estimates from Wood Mackenzie. "For companies with aging refineries that required significant investment to remain viable, it has been difficult to justify the spending in the face of a weak demand outlook, particularly for gasoline as a result of increased fuel efficiency and the rise of electric vehicles," Ed Crooks, Vice-Chair, Americas, at WoodMac wrote last week. At the same time, new refining capacity in the Middle East and Asia is only now entering the market after being delayed, in part because of the pandemic and weak refining margins, Crooks notes.

Texas Oil and Gas Production Drops Month on Month - Texas crude oil and natural gas production dropped from January to February, according to the latest preliminary figures from the Texas Railroad Commission (RRC). The preliminary reported total volume of crude oil in Texas in February was 99.07 million barrels, equating to 3.53 million barrels per day, the RRC highlighted. The preliminary reported total volume of natural gas in February was 718.31 billion cubic feet, equating to 25.65 billion cubic feet per day, the RRC revealed. Back in April, the RRC outlined that the preliminary reported total volume of crude oil in Texas in January was 118.05 million barrels, equating to 3.80 million barrels per day. The preliminary reported total volume of natural gas was said to be 871.06 billion cubic feet, equating to 28.09 billion cubic feet per day. Crude oil and natural gas production as reported to the RRC for February 2022 came from 162,109 oil wells and 84,801 gas wells, the organization highlighted. Crude oil and natural gas production as reported to the RRC for January 2022 came from 162,579 oil wells and 85,812 gas wells, according to the organization. The RRC reported that from March 2021 to February 2022, total Texas reported production was 1.5 billion barrels of crude oil and 10.6 trillion cubic feet of total gas. Texas’ top five crude oil producing counties ranked by preliminary production for February 2022, as reported by the RRC, can be seen below: Earlier this month, the RRC revealed that it had issued a total of 946 original drilling permits in April 2022. This compared to a total of 1,176 original drilling permits in March 2022 and a total of 732 in April 2021, according to the RRC.

Magnolia Reaping 'Early Stages' of Growth from Austin Chalk Development - Magnolia Oil and Gas Corp. may be at the beginning of a year-long surge in production growth after a strong showing in the first three months of the year in the Eagle Ford Shale and Austin Chalk formation. The Houston-based independent previously launched development programs for parts of its South Texas assets, including the Giddings field and in Karnes County. Management in reporting the 1Q2022 results show those efforts are at the tipping point of a significant pay-off. CEO Steve Chazen said much of the first quarter’s success was from the Giddings, which has quickly grown from about one-third of total production to nearly 60%. More progress is expected, he said, as the company continues to develop the field. “With Giddings still in relatively early stages of development, our operating team’s improved understanding and growing experience will allow us to increase the oil and gas recovery ability…,” Chazen said. Magnolia reported 1Q2022 production at 6.5 million boe, up 15% from 5.6 million boe in the year-ago period. It was also a 3% sequential increase over the prior quarter. Average daily production for 1Q2022 was 71,835 boe/d, compared with 62,262 boe/d in 1Q2021. Natural gas production in 1Q2022 was 12,378 MMcf, versus 10,240 MMcf in 1Q2021. Average daily gas production was nearly 138 MMcf/d from 114 MMcf/d in the previous year’s first quarter. Oil production averaged 2.8 million bbl in the quarter, up from 2.6 million bbl in the year-prior period. Average daily oil production was 31,289 b/d from 28,808 b/d. Production was at the high end of guidance, attributed chiefly to the growth of its Giddings asset. The wells there produced 31% more oil during 1Q2022 than in the year-ago period.5:50 PM

BKV to buy ExxonMobil Barnett shale assets for $750 million -Subsidiaries of BKV Corp., Denver, will pay $750 million to acquire ExxonMobil’s operated and non-operated North Central Texas Barnett shale gas assets, ExxonMobil said in a release May 19. Additional payments are contingent on future natural gas prices, the oil and gas major said.BKV currently holds about 292,600 net acres in Denton, Parker, Tarrant, and Wise counties in Texas with current production of 550 MMcfd (gross), according to the company website. The private company was formed in 2015 by Thailand-based Banpu Public Co. Ltd. BKV acquired a large Barnett shale position through a $770-million deal with Devon Energy Corp., Oklahoma City, in 2019 (OGJ Online, Dec. 18, 2019).ExxonMobil removed the assets—operated by subsidiaries XTO Energy Inc. and Barnett Gathering LLC—from its development plan in 2020 as part of a larger strategy to prioritize investments on “advantaged assets with lowest cost of supply,” it said.XTO Energy had built a large position in major US shale, tight gas, and coalbed methane plays, amassing a 277,000-acre position in the Barnett specifically, before its 2009 acquisition by ExxonMobil in an all-stock deal valued at $41 billion (OGJ Online, Dec. 14, 2009; Jan. 1, 2010). At closing, BKV will acquire some 160,000 total net acres primarily in Tarrant, Johnson, and Parker counties, with additional smaller positions in Jack, Wise, Denton, Erath, Hood, and Ellis counties, BKV said in a separate release May 20. Average working interest is 93% in over 2,100 wells with operatorship positions, the company continued. Through the deal, BKV also will acquire some 750 miles of gathering pipelines, compression, and processing infrastructure. As part of the deal, all employees of ExxonMobil subsidiaries in the Barnett shale will receive full employment offers with BKV, according to ExxonMobil. The sale is expected to close in this year’s second quarter.

U.S. Shale Merger Creates A New $7 Billion Giant - Centennial Resource Development and Colgate Energy Partners III, LLC have agreed to combine in a $7.0-billion merger of equals, creating the largest pure-play exploration and production (E&P) firm in the Delaware Basin in the Permian, the companies said on Thursday.The combined firm will be the largest pure-play E&P company in the Delaware Basin, with around 180,000 net leasehold acres, 40,000 net royalty acres, and total current production of approximately 135,000 barrels of oil equivalent per day (Boe/d). The $7.0 billion merger of equals values Colgate at approximately $3.9 billion and is comprised of 269.3 million shares of Centennial stock, $525 million of cash, and the assumption of approximately $1.4 billion of Colgate’s outstanding net debt.The boards of directors of both companies have unanimously approved the deal, which is expected to close in the second half of this year.The new firm aims to significantly increase cash returns to shareholders, with over $1 billion of expected free cash flow in 2023 at current strip prices, Centennial and Colgate said.“We are excited to partner with Colgate as we share a common vision for the pro forma company that includes a strong balance sheet, a disciplined investment program to drive cash flow and a robust return-of-capital program,” said Sean Smith, Chief Executive Officer of Centennial.The deal follows a strong start to 2022 upstream mergers and acquisitions in the U.S. oil and gas industry, although activity slowed down after early March when oil prices spiked following the Russian invasion of Ukraine. A total of $14 billion in deals were announced during the first quarter of 2022, energy data analytics company Enverus said last month. The $6 billion in transactions in January 2022 was the strongest M&A market launch in five years. However, the last significant transaction in the first quarter occurred in early March before a spike in commodity prices temporarily halted activity, Enverus noted.

Indigenous citizens from U.S., Canada, Siberia converge for Line 5 ‘eviction’ anniversary ⋆ Michigan Advance - Canadian pipeline company Enbridge has been considered an international trespasser in the Straits by the state of Michigan since May 13, 2021. Rather than complying with Gov. Gretchen Whitmer’s order months before to cease operation by that date, Enbridge refused and filed a federal lawsuit to solidify their claim that only a federal agency can force a Line 5 shutdown. That lawsuit remains pending as a federal judge deliberates. Indigenous citizens from tribes in Michigan, Wisconsin, Minnesota, Maine, Canada and even Siberia, Russia, joined together Friday in Mackinaw City on the anniversary of the attempted Line 5 “eviction.” The numerous speakers uplifted treaty rights, shared Native wisdom and spoke out against extractive industries that disproportionately build into Indigenous lands. Chelsea Fairbank of Maine, whose doctoral work focuses on extractive fossil fuel sites on land that impacts Indigenous people in particular, said all residents of Turtle Island (North America) and beyond must break their “colonial relationship to land.” Indigenous activists and their supporters are “pushing back against the monsters of our world,” Fairbank said, pointing to oil infrastructure like Line 5 in Michigan and Line 3 in Minnesota. Both are owned by Enbridge and snake through treaty territories. She and others spoke to the importance of protecting treaty lands and waters from the dangers that fossil fuel projects can bring, like potential damage to manoomin (wild rice) in the Great Lakes region. “Where there’s manoomin, there’s great, pristine life,” said Dan Hinmon, who has spent the last 10 years harvesting and restoring wild manoomin beds in Michigan. Hinmon is a Little Traverse Bay Bands of Odawa Indians (LTBB) citizen and a treaty rights enhancement specialist for his tribe.Other speakers included a hydrogeologist, a chemical engineer, a hydrologist and more to underscore the potential environmental threats from oil pipelines. Sean McBrearty of Oil & Water Don’t Mix and Clean Water Action also shared the podium and broke down the legal fights over Line 5. Those speaking through the Indigenous lens included Pueblo/Yaqui/Apache attorney and activist Holly T. Bird, Skyler Williams from the Mohawk Nation of the Wolf Clan, Layla Staats of the Haudenosaunee, Amber George of the Wet’suwet’en Nation and several speakers, musicians and dancers from the Siberian region of Russia. The all-day event was punctuated by traditional dance, song and stories from various tribal backgrounds. Indigenous water protector group MackinawOde organized the two-day event which is slated to have an outdoors component in Mackinaw City on Saturday. Line 5 was built in 1953 and stretches from the far western border of the Upper Peninsula down into Canada near Detroit, running for approximately four miles under the environmentally sensitive Straits of Mackinac on its way into the Lower Peninsula. All 12 federally recognized tribes in Michigan publicly oppose the Line 5 pipeline and its proposed tunnel-enclosed replacement.

“Drill, Baby, Drill” 2022 Edition - by Menzie Chinn - Back in the more innocent days of 2010, we had Sarah Palin – “Drill, baby, drill” (more innocent because folk were just circulating doctored photos of President Obama, instead of threatening to kill elected officials). Now, we have a new chorus of people asserting that allowing more permitting would relieve gasoline price pressures. Well, from the Dallas Fed,, some text in plain English. Consumers and policymakers often ask what domestic oil producers can do to raise output and lower gasoline prices, especially since producers’ profitability has greatly improved in 2022. Because the price of crude oil is determined in global markets, increases in domestic oil production affect the retail price of gasoline only to the extent that they lower global oil prices.Many observers point out that oil companies currently hold nearly 9,000 permits to drill on federal lands. But holding 9,000 permits does not equate to 9,000 well locations that are worth drilling, nor would it be possible to churn through that much inventory in a reasonable time frame.Data provider Enersection found that since 2015, an average of 1,560 wells have been drilled on federal lands annually, but only 47 percent of federal permits issued were actually utilized. This is because companies tend to acquire permits on the acreage they lease even if they are not certain whether the location is worth developing.The latest Dallas Fed Energy Survey shows that investor pressure to maintain capital discipline—which precludes higher investment in expanding oil production—is the primary restraint on publicly traded companies. This is not simply a case of investors being selfish, but of investors who suffered persistent losses in years past wanting compensation for the risk they take. Depriving these investors of the returns they insist on, by whatever means, would likely be counterproductive because without these investors, the industry would lack the capital to maintain—never mind, increase—crude production going forward.Additionally, producers and service companies are constrained by labor shortages, rising input costs and supply-chain bottlenecks for vital equipment such as well casing and coiled tubing. An industry that lacks experienced staff and materials cannot on short notice substantially increase drilling and production.Complicating matters, many shale producers are running low on top-quality drilling locations. Thus, it would be unreasonable to expect a noticeable increase in oil production before 2023 at the earliest, even if investors were to agree to higher production targets.Higher U.S. Oil Production Might Not Lower Retail Gasoline Prices Apart from the difficulties of expanding domestic oil production, what are the odds of higher U.S. oil production growth materially lowering the prices of crude oil and gasoline?Even under the most optimistic view, U.S. production increases would likely add only a few hundred thousand barrels per day above current forecasts. This amounts to a proverbial drop in the bucket in the 100-million-barrel-per-day global oil market, especially relative to a looming reduction in Russian oil exports due to war-related sanctions that could easily reach 3 million barrels per day.Placing the responsibility to lower retail gasoline prices on shale oil producers is thus unlikely to work, and additional regulation of oil producers is unlikely to lower pump prices.

US fracking boom could tip world to edge of climate disaster - The fate of the vast quantities of oil and gas lodged under the shale, mud and sandstone of American drilling fields will in large part determine whether the world retains a liveable climate. And the US,the world’s largest extractor of oil, is poised to unleash these fossil fuels in spectacular volumes. Planned drilling projects across US land and waters will release 140bn metric tons of planet-heating gases if fully realised, an analysis shared with the Guardian has found. The study, to be published in the Energy Policy journal this month, found emissions from these oil and gas “carbon bomb” projects were four times larger than all of the planet-heating gases expelled globally each year, placing the world on track for disastrous climate change. The plans include conventional drilling and fracking spanning the deep waters of the Gulf of Mexico to the foothills of the Front Range in Colorado and the mountainous Appalachian region. But the heart is the Permian basin, a geological formation 250 miles wide that sits under the mostly flat terrain of west Texas and New Mexico.One lobe of this formation, known as the Delaware basin, is predicted to emit 27.8bn metric tons of carbon during the lifetime of planned drilling, while another, known as the Midland basin, will potentially unleash 16.6bn tons of emissions.It means the US, the centre of the world’s addiction to oil and gas, will play an outsized role in the heatwaves, droughts and floods that will impact people around the planet.Extracting oil and gas through unconventional methods such as fracking has expanded rapidly across the US over the past two decades, with at least 17.6 million people living within about half a mile (1km) of an active well. Further expansion will be catastrophic for climate change, and poses a growing threat to the health and wellbeing of families and communities living near drilling sites.

Revealed: the ‘carbon bombs’ set to trigger catastrophic climate breakdown - The world’s biggest fossil fuel firms are quietly planning scores of “carbon bomb” oil and gas projects that would drive the climate past internationally agreed temperature limits with catastrophic global impacts, a Guardian investigation shows.The exclusive data shows these firms are in effect placing multibillion-dollar bets against humanity halting global heating. Their huge investments in new fossil fuel production could pay off only if countries fail to rapidly slash carbon emissions, which scientists say is vital.The oil and gas industry is extremely volatile but extraordinarily profitable, particularly when prices are high, as they are at present. ExxonMobil, Shell, BP and Chevron have made almost $2tn in profits in the past three decades, while recent price rises led BP’s boss to describe the company as a “cash machine”.The lure of colossal payouts in the years to come appears to be irresistible to the oil companies, despite the world’s climate scientists stating in February that further delay in cutting fossil fuel use would mean missing our last chance “to secure a liveable and sustainable future for all”. As the UN secretary general, António Guterres, warned world leaders in April: “Our addiction to fossil fuels is killing us.” Details of the projects being planned are not easily accessible but an investigation published in the Guardian shows:

• The fossil fuel industry’s short-term expansion plans involve the start of oil and gas projects that will produce greenhouse gases equivalent to a decade of CO₂ emissions from China, the world’s biggest polluter.
• These plans include 195 carbon bombs, gigantic oil and gas projects that would each result in at least a billion tonnes of CO₂ emissions over their lifetimes, in total equivalent to about 18 years of current global CO₂emissions. About 60% of these have already started pumping.
• The dozen biggest oil companies are on track to spend $103m a day for the rest of the decade exploiting new fields of oil and gas that cannot be burned if global heating is to be limited to well under 2C.
• The Middle East and Russia often attract the most attention in relation to future oil and gas production but the US, Canada and Australia are among the countries with the biggest expansion plans and the highest number of carbon bombs. The US, Canada and Australia also give some of the world’s biggest subsidies for fossil fuels per capita.
• The dozen biggest oil companies are on track to spend every day for the rest of the decade $103m

At the UN’s Cop26 climate summit in November, after a quarter-century of annual negotiations that as yet have failed to deliver a fall in global emissions, countries around the world finally included the word “coal” in their concluding decision. Even this belated mention of the dirtiest fossil fuel was fraught, leaving a “deeply sorry” Cop president, Alok Sharma, fighting back tears on the podium after India announced a last-minute softening of the need to “phase out coal” to “phase down coal”.Nonetheless, the world agreed coal power was history – the question now was how quickly cheaper renewables could replace it, and how fair the transition would be for the small number of developing countries that still relied on it.But there was no mention of oil and gas in the Cop26 final deal, despite these being responsible for almost 60% of fossil fuel emissions.

Q&A: The Activist Investor Who Shook Up the Board at ExxonMobil, on How—or if—it Changed the Company - A year ago this month, a small hedge fund won an unlikely victory against ExxonMobil, gaining support from a majority of the company’s shareholders to replace three of its directors, against management’s wishes. The fund, called Engine No. 1, had argued that Exxon was failing to plan for a transition away from fossil fuels, and as a result was jeopardizing its long-term business prospects.While Engine No. 1 held only a tiny number of shares, it waged a six-month campaign and convinced large investors like BlackRock and State Street that Exxon needed fresh faces on its board of directors. Even before the vote, Exxon responded to the pressure by announcing a new low-carbon business line and more ambitious plans to reduce its own direct greenhouse gas emissions.This month, Inside Climate News talked with Charlie Penner, who was head of active engagement for Engine No. 1, to take stock of what, if anything, has changed. Penner has since left the fund, and he declined to comment on what comes next.This interview has been edited for length and clarity.

$230M settlement reached over 2015 California oil spill --The owner of an oil pipeline that spewed thousands of barrels of crude oil ontoSouthern California beaches in 2015 has agreed to pay $230 million to settle a class-action lawsuit brought by fishermen and property owners, court documents show.Houston-based Plains All American Pipeline agreed to pay $184 million to fishermen and fish processors and $46 million to coastal property owners in the settlement reached Friday, according to court documents.The company didn’t admit liability in the agreement, which follows seven years of legal wrangling. The agreement still must undergo a public comment period and needs federal court approval. A hearing on the matter is scheduled for June 10."This settlement should serve as a reminder that pollution just can’t be a cost of doing business, and that corporations will be held accountable for environmental damage they cause," said Matthew Preusch, one of the attorneys who represented the plaintiffs.Plains All American Pipeline officials didn’t immediately return a message Saturday from The Associated Press seeking comment.On May 19, 2015, oil gushed from a corroded pipeline north of Refugio State Beach in Santa Barbara County, northwest of Los Angeles, spreading along the coasts of Santa Barbara, Ventura and Los Angeles counties.It was the worst California coastal oil spill since 1969 and it blackened popular beaches for miles, killing or fouling hundred of seabirds, seals and other wildlife and hurting tourism and fishing.A federal investigation said 123,000 gallons spilled, but other estimates by experts in liquids mechanics were as high as 630,000 gallons.

Canada can boost oil output by 900,000 barrels a day, Kenney says — Canada’s oil production could increase by 900,000 barrels a day to make up for supply losses from Russia’s war in Ukraine, according to the premier of the province of Alberta. Premier Jason Kenney gave the estimate in testimony before a U.S. Senate committee on Tuesday. It’s about triple the estimate delivered weeks ago by Canadian Natural Resources Minister Jonathan Wilkinson. About 300,000 barrels a day of unused capacity exists in the North American pipeline system, which should be filled this year through higher output, Kenney said. Another 200,000 barrels of crude oil could be shipped by rail and “if midstream companies get serious about it, and if regulators approve it,” a further 400,000 barrels could be added through pipeline reversals and technical improvements. Boosting Canada’s oil output by that amount would not happen quickly. Canada exported about 3.9 million barrels a day of crude oil to the U.S. in the first two months of the year, according to data from the U.S. Energy Information Administration -- the bulk of the country’s production. By 2024, the completion of the Trans Mountain pipeline expansion project to British Columbia will give Canada even more capacity to ship oil to the US, Kenney said in an interview on Bloomberg Television. “My point is, let’s be visionary about this. Let’s have a North American energy alliance, and let’s get another major pipeline done because we’ve got the third-largest reserves on Earth up in Alberta,” he said. Energy producers can raise shipments of crude by 200,000 barrels a day and natural gas by the equivalent of 100,000 barrels by year-end by accelerating planned projects to expand output to help compensate for the loss of Russian supply, Wilkinson said at a March 24 press conference in Paris.

Pemex’s $12.5 Billion Dos Bocas Refinery Sees Higher Costs -- Petroleos Mexicanos’ beleaguered mega-refinery project in Dos Bocas could run at least $4.7 billion over budget with just months to go before its grand opening. Pemex, as the state-owned oil company is known, has budgeted $12.5 billion for the project through the end of 2022, and is expected to spend some $2 billion more on the project, according to company filings and a person familiar with the matter who asked not to be identified because the information isn’t public. Pemex is expected to hold a board meeting on Dos Bocas soon.

U.S. to ease sanctions on Venezuela, enabling cargoes to Europe — The Biden administration plans to ease sanctions on Venezuelan oil in a bid to bring more of the country’s crude to Europe. The U.S. will allow European companies still operating in Venezuela to divert more oil to the continent immediately while Chevron will be allowed to negotiate a resumption of operations in the country, according to a person familiar with the matter who spoke on condition of anonymity to detail the plans. The U.S.-backed Venezuelan opposition supports the move, the person said. The easing of penalties come as tightening global oil supplies send the cost of crude and fuels skyward, threatening to worsen already historic inflation. More barrels from Venezuela would help alleviate the supply crunch while also aiding Europe in weaning itself from Russian energy amid the superpower’s invasion of Ukraine. U.S. benchmark crude fell on the news. The move is meant to facilitate negotiations between the government of President Nicolas Maduro and the American-backed opposition, according to a second person who spoke on condition of anonymity. But it’s politically contentious, with some lawmakers arguing that the move only bolsters Maduro’s regime. Italy’s Eni SpA and Spain’s Repsol SA are the only major European oil producers with operations in the country. They are working with the Biden administration to divert Venezuelan oil bound for China to Europe, one of the people said. While Chevron currently isn’t allowed to drill for or export oil from Venezuela, the resumption of talks with state-owned PDVSA paves the way for the San Ramon, California-based company to obtain a new license allowing it to resume operations. It also signals that Venezuelan oil may be coming to the U.S., one person said.

Venezuela investors meet in Davos as U.S. weighs sanctions — Venezuela creditors are holding a rare meeting in Davos next week to discuss potential opportunities in the oil sector amid increasing optimism for investment in the country as the U.S. floats easing some sanctions. London-based brokerage IlliquidX Ltd. and Canaima Capital Management, a fund focused on distressed debt, are hosting the May 23 meeting with more than two dozen creditors in Davos on the sidelines the World Economic Forum to explain the implications of a potential opening in Venezuela’s oil sector. “It’s the first time a discussion like this is happening in Davos,” said Celestino Amore, chief executive officer of IlliquidX and co-founder of Canaima. “Investors want to know about eventual opportunities in the Venezuelan oil and gas sectors if sanctions are removed and what would be the impact on creditors.” Speakers at the event include former Shell Plc. executive Jeroen Van Der Veer, Venezuelan Oil Chamber President Reinaldo Quintero, sovereign debt restructuring expert Rodrigo Olivares-Caminal, Keith Mines, who handled Venezuelan affairs at the US State Department, economist and Council of Foreign Relations fellow Francisco Rodriguez, and director of consulting firm Araya Energy Group Juan Carlos Andrade. Venezuela remains deeply sanctioned and any restructuring of its more than $60 billion of defaulted debt is still nowhere in sight. But the global energy crisis caused by Russia’s invasion of Ukraine has opened a discussion on how Venezuela could help address oil supply disruptions. The US is currently planning sanctions relief targeting restrictions on oil companies working in Venezuela. Defaulted state-oil company bonds rose this week as investors priced in optimism over those potential changes. PDVSA notes maturing in 2024 jumped as much as 18% between Monday and Thursday to around 7 cents on the dollar, according to data compiled by Bloomberg. The market continues to be cautious, however, and the prices remain below levels seen in March following a visit by US officials to Caracas. On Friday, some bonds pared gains, with the 2024s falling to around 5 cents. US investors remained barred from buying the securities.

Peru sued Repsol for 4,500 million dollars for an oil spill -The measure was promoted by the National Institute for the Defense of Competition and the Protection of Intellectual Property (Indecopi) of Peru due to the pollution generated after the oil spill that occurred last January 15 in a refinery operated by the Spanish oil company and that affected twenty beaches on the Peruvian coast. “We have filed this lawsuit in accordance with the rules of the Civil Code, which establishes that whoever operates a dangerous asset or by carrying out a dangerous activity, and causes damage to others, is obliged to compensate him,” stated the director of Indecopi, Julián Palacín, in a video released by the institution. The oil spill, calculated in about 11,000 barrelsaffected 700,000 inhabitants and caused the closure of dozens of beaches, shops, restaurants and tourist services in the summer season, in addition to affecting fishing activity. The fine is 3,000 million dollars for the damages caused, plus 1,500 million for moral damages to consumers, users and those affected, a figure that has to be defined by the judge at the time of resolving. “The prejudice and moral damages suffered by the population of that area are protected by the rulings of the Inter-American Court of Human Rights,” Palacín said. He concluded by announcing that this is the first case in Peru where an international oil company is being sued for civil liability in defense of the interests of the population, and stated that this could be “a unique jurisprudential precedent” in the country. The civil claim for compensation for damages was filed before the 27th Civil Court of the Superior Court of Justice of Lima against six defendants: Repsol SA (Spain), Mapfre Global Risks (Spain), Mapfre Peru Insurance and Reinsurance Companies ( Peru), La Pampilla Refinery (Peru), Transtotal Maritime Agency (Peru) and Fratelli dŽamico Armatori (Italy). The fact The Repsol crude oil spill occurred on January 15 of this year at the La Pampilla Refinery, some 20 kilometers from Lima, and was defined by the UN “as the worst ecological disaster in the country’s history.” As reported by the company at the time, the accident occurred during the unloading process of the Italian-flagged “Mare Dorium” tanker, presumably due to the violence of the waves due to the volcanic eruption in tonga.

Peru Sues Spanish Oil Giant Repsol for Billions After “Worst Ever” Oil Spill --The Peruvian government has sued Spanish oil major Repsol and five other companies for the oil spill that occurred off the coast of Lima four months ago. The lawsuit, seeking $4.5 billion in damages, was filed before the 27th civil court in Lima against Repsol (Spain), Mapfre Global Risks (Spain), Mapfre Peru Insurance and Reinsurance Companies (Peru), La Pampilla Refinery (Peru), Transtotal Maritime Agency (Peru) and Fratelli d’amico Armatori (Italy, owner of the tanker involved), Peru’s consumer protection agency said.“We have filed this lawsuit in accordance with the rules of the Civil Code, which establishes that anyone who causes damage to others while operating a dangerous asset or conducting dangerous activity, is obliged to pay compensation,” said the agency’s director, Julián Palacín, in a recorded statement.The Repsol crude oil spill occurred on January 15 at the La Pampilla Refinery, some 20 kilometers south of Lima, and was described by the UN “as the worst ecological disaster in [Peru’s] history.” According to Repsol, the accident occurred during the unloading of the Italian tanker “Mare Dorium”, allegedly due to unusually rough seas caused by the eruption of a volcano near Tonga. Shortly after the spill at La Pampilla Peru’s then-prime minister (and now president of the Council of Ministers), Mirtha Vásquez, told journalists that Repsol “apparently” did not even have a contingency plan in place for an oil spill. The company’s initial response was certainly to play down the scale and scope of the disaster, describing the spill as “limited”. It even claimed that no more than seven gallons of oil had escaped into the sea.That tactic became less and less tenable as environmental groups began appraising the true scale of the damage inflicted. According to government estimates, as many as 12,000 barrels of oil spilled into the sea, causing the death of huge numbers of fish, marine mammals and birds across 140 kilometers of coastline. The spill led to the closure of dozens of beaches, shops, restaurants and tourist services in the summer season, in addition to affecting fishing activity.The effects on the environment, local communities and the economy have been brutal, Christel Scheske told The Guardian:“The environmental and social impacts of the Repsol oil spill in the short and long term are devastating, and the company’s response has been weak. The oil spill has affected a highly biodiverse part of the Peruvian coast, including two protected areas which are important not only for Peru’s astounding marine biodiversity, but also for over 1,000 artisanal fishers in the region that depend on them.Heavy metals from the crude oil will remain in the ecosystem for many years, rendering fish, molluscs and other marine species dangerous for human consumption, and affecting the entire marine food web.”Repsol’s strategy, which it has doggedly stuck to since, was to deny any responsibility for the disaster. An internal inquiry conducted by Repsol conveniently absolved the oil major of almost all responsibility, laying most of the blame for the spill on Giacomo Pisani, the captain of the Mare Doricum, reported Spanish daily El Mundo on Monday. But Pisani has already fled the scene, as Peru’s most widely read financial newspaper Gestion reports:

Peru requests extradition of Italian captain over oil spill - Peruvian prosecutors said Tuesday that they had requested the extradition of the Italian captain of a vessel as part of their investigation into the spill of thousands of barrels of oil off the coast of Peru. The prosecutors’ office in Peru said in a statement that the captain of the Mare Doricum, Giacomo Pisani, left the country on March 9. His departure came one day after a hearing in which he was prohibited from leaving Peruvian territory, according to authorities. Peru said 11,900 barrels were spilled on Jan. 15 in front of a Repsol refinery and that the spill was its “worst ecological disaster.” The spill in the Pacific occurred during an unloading of oil from the Italian ship, owned by the company Fratelli d’Amico Armatori S.p.A., that was destined for the refinery. Repsol, a Spanish company, has said huge waves created by a volcanic eruption in Tonga caused the spill and that the fault lies with the Mare Doricum oil tanker. The tanker’s owners dispute the allegation. Pisani and the local director of Repsol, Jaime Fernández-Cuesta, are among several people being investigated for the alleged crime of environmental pollution.

Peru demands Repsol compensates oil spill victims - Peruvian President Pedro Castillo on Monday asked Repsol to compensate those affected by a January oil spill in the Pacific, after his government sued the energy company for $4.5 million. Following the spill, the government in March said that Repsol had agreed to pay $805 to each of those affected, as part of a round of compensation. The company has insisted that about $7.8 million has been paid so far to 5,500 people. However, the government announced it was suing Repsol on Friday. The company then responded by saying that the lawsuit was unfounded because the estimates "lacked the slightest basis to support the figures indicated." The government had indicated in its civil lawsuit for damages that it represented the interests of about 700,000 parties. Speaking about the clean up operation, Castillo said that the Ministry of the Environment had "precise instructions to supervise the cleaning of the ecosystem" which impacted about 106 square kilometres, killed marine animals and polluted the sea along the country's coast. The spill occurred on January 15 and lasted at least eight minutes during the unloading of oil from the Italian-flagged ship Mare Doricum to a Repsol refinery. Peru has claimed that the spill of 11,900 barrels of crude oil into one of the most biodiverse seas in the world is the "worst ecological disaster" in its history.

UK Diesel Prices Reach Record High - Diesel prices in the UK have reached a record high of 180.29 pence ($2.21) per liter, the RAC highlighted on Monday. The price move comes less than two months after UK Chancellor Rishi Sunak announced a five pence ($0.06) per liter cut on the average price of fuel, the RAC pointed out. The previous diesel price high was recorded on March 23, 2022, at 179.90 pence ($2.207), the RAC outlined. The RAC, which highlighted that the UK government has tried to move away from its reliance on importing Russian oil in recent weeks, also warned that the price per liter for petrol cars is “fast approaching” record levels of 167.3 pence ($2.05) per liter, which were set on March 22. “Sadly, despite the Chancellor’s five pence a liter duty cut the average price of a liter of diesel has hit a new record high at 180.29 pence,” RAC fuel spokesperson Simon Williams said in a company statement. “Efforts to move away from importing Russian diesel have led to a tightening of supply and pushed up the price retailers pay for diesel. While the wholesale price has eased in the last few days this is likely to be temporary, especially if the EU agrees to ban imports of Russian oil,” Williams added in the statement. “Unfortunately, drivers with diesel vehicles need to brace themselves for yet more pain at the pumps,” Williams continued. The RAC’s fuel price watch tool is currently warning drivers that prices for unleaded, super unleaded and diesel are likely to rise.

Hungary says ditching Russian oil to cost at least $810 million — Hungary told its European Union counterparts that it will cost at least 770 million euros ($810 million) to revamp its oil industry as they wrangle over potential sanctions that would target Russian supplies. Prime Minister Viktor Orban’s government said 550 million euros were needed to overhaul its refineries to comply with the ban, and another 220 million euros for a pipeline from Croatia, according to people familiar with discussions that have taken place this week between EU ministers and documents seen by Bloomberg. Additional funds may be needed to adapt to a potential price spike resulting from a ban on Russian imports. Landlocked Hungary is also insisting that any restrictions should focus on sea-borne oil -- and exempt pipelines -- for Budapest to back the ban, according to people. The EU has given no indication of wanting to make that distinction in the sanctions package, which must be approved by all 27 EU states to go forward. As part of a broader strategy to wean Europe off Russian crude over the next six months and refined fuels by early January, the EU is expected to propose some investments this week to help countries that are most dependent on Russian supplies. It has also offered Hungary and Slovakia until the end of 2024 to comply, and the Czech Republic until June of the same year. One of the people said they hoped the package will convince Hungary to drop its veto threat and end a week of deadlock over the proposal. Orban has suggested the issue should be discussed by EU leaders, with the next European Council summit scheduled for end-May. The proposed sum is a fraction of the 15 billion to 18 billion euros that Hungarian Foreign Minister Peter Szijjarto said would be required to fix Hungary’s energy infrastructure in a tweet on Monday.

Progressives warn Europe against rush to LNG reliance - Democratic lawmakers raised alarms yesterday about the climate consequences of the rush to replace Russian energy in Europe with liquefied natural gas.The warning from both Senate and House Democrats comes as the European Union released a sweeping plan earlier this week to end imports of fossil fuels from Russia and rapidly scale up its use of renewable power. That plan acknowledges a need to import gas from other sources.In a letter sent to the White House and E.U. leadership, Rep. Jared Huffman (D-Calif.) and Sen. Jeff Merkley (D-Ore.) led 20 other colleagues in urging prudence in the build-out of natural gas import infrastructure in Europe.Such an effort could mean higher emissions profiles, the lawmakers warned, in contradiction to the goals of the Paris Agreement.“It is critically important that our countries not lock ourselves into decades of further reliance on fossil fuels when climate science, environmental justice, and public health concerns necessitate a rapid transition towards full renewable energy,” the lawmakers wrote.U.S. liquefied natural gas has emerged as a key leverage point in the rush to transition European countries off Russian oil and natural gas. Those products have been accused of financing Russia’s invasion of Ukraine.Earlier this week, Greek Prime Minister Kyriakos Mitsotakis said in an appearance to a joint session of Congress that LNG imports from the United States are among his country’s top priorities as it looks to build out an import energy hub for its surrounding region (E&E News PM, May 17). The comment earned a standing ovation from lawmakers in the chamber.Still, the progressive lawmakers argued in their letter that any fossil fuel infrastructure build-out would take at least three years to complete — far short of immediate energy demands. That money, they said, should go to renewable energy and efficiency improvements.“Building new fossil fuel infrastructure diverts resources from the investments we need to address the climate crisis and ensure the energy security from energy efficiency and renewable sources,” the lawmakers wrote.

Russia says half of Gazprom clients abroad opened ruble accounts — Around half of Gazprom PJSC’s foreign clients have complied with a request from Russia’s president to open accounts with Gazprombank JSC, according to Deputy Prime Minister Alexander Novak. The shift in procedure follows a demand by Vladimir Putin in March that foreign buyers open ruble and foreign-currency accounts at the bank to handle payments for natural gas. But European companies have feared that doing so might violate sanctions imposed on Russia following its invasion of Ukraine. “I think we have about 54 companies that have contracts with Gazprom Export,” Novak said Thursday at an event in Moscow. “According to the data I have, about half of them have already opened special accounts in our authorized bank -- foreign currency and ruble accounts.” Novak, who is also Russia’s top energy official, did not name the companies or countries complying with the new payment mechanism, saying only that some of Gazprom’s major clients have either paid for deliveries or are ready to pay on time, avoiding a supply cutoff. The market remains wary as payment deadlines fast approach. Moscow has already halted supplies to Poland and Bulgaria for non-compliance, and Finland has said there’s a “real risk” that flows will end this week as it’s refusing to pay in rubles. The European Union, which last year imported about 40% of its gas from Russia, has found itself divided over Putin’s order. The bloc has told member states that the proposed payment mechanism violates sanctions, yet there’s been nothing in writing from the European Commission that explicitly stops companies from paying Gazprom under the new rules.

Russia will shut off gas to Finland from Saturday, Finnish energy provider says -Russia may have just made its first retaliatory move against Finland after lawmakers in Helsinki officially applied to join the NATO military alliance. Gasum, Finland's state-owned gas wholesaler, said in a statement Friday morning that imports from Russia will be halted on Saturday. "On the afternoon of Friday May 20, Gazprom Export informed Gasum that natural gas supplies to Finland under Gasum's supply contract will be cut on Saturday May 21, 2022 at 07.00," it said in a statement. Gasum's CEO, Mika Wiljanen, added that the company had been preparing for such a situation "and provided that there will be no disruptions in the gas transmission network, we will be able to supply all our customers with gas in the coming months." "Gasum will supply natural gas to its customers from other sources through the Balticconnector pipeline. Gasum's gas filling stations in the gas network area will continue in normal operation," he said. A spokesperson for Gazprom was not immediately available when contacted by CNBC. It comes after Russia's state-run gas giant Gazprom in April told Poland and Bulgaria that it would halt flows after both countries refused Moscow's demand to pay for gas supplies in rubles. Gasum gave no reason for the move, but Finland has also reportedly refused to pay for Russian gas in rubles. It also comes just two days after Finland formally applied to join NATO. Russia had warned of retaliation if the traditionally neutral nation became a member of the Western military alliance. After Finland's application, alongside fellow Nordic nation Sweden, Moscow wasted no time in making its feelings known, with Russian President Vladimir Putin saying Monday that the expansion of NATO "is a problem." Putin said Russia would respond to an expansion of military infrastructure in Sweden and Finland, but also insisted Moscow had "no problems" with the countries.

UAE to more than double LNG export capacity with Fujairah plant — Abu Dhabi National Oil Co. plans to build a new liquefied natural gas plant as the world’s producers race to expand their exports amid surging demand. The LNG facility, to be built at Fujairah on the United Arab Emirates’ coast outside the Persian Gulf, will be able to produce as much as 9.6 million tons a year. The UAE currently has three liquefaction trains with a combined capacity of 5.8 mtpa at Das Island, which is located inside the Gulf. Adnoc has appointed McDermott International Ltd as design contractor and intends to award a contract for the construction of the plant in 2023, said the oil company in a statement on its Linkedin page. The plant will use new technologies and “clean power” to reduce the carbon intensity of the LNG it produces, according to the statement. Appetite for LNG among energy consumers has grown since Russia’s invasion of Ukraine, particularly in Europe, reinforcing a global market for the fuel that was already strengthened by rising demand in Asia last winter. While prices have eased slightly over the past month “higher prices and more volatility” are expected because of Europe’s switch to LNG, Biraj Borkhataria, associate director of European research at RBC Europe Limited, said in a note. A pipeline will be constructed linking Abu Dhabi’s Habshan gas production facilities to Fujairah and the liquefaction plant is scheduled to start in 2027, according to two people familiar with the matter. A spokesperson for the company declined to comment on the matter. A government official previously said the UAE was considering building an LNG plant at Fujairah to facilitate the extra exports and state producer Adnoc last month agreed to buy two LNG carriers from a Chinese shipyard. The UAE was the world’s 12th-largest LNG producer last year, making it a relatively small global player. However, a $20 billion push to develop more of its natural gas resources means it will be able to produce much more from about 2025 and the country aims to become self-sufficient by 2030.

Iran’s natural gas output to increase by 45 mcm in year to March -The National Iranian Gas Company (NIGC) will add around 45 million cubic meters (mcm) per day to the country’s natural gas output in the year to March 2023, says the CEO of the state-run company as he indicates that Iran’s gas supply to Iraq and Turkey may increase in the future. . Majid Chegeni said on Sunday that the NIGC will secure the increased gas output from Phase 11 and Phase 14 of South Pars, the world’s largest gas field that straddles Iran-Qatar maritime border in the Persian Gulf. Speaking on the sidelines of a major petroleum event in Tehran, Chegeni said that Iran’s total annual gas output is expected to reach a record of 278 billion cubic meters (bcm) this calendar year, up from 269 bcm reported in the year to March this year. He said that Iranian natural gas exports to neighboring Iraq and Turkey increased by 2% over the past calendar year to reach a total of 17 bcm. The official said gas exports to Iraq had increased to 35 mcm per day following recent talks between the two countries on how Iraq will settle previous debts. The NIGC chief said that Iran had met its contractual obligations regarding gas exports to Turkey over the last calendar year, adding that total exports to the country reached over 9 bcm over the period, up from a minimum of 8.5 bcm stipulated in the export contract. Chegeni said that both Turkey and Iraq have been negotiating with the NIGC to renew supply contracts that are set to expire in the near future. He added the two neighbors have asked for higher volumes of natural gas imports from Iran in future contracts.

Iran considering gas exports to Europe: official - Iran is considering the possibility of exporting gas to Europe, an oil ministry official said Sunday against the backdrop of soaring energy prices due to Russia’s war in Ukraine. “Iran is studying this subject but we have not reached a conclusion yet,” deputy oil minister Majid Chegeni was quoted as saying by the ministry’s official news agency, Shana. “Iran is always after the development of energy diplomacy and expansion of the market,” he added. Though Iran boasts one of the world’s largest proven gas reserves, its industry has been hit by US sanctions that were reimposed in 2018 when Washington withdrew from a landmark nuclear deal between Tehran and world powers. Talks aiming to revive the 2015 nuclear deal began last year in Vienna but have been on pause for weeks amid outstanding issues. Russia’s invasion of Ukraine in February sent global oil and gas prices soaring, with many European countries dependent on energy imports from Russia. The situation worsened Wednesday when Kyiv said Russia had halted gas supplies through a key transit hub in the east of the Ukraine, fueling fears Moscow’s invasion could worsen an energy crisis in Europe. Last year, the European Union received around 155 billion cubic meters of Russian gas, accounting for 45 percent of its imports. Iran’s deputy oil minister also confirmed that Tehran and Baghdad had signed a memorandum of understanding a few weeks ago that will see the Islamic republic increase gas exports to Iraq. “Gas exports from Iran increased and in this memorandum it was stated that Iraq’s debt of $1.6 billion to Iran will be paid by the end of May,”

$650B Worth of Oil Reserves Being Auctioned in Congo -Oil blocks that the Democratic Republic of Congo plans to auction have reserves estimated at 16 billion barrels that would be worth more than $650 billion at current prices, according to the country’s oil minister. Preliminary data compiled by Texas-based GeoSigmoid still need to be confirmed by further exploration and “the discovery of economically profitable hydrocarbon deposits,” Minister Didier Budimbu said Saturday in a speech announcing the results. The estimates are based on an oil recovery rate of 35% and an average price of $107 a barrel. The 16 blocks will go on tender on July 28 and 29 in Kinshasa, the capital. The four blocks along the Tanganyika valley are forecast to have 7.25 billion barrels of reserves while the nine offered in the Cuvette Centrale, or central basin, have an estimated 6.4 billion barrels, according to Budimbu. The Ndunda block near the Atlantic coast has an estimated 130 million barrels, while Nganzi potentially has 2 billion barrels, and Yema/Matamba-Makanzi 800 million barrels, he said. Congo is the largest country by landmass in sub-Saharan Africa with significant potential oil reserves but its current production is only about 25,000 barrels per day from aging oil blocks controlled by France’s Perenco SA on the Atlantic Ocean coast. While the blocks have potential to generate revenue in an impoverished nation whose budget for this year is projected at $11.1 billion, the tender offers have sparked concern among environmentalists over opening Congo’s massive rainforests and the world’s largest peatlands to exploration. The oil ministry said in a video presentation that the blocks were chosen “meticulously” and take into account the sensitivity of the country’s protected areas.

OPEC Authorizes Iraq to Increase Output to 4.5 Mln Bpd - Iraq’s representative at OPEC said the organization had agreed to the country increasing its output to 4.5 million barrels of oil per day (bpd) starting from June, the state news agency (INA) reported on Saturday. There will be further increases of 50,000 bpd in output in each of the months July, August and September, INA added, citing Muhammad Saadoun’s statements. Iraq pumped 4.43 million barrels per day (bpd) of oil in April, 16,000 bpd above its OPEC+ quota for that month, according to data from state-owned marketer SOMO seen by Reuters on May 11. Iraq’s March production was impacted by field outages in the south, pushing its output 222,000 bpd below the production ceiling for that month. Like several other OPEC members, Iraq has struggled to pump more oil at a time of already tight global supply and soaring prices. Almost half the global shortfall in planned oil supply by OPEC and its allies – a grouping known as OPEC+ – is down to Nigeria and Angola, due to several factors including the exit by Western oil majors from African projects. OPEC+ produced 1.45 million barrels per day (bpd) below its production targets in March, as Russian output began to decline following sanctions imposed by the West, a report from the producer alliance seen by Reuters showed. Russia produced about 300,000 bpd below its target in March at 10.018 million bpd, based on secondary sources, the report showed. OPEC+ compliance with the production cuts rose to 157 percent in March, from 132 percent in February, the data showed, the highest since the group introduced record production cuts of about 10 million bpd in May 2020 to counter the impact of the pandemic on demand. OPEC+ agreed last month to another modest monthly oil output boost of 432,000 bpd for May, resisting pressure by major consumers to pump more. As the group unwinds production cuts, several producers, namely West African countries struggling with under-investment and an exodus of international energy companies, are failing to keep up. At its meeting last month, OPEC+ also ditched the Paris-based IEA as one of its secondary sources, replacing it with consultancies Wood Mackenzie and Rystad Energy.

Oil giant Aramco reports record first quarter as oil prices soar - Oil giant Aramco reported a more-than 80% jump in net profit Sunday, topping analyst expectations and setting a new quarterly earnings record since its IPO. The Saudi Arabian behemoth said net income rose 82% to $39.5 billion in the first three months of the year, up from $21.7 billion over the same period last year. Analysts polled by Reuters had forecast net income of $38.5 billion dollars. The record quarter for Aramco comes amid a standout quarter for Big Oil, which is benefiting from a sharp rise in oil and gas prices. Aramco said its earnings were driven by higher crude oil prices, rising volumes sold and improved downstream margins. "During the first quarter, our strategic downstream expansion progressed further in both Asia and Europe, and we continue to develop opportunities that complement our growth objectives," Aramco President and CEO Amin Nasser said in the earnings release Sunday. "Against the backdrop of increased volatility in global markets, we remain focused on helping meet the world's demand for energy that is reliable, affordable and increasingly sustainable." With a market cap of around $2.43 trillion on Wednesday, Aramco last week surpassed Apple to become the world's most valuable company. The companies' market caps looked similar on Sunday. Aramco stock is up over 15% so far in 2022. In March, the oil giant reported that its full-year profit last year more than doubled due to the ongoing rise in oil prices, driven higher by Russia's invasion of Ukraine, looming European Union sanctions on Russian oil and the prospect of tighter supply. The Aramco results reflect an ongoing momentum in the oil and gas industry, which has benefited from a more-than 45% increase in prices since the start of the year. Earnings from Aramco's global peers such as BP and Shell have hit their highest level in years, despite incurring write-downs for exiting operations in Russia following the invasion of Ukraine. Aramco is rewarding investors as a result. The company said it would use $4 billion dollars in retained earnings to distribute bonus shares to shareholders — amounting to one share for every 10 shares held. It also kept its enormous dividend stable at $18.8 billion dollars, covered by a 68% year-on-year increase in free cash flow to $30.6 billion dollars.

Persian Gulf’s smallest oil producer looks to gas imports to meet demand — The smallest oil producer in the Persian Gulf is turning to natural gas imports to meet rising energy demand as production from its own deposits slips. Bahrain plans to import at least five or six cargoes of liquefied natural gas in 2025, according to Mark Thomas, chief executive officer of Nogaholding, which manages the country’s oil and gas infrastructure. The country may take a cargo of LNG in 2023 to test its infrastructure and plans to buy three to five cargoes in 2024 to meet surging demand during the summer months, he said. Middle Eastern oil producers like Saudi Arabia and the United Arab Emirates are ploughing billions of dollars into finding new gas resources for their expanding chemical and industrial sectors. As OPEC’s first and third-largest producers they can pump as much as 12 million and 4 million barrels a day, respectively. Bahrain is just a fraction of that and faces similar problems as it develops new, gas-dependent industries to bolster growth. Bahrain is at the “tipping point between supply and demand” as declining output will struggle to keep up with consumption unless the island nation can develop new resources, Thomas said in an interview Monday at the Middle East Petroleum Gas Conference. Bahrain is working with two international oil companies on exploration of unconventional offshore gas fields, said Thomas, without identifying the partners. Nogaholding is seeking an independent financial adviser to review the debt structure of the country’s oil businesses and to determine whether to sell assets to raise funds. Bahrain’s energy minister, speaking at the same conference, said the government would decide on a strategy to help fund further expansion of industry in Bahrain. That comes after Saudi Arabia sold shares in state producer Aramco and Abu Dhabi listed some of its oil assets.

CNOOC, Uganda petroleum authority conduct oil spill drill - The local branch of China National Offshore Oil Corporation (CNOOC) in Uganda and the Petroleum Authority of Uganda conducted the country's first oil spill emergency drill in Hoima, which will help enhance the nation's response capability to deal with pollution emergencies, the company told the Global Times on Tuesday. The drill simulated the rupture of inflow pipeline between the No.3 well filed in Kingfisher oilfield and the central processing station, incorporating different models and various scenarios, which fully tested the emergency response capability and collaboration between Uganda and oilfield operators in case of sudden crude oil spills. Chen Zhuobiao, the president of CNOOC Uganda, said that the company will continue strengthening safety awareness and urge contractors to implement safety and environmental protection measures to ensure that construction work for the Kingfisher oilfield project progress smoothly. A local official said that the drill improved the emergency response capability and practical skills for local oilfield operators, while enhanced the coordination capability of emergency disposal for various departments of the Uganda government, adding that it significantly promoted safe and efficient development of local oilfields. Uganda discovered the country's first commercial oilfield in 2006 in the Lake Albert area, covering an area of 1,518 square kilometers with 6 billion barrels of reserves. CNOOC-participated Lake Alberta project officially launched construction in February 2022, which is expected to begin production early 2025. The project will bring new development opportunities for Uganda to become an important crude oil producer in East Africa.

China In Talks To Buy Cheap Russian Oil For Strategic Reserves - China is in talks with Russia to buy its cheap oil to replenish strategic reserves, in the latest indicator of deepened energy ties between the two large powers and rivals to the United States. It's also the latest sign that a mulled EU Russian oil embargo may in the end be blunted before it ever gets off the ground, amid continuing inter-EU resistance led by Hungary.Bloomberg reports Thursday that "The crude would be used to fill China’s strategic petroleum reserves, and talks are being conducted at a government level with little direct involvement from oil companies, said a person with knowledge of the plan."Currently the EU is negotiating toward a phased embargo, seeking to find compromise with those central and eastern European members which are heavily dependent on Russian energy.The prior US ban on imports of Russian oil, which came early in the invasion of Ukraine, has already served to push more Russian oil tankers east towards Asia, diverting from Western markets. India too has reportedly been taking advantage of the comparatively cheaper prices.A source privy to the talks said they aren't close enough that a deal is guaranteed to be signed, nor is an estimated volume of crude Beijing is reportedly seeking known at this point."There is still room to replenish stocks and it would be a good opportunity for them to do so, if they can be sourced on commercially attractive terms," a senior oil analyst at industry firm Kpler, Jane Xie, told Bloomberg.The report cites the data analytics firm to estimate that China's "overall stockpiles are at 926.1 million barrels, up from 869 million barrels in mid-March -- but still 6% lower than a record in September 2020." And by way of comparison, "the US Strategic Petroleum Reserve has a capacity of 714 million barrels. It currently holds about 538 million barrels."

Oil prices rise on China's demand recovery, gasoline at an all-time high (Reuters) -Oil prices rose on Monday on optimism that China would see significant demand recovery after positive signs that coronavirus pandemic was receding in the hardest-hit areas. Brent crude rose $1.34, or 1.2%, at $112.89 a barrel at 12:10 p.m. EDT (1710 EDT) 1342 GMT, while U.S. West Texas Intermediate (WTI) crude rose $2.22, or less than 0.1%, to $$112.71 a barrel. Shanghai aims to reopen broadly and allow normal life to resume for the city's 25 million people from June 1, a city official said on Monday, after declaring that 15 of its 16 districts had eliminated cases outside quarantine areas. However, it is estimated that 46 cities in China are under lockdowns, hitting shopping, factory output and energy usage. In line with the unexpected industrial output decline, China processed 11% less crude oil in April, with daily throughput the lowest since March 2020. U.S. gasoline futures set an all-time high again on Monday as falling stockpiles fuelled supply concerns. [EIA/S] "Oil prices will remain bullish, especially WTI's near-term contract, as U.S. gasoline prices continued to rise amid weaker imports of petroleum products from Europe," Oil prices also found some support as the European Union's diplomats and officials expressed optimism about reaching a deal on a phased embargo of Russian oil despite concerns about supply in eastern Europe. Austria expects the EU to agree on the sanctions in the coming days, Foreign Minister Alexander Schallenberg said on Monday. German Foreign Minister Annalena Baerbock said the bloc would need a few more days to find agreement. "With a planned ban by the EU on Russian oil and slow increase in OPEC output, oil prices are expected to stay close to the current levels near $110 a barrel," said Naohiro Niimura, a partner at Market Risk Advisory.

Oil Rallies on China's Reopening Hope, Geopolitical Strife -- Reversing earlier losses, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange rallied in afternoon trade Monday, sending the international crude benchmark to a seven-week high $114.24 per barrel (bbl) settlement amid a one-two punch of heightened geopolitical tensions in Europe after Sweden and Norway made a formal decision to join the North Atlantic Treaty Organization, and the potential for a broader reopening of China's economy that is expected to boost oil demand this summer. China's economy suffered sharp contraction in April, with both manufacturing and service sectors eroding to levels not seen since the beginning of the Wuhan outbreak in February 2020. As COVID controls tightened the grip over China's major cities and mobility came to a standstill, refinery run rates plunged a staggering 11% in April, sending daily crude throughputs to their lowest point since March 2020. On the national level, industrial output declined 2.9% in April, but was isolated to Shanghai and Jilling -- the two areas most affected by the COVID lockdowns, with contraction for the two regions closer to 30%. Meanwhile, unemployment rate in China's 31 largest cities climbed to 6.1% in April, the second highest jobless rate since a 6.2% peak during the onset of the COVID 19 pandemic. Reports of social strife across China's universities likely pressured officials in Shanghai this weekend to signal the end of draconian lockdowns. Shanghai Vice Mayor Chen Tong said businesses such as shopping malls and hair salons will allow to gradually reopen next month, while consumers could shop in "an orderly way" under some restrictions. In European Union, geopolitical tensions flared after Sweden and Finland made an official bid to join NATO -- a decision Russian President Vladimir Putin called "a mistake." He said the movement of troops or weapons into new NATO states would cause Russia to react. Last week, Russian government announced countersanctions on several private companies in Germany and Poland that receive Russian gas through Nord Stream 1 and Yamal-Europe pipeline. Both pipelines are the only alternatives to the pipeline network that runs through Ukraine which was partially shutdown by Ukrainian authorities. Since then, Germany's government announced a plan to completely phase-out Russian oil imports by the end of the year even if a broader EU ban on Russian oil remains elusive. Russian exports of naphtha, a key component in diesel production, plunged in April to just about 333,000 barrels per day, according to Bloomberg calculations using data from analytics firm Vortexa Ltd. That's the lowest export rate since at least the beginning of 2016. Europe's imports of diesel from Russia are expected to drop following Sunday's (May 15) deadline, when sanctions on state-owned Rosneft Oil and Gazprom Neft take effect. At settlement, NYMEX June West Texas Intermediate rallied $3.71 bbl to $114.20 bbl, and Brent crude advanced to $114.24 bbl, up $2.69 bbl. NYMEX June RBOB futures climbed to a fresh record-high settlement of $4.0229 gallon on the spot continuous chart, while the June ULSD contract declined 1.37 cents to $3.9075 gallon.

Failure To Implement Russian Oil Ban Could Send Oil Crashing To $65 -- A key factor in the upper band of the benchmark crude oil trading ranges over the past weeks is market concern over a ban of Russian oil exports to the European Union (E.U.). Prior to the invasion of Ukraine, Europe was importing around 2.7 million barrels per day (bpd) of crude oil from Russia and another 1.5 million bpd of oil products, mostly diesel. This fear, though, is vastly overblown for several reasons analysed below. The removal of this particular fear factor in the oil price will allow oil prices to move back over the course of this year to the level they were before the Russia-Ukraine ‘war premium’ began to be priced in by the smart money in September 2021, which was around US$65 per barrel (pb) of Brent. The primary reason why a meaningful E.U. ban on Russian oil (or gas) will not occur is that it would require the unanimous backing of all of its 27 member countries. Even before the E.U.’s 27 member states met on 8 May to discuss pushing forward with the ban on Russian oil, Hungary and Slovakia had made it clear that they were not going to vote in favour of it. According to figures from the International Energy Agency (IEA), Hungary imported 70,000 bpd, or 58 percent, of its total oil imports in 2021 from Russia, while the figure for Slovakia was even higher, at 105,000 bpd, equating to 96 percent of all its oil imports last year. Other E.U. countries also heavily reliant on Russia’s Southern Druzhba pipeline running through Ukraine and Belarus have also made it clear that they are not willing to support the ban on Russian oil exports, the most vocal of which have been the Czech Republic (68,000 bpd, or 50 percent or its 2021 oil imports came from Russia) and Bulgaria (which is almost completely dependent on gas supplies from Russia’s state-owned oil giant Gapzrom, and its only refinery is owned by Russia’s state-owned oil giant, Lukoil, providing over 60 percent of its total fuel requirements). Other E.U. member states that are also especially dependent on Russian oil imports are Lithuania (185,000 bpd, or 83 percent of its 2021 total oil imports) and Finland (185,000 bpd, or 80 percent of its total oil imports). Even compromise proposals offered by the E.U. of allowing Hungary and Slovakia to continue to use Russian oil until the end of 2024 (and the Czech Republic until June 2024) were not enough to remove their opposition to the idea of the E.U. ban on Russian oil. […]All of this rhetorical flim-flam by Germany and the E.U. has resulted in an oil price that remains way above where it should be, given the confluence of multiple bearish factors currently at play. On the supply side there remain definite pledges from the U.S. Energy Secretary, Jennifer Granholm, to engineer a “significant increase” in domestic energy supply by the end of the year, with the U.S. also working to identify at least three million bpd of new global oil supply. There remains the prospect of further strategic petroleum releases as and when required both from the U.S. and from member countries of the IEA, and of a new ‘nuclear deal’ with Iran as the U.S. is still open to the idea. Additionally, the U.S.’s ability to pressure OPEC into increasing production has been increased by its resuscitating the threat of the ‘NOPEC’ Bill. On the demand side, there remains further likely destruction from the COVID-related lockdowns across China, and no prospect of its ‘zero-COVID’ policy being meaningfully relaxed, and of a series of U.S. interest rate hikes stifling economic growth elsewhere. It is apposite to note at this point that even without these bearish factors in play, Brent crude was trading at around US$65 pb before the real Russia-Ukraine war premium was kicked in by the smart money in September 2021 when U.S. intelligence officers started to notice highly unusual Russian military movements on the Ukraine border after the conclusion of the joint Russia-Belarus military exercises that had taken place.

Oil prices fall as EU fails to ban Russian oil exports -Oil prices fell on Tuesday on supply uncertainties as EU countries have so far failed to agree to ban Russian oil exports in the face of opposition from Hungary. International benchmark Brent crude was trading at $114.25 per barrel at 0619 GMT for a 0.47% decrease after closing the previous session at $114.79 a barrel. American benchmark West Texas Intermediate (WTI) was at $111.78 per barrel at the same time for a 0.03% loss after the previous session closed at $111.82 a barrel. Top EU diplomats on Monday gathered in Brussels to discuss the latest developments on the Russia-Ukraine war and to show the bloc’s support for Western Balkan countries. During a two-day meeting, the ministers planned to hold talks on the sixth sanctions package against Russia proposed by the European Commission last week, which includes highly divisive plans on the imposition of an oil embargo. However, the EU’s efforts have been facing opposition from Hungary, which demands “15-18 billion euros” from the bloc to mitigate the cost of ditching Russian crude.” “Unfortunately, the whole (European) Union is held hostage by one country which cannot help us to find consensus,” Lithuania’s top diplomat Gabrelius Landsbergis said on Monday, referring to Hungary. Ukraine’s Foreign Minister Dmytro Kuleba on Monday also confirmed that Hungary appears to be the only country raising opposition. On the demand side, weak economic data from China, which added to investor concerns over an economic downturn amid price pressure and rising borrowing costs, also put downward pressure on oil prices. Retail sales and factory output in China fell in April to their lowest levels in roughly two years, according to official data. Chinese data also showed that the economy processed 11% less crude oil in April than a year earlier, a result of the country’s restrictions due to the coronavirus pandemic.

Oil Futures Plunge in MOC Trade Ahead of US Stock Report -- Oil futures nearest delivery fell more than 2% in market-on-close trade Tuesday in reaction to reports suggesting the Biden administration is prepared to lift some sanctions on Venezuelan oil exports amid a tightening global market as traders positioned ahead of the release of weekly U.S. inventory report. Demand for motor gasoline regained momentum in the second week of May, according to DTN Refined Fuels Demand data, increasing 2.7% from the previous week. At 225 million bbl, gasoline stockpiles currently stand at the lowest level this year and about 5% below the five-year average.The situation is more dire for distillate stocks that fell to their lowest level in 17 years in early May and are about 23% below the five-year average. U.S. distillate inventories likely halted a destocking pattern near 104 million bbl last week, according to industry analysts.Commercial crude oil inventories are projected to have climbed by 1.4 million bbl for the week ended May 13, although estimates range from a decrease of 1.6 million bbl to an increase of 4 million bbl. Refinery tun rates likely rose by 0.6% from the previous week to 90.6% of capacity.The closely watched report from the American Petroleum Institute is scheduled for release at 4:30 p.m. ET, followed by official data from the U.S. Energy Information Administration Wednesday morning.Media airwaves were hit with reports Tuesday afternoon that Biden administration will begin to ease some sanctions on Venezuelan oil exports to encourage ongoing dialogue between the South American President Nicolas Maduro and the opposition. Although details of negotiations have not been made public, speculation has swirled for months that the White House is prepared to replace some Russian oil exports sanctioned in response to President Vladimir Putin's invasion of Ukraine with Venezuelan barrels. Previously, the White House allowed Chevron to negotiate a license with Venezuelan state-owned oil company PDVSA but has not allowed entry into any production agreement. That might change this week.According to the latest data, Venezuela's crude oil production now stands at its lowest level in more than 50 years. Output in April averaged just 668,000 barrels per day (bpd), according to OPEC, down markedly from a presanction high of 2.3 million bpd in 2018. At settlement, NYMEX June West Texas Intermediate plunged $1.80 bbl to $112.40 bbl, and Brent crude declined to $111.93 bbl, down $2.31 bbl. NYMEX June RBOB futures retreated 8.12 cents from Monday's $4.0640 record-high settlement on the spot continuous chart to $3.9417 gallon, while the June ULSD contract dropped 10.82 cents to $3.7993 gallon.

API Reports Inventory Draws In Crude, Gasoline Despite SPR Release -The American Petroleum Institute (API) reported a draw this week for crude oil of 2.445 million barrels, compared to analyst predictions of a 1.533 million barrel build.The draw comes even as the Department of Energy released 5 million barrels from the Strategic Petroleum Reserves in Week Ending May 13.U.S. crude inventories have shed some 76 million barrels since the start of 2021 and about 18 million barrels since the start of 2020, according to API data.In the week prior, the API reported a build in crude oil inventories of 1.618 million barrels after analysts had predicted a draw of 457,000 barrels.Oil prices were trading up on Tuesday as the market anticipates a resurgence in oil demand from China, with Shanghai returning to normal as early as June 1.WTI was trading up 0.56% at $114.80 per barrel on the day at 11:21 a.m. ET—up roughly $15 per barrel on the week. Brent crude was trading up 0.51% on the day at $114.80—and up nearly $17 per barrel on the week, with the spread between the two benchmarks now completely evaporated.U.S. crude oil production fell to 11.8 million bpd in the week ending May 06—the first drop since the end of January. Crude production in the United States is down 1.3 million barrels per day from pre-pandemic times.This week, the API reported a draw in gasoline inventories of 5.102 million barrels for the week ending May 13—after the previous week's 823,000-barrel build.Distillate stocks saw a build in inventories of 1.075 million barrels for the week compared to last week's 662,000-barrel increase.Cushing saw a 3.071-million-barrel draw this week. Cushing inventories slipped to 28.242 million barrels in the week prior, as of May 6, according to EIA data—down from 59.2 million barrels at the start of 2021, and down from 37.3 millin barrels at the end of 2021.At 4:39 pm, ET, WTI was trading at $112 (-1.93%), with Brent trading at $111.30 (-2.58%).

WTI Gains After US Retail, Industrial Data Lift Outlook -- West Texas Intermediate futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange advanced in pre-inventory trade Wednesday after industry data from the American Petroleum Institute reported gasoline stocks in the United States declined by a larger-than-expected margin for the second consecutive week in May. This heightened fears over low inventory levels heading into the summer driving season, while upbeat data on consumer spending and industrial production for April showed continued momentum for the U.S. economy despite rising inflation. U.S. industrial production increased more than expected in April and marked the fourth consecutive month of gains above 0.8% amid continued strong demand for durable goods. Consumer demand for durable goods such as autos and home appliances have underpinned growth in manufacturing for more than two years into the pandemic. For comparison, production at U.S. factories for the first three months of the year was 0.6% higher compared with the same period a year ago even as inflation surged to a four-decade high 8.3%. "In April, all major market groups recorded gains, with most rising around 1%. A step-up in the production of motor vehicles contributed to increases of 1.5%, 3.3%, and 1.1% for consumer durables, transit equipment, and durable materials, respectively," said the U.S. Federal Reserve in its monthly report on industrial production. Furthermore, U.S. retail sales for April showed Americans are still spending on merchandise at a rapid clip, potentially fueled by credit-card borrowing, suggest some economists. The value of overall retail purchases increased 0.9% in April, after an upwardly revised 1.4% gain in March, Commerce Department figures showed Tuesday. Excluding vehicles and gas stations, sales rose 1% last month. The figures are not adjusted for inflation. Separately, API late Tuesday showed commercial crude oil stocks in the United States declined 2.445 million barrels (bbl) for the week ended May 13, contrasting with estimates for a 1.4-million-bbl build, with inventory at the Cushing tank farm in Oklahoma having been drawn down 3.071 million bbl. Gasoline stocks declined by a steep 5.102 million bbl that was more than estimates for a 1-million-bbl decrease. Against expectations for no change in distillate fuel inventory during the week ended May 13, API reported a 1.075-million-bbl build. Demand for motor gasoline regained momentum in the second week of May, according to DTN Refined Fuels Demand data, increasing 2.7% from the previous week. At 225 million bbl, gasoline stockpiles currently stand at the lowest level this year and about 5% below the five-year average. Near 7:30 a.m. EDT, NYMEX June West Texas Intermediate advanced $1.91 bbl to $114.32 bbl, and Brent crude rallied to $113.36 bbl, up $1.43 bbl. NYMEX June RBOB futures softened 0.40 cents to $3.9770 gallon, retreating from Monday's $4.0640 record high on the spot continuous chart, while the June ULSD contract surged 2.67 cents to $3.8260 gallon.

WTI Erases Gains Despite Big Crude, Gasoline Draws; SPR At 1987 Lows - Oil pries are up overnight as China relaxed some of its quarantine restrictions on Shanghai extending gains from the surprise crude draws reported by API. For now, all eyes are on the middle market as refineries shift their mix amid record high gasoline and diesel prices..."Gasoline prices on the exchanges had followed the two price peaks seen on the crude oil market in March to only a disproportionate extent. Margins had increased on the diesel market in particular, partly because product stocks were and remain very low. The focus appears to be shifting as the summer driving season draws ever closer in the US: the crack spread on the diesel market has dropped back noticeably while that on the gasoline market has soared," Will the official data confirm API's draws after last week's huge official build in crude stocks? API

• Crude -2.445mm (+1.553mm exp)
• Cushing -3.071mm - biggest draw since Oct 2021
• Gasoline -5.102mm - biggest draw since Oct 2021
• Distillates +1.075mm

DOE

• Crude -3.394mm (+1.553mm exp)
• Cushing -2.403mm - biggest draw since Feb
• Gasoline -4.779mm - biggest draw since Oct 21
• Distillates +1.235mm

This is the 7th straight weekly draw in gasoline stocks (and 14th week of the last 15) and we are seeing a major crude draw... Distillates stockpiles recovered on the East Coast and nationally. Full Colonial pipes carrying maximum distillates and gasoline are moving at a much faster pace to Linden, New Jersey.The headline draw of 3.4 million barrels in crude stockpiles was supplemented by the withdrawal of another 5 million barrels of crude from the Strategic Petroleum Reserve last week. That’s 30 straight weeks of crude draws from the SPR, and there’s going to be many more of them to come.

Oil falls 2.5% as US refiners ramp up output, equities retreat – CNA Oil prices fell 2.5 per cent on Wednesday, reversing early gains as traders grew less worried about a supply crunch after government data showed U.S. refiners ramped up output, and as crude futures followed Wall Street lower. Brent crude futures for July settled down $2.82, or 2.5 per cent, at $109.11 a barrel. U.S. West Texas Intermediate (WTI) crude for June fell $2.81, or 2.5 per cent, to $109.59 a barrel. Both benchmarks gave up early gains of $2-$3 a barrel following a change in risk sentiment as equity markets fell, said UBS analyst Giovanni Staunovo. U.S. crude inventories fell by 3.4 million barrels last week, government data showed, an unexpected drawdown, as refiners ramped up output in response to tight product inventories and near-record exports that have forced U.S. diesel and gasoline prices to record levels. U.S. gasoline prices fell 5 per cent, two days after touching a record high. Capacity use on both the East Coast and Gulf Coast was above 95 per cent, putting those refineries close to their highest possible running rates. "While on the face of it, the report was extraordinarily bullish, they (refiners) are racing to put more refined product on the market... there's obviously a refiners response," said John Kilduff, a partner at Again Capital LLC. The dollar strengthened and global stocks retreated on concerns about economic growth and rising inflation. Bearish sentiment also followed reports that the United States is planning to relax sanctions against Venezuela and allow Chevron Corp to negotiate oil licenses with state producer PDVSA. "The perception that we could see some more supply coming Venezuela coming into the market, along with the equity markets, it's causing some profit taking in a much-needed technical correction in the crude," said Dennis Kissler, senior vice president for trading at BOK Financial. The European Union's failure to persuade Hungary to lift its veto on a proposed embargo on Russian oil was adding price pressure, although some diplomats expect agreement on a phased ban at a summit at the end of May. Ongoing supply concerns remained supportive. Russian crude output in April fell by nearly 9 per cent from the previous month, an internal OPEC+ report showed on Tuesday, as Western sanctions on Moscow curbed exports. On the demand side, hopes of further lockdown easing in China boosted expectations of a recovery. Authorities allowed 864 of Shanghai's financial institutions to resume work, sources said, and China has relaxed some COVID test rules for U.S. and other travelers.

Oil prices extend losses on fears of economic slowdown - Oil prices fell on Thursday, following earlier gains, on concerns that high fuel prices could hurt economic growth, but planned easing of restrictions in Shanghai and a tight supply outlook capped losses. Brent crude futures for July were down $1.25, or 1.2 percent, at $107.86 a barrel by 0932 GMT. US West Texas Intermediate (WTI) crude futures for June fell $1.96, or 1.8 percent, to $107.63 a barrel. Front-month prices for both benchmarks fell about 2.5 percent on Wednesday. “Slumping stocks led by the US retail sector raised concerns about growth, and with that, demand for fuels,” Saxo Bank analyst Ole Hansen said. Heavy falls on European and Asian stock markets followed Wall Street’s worst day since mid-2020, as stark warnings from some of the world’s biggest retailers underscored just how hard inflation is biting. The looming possibility of a European Union ban on Russian oil imports has been supporting prices, however. This month the EU proposed a new package of sanctions against Russia for its invasion of Ukraine, which Moscow calls a “special military operation.” That would include a total ban on oil imports in six months’ time, but the measures have not yet been adopted, with Hungary among the most vocal critics of the plan. Russian Deputy Prime Minister Alexander Novak said on Thursday that Moscow would send any oil rejected by European countries to Asia and other regions. Novak said Russian oil production was about 1 million bpd lower in April but had increased by 200,000 bpd to 300,000 bpd in May with more volumes expected to be restored next month. On Wednesday, the European Commission unveiled a 210-billion-euro ($220-billion) plan for Europe to end its reliance on Russian fossil fuels by 2027, and to use the pivot away from Moscow to quicken its transition to green energy. Also, US crude inventories fell last week, an unexpected drawdown, as refiners ramped up output in response to tight product inventories and near-record exports that have forced US diesel and gasoline prices to record levels. Capacity use on both the East Coast and Gulf Coast was above 95 percent, propelling those refineries close to their highest possible running rates. In China, investors are closely watching plans to ease coronavirus curbs from June 1 in the most populous city of Shanghai, which could lead to a rebound in oil demand from the world’s top crude importer.

Oil Turns Higher as Traders Focus on Global Fuel Shortage -- After Thursday morning selloff triggered by concerns over a potential U.S. recession, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange turned positive to settle Thursday's session with gains between 2% and 3% as investors refocused on tightening fuel supplies in the United States, with nationwide distillate inventories drawn down to their lowest level in 14 years. Global commodity markets continue to suffer from persistent fuel shortages in the United States, Europe and Asia as economies bounced back from pandemic restrictions this year. Domestically, inventories of distillate fuels that are primarily used in manufacturing, shipping and construction fell to 105 million barrels (bbl) -- the lowest level since the summer of 2008 that was quickly followed by the onset of the great financial crisis and recession. Similar trend can be observed in Europe where distillate stocks also fell to a 14-year low 378 million bbl in April. China doesn't publicly disclose the size of its product and crude inventories, but wire services report that Beijing is actively engaging Moscow to buy additional oil to replenish its dwindling petroleum stocks. Refiners in China have been quietly buying Russian crude since the invasion, even as a COVID-19 resurgence dents consumption in the world's biggest crude importer. China's oil demand last month slumped 6.7% year-on-year as strict lockdowns confined millions to their homes. Kpler estimates China's overall crude stockpiles stand at 926.1 million bbl, up from 869 million bbl in mid-March -- but still 6% lower than a record in September 2020. By comparison, the U.S. Strategic Petroleum Reserve currently holds about 538 million bbl. Also lending price support, Wednesday's weekly report from the Energy Information Administration which revealed U.S. commercial crude oil inventories fell to their lowest point since January 2005 and gasoline stocks eroded to a fresh one-year low ahead of the summer driving season, with demand for the motor transportation fuel topping 9 million barrels per day (bpd) last week. Refinery crude throughputs climbed above the five-year average for the first time in a month as refiners processed over 15.9 million bpd, which helped ease concerns over a crunch in gasoline and diesel supplies. Earlier in the session, oil complex came under selling pressure from investor concerns over a potential recession looming over the U.S. economy with decades-high inflation and an aggressive rate hike trajectory laid out by the Federal Reserve seen slowing growth. The Federal Reserve, for its part, has said it won't stop hiking the federal funds rate until there is "clear and convincing" evidence that inflation is slowing, West Texas Intermediate June futures rallied $2.62 to $112.21 bbl after hitting an intrasession low of $105.13 bbl, and the July contract settled at more than $2 discount ahead of the June contract's expiration Friday afternoon (May 20). Brent crude for July delivery advanced $2.93 to $112.04 bbl. NYMEX June RBOB rallied 11.11 cents to $3.8317 gallon, while front-month ULSD gained more than 12 cents to settle at $3.7920 gallon.

Oil prices steady amid prospect of increase in Chinese demand in week ending May 20 -Oil prices were mainly steady on Friday as loosening of COVID-19 restrictions in China helps fuel demand and the impending EU ban on Russian crude jeopardizes stability of the global demand and supply balance. International benchmark Brent crude opened trading day at $114.24 on Monday but dropped to $112.41 at closing as European countries failed to come to a unanimous understanding of how to enact a ban on Russian crude exports. American benchmark West Texas Intermediate (WTI) ended the day at $107.37 on Monday after starting at $107.20. On the last trading day of the week, the news flow from China shows its effect on the market. The record cut in loan interest rates in China reduced the economic concerns in the markets to some extent. However, the detection of COVID-19 cases outside the quarantine zones in Shanghai, which was struggling with the epidemic, brought up the concerns about the measures again. In Shanghai, which has entered the 8th week of the quarantine measures implemented due to the pandemic triggered by omicron cases in China, one of the world's largest oil consumers, manufacturing, construction and trade companies carry out their activities under closed-circuit epidemic protection measures. China on Friday cut a key interest rate for long-term loans for the second time this year as part of a push to overcome the impact of stringent COVID-19 lockdowns and a downturn in the property sector. The five-year loan prime rate, a reference for mortgages, was lowered by 15 basis points to 4.45% from 4.6%, the People’s Bank of China said in a statement. In addition, Iran is having difficulties in selling its crude as more Russian oil is available and Iranian crude exports to China declined sharply since the start of the Ukraine war as China buys discounted Russian oil. Meanwhile, the European Commission issued new guidance on Tuesday on how EU companies can pay for Russian gas in rubles without violating the bloc's sanctions. On Wednesday, European Commission head Ursula Von der Leyen unveiled a €300 billion ($315 billion) plan to end Europe's reliance on Russian energy. She outlined a three-step plan, called Repower EU, which focuses on the demand side, supply side and accelerating the clean energy transition. A possible European ban on Russian oil imports is still being discussed within the respective EU bodies and negotiations are going on between the member states. Oil prices closed at $112.04 on Thursday and rose on Friday to around $112.34 at 1226 GMT. WTI was at $109.80 per barrel at the same time after the previous session closed at $109.89 a barrel.

Oil Gains With Equities Rebound, Russian Output in Focus - With U.S. equities rebounding after a three-session selloff, oil futures traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange advanced in early trade Friday as investors reassess the impact of the disruption to Russian oil production this summer after China reportedly entered discussions to buy additional oil from Russia to replenish its crude oil reserves. China's oil reserves are estimated to have fallen around 10% so far this spring, with Kpler estimating China's overall crude stockpiles currently stand at 926.1 million barrels (bbl). Storage capacity could be as high as 1 billion bbl, with China secretive regarding its oil infrastructure and inventory levels. China's reserves are said to have reached a record high in September 2020 when Chinese traders went on a buying spree to scoop up discounted oil. For comparison, U.S. Strategic Petroleum Reserve currently holds about 538 million bbl. China's decision to restock reserves with discounted Russian oil would lend support for the Russian oil industry that has been battered by Western sanctions in the aftermath of its invasion of Ukraine. After falling more than 1 million barrels per day (bpd) in April, Russian oil production recovered somewhere between 200,000 and 300,000 bpd in early May, with the rebound expected to continue in June, according to Russian Prime Minister Alexander Novak. Nonetheless, Russian oil production is still seen falling by as much as 17% in 2022, according to government forecasts, as the country struggles with Western sanctions The scale of the production decline would be the most significant since the 1990s when the oil industry suffered from mismanagement and underinvestment. In April, Russia's oil production is estimated to have fallen to 9.14 million bpd -- the lowest since Spring 2020. Disruption of Russian oil production comes at a time when global commodity markets suffer from acute shortages of fuels, especially middle distillates which correlate closely with economic activity. Middle distillates are primarily used in manufacturing, shipping and construction. Domestically, distillate inventories fell to the lowest level since the summer of 2008 that was quickly followed by the onset of the Great Financial Crisis and recession. Similar trends can be observed in Europe where distillate stocks also fell to a 14-year low 378 million bbl in April. Also lending price support, Wednesday's weekly report from the Energy Information Administration which revealed U.S. commercial crude oil inventories fell to their lowest point since January 2005 and gasoline stocks eroded to a fresh one-year low ahead of the summer driving season, with demand for the motor transportation fuel topping 9 million bpd last week. Refinery crude throughputs climbed above the five-year average for the first time in a month as refiners processed over 15.9 million bpd, which helped ease concerns over a crunch in gasoline and diesel supplies. Near 7:30 a.m. EDT, West Texas Intermediate June futures gained $0.24 to $112.45 bbl ahead of expiration Friday afternoon, while the July WTI contract narrowed its discount to the expiring contract $2.21 bbl. Brent crude for July delivery advanced $0.53 to $112.57 bbl. NYMEX June RBOB rallied 3.55 cents to $3.8672 gallon, while front-month ULSD traded mostly unchanged near $3.7935 gallon.

Oil Hit Weekly Gain as Rising Fuel Demand Offset Broader Economic Fears | Rigzone -Oil set its fourth straight weekly gain as product markets remain tight amid strong demand, eclipsing concerns about an economic slowdown that have roiled financial markets. West Texas Intermediate rose to settle above $113 a barrel, after fluctuating in a session where equities slid closer to a bear market, weighing prices. Despite the choppy trading, oil posted its best run of weekly increases since mid-February. Rising demand for motor fuels and shrinking inventories ahead of the summer driving season underscored a fundamentally tight supply situation even as broader economic fears shook equity markets. “There continues to be a disconnect between the risk financial markets associate with crude financial assets and the physical market that is trying to digest SPR releases to meet product demand,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. “This dichotomy keeps markets fragmented and volatile - it could end up being a cruel summer for energy traders.” Crude has surged almost 50% this year, also helped along by Russia’s assault on Ukraine that sent shock waves through markets. While the US and UK have announced bans on Russian exports, flows to Asia have picked up. China is seeking to replenish strategic stockpiles with cheap Russian oil even as officials grapple to suppress Covid-19 outbreaks. India has also boosted purchases. There were mixed signals from China on Friday. While banks cut a key interest rate for long-term loans by a record to bolster a slowing economy, Shanghai found the first cases of Covid-19 outside quarantine in six days. It raises questions on whether the easing of the city’s lockdown will be impacted. Prices: WTI for June delivery rose $1.02 to settle at $113.23 a barrel in New York. WTI for July, which has greater volume and open interest, rose 39 cents to settle at $110.28. Brent for July rose 51 cents to settle at $112.55 a barrel. The global benchmark’s prompt spread, the difference between its two nearest contracts, widened to as much as $2.59 in backwardation -- a bullish pattern -- compared with $1.80 a week ago Traders are also keeping a close eye on refined products market, as a a global crunch on inventories coincides with entering the summer driving season. On Wednesday, US crude data revealed continued market tightness with gasoline inventories falling to the lowest since December and a pickup in demand. Oil’s jump has contributed to the fastest inflation in decades, prompting the US Federal Reserve to vow that it’ll go on raising interest rates until there are clear signs that price pressures are easing. That’s spurred wild shifts in investors’ appetite for risk, swinging equity, bond and commodity markets.

Qatar pledges $2m to address oil tanker threat off Yemeni coast - Qatar has pledged a $2 million donation to the combat the threat posed by the floating oil tanker ‘Safer’ off Yemen’s coast. This was announced during Qatar’s speech, presented by Nasser bin Ibrahim Al Langawi, Ambassador to the Netherlands, at a high-level pledging conference for Yemen, co-sponsored by the UN and the Dutch government, to confront the threat of the ‘Safer’ oil tanker. Al Langawi also praised the UN’s ongoing efforts to negotiate with the Yemeni government over the floating oil tanker ‘Safer’ off Yemen’s coast, as well as the active involvement of UN Resident and Humanitarian Coordinator for Yemen David Gressly. The FSO Safer, which carries more than four times the oil on board the Exxon Valdez when it ran aground in Prince William Sound in Alaska, in 1989, has the potential to become one of the biggest environmental disasters in history. The ship might disintegrate or explode at any time, according to international authorities, wreaking havoc on the countries and marine life along the Red Sea, as well as worldwide supply chains that rely on transiting those seas. The UN has only raised half of the $80 million it needs to start an emergency operation to remove the oil off the ship it calls a “time bomb.” Officials from the United Nations want the project completed by September, when the risk of a breakup increases due to winter seas. Since 2015, when a Saudi-led coalition intervened in Yemen’s war against the Iran-aligned Houthis after they deposed the internationally recognised government from Sanaa, the Safer has been stranded off the Ras Issa oil terminal without repair. The Houthis, who control the area where the tanker is anchored and the national oil company that owns it, inked a pact with the UN in early March to deal with it. The objective is to move the oil to a secure temporary vessel before arranging long-term storage. Gressly revealed that the first several months of the work will be spent prepping the perilous vessel for safe oil unloading, which the UN intends to begin within weeks.

Imperialist powers back Israel’s assassination of Al-Jazeera journalist Shireen Abu Akleh - Ten-strong rows of Israeli security forces in full combat gear brutally attacked Palestinians mourning the murder of Shireen Abu Akleh, the widely respected Al Jazeera journalist, on Friday. They grabbed Palestinian flags from mourners as they tried to carry her coffin to Jerusalem’s Old City and then to the Roman Catholic cemetery on Mount Zion. The 51-year-old Palestinian-American reporter, clad in a press vest and helmet and standing in open view near a roundabout, had been covering constant raids by Israeli security forces in the West Bank city of Jenin, when she was targeted and shot by Israeli snipers Wednesday morning. Another journalist was hospitalised. After her death, police stormed her family’s home demanding they take down the Palestinian flag and end the gathering and singing. Such were the police beatings on the day of the funeral that the pall bearers nearly dropped the coffin. Soldiers fired sponge-tipped bullets and threw stun grenades at the crowds gathered at the hospital morgue until Abu Akleh’s family were forced to change plans and whisk her coffin away in a car as a police officer removed the Palestinian flags covering it. Israel’s assassination sparked outrage and sorrow, with thousands of Palestinians turning up to greet her coffin and help carry it through the West Bank cities of Jenin, Nablus and Ramallah. Despite restrictions preventing Palestinians from the West Bank and Gaza entering East Jerusalem, mourners, Christian and Muslim, came from all over Israel, making this the biggest Palestinian funeral in decades, exceeding that of Yasser Arafat in Ramallah in 2004. The Israeli authorities had tried to pin the blame for Abu Akleh’s killing on the Palestinians, claiming she fell as they fired on Israeli soldiers and issuing a blatantly faked video clip of Palestinian fighters in a narrow alleyway as “proof”. The US embassy, rejecting any responsibility to investigate the death of an American citizen—Abu Akleh held dual Palestinian-US nationality—rushed to tweet the same clip. After visiting the site of the clip, the human rights group B’Tselem said it was impossible for Abu Akleh to have been hit from there. On Friday, the Palestinian Authority’s (PA) public prosecutor concluded after an autopsy and interviews with witnesses that Abu Akleh had been deliberately shot in the head by Israeli forces. In the face of the overwhelming evidence, Israel has had to retract its claim, admit that Israeli forces might have killed her and offer the PA a “joint investigation” into her killing. The PA is demanding an independent international investigation.

Fresh Fighting Grips Libyan Capital Over Decade After Obama's Regime Change War - Well over a decade after the Obama-Hillary led NATO military intervention in Libya in 2011, which resulted in the overthrow and violent street execution of Muammar Gaddafi, the capital of Tripoli has once again fallen into chaos as gunfights between rival factions threaten a fragile truce. For years oil-rich Libya has been fought over by two rival governments, one based in the east and the UN-recognized national government in Tripoli. This week's breakout in fighting began when according to Al Jazeera, "Fathi Bashagha, who was appointed prime minister three months ago by the East-based House of Representatives, arrived in Tripoli in the early morning hours with cabinet members and was reportedly accompanied by the Tripoli-based Nawasi Brigade militia."Bashagha was forced to leave the capital a mere four hours after arriving given his presence triggered attacks by local rival militias. Currently, Abdul Hamid Dbeibah is the prime minister of the UN/US-backed Government of National Unity (GNU) in Tripoli, but his eastern rival Tobruk-based parliament says his term has ended, and that Bashagha must take his rightful post. However 'interim' PM Dbeibah has refused to hand over power until a properly elected government is in place. He's instead described Bashagha's bid as illegal, part of a "desperate attempt to spread terror and chaos."

Watch: Iran Rolls Out Digital Food-Rationing - Via Off-Guardian.org,Iran is set to be the first country to roll out a food-rationing scheme based on new biometric IDs.Where vaccine passports failed, food passports will now be eagerly accepted by hungry people who can’t afford rapidly inflating food prices.This is the realization of a longstanding agenda by the Rockefeller/UN/WEF crowd to, as Kissinger put it, “control food, and control people.”Christian breaks it down in this Ice Age Farmer broadcast...

Gasoline Sales Soar as Indian Drivers Escape Searing Summer Heat - India’s gasoline sales soared over the first half of May for the best start to a month in more than two years as people utilized their air-conditioned cars to escape a record-breaking heatwave. The three biggest retailers sold 1.28 million tons of gasoline during May 1-15, up 14% from the corresponding period in April, according to refinery officials with knowledge of the matter. That’s also the biggest volume sold over the first half of a month since at least March 2020.

Crisis-Hit Sri Lanka Defaults On Debt As It Runs Out Of Fuel - There's no money to buy petrol, the crisis-hit Sri Lankan government said Wednesday as it urged citizens to "not to wait in line" for fuel, and following violent protests in the streets, which started in early April in the capital of Colombo and quickly spread across the country due to soaring prices amid food and other essential resource shortages like medicine. On Tuesday the new prime minister, Ranil Wickremesinghe, declared in a television address that Sri Lanka was down to it's "last day of petrol" amid the most severe crisis in over seven decades. He said the country would need an immediate bail-out of at least $75 million of foreign currency just to cover the next few days of essential imports.He additionally signaled the central bank would be forced to print money if it hoped to pay government wages. Parliament has further been informed that the government has missed its April 18 deadline to pay $78 million in global bonds payments, as well as another $105 million owed to Chinese banks, according to Bloomberg. Wednesday marked the end of a 30-day grace period.Following the development, Reuters wrote "Sri Lanka is expected to be placed into default by rating agencies on Wednesday after the non-payment of coupons on two of its sovereign bonds."It's predicted to be just the beginning of a historic default on a total $12.6 billion of overseas bonds - the first such since the small country's independence from Britain in 1948, amid a continued spiral of runaway inflation and foreign exchange squeeze fueled by lack of dollars. Power and Energy Minister Kanchana Wijesekera told parliament Wednesday, "There aren't enough dollars available to open letters of credit." He explained, "We are working to find funds but petrol will not be available at least until the weekend. The very small reserve stock of petrol is being released for essential services like ambulances," he said.PM Wickremesinghe followed by saying that an emergency bridge loan of $160 million has been secured from the World Bank - though it wasn't specified if the funds would be used for fuel imports.