natural gas touches $10; US oil supplies at a 19 year low; SPR at a 37½ year low after record withdrawal

US natural gas touches $10 as European price hits $90; US oil supplies at a 19 year low; Strategic Petroleum Reserve at a 37½ year low after record withdrawal; total oil + oil products supplies at a new 13½ year low

oil prices rose for the second time in three weeks after the Saudis warned that OPEC would cut their output if the US reached a deal with Iran...after falling 1.4% to $90.77 a barrel last week on fears of a global slowdown and the possibility of a nuclear accord with Iran, the contract price for the benchmark US light sweet crude for September delivery slid in early Asian trading Monday, as oil traders considered the prospect of more Iranian oil supplies flooding the market in coming weeks, and then turned mixed in early New York trading after Gazprom's plans to temporarily shut a key natural gas pipeline to the EU sent European gas prices to record highs, but then tumbled more than 4% on fears that aggressive US interest rate hikes would lead to a global economic slowdown and dent fuel demand, before paring those deep losses to settle 54 cents lower at $90.23 a barrel after Saudi Arabia's oil minister warned that OPEC+ production could cut output in the event a nuclear deal returned sanctioned Iranian oil to the market, as trading in the September oil contract expired and the contract price for US light sweet crude for October delivery settled off 9 cents at $90.36 a barrel ...with US oil quotes now referencing the October contract price, prices rallied on Tuesday after Saudi Arabia warned that OPEC could cut output to correct the recent oil price decline, and settled $3.38 higher at $93.74 a barrel, as an unexpected shutdown of the Caspian Pipeline that delivers Kazakhstan's oil to Europe also lent additional support to prices...oil prices held onto those gains in afterhours trading Tuesday after the American Petroleum Institute reported the 2nd consecutive big drop in commercial crude supplies, but then slipped in Asian trading Wednesday on easing fears of an imminent cut in output by OPEC before rallying again in New York to close $1.15 higher $94.89 a barrel following the EIA's report of lower oil production, a sharp drop in commercial crude inventories and a record surge in fuel exports from the Gulf Coast, while soaring natural gas and power prices across the EU lent further support to the complex....oil prices eased in volatile early trading on Thursday as traders braced for the possible return of sanctioned Iranian oil exports to the market, and on worries that rising U.S. interest rates would weaken fuel demand. and then tumbled after the White House said that an Iran nuclear deal that’s good for the US would be good for the Biden administration, and finished $2.37 lower at $92.52 a barrel following hawkish comments from several Fed officials suggested that a 75-basis point rate increase was more likely at the September 21-22nd meeting than a half point hike...oil prices edged lower in see-saw trading early Friday as traders digested warnings from Fed Chairman Powell that there was no quick fix for inflation, and that we'd need tight monetary policy "for some time" before inflation is under control, which would mean slower growth, a weaker job market and "some pain" for households and businesses, but recovered to end 54 cents higher at $93.06 a barrel, boosted by signals from Saudi Arabia and the Emirates that OPEC could again cut oil output...oil prices thus posted a 2.5% gain on the week, while the October oil contract, which had finshed last week at $90.45 a barrel, ended 2.9% higher, as Saudi Arabia’s warning that oil supply cuts might be warranted overshadowed several bearish developments...

meanwhile, US natural gas prices finished lower for the 1st time in 3 weeks​,​ after ​first ​touching a new a 14 year high over $10, following a postponement ​of the expected restart date for Freeport LNG exports...after rising 6.5% to a 14-year high of $9.336 per mmBTU last week after prices in Europe and Asia set new all time records, the contract price of US natural gas for September delivery opened at $9.863 per mmBTU on Monday, fifty-three cents above Friday’s closing price, after European gas prices had jumped more than 15% to an intraday high of $85.95, but fell back after failing to breach $10 to settle 34.4 cents, or 3.7% higher at $9.680 per mmBTU, with gains also driven by a strong demand outlook and concerns over availability of the fuel... however, after surging to a $10.028 per mmBTU intraday high early on Tuesday, natural gas prices plunged nearly $1 before settling down 48.7 cents on the day at $9.193 per mmBTU on news of a further delay in the resumption of operations at the Freeport LNG export plant in Texas...but US natural gas prices firmed on Wednesday, buoyed by elevated global gas prices, which offset pressure from the Freeport delay, and settled 13.7 cents higher at $9.330 per mmBTU...natural gas prices remained rangebound on Thursday after the EIA storage report showed a weekly inventory build somewhat above expectations, and settled 4.5 cents higher at $9.375 per mmBTU​, and then seesawed around that price level on Friday, as traders weighed soaring global prices and the specter of light supplies for the coming winter against relatively benign near-term weather patterns and ultimately settled at $9.296 per mmBTU, down 7.9 cents on the day and 0.7% lower on the week...

The EIA's natural gas storage report for the week ending August 19th indicated that the amount of working natural gas held in underground storage in the US rose by 60 billion cubic feet to 2,579 billion cubic feet by the end of the week, which left our gas supplies 268 billion cubic feet, or 9.4% below the 2,847 billion cubic feet that were in storage on August 19th of last year, and 353 billion cubic feet, or 12.0% below the five-year average of 2,932 billion cubic feet of natural gas that were in storage as of the 19th of August over the most recent five years....the 60 billion cubic foot injection into US natural gas working storage for the cited week was 9 bcf more than the average 51 billion cubic foot injection forecast by an S&P Global Platts' survey of analysts, and was nearly double the 32 billion cubic feet that were added to natural gas storage during the corresponding week of 2021, and was also much more than the average injection of 46 billion cubic feet of natural gas that had typically been added to our natural gas storage during the same week over the past 5 years.... 

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending August 19th showed that despite a record withdrawal of crude from the SPR, a drop in our oil exports, and a decrease in​ our​ refining, we had to pull oil out of our stored commercial crude supplies for the 4th time in 6 weeks, and for the 23rd time in the past 39 weeks, in part due to a big decrease in oil supplies that could not be accounted for....Our imports of crude oil rose by an average of 40,000 barrels per day to average 6,171,000 barrels per day, after falling by 39,000 barrels per day during the prior week, while our exports of crude oil fell by 823,000 barrels per day to average 4,177,000 barrels per day, which meant that our trade in oil worked out to a net import average of 1.994,000 barrels of oil per day during the week ending August 19th, 863,000 more barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly 100,000 barrels per day lower at 12,000,000 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 13,994,000 barrels per day during the August 19th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,255,000 barrels of crude per day during the week ending August 19th, an average of 168,000 fewer 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 average of 1,625,000 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, the crude oil figures from the EIA for the week ending August 19th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 636,000 barrels per day less 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 (+636,000) 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 omission or error 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 (+1,697,000) barrels per day, that means there was a 1,061,000 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 ​​changes in ​supply and demand ​from that week to this ​that are ​indicated by this week's report are ​similarly erroneous... 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)….

This week's 1,625,000 barrel per day decrease in our overall crude oil inventories left our oil supplies at 874,737,000 barrels at the end of the week, which is our lowest total oil inventory level since July 25th, 2003, and therefore at a 19 year low.….​Our oil inventories decreased this week as 469,000 barrels per day were being pulled out of our commercially available stocks of crude oil and a record 1,156,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve. That draw on the SPR was another installment of the emergency withdrawal under Biden's "Plan to Respond to Putin’s Price Hike at the Pump" (sic), that was expected to supply 1,000,000 barrels of oil per day to commercial interests over a six month period up to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising, at least up until then....Including the administration's initial 50,000,000 million barrel SPR release earlier this year, their subsequent 30,000,000 barrel release, and other withdrawals from the Strategic Petroleum Reserve under recent release programs, a total of 203,082,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 25 months, and as a result the 453,065,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since January 11, 1985, or at a 37 1/2 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs had already drained those supplies considerably over the past dozen years, even before the Biden administration's SPR releases. Now the total 180,000,000 barrel drawdown expected during the  current six month release program to November will remove almost a third of what remained in the SPR when the program started, and leave us with what would be less than 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 fell to an average of 6,454,000 barrels per day last week, which was still 1.9% more than the 6,334,000 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 lower at 12,000,000 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 lower at 11,600,000 barrels per day, while Alaska’s oil production was 6,000 barrels per day lower at 409,000 barrels per day but 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 8.4% below that of our pre-pandemic production peak, but was 23.7% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021...

US oil refineries were operating at 93.8% of their capacity while using those 16,255,000 barrels of crude per day during the week ending August 19th, up from their 93.5% utilization rate during the prior week, and a refinery utilization rate that's within the normal range for mid summer. The 16,255,000 barrels per day of oil that were refined this week were 1.1% more than the 16,072,000 barrels of crude that were being processed daily during week ending August 20th of 2021, but 6.6% less than the 17,408,000 barrels that were being refined during the prepandemic week ending August 23rd, 2019, when our refinery utilization was at 95.2%, also within the normal range for mid summer...

With the decrease in the amount of oil being refined this week, gasoline output from our refineries was also lower, decreasing by 536,000 barrels per day to 9,429,000 barrels per day during the week ending August 19th, after our gasoline output had decreased by 185,000 barrels per day during the prior week. This week’s gasoline production was 8.0% less than the 10,249,000 barrels of gasoline that were being produced daily over the same week of last year, and 11.5% less than our gasoline production of 10,660,000 barrels per day during the week ending August 23rd, 2019, ie, during the year before the pandemic impacted US gasoline output. Meanwhile, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 22,000 barrels per day to 5,200,000 barrels per day, after our distillates output had increased by 56,000 barrels per day during the prior week. With those and prior increases, our distillates output was 4.2% more than the 4,988,000 barrels of distillates that were being produced daily during the week ending August 20th of 2021, and fractionally more than the 5,193,000 barrels of distillates that were being produced daily during the week ending August 23rd 2019...

With the big decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 5th time in 8 weeks; and for the 23rd time out of the past twenty-nine weeks, but only decreased by 28,000 barrels to 215,647,000 barrels during the week ending August 19th, after our gasoline inventories had decreased by 4,462,000 barrels during the prior week. ​ ​Our gasoline supplies held ​relatively ​steady this week because the amount of gasoline supplied to US users decreased by 914,000 barrels per day to​ ​8,434,000 barrels per day, while our exports of gasoline rose by 18,000 barrels per day to 920,000 barrels per day, and while our imports of gasoline fell by 99,000 barrels per day to 615,000 barrels per day. After 23 gasoline inventory drawdowns over the past 29 weeks, our gasoline supplies were 4.5% lower than last August 20th's gasoline inventories of 225,924,000 barrels, and about 7% below the five year average of our gasoline supplies for this time of the year…

Even after the increase in our distillates production, our supplies of distillate fuels decreased for the 5th time in 8 weeks and for the 33rd time in the past year, falling by 662,000 barrels to 111,490,000 barrels during the week ending August 19th, after our distillates supplies had increased by 766,000 barrels during the prior week. Our distillates supplies fell this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, decreased by 37,000 barrels per day to 3,888,000 barrels per day, because our exports of distillates rose by 271,000 barrels per day to 1,579,000 barrels per day while our imports of distillates rose by just 9,000 barrels per day to 173,000 barrels per day.. After forty-eight inventory withdrawals over the past seventy-one weeks, our distillate supplies at the end of the week were 19.4% below the 138,459,000 barrels of distillates that we had in storage on August 20th of 2021, and about 24% below the five year average of distillates inventories for this time of the year...

Meanwhile, despite a record withdrawal of crude from the SPR, a drop in our oil exports, and a decrease in our oil refining, our commercial supplies of crude oil in storage fell for the 9th time in 15 weeks and for the 30th time in the past year, decreasing by 3,282,000 barrels over the week, from 424,954,000 barrels on August 12th to 421,672,000 barrels on August 19th, after our commercial crude supplies had decreased by 7,056,000 barrels over the prior week. After those decreases, our commercial crude oil inventories were about 6% below the most recent five-year average of crude oil supplies for this time of year, but still roughly 22% above the average of our crude oil stocks as of the third week of August 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 commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, and then jumped again after last year's winter storm Uri froze off US Gulf Coast refining, our commercial crude supplies as of this August 19th were still 2.5% less than the 432,564,000 barrels of oil we had in commercial storage on August 20th of 2021, and were 17.0% less than the 507,763,000 barrels of oil that we had in storage on August 21st of 2020, and 3.7% less than the 437,778,000 barrels of oil we had in commercial storage on August 23rd of 2019…

Lasty, with our inventories of crude oil and our supplies of all products made from oil near multi-year lows in recent months, we are 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 12,561,000 barrels this week, from 1,673,923,000 barrels on August 12th to 1,667,196,000 barrels on August 19th, after our total inventories had fallen by 12,561,000 barrels during the prior week. That left our total liquids inventories down by 121,237,000 barrels over the first 32 weeks of this year, and at the lowest level since October 10th, 2008, and thus at a 13 1/2 year low... 

This Week's Rig Count

The number of drilling rigs running in the US rose for the first time in four weeks and for the 82nd time over the prior 100 weeks during the week ending August 26th, but they're still 3.5% below the prepandemic rig count....Baker Hughes reported that the total count of rotary rigs drilling in the US increased by 3 to 765 rigs this past week, which was still 257 more rigs than the 508 rigs that were in use as of the August 27th report of 2021, and was 1,164 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 increased by 3 to 605 oil rigs during the past week, after the number of rigs targeting oil had been unchanged during the prior week, and there are now 195 more oil rigs active now than were running a year ago, even as they just amount to just 37.6% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are down 11.4% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 1 to 158 natural gas rigs, which was still up by 61 natural gas rigs from the 97 natural gas rigs that were drilling during the same week a year ago, even as they were still only 9.8% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….other than those rigs targeting oil and natural gas, Baker Hughes also reports that two "miscellaneous" rigs continued drilling this week, including a directional rig drilling to between 5,000 and 10,000 feet on the big island of Hawaii, and a vertical rig drilling more than 15,000 feet into a formation in Humboldt county Nevada that Baker Hughes doesn't track....a year ago, there were was only one such "miscellaneous" rig running...

The offshore rig count in the Gulf of Mexico was unchanged at 16 rigs this week, with all of this week's Gulf rigs drilling for oil in Louisiana's offshore waters....that's two more than the number of offshore rigs that were active in the Gulf a year ago, when all 14 Gulf rigs were also drilling for oil offshore from Louisiana...in addition to rigs drilling in the Gulf, we still have two offshore directional rigs drilling for natural gas in the Cook Inlet of Alaska; one is indicated to be drilling to between 10,000 and 15,000 feet, while the other one is indicated to be drilling to between 5,000 and 10,000 feet...a year ago, there were was only one rig drilling offshore from Alaska...

In addition to rigs running offshore, 3 water based rigs continue to drill through inland bodies of water this week...those include a directional rig drilling for oil to between 10,000 and 15,000 feet, inland in Galveston Bay. Texas; a directional rig targeting oil at a depth greater than 15,000 feet drilling through a lake on Grand Isle, Louisiana, and a directional rig drilling for oil in Terrebonne Parish, Louisiana, also at a depth greater than 15,000 feet...

The count of active horizontal drilling rigs was unchanged at 694 horizontal rigs this week, which was 235 more rigs than the 459 horizontal rigs that were in use in the US on August 27th of last year, but barely over half of the record 1,374 horizontal rigs that were drilling on November 21st of 2014....however, the vertical rig count was up by 2 to 31 vertical rigs this week, and those were also up by 10 from the 21 vertical rigs that were operating during the same week a year ago…meanwhile, the directional rig count was up by 1 to 40 directional rigs this week, while those were also up by 12 from the 28 directional rigs that were in use on August 27th 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 August 26th, the second column shows the change in the number of working rigs between last week’s count (August 19th) and this week’s (August 26th) count, the third column shows last week’s August 19th 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 27th of August, 2021...

it appears that all of this week's changes were in Texas and two adjoining states...checking the Rigs by State file at Baker Hughes for the changes in Texas Permian, we find that there were four rigs added in Texas Oil District 8, which covers the core Permian Delaware, which would have included a natural gas rig, but that there was an oil rig pulled out of Texas Oil District 7C, which includes the southern counties of the Permian Midland, which combined accounts for the 3 rig increase in the Permain basin, which now has 4 natural gas rigs in addition to 344 oil rigs....elsewhere in Texas, there were two natural gas rigs pulled out of Texas Oil District 2, which accounts for the change in the Eagle Ford shale, which still has 7 natural gas rigs and 63 oil rigs active, and there was a natural gas rig added in Texas Oil District 6, which accounts for the increase in the Haynesville shale, which now has 69 natural gas rigs and 1 oil rig...

meanwhile, Oklahoma saw the removal of two oil rig from the Cana Woodford, but the addition of two oil rigs in the Ardmore Woodford, so the Oklahoma rig count remained unchanged....the rig addition in Louisiana was in a basin that Baker Hughes doesn't track in the southern part of the state, while there was also a natural gas rig pulled out of a basin that Baker Hughes doesn't track somewhere, but we can't easily tell where because there was likewise an oil rig added in the same basin at the same time, leaving totals for whatever basin & state that was in unchanged...if you really need to know where those changes occurred, Baker Hughes offers the North America Rotary Rig Count Pivot Table (xls) which shows the individual well drilling records by state and county since February 2011, including all those in basins that Baker Hughes doesn't track in their other summaries... 

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Looking for jobs in all the wrong places: Ohio policymakers’ misguided belief in natural gas - Ohio Capital Journal -- If you’re looking for economic development that will deliver job growth, increase local commerce, and improve quality of life, you can’t do much worse than natural gas extraction, gas-fired power plants, and infrastructure. They don’t provide many jobs and they impose serious costs that discourage other kinds of job-creating economic activity. Apart from contributing to local and state tax revenues — contributions which are often undercut by tax subsidies and regulatory favors — about the only benefit of natural gas power generation is low-cost electricity, and if you check your electric bill, you’ll see that even that benefit is now being wiped out.This all seems hard to believe, what with governors and legislators lavishing incentives on these industries in the belief that by doing so they would create jobs and stimulate economic development. That was certainly true of an Ohio economic development officer I met with recently who talked excitedly about the new billion-dollar gas-fired power plant in Guernsey County. “Do you know what that means in jobs and commerce to a county with just 39,000 people?” she asked. Sadly, I did know and wondered if she was so dazzled by the amount of money being invested and the plant’s impressive size that she assumed it would have a commensurate economic impact. That’s how many politicians seem to evaluate projects before lavishing taxpayer money on them. For instance, state Reps. Jon Cross, R-Kenton, and Jay Edwards, R-Nelsonville, recently introducedHouse Bill 685, the ENERGIZEOhio bill, “…to promote the use of Ohio’s abundant natural gas energy resource” because, say the authors, “…too many communities across the state have been locked out of future job growth and economic development opportunities due to limited energy infrastructure to deliver Ohio’s natural gas to them.” “Future job growth and economic development?” Really? Let’s look at what natural gas economic development really looks like starting with that billion-dollar power plant in Guernsey County. The plant will employ 30 people, about as many as an average supermarket. Meanwhile, nearly all of the hundreds of millions dollars the plant will spend yearly to purchase natural gas from nearby wells will go to out-of-state investors. That’s because natural gas production, like the construction and operation of gas-fired power plants, is capital-intensive, leaving little money for jobs and wages. Even property owner royalties generally go to just a few local families who mostly save or invest the money rather than spend it locally. In other words, the billion-dollar power plant will do shockingly little to deliver jobs and commerce.

Riverbend Energy Group Wraps Up $1.8 Billion Sale of Nonop Shale Assets --Riverbend Energy Group recently completed the $1.8 billion sale of nonoperated portfolios, marking the successful monetization for Riverbend of three of Riverbend’s five active traditional energy portfolios. The transaction, previously announced in June, included its equity interests in Riverbend Oil & Gas VI LLC, Riverbend Oil & Gas VI-B LLC and Riverbend Oil & Gas VIII LLC. The buyer wasn’t disclosed. The divested portfolios represent a substantial, diversified asset base of nonoperated interests across the Bakken/Three Forks, Utica, Fayetteville and Haynesville. As of the effective date of May 1, these properties produced approximately 47,000 boe/d from over 11,000 wells, according to the release. Based in Houston, Riverbend is multi-faceted investment firm, utilizing risk-weighted deal evaluation processes to deploy capital into a variety of investment theses in the U.S. energy sector. Since 2003, the firm has successfully acquired, developed, and managed over $5 billion of total enterprise value across 10 asset portfolios.

Pennsylvania Natural Gas Production Dips for Second Consecutive Quarter - Unconventional natural gas production in Pennsylvania declined again in the second quarter, according to the state’s Independent Fiscal Office (IFO). The 0.9% year/year decrease to 1.836 Tcf marks the first time that production recorded a yearly decline in consecutive quarters since quarterly production data became available in 2015, IFO said. Production fell 0.6% in the first quarter of the year. However, growth in producing wells ticked up slightly in the second quarter after several years of consistent deceleration, IFO said. “Decelerating or flat growth in producing wells is due to less drilling activity in 2020 and 2021 and older wells that were shut in or plugged. The uptick in drilling in 2022 should lead to stronger growth in producing wells,” said the report, which was compiled by researchers Jesse Bushman and Rachel Flaug.There were 11,042 total producing wells in Pennsylvania in the second quarter of 2022, an increase of 4.4% from the prior year. Horizontal producing wells account for over 99% of production and recorded an annual increase of 4.8% in the state.There were 133 new horizontal wells spud in the second quarter, up 10.8% year/year. Preliminary data for the third quarter show that the number of wells spud in July and August is up 73.3% from the same period in 2021. Researchers attribute the recent uptick in drilling to elevated natural gas prices.Henry Hub averaged $7.39/MMBtu in the second quarter, its highest quarterly level since the third quarter of 2008 and up 156.8% year/year. Pennsylavnia’s second quarter average was $6.66, up 221.8% year/year. The Pennsylvania price is a weighted average of the Dominion South and Transco Leidy hubs.“Current forecasts project that prices will remain elevated in the short term due to global supply and demand pressures,” researchers said. North American prices have surged recently on the back of supply worries both domestically and abroad. Pennsylvania is the United States’ second-largest natural gas producer, after Texas. The states rounding out the top five are Louisiana, Alaska and West Virginia. Of those states, only Pennsylvania production is showing a decline. One of the reasons for this could be infrastructure constraints. The Appalachian Basin is the nation’s largest gas-producing region, with output of more than 35 Bcf/d. But over the last decade environmental groups have successfully stopped or slowed down pipeline projects and limited further growth in the Northeast.

As Pa. faces 'looming crisis' of new abandoned wells, state law will freeze well bonding rates for a decade - Pittsburgh Post-Gazette -Gov. Tom Wolf let a bill become law that freezes bonding rates for Pennsylvania’s conventional oil and gas wells for at least a decade at levels that have proven too low to prevent drillers from walking away from their cleanup obligations.House Bill 2644 became law late Monday without the Democratic governor’s signature as part of negotiations over the recently adopted state budget, his spokeswoman said.The bill, which was passed by the Republican-controlled Legislature, freezes bond amounts for conventional oil and gas wells at $2,500 per well, or less than 10% of expected cleanup costs if companies walk away without plugging them.For active wells drilled before 1985 — which number nearly 60,000, according to state records — the bond will remain zero.“The administration has serious concerns with the bill — concerns it expressed repeatedly to the Legislature as the bill was moving,” Mr. Wolf’s press secretary Elizabeth Rementer said. Still, the governor agreed to let it become law “as a result of divided government.”The bill forbids state environmental regulators from adjusting bond amounts over the next decade to reflect the true costs of plugging conventional wells that are abandoned by their owners.Previously, state law allowed the environmental rule-making board to adjust bonding levels every two years, but rates have remained the same since they were established for conventional -— that is, shallow, vertical wells — in 1985. Efforts to raise the bond amounts on conventional wells were rolled back by the Legislature in the 1990s and 2012.Pennsylvania oil and gas regulators have called the threat of new well abandonments a “looming crisis” that could cost taxpayers billions of dollars. That is on top of the estimated $6.6 billion it will cost to plug roughly 200,000 wells that were left unsealed by past operators over a century of drilling.Oil and gas well bonds are meant to act as a form of insurance against unfunded abandonment. The payments are forfeited to the state if an operator walks away without permanently sealing and restoring a well site.But because so many conventional wells in Pennsylvania are exempt from bonding requirements or qualify for discounted blanket bonds, the bonds on file amount to $15 per well, as of 2020, according to the Pennsylvania Department of Environmental Protection.The average plugging cost for an abandoned conventional well in Pennsylvania is $68,000, according to a recent DEP application for federal infrastructure funds.

More concerns emerge for Pennsylvania's abandoned oil, gas wells -- In 2020, an employee for the Pennsylvania Department of Environmental Protection smelled crude oil while driving to work in the northwestern part of the state. Trusting his instincts, he asked agency crews to follow their noses. They found an old abandoned well leaking oil within 500 feet of a dozen year-round and seasonal residences. The oil was flowing directly into the South Branch of Tionesta Creek, which the state classifies as a cold-water, high-quality fishery, meaning it is among the most unpolluted in the state. DEP found no record of the well’s owner and had to use emergency funds to stop the oozing pollutant and its nuisance odors. Elsewhere, a well borehole filled with acid mine drainage was spewing poisonous iron-rich water into a tributary of the Susquehanna River. A garage in Armstrong County that was built over an unseen abandoned gas well blew up. These scenarios play out too often, say state environmental officials. The state has more than 200,000 wells that were constructed and abandoned by oil and gas companies — the most of any state in the nation. No one knows for sure just how many because some wells are so old that no records exist. The state did not require notification of wells until 1955. Often obscured by vegetation or located deep in the woods, more abandoned oil and gas wells are found all the time, often leaking oil and methane. Oil can be toxic to frogs, reptiles, fish, waterfowl and other freshwater life. Methane, a global-warming gas, is highly poisonous to aquatic organisms. One overarching issue is that even modern-day drillers in the state sometimes abandon wells without plugging them, a violation of state laws. Research of DEP records by David Hess, a former DEP secretary who publishes an environmental blog, showed that from 2016 through 2022, the agency issued 4,270 notices of violations to 256 oil and gas companies for abandoning wells without plugging them. Some abandoned hundreds of wells, records showed. DEP is working with many of the owners to plug them. If abandoned, the wells must be sealed at taxpayer expense. DEP estimates that it will cost $1.6 billion to plug and stop leaks on the 200,000 abandoned wells identified so far. Pennsylvania requires drillers to post a bond that helps cover any state-incurred costs for plugging abandoned wells. But the recent increased focus on the wells highlighted the fact that the bond covers only a fraction of the actual cost. The 1984 Oil and Gas Act requires drillers to post a bond of $2,500 per well. But DEP officials say the average plugging cost is $33,000. This summer, the state Environmental Quality Board, which issues all DEP regulations, agreed to consider a petition from environmental groups that called for increasing the bond to $38,000 per well. Before the board could take any action, the state legislature rushed through a law that blocks any increase in plugging bonding for 10 years.In addition, it continues to exempt the owners of conventional oil and gas wells drilled before 1985 — most of the wells currently in service — from having to pay a bond. Gov. Tom Wolf did not sign the law but allowed it to go into effect without a veto, reportedly as part of a trade to get education priorities into the state budget.

Biden admin deploys $560M to clean up orphaned oil wells - The Biden administration has awarded $560 million to plug orphaned oil and gas wells across 24 states, the largest single investment in oil field cleanup in history, officials said today. The funding is part of a $4.7 billion orphaned well program greenlighted by last year’s Infrastructure, Investment and Jobs Act. The bipartisan program offers grant dollars to qualifying states to pay for finding abandoned wells, tracking their methane releases, plugging them to stem polluting gases and restoring the land at the surface. Interior Secretary Deb Haaland today praised the Biden administration’s progress so far in building the first-of-its-kind program. “President Biden’s Bipartisan Infrastructure Law is enabling us to confront long-standing environmental injustices by making a historic investment to plug orphaned wells throughout the country,” she said in a statement. Historic oil and gas activity in regions like Appalachia and the West goes back more than a century, with many old wells lost. Additionally, oil and gas price busts have left more wells abandoned, their original drillers out of business or difficult to trace. When left unchecked, those wells can release greenhouse gases like methane and pose combustion risks. All told, states have flagged more than 10,000 high priority wells for cleanup, the first in line of a nearly 130,000 backlog of unreclaimed known well sites, Interior reported today. That number is expected to rise as federal funds bolster state efforts to identify hidden or lost orphans. Of the nearly two-dozen states receiving federal funds, Kentucky, Kansas and Oklahoma have more than 1,000 wells identified for plugging. But hundreds of wells have been found in states like Colorado, Illinois and Texas. The half-billion-dollar funding announced today will be spread across 22 states that have been allocated $25 million in initial grants. Two others — Arkansas and Mississippi — will receive $5 million each. Mississippi is aiming to create an inventory of its orphaned wells and kick off a program to track methane. Other states devoted to methane measurement before and after plugging are California and West Virginia. Meanwhile, Arkansas, Kansas, New Mexico and Ohio have said they will focus first on cleanup in disadvantaged communities, and Arizona, Louisiana and Montana have committed to hiring local, giving small businesses preference. Wyoming, which has been regularly plugging wells through a tax on industry for years, is also among the first states to receive grant money. It estimates some 300 jobs will be created by its upcoming plugging activity with federal funds. Today’s announcement is part of the $1.15 billion “phase one” of the national orphaned well program. An initial $33 million was also used recently to plug nearly 300 orphans on federal lands.

Biden Admin Urges Fuel-Export Cuts to Restock Northeast - The Biden administration is warning refiners that it may take “emergency measures” to address fuel exports as stockpiles of gasoline and diesel fuel remain near historically low levels in the Northeast. While East Coast gasoline and diesel inventories are well below normal, exports of US refined products are at an all-time high, the Energy Department wrote in a letter last week to refiners that included Exxon Mobil Corp., Valero Energy Corp., and Phillips 66. “It is our hope that companies will proactively address this need,” Energy Secretary Jennifer Granholm wrote in the letter, which was also sent to BP America, Chevron Corp., Marathon Petroleum Corp. and Shell Plc. “If that is not the case, the administration will need to consider additional federal requirements or other emergency measures.” Emergency actions can be avoided if the industry prioritizes “building inventories during this critical window,” Granholm said in the letter, which was obtained by Bloomberg. The Biden administration is effectively asking refiners to prioritize American consumers over maximizing profits by supplying fuel-starved Europe, which is facing an unprecedented energy crunch after the invasion of Ukraine triggered US sanctions on Russian oil supply. While US retail gasoline prices have eased after hitting a record nationwide average above $5 a gallon in June, the White House remains under pressure to tackle inflation ahead of the midterm elections. US government officials said the administration isn’t actively considering export controls and the letter shouldn’t be construed as a direct threat to limit shipments abroad. An Energy Department official said emergency measures being taken included tapping a little-used emergency diesel fuel reserve, the Northeast Home Heating Oil Reserve located in New England, which contains a cache of 1 million barrels of ultra-low sulfur distillates. Though US refineries are operating near capacity, the Biden administration is concerned that much of the fuel they’re producing is being exported rather than sent to the supply-constrained East Coast, according to people with direct knowledge of the matter. The White House’s perception is that the industry simply wants to shift the product to the market that pays the highest price, instead of helping the American consumer, the people said. However, the administration isn’t planning any export limits on crude or natural gas, according to the people. Granholm’s letter also comes ahead of the peak of Atlantic hurricane season, when storms can wreak havoc on US fuel supply. Though few storms have emerged so far, the most-active part of the season typically doesn’t begin until right around now.

Trouble on pipeline's path hits home for Manchin - — Becky Crabtree dreamed of her daughter living next door when she purchased a tract of land in this rural community near the George Washington and Jefferson National Forests. But those plans crumbled five years ago when Crabtree began battling the proposed Mountain Valley pipeline, a project Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.) is now attempting to help push through to completion. The pipeline bisects Crabtree’s sheep pasture in southern West Virginia and the area where her daughter and son-in-law’s house would have been built. Designed to transport natural gas from West Virginia shale reserves to energy markets in mid-Atlantic states, the Mountain Valley pipeline has been mired in legal challenges since receiving approval from the Federal Energy Regulatory Commission (FERC) in 2017. Earlier this month, Manchin released a framework for Congress to mandate completion of the pipeline as part of a broader permitting reform package (Energywire, Aug. 2). A new summary of potential legislation would also help the pipeline, although it does not mention it specifically, The Washington Postreported yesterday.To Manchin and other supporters of the 304-mile project, Mountain Valley exemplifies the nation’s inefficient and cumbersome permitting process, where pipelines and other critical energy projects are hindered by environmental opponents and permits revoked by the courts. But others who’ve followed Mountain Valley’s eight-year journey say it makes an argument for more robust environmental reviews for energy projects, not less strict ones, and showcases the delays that can occur when federal agencies cut corners. Slated to cross hundreds of waterways, meander over mountains and pass through more than a thousand parcels of private land in West Virginia and Virginia, the project’s history may offer lessons for the pipeline industry and agencies that review large energy projects, observers say. In a slew of recent decisions, the 4th U.S. Circuit Court of Appeals tossed out approvals for the pipeline, which would also cross the Appalachian Trail and run through the Jefferson National Forest.The notion of Congress driving the completion of Mountain Valley has left Crabtree and other landowners feeling sidelined by their representatives. While the fate of a permitting reform package remains uncertain, Manchin’s office maintains that Senate Majority Leader Chuck Schumer (D-N.Y.), House Speaker Nancy Pelosi (D-Calif.) and President Joe Biden agreed to advance the deal in exchange for Manchin’s support for the Inflation Reduction Act (Energywire, Aug. 2).“We understand politics. We understand you give a little, you take a little,” said Crabtree, a high school science teacher who’s running as a Democrat for a seat in the West Virginia House of Delegates. “It doesn’t feel particularly good to be the sacrificial lamb for this particular deal.”

Starting to Think Manchin's Side Deal is in Real Trouble -Bill McKibben -It’s starting to become clear that the “side deal” to permit pipelines and other fossil fuel projects that was put forth by Joe Manchin and Chuck Schumer as an accessory to the Inflation Reduction Act (aka the ‘climate bill’) faces tougher-than-expected sledding in the Congress. Some of us started lobbying against the giveaways it proposed to the oil industry even before the IRA was signed, but now it appears that the agitation is growing—growing enough that what activists are calling a “dirty deal” may in fact be in danger.I talked at length this afternoon with Ro Khanna, who chairs the House Oversight Subcommittee on the Environment, and he was quite blunt. He called the side deal a gutting of the National Environmental Policy Act (NEPA) and said “that’s not going to happen. You’re not going to get progressive support for that.” In fact, he promised a September 15 hearing of his subcommittee to explore whether or not the fossil fuel industry actually wrote the language of the deal: an early draft circulating on Capitol Hill literally bore a watermark from the American Petroleum Institute.He pointed out that Raul Grijalva, chair of the Committee on Natural Resources, had written a letter to Speaker Pelosi saying such a deal was unacceptable. “I’m on that letter, many progressives will get on.” Manchin has said he was promised his deal would be attached to must-pass legislation, presumably the omnibus budget bill. “If that happened, you’d really have a mutiny among my progressive colleagues,” Khanna said.If the deal—which among other things could explicitly greenlight Appalachia’s Mountain Valley Pipeline boondoggle—did get added to the budget bill, and if Khanna was right that progressives objected, it might still pass if Republicans came on board to back it (that’s how big defense bills get passed each year over progressive objections). But Khanna said it would be “pretty unprecedented” to “come up with an omnibus budget bill that excluded a key caucus. It would split the party before a crucial midterm election,” creating a “media outcry.” It would be “a very divisive move. I’m not saying it’s impossible—we have to guard against it, and that’s why we’re mobilizing now.” “If this passes,” says Khanna, “it runs roughshod over these communities that have been fighting for five or ten years. There’s no way we can allow that kind of wholesale gutting to happen.”

FERC grants Mountain Valley Pipeline permit extension - The Federal Energy Regulatory Commission has given the greenlight to a four-year extension to build the Mountain Valley Pipeline.MVP, which is being built and will be partially owned by Equitrans Midstream Corp. (NYSE: ETRN), will now have until Oct. 13, 2026, to put into service the 303-mile pipeline that will take Marcellus and Utica Shale gas through West Virginia and Virginia. The pipeline, which has been mired in legal and regulatory challenges that have delayed by five years the completion date, had asked for the extension in June. It's the second extension of construction for the pipeline.FERC's extension doesn't mean that construction can conclude: There are still permits that have to be received (and in some cases reapproved) as well as satisfying the overall stop-work order that FERC has on the project. The company has said it is working toward an operation date of the second half of 2023.But the commission said it was appropriate to extend the time period again and that the company had been working in good faith."Since the last grant of an extension of time, Mountain Valley has continued to actively pursue project construction and has engaged in whatever construction and restoration activities it was allowed to pursue," FERC said. "We consider it likely that, should Mountain Valley receive the required permits, those permits will undergo judicial review, which will take time to resolve." It also affirmed its findings on environmental analysis and public interest to continue to be valid. MVP and several other energy infrastructure projects got a big boost earlier this summer with the passage and signature of the Inflation Reduction Act after U.S. Sen. Joe Manchin, D-West Virginia, won energy-friendly provisions.MVP said it was pleased with the ruling.But one of the organizations fighting MVP, Appalachian Voices, said FERC was ignoring the environmental damage that the pipeline construction was doing in West Virginia and Virginia. David Sligh, conservation director of Wild Virginia, called FERC's extension "the latest in a long line of irresponsible decisions.""The Commission has again favored the narrow interest of a profit-making corporation over the public interest," Sligh said. "Most appalling is FERC's refusal to acknowledge the changes the environment already caused by MVP or to base this decision on any rational assessment as to whether damage and destruction to our waters and peoples' lands will continue if MVP work is allowed to proceed."

FERC Gives MVP Another Four Years to Reach Finish Line - FERC has granted the heavily scrutinized Mountain Valley Pipeline (MVP) another four years to finish construction and enter service, a move that could augur well for the embattled natural gas project’s political and regulatory future. In an order filed Tuesday, the Federal Energy Regulatory Commission gave MVP until Oct. 13, 2026, to complete what has proven to be a drawn-out construction process for the 300-mile, 2 million Dth/d Appalachia-to-Southeast natural gas conduit. After an earlier two-year extension issued in 2020, MVP had previously had until October to place the pipeline into service.The commissioners, led by Democratic Chairman Richard Glick, ultimately rejected assertions from project opponents that the agency should revisit its environmental review of the pipeline. MVP received a certificate order from FERC in 2017.“There has been no showing that the environmental effects of the project have changed materially since the Commission authorized the project,” FERC wrote. The order stated, however, that “the environment is subject to change, and that the validity of our conclusions and environmental conditions cannot be sustained indefinitely.”Commissioner James Danly of the Republican minority took issue with that language in particular, writing in a separate concurring opinion that such a statement “reinforces the Commission’s misguided view…that it may revisit determinations made in final, unappealable certificate orders.”FERC should take a “narrow” approach to considering requests for an extension of time and not overstep its legal authority, Danly argued.The latest FERC action follows the passage of the Inflation Reduction Act, made possible after a compromise was reached with Sen. Joe Manchin (D-WV), a supporter of MVP, which runs through part of his state. Management for MVP sponsor Equitrans Midstream Corp. recently pointed to the legislation as a positive for the project’s ambitions of reaching the finish line.Analysts at ClearView Energy Partners LLC in a recent note to clients alluded to Glick’s renomination process as another factor that could influence MVP’s regulatory future.With Manchin chairing the Senate Energy and Natural Resources Committee, the ClearView analysts said they “did not expect” a confirmation hearing to be scheduled “prior to (constructive) action on the MVP certificate extension. Chairman Manchin is a vocal advocate for the project and has been actively pushing the White House and federal agencies beyond FERC to facilitate its completion by expeditiously addressing outstanding permits. “With this approval in hand, the path would appear clear for that nomination process to move forward.”

US Natural Gas Spikes 81% in 7 Weeks, Hits New 14-Year High, Unwinds Plunge in June and July by Wolf Richter - Here we go again. This morning, the notoriously volatile natural-gas futures, which have taken down numerous hedge funds over the years, jumped to nearly $10 per million Btu and currently trade at $9.75, the highest since July 2008, up 146% from a year ago, and up 350% from three years ago, topping off a series of spikes that started in early July, just when folks got used to the plunge in commodities prices.The price has now recovered all of its plunge that started in June 8, when a fire damaged and shut down the Freeport natural gas liquefaction plant in Texas, which cut LNG export capacity by 17%. The plant is scheduled to resume exports at partial capacity in October. The part of the plant that was damaged will take longer.The shutdown of the LNG export facility removed some demand from the US, and the plunge in price was a classic knee-jerk reaction that has now been unwound. Since the low point on June 30 ($5.39), the price has spiked by 81%.The June-July plunge in natural-gas futures prices had been one of the reasons cited why inflation in the US has peaked. Utility natural gas piped to homes accounts for about 1% of total CPI. In the July CPI reading, utility gas piped to the home fell by 3.6% from June, the first month-to-month decline since January, and a welcome relief after the spikes in the prior months, including +8.2% in June from May, and +8.0% in May from April.Spikes in futures prices don’t immediately translate into higher natural gas prices at home, but eventually they do. And this is another example of the game of inflation Whac A Mole, with price spikes popping up here and there all over again.Natural gas also feeds into electricity prices via power generators, into food prices via fertilizers made from natural gas, and into prices of all kinds of other products.The two-year surge in natural gas prices was powered by US exports of LNG, which have been booming, with new LNG export terminals coming online one after the other — seven since 2016. A small LNG terminal at Kenai, Alaska, has been operating for years. LNG exports added to demand for US natural gas and increasingly linked US natural-gas prices to global LNG prices.For operators of natural-gas-fired power plants, struggling to meet demand from air conditioning, the hit to natural gas export capacity this summer came just at the nick of time, and the plunge in the price of natural gas during the summer was a godsend. But that is now over.Exports of LNG have soared since 2016. The US also exports natural gas via pipeline to Mexico and to a smaller extent to Canada, but those pipeline exports have been roughly level over the past few years. What has added new demand on a large scale in the US are the LNG export terminals.The EIA has released LNG export data through May, which doesn’t yet include the potential decline in exports in June and July due to the shutdown of the Freeport LNG terminal. It will release June export data at the end of August: But even at today’s price, natural gas futures are a lot lower than they were during the spikes in 2005 and 2008, and just a tad above where they’d been in 2000. Back then, there was talk of natural gas shortages, and LNG import terminals were built to import expensive LNG to the US.This episode was followed by the boom in fracking, which turned the US into the largest natural gas producer in the world, which caused the price of natural gas in the US to collapse, sending into bankruptcy court many of the largest natural-gas frackers, including Chesapeake.And now the US natural gas market has been connected to global markets via large-scale export terminals that are arbitraging away much of the price difference between US natural gas and global LNG prices. So welcome to the new old world of higher natural-gas prices.Seen in this light, today’s price of natural gas in the US is not all that extraordinary, and it’s still a lot lower than in many other parts of the world:

U.S. natgas futures tease $10/mmBtu on sturdy demand, Europe crisis (Reuters) - U.S. natural gas futures jumped on Monday to within touching distance of the key $10 per million British thermal units (mmBtu) level, with gains driven by a strong demand outlook, record prices in Europe and concerns over availability of the fuel. Front-month gas futures rose 34.4 cents, or 3.7%, to settle at $9.680 per mmBtu, after jumping nearly 7% to $9.982, a 14-year high, earlier in the session. “This ($10) has been a long-awaited number,” Robert DiDona of Energy Ventures Analysis said. “We've had strong LNG demand and we've had a much warmer than normal summer, which has put continued pressure on our storage estimates, which we expect to finish below the five year average, so that has subsequently been resulting in a higher forward curve,” DiDona added. Global gas prices remained elevated near $84 per mmBtu in Europe and $57 in Asia. Russia will halt natural gas supplies to Europe for three days at the end of the month via its main pipeline into the region, state energy giant Gazprom said on Friday, piling pressure on the region as it seeks to refuel ahead of winter. “The fact that the strong (price) gains are developing amidst a little assistance from the weather factor suggests a strong underpinning in which record high European prices and major concerns over supply availability during the coming winter are keeping speculative shorts on the defensive,” analysts at energy consulting firm Ritterbusch and Associates said in a note. The average amount of gas flowing to U.S. liquefied natural gas (LNG) export plants held at 10.9 bcfd so far in August, the same as July. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG.

Natural Gas Futures Plummet After Freeport Pushes Back Restart; Cash Remains Strong - In a huge blow to natural gas bulls licking their chops at the sight of $10 gas, Freeport LNG’s announcement that it would not begin initial production until November, rather than the October startup previously targeted, crushed futures. After surging to a $10.028/MMBtu intraday high, the September Nymex gas futures contract plunged 48.7 cents day/day to settle at $9.193. October futures tumbled 49.2 cents to $9.155. Spot gas prices continued to rise, however, with robust power burns driving demand. NGI’s Spot Gas National Avg. tacked on 18.0 cents to $9.245. What started out as the most promising run at $10 gas yet, Tuesday’s session took a dramatic turn in the afternoon after Freeport provided an update on the planned return of its liquefied natural gas export terminal off the upper Texas coast. In the update, Freeport said it expects initial production can begin in early- to mid-November, with a sustained level of at least 2 Bcf/d by the end of November. This would represent more than 85% of the facility’s export capacity. “What a market reaction,” said Enelyst managing director Het Shah of the post-Freeport price slide. September futures tumbled all the way to a $9.050 intraday low before rebounding. Still, the prompt closed the session on the lower end of the nearly $1.00 trading band. Freeport’s recovery plan would utilize the second loading dock as a lay berth until loading capabilities at the second dock are reinstated in March. At that time, the company expects to be capable of operating at 100% of capacity. Shah said the later timeline for a return of operations could shift 106 Bcf of gas back into storage, assuming Freeport ramps up one liquefaction train at a time. This would put inventories back on track to reach 3.4 Tcf at the end of October. Some estimates had shifted closer to 3.3 Tcf based on recent storage data. That said, the delayed restart does not bode well for Europe looking to import more LNG in preparation for the winter. Dutch Title Transfer Facility prices have surged higher since late last week after Russia’s Gazprom PJSC announced plans for a three-day shutdown of flows to Europe via the Nord Stream 1 pipeline. Cove Point LNG also is gearing up for annual scheduled maintenance in September. As such, the Freeport news could send TTF prices screaming even higher when European trading gets underway overnight, according to Shah. “Is that going to take Henry Hub back up?” One participant on the online platform Enelyst noted that, as it has many times before when reacting to headlines, the market would likely calm down and revisit the bullish scenario. After all, storage inventories remain well below average and are likely to remain so even with another month of Freeport being out of service. Production also remains a constant disappointment, failing to sustain recent highs for more than a few days.

USA Henry Hub Gas Prices Climb to Record High | Rigzone -U.S. Henry Hub prices have climbed to a record high, Rystad Energy analyst Lu Ming Pang highlighted in a market note sent to Rigzone on Wednesday. The commodity almost hit the $10 per MMbtu mark for the first time, Pang outlined, adding that Henry Hub has typically averaged about $2 to $4 per MMbtu in previous summers. “Prolonged abnormal weather and a high demand for LNG internationally has applied upwards pressure on prices,” Pang said in the note. “Mild weather in the past week has reduced gas-for-power demand for cooling, resulting in 5.4 billion cubic feet per day (Bcfd) taken off gas demand. Given that domestic natural gas production has decreased by only 1.1 Bcfd, it appears that Henry Hub prices are responding to the reverberations in Europe, as compared to domestic fundamentals,” Pang added. In the note, Pang highlighted that U.S. storage levels were at 2.519 trillion cubic feet full as of August 17, which he said is 367 billion cubic feet (Bcf) below the five-year average, and 296 Bcf below last year’s levels for the same period, “adding further pressure on refilling U.S. storages, which may keep Henry Hub prices high”. At the time of writing, the Henry Hub price was trading at $9.39 per MMbtu. Henry Hub was trading under $4 per MMbtu at the start of the year. In a separate market note sent to Rigzone last week, Pang said the heatwave across the U.S. in July had led to record Henry Hub prices of beyond $9.46 per MMBtu. According to scientists from the U.S. National Oceanic and Atmospheric Association’s National Centers for Environmental Information, July 2022 will go down in the history books as the third-hottest July on record for the United States. The average temperature across the contiguous U.S. last month was 76.4 degrees F (2.8 degrees above average), NOAA highlighted. July 1936 was the hottest on record and July 2012 was the second hottest, NOAA outlined. According to NOAA, Texas felt the brunt of the heat this year, “reporting its hottest July, May-July and April-July on record”.

U.S. natgas futures firm on elevated global prices (Reuters) - U.S. natural gas futures edged up on Wednesday, buoyed by elevated global gas prices which offset limited pressure from a delay in the restart of the Freeport export hub. Front-month gas futures rose 13.7 cents, or 1.5%, to settle at $9.330 per million British thermal units (mmBtu). Prices stabilized following a volatile session on Tuesday, when they hit $10 per mmBtu for the first time since 2008 before retreating on news of a delay in Freeport LNG’s fire-hit Texas plant's return to operation, which would continue to hit demand by hurting the country’s capacity to send the fuel abroad. U.S. prices continued to take cues from elevated global gas rates, with contracts at $80 per mmBtu in Europe and $56 in Asia, a likely positive driver for relatively less expensive U.S. gas exports. "A major component of what's directing U.S. gas prices is again what's happening in international markets, which are rallying from the Nord Stream 1 outage coming up at the end of August," Russian state energy giant Gazprom said last week the country would halt natural gas supplies to Europe for three days at the end of the month via its main pipeline into the region. The Freeport restart delay also compounded global supply woes to some extent. "Although such a delay may not appear to disrupt the fall balances appreciably, it does require a significant adjustment in expected storage levels heading into the next heating cycle" with the supply shortfall likely to be reduced to around 250 billion cubic feet (bcf) or less by late November versus north of 300 bcf previously, Ritterbusch and Associates said in a note. Elsewhere, gas production in Britain rose 26% in the first half of this year compared with the same period last year, an industry body said on Wednesday, as it cuts Russian energy imports in response to Moscow's invasion of Ukraine.

NYMEX Henry Hub futures market shrugs off oversized build to US natural gas storage | S&P Global Commodity Insights - The weekly US natural gas storage injection more than tripled in size from mid- to late August as milder weather across the eastern half of the US lowered cooling demand, easing the market's supply crunch. The US Energy Information Administration Aug. 25 announced a 60-Bcf injection to US inventories for the week ending Aug. 19, outpacing market expectations by 5-10 Bcf.The addition to stocks was 9 Bcf more than the S&P Global Commodity Insights' storage survey result anticipated, which called for an injection of 51 Bcf. The weekly build was 14 Bcf larger than the prior five-year average injection of 46 Bcf, and nearly double the volume injected during the corresponding week in 2021 when just 32 Bcf was added to US stocks. On Aug. 25, the soon-to-expire September futures contract traded in a narrow range during the morning session holding steady at around $9.30/MMBtu, apparently shrugging off the EIA's latest storage estimate.Over the past two trading days, the balance 2022 futures contracts have held steady in the low to mid-$9/MMBtu range, consolidating losses that came after the announcement of a delayed restart to operations at Freeport LNG on the afternoon of Aug. 23. With the October gas market now long an additional 2 Bcf/d in unexpected supply, the futures market has pulled back from recent record highs. During the seven-day period ended Aug. 19, injections in the East region recorded the largest weekly gain, more than quadrupling to a net total of 30 Bcf. In the Midwest, total injections were up 9 Bcf on the week to 30 Bcf. In the South-Central region, net storage activity flipped from a withdrawal of 8 Bcf to an injection totaling 5 Bcf, EIA data showed.During the reference week, population-weighted temperatures across the Northeast dropped by more than 4 degrees Fahrenheit, with Texas registering a similar drop on the week. In the Midwest, a milder air mass ushered in temperatures nearly 3 F cooler. According to Platts Analytics, US gas-fired power burn demand dropped by more than 5.2 Bcf/d during the week to an average of 40.9 Bcf/d.For the week already in progress, hotter weather in the Northeast has lifted power burn demand there by nearly 1.3 Bcf/d, while net changes in other regions appear mostly neutral on balance. According to current projections, the EIA is likely to announce a slightly smaller injection to gas storage for the week ending Aug. 26, somewhere in the range of 52-58 Bcf, Platts Analytics data shows. This fall, the prospect of refilling US gas storage at an average or even above-average pace now looks more promising with the addition of some 60 Bcf in supply from lost feedgas demand at Freeport LNG. Over the balance of the current injection season, even average weekly builds to US stocks would leave pre-winter inventories at a concerningly low level below 3.3 Tcf. According to forecasts from Platts Analytics, the US industry is on target to finish the current injection season just above that level with a projected 3.3-3.4 Tcf in the ground.

Natural Gas Futures Fail to Sustain Momentum as Shoulder Season Nears - Natural gas futures seesawed in and out of the green on Friday as traders weighed soaring global prices and the specter of light supplies for the coming winter against relatively benign near-term weather patterns. The September Nymex gas futures contract ultimately settled at $9.296/MMBtu, down 7.9 cents day/day. October shed 7.5 cents and closed at $9.269. NGI’s Spot Gas National Avg. slid 4.0 cents lower to $8.815. Despite the late-week finish in the red, prices remain lofty by historical standards and analysts say much remains on bulls’ side. European and Asian natural gas prices spiked over the past week amid intensifying global competition for fuel as countries across the northern hemisphere try to prepare for the coming winter. U.S. LNG exports have played a key role in helping to meet global demand this year. American liquefied natural gas facilities are operating at or near capacity, and this is expected to continue even after the Freeport LNG plant returns to service later this year after a fire in June. The demand driving that consistent level of exports has created a foundation for strong U.S. prices. “Near-term fundamentals are supportive, with LNG feed gas reaching an eight-week high at 11.5 Bcf/d,” EBW Analytics Group’s Eli Rubin, senior analyst, said Friday. Europe was already increasingly dependent on U.S. exports amid depleted supplies on the continent in recent years. Russia’s war in Ukraine amplified the problem. Russia’s Gazprom PJSC in July cut gas deliveries via the Nord Stream 1 (NS1) pipeline to 20% of capacity, citing turbine repair delays that it blamed on Western sanctions against the Kremlin because of the war. Then, earlier this month, Gazprom said it would halt all gas flows to Europe via NSI for three days beginning Wednesday (Aug. 31). It cited needed maintenance, but the announcement sparked new worries about the continent’s reliance on Russia and its ability to store enough gas to heat homes and power industrial production this winter. The crisis could intensify as Asian countries increasingly vie for LNG, pushing up prices. The North Asian spot LNG benchmark hit a five-month high in the past week. In recent days, the European benchmark Dutch Title Transfer Facility set records, surging past the $90 mark. The bullish global demand picture, however, failed to outshine domestic forecasts for relatively mild late season weather after scorching hot conditions much of the summer. “Overall, weather patterns are viewed as seasonal much of the next 15 days, besides brief stronger heat early” in the week ahead, NatGasWeather said Friday. Still, “while weather patterns aren’t nearly as hot and intimidating as they’ve been, wind energy generation has been exceptionally light and is aiding stronger demand than what normally would be expected.”

As The U.S. Races Toward 30 Bcf/D Of LNG Exports, What Could It Mean For Upstream Markets?? - The momentum for U.S. LNG right now is powerful. With Europe’s efforts to wean itself off Russian natural gas boosting long-term LNG demand and Asian consumption expected to grow even further, there has been a strong push for new LNG projects in North America. So far, that has helped propel two U.S. projects, Venture Global’s Plaquemines LNG and Cheniere’s Corpus Christi Stage III, to reach a final investment decision (FID). With these two projects getting a green light, total export capacity in the U.S. will be at least 130 MMtpa — or 17.3 Bcf/d — by mid-decade. That top-line export capacity could be much higher, however. There are currently eight U.S. Gulf Coast pre-FID projects with binding sales agreements, and a handful of projects that are fully subscribed in credible non-binding deals. If all those projects go forward, it would add a staggering 86 MMtpa (11.4 Bcf/d) of export capacity to the U.S., pushing the total toward 30 Bcf/d, or 225 MMtpa. In today’s RBN blog we look at U.S. LNG under development, how high export capacity could go, and the implications for the U.S. natural gas market.The U.S. currently has 90.85 MMtpa (12 Bcf/d) of operational capacity at LNG export facilities, including Calcasieu Pass, which is still commissioning its last few trains but is expected to be fully in service soon. Beyond those, there are three projects that have taken FID and are under construction along the U.S. Gulf Coast — Plaquemines (seeJump in the Line) and Corpus Christi Stage III (see Jump in the Line, Part 2) both recently got their final go-aheads, as we mentioned in the intro, and ExxonMobil and QatarEnergy's Golden Pass, which took FID back in early 2019 and is expected online in 2024. [There are also projects under construction in Canada and Mexico (see our Go West series).] Beyond the Gulf Coast projects that have taken FID, there are several hoping to capitalize on the current market momentum. At RBN, we evaluate prospective LNG export projects based on their commercial, regulatory and infrastructure/feedgas progress and, from there, put them into three categories: probable, possible or speculative. In the possible category we further break this down into three tiers of likelihood based on how close they are to FID. Our full account of all projects and the progress they’ve made toward FID is available in the LNG Voyager Quarterly Report, the latest of which was released earlier this month. Prior to this year, the lowest tier in the possible category — Tier 3 — was by far the most numerous category. There were plenty of LNG projects announced but very few with a genuine shot at a near-term FID. Most had made just a little progress, usually on the regulatory front, but it didn’t seem likely that many, if any, would ever take FID. Now we have eight land-based U.S. Gulf Coast projects that we categorize as probable (dark orange diamonds and project names in Figure 1) or possible (Tier 1, light orange; Tier 2, yellow), not to mention other offshore projects (the topic of an upcoming blog) and projects in Mexico and Canada. When you evaluate each of these individual projects on its own merits, a strong case for FID can be made for every one. But together, as a big picture, we’re talking about 86.1 MMtpa (11.4 Bcf/d) of new export capacity in a very small geographic footprint. It’s an almost unthinkable amount of LNG. The lines between the categories — differentiating what will be built and what won’t — and even the lines between FID and not — are blurring, but it’s increasingly looking like most of these projects, and potentially others out there, will go forward. And, as we mentioned in the introduction, that will have a significant impact on the U.S. natural gas value chain — from upstream to downstream — particularly on the Gulf Coast.

Freeport LNG Start Date Pushed Back -Freeport LNG Development L.P. has announced that it has completed a “detailed assessment” of alternatives for resuming operations at its liquefaction facility following an incident at the site on June 8. In a statement posted on its website, the company noted that it has identified a recovery plan for reinstatement of partial operations that it believes ensures the long-term safety and integrity of the facility, provides recovery execution certainty, and minimizes procurement and performance testing risks. The company said it is anticipated that initial production can commence in early to mid-November and ramp up to a sustained level of at least two billion cubic feet per day by the end of November, which Freeport highlighted represents over 85 percent of the export capacity of the facility. The company said the recovery plan will utilize Freeport LNG’s second LNG loading dock as a lay berth until loading capabilities at the second dock are reinstated in March 2023, “at which time we anticipate being capable of operating at 100 percent of our capacity”. Freeport conceded that typical construction risks could impact the recovery plan. The company also revealed that it has engaged Kiewit Energy Group Inc to perform the engineering, procurement, and reconstruction activities necessary to implement Freeport LNG’s recovery effort. “Freeport LNG continues to coordinate closely with representatives of the Pipeline Hazardous Materials Safety Administration, the Federal Energy Regulatory Commission, the U.S. Coast Guard and other applicable regulatory agencies to implement its recovery plan and corrective measures to ensure a safe and confident resumption of operations,” Freeport said in a company statement. Earlier this month, Freeport revealed that it and the Pipeline Hazardous Materials Safety Administration had entered into a Consent Agreement related to the June 8 incident at Freeport LNG’s liquefaction facility. The obligations under the Consent Agreement are intended to ensure that Freeport LNG can safely and confidently resume initial LNG production and thereafter ultimately return to full operation of all liquefaction facilities, Freeport noted at the time. Back in June, Freeport highlighted that it was estimated that the resumption of partial liquefaction operations would occur in early October 2022. At the time, the company was also continuing to target year-end for a return to full production.

Fire at Biggest USA Midwest Refinery - An outage at the largest US Midwest refinery is raising wholesale fuel prices regionally just as the agricultural sector gears up for its busiest time of year. BP PLC shut two crude units at its 435,000 barrel-a-day Whiting, Indiana, refinery after a fire Wednesday, Wood Mackenzie’s Genscape said. The fire occurred in the power house and caused a loss of cooling water, which could lead to damaged equipment, according to a person familiar with operations. A prolonged shutdown of the plant, which supplies gasoline, diesel and jet fuel to most of the region’s major distribution centers, could tighten fuel markets just as farmers in the nation’s breadbasket prepare for harvesting season. Diesel demand typically starts to rise this time of year because it’s used for heating and to fuel big machinery. Mid-continent distillate inventories, which include diesel, are at their lowest seasonally since 2006, and gasoline stockpiles are the least since 2014, according to government data. Diesel for prompt delivery traded at a 5-cent per gallon premium over early September deliveries, according to a broker. Gasoline delivered into Michigan jumped 10 cents a gallon on news of the outage as well. A lengthy shutdown could divert crude to the storage depot in Cushing, Oklahoma. Inventories at the hub, the delivery point for benchmark US crude futures, have already risen for eight straight weeks and the prospect of further builds are weighing on futures and physical crude markets. In the oil futures market, the US crude futures prompt spread contracted sharply, with the gap between the October and November contracts narrowing by 10 cents. WTI’s discount to international benchmark Brent crude weakened for the same reason, traders said. The units shut include Pipestill 12, the region’s largest crude unit with a capacity of 255,000 barrels-a-day, and the 70,000 barrel-a-day Pipestill 11A. Pipestill 12 processes as much as 90% heavy Canadian crude that’s piped in from the oil sands. If the fire damage is confined to a control panel, restart of the units could begin as soon as this weekend with a return to normal operations as soon as early next week. The fact that a 102,000 barrel-per-day coker, which supports Pipestill 12, is still running may indicate a short downtime is expected.

US Strategic Oil Reserves Hit Lowest Level Since 1985 on Biden Releases -- The US's strategic oil reserves fell to their lowest level in 37 years last week as the releases ordered by President Joe Biden continued. Strategic petroleum reserve (SPR) stockpiles fell to 453.1 million barrels in the week to Friday, according to Department of Energy data. That's the lowest level since January 1985. Stockpiles have fallen by more than 160 million barrels this year after the White House ordered the release of record amounts of crude oil in an effort to cool sky-high gasoline prices and tamp down on inflation. Biden said in March that the US would release 1 million barrels of oil a day for six months as energy prices spiked in the wake of Russia's invasion of Ukraine — which adds up to about 180 million barrels. The White House then said in late July the US would release another 20 million barrels. Meanwhile, the US has pushed for other countries to release oil from their strategic reserves in an effort to boost supply and cool the pressure in the market. In March, the International Energy Agency said non-US member countries would open up an additional 60 million barrels. Analysts have said the releases have contributed to the sharp fall in oil prices seen over the last two months, although the key driver has been fears about a global economic slowdown. Brent crude oil has lost around 20% from its June highs, while WTI crude, the US benchmark price, has dropped around 24%. That decline has brought US gasoline prices down from above $5 a gallon in June to $3.89 on Tuesday, according to AAA. "The combined international agreements will result in an estimated 260 million barrels of supply released to the global market by October," Thomas Feltmate, senior economist at TD Economics, said in a note earlier this month. "Its impact on prices can't be understated." The US strategic petroleum reserve is kept in huge underground salt caverns at four major facilities in Texas and Louisiana. When the US releases oil from the reserves, the Department of Energy sells the crude in an auction to the highest bidder. At its peak in 2009, the SPR held 727 million barrels of crude oil. The US consumed about 20 million barrels of oil a day on average in 2021, according to the Energy Information Agency, while it produced around 11 million barrels a day. The Biden administration is proposing to refill the stockpiles under a plan that is likely to see it order 60 million barrels this fall, for delivery at an unspecified time in the future.

Onshore Drilling Rig Use To Increase Over The Next Five Years --The specialist energy market research and consultancy firm Westwood Global Energy has revealed a healthy recovery roadmap for the global land rig market, driven by higher commodity pricing and mounting pressures around energy security. Westwood expects many regions to recover from the dramatic global downturn throughout 2020 better than previously expected. In 2020, levels reached a low of around 39,000 wells drilled onshore globally, but activity in 2022 is expected to reach 49,600 before climbing to around 60,000 wells in 2026. The increase in drilling demand combined with higher commodity pricing has seen land drilling rig dayrates increase in several regions. The US has seen dayrates increase by 25 percent over 2022, with average dayrates for the second quarter of 2022 reaching $26,500. Other regions such as the Middle East have more stable pricing due to longer-term contracts and the presence of large National Oil Company-owned rig fleets. As operators focus on developing more complex reservoirs, growing demand for super-spec automated rigs in the US has also meant that these units are reaching dayrates in the mid-$30,000s due to tight supply. Outside of the US, countries such as Colombia and Oman are also experiencing high demand for high-spec rigs, with Colombia seeing dayrates reaching $45,000 for units with automation capabilities. “It’s encouraging to see the market begin to get back on its feet after the setbacks from 2020 and 2021, but there will still be a significant oversupply of rigs globally, which we expect to see throughout the forecast period.” “The need for greater domestic energy production to ensure the security of supply has no doubt had an impact on the speed of recovery that we’re seeing in comparison to last year’s forecast. The sanctions imposed on Russia following its invasion of Ukraine have led to higher-than-expected oil and gas prices, supporting rig demand globally.”

Oil and Gas Recruiters Talk Staff Shortage -There’s a dearth of immediately available candidates. That’s what Amanda McCulloch, the chief executive of TMM Recruitment – which works with employers in the north-east of Scotland and is predominantly focused on business support functions and onshore engineering and trades roles - told Rigzone when asked if there is a staff shortage in the oil and gas industry. “Resourcing at short notice or for temporary assignments is particularly difficult and if a long-term contract role can be offered as staff, we’re encouraging employers to consider this option,” McCulloch said. “All our recruitment specialisms are reporting candidate shortages and with more job opportunities than people have experienced in the last five to seven years, salary expectations have shifted upwards,” the chief executive added. When asked which workers are particularly in demand, McCulloch noted that recruiters are among the most sought-after professionals right now, adding that “that’s a reflection of higher recruitment volume in an environment of low candidate availability”. “Reflecting a renewed focus on compensation and training there’s a positive shift in enquiries for people with this specialist knowledge,” McCulloch said. The TMM Recruitment representative highlighted that there’s a shortage across IT disciplines from software developers, business analysts, data science and cyber specialists to system specific technical experts. “Contracts, tendering and commercial advisors are in high demand and in accountancy and finance it is treasury, tax, compliance, corporate finance and cost controller roles that are challenging to fill,” McCulloch said. “It’s also worth noting the sustained demand for marketing, communications and environmental professionals since before the end of the pandemic. At the executive level I’m working on board appointments directly associated with the energy transition, diversification and commercializing technology in PE backed SMEs,” McCulloch added.

Oil and gas wastewater violations by XTO Energy results in $1.7M fine - An international oil and gas company agreed to pay $1.77 million in fines to New Mexico regulators for violations in its wastewater operations in the Permian Basin. XTO Energy was first issued four notices of violations by New Mexico’s Oil Conservation Division (OCD) in February for violating state regulations at water disposal facilities south of Malaga. The facilities were injecting oil and gas wastewater, known as produced water in industry terms brought to the surface with oil and gas and high in salt and other toxic chemicals. They were found in violation of reporting the amount of water injected, or notifying the state when injection commenced. More:$110 million sale of Permian Basin assets continues oil and gas growth in New Mexico, Texas To dispose of produced water, energy companies like XTO often pump it back into the shale formations it came from and are required by the State of New Mexico to report volumes of water injected and when operations begin. The notices issued to XTO reported the company had failed to do so, initially incurring fines up to about $2.2 million. More:Ronchetti oil and gas rebate an expensive campaign promise or giving power to New Mexicans? Disposal injection is closely regulated in southeast New Mexico’s Permian Basin as the practice was recently linked to increasing earthquakes along the border to Texas in both states. After being notified of OCD’s discovery of the violations, XTO audited all of its water injection sites in New Mexico, finding other similar violations, per the OCD’s announcement. Courtney Wardlaw, spokesperson for XTO’s parent company ExxonMobil said none of the violations were linked to induced seismicity and the deficiencies in the operations were fixed. More:Vasquez to balance oil and gas and the environment. Will it get him elected to Congress? “We have fully implemented the needed corrective actions in New Mexico. We’ve been operating in New Mexico for quite some time, and we make a priority for the safety of our workforce and the environment in those communities in which we operate.”

Could protecting a rare bird threaten oil drilling in new Mexico? --Republican congressional leaders including New Mexico’s U.S. Rep. Yvette Herrell are fighting a proposal to provide federal protections to the lesser prairie chicken in multiple western states, arguing such government action would stymie oil and gas and other industries in the region. In June 2021, the U.S. Fish and Wildlife Service proposed designating the species as “endangered” in a southern population zone, encompassing southeast New Mexico and West Texas – the Permian Basin region known as the U.S.’ most active oilfield. A northern population of the chicken was proposed for a “threatened” designation, covering the northern Texas panhandle, and areas of Kansas, Colorado and Oklahoma. More:Oil and gas impacts lead to lawsuit for federal action on lesser prairie chicken protection An endangered designation means a species’ extinction is imminent, and entails the federal government restricting some land uses and activities that would kill individual chickens while also requiring the government to devise a plan to recover the species' population. Threatened status means a species is likely to meet the standards for threatened soon, and the federal government takes similar but less-restrictive steps to prevent that elevation of status. If either a listing as endangered or threatened was ultimately made, Herrell said it would prove damaging to the oil and gas industry in New Mexico, which is contained within her southern Second Congressional District, and a key driver of the state’s economy. Her comments came during a recent hearing on endangered species of the all-Republican Congressional Western Caucus discussing the impacts of federal conservation efforts on industry. Herrell herself was recently named ranking member of the House Oversight Committee’s environmental subcommittee and is an ardent supporter of oil and gas and opponent of increased government regulations. She’s up for reelection in November, running against Democrat former-Las Cruces City Councilor Gabe Vasquez, and energy and its impact on the environment was a central theme of both campaigns. “Unfortunately, the Fish and Wildlife Service has proposed to list the lesser prairie chicken as endangered in my district, which is both unfair and unjustified,” Herrell said. “A listing would also have a negative impact on industries both vital to New Mexico’s economy and our national security like energy production and agricultural operations.”

Judge revives block on Biden leasing pause - A federal judge has barred the Biden administration from pausing new oil and gas leases on federal lands in 13 Republican-led states.The ruling follows a decision this week from the 5th U.S. Circuit Court of Appeals that struck down an order requiring the Interior Department to continue lease sales. The appeals court ruled that the mandate issued last year by the U.S. District Court for the Western District of Louisiana “lacked specificity” and sent the matter back to the lower bench to decide if the Biden administration had authority to pause lease sales (Greenwire, Aug. 17).The day after the 5th Circuit opinion was released, Judge Terry Doughty of the Louisiana District Court — the same judge who issued the preliminary injunction against Interior last year — ruled that the leasing moratorium was “beyond the authority of the President of the United States.”The pause comes from Executive Order 14008, which President Joe Biden issued on Jan. 27, 2021, to address climate change. A section of that order required Interior to stop all new oil and gas lease sales until it could review the environmental impacts of the program.Legal observers have noted that the Biden administration was unlikely to revive the moratorium after Interior issued its analysis of the program’s impacts in November 2021 and after committing to leasing requirements under the newly passed Inflation Reduction Act (Energywire, Aug. 18).Doughty, a Trump appointee, ruled that Biden’s pause violated the Mineral Leasing Act (MLA) and Outer Continental Shelf Lands Act (OCSLA), which set rules for federal onshore and offshore energy development.“Even the President cannot make significant changes to the OCSLA and/or the MLA that Congress did not delegate,” Doughty said in the ruling.The legal challenge against Biden’s executive order was brought by a coalition of 13 states led by Louisiana Attorney General Jeff Landry (R). Landry’s office did not respond to request for comment in time for publication.

Interior denies it ignored impact of 3,500 oil, gas permits on climate - (Reuters) – The Biden administration has widely denied allegations it violated environmental review laws when approving thousands of oil and gas drilling permits, including a failure to consider how greenhouse gas emissions affect climate change. Will do US Department of the Interior on Monday pushed back On claims it shied away from obligations under the National Environmental Policy Act and other laws to consider how permits for more than 3,500 oil and gas wells could contribute to climate change, as noted by the Center for Biological Diversity and others. Conservation groups made the allegation in June. Complaint, In a 50-page response, the government dismissed the groups’ claims in broad strokes, repeatedly asserting that a series of allegations made by the group – including “a growing body of scientific literature” showing That greenhouse gases cause climate change—and that the crisis is primarily driven by the burning of fossil fuels—were “vague and ambiguous”. The government said it lacked “knowledge and sufficient information” to form an opinion on those claims. But according to Bret Hartl, director of government affairs for the Center for Biological Diversity, the lack of data is part of the point of the lawsuit. The government’s approach to allowing it fails to take a look at the cumulative impacts of oil and gas drilling on federal lands, so it may be difficult to draw a straight line between the damages of the program and climate change, he said. “In general, it is a mess. The way the government has looked at leasing as well as permitting is a mess and remains a mess because the answer to the question is never – who we What’s the harm in doing that and what’s the harm in that big sense of climate change? A spokesman for the Interior Department declined to comment on the matter, but confirmed that approval is under way under the Biden administration. The Center for Biological Diversity and WildEarth Guardians, which is represented by the Western Environmental Law Center, targeted at least 3,535 permits in New Mexico’s Permian Basin and Wyoming’s Powder River Basin, which they said during Biden’s first 16 months. in the U.S. accounted for three quarters of all onshore drilling approvals.

Cleanup continues at site of Yellowstone park gasoline spill - (AP) — Cleanup continued Monday after a fuel pup trailer rolled onto its side in Yellowstone National Park last week and spilled gasoline, park officials said. The accident, which happened at about 4 a.m. Friday on U.S. Highway 191 in the western side of the park, spilled 4,800 gallons of gasoline onto the roadway and into a wetland adjacent to the highway, the Environmental Protection Agency said. While the wetland feeds into nearby Grayling Creek, there had been no reports of gasoline reaching the creek. Crews were working Monday to clean up fuel, pump contaminated water and excavate contaminated soil in and around the wetland, said Katherine Jenkins, a spokesperson for the EPA. Park law enforcement cited the truck driver for failure to maintain control

Oilfield wastewater spill reported in northwest North Dakota --State regulators are investigating the spill of oilfield wastewater from a broken pipeline in northwestern North Dakota. Karl Rockman, of the state Department of Environmental Quality, said Hess Corp., the pipeline's owner, reported the saltwater spill near Ray on Aug. 15, and estimated its size at 8,400 gallons. Rockman said Monday the spill now appears to be at least 100 times that. It was not immediately known what caused the leak to the pipeline. Agency officials were on scene to oversee the cleanup and investigate the spill, said Rockman, director of the department's division of water quality. Rockman said it was unknown if any drinking water sources were threatened, or how much land was affected. Saltwater is an unwanted byproduct of oil and gas development and is considered an environmental hazard by the state. It is many times saltier than sea water and can easily kill vegetation exposed to it.

AG Ferguson joins other western states in requesting to halt expansion of methane gas pipeline – Washington state Attorney General Bob Ferguson joined other Western state’s attorneys general on Monday in filing a motion to stop the expansion of a methane gas pipeline that would run from Canada to California. Gas Transmission Northwest asked the Federal Energy Regulatory Commission to expand its capacity to transport methane gas in a pipeline that runs through the Pacific Northwest, including near Spokane and North Idaho. Gas Transmission Northwest is a pipeline run by Canada-based TC Energy, which also is in charge of the Keystone pipeline system through the northern United States. Ferguson, along with attorneys general in Oregon and California, filed a motion to intervene and protest the expansion. “This project undermines Washington state’s efforts to fight climate change,” Ferguson said in a statement. “This pipeline is bad for the environment and bad for consumers.” The motion says Washington, Oregon and California are concerned with the environmental impact that the pipeline expansion will have, including an increase in air pollution and possibly increasing risks to those who are already disproportionately affected by climate change. The pipeline expansion would transport about 150 million cubic feet per day of additional methane gas from Canada for sale in Washington, Idaho, Oregon and California, according to Ferguson’s office. It would emit about 3.47 million metric tons of carbon dioxide equivalent each year for the next 30 years, according to his office. “The reality is, when we expand gas infrastructure, it’s all too often minority, low-income, and Indigenous communities that pay the price,” California Attorney General Rob Bonta said in a statement. “I urge FERC to address the deficiencies in its environmental review and comply with the law.” Ferguson claims that the company is using “faulty assumptions” about the demand for methane gas in the next three decades. The motion says there is “no public necessity” for the increased pipeline capacity as many state policies are already working to reduce regional demand for methane.

Oil spill settlement reached with California businesses — A pipeline operator said Thursday that it has reached a settlement with Southern California tourism companies, fishermen and other businesses that sued after a crude oil spill off the coast last year near Huntington Beach. Amplify Energy Corp., which owns the pipeline that ruptured and faces a criminal charge for its oversight, said in a statement that claims have been settled in the class-action lawsuit filed by businesses affected by the October spill of about 25,000 gallons (94,600 liters) of crude into the Pacific Ocean. The company did not say how much the businesses would be paid but said its insurance policies will cover the cost of the settlement, which would still need to be approved by a federal court. “Although we are unable to provide additional detail at this time, we negotiated in good faith and believe we have come to a reasonable and fair resolution,” Martyn Willsher, Amplify’s president and chief executive, said in the statement. The pipeline rupture sent blobs of crude washing ashore in surf-friendly Huntington Beach and other coastal communities. While less severe than initially feared, the spill about 4 miles (6.4 kilometers) offshore shuttered beaches for a week and fisheries for more than a month, oiled birds and threatened wetlands that communities have been striving to restore. Attorneys for the businesses that sued said in a statement that the settlement includes monetary relief but they didn't provide details. The agreement doesn’t apply to the operators of ships accused of dragging anchors in the harbor and causing damage to the pipeline months before the spill. “All rights to continue pursuing claims against the ship related entities are expressly reserved by both the Class Plaintiffs and the Amplify entities,” the statement said. The settlement also doesn't resolve Houston-based Amplify's claims against an organization that helps oversee marine traffic. Amplify contends that two ships during a January 2021 storm dragged their anchors across the pipeline that carried crude from offshore oil platforms to the coast. Amplify also faces a criminal charge related to the pipeline leak. U.S. prosecutors charged Amplify and two of its subsidiaries with illegally discharging oil and claimed the companies failed to respond to eight leak detection system alarms over a 13-hour period that should have alerted them to the spill. Amplify has said workers believed they were false alarms.

Calif. poised to ban sales of new gas-fueled cars by 2035 - California regulators are poised to approve a groundbreaking rule that would effectively ban sales of new gas-fueled passenger vehicles starting in 2035.The California Air Resources Board (CARB) is scheduled to vote today on its “Advanced Clean Cars II” proposal, which would require that automakers offer only electric and other zero-emission vehicles (ZEVs) in the state by that 2035 deadline.Automakers must hit other clean car benchmarks along the way, including ensuring that 35 percent of new cars are ZEVs by 2026, and 68 percent are ZEVs in 2030. Only used gas-fueled cars would be sold in the state after 2035.“California now has a groundbreaking, world-leading plan to achieve 100 percent zero-emission vehicle sales by 2035,” said Democratic Gov. Gavin Newsom, who in a 2020 executive order asked CARB for the regulation. “It’s ambitious, it’s innovative, it’s the action we must take if we’re serious about leaving this planet better off for future generations.”The proposed rule would also require automakers to give warranties ensuring 70 percent of EV battery health for eight years or 100,000 miles. There are also requirements to standardize battery health measurements and mandates for battery labeling, aimed at aiding battery recycling.The likely decision potentially has reverberations beyond the nation’s most populous state. California officials hope that the 17 states that follow California’s existing ZEV mandate will adopt the 2035 edict. That action is already underway in some states, including Massachusetts, where Gov. Charlie Baker (R) recently signed legislation to phase out sales of gas-fueled cars by 2035.That Massachusetts law can’t take effect until California acts, said Bill Magavern, policy director at the Coalition for Clean Air. California is the only state that has an EPA waiver from the national vehicle emissions standard, as long as its regulation is tougher. Massachusetts and other states must follow either the national standard — or California’s stricter one. California also will need to secure a new EPA waiver for the Advanced Clean Cars II mandate, because it’s a new program.In addition to Massachusetts, New York and Washington also have said they will ban sales of new gas cars after 2035.Magavern said California “will kind of be a demonstration that this transition is happening. We’ve already seen a lot of signs of that, but I think this will actually be the most tangible sign.”

Is NEPA a winning strategy to fight oil and gas? - Environmentalists have long used four letters — NEPA — to force greenhouse gas disclosures about fossil fuel plans on public lands. But as the massive Willow oil and gas project in Alaska shows, the National Environmental Policy Act may not be enough to stop proposals even as Democrats’ political commitments and climate policies aim to reduce federal drilling.A draft environmental reviewrecently released by the Biden administration found that Willow could drive as much as $18 billion in climate damages. That finding came on the heels of a federal judge vacating the project’s Trump-era approval over an earlier climate analysis deemed insufficient under NEPA. But the new carbon cost estimates produced by the Biden administration are just one factor in determining whether the White House ultimately approves — or rejects — Willow.Legal analysts say that’s because NEPA has its limits. It demands robust analysis, but it can’t force an administration to make a particular decision.“NEPA, for all its benefits, doesn’t mandate outcomes. All it mandates is that an agency accurately disclose the impacts — the environmental impacts — of a project,” said Jeremy Lieb, a senior attorney for Earthjustice, one of the organizations that got the Willow project approval revoked on climate grounds.Willow, backed by Houston-based ConocoPhillips, highlights a long struggle by environmental groups to make climate change central to decisions about fossil fuel development on public lands. The project also underscores the legal constraints faced by climate organizers who ultimately want to retire oil and gas drilling on federal lands — an action that may have to come from the White House or Congress rather than the courts.The Biden administration hasn’t yet revealed its plans with Willow. A public comment period on the draft environmental review ends this month.Over a 30-year lifetime, Willow could generate some $10 billion in public revenues by producing from a 600-million barrel reserve, according to ConocoPhillips. The company had pushed to begin construction during the winter of 2021, before being stymied by courts. Company leadership has since stressed that the company needs federal approval before reaching a financial close and moving the project forward. The project’s supporters, who include union workers, state and local political leaders and Alaska Native corporations, are now hoping for a final decision this year in time for construction during the Arctic’s narrow window for operations — when it’s cold enough for ice roads to protect the sensitive tundra.

Oil and gas industry contracts in North America down a decrease in July 2022 - Oil and gas contracts in North America registered a decrease of 10% in July 2022 with 138 contracts, when compared with 153 contracts in the previous month, according to GlobalData’s oil and gas contracts database.The activity marked an increase of 17%, when compared with the last 12-month average of 118 contracts. Looking at contracts by country, the US led the activity in July 2022 with 127 contracts representing a 92% share of all the oil and gas contracts, followed by Canada with seven contracts and a 5% share and Mexico with two contracts and a 1% share. It saw a decrease of 9% over the previous month’s total of 139 contracts and an increase of 25% when compared with the last 12 month-average 102 contracts in the US.

Peru Updates Spill Figure: It Rises To 11,900 Barrels – Peru updated the number of oil spilled in the Pacific in front of a Repsol refinery on Friday and nearly doubled the previous amount, indicating they added up to at least 11,900 barrels to a tragedy that It has been described as “the worst environmental disaster in its capital in recent decades.” A Peruvian judge banned the Spanish Repsol’s local director, Jaime Fernández-Cuesta, three managers and a state official from leaving the country for 18 months after being investigated for an alleged offense of environmental pollution. Environment Minister Rubén Ramírez told reporters that “the new estimate is 11,900 barrels,” at least 1.8 million liters of oil, and said that figure could rise. Repsol later provided a lower figure than the official one and calculated the spill at 10,396 barrels. Ramírez indicated that the oil slick spread over 44 linear kilometers of coastline and contaminates a total of more than 116 square kilometers between sea and land, an area slightly larger than Paris. After the spill on January 15, Repsol reported that seven gallons – about 26.5 liters – three days later, 6,000 barrels had been spilled. During the day, the Italian company that owns the ship “Mare Doricum” – from which crude oil was unloaded when a strong wave was attributed to an underwater volcanic eruption near Tonga – said on Friday Said they were shifting to another ship. The rest of its oil tanker cargo was anchored in the port of El Callao. Peru has banned the Italian ship owned by Fratelli d’Amico Armatori SpA from setting sail and indicated that it would have to pay $37.5 million in bail if the ship decides to leave the country.

Pacific Ocean: Peru sues Repsol with $4.5bn over sweeping oil spill in Pacific Ocean - In January this year, Peru experienced a catastrophic oil spill which left the beaches contaminated along the coastlines in Lima. The nation's consumer protection agency has now filed a civil lawsuit and sought damage costs amounting to $4.5 Billion- $1.5bn for the locals and $3bn for the environmental deterioration. The leak was estimated from 10,000 barrels causing grievous environmental damage and cessation of marine lives in and around the area. Peru recalls the incident as one of the greatest eco-catastrophes recently, although Repsol has dismissed its accountability for the occurrence. At the very beginning, the refinery blamed it on waves stirred by a volcanic emission in Tonga. But a probe revealed that a pipeline in Repsol's name that runs underwater catalyzed the incident. It happened when Mare Doricum, an Italian tanker, arrived at Repsol to unload. However, Repsol has rebuffed the lawsuit stating that it lacks merit and the sum is unreasonable. So far, numerous locals and fishermen have lost their livelihoods to the disaster, as recorded by the Peruvian Environment Ministry. Indecopi alleged that the destructive effects of the spill are still felt by the people inhabiting and working in the region. Therefore, m must put the situation to the right. The head of the Indecopi stated that they are doing their utmost to make Repsol compensate for the population living within 150Km of the contaminated waters. The investigation proceedings began in January to look into Repsol's conduct, and four of their executives were prohibited from exiting the land for the subsequent 18 months. Repsol, in the month of May, claimed that it cost them $150m to cleanse the spill.

UK Offshore Drillers Could Go On Strike If Pay Conditions Are Not Met -UK workers' union Unite has started a ballot for over 300 offshore drilling and contract maintenance workers covered by the United Kingdom Drilling Contractors Association (UKDCA) on strike action. The ballot opened on August 22 and will close on September 27. It follows Unite members rejecting a 5 percent pay offer. It is worth noting that the UKDCA covers around 600 workers including several major offshore contractors including Archer, Maersk, Transocean, and Odfjell. “Unite’s UKDCA members are always the first to suffer when there is a downturn offshore and the last to benefit when there is an upturn – that is if they even benefit at all. UKDCA drill crews have had no meaningful pay increase for several years despite the consistently high price of oil and gas, and record operator profits. Our members have their union’s full support in fighting for better jobs, pay, and conditions offshore,” Unite general secretary Sharon Graham said. Earlier this month Unite accused BP of ‘unfettered profiteering’ as the oil and gas giant reported its biggest quarterly profit for 14 years which hit $8.45 billion between April and June – more than three times the amount it made in the same period last year. “Inflation stands at a forty-year high and it’s expected to rise further with energy bills having risen by 54 percent. Drilling companies have major problems in retaining and re-employing experienced drill crew, yet they want to pay our members a pittance. Unite always remains open to meaningful dialogue and we urge the UKDCA to get back round the table before the dispute escalates to strike action,” Vic Fraser, Unite’s industrial officer, added.

Gas prices in Europe have risen to $2,700 on news about PP-1 - The price of gas in Europe during the first hour of trading at the p’ increased by 8% more on Friday, and on the previous day it exceeded $2,700 per 1000 gas. cube m on the background of information to Gazprom about the supply of gas pipeline Pivnichniy Potik-1. About the data of the London Stock Exchange ICE on the evening of April 19. So , the rate of spring f’future on the TTF hub in the Netherlands grew to $2712 per 1 yew. cube m, or 261 euros per MW year. This year, Gazprom has announced that the supply of gas by Pivnichny Stream-1 will be completed from 31 sickles to 2 spring through the repair of a single gas-pumping unit, which was left in operation. “The complex of regulatory work will be carried out in conjunction with the technical maintenance contract with the facsimiles of Siemens”, – The technical maintenance of the unit will need to be carried out for 1000 years. After the completion of the work, in case of technical failures, the gas transportation unit will be renewed up to 33 million cubic meters. m for mining.

European gas prices surge as Russian pipeline maintenance fuels fears of a total shutdown -European natural gas prices surged on Monday after Russia's state-owned energy giant Gazprom said it would shut down Europe's single biggest piece of gas infrastructure for three days from the end of the month.The unscheduled maintenance works on the Nord Stream 1 pipeline, which runs from Russia to Germany via the Baltic Sea, deepen a gas dispute between Russia and the European Union and exacerbate both the risk of a recession and a winter shortage. The front-month gas price at the Dutch TTF hub, a European benchmark for natural gas trading, jumped 19% on Monday to reach 291.5 euros ($291.9) per megawatt hour.The contract closed on Friday at a record high of 244.55 euros per megawatt hour, registering its fifth consecutive weekly gain.Gazprom said Friday that the shutdown was because the pipeline's only remaining compressor required servicing. Gas flows via the Nord Stream 1 pipeline will be suspended for the three-day period from Aug. 31 to Sept. 2.Gazprom said gas transmission would resume at a rate of 33 million cubic meters per day when the maintenance work is completed "provided that no malfunctions are identified."The announcement of the temporary shutdown comes as European governments scramble to fill underground storage facilities with natural gas supplies in a bid to have enough fuel to keep homes warm during the coming months.Russia has drastically reduced natural gas supplies to Europe in recent weeks, with flows via the Nord Stream 1 pipeline currently operating at just 20% of the agreed-upon volume.Moscow has previously blamed faulty and delayed equipment for the sharp drop in gas supplies.Germany, however, considers the supply cut to be a political maneuver designed to sow uncertainty across the bloc and boost energy prices amid the Kremlin's onslaught against Ukraine. Until recently, Germany bought more than half of its gas from Russia. And the government of Europe's largest economy is now battling to shore up winter gas supplies amid growing fears that Moscow could soon turn off the taps completely. What's more, Europe's race to save enough gas comes at a time of skyrocketing prices. The surge in energy costs is driving up household bills, pushing inflation to its highest level in decades and squeezing people's spending power.

Europe’s Gas Price Is Now Equivalent To $410 Per Barrel Of Oil -Heatwaves this summer and expected natural gas shortages this winter are driving gas prices higher and higher.Europe’s benchmark gas prices surged by 14% in just three days to a fresh record-high, continuing the upward trend from recent weeks, as gas demand for power generation is high amid heatwaves and Russian pipeline supply remains at low levels, while the EU scrambles to fill gas storage ahead of the winter that would see energy and gas rationing, industries shutting down production, and households paying sky-high prices for heating and electricity. Europe is in the most precarious position, but natural gas prices are rallying in the United States and Asia, too. Gas demand for power is high, and production is flat in America, while major Asian buyers are back on the LNG market to secure supplies for the winter.As LNG is now a global commodity, benchmark gas and spot LNG prices are soaring all over the world. And they could jump even higher when the heating season approaches.Europe’s benchmark gas prices at the Dutch TTF hub rallied 14% between Monday and Wednesday, jumping by 6% on Wednesday at a new record of $240 (236 euro) per megawatt-hour. Gas prices have already doubled since June, when Russia first reduced supply via Nord Stream, the key pipeline carrying gas to Europe’s biggest economy, Germany.The European gas benchmark now trades at what would be an equivalent of $410 per barrel of crude oil, which highlights “the debilitating economic impact on the region,” Ole Hansen, Head of Commodity Strategy at Saxo Bank, said this week.Such record gas prices are hitting industries in Germany and the rest of Europe, with companies announcing production halts or curtailments “until further notice” amid soaring energy costs. Industries have warned that reduced production and operations could lead to a collapse of supply and production chains. Governments are scrambling to secure enough gas for the winter while walking a tight rope between alleviating the cost burdens on households and avoiding an industrial collapse and a wave of bankrupt energy companies.As a result of the gas crunch and a heatwave constraining supply and output from other fuel sources, year-ahead electricity prices continue to soar in Europe, with German power prices, the European benchmark, jumping to over $508 (500 euro) per megawatt-hour on Tuesday—a new record.Despite faster storage builds than usual, Germany will only have enough natural gas to cover two and a half months of consumption this winter if Russia completely suspends deliveries, Klaus Müller, the president of Germany’s energy regulator, told Bloomberg this week.“The burden of high gas and oil prices will actually mean that we are going to see some steep contraction in the European economies next year,” Amrita Sen, director of research at Energy Aspects, told Bloomberg on Wednesday.European prices are at record highs and at around seven times higher than U.S. benchmark prices. But the U.S. prices at Henry Hub have surged, too, to the highest they have been in 14 years. This is the result of flattish domestic production, strong gas demand from the power sector in heatwaves, and lower than normal stocks in storage, despite the outage at the Freeport LNG export terminal, which has made available more gas for domestic consumption. The Freeport LNG outage prompted a 39% decline in Henry Hub prices in June. But in July, higher-than-normal temperatures across much of the U.S. resulted in strong gas demand in the power sector, which absorbed much of the Freeport LNG-related surplus and kept natural gas inventories from rising faster, the EIA said last week. Moreover, natural gas price volatility reached an all-time high in Q1 2022, the EIA noted.

Gas, coal prices double 6 months into Russia-Ukraine war --Natural gas and coal prices on global markets reached record levels six months into the Russia-Ukraine war. Natural gas prices in Europe increased by about 127.6% in the six months since the start of the Russia-Ukraine war. The price of natural gas per megawatt-hour for March contracts in Europe, trading on the Netherlands-based virtual natural gas trading point (TTF), reached €128.31 ($128.36) on Feb. 24, at the start of the war. However, the price for September futures contracts, which opened at €272 ($272.12) per megawatt-hour on Wednesday, ended the day at €292.15 ($292.32) per megawatt-hour. The EU's post-war sanctions, the reduction in fossil fuels imported from Russia and reduced gas flow to Europe ramped up prices. The EU aims to reduce natural gas imports by two-thirds by the end of the year to wean off Russian gas dependence. Russian energy company Gazprom announced on June 14 that gas shipments to Europe via the Nord Stream natural gas pipeline would drop from 167 million cubic meters to 100 million cubic meters. As of June 16, the company announced that only up to 67 million cubic meters of natural gas would be supplied daily through the line. In its release on July 27, Gazprom said it would reduce the daily natural gas delivery capacity to Europe via the Nord Stream pipeline to 20%. As recent as Aug. 19, Gazprom confirmed that natural gas deliveries through the said line would be under maintenance and not operate between Aug. 31 and Sept. 2. The price of March contract coal traded on the API2 Rotterdam Coal Futures Market was $192.35 on Feb. 24 but rose to $376.95 on Wednesday, showing an increase of 96% over six months. The price of coal hit its highest closing price since the war at $398.45 on March 2. Imports of coal from Russia were completely halted under sanctions that came into effect on Aug. 10. Before the war, Russia's share of the EU's coal imports amounted to around 45%. Supply concerns on global markets pushed coal prices higher after Russia, one of the world's largest coal-producing countries, entered the war. International benchmark Brent crude closed the day on Aug. 24 at $101.75 a barrel for a 2.7% increase from Feb. 24, the first day of the Russia-Ukraine war when it traded at $99.08 a barrel. American benchmark West Texas Intermediate (WTI) also increased 1.7% during the same period. Earlier last month, EU leaders agreed on the sixth sanctions package that calls for a 90% reduction in Russian oil imports by the end of 2022. The plan also includes phasing out Russian crude oil supplies by Dec. 5 and the supply of refined products by Feb. 5. EU states agreed to ban seaborne oil transport, partially exempting pipeline oil as some member countries, including Hungary, particularly opposed the oil import ban via the Druzhba pipeline. This pipeline transports Russian oil to refineries in Poland, Germany, Hungary, Slovakia and the Czech Republic. Recent data shows the EU has so far failed to crash the Russian economy using oil embargoes despite the EU importing 25% of its oil from Russia.

EU Eyes Emergency Talks on Energy Crisis --European Union energy ministers may hold an emergency meeting to discuss the spike in power markets as leaders strike a more urgent tone on the unfolding crisis. The Czech Republic, which holds the EU’s rotating presidency, is considering calling a gathering to debate the idea of capping electricity prices, the CTK newswire cited Industry Minister Jozef Sikela as saying. He added the Czechs would favor an EU-wide price limit but gave no details on the potential new measures. Europe is grappling with the worst energy crisis in decades, with spiking costs of gas and electricity driving inflation and threatening to drag economies into recession. European power prices have soared in the past weeks with Russian gas supply cuts in the wake of Moscow’s invasion of Ukraine. “If you have a European market and a problem for all of Europe, then the simplest approach is to seek a solution on a European level,” Sikela said. “We have to look whether this situation continues and escalates further.” In reference to the possible ministerial meeting, French government spokesperson Olivier Veran told reporters Wednesday that France “in general” is aligned with EU energy policies. But he stressed that doesn’t necessarily mean Paris will back the “logic” of a European energy price cap. France’s situation is different from other European countries thanks to government measures that have offered the country better protection against inflation, Veran said.

European gas prices surge as Russia announces Nord Stream 1 shutdown -European natural gas prices surged on Monday after Russia's state-owned energy giant Gazprom said it would shut down Europe's single biggest piece of gas infrastructure for three days from the end of the month.The unscheduled maintenance works on the Nord Stream 1 pipeline, which runs from Russia to Germany via the Baltic Sea, deepen a gas dispute between Russia and the European Union and exacerbate both the risk of a recession and a winter shortage.The front-month gas price at the Dutch TTF hub, a European benchmark for natural gas trading, jumped 19% on Monday to reach 291.5 euros ($291.9) per megawatt hour.The contract closed on Friday at a record high of 244.55 euros per megawatt hour, registering its fifth consecutive weekly gain.Gazprom said Friday that the shutdown was because the pipeline's only remaining compressor required servicing. Gas flows via the Nord Stream 1 pipeline will be suspended for the three-day period from Aug. 31 to Sept. 2.Gazprom said gas transmission would resume at a rate of 33 million cubic meters per day when the maintenance work is completed "provided that no malfunctions are identified."The announcement of the temporary shutdown comes as European governments scramble to fill underground storage facilities with natural gas supplies in a bid to have enough fuel to keep homes warm during the coming months.

European Power Prices Skyrocket as Natural Gas Supply Fears Keep Driving Records - The cost of electricity has surged to record highs across Europe, following a meteoric rise in natural gas prices that could pave the way for painfully high consumer rates across the continent through the winter and well beyond. Electricity futures across much of the continent jumped above 600 euros/MWh this week, an exponential gain from the roughly 20-30 euros/MWh average over the last decade. In a note on Wednesday, Rystad Energy analysts wrote that records have been broken on an hourly and daily basis throughout the month. “Should the current trend continue, then winter power prices will be punishing for European consumers large and small,” said Rystad analyst Fabian Rønningen. German and French power prices hit fresh highs as the week came to an end. French year-ahead power surged past 1000 euros/MWh Friday for the first time ever.The power crisis has unfolded in tandem with soaring natural gas prices as Russia has curbed exports to the continent. The benchmark Dutch Title Transfer Facility again set records Friday, when contracts through the remainder of the year finished above $100/MMBtu amid ongoing fears there won’t be enough gas to go around this winter. Rønningen noted that natural gas is the marginal producer of electricity in most European nations, meaning power and gas contracts are usually highly correlated. The European power crisis has been gaining momentum throughout the summer. French nuclear availability issues, depleted hydro reservoirs due to drought and declining output at aging nuclear and coal plants have exacerbated the situation along with low wind output. Analysts at Engie EnergyScan said this week that fundamentals are unlikely to change anytime soon given hot forecasts, calm weather conditions further curbing wind and the anxiety gripping the market over whether Russia will further cut deliveries next month. The situation has grown so dire that European energy ministers are again reportedly considering an emergency summit to address the snowballing crisis.

Bidding War Between Asia and EU on Who Gets Most USA LNG -There’s basically a bidding war now between Asia and Europe on who gets the most U.S. LNG. That’s what Matteo Illardo, a Europe analyst with RANE, said in an audio clip sent to Rigzone this week, adding that production is “almost at maximum level in the U.S.”. Asked if a bidding war has implications for inflation for the U.S., Asia and elsewhere, Illardo said, “that’s definitely driving prices high”. “In the end, this is also causing disruptions, for instance, in countries that do not get their gas, because on the one hand, the bidding war means that Europe gets its LNG and gets it at high prices and who does not get the LNG not only has higher energy prices overall, but also has not enough supplies maybe to power industries such as the textile industries in South Asia that basically employ most of the workforce there,” Illardo said. “So, it does have second order implications that go even beyond inflation, but definitely it does keep prices even higher,” he added. In the audio clip, Illardo stated that the U.S. is definitely increasing supplies of LNGs to Europe and highlighted that the U.S. “is one of the suppliers in which Europe is now relying the most to get its LNG, together with Qatar in the Middle East”. In its latest short term energy outlook (STEO), the U.S. Energy Information Administration (EIA) confirmed that, in the first half of 2022, the U.S. became the largest LNG exporter in the world. The EIA forecasted in its August STEO that U.S. LNG exports will average 11.2 billion cubic feet per day for all of 2022, which the organization highlighted is a 14 percent increase from 2021, and 12.7 billion cubic feet per day for all of 2023.

Quebec can meet Europe's gas needs: producers - - The Canadian province of Quebec has enough natural gas to meet European demand, but any plan to ship compressed natural gas (CNG), in the near term, or LNG in the longer term, would require the Quebec government to drop its Bill 21 legislation banning the production of natural gas in the province, according to executives with gas assets in the province.Utica Resources CEO Mario Levesque, in an August 24 statement, and Questerre Energy CEO Michael Binnion, on August 23, were responding to comments from Canadian prime minister Justin Trudeau earlier this week suggesting that the distance from potential east coast LNG facilities to western gas fields made new gas export prospects challenging.“The business case for Quebec gas is crystal clear,” Levesque said. “Quebec has enormous quantities of natural gas (about 20% of Canada’s total recoverable gas), enough to replace all Russian imports into Germany for 20 to 40 years.”Most of Quebec’s gas reserves are located in the Utica shale basin, which covers a wide swath of the St Lawrence Lowlands, and are in close proximity to existing deep water ports.And Questerre Energy’s reserves – a resource estimated at some 6 trillion ft³ – are located within 10 km of a fully permitted, but still unsanctioned, export facility at Becancour, Binnion said.“As the producer of the natural gas, we can deliver to the export facility directly, eliminating the risks of securing sufficient and reliable supply to meet long-term supply contracts,” he said. “The business case is established for our company which previously made a final investment decision supported by independent reports to proceed with the production of natural gas.”Both executives pointed out that a Quebec LNG export facility would be much closer to Europe than other terminals in Qatar or even the Cove Point LNG facility in Maryland, on the US east coast.“The fact is that Quebec gas is the key for Canada to be able to step up to its responsibility of helping Europe in this difficult time,” Levesque said. “Other sources of Canadian gas are far from Atlantic ports and it is a long, complex and expensive process to build the required infrastructure to transport these products to Europe.”He agreed with Trudeau’s desire, expressed in the midst of German chancellor Olaf Scholz’s visit to Canada, to ramp up natural gas production to help Europe, and offered a three-point plan: rapidly increase Quebec natural gas production, begin exports of CNG to Germany within the next 18 months – each CNG ship would be able to deliver about 20bn ft³/year – and develop the Becancour LNG facility to produce 1-2 trillion ft³/year of LNG, equivalent to 100% of Germany’s imports from Russia and more than a third of all European consumption of Russian gas.“This would require the lifting of the Quebec government’s new law banning the production of hydrocarbons – a law which makes no sense, particularly after Russia’s invasion of Ukraine,” Levesque said.Questerre’s Binnion added that Quebec can also help fulfill Trudeau’s goal of exporting hydrogen to European markets through its Clean Gas project, as-yet unsanctioned in the wake of Quebec’s ban on gas production. “By eliminating the emissions from production and utilising new carbon technology, we can use this Clean Gas to produce zero-emissions hydrogen as well as ammonia for export,” he said. “This is consistent with the new hydrogen pact signed by G7 countries earlier this year, including Canada and Germany.” Utica Resources and Questerre Energy are each pursuing legal challenges to Bill 21.

Sending Canadian LNG to Germany is ‘doable,’ Trudeau says - — Prime Minister Justin Trudeau says exporting liquified natural gas from Canada’s east coast to Germany could ease Europe’s gas crunch. The prime minister’s remark in Montreal on Monday raised eyebrows given the lack of export facilities in Atlantic Canada. Three days ago, he suggested there’s “not a whole lot” Canada can do in the short term to boost energy supplies in Europe. But on Monday at a joint press conference with German Chancellor Olaf Scholz, Trudeau said, “It’s doable, we have infrastructure around that.” He didn’t offer a timeline when asked for one. Scholz is on a three-day visit to Canada with Vice Chancellor Robert Habeck and a business delegation that includes CEOs from Volkswagen AG and Mercedes-Benz. Doable doesn’t mean realistic given that Europe wants to slash Russian gas purchase by two-thirds by the end of the year. Trudeau said weak business cases have kept proposed export facilities from moving forward, adding that Canada’s east coast is “a long way from the gas fields in Western Canada.” He said the priority is on immediate solutions and existing infrastructure. “Right now our best capacity is to continue to contribute to the global market to displace gas and energy that then Germany and Europe can locate from other sources,” Trudeau said. Earlier this year, Canada responded to the energy crisis created by Russia’s war in Ukraine with a pledge to drum up oil and gas production by the equivalent of up to 300,000 barrels per day by the end of the year. But because Canada lacks coastal export facilities, nearly all of its oil and gas goes to one market, the United States. The Canadian government’s promise to send oil and gas to Europe requires companies to send shipments from the U.S. Gulf Coast.

Russia LNG Plant Scraps Cargo to Asia Buyer -Russia’s push to consolidate control over its natural gas is beginning to curb supply to customers in Asia, the first tangible example Moscow’s move to nationalize Sakhalin is affecting shipments to the region. Sakhalin Energy LLC, the new operator set up by Moscow to tighten ownership over the liquefied natural gas facility in Russia’s Far East, scrapped a shipment to at least one Asian customer due to payment issues as well as delays signing revised contracts, according to traders with knowledge of the matter. Moscow transferred the ownership of the plant to Russia-based Sakhalin Energy from a Bermuda-based entity on Aug. 19 and customers were asked to commit to new deals and send payments to banks in Moscow from that date. Few buyers have signed the revised contracts, which could threaten the flow of gas to markets including Japan and South Korea, the traders said. Any disruption to natural gas shipments risks exacerbating a supply crunch gripping Asia, which is grappling with surging power bills and higher inflation. Missed deliveries could cause blackouts this winter in Japan, which is the biggest buyer of Sakhalin gas and typically gets about 9% of its LNG needs from the project. “Without Sakhalin, North East Asia will have to drag more cargoes away from Europe, intensifying the scramble for gas between Asia and Europe heading into winter that could send LNG prices to unprecedented levels,” said Saul Kavonic, an energy analyst at Credit Suisse Group AG. Dutch natural gas futures, the benchmark for Europe, rose as much as 2.6% as of 7:21 a.m. in London, to almost $80 a million British thermal units. Increased competition between East Asia and Germany to keep the lights on and industry going could result in prices exceeding $100 per million Btu, according to Kavonic. President Vladimir Putin has been tightening his grip over Russian energy assets, and has also limited flows into Europe in what’s been widely viewed as the use of natural resources as a weapon. Gas prices from Asia to Europe have surged as energy-starved customers rush to ensure supply before the key winter heating season.

Iran And Russia Move To Create A Global Natural Gas Cartel - The US$40 billion memorandum of understanding (MoU) signed last month between Gazprom and the National Iranian Oil Company (NIOC) is a stepping stone to enabling Russia and Iran to implement their long-held plan to be the core participants in a global cartel for gas suppliers in the same mold as the Organization of the Petroleum Exporting Countries (OPEC) for oil suppliers. With a foundation in the current Gulf Exporting Countries Forum (GECF), this ‘Gas OPEC’ would allow for the coordination of an extraordinary proportion of the world’s gas reserves and control over gas prices in the coming years. Occupying the number one and number two positions in the world’s largest gas reserves table, respectively – Russia with just under 48 trillion cubic meters (tcm) and Iran with nearly 34 tcm – the two countries are in an ideal position to do this. The Russia-Iran alliance, as evidenced in the most recent multi-faceted MoU between Gazprom and the NIOC, wants to control as much of the two key elements in the global supply matrix – gas supplied over land via pipelines and gas supplied via ships in liquefied natural gas (LNG) – as possible. According to a statement last week from Hamid Hosseini, chairman of Iran’s Oil, Gas, and Petrochemical Products Exporters’ Union, in Tehran, after the Gazprom-NIOC MoU had been signed: “Now the Russians have come to the conclusion that the consumption of gas in the world will increase and the tendency towards consumption of LNG has increased and they alone are not able to meet the world’s demand, so there is no room left for gas competition [between Russia and Iran].” He added: “The winner of the Russia-Ukraine war is the United States, and it will capture the European market, so if Iran and Russia can reduce the influence of the United States in the oil, gas and product markets by working together, it will benefit both countries.” The Gazprom-NIOC MoU, as initially analyzed by OilPrice.com, contains four key elements that are geared towards the build-out of a ‘Gas OPEC’. One element is that the Russian state-backed gas giant has pledged its full assistance to the NIOC in the US$10 billion development of the Kish and North Pars gas fields with a view to the two fields producing more than 10 million cubic meters of gas per day.A second element is that Gazprom will also fully assist with a US$15 billion project to increase pressure in the supergiant South Pars gas field on the maritime border between Iran and Qatar.A third element is that Gazprom will provide full assistance in the completion of various liquefied natural gas (LNG) projects and the construction of gas export pipelines.The fourth element is that Russia will examine all opportunities to encourage other major gas powers in the Middle East to join in the gradual roll-out of the ‘Gas OPEC’ cartel, according to a senior source who works closely with Iran’s Petroleum Ministry. “Gas is widely seen as the optimal product in the transition from fossil fuels to renewable energy, so controlling as much of the global flow of that will be the key to energy-based power over the next ten to twenty years, as has already been seen on a smaller scale in Russia’s hold over Europe through its gas supplies,” he added.

France 'preparing to secure Yemeni gas facility' for exports: report - France could be gearing up to help protect a gas facility in Yemen to allow for exports in a bid to cut Europe's reliance on Russia, according to an ex-Yemeni foreign minister. Abubaker Alqirbi tweeted in Arabic on Tuesday that "information is coming in" about "preparations being made to export gas from the Balhaf facility" and that this "could be the reason for events in Shabwa" and moves made by France. Yemeni government forces recently clashed with UAE-backed southern separatist forces in gas-rich Shabwa province, where Balhaf is located, last week, leading to dozens of civilian and combatant casualties. Drones and artillery, believed to belong to the UAE, have fired on government positions located on an important road between Ataq and a city in the neighbouring province of Hadramaut, according to pan-Arab news website Arabi 21. France is negotiating with countries in the region and factions participating in Yemen's war, according to the information cited by Alqirbi. The aim is to see gas exports restart at Balhaf "in light of increased international gas prices and to reduce Russian pressure on Europe". This has been a major concern since Russia invaded Ukraine in February. Paris could "provide protection for the facility through the French Foreign Legion" – part of the country's military in which foreign citizens serve. The key Balhaf gas facility has been turned into a base by UAE troops, who have not allowed exports of the fossil fuel, Arabi 21 said. Mohammed Saleh bin Adyo, the former governor of Shabwa governor, urged the soldiers leave the site on more than one occasion while he was in office. The UAE, while officially part of the Saudi-led coalition, has pursued its own agenda in Yemen. It now wants to bring more territory under the control of militias it backs, analysts believe. The UAE supports the Southern Transitional Council and other separatist groups which seek to establish an independent state in Yemen's south.

Global LNG Investments To Peak At $42 Billion In 2024 - As the global energy crisis deepens and countries scramble to secure reliable energy sources, investments in new LNG infrastructure are set to surge, reaching $42 billion annually in 2024, Rystad Energy research shows. These greenfield investments are 200 times the amount in 2020 when just $2 billion was invested in LNG developments due to the pandemic. However, project approvals after 2024 are forecast to fall off a cliff as governments transition away from fossil fuels and accelerate investments in low-carbon energy infrastructure. The new LNG projects are driven mainly by a short-term increase in natural gas demand in Europe and Asia due to Russia’s war in Ukraine and ensuing sanctions and restrictions placed on Russian gas exports. Spending on greenfield LNG projects this year and next will stay relatively flat, with $28 billion approved in 2021 and $27 billion in 2022. Investments sanctioned in 2023 will show a modest increase, nearing $32 billion, before peaking at $42 billion in 2024. After this date, investments will decline and drop back near 2020 levels to reach $2.3 billion in 2029. Despite an expected jump in 2030 when project announcements are forecast to total nearly $20 billion, investment in greenfield LNG is unlikely to ever return to 2024 levels as countries scale up investments in low-carbon technologies. Natural gas is a core component of many countries’ power generation systems and, although there is a determination to reduce fossil fuel dependency and transition to a low-carbon power mix, demand for LNG is set to grow over the short term. Global gas demand is expected to surge 12.5% between now and 2030, from about 4 trillion cubic meters (Tcm) to around 4.5 Tcm. Gas demand in the Americas will remain relatively flat up to 2030. In contrast, on the back of strong economic growth and pro-gas policies from governments, regional demand in Asia and the Pacific will soar, growing 30% from about 900 billion cubic meters (Bcm) to around 1.16 Tcm by 2030. The Americas – primarily the US – will account for 30% of cumulative gas demand by 2030, while Asia-Pacific will account for 25%. Helped by this new infrastructure, total LNG supply is expected to almost double in the coming years, growing from around 380 million tonnes per annum (Mtpa) in 2021 to about 636 Mtpa in 2030, with several major LNG projects already underway or in the pipeline. LNG production is predicted to peak at 705 Mtpa in 2034.

Kazakhstan’s oil exports via Russian terminus disrupted for fourth time this year - Fresh speculation that the Kremlin is tampering with Kazakhstan’s oil exports has arisen with an announcement that shipments of flows from the CPC pipeline have been disrupted for the fourth time this year.Reuters reported on August 23 that the disruption at the pipeline terminus in Novorossijsk on Russia’s Black Sea coast could run to at least a month but added that, in the meantime, one of the facility’s three export berths still functional would work in “intensive mode” and continue to transfer 60-70% of total capacity.Kazakhstan is dependent on the CPC pipeline—run by the Caspian Pipeline Consortium—for the export of around four-fifths of its crude oil. There continues to be a lot of industry talk that post-Soviet Kazakhstan, which has stopped well short of expressing any support for Russia’s invasion of Ukraine, is being taught a ‘who’s boss’ lesson by Moscow, which can also exert control over the Novorossijsk export platforms as part of a manipulation of world oil markets, should it so wish. The terminal handles about 1% of global oil supply.CPC reported damage at "the attachment points of underwater sleeves to buoyancy tanks" as the reason for the suspension of oil loadings at two of the three single mooring points (SPMs) at the Novorossijsk terminal. It said the damage may have been caused by "exceptionally difficult weather conditions" last winter.The three disruptions to oil shipments from Novorossijsk that preceded this latest one involved the shutting down of two SPMs due to alleged storm damage in March; export suspension attributed to mine-clearing operations on the seabed in June; and alleged oil spill concerns that led to a Russian court ordering CPC to halt shipments for 30 days. The court order was, however, quickly reversed on appeal and never came into force. The latest CPC disruption comes amid Russia’s plans to close down the Nord Stream gas pipeline for three days between August 31 and September 2, in a move that will put further strain on the European gas market. Russia’s TASS news agency reported that while performing scheduled maintenance on the two closed SPMs, divers discovered cracks in subsea hose attachments to buoyancy tanks. CPC said it then contacted the SPM manufacturer and an organisation that supervises the safe operation of equipment, the ABS classification society. It said they "strongly recommended that the operation of the SPMs should be suspended until the buoyancy tanks are replaced". CPC said it was currently looking for an entity to replace the buoyancy tanks. No timeline for the relaunch of the SPM operations has been provided.

CPC says fixing equipment at two mooring points will take a month each - — Russian and Kazakh oil exports via the Caspian Pipeline Consortium's (CPC) Black Sea terminal face at least one month's disruption each once repairs begin on two of its three single point moorins (SPMs), CPC confirmed on Aug. 23. Oil exports via the two SPMs have been suspended due to equipment damaged by bad winter weather, CPC said Aug. 22, confirming a Reuters report on Saturday. The CPC’s Marine Terminal has had SPM-1 and SPM-2 in operation since 2002 and 2014, respectively. An oil loading system consists of subsea and sea surface equipment, including a subsea pipeline, a pipeline end manifold, suction anchors, anchor chains, subsea hoses and SPM. While performing scheduled maintenance this month on SPM-1 and SPM-2, divers discovered cracks in subsea hose attachments to buoyancy tanks (a buoyancy tank is a hollow air-filled vessel designed to keep subsea hoses in a necessary configuration). There is no threat to the flora and fauna of the Black Sea, CPC said, and the integrity of the equipment remains intact. A crack was found on a joining plate connecting some subsea hose piping on a buoyancy tank of SPM-1. Another crack was found on an identical joining plate on a buoyancy tank of SPM-2. A swivel joint was found to be displaced at the location of a crack (see photos to the right). Due to the damage discovered on subsea equipment, CPC immediately contacted the SPM manufacturer, IMODCO, and an organization that supervises safe operation of equipment, the ABS classification society, for consultations whether the equipment could continue to be operated, providing comprehensive information about the defects found. These entities strongly recommended that the operation of the SPMs should be suspended until the buoyancy tanks were replaced. The ABS classification society, in particular, stressed that exceptionally adverse weather conditions had been observed during the 2021-2022 winter season, which could have caused the damage that was discovered. As a reminder, it was the abnormal storms that caused the damage to some sections of floating hoses in March of this year.The CPC Marine Terminal is temporarily loading crude oil by using only SPM-3. The use of the single SPM will allow to meet shipper nominations with reduced volumes.

Sudan offers more oil blocks to Russian company -- Sudan has offered more oil blocks to Russia’s Zarubezhneft oil company, at the end of a three-day visit of a high-level government delegation to Moscow. The two countries also agreed to enhance cooperation and expand trade in several other sectors. On Wednesday, Sudanese-Russian technical talks began in Moscow, in preparation for meetings of the Russian-Sudanese intergovernmental commission on Friday.The Undersecretary of the Ministry of Minerals, Mohamed Saeed Zeinelabdeen affirmed Sudan's readiness to enter into new partnerships with Russia, the Sudan News Agency (SUNA) reported on Thursday. El Tahir Mohamed Abulhasan, Director of the Oil Exploration and Production Administration at the Sudanese Ministry of Oil, said at plenary session of the Russian-Sudanese intergovernmental commission on Thursday that they discussed Zarubezhneft's proposal for investments in Sudan.“We previously provided several blocks for development, and now we have added more, in regions with gas and oil potential. I think by October we will pass on the necessary information so that they can start looking at these areas," he stated. At the end of the joint meetings on Friday, he confirmed the deal.The Interfax Information Services Group on Thursday cited Dmitry Semyonov, head of the Russian Energy Ministry's International Cooperation Department, who said that “the number of oil blocks for development by our Zarubezhneft company, together with Sudan's Energy and Oil Ministry and state company Sudapec, was increased.“We also agreed with companies to discuss expanding cooperation in the oil sector beyond just production, to look at oil recovery technologies, associated gas utilisation, oil refining, petrochemicals and training,” he said.

Mystery Supertanker Awaits Fate After Seizure - An oil supertanker that Nigeria tried to seize has been stuck off the coast of nearby Equatorial Guinea for more than 10 days, where it was impounded by local authorities. The Nigerian navy said that its counterparts in Equatorial Guinea arrested the Heroic Idun on Aug. 12, four days after the same vessel allegedly tried to load a cargo of crude unlawfully from the deep-water Akpo field operated by TotalEnergies SE. The ship lacked the necessary clearance and left Nigerian waters before being intercepted by the Equatoguinean military, the navy said on Aug. 19. The Nigerian navy said that the ship was on hire to trading giant Trafigura Group, but that appears to not be the case, according to a person familiar with the matter. The tanker was on lease to BP Plc from Mercuria Group at around the time the navy tried to seize it on April 8, according to another person with knowledge of the situation. For its part, Europe’s biggest oil company said it hired the Heroic Idun to collect an Akpo cargo ten days after the Nigerian navy interrogated the ship but booked another carrier after the Idun was “unable to perform the lifting.” One potential explanation for the controversy is that the ship didn’t have the right paperwork at the time it arrived. Loading programs show the cargo belonged to Prime Oil & Gas Cooperatief UA, which owns a 16% interest in the Total-operated license that contains the Akpo field. Prime declined to comment. Total “is not involved,” a spokesman said by email. “At no time was crude volumes transferred” to the vessel, the company said. Equatorial Guinea is conducting its own investigation and Nigeria has started diplomatic procedures to take control of the tanker, which is currently anchored off the coast of Luba, the Nigerian navy said.

1, 086 oil spills recorded in 7 years in Bayelsa – NOSDRA -- The National Oil Spill Detection and Response Agency (NOSDRA) on Wednesday said a total of 1,086 oil spills were recorded in Bayelsa from 2015 to February 2022. Mr Idris Musa, Director-General, NOSDRA, made this known when delegations from Connected Development (CODE) and OXFAM paid an advocacy visit to his office in Abuja. The visit was to discuss some challenges witnessed in oil-bearing communities. Musa said that out of the 1, 086 oil spill incidents recorded in Bayelsa, 917 were as a result of sabotage in the form of third party breakage of pipelines with hacksaw or outright blowing up of the pipelines. He said that communities in the area must protect oil installations and tackle such vandals, as their silence was causing harm to their environment. “You see we cannot keep running away, I gave you the statistics now that we recored 1, 086 oil spill in Bayelsa from 2015 to February 2022, that is 84.4 per cent; that means we need to do something . “It is not about experts, if I came from a community for instance, and then an expert will come and aid me to break a pipeline in my community that will spill oil into my water, will I then drink it and do other domestic chores? “We need to speak to these issues, we have done that consistently with evidence, what we call Disaster Risk Reduction programme for communities, telling them why they do not need to vandalise oil facilities. “So CSOs also have to wake up and interface with these communities, let everybody check his own part and do the right thing, that is what I will advocate, the blame is not just on oil companies.

India's crude oil production falls 3.76 percent in July - India's crude oil production stood at 2453.19 thousand metric tonnes (TMT) in July 2022, which is 3.76 per cent lower than the production of July 2021 and 5.57 per cent down when compared with the target for the month, according to the official data released on Tuesday. Cumulative crude oil production during April-July, 2022 was 9912.42 TMT, which is 2.17 per cent lower than the target for the period and 0.50 per cent lower than production during the corresponding period of last year, according to data released by the Ministry of Petroleum & Natural Gas. Crude oil production by ONGC (Oil and Natural Gas Corporation) in the nomination block during July 2022 was 1636.56 TMT, which is 3.36 per cent lower than target of the month and 1.70 per cent lower when compared with production of July 2021. Cumulative crude oil production by ONGC during April-July, 2022 was 6606.19 TMT, which is 1.12 per cent lower than the target for the period but 1.99 per cent higher than the target for the period and production during the corresponding period of last year respectively. Reasons for shortfall in production include: natural decline in production from Gandhar in Ankleshwar; ceasure of high potential wells in Geleki field in Assam; closure of wells due to DAB issues; less contribution from PEC fields in Jorhat and restriction on drilling activities due to socio-political issues in Cauvery. Crude oil production by OIL (Oil India Ltd) in the nomination block during July 2022 was 263.70 TMT, which is 8.11 per cent lower than the target of the month but 4.12 per cent higher when compared with production of July 2021. Cumulative crude oil production by OIL during April-July 2022 was 1037.55 TMT, which is 4.94 per cent lower than the target for the period but 4.21 per cent higher when compared to production during the corresponding period of last year. Reasons for shortfall in production are: less than planned contribution from workover wells and loss due to miscreant activities in Main Producing Area (MPA). Crude oil production by Pvt/JVs companies in the PSC/RSC regime during July 2022 was 552.92 TMT, which is 10.45 per cent lower than the target of the reporting month and 12.34 per cent lower than the month production of July 2021. Cumulative crude oil production by Pvt/JVs companies during April-July 2022 was 2268.68 TMT, which is 3.87 per cent and 8.86 per cent lower than the target for the period and production during the corresponding period of last year respectively.

Egypt and Jordan tackle oil spill from ro-ro in Red Sea - Authorities in Egypt and Jordan are dealing with an oil spill from a ro-ro in the Red Sea. The fuel leaked from the 190-lane-metre Flower of Sea (built 1987), polluting parts of the Aqaba coast and waters in nearby countries, Jordanian officials said on Tuesday. The incident is believed to have occurred a week ago and oil has since been washing up on Egyptian beaches. No information has been given about the size of the spill. Nidal Al Majali, an official at the Aqaba Economic Zone, told the state-owned Egyptian newspaper paper Al Dustoor that government teams have been working to “isolate and remove the pollution” from the Aqaba container terminal and from other parts of the 26km coastline. Al Majali said the spill was due to a “fault” in the fuel tanks of the vessel “while it was docking in Jordanian territorial waters”. “The continued emergence of oil spots is due to changes in the direction and speed of the wind,” the official added. “Some spots have been seen on the shores of neighbouring countries,” he said. One eye-witness reported feeling oil on his feet while kitesurfing in Jordan, but said most of the fuel appeared to have been blown by strong winds to Egypt. “One can smell it in the water deep offshore,” he said. A European resident in the Egyptian resort of Dahab, 100km from Aqaba across the Red Sea, said she had been seeing oil spots washed on to the shore. Many swimmers emerged from the sea with large black stains on their skin, she said. “Volunteers are cleaning since a week here and they are not done,” she added. “Dahab is hardly the only place where it washed up and we don’t know if the patch in Jordan is under control.” The vessel is listed as operated by Sea Gate Management of Egypt, which could not be contacted. The ship has six port state control detentions on its record since 2014. The latest was in Aqaba in December 2021. The Flower of Sea was held for a day with 17 deficiencies. Grounds for detention related to inoperative or inadequate fire alarms, and faults with emergency lighting.

Gulf of Aqaba hit by oil spill from cargo ship off Jordan's Red Sea shore - A fuel oil spill from a ship has polluted parts of the Aqaba coast and waters in nearby countries, Jordanian authorities said on Tuesday.The spill, which officials say occurred a week ago and has been washing up Egypt's shoreline, comes less than two months after a chlorine gas explosion at the Aqaba port killed 13 people.The authorities have not given any information on the size of the spill.Pollution is a sensitive topic in Jordan and Egypt, which depend on their sea outlets to attract tourists not only to beaches and reefs but also as a gateway to archaeological and other sites.Nidal Al Majali, an Aqaba Economic Zone official, told the state-owned paper Al Dustoor that government teams have been working to “isolate and remove the pollution” from the Aqaba container terminal and from other parts of the 26-kilometre coastline.“Work is ongoing to deal with oil spill since seven days,” he said. A beach in the Egyptian Red Sea beach town of Dahab where traces of crude oil were found following an oil spill near the Jordanian port city of Aqaba. Photo: Egypt's Ministry of Environment.He said the spill was due to a “fault” in the fuel tanks of a vessel he identified as Flower of Sea“while it was docking in Jordanian territorial waters”.“The continued emergence of oil spots is due to changes in the direction and speed of the wind,” Mr Al Majali said.“Some spots have been seen on the shores of neighbouring countries,” he said.The Marine Vessel Traffic tracking website shows the vessel's last position 12 days ago in the Gulf of Suez and heading to Aqaba.It lists the vessel as a cargo ship designed to carry cars and other wheeled machines. It was built in 1987 and flies the flag of Palau, a small island country east of the Philippines.A Jordanian businessmen who had just returned to Amman after kitesurfing in Aqaba said he felt the fuel oil on his feet but most of it appeared to have been blown by strong winds to Egypt.“One can smell it in the water deep offshore,” he said, adding that the beaches were full.Aqaba, which has a 190,000 population, is just north of Saudi Arabia and faces Israel and Egypt. It is Jordan’s only sea outlet.

Iran to start extracting oil from field shared with Saudi Arabia - On Saturday, an Iranian official unveiled plans for the development of an oil field that straddles the maritime border with Saudi Arabia in the Persian Gulf within the next three years. He added that a contract will be awarded for the first phase of development works at Esfandiar oilfield, which is connected to Saudi Arabia’s Umm Lulu oil field. Alireza Mehdizadeh, who leads the Iranian Offshore Oil Company, said a drilling rig and four production wells have been planned for the first phase of the development project in Esfandiar, which is located 95 kilometers to the southwest of the Iranian island of Kharg and is estimated to have more than 500 million barrels of oil. "The fluid mixture produced in the oilfield will be processed in the nearby Abuzar oilfield before it is transferred to Kharg Island," Mehdizadeh added. He said Iran also plans to drill an exploration well in Esfandiar to obtain more information about the structure of the oil reservoir and to have a better analysis of the next phases of the development project in the field.

Kuwait rejects gas contract extension for two firms - Kuwait has refused to extend two gas contracts for the US-based Schlumberger and Kuwait-based Spetco International Petroleum Company after both firms were late in completing the projects, a local newspaper reported on Monday. The state-owned Kuwait Oil Company, the OPEC member’s upstream investment arm, had requested the extension from the Central Agency for Public Tenders (CAPT), the Arabic language daily Alrai said, quoting official sources. But CAPT rejected the request for renewing the contracts which involve the installation of production equipment in Jurassic fields in North Kuwait, it said. The two companies have already paid “penalties” for a delay in completing the projects and they asked for an extension to avert further penalties, the paper said. “CAPT refused to extend the contracts for the two firms although part of the contract has not been completed,” the paper added without providing further details.

IEA Raises 2022 Global Oil Demand Estimates to 99.7m bpd – - The International Energy Agency (IEA) has raised its forecast for world oil demand in 2022 to 99.7 million barrels per day in 2022 and 101.8 million bpd in 2023.. In its latest Oil Market Report (OMR), the organisation which provides data, forecasts and analysis on the global oil market, stated that the projection was hinged on soaring oil use for power generation and gas-to-oil switching by many countries. On the back of skyrocketing gas prices, many countries have found a veritable alternative in the deployment of crude oil products, raising the consumption of the black gold. “World oil demand is now forecast at 99.7 million bpd in 2022 and 101.8 million bpd in 2023,” the IEA report stated. Although the Organisation of Petroleum Exporting Countries (OPEC) has recently increased member countries’ quota marginally, Nigeria has continued to lead underperforming nations in Africa. In July, the country produced a miserly 1.083 million bpd as against the 1.826 million bpd allocated to it by the international oil cartel, a shortage of almost 800,000 bpd. To curb oil theft which has been blamed for the inability to drill more crude, there has recently been massive deployment of the military in the Niger Delta. At a time the international price of crude oil has exceeded $100 for months, the country has been unable to take advantage of the high prices, a development that has negatively affected the economy. In addition, the federal government appears to have realised the futility of deploying only official forces to carry out surveillance activities on the pipelines, with the recent deal with an ex-militant, Mr Government Ekpemupolo, also known as Tompolo, valued at about N4 billion monthly. When President Muhammadu Buhari took over government in 2015, he had insisted that it was a shame that regional warlords were the ones protecting the assets when Nigeria has a capable military.

Global Oil Production: OPEC+ missed output targets by 2.9 mn bpd in July: Sources -- OPEC+ produced 2.892 million barrels per day (bpd) below their targets in July, two sources from the producer group said, as sanctions on some members and low investment by others stymied its ability to raise output. Compliance with the production targets stood at 546% in July the sources said, compared with 320% in June, when the supply gap stood at 2.84 million bpd. OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, agreed to increase output by 648,000 bpd in each of July and August, as they fully unwind nearly 10 million bpd of cuts implemented in May 2020 to counter the COVID-19 pandemic. The group agreed this month to increase production targets by another 100,000 bpd in September, under pressure from major consumers including the United States which are keen to cool prices. Only Saudi Arabia and the United Arab Emirates are believed to have some spare capacity and will be able to increase production in a meaningful way. Global oil production spare capacity, mainly concentrated in the two Gulf producers, is already at historical lows.

OPEC chief says blame policymakers, lawmakers for oil price rises - Policymakers, lawmakers and insufficient oil and gas sector investments are to blame for high energy prices, not OPEC, the producer group’s new Secretary General Haitham Al Ghais told Reuters on Thursday. A lack of investment in the oil and gas sector following a price slump sparked by COVID-19 has significantly reduced OPEC’s spare production capacity and limited the group’s ability to respond quickly to further potential supply disruption. The price of Brent crude came close to an all-time high of $147 a barrel in March, after Russia’s ordering of troops into Ukraine exacerbated supply concerns. While prices have since declined, they are still painfully high for consumers and businesses globally. “Don’t blame OPEC, blame your own policymakers and lawmakers, because OPEC and the producing countries have been pushing time and time again for investing in oil (and gas),” Al Ghais, who took office on Aug. 1, said in an online interview. Oil and gas investment is up 10% from last year but remains well below 2019 levels, the International Energy Agency said last month, adding that some of the immediate shortfalls in Russian exports needed to be met by production elsewhere. The OPEC official also pointed the finger at a lack of investment in the downstream sector, adding that OPEC members had increased refining capacity to balance the decline in Europe and the United States. “We are not saying that the world will live on fossil fuels forever … but by saying we’re not going to invest in fossil fuels … you have to move from point A to point B overnight,” Al Ghais said. OPEC exists to ensure the world gets enough oil, but “it’s going to be very challenging and very difficult if there is no buy-in into the importance of investing,” he said, adding that he hopes “investors, financial institutions, policymakers as well globally seriously take this matter (to) heart and take it into their plans for the future.”

Oil Firms After Nord Stream Closure Spiked EU Gas Prices - Oil futures moved mixed early Monday following last week's announcement Russia's energy company Gazprom plans to temporarily throttle a key natural gas pipeline to the European Union in a move that sent European gas futures to record highs at the start of the week and deepened concerns over inflation and recession for the 27-nation economic bloc. Soaring prices for natural gas and electricity forced some industrial operators in Europe to announce shutdowns this summer, including energy-intensive production of metal, pulp, and paper. The industrial shutdowns ahead of the winter months could spell an inflation disaster for the European continent, with consumer prices already rising at a record pace of 8.9%. Dutch Title Transfer Facility gas futures spiked over 12% on Monday to euro288/MWh, up 50% since the beginning of the summer, while year-ahead baseload power prices in Germany and France climbed to a new record of euro775/MWh and euro624/MWh, respectively. Volatility in European energy markets follow an announcement from Gazprom that it plans to shut down the Nord Stream gas pipeline for three days between Aug. 31 and Sept. 2 for "maintenance." Once maintenance is completed Russia says gas flow will be restored to the current level of 33 million cubic meters per day which is around just 20% of the capacity. The temporary closure wasn't previously announced and comes just weeks after the 760-mile Nord Stream pipeline, which connects Russia's prolific Siberian gas fields with Germany under the Baltic Sea, was shut for 10 days of annual maintenance in July. After the work ended, Gazprom restored gas flow, but only to 40% of the pipeline's capacity. It later cut flows to 20% of capacity, saying it couldn't maintain normal flow without a turbine that the German government claims Russia is refusing to take. At this point, Nord Stream pipeline operates with a single functioning turbine at the Portovaya compressor station. Markets are now more skeptical than ever that Russia will maintain its European gas flows this winter that is pushing prices higher with intermittent interruptions seen before completely cutting off exports. EU gas storages are now around 76% full, broadly in line with their historical average for this time of year. In early trading, NYMEX September West Texas Intermediate traded little changed near $90.79 barrel (bbl) ahead of expiration Monday afternoon, with the October contract expanding its discount to $0.38 bbl. ICE October Brent futures slipped to $96.65 bbl. NYMEX September RBOB declined 1 cent to $3.0070 gallon, while the NYMEX September ULSD contract added 5.92 cents to $3.7597 gallon.

Oil Falls 4% On Concerns Economic Slowdown May Dent Fuel - Oil prices fell on Monday in volatile trading, ending three days of gains, on fears aggressive US interest rate hikes may lead to a global economic slowdown and dent fuel demand. Brent crude futures for October settlement fell $3.99, or 4.1 per cent, to $92.73 a barrel by 1411GMT. US West Texas Intermediate (WTI) crude for September delivery — due to expire on Monday — was down $3.77, or 4.1 per cent, at $87. The more active October contract was down $3.73 cents, or 4.1 per cent, at $86.71. “Choppy trade continues. There remain many factors influencing the oil price right now from a tight market to a diminishing growth outlook and a potential Iran nuclear deal,” Pressuring prices were worries over slowing fuel demand in China, the world's largest oil importer, partly because of a power crunch in the southwest. Beijing cut its benchmark lending rate on Monday as part of measures to revive an economy hobbled by a property crisis and a resurgence of COVID-19 cases. Also pushing down prices, the dollar index rose to a five-week high on Monday. A stronger U.S. currency is generally bearish for the market because much of the world's oil trade is conducted in dollars. Investors will be paying close attention to comments by Fed Chair Jerome Powell when he addresses an annual global central banking conference in Jackson Hole, Wyoming, on Friday. Meanwhile, the leaders of the United States, Britain, France and Germany discussed efforts to revive the 2015 Iran nuclear deal, the White House said on Sunday, which could allow sanctioned Iranian oil to return to global markets. High natural gas prices exacerbated by reduced supply from Russia is strengthening oil demand, said Ole Hansen, head of commodity strategy at Saxo Bank. “While funds continued to sell crude oil in anticipation of an economic slowdown, the refined product market was sending another signal with refinery margins on the rise again, partly due to surging gas prices making refined alternatives, such as diesel, look cheap,” Supply worldwide remains relatively tight, with the operator of a pipeline supplying about one per cent of global oil via Russia saying it will reduce output again because of damaged equipment.

Oil Spikes After Saudi Prince Hints At Shift In OPEC+ Strategy -- For almost two months we have been highlighting the dramatic (and growing) disconnect between physical and paper (futures) markets in the oil sector. It appears that Saudi Arabian Oil Minister Prince Abdulaziz bin Salman has finally recognized this as an issue. The implicit leader of OPEC said “extreme” volatility and lack of liquidity in the futures market are disconnecting prices from fundamentals and may force OPEC+ to act. “The paper and physical markets have become increasingly more disconnected,” he said in response to written questions from Bloomberg News. While futures prices are tumbling, in the physical realm, inventories of energy and metals continue to fall from already uncomfortably low levels as demand remains above supply in all cyclical commodities, except iron ore. Timespreads, the single most accurate measure of underlying fundamentals, trade at unprecedented levels of backwardation, irrespective of the price sell-off. Prince Abdulaziz said futures prices don’t reflect the underlying fundamentals of supply and demand, which may require the group to tighten production when it meets next month to consider output targets. “Witnessing this recent harmful volatility disturb the basic functions of the market and undermine the stability of oil markets will only strengthen our resolve,” he said. These headlines sent the front-month WTI future rebounding from the 'Iran deal imminent' plunge...As we noted previously, Goldman was all over this disconnect and has been buying every barrel of oil it can find..."this latest commodity sell-off is completely delinked from physical fundamentals and driven by financial liquidation."In a response to questions from Bloomberg, Prince Abdulaziz responded in writing: In OPEC+ we have experienced a much more challenging environment in the past and we have emerged stronger and more cohesive than ever. OPEC+ has the commitment, the flexibility, and the means within the existing mechanisms of the Declaration of Cooperation to deal with such challenges and provide guidance including cutting production at any time and in different forms as has been clearly and repeatedly demonstrated in 2020 and 2021.Soon we will start working on a new agreement beyond 2022 which will build on our previous experiences, achievements, and successes. We are determined to make the new agreement more effective than before. Witnessing this recent harmful volatility disturb the basic functions of the market and undermine the stability of oil markets will only strengthen our resolve.

Oil Pares Losses After Warning from Saudi Oil Minister - Oil clung to $90 at the conclusion of a volatile session after Saudi Oil Minister Prince Abdulaziz bin Salman warned the disconnect between the futures market and supply fundamentals may force OPEC and its allies to act. West Texas Intermediate pared more than $4 of losses intraday to settle above $90 a barrel, still finishing cents below the previous session. The Saudi oil chief warned that “extreme” volatility and lack of liquidity in the futures market are moving prices in ways that don’t conform to fundamental supply-and-demand factors. The divergence may prompt the OPEC+ alliance to act, Bloomberg News reported. So far this month, prices have swung within a range of about $13. Prince Abdulaziz represents the largest oil producer in OPEC+ and is arguably the most important player in the 23-nation alliance. He said futures prices don’t reflect the underlying fundamentals of supply and demand, which may require the group to tighten production when it meets next month to consider output targets. “The Saudis just reminded oil markets that they still run the show,” said Ed Moya, senior market analyst at Oanda. “OPEC+ is not happy with how oil market fundamentals are nowhere being reflected with current prices. It seems energy traders should prepare for enhanced volatility going forward and that the Saudis may look to do whatever it takes to keep prices supported here.” Prices fell earlier in the session after US President Joe Biden spoke with leaders from France, Germany and the UK about reviving a nuclear deal with Iran, a step that probably would allow more crude shipments by the OPEC nation. After surging in the first five months of the year, crude’s rally has been thrown into reverse, with losses deepening in the summer trading months. The selloff, which has been intensified by below-average trading volumes, may alleviate some of the inflationary pressures coursing through the global economy that have spurred central banks, including the US Federal Reserve, to hike rates. WTI for September delivery, which expires Monday, fell 54 cents to settle at $90.23 a barrel in New York. The more-active October settled little changed at $90.36 a barrel. Brent for October settlement dropped 24 cents to settle at $96.48 a barrel. Additionally, China was said to be planning a series of special loans to ramp up support for its beleaguered property market, the latest sign of the world’s largest crude importer moving to shore up its economy. The apparent need for such stimulus has exacerbated fears of a global slowdown.

Oil Rallies After Saudi Arabia Signals Output Cut in September -- New York Mercantile Exchange oil futures rallied in early trade Tuesday, sending the new front-month West Texas Intermediate contract above $92 barrel (bbl) following remarks from Saudi Arabian oil minister Prince Abdelaziz Bin Salman hinting at a possible shift in OPEC+ production policy as a response to the recent fall in oil prices, citing a growing disconnect between what the prince called a volatile and illiquid futures market and underlying fundamentals. OPEC+ may be forced to agree to a cut in crude production at its Sept. 5 meeting to realign the paper market with underlying fundamentals, according to Bin Salman. In a written response to Bloomberg News, the oil minister said, "The paper market fell into vicious circle ... amplified by the flow of unsubstantiated stories about demand destruction, recurring news about the return of large volumes of supply, and uncertainty and ambiguity about the potential impacts of price caps, embargoes, and sanctions." Brent futures, the international price benchmark for crude oil, fell more than 20% since early June when it traded around $125 bbl, dragged lower by real-time data showing demand contraction in three major global economies -- China, European Union, and the United States. In August, European manufacturing contracted for a second consecutive month according to overnight data released from the Eurozone, with business activity stuck in a downturn midway through the third quarter. China's economy suffered a shock slowdown this summer amid its zero-COVID policy that has led to ongoing disruptions to business activity. These bearish factors are likely to linger if not accelerate heading into the fourth quarter. Bin Salman called the oil market's logic misplaced, suggesting limited spare capacity from OPEC+ producers should be the guide for the market. "The markets are ignoring OPEC+'s limited spare capacity and the risk of severe disruptions. Soon we will start working on a new agreement beyond 2022 which will build on our previous experiences, achievements, and successes. Witnessing this recent harmful volatility disturb the basic functions of the market and undermine the stability of oil markets will only strengthen our resolve," stated the oil minister. Further supporting the oil complex early Tuesday is dimming optimism over multinational nuclear talks with Iran, with U.S. State Department spokesperson Ned Price indicating reaching an agreement with Tehran is "highly uncertain" adding that "gaps remain." Should the agreement materialize, it could lift sanctions on at least 1 million barrels per day (bpd) in crude oil exports from Iran, according to several estimates. Ambiguity remains, however, over how much oil Iran could bring to market in the short-term, with some analysts suggesting tapping into offshore oil storage could at least provide Europe with a cushion as they face uncertainty over energy supplies this winter. Near 7:30 a.m. EDT, WTI October futures added $1.39 to trade near $91.75 bbl, and Brent rallied to $97.74 bbl, up $1.26. NYMEX September RBOB futures gained 1.54 cents to $2.8966 gallon, while the September ULSD contract added 2.11 cents to near $3.7973 gallon.

Oil Jumps; OPEC Cuts-Scare Fills Void of Iran Deal in the Works -- Crude prices jumped almost 4% Tuesday as the bulls played up for a second day remarks by Saudi Arabia's Energy Minister Abdulaziz bin Salman that the kingdom could cut production "anytime" at the OPEC+ oil producing coalition that it controlled. Abdulaziz had been responding to written questions put forth by Bloomberg when he said that, and the timing was convenient enough to snuff out a selloff that had been choking longs in the market since the start of the week. Iran, meanwhile, dropped another bomb -- metaphorically -- on the market when it gave up a key condition barring the inspection of its sites that it had previously insisted on during negotiations aimed at reinstating its 2015 nuclear deal with world powers. The agreement from seven years ago is critical to ending U.S. sanctions on Iranian oil exports, to pave the way for Tehran's legitimate return to the oil market. Previously, Iran had demanded that as a condition of re-entering the nuclear deal. Effectively what that meant is that Iran had less to hide from the IAEA amid accusations that the Islamic Republic had amassed enough capacity, including uranium enrichment, at those sites to build an atomic bomb. For the record, Tehran has maintained that its nuclear program was for civil uses like power generation and not for making weapons. Saudi Arabia, Israel and other arch rivals of the Islamic Republic, of course, do not believe that story. There's another reason why the Saudis do not want the nuclear deal reinstated for Iran: The potential of an oil glut that could cause within OPEC+. Industry sources estimate that Iran could bring an additional one million barrels per day or more into the market. Some say that's a drop in the bucket for the output OPEC+ has already lost from Western sanctions on Russian oil exports triggered by the Ukraine war. But with a likely U.S. recession that could spill over into Europe, the additional barrels from Iran might end up as oversupply, especially if oil imports from top buyer China continue to suffer as they had over the past month. Still, the narrative of a nuclear deal reinstatement for Iran was overpowered by the threat the Saudis could muscle in on OPEC+, forcing it to slash production to mitigate the barrels Tehran would bring. "A weakening U.S. economy should be bad news for oil, but today’s soft economic readings suggest that OPEC+ will easily be able to justify production cuts soon," said Ed Moya, analyst at online trading platform OANDA. West Texas Intermediate, the benchmark for U.S. crude, settled up $3.38, or 3.7%, at 93.74 a barrel. WTI fell to as low as $86.60 on Monday. WTI remains down almost 6% since the start of August, extending the back-to-back loss of more than 7% in July and June. Brent, the London-traded global benchmark for crude, settled up $3.53, or about 3.7%, at $100.23. Brent is down more than 8% since the start of August, after a 6.5% drop in July and slide of more than 4% in June.

OPEC Deepens Support for Saudi Call to Consider Action - OPEC’s united front on possible action grew stronger, as more nations endorsed Saudi Arabia’s view that supply curbs may be needed to stabilize world oil markets. Within 48 hours of comments from Saudi Arabian Energy Minister Prince Abdulaziz bin Salman that OPEC might have to curtail production, fellow members Iraq, Algeria, Kuwait, Equatorial Guinea and Venezuela released statements expressing their support. Further endorsements came on Thursday from Libya and Congo. Oil markets are suffering a “disconnect” as international futures contracts -- which have tumbled in recent months -- fail to accurately reflect the fundamentals of supply and demand, Prince Abdulaziz said in an interview on Monday. The result has been “extreme” volatility in prices, he added. The Organization of Petroleum Exporting Countries and its partners are prepared to reduce output in order to bring the two sides of the market back into equilibrium, the prince said. Messages of support have appeared from Baghdad to Caracas. Crude traders were surprised by the pivot from the Saudis, which have been under pressure from the US to help tame gasoline prices by opening the taps. President Joe Biden had been hopeful of action following a visit to the kingdom last month, but Riyadh and its OPEC+ partners responded with a token hike of just 100,000 barrels a day. OPEC+ is also having to contend with the prospect of renewed exports from member nation Iran, which is edging closer to resurrecting an international nuclear accord that could remove US sanctions on its oil trade. At the same time, EU measures are set to squeeze supplies from OPEC+ member Russia in protest over its invasion of Ukraine. Clarity should come on Sept. 5, when the 23-nation OPEC+ alliance is due to hold its next meeting.

WTI Holds Gains After 2nd Large Weekly Draw In A Row - Oil prices ended higher on the day, despite another Iran-nuke-deal headline (supply) and ugly economic data (demand) as OPEC+ sources confirmed the cartel's willingness to shift to production cuts in the case of an Iran deal in order to recouple physical and futures markets.“Oil continues to march higher today as the market digests comments regarding potential cuts from OPEC+,” .“Market observers will also be closely watching US inventory reports to see if the recent strength in gasoline demand has held up.”Adding further support to prices, Kazakh oil exports may be disrupted for months due to damaged moorings. API:

• Crude -5.632mm (-3.2mm exp)
• Cushing +679k
• Gasoline +268k
• Distillates +1.05mm

After the prior week's large crude draw, analysts expected another sizable draw last week and according to API's report, they are right with a larger than expected 5.632mm barrel draw. Cushing stocks rose and product inventories built... WTI was hovering around $93.50 ahead of the API data and limped modestly lower after the print... In the US, gasoline prices are on their longest run of declines since 2015, potentially easing some of the inflationary pressures on the country’s economy. However, that slide may soon come to an end as wholesale gasoline and crude prices have decoupled higher...

Oil prices fall as fears of imminent OPEC+ output cut recede - Oil prices fell on Wednesday, taking a breather from a nearly 4% surge the previous day on receding fears of an imminent output cut by the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+. Global benchmark Brent crude futures fell 21 cents, or 0.2%, to $100.01 a barrel by 0114 GMT, after rising 3.9% on Tuesday. The U.S. West Texas Intermediate crude futures contract was down 10 cents, or 0.1%, at $93.64 a barrel, having jumped 3.7% the previous day.Both contracts soared on Tuesday after de facto OPEC leader Saudi Arabia flagged the possibility of introducing cuts to balance a market it described as "schizophrenic", with the paper and physical markets becoming increasingly disconnected.But potential OPEC+ production cuts may not be imminent and are likely to coincide with the return of Iran to oil markets should that country clinch a nuclear deal with the West, nine OPEC sources told Reuters on Tuesday.A senior U.S. official told Reuters on Monday that Iran had dropped some of its main demands on resurrecting a deal."Tuesday's rally was overdone as many investors knew it would take several months for Iranian oil to flow into the international market even if an agreement to revive Tehran's 2015 nuclear deal was made, meaning OPEC+ would not trim output so quickly," "Still, there is not much room for the market's downside due to robust heating fuel demand for the winter," he said, citing that the recent rally in the U.S. heating oil market and surging natural gas prices boosted expectations for stronger heating oil demand and tighter crude supply. U.S. gas prices shot above $10 for the first time in about 14 years due to a surge in prices in Europe, where tight supplies persist. Underlining tight supply, U.S. crude stockpiles fell by about 5.6 million barrels for the week ended Aug. 19., according to market sources citing American Petroleum Institute figures on Tuesday, against analysts' estimate of a drop by 900,000 barrels in a Reuters poll. But gasoline inventories rose by about 268,000 barrels, while distillate stocks increased by about 1.1 million barrels.

Brent oil climbs above $100 a barrel amid talk about OPEC output cuts -(Reuters) -Benchmark Brent oil climbed above $100 a barrel on Wednesday after Saudi Arabia suggested this week that OPEC could consider cutting output in response to poor liquidity in the crude futures market and fears about a global economic downturn. Brent for October settlement reached a three-week high, trading up $1.30, or 1.3%, at $101.52 a barrel by 0850 GMT. U.S. crude was up $1.18, or 1.3%, at $94.92 a barrel. Contracts for both crudes soared on Tuesday after Energy Minister Prince Abdulaziz bin Salman flagged the possibility of cutting production amid poor futures market liquidity and macro-economic fears. OPEC sources later told Reuters any cuts by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, were likely to coincide with a return of Iranian the market should Tehran secure a nuclear deal with world powers. A U.S. official said on Monday that Iran had dropped some of its main demands on resurrecting a deal. OPEC+ is already producing 2.9 million barrels per day less than its target, sources said, complicating any decision on cuts or how to calculate the baseline for an output reduction. "The oil price and supply outlook suggest that an OPEC+ cut is not currently warranted," PVM analyst Stephen Brennock said, outlining possible threats to supply underpinning the market. "Global oil supply could take a hit as peak U.S. hurricane season approaches," he said. "Elsewhere, future supply outages in Libya cannot be discounted while Nigeria's oil fortunes show little sign of improving." U.S. crude stockpiles fell by about 5.6 million barrels for the week ended Aug. 19, according to market sources citing American Petroleum Institute figures. Analysts had estimated a drop by 900,000 barrels in a Reuters poll. Market participants will be watching Federal Reserve Chair Jerome Powell's speech at the Jackson Hole central bank symposium on Friday. He is expected to stress the Fed's focus on controlling inflation.

WTI Slides Despite US Crude Production Cut, Gasoline Demand Tumbles - Oil prices have extended gains this morning, after last night's API-reported crude draw and yesterday's OPEC+ headlines.“The stakes are very high and will test European resolve for inflicting pain on Russia at the cost of their economy,” “Buyers of Russian crude are playing the game to get the cheapest crude without drawing the ire of the US and Europe.”The potential revival of a nuclear deal with Iran, which could lead to a surge in exports from the OPEC producer, had weighed on the market recently. A senior US House Republican demanded that Congress be given a chance to review any agreement as Tehran and Western powers inch toward an accord."A nuclear deal with Iran would likely mean only modest increases to global supply — under 200,000 barrels — over the next 12 months. But demand may fall sharply if emerging markets, especially China, face extended economic pressure."Will the official data confirm API's bullish view. DOE:

• Crude -3.28mm (-3.2mm exp)
• Cushing +426k
• Gasoline -27k
• Distillates -662k

The official data confirmed API's crude draw - slightly bigger than expected - but it also showed draws in products (API showed builds). Stocks at the Cushing hub rose for the 8th straight week... Last week saw the biggest ever weekly draw from the Strategic Petroleum Reserve, at 8.1 million barrels. Adding that to the headline draw in commercial crude stockpiles, total nationwide crude inventories (including commercial stockpiles and oil held in the SPR) fell by 11.4 million barrels in the week to August 19. That’s the biggest drop in total nationwide crude stockpiles since April. US Crude Production slipped lower for the 2nd straight week... Bloomberg reports that gasoline demand on a weekly basis dropped off sharply, continuing a streak of higher-than-usual volatility. The four-week demand rolling basis fell by 2.24% as well to 8.86m b/d, barely above the same time in 2020.

WTI Near $95 as Inventories Fall, US Output Hits 12M Bpd -- West Texas Intermediate and ULSD futures and Brent crude settled Wednesday's session with gains between 1.5% and 4.5%. The gains came amid a one-two punch of a sharp drop in U.S. commercial crude oil inventories along with a record surge in fuel exports from the U.S. Gulf Coast while soaring natural gas and power prices across the European Union fueled by the anticipated shutdown of the key pipeline from Russia lent further support to the complex. The Energy Information Administration inventory report released mid-morning Wednesday was mixed-to-bearish for the oil complex, showing commercial crude-oil inventories declined by a larger-than-expected 3.3 million barrels (bbl) for the third week of August, not due to strong demand domestically but rather an increased pull on U.S. barrels from European and Asian buyers ahead of the winter months. Details of the report revealed that over past two weeks U.S. oil exports climbed to 4.5 million barrels per day (bpd), compared with an average 3 million bpd a year ago. On a four-week average basis, U.S. exports were around 1 million bpd more compared with the same period last year. Industry analysts expect shipments will average above 4 million bpd over the next few months and into next year, which should continue to support the recovery of the U.S. oil patch. Surprisingly, domestic operators scaled back production by 100,000 bpd last week to 12 million bpd, which is still 1.1 million below the pre-pandemic high of early March 2020. In the gasoline complex, however, EIA's data showed a sharp decline in gasoline demand of 914,000 bpd for an average pace of consumption at 8.434 million bpd, bringing the four-week average to just 8.9 million bpd -- a full 7% below last year's level. The incoming data poured some cold water on hopes that falling prices at the gas pump might incentivize some Americans to take more road trips before summer ends. The American Automobile Association found that almost two-thirds of U.S. adults have changed their driving habits or lifestyle since March, with the top two changes used to offset high gas prices are driving less and combining errands. The bearish development left gasoline inventories little changed from the previous week at 215.6 million bbl compared with analyst expectations for inventories to have decreased by 1.1 million bbl. . At settlement, WTI October futures added $1.15 to $94.89 per bbl, and October Brent rallied above $101 per bbl, up $1 per bbl from Tuesday's close. NYMEX September RBOB futures declined 13.23 cents to $2.8007 per gallon, while the September ULSD contract advanced 17.13 cents for a $4.0132-per-gallon settlement..

Oil prices ease on possible Iran oil exports, rising interest rates -- Oil prices eased on Thursday in volatile trade as investors braced for the possible return of sanctioned Iranian oil exports to the market and on worries that rising U.S. interest rates would weaken fuel demand. The prospect that the OPEC+ producer group could curb oil supplies limited the decline in oil prices. Brent crude fell 4 cents to $101.18 a barrel by 11:41 p.m. EDT 1541 GMT, while U.S. West Texas Intermediate crude fell 33 cents, or 0.4%, to $94.56 a barrel. Talks between the European Union, the United States and Iran UPDATE 4-Iran reviews U.S. response to EU nuclear text for revival of 2015 pact - Reuters to revive the 2015 nuclear deal are continuing, with Iran saying it had received a response from the United States to the EU's "final" text to resurrect the agreement. Investors also were waiting for scheduled remarks on Friday by U.S. Federal Reserve Chair Jerome Powell, who is expected to Kansas City Fed's Economic Policy Symposium in Jackson Hole, Wyoming. "The (market) is a little bit concerned about what Jerome Powell is going to say tomorrow about rising interest rates," Powell is expected to summarize where the Fed stands in its fight to control inflation, including information about its rate-path hike in the long and short-term. Limiting the downside for oil prices were comments on Monday by Saudi Energy Minister https://www.reuters.com/business/energy/saudi-says-opec-has-options-confront-market-challenges-including-cutting-output-2022-08-22 Prince Abdulaziz bin Salman that helped push prices to three-week highs, when he flagged the possibility that OPEC+ could cut production. Falling U.S. crude and product stockpiles also helped support prices. Oil inventories fell by 3.3 million barrels in the week to Aug. 19 to 421.7 million barrels, steeper than analysts' expectations in a Reuters poll for a 933,000-barrel drop. The bullish impact was countered by a drawdown in gasoline inventories that was less than expected, reflecting weak demand. U.S. gasoline stocks fell by 27,000 barrels in the week to 215.6 million barrels. Analysts had forecast a 1.5 million-barrel drop.

Oil Spikes After Local Media Reports 'No Iran Nuclear Deal' - Iran's Foreign Ministry has announced that it has received the White House response to its earlier in the week submission of a finalized nuclear deal text. Al-Arabiya and other regional outlets are reporting that the US has rejected the additional conditions put in place by Iran, meaning there's no deal. "It has also said Iran should not be allowed to enrich uranium beyond purity level of 4%, Al-Arabiya reports," according to early unconfirmed reports. "The US has rejected all the additional conditions requested by Iran, and urged Iran to lift any restrictions on international inspections," regional source Iran International writes. Oil prices are spiking on the breaking news...The US State Department earlier announced that "Our review of Iran's comments on the EU's proposed final text has now concluded. We have responded to the EU today. We have conveyed our feedback privately to the EU. But we’re not going to detail that feedback today."Tehran has further announced it is reviewing the US response and plans to issue formal notification to the European Union once the review is complete. As we predicted, it does not appear any final deal is on the horizon this week (or likely ever), given the trajectory of things, including - it should be mentioned - rare US airstrikes on "Iranian-backed" groups in Syria on Tuesday.As it stands, the longer the can gets kicked down the road, and more and more conditions are made firm and out in the open - most especially the disagreement over international inspections, which Iran has demanded be dropped - the more likely there will continue to be no deal.

Oil Ends Below $100 Again as Biden Admin to Okay an Iran Deal in U.S. Interest -- The White House says an Iran nuclear deal that’s good for the United States will be good for the Biden administration. And that was good enough to send oil tanking back to below $100 a barrel on Thursday. “If it is in our best interests, the U.S. will agree to the Iran deal,” White House spokeswoman Karine Jean-Pierre told a media conference Thursday as the back-and-forth effort to revive Iran’s 2015 nuclear deal with global powers went forth again, threatening to deliver an additional one million barrels per day of crude into the market should Tehran win reprieve from U.S. sanctions. The White House’s latest response to the negotiations around Iran forced Brent crude to settle down $1.88, or 1.9%, at $99.34 per barrel as the London-traded global benchmark for oil gave up its tenuous hold in the $100 territory it had occupied for just two days. Prior to Thursday’s slide, Brent reached as high as $102.45 over the past week, rallying in five sessions out of six, after hitting a six-month low of 91.71 on Aug. 16. New York-traded West Texas Intermediate, the benchmark for U.S. crude, settled down $2.31, or 2.4%, at $92.52 per barrel. Like Brent, WTI had risen in five of the past six sessions, climbing from a six-and-a-half month low of $85.73 on Aug. 16 to $95.73 earlier on Thursday. “Granted that there’s been a lot of back-and-forth on Iran over the 20 months of this administration and even now, there’s no guarantee that the deal will be restored,” said John Kilduff, founding partner at New York energy hedge fund Again Capital. “But the latest noises on this that have emerged from both the White House and Tehran have been positive, and that’s a negative for oil prices if it means having what could be a ballpark figure of some million additional barrels per day landing on the market.” Prior to the White House’s comment on Thursday, the State Department said the United States has conveyed its official response to the European Union’s proposal to salvage the seven-year-old agreement. Iran also confirmed that it had received the U.S. response. "The careful study of the views of the American side has started and Iran will share its comments with the coordinator upon completion of the review," said a spokesman for Iranian Foreign Minister Nasser Kanaani. The nuclear deal, officially known as the Joint Comprehensive Plan of Action, is critical to ending U.S. sanctions on Iranian oil exports and allowing Tehran's legitimate return to the export market for oil. Talks between Iran and global powers, led by the EU, have dragged on for 20 months since President Joe Biden entered office. Biden’s predecessor Donald Trump was the one who canceled the 2015 agreement in 2018, putting sanctions on Iran. For the record, Tehran has maintained that its nuclear program was for civil uses like power generation and not for making weapons. Saudi Arabia, Israel and other arch rivals of the Islamic Republic, of course, do not buy that story.

Oil prices dip after US Fed chair Powell warns of economic pain ahead (Reuters) -Oil prices edged lower in see-saw trading on Friday, as investors digested warnings from the head of the U.S. Federal Reserve that there is no quick cure for inflation. The U.S. economy will need tight monetary policy "for some time" before inflation is under control, which means slower growth, a weaker job market and "some pain" for households and businesses, U.S. Federal Reserve Chair Jerome Powell said. Still, data has shown some small decline in inflation, with the Fed's closely watched personal consumption expenditures price index falling in July to 6.3% on an annual basis, from 6.8% in June. Inflation expectations based on the University of Michigan's measures also eased in July. But "a single month's improvement falls far short of what the Committee will need to see before we are confident that inflation is moving down," Powell said, referring to the central bank's policy-setting Federal Open Market Committee. "The market is concerned that Powell sounded a bit more hawkish when it came to inflation," Brent crude futures fell 1 cent to $99.33 a barrel by 1:13 p.m. EDT (1713 GMT). U.S. West Texas Intermediate (WTI) crude futures fell 33 cents to $92.19 a barrel. Both contracts rose and fell by $1 throughout the session. Overall, Brent was on track for a weekly gain of around 2.6%, while WTI was set to rise 1.5%. Some European Central Bank policymakers want to discuss a 75 basis point interest rate hike at a Sept. 8 policy meeting, even if recession risks loom, as the inflation outlook is deteriorating, five sources with direct knowledge of the process told Reuters. Price losses were limited as OPEC's de facto leader Saudi Arabia on Monday flagged the possibility of production cuts to offset the return of Iranian barrels to oil markets should Tehran clinch a nuclear deal with the West. On Friday, the United Arab Emirates became the latest OPEC+ member to state it is aligned with Saudi Arabia's thinking on crude markets, a source with knowledge of the matter told Reuters. "The impression remains that Saudi Arabia is not willing to tolerate any price slide below $90. Speculators could view this as an invitation to bet on further price rises without the need to fear any more pronounced price declines," Commerzbank said in a note. In U.S. supply, the oil drilling rig count, an indication of future production, rose by 4 to 605 in the week to Aug. 26, Baker Hughes Co said on Friday.

Oil prices rise on signals OPEC might cut output **Oil prices ended higher on Friday, boosted by signals from Saudi Arabia that OPEC could cut output, but trading was volatile as investors digested and ultimately shrugged off warnings from the head of the U.S. Federal Reserve about economic pain ahead. Brent crude futures rose $1.65 to settle at $100.99 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 54 cents to settle at $93.06 a barrel. Both contracts rose and fell by $1 throughout the session. Overall, Brent gained 4.4% for the week, while WTI was set to rise 2.5%. The United Arab Emirates became the latest OPEC+ member to state it is aligned with Saudi Arabia's thinking on crude markets, a source with knowledge of the matter told Reuters. On Monday, Saudi Arabia flagged the possibility of production cuts to offset the return of Iranian barrels to oil markets should Tehran clinch a nuclear deal with the West. "The impression remains that Saudi Arabia is not willing to tolerate any price slide below $90. Speculators could view this as an invitation to bet on further price rises without the need to fear any more pronounced price declines," Commerzbank said in a note. Oil prices briefly fell after Fed Chair Jerome Powell said tight monetary policy may be in store "for some time" to fight inflation, meaning slower growth, a weaker job market and "some pain" for households and businesses. Data has shown some small decline in inflation, with the Fed's personal consumption expenditures price index falling in July to 6.3% on an annual basis, from 6.8% in June. Inflation expectations based on the University of Michigan's measures also eased in July. But "a single month's improvement falls far short" of what the Fed needs to see, Powell said. "The market is concerned that Powell sounded a bit more hawkish when it came to inflation," said Phil Flynn, an analyst at Price Futures group in Chicago. Meanwhile, some European Central Bank policymakers want to discuss a 75 basis point interest rate hike at a Sept. 8 policy meeting, even if recession risks loom, as the inflation outlook is deteriorating, five sources with direct knowledge of the process told Reuters. In U.S. supply, the oil drilling rig count, an indication of future production, rose by 4 to 605 in the week to Aug. 26, Baker Hughes Co said on Friday. Money managers raised their net long U.S. crude futures and options positions in the week to Aug. 23 by 24,215 contracts to 179,039, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Oil Posts Weekly Gain as Saudi Warning Lingers Over Market -- Oil rose this week with Saudi Arabia’s warning that supply cuts may be warranted overshadowing multiple bearish developments. West Texas Intermediate futures settled at $93.06 a barrel on Friday for a 2.5% weekly gain. Prices have been buoyed since the Saudi oil minister said the OPEC+ alliance may limit production to stabilize a volatile market. Meanwhile, the US central bank probably will continue raising interest rates to combat inflation, Federal Reserve Chair Jerome Powell signaled. Higher rates are typically seen as damaging to energy demand. “Powell reminded Wall Street that restrictive policy is required but we are not there yet, so recession fears and a deteriorating crude demand outlook is not warranted yet,” said Ed Moya, senior market analyst at Oanda. Oil has lost almost a quarter of its value since June on escalating concerns over a global economic slowdown, but seems to have found a floor around $90 a barrel this month. The prospect of a revived nuclear deal with Iran, which could lead to a surge in crude exports, has added to bearish sentiment recently. With inflation still rampant, Fed officials revived concerns Friday that they would take continue to move aggressively to slow the economy. “Restoring price stability will likely require maintaining a restrictive policy stance for some time,” Powell said in remarks prepared for a policy forum in Jackson Hole, Wyoming. “The historical record cautions strongly against prematurely loosening policy.”

Yemen’s HSA pledges $1.2m to UN drive to avert tanker oil spill – Middle East Monitor --Yemen's HSA Group, on Thursday, became the first private entity to pledge funds for a United Nations operation to avoid an oil spill from a tanker stranded off the coast of Yemen, as the UN urgently tries to secure an initial requirement of $80 million, Reuters reports. The international organisation, which has so far raised over $60 million, has warned that the "Safer", stranded since 2015 off a Red Sea oil terminal, could spill four times as much oil as the 1989 Exxon Valdez disaster near Alaska. HSA, Yemen's largest private company, announced a $1.2 million donation towards initially offloading the tanker, which holds 1.1 million barrels. "Given that there remains a large funding shortfall, and time is running out, HSA believes that the private sector must step forward," Nabil Hayel Saeed Anam, Managing Director of HSA's Yemen operations, said in a statement. The UN has raised $64 million, including the HSA pledge, and more than $142,000 through a public crowd-funding drive initiated in June and which will be re-launched later this month, a UN spokesperson told Reuters in response to a query. The "Safer" threatens an environmental disaster for Yemen, which is already grappling with a dire humanitarian crisis due to a seven-year war, and across the Red Sea. The UN says the cost of a clean-up alone would be $20 billion.

U.S. strikes back at Iran-backed groups in Syria as skirmishes intensify - The U.S. military launched additional retaliatory strikes on Iran-backed forces in Syria on Thursday, in the latest back-and-forth with militants that American officials said were being directed by Iran’s Islamic Revolutionary Guard Corps. In the latest skirmish, the militants planned to launch additional rockets on U.S. personnel, Defense Department officials said, but U.S. forces prevented the attack by striking the militants with AH-64 Apache attack helicopters, AC-130 gunships and M777 artillery. In total, the strikes this week killed four enemy fighters and destroyed seven enemy rocket launchers, according to a release from U.S. Central Command. Iran-affiliated forces have recently stepped up low-level attacks on U.S. forces in Syria, including one incident on Aug. 15 when they launched rockets at the Green Village base near the Iraqi border. The Biden administration responded to that attack with precision airstrikes in Deir ez-Zor, Syria, on Tuesday that targeted infrastructure facilities used by groups affiliated with the IRGC. In retaliation, the militants launched rocket attacks on two separate sites in northeastern Syria that wounded three U.S. service members on Wednesday. At roughly 7:30 p.m. local time, rockets landed inside the perimeter of Mission Support Site Conoco, and a further barrage later landed in the vicinity of Mission Support Site Green Village, the military said. One U.S. service member in Conoco was treated for a minor injury and returned to duty, while two others are under evaluation for minor injuries. U.S. forces initially responded to the Wednesday strikes using attack helicopters, according to Central Command. The response destroyed three vehicles and equipment used to launch some of the rockets. Congress has not authorized the use of military force in Syria, but U.S. troops have been in the country for several years and have often been targeted by Iran-backed militias. Those attacks have prompted counter-fire from the U.S. that lawmakers believe is consistent with President Joe Biden’s Article II constitutional authorities and doesn’t require explicit authorization. Top Democrats have indicated so far that they support the latest effort. House Armed Services Chair Adam Smith (D-Wash.) called it a “self-defense operation” that shows the U.S. can respond swiftly to terrorism threats around the world. And Speaker Nancy Pelosi lauded Biden for what she said was “a necessary, proportionate measure to defend U.S. personnel.”