natural gas price at a 14 year high; oil exports at a record high, oil supplies at a 18½ year low; DUCs at a record low

US natural gas prices are at a 14 year high but European gas prices are 8 times higher; US oil exports at a record high, US oil supplies at a 18½ year low with SPR at a 37 year low; total oil + oil products supplies at a 13½ year low; DUCs at a record low, DUC backlog at 4.4 months

oil prices fell for the 6th ​time out of the last eight​ weeks​​​ on fears of a global slowdown and the possibility of a nuclear accord with Iran...after rising 3.5% to $92.09 a barrel last week ​as weak US inflation data suggested that monetary policy might not need to be as restrictive going forward, the contract price for the benchmark US light sweet crude for September delivery moved lower in Asian morning trading on Monday on profit-taking amid a lack of fresh cues, and then dropped 5% to a new 6 month low after China reported factory output and retail sales slowed far more than analysts had expected, and that their youth unemployment hit a record high. before steadying to settle $2.68 lower at $89.41 a barrel, as tentative signs of a breakthrough in Iranian nuclear talks that could end sanctions on the country's crude-oil exports also weighed on prices....oil prices extended their losses on Tuesday after weak US and Chinese data spurred concerns about a potential global recession that ​would hit energy demand, and then tumbled to their lowest since before Russia's invasion of Ukraine as traders awaited clarity ​from talks to revive a deal that ​would allow more Iranian oil exports, before settling $2.88 lower at $86.53 a barrel as traders awaited the release of weekly US inventory data, with expectations that commercial crude stockpiles had continued building through the second week of August...oil prices moved higher Wednesday morning after the new head of OPEC said global oil markets faced a high risk of a supply squeeze this year as demand remained resilient while spare production capacity dwindled, and then jumped $1 as an unexpectedly large drop in U.S. oil and gasoline supplies reminded traders that demand remained firm, even if overshadowed by the prospect of a global recession, and settled $1.58 higher at $88.11 a barrel, as a rebound in gasoline demand to the highest level since before the July 4th holiday suggested that falling prices at the gas pump had incentivized Americans to take on late-summer road trips....oil prices extended higher in early morning trading Thursday following the bullish EIA inventory data, and rallied to settle $2.39 higher at $90.50 a barrel, as positive U.S. economic data and robust U.S. fuel consumption offset concerns that slowing economic growth in other countries could undercut demand...however, oil prices fell in early morning trading on Friday, amid persistent concerns over demand weakness across major economies of Asia and Europe, while ongoing negotiations aimed at reviving the 2015 nuclear accord with Iran further weighed on the oil complex, but reversed higher in afternoon trading following reports that Russia's Gazprom planned to halt exports of natural gas into EU starting Aug. 31, and settled 27 cents higher at $90.77 a barrel as traders braced for more volatility amid concerns the Fed was far from done with interest rate increases...but despite the tight oil & fuel supplies, oil prices still ​still ​ended 1.4% lower on the week on a stronger U.S. dollar and fears that a global economic slowdown would weaken crude demand....

meanwhile, US natural gas prices finished at a 14 year high, as prices in Europe and Asia set new all time records...after rising 8.7% to $8.768 per mmBTU last week on weaker well output and on signs that Freeport LNG was on track to resume exports by early October, the contract price of natural gas for September delivery fell 4.0 cents or about half a percent to $8.728 per mmBTU on Monday on rising supplies and forecasts for cooler weather and lower air conditioning demand over the next two weeks than had been expected, but then surged higher in early Tuesday trading on technical momentum and hefty declines in the latest production estimates, and settled 60.1 cents higher at a 14 year high of $9.329 per mmBTU, as maintenance activities took another toll on gas field production...natural gas​ ​prices slid 8.5 cents to $9.244 per mmBTU on Wednesday, ​off about 1% from that 14-year high, as traders focused squarely on the next day's round of EIA inventory data, despite a drop in output, hotter-than-normal weather on the West Coast and in Texas, and near-record global prices...​gas​ prices ​then ​rebounded in early trading Thursday ahead of the inventory data, which was expected to show a lighter-than-average summer injection into Lower 48 stockpiles, but then ​inexplicitly ​crashed when the week's injection into natural gas storage was about half of what the market had expected, and settled 5.6 cents lower at $9.188 per mmBTU​,​ as well output stayed on track for a record high for the month...however, natural gas prices rose 14.8 cents, or almost 2% to another 14-year high at $9.336 per mmBTU on Friday, after global gas prices jumped to record highs on the Russian plan to halt exports of natural gas into Europe starting Aug. 31, and thus finished 6.5% higher on the week...

The EIA's natural gas storage report for the week ending August 12th indicated that the amount of working natural gas held in underground storage in the US rose by 18 billion cubic feet to 2,519 billion cubic feet by the end of the week, which left our gas supplies 296 billion cubic feet, or 10.5% below the 2,815 billion cubic feet that were in storage on August 12th of last year, and 367 billion cubic feet, or 12.7% below the five-year average of 2,886 billion cubic feet of natural gas that ​were in storage as of the 12th of August over the most recent five years....the 18 billion cubic foot injection into US natural gas working storage for the cited week was less than the lowest forecast and just over half of the average 34 billion cubic foot injection forecast from an S&P Global Platts' survey of analysts, and was much less than half of the 46 billion cubic feet that were added to natural gas storage during the corresponding week of 2021, and also much less than half of the average injection of 47 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 12th indicated that after a record jump in our oil exports, we had to pull oil out of our stored commercial crude supplies for the 5th time in 9 weeks, and for the 22nd time in the past 38 weeks, despite another big withdrawal of crude from the SPR, and despite a big jump in oil supplies that could not be accounted for....Our imports of crude oil fell by an average of 39,000 barrels per day to average 6,132,000 barrels per day, after falling by 1,171,000 barrels per day during the prior week, while our exports of crude oil jumped by ​a record ​2,890,000 barrels per day to average ​a record ​5,000,000 barrels per day, which meant that our trade in oil worked out to a net import average of 1.132,000 barrels of oil per day during the week ending August 12th, 2,929,000 fewer barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly 100,000 barrels per day lower at 12,100,000 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 13,232,000 barrels per day during the August 12th reporting week…

With our oil exports at a record high, we'll include a historical graph of them below, where you can see that prior to the end of 2014, US oil exports, except for those allowed under NAFTA, had been negligible because they had been banned 40 years earlier, in the wake of the Arab oil embargo. The ban on US oil exports was lifted in a spending bill that Congress passed during the last week of 2015, part of a compromise that Obama agreed to in order to avoid a government shutdown...​as you can see, ​this week’s spike clearly beat previous ​oil export ​highs by a large margin..

Meanwhile, US oil refineries reported they were processing an average of 16,423,000 barrels of crude per day during the week ending August 12th, an average of 158,000 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 1,494,000 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 12th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 1,697,000 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 (+1,697,000) 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 (+343,000) barrels per day, that means there was a 1,354,000 barrel per day difference between this week's balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the week over week supply and demand changes indicated by this week's report are worthless...however, since most everyone treats these weekly EIA reports as gospel, and since these figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably accurate by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

This week's 1,494,000 barrel per day decrease in our overall crude oil inventories left our oil supplies at 886,110,000 barrels at the end of the week, which is our lowest total oil inventory level since September 19th, 2003, and therefore at a new 18 1/2 year low (see graph below)….our oil inventories decreased this week as 1,008,000 barrels per day were being pulled out of our commercially available stocks of crude oil and 486,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve. The draw on the SPR was part 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 further, at least up until that time. The administration's previous 30,000,000 million barrel release from the SPR to address Russian supply related shortfalls wrapped up in June, and his earlier release of 50 million barrels from the SPR to incentivize US gasoline consumption was completed in May...Including those, and other withdrawals from the Strategic Petroleum Reserve under recent release programs, a total of 194,993,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 25 months, and as a result the 461,156,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since March 22nd, 1985, or at a new 37 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 6,452,000 barrels per day last week, which was ​still​ 0.5% more than the 6,421,000 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 12,100,000 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 11,700,000 barrels per day, while Alaska’s oil production was 18,000 barrels per day lower at 415,000 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 7.6% below that of our pre-pandemic production peak, but was 24.7% 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 93.5% of their capacity while using those 16,423,000 barrels of crude per day during the week ending August 12th, down from their 94.3% utilization rate during the prior week, but still a refinery utilization rate that's within the normal range for mid summer. The 16,423,000 barrels per day of oil that were refined this week were 2.6% more than the 16,006,000 barrels of crude that were being processed daily during week ending August 13th of 2021, but 7.2% less than the 17,702,000 barrels that were being refined during the prepandemic week ending August 16th, 2019, when our refinery utilization was at 95.9%, near the top of the normal range, even 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 185,000 barrels per day to 9,965,000 barrels per day during the week ending August 12th, after our gasoline output had increased by 858,000 barrels per day during the prior week. This week’s gasoline production was 0.4% less than the 10,000,000 barrels of gasoline that were being produced daily over the same week of last year, but 0.7% more than our gasoline production of 9,897,000 barrels per day during the week ending August 16th, 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 56,000 barrels per day to 5,178,000 barrels per day, after our distillates output had increased by 189,000 barrels per day during the prior week. With those increases, our distillates output was 6.8% more than the 4,848,000 barrels of distillates that were being produced daily during the week ending August 13th of 2021, but 3.0% less than the 5,340,000 barrels of distillates that were being produced daily during the week ending August 16th 2019...

With the big decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 4th time in nine weeks; and for the 22nd time out of the past twenty-eight weeks, decreasing by 4,462,000 barrels to 215,674,000 barrels during the week ending August 12th, after our gasoline inventories had decreased by 4,978,000 barrels during the prior week. Our gasoline supplies decreased again this week ​because the amount of gasoline supplied to US users increased by 225,000 barrels per day to 9,348,000 barrels per day, and even though our exports of gasoline fell by 224,000 barrels per day to 902,000 barrels per day​,​ while our imports of gasoline rose by 119,000 barrels per day to 714,000 barrels per day. After 22 inventory drawdowns over the past 28 weeks, our gasoline supplies were 5.5% lower than last August 13th's gasoline inventories of 228,165,000 barrels, and about 8% below the five year average of our gasoline supplies for this time of the year…

After the increase in our distillates production, our supplies of distillate fuels increased for the 7th time in 11 weeks but for just the 20th time in the past year, rising by 766,000 barrels to 111,490,000 barrels during the week ending August 12th, after our distillates supplies had increased by 2,166,000 barrels during the prior week. Our distillates supplies rose by less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, increased by 201,000 barrels per day to 3,925,000 barrels per day, and because our exports of distillates rose by 15,000 barrels per day to 1,308,000 barrels per day, while our imports of distillates fell by 40,000 barrels per day to 164,000 barrels per day.. After forty-seven inventory withdrawals over the past seventy weeks, our distillate supplies at the end of the week were 18.6% below the 137,814,000 barrels of distillates that we had in storage on August 13th of 2021, and about 23% below the five year average of distillates inventories for this time of the year...

Meanwhile, after this week's big decrease in our oil exports, our commercial supplies of crude oil in storage fell for the 8th time in 14 weeks and for the 30th time in the past year, decreasing by 7,056,000 barrels over the week, from 432,010,000 barrels on August 5th to 424,954,000 barrels on August 12th, after our commercial crude supplies had increased by 5,457,000 barrels over the prior week. After that decrease, 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 second 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 12th were still 2.4% less than the 435,544,000 barrels of oil we had in commercial storage on August 13th of 2021, and were 17.1% less than the 512,452,000 barrels of oil that we had in storage on August 14th of 2020, and 2.9% less than the 437,778,000 barrels of oil we had in commercial storage on August 9th of 2019…

Finally, 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 1,686,484,000 barrels on August 5th to 1,673,923,000 barrels on August 12th, after our total inventories had risen by 7,709,000 barrels during the prior week. That left our total liquids inventories down by 114,510,000 barrels over the first 31 weeks of this year, and at the lowest level since October 17th, 2008, and thus at a 13 1/2 year low...     

This Week's Rig Count

The number of drilling rigs running in the US fell for only the 10th time over the previous 99 weeks during the week ending August 19th, and decreased for 3 weeks in a row for the first time since the initial Covid ​surge; however, they're still 3.9% below the prepandemic rig count....Baker Hughes reported that the total count of rotary rigs drilling in the US decreased by 1 to 762 rigs this past week, which was still 259 more rigs than the 503 rigs that were in use as of the August 20th report of 2021, and was 1,167 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global market with oil in an attempt to put US shale out of business….

The number of rigs drilling for oil was unchanged at 601 oil rigs during the past week, after the number of rigs targeting oil had increased by 3 during the prior week, but there are still 196  more oil rigs active now than were running a year ago, even as they now amount to just 37.4% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are also down 12.0% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 1 to 159 natural gas rigs, which was still up by 62 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 9.9% 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 two "miscellaneous" rigs that ​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 up 1 to 694 horizontal rigs this week, which was 240 more rigs than the 454 horizontal rigs that were in use in the US on August 20th of last year, but barely over half of the record 1,374 horizontal rigs that were drilling on November 21st of 2014....on the other hand, the vertical rig count was down by 2 to 29 vertical rigs this week, but those were still up by 10 from the 19 vertical rigs that were operating during the same week a year ago…meanwhile, the directional rig count was unchanged at 39 directional rigs this week, while those were also up by 9 from the 30 directional rigs that were in use on August 20th 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 19th, the second column shows the change in the number of working rigs between last week’s count (August 12th) and this week’s (August 19th) count, the third column shows last week’s August 12th 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 20th of August, 2021...

there were just a few pretty straightforward changes this week...checking the Rigs by State file at Baker Hughes for the changes in Texas Permian, we find that there were two rigs pulled out of Texas Oil District 8, which covers the core Permian Delaware, and that there was another oil rig pulled out of Texas Oil District 8A, which includes the northern counties of the Permian Midland...since the Texas Permian count is thus down by three while the national Permian rig count was just down by one, we can conclude that the two rigs added in New Mexico were set up to drill in the far west Permian Delaware​, offsetting 2 Texas Permian​ ​losses​...elsewhere in Texas, there was one rig pulled out of Texas Oil District 2 while there was a rig added in Texas Oil District 3 at the same time, which were most likely offsetting changes in the Eagle Ford shale, leaving the Texas rig count down by three...the only other activity evident from our tables is the removal of an oil rig from Oklahoma's Cana Woodford, and since the Oklahoma rig count remained unchanged, we know there had to be a rig added elsewhere in the state in a basin that Baker Hughes doesn't track...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 occured, 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..

DUC well report for July

Monday of this week saw the release of the EIA's Drilling Productivity Report for August, which included the EIA's July data on drilled but uncompleted (DUC) oil and gas wells in the 7 most productive shale regions (shown under the report's tab 3)....that data showed a decrease in uncompleted wells nationally for the 25th consecutive month, as both completions of drilled wells and drilling of new wells increased in July, but remained well below average pre-pandemic levels...for the 7 sedimentary regions covered by this report, the total count of DUC wells decreased by 20 wells, falling from 4,297 DUC wells in June to 4,277 DUC wells in July, which was the lowest number of US wells left uncompleted on record, and also 28.4% fewer DUCs than 5,975 wells that had been drilled but remained uncompleted as of the end of July of a year ago...this month's DUC decrease occurred as 954 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during July, up from the 938 wells that were drilled in June, while 974 wells were completed and brought into production by fracking them, up by just 4 from the 970 well completions seen in June, but up by 245 from the 716 completions seen in July of last year....at the July completion rate, the 4,277 drilled but uncompleted wells remaining at the end of the month represents a 4.4 month backlog of wells that have been drilled but are not yet fracked, unchanged from the DUC well backlog of a month ago, which is the lowest DUC backlog since March 2015, despite a completion rate that is still al​most ​15% below 2019's pre-pandemic average...

only the oil producing regions saw a net DUC well decrease during July, since the DUC well decrease in natural gas producing Appalachian basins was less than the DUC well increase in Haynesville shale....the number of uncompleted wells remaining in the Permian basin of west Texas and New Mexico decreased by 21, from 1,218 DUC wells at the end of June to 1,197 DUCs at the end of July, as 417 new wells were drilled into the Permian basin during July, while 438 already drilled wells in the region were being fracked....in addition, the number of uncompleted wells remaining in Oklahoma's Anadarko basin decreased by 8, falling from 723 at the end of June to 717 DUC wells at the end of July, as 64 wells were drilled into the Anadarko basin during July, while 70 Anadarko wells were completed....meanwhile, there was a decrease of 1 DUC well in the Bakken of North Dakota, where DUC wells fell from 427 at the end of June to a record low  of 426 DUCs at the end of July, as 77 wells were drilled into the Bakken during June, while 78 of the drilled wells in the Bakken were being fracked....on the other hand, DUCs in the Eagle Ford shale of south Texas increased by 1, from 611 DUC wells at the end of June to 612 DUCs at the end of July, as 113 wells were drilled in the Eagle Ford during Ju​ly, while 113 already drilled Eagle Ford wells were fracked....at the same time, DUC wells in the Niobrara chalk of the Rockies' front range increased by 4, riising from 328 at the end of June to 332 DUC wells at the end of July, as 112 wells were drilled into the Niobrara chalk during July, while 108 Niobrara wells were completed....

among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 8 wells, from 524 DUCs at the end of June to 516 DUCs at the end of July, as 96 wells were drilled into the Marcellus and Utica shales during the month, while 104 of the already drilled wells in the region were fracked....at the same time, the uncompleted well inventory in the natural gas producing Haynesville shale of the northern Louisiana-Texas border region rose by 11, from 466 DUCs in June to 477 DUCs by the end of July, as 75 wells were drilled into the Haynesville during July, while 64 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of July, DUCs in the five major oil-producing basins tracked by this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) decreased by a net total of 23 wells to 3,284  DUC wells, while the uncompleted well count in the major natural gas basins (the Marcellus, the Utica, and the Haynesville) increased by net of 3 wells to 993 wells, although as this report notes, once into production, more than half the wells drilled nationally will produce both oil and gas...

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House Republicans propose free loans, tax breaks for new gas pipelines - Two state House Republicans proposed legislation to give some natural gas pipeline developers state-funded tax breaks and interest-free loans, while allowing them to add a surcharge to ratepayers’ monthly bills. Reps. Jay Edwards, of Nelsonville, and Jon Cross, of Kenton, proposed House Bill 685 to aid communities that they say lose out on economic gains from natural gas development due to a lack of infrastructure. The bill would allow local governments to request a designation as an “EnergizeOhio zone.” The director of the Ohio Department of Development must grant it if he or she determines that “deficiencies in natural gas infrastructure” in the area harm economic growth. Pipeline developers siting projects within these zones can obtain interest-free loans from a new $20 million pot of money to purchase or lease land easements. The legislation would create another $50 million pot, funded by federal coronavirus relief dollars, for natural gas infrastructure projects. For companies that have already obtained regulatory approval to add surcharges to customer bills for infrastructure development, the legislation allows them to add another $1.50 if the project is in an EnergizeOhio zone. Lastly, it allows developers to receive a 75% tax abatement on new pipelines while speeding up their tax depreciation rate. Legislative analysts have not yet published a financial analysis of the bill’s costs. Sean O’Leary, a researcher with the Ohio River Valley Institute, said the bill is predicated on the idea that natural gas development in Ohio is necessarily a good thing for communities. The problem, he said, is it’s just not true. Seven Ohio counties — Belmont, Guernsey, Harrison, Jefferson, Noble, Monroe and Carroll — produce 95% of the natural gas in Ohio. Those counties’ gross domestic product, he said, has boomed since 2012, thanks to their natural gas output. Their population and employment levels, meanwhile, have remained stubbornly flat. “Just go to Belmont County, for Christ’s sake,” he said. “There’s just not an economic revival going on there.” Keith Conroy, a lobbyist representing the Ohio Gas Access Partnership, which announced support for the bill, declined an interview. The organization issued a news release to support the idea. “By lowering the cost of building energy infrastructure in the state, gas companies will be able to build to growing businesses in communities that need it and provide that energy at a competitive and affordable price,” it states. Cross, in a news release, made similar comments \

Salineville gas drillers want gov’t to let them do their jobs - (WKBN) – Workers with Encino Energy are about to put four new oil and gas wells online at a three-acre site in Salineville. Congressman Bill Johnson, R-6th District, was invited to take a tour Monday and hear what executives say they need to be successful.“They’re looking for Washington to get out of the way and let them do what they know how to do,” Johnson said. The site will soon begin the fracking process, something Johnson says Ohio needs more of.“If we could quadruple the amount of natural gas that we’re exporting right now, we would lower carbon emissions globally,” he said.But to do that, executives with both Encino and EQT Energy say they desperately need more processing and pipeline infrastructure to get all those resources to market.U.S. Senate Candidate Tim Ryan’s campaign says he has been a supporter of the oil and gas industry, giving a speech in the House just last week. However, Senate challenger J.D. Vance, who also took a tour of the well site, claims Ryan’s statements ring hollow.“I don’t care what Tim Ryan says, I care what he does, and what he does has been a failure. Not just for the energy industry in this state but everybody who depends on it, which is pretty much all of Ohio,” Vance said.Executives claim they will produce energy for the next 50 years here, with no government subsidies. They say they just need lawmakers to let them do their jobs.

Tiger Group announces liquidation sale of Buckeye Water Services - Waste Today Magazine -Tiger Group, Boston, is offering for immediate sale an entire fleet of late model rolling stock previously operated by Buckeye Water Services from its locations in Ohio and Pennsylvania. All assets are available for individual purchase in the company-closing liquidation, which includes construction equipment and more than 100 twenty- and thirty-yard roll-off boxes. A wide range of assets from Buckeye Water Services, a fracking services and waste hauling company, are available for immediate sale from Tiger Group. The sale features multiple tractors and trucks, including a 2018 Kenworth T880 10x4 dump truck and a 2013 Mack tractor with a 2018 Dragon tanker trailer "This sale represents a particularly strong opportunity for any company that provides water services to the hydraulic-fracturing sector or hauls construction waste, in part because the rolling stock on offer is so new and well-maintained," says Chad Farrell, managing director for Tiger Commercial & Industrial. "But other companies could benefit by acquiring former Buckeye assets of more general utility, like pickup, winch and service trucks, SUVs, a Caterpillar skid steer and a lowboy trailer by Entyre." With two locations, one near Columbus, the other near Pittsburgh, Buckeye Water Services provided specialized services to the oil-and-gas industry for more than 50 years. The company also had substantial waste-hauling operations, according to John Coelho, senior director of Tiger Commercial & Industrial. Available trucks and trailers include:

Children who live near fracking sites at birth face increased risk of leukemia: study - Pennsylvania children living near fracking sites at birth are two to three times more likely to be diagnosed with leukemia during early childhood than those who did not live near such facilities, a new study has found. The study, published in Environmental Health Perspectives on Wednesday, explored the connection between the development of cancer and proximity to such unconventional oil and gas development — also known as hydraulic fracturing, or “fracking.” Scientists have previously reported on potential threats to residents posed by fracking, such as air pollution from vehicle emissions and construction, as well as water contamination from the drilling process or wastewater spills, according to the authors. In addition, hundreds of chemicals — some with known or suspected cancer links — have reportedly been used in the water injection process that occurs during fracking, they added. Yet data on the association between fracking and childhood cancer remains scarce, the researchers observed.“Unconventional oil and gas development can both use and release chemicals that have been linked to cancer,” senior author Nicole Deziel, an associate professor of epidemiology at the Yale School of Public Health, said in a statement.As a result, Deziel continued, the possibility that children living near such sites are “exposed to these chemical carcinogens is a major public health concern.” Deziel and her team conducted a registry-based survey — an observational study that comes from patient registries — of 405 Pennsylvania children aged 2-7, who were diagnosed with acute lymphoblastic leukemia between 2009 and 2017, according to the study.The survey also included 2,080 control subjects matched on birth year.Acute lymphoblastic leukemia (ALL) is the most common form of childhood leukemia. Although long-term survival rates are high, patients may end up at higher risk of other health problems, developmental challenges and psychological issues, the researchers said. The authors probed the link between in-utero exposure and childhood leukemia diagnosis in two different exposure windows: a so-called primary window of three months preconception to one year prior to diagnosis and a “perinatal window” of preconception to birth. Ultimately, they found that children with at least one fracking well within 1.24 miles of their birth residence during the primary window had 1.98 times the odds of developing ALL in comparison to those with no such wells. Meanwhile, children with at least one fracking well within 2 kilometers of their birth residence during the perinatal window were 2.8 times more likely to develop ALL than their peers who had no wells nearby. These results demonstrate that exposure to fracking sites “may be an important risk factor for ALL, particularly for children exposed in utero,” first author Cassandra Clark, a postdoctoral associate at the Yale Cancer Center, said in a statement. Clark and her colleagues also determined that drinking water could play an important role in exposing children to oil and gas-related chemicals. Going forward, the researchers said they hope their findings will help inform public policy, including the regulation of “setback distances” — the required minimum distances between private residences and fracking wells. Since fracking operations located 1.24 miles or more from residences are associated with an increased risk of ALL, Clark stressed “that existing setback distances, which may be as little as 150 feet, are insufficiently protective of children’s health.”

IFO Report – PA Shale Production Down Second Quarter in a Row | Marcellus Drilling News - Yesterday the Pennsylvania Independent Fiscal Office (IFO) released its latest quarterly Natural Gas Production Report for April through June 2022 (full copy below). There were 133 new horizontal wells spud (drilled) in 2Q22, an increase of 13 wells (10.8%) compared to 2Q21. However, natural gas production volume was 1,836 billion cubic feet (Bcf) in 2Q22, a slight decrease (-0.9%) from 2Q21. It is the second quarterly decrease in production in a row. It appears that maybe PA has hit a plateau for natural gas production.

N.J. pipeline project could shake up FERC gas reviews - A proposed Northeast pipeline expansion could test the Federal Energy Regulatory Commission’s approach to scrutinizing demand for new natural gas infrastructure at a time when a slew of states are trying to use less of the fossil fuel. The Regional Energy Access Expansion (REAE) project is designed to support growing demand for natural gas in New Jersey, Pennsylvania and Maryland, according to developer Transcontinental Gas Pipe Line Co. LLC. New Jersey state officials, however, have told FERC that the Garden State doesn’t need more gas, in part because of the state’s climate policies and energy efficiency goals. The tension offers an unusual opportunity for the commission to consider a state’s climate targets before signing off on a pipeline project, according to some legal experts. At the same time, it exposes a key question for the commissioners as they contemplate new approaches to natural gas reviews: What evidence and perspectives should carry the most weight? “We finally get to see what FERC will do now that they have these data from the state showing that we don’t need more gas capacity,” said Jennifer Danis, a senior staff attorney at the Niskanen Center, a libertarian-leaning think tank that is representing the New Jersey Conservation Foundation opposing the project before the commission. In a potential first for a pipeline proceeding, the New Jersey Division of Rate Counsel and the New Jersey Board of Public Utilities (BPU) have presented FERC with an independent study on the state’s natural gas capacity. Conducted by the consulting firm London Economics International for the BPU last year, the analysis concluded that New Jersey was “well-positioned with available interstate supply beyond 2030,” contrary to gas utilities’ claims of potential shortfalls. The study was commissioned by the BPU last year as New Jersey seeks to transition off fossil fuels. The Garden State has a target of 100 percent clean energy by 2050 across the electric power, transportation and buildings sectors. “We don’t need additional pipelines going either into or bringing gas into New Jersey,” said Brian Lipman, director of the New Jersey Division of Rate Counsel, which represents consumers on utility issues. “We’re concerned about overbuilding gas pipelines, especially during this transition period where we’re not really sure what role natural gas will be playing within the next five to 10 years.”

Sen. Joe Manchin's maneuvers for Mountain Valley Pipeline not necessarily certain to succeed - When there’s a legal battle brewing over the Mountain Valley Pipeline, supporters would rather see it play out in the federal courthouse in Washington, D.C. — not one 100 miles to the south in Richmond. The U.S. Court of Appeals for the District of Columbia is largely deferential to pipeline approvals by the Federal Energy Regulatory Commission, legal experts say. The appellate court upheld a FERC decision that greenlighted Mountain Valley in 2017, and more recently rejected challenges to the commission’s approval for an extension of the pipeline. In Richmond, where the 4th U.S. Circuit Court of Appeals sits, the pipeline has not fared as well. The Fourth Circuit has stayed or struck down nearly a dozen permits issued to Mountain Valley by other federal agencies. Joe Manchin hopes to change that. The U.S. senator from West Virginia, a staunch supporter of Mountain Valley, struck an agreement with Democratic leaders earlier this month that would make Washington, D.C., the exclusive venue for future legal challenges.But should Manchin’s proposed legislation be passed, there’s no guarantee that it would ensure the completion of a litigation-battered and long-delayed natural gas pipeline that passes through the New River and Roanoke valleys. “It would be foolhardy to say that this is a fait accompli now,” said Cale Jaffe, a law professor and director of the Environmental Law and Community Engagement Clinic at the University of Virginia. First, there’s the unusual nature of Manchin’s venue proposal, which some lawyers likened to switching referees in the middle of a ballgame. “We seldom see a legislative intervention in litigation to change the court in which legal challenges are to be filed,” said Steve Emmert, a Virginia Beach lawyer who founded and is past chair of the appellate practice section of the Virginia Bar Association. Under current federal law, challenges to an approval by FERC — the lead agency that oversees interstate projects such as Mountain Valley — go to the D.C. Court of Appeals. Petitions that seek to overturn secondary permits issued by other government agencies wind up before the appellate court in the district where the project is located, which for Mountain Valley is the Fourth Circuit.Even if the proposal were to become law, some legal experts said Mountain Valley may not necessarily find a more sympathetic forum in the D.C. Court of Appeals, which in recent years has become more willing to scrutinize FERC decisions. “On the whole, I wouldn’t expect the change of venue to make that much of a difference,” Alison Gocke, an associate professor of law at UVa’s law school, wrote in an email. “These are both circuits that have a record of thoughtful decisions that try to faithfully apply the law, and I would imagine challenges to the MVP would be treated and reviewed similarly in both.”

Mountain Valley Pipeline opponents vow to keep up fight despite Manchin deal - In some Virginia circles, activists worry that the last-minute agreement to rescue a climate victory in the U.S. Senate amounts to a burdensome yoke for Appalachian communities united for years in fending off the $6.6 billion natural gas Mountain Valley Pipeline. Bill Muth, an organizer with Third Act Virginia, said he is thrilled by the “good parts” of the new law that are expected to reduce carbon emissions by 40% over the next eight years. “I loathe the side deal,” the Richmond resident said about negotiations reportedly reached between Democratic Sen. Joe Manchin of West Virginia and Senate Majority Leader Chuck Schumer of New York. “Third Act Virginia stands solidly with the frontline communities in Appalachia.” The organization is a relatively new chapter of Third Act, a national climate justice organization Bill McKibben launched last September so “experienced Americans” age 60 and up could commit what the late Georgia Congressman John Lewis of Georgia classified as “good trouble.” “If anything,” Muth continued, “the IRA clarifies that the climate crisis is a climate justice emergency.” While few are privy to the specifics of what was promised to Manchin, one reported provision that rankled advocates was an agreement to complete the now-on-hold Mountain Valley Pipeline, which would transport hydraulically fracked gas from wells in Manchin’s home state. It could even restrict which courts are allowed to rule on pipeline challenges. “Until those details were revealed, the MVP was on life support,” Muth said. “With the side deal, it seems all the pieces of significant resistance to the pipeline have fallen like dominoes.” He’s referring to other measures in the deal that potentially open the door for Congress to upend the bedrock environmental laws and curtail citizen challenges to fossil fuel projects. For example, that could lead to reforms such as accelerating Clean Water Act certifications and capping at two years the permitting timelines for major energy projects. “It’s even more chilling if Manchin can impose his will on the Federal Energy Regulatory Commission and other regulators,” Muth said. “That potential to gut environmental protection laws and take the legitimacy out of regulatory processes is one reason I’m committed to seeing that MVP doesn’t see the light of day.” Third Act remains committed to campaigns that pressure the financial industry to divest from fossil fuel infrastructure, said Muth, a retired Virginia Commonwealth University literacy professor. In June, he led dozens of protesters on a march from the James River to the downtown Richmond headquarters of Wells Fargo Bank. The bank is the No. 1 funder of the pipeline’s construction partners. “If regulatory and judicial is compromised even further, you can expect some Third Acters to be doing more direct actions on the MVP,” he said. “Decisions in Congress that have nothing to do with the frontline people on this pipeline route keep me grounded and assured that the right stand is to make sure it never gets built.”

Activists continue fight against Mountain Valley Pipeline - — Gazing up from a park in Southwest Virginia, a lush forest sits atop the surrounding mountain range. The view is interrupted by a strip of land dug out to make room for the Mountain Valley Pipeline. Dozens gathered this past weekend in a picnic shelter at Elliston’s Eastern Montgomery Park to protest the pipeline project in what was called a “Circle of Protection.” “We're here to celebrate each other and this incredible resistance community that's here,” said Deborah Kushner, of Staunton. “And we're also here to kind of gather our energies for the next round, which proves to be even more difficult.” The collection of activists, faith leaders, musicians and community members provided a space for those affected by the pipeline’s construction to voice their concerns and offer testimonies. The hourlong event was hosted by the Protect Our Water, Heritage, Rights Coalition, an interstate environmental coalition focused on preventing harm caused by the expansion of fossil fuel infrastructure — including the MVP. Initially proposed in 2014, the Mountain Valley Pipeline is an unfinished 303-mile natural gas pipeline that runs through six counties in Virginia and 11 in West Virginia. The pipeline is more than 90% complete, according to MVP’s website. However, it has been blocked by lawsuits from environmental justice organizations and protests from residents of the areas that have been affected throughout its construction. Russell Chisholm, co-chairperson of POWHR, called the Circle of Protection a “movement-building and solidarity effort,” as well as an opportunity to heal during stressful times for those fighting against the MVP construction. “Especially through the pandemic, a lot of people who work in the service industry lost their jobs or they lost wages or they got sick and they have no health care,” Chisholm said. “So, for us — for people who are very active organizing against this pipeline — it is a way to uplift some of those other struggles and uplift the people who are trying to address some of those struggles.” Chisholm lives in the nearby rural town of Newport and can’t reach his home without driving through the construction area around MVP — and its blast and incineration zones. These zones are where crews plan to detonate explosives to clear a path for construction. “There's two ways I can come and go from my house,” Chisholm said. “And they both go through that blast area.” Many attendees at the weekend event were senior citizens who run generational farms in the area. They said the MVP construction cuts right through their property, affecting their water and endangering local wildlife. Sixty-seven-year-old Kushner is one of the leaders of Third Act Virginia, part of a national organization that mobilizes people 60 and older to protect the environment and democracy for future generations. “It makes perfect sense for us to gear it up into motion,” she said while discussing why retirees might want to engage with the organization. “We've got the time. Many of us have the energy.” Though Kushner said she loved her job, after retiring five years ago, she felt that there was much more she could do for the planet. “It's truly the only kind of work that makes sense to me,” she said. “If we aren't working to protect each other, and nature, all this beautiful scenery around us and future generations, we're not just treading water; we're working to the detriment of our society.” Chisholm said members of Third Act provide support in the MVP fight, describing them as the “leading elders” of the movement: “I would say that within our movement, that elder leadership has always been there, within POWHR, and within the frontline directly impacted communities. I think Deborah really helped raise the visibility of the MVP fight long before this bright spotlight has been brought on us with the Inflation Reduction Act discussion and this other side deal.”

Manchin-linked company could reap millions from climate law - Tucked into the massive climate bill President Joe Biden signed into law this week is a one-sentence provision that could give a huge financial boost to a single energy company.The provision, found on page 687, provides $700 million in grants to mitigate the methane emissions of “marginal conventional wells.” These are low-producing oil and gas wells near the end of their useful economic life. They are a specialty of Alabama-based Diversified Energy Co. PLC.The company owns more oil and gas wells than any other U.S. company, including more than 10 percent of the estimated 600,000 marginal wells in the country. Much of Diversified Energy’s business model relies on acquiring dying wells, which often have high methane emissions, and milking them for profit years after other companies walk away.Because of the sheer number of marginal wells owned by Diversified Energy, the company is well positioned to take advantage of the one-sentence provision in the Inflation Reduction Act, observers say. The company can use the $700 million in federal grants to plug defunct wells and contain methane leaks.“By the mere fact that they’re so large by well count, they do stand to benefit from this,” said Adam Peltz, a senior attorney at the Environmental Defense Fund. Though unknown to the broader American public, Diversified Energy has spent years cultivating a relationship with Sen. Joe Manchin (D-W.Va.), the chief architect of the Inflation Reduction Act. It has opened a field office in West Virginia and contributed more money to Manchin than any other candidate in this election cycle. The company also pays Larry Puccio, Manchin’s close friend and former chief of staff, to lobby on the state and federal level. Company officials had dinner with Manchin a few days before the Senate approved the Inflation Reduction Act, the Wall Street Journal reported.Reached over the phone, Puccio said, “I’m not an elected official, and I don’t do interviews.” Diversified claims in financial reports that it owns 67,000 oil and gas wells, both conventional and unconventional. That’s far more wells than Exxon Mobil Corp., the second-biggest well holder, which owns about 37,000.Diversified aims to get about 50 years of use out of each well. That approach means wells are kept unplugged — and potentially releasing climate-damaging methane — for years or even decades after they might otherwise be sealed,Bloomberg has reported.All oil and gas wells eventually become marginal at some point. It’s their journey that has the biggest implications for climate and pollution, Peltz said. The largest energy companies generally operate wells only as long as they are highly productive, he said. As the profit margins of a well declines, the larger companies — which have higher overhead costs — look to offload it.Smaller companies with lower operating costs buy those wells and keep them going for years, often selling them down a chain of increasingly financially troubled companies. Some of those smaller companies eventually go bankrupt, leaving the taxpayer with the cost of plugging the well.Abandoned wells not only leak methane that warms the planet — they also pollute the air and groundwater, Peltz said.“Clearly, we’ve made terrible mistakes in the past, and that’s why we are where we are with all these different wells,” he said. “The real shame is if we don’t prevent today’s currently active wells from becoming orphans in the future and Diversified is a test case of that.”

Permitting deal: Pipeline boom or ‘propaganda exercise?’ - A proposal backed by the White House and Democratic leaders in Congress to speed up federal permitting is targeting an industry that many environmentalists dislike: pipelines.But will the plan really do much to boost pipelines, and is the industry backing it?For some companies, hope remains that permitting changes could be passed as part of a stopgap spending bill next month, as promised by Democratic leaders. But others are sticking to their talking points and expressing little enthusiasm as they wait for signs of whether the plan — which has not been formally introduced as legislation — gets the bipartisan support it would require. Some conservatives, meanwhile, are pushing back on the idea that the proposed permitting changes would work. “The whole thing looks like what it is: a propaganda exercise driven by people who have never permitted a project and, therefore, don’t understand how the process actually works,” longtime GOP energy lobbyist Mike McKenna said.Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.), Senate Majority Leader Chuck Schumer (D-N.Y.), House Speaker Nancy Pelosi (D-Calif.) and President Joe Biden agreed to pursue permitting reform legislation in exchange for Manchin’s vote on the Inflation Reduction Act — the climate, tax and health care bill that Biden signed into law this week.Supporters of the deal have said that changes are needed to speed up energy projects. Manchin has called National Environmental Policy Act rules “burdensome,” saying in a statement this month that “that’s why I fought so hard to secure a commitment on bipartisan permitting reform, which is the only way we’re going to actually fix this problem.”The proposal floated by Manchin includes well-known concepts such as two-year limits on environmental reviews under NEPA, revisions to Clean Water Act approvals and limits on judicial review. It also includes the creation of a new priority list of projects to include those for fossil fuels, nuclear energy, carbon capture and renewables (E&E Daily, Aug. 2).Manchin and Schumer have said they’re committed to getting a permitting measure done during this fiscal year, which ends Sept. 30. But there are significant obstacles, including opposition from some progressive lawmakers. Passage in the Senate would require 60 votes, and many Republicans are not committing to support the proposal, which they see as linked to the climate and energy provisions of the reconciliation bill that passed the Senate on a party line vote (Greenwire, Aug. 5). Lobbyists say congressional leaders have committed to a vote on the changes, not a commitment to round up votes.

U.S. natural gas futures down 1% on rising output, lower demand | BOE Report - U.S. natural gas futures fell about 1% on Monday on rising supplies and forecasts for cooler weather and lower air conditioning demand over the next two weeks than previously expected. Also weighing on gas prices was a 5% drop in oil futures earlier in the day and the ongoing outage at the Freeport liquefied natural gas (LNG) export plant in Texas, which has left more gas in the United States for utilities to inject into stockpiles for next winter. Freeport LNG, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day (bcfd) of gas before it was shut on June 8. Freeport expects the plant to return to at least partial service in early October. Front-month gas futures fell 4.0 cents, or 0.5%, to settle at $8.728 per million British thermal units (mmBtu). So far this year, the gas front-month was up about 134% as higher prices in Europe and Asia keep demand for U.S. LNG exports strong. Global gas prices have soared this year following supply disruptions linked to Russia’s invasion of Ukraine on Feb. 24. Gas was trading around $68 per mmBtu in Europe, a five-month high, and $45 in Asia. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 97.6 bcfd so far in August from a record 96.7 bcfd in July. With warmer weather expected, Refinitiv projected average U.S. gas demand, including exports, would rise from 96.3 bcfd this week to 96.9 bcfd next week. Those forecasts were lower than Refinitiv’s outlook on Friday. The average amount of gas flowing to U.S. LNG export plants has risen to 11.0 bcfd so far in August from 10.9 bcfd in 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. The reduction in U.S. exports from Freeport is a problem for Europe, where most U.S. LNG has gone this year as countries there wean themselves off Russian energy. Russia, the world’s second-biggest gas producer, has provided about a third of Europe’s gas in recent years, totaling about 18.3 bcfd in 2021. The European Union wants to cut Russian gas imports by two-thirds by the end of 2022 and refill stockpiles to 80% of capacity by Nov. 1 and 90% by Nov. 1 each year beginning in 2023. Gas stockpiles in northwest Europe – Belgium, France, Germany and the Netherlands – were about 3% below their five-year (2017-2021) average for this time of year, according to Refinitiv. Storage was currently at about 71% of capacity. That is much healthier than U.S. gas inventories, which were about 12% below their five-year norm.

Bulls Parade Past $9 as Production Dips Again; Spot Gas Surges on Lingering Heat - After a solid recovery throughout Monday’s session, natural gas futures extended their streak Tuesday as maintenance activities took another toll on production. The September Nymex gas futures contract soared 60.1 cents day/day to settle at $9.329/MMBtu. October futures climbed 59.9 cents to $9.311. Spot gas prices also surged as power burns remain elevated despite cooler weather. NGI’s Spot Gas National Avg. shot up 58.5 cents to $8.935. With weather set to moderate from the record heat seen across much of the country in June and July, bulls wasted no time in pouncing on the latest production data that showed a roughly 1.8 Bcf day/day decline. Some technical momentum carried the September Nymex contract up more than 50 cents as Tuesday’s session got underway, with bulls maintaining control throughout the day. Wood Mackenzie said the production declines were concentrated in areas where there are maintenance or operational issues underway, though revisions are expected in Wednesday’s sample data. Overall Northeast production was down around 840 MMcf/d, according to the consultancy. About 310 MMcf/d of lost output was seen in Southwest Pennsylvania (SWPA), while around 165 MMcf/d was in Northeast Pennsylvania (NEPA). West Virginia recorded a roughly 175 MMcf/d drop, and Ohio saw about a decline of about 190 MMcf/d. In SEPA, production was down along most pipes in the area, but the most significant drops were along Columbia Gas Transmission (TCO) and Texas Eastern Transmission, according to Wood Mackenzie. However, there were no posted maintenance events along those systems, the firm said. NEPA production was down along Tennessee Gas Pipeline, where the force majeure along the 300 Line remains in place restricting operational capacity, according to Wood Mackenzie. Flows were lower on several pipelines in Ohio. Production also dropped about 285 MMcf/d in the Rockies, while Texas output was down about 235 MMcf/d with two maintenance events on Natural Gas Pipeline Co. of America. Both are set to end next week. Transcontinental Gas Pipe Line Co.’s (Transco) storage system increased by a modest 0.32 Bcf based on Monday’s data. This is 0.5 Bcf less than the prior week, according to Mobius. Southern Star did not report, but typically follows a similar week/week path as Transco, Mobius said. The Eastern Gas system posted an inventory gain of 4 Bcf, or half of the prior week’s reported build. TCO storage, also in the Northeast, did not report last week’s inventory change, but Monday’s report of 156 Bcf in underground storage implies a build of 5 Bcf or less. “These data points, and an assumed change for Southern Star, collectively imply a week-over-week build of well under 10 Bcf,” Mobius analyst Zane Curry said. The lowest total build for these four facilities so far this summer is 10.21 Bcf, recorded for the week ending July 21. That week, the total inventory change as reported by the Energy Information Administration (EIA) was 15 Bcf.

US natgas up 3% to 14-yr high on output drop, soaring global prices (Reuters) - U.S. natural gas futures climbed about 3% to a fresh 14-year high on Wednesday on a drop in daily output, hotter than normal weather on the West Coast and in Texas, and near record global prices. That U.S. price increase came despite forecasts for less hot weather and lower air conditioning demand across much of the country over the next two weeks than previously expected. Also preventing U.S. prices from spiking higher, traders noted the ongoing outage at the Freeport liquefied natural gas (LNG) export plant in Texas, which has left more gas in the United States for utilities to inject into stockpiles for next winter. Front-month gas futures NGc1 rose 28 cents, or 3.0%, to $9.609 per million British thermal units (mmBtu) at 8:43 a.m. EDT (1243 GMT), putting the contract on track for its highest close since July 2008. That kept the front-month in technically overbought territory with a relative strength index (RSI) above 70 for a second day in a row. The jump in gas prices coupled with recent declines in crude futures have cut oil's premium over gas to its lowest since April 2020 when crude briefly turned negative. Over the last several years that premium has prompted U.S. energy firms to focus most of their drilling activity on finding more oil instead of gas because crude was by far the more valuable commodity. The oil-to-gas ratio, or level at which oil trades compared with gas, dropped to 9-to-1 on Wednesday. So far in 2022, crude has traded about 17 times over gas. That compares with crude's average premium over gas of 19 times in 2021 and a five-year average (2017-2021) of 20 times. On an energy equivalent basis, oil should trade only six times over gas. In the spot market, power prices for Wednesday in Southern California and in Washington State climbed to their highest since September 2021 as homes and businesses cranked up their air conditioners to escape a heat wave. It's also hot in Texas where power prices at the ERCOT North hub, which includes Dallas, jumped to their highest since June 2021. So far this year, the gas front-month was up about 157% as higher prices in Europe and Asia keep demand for U.S. LNG exports strong. Global gas prices have soared this year following supply disruptions linked to Russia's invasion of Ukraine on Feb. 24. Gas was trading near a record $68 per mmBtu in Europe and at an all-time high of $57 in Asia.

US gas storage levels increase by lower-than-expected 18 Bcf on week: EIA - US natural gas working stocks rose by just 18 Bcf during the week ended Aug. 12, well below market expectations, but the build was insufficient to keep the momentum going for US gas futures. Storage inventories rose to 2.519 Tcf for the week ended Aug. 12, the US Energy Information Administration reported on Aug. 18. The build was far less than an S&P Global Commodity Insights' survey of analysts that called for a 34 Bcf build and was outside the survey's range of 20-52 Bcf. The weekly injection rate was lower than the 46 Bcf build reported during the corresponding week in 2021, and was lower than the five-year average build of 47 Bcf, according to EIA data. As a result, stocks were 367 Bcf, or 12.7%, below the five-year average of 2.886 Tcf, and were 296 Bcf, or 10.5%, lower than year-ago stock levels. The NYMEX Henry Hub September contract soared to trade higher than $9.50/MMBtu in the hour after the weekly storage report published, which would have set a fresh 14-year record high for the prompt-month contract if it held, but the initial burst of bullish sentiment faded quickly. By 12:30 pm ET, the prompt-month contract had fallen to trade around $8.96/MMBtu, down nearly 30 cents from its prior-day settlement. The Aug. 18 price weakness interrupted a strong rally for US gas futures, with the September through January contracts all trading above $9/MMBtu since Aug. 16. The prompt-month reached its highest daily settlement price since 2008 on Aug. 16 after European gas prices reached all-time highs on Aug. 15, signaling global market tightness for gas. The Aug. 18 gas storage report revealed that several regions saw net withdrawals for the week ended Aug. 12, as above-normal gas-fired power demand continued to tighten supply-demand balances. The US South-Central region saw an 8 Bcf net pull from storage for the week ended Aug. 12, driven entirely by a net withdrawal from salt cavern storage facilities. Storage levels in South-Central salt caverns fell to 26.9% below the five-year average, the largest deficit of any region or sub-region. Pacific storage also contracted during the week ended Aug. 12, with the EIA reporting a net withdrawal of 4 Bcf. A forecast by S&P Global's supply and demand model called for a much larger injection of 55 Bcf for the week ending Aug. 19. A net build of this size would be larger than both the five-year average build of 46 Bcf and the 32 Bcf build observed during the corresponding week in 2021. Cooler temperatures across the Northeast and Midwest for the week in progress support the higher storage expectations. Data from Platts Analytics showed that Northeast gas-fired power demand has averaged 9 Bcf/d for Aug. 13-18, down from 12.3 Bcf/d for the week ended Aug. 12. Similarly, Midwest gas demand has averaged 5.2 Bcf/d for Aug. 13-18, down from 6.4 Bcf/d for the previous seven days. .

U.S. natgas up 2% to a 14-year high on record global prices (Reuters) - U.S. natural gas futures rose about 2% to a 14-year high on Friday on record global gas prices, concerns about Russian gas export to Europe and forecasts for hotter U.S. weather that will boost air conditioning demand through early September. That price increase came despite record output and the ongoing outage at the Freeport liquefied natural gas (LNG) export plant in Texas, which has left more gas in the United States for utilities to inject into stockpiles for next winter. Front-month gas futures rose 14.8 cents, or 1.6%, to settle at $9.336 per million British thermal units (mmBtu), their highest close since August 2008. For the week, the front-month was up about 6% after gaining 9% last week. With hot weather moving into the U.S. Northeast, spot gas prices for Friday at the Dominion South hub in Pennsylvania rose to their highest since February 2014 for a second day in a row. In Alberta, producers were having a tough time getting gas out of the province due to a lack of pipeline capacity, maintenance on existing pipes and rising production. Prices for Friday at the AECO hub NG-ASH-ALB-SNL in Alberta plunged 73% to just 74 cents per mmBtu, their lowest since September 2019. So far this year, gas futures are up about 150% as higher prices in Europe and Asia keep demand for U.S. LNG exports strong. Global gas prices have soared due to supply disruptions and sanctions linked to Russia's invasion of Ukraine on Feb. 24. Global gas prices were on track to close near record levels around $75 per mmBtu in Europe and $57 in Asia. Russian gas exports via the three main lines into Germany - Nord Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route - held near 2.5 bcfd so far in August, down from an average of 2.8 bcfd in July and 10.4 bcfd in August 2021. Russian energy company Gazprom PAO said it will halt gas supplies to Europe for three days at the end of the month for unscheduled maintenance on Nord Stream 1.

Market Eyes Risk of Winter Supply Squeeze as Natural Gas Forwards Rally -- Natural gas forwards rallied from coast to coast during the Aug. 11-17 trading period as mounting storage adequacy concerns overshadowed a mild late-summer forecast, according to NGI’s Forward Look data. Fixed prices for September delivery at benchmark Henry Hub surged $1.042 during the period to $9.245/MMBtu, setting the pace for hefty markups across the Lower 48. Still, with the focus shifting away from summer cooling demand as the shoulder season approaches, double-digit regional basis discounts were the norm for the period. Southeast basis premiums notably faded week/week, with Transco Zone 4 September basis finishing at plus-49.6 cents, a 25.0-cent swing lower week/week. Florida Gas Zone 3 basis tumbled 35.7 cents to plus-65.4 cents. The Aug. 11-17 trading period saw Nymex futures advance more than $1 week/week, including single-day prompt-month rallies of 67.2 cents on Aug. 11 and 60.1 cents on Tuesday (Aug. 16). The gains have occurred despite a deteriorating weather-driven demand outlook, suggesting the market’s focus has shifted to pricing in supply risks for the upcoming winter, according to analysts. The bullish case for the months ahead centers around a thin domestic inventory margin, set against a backdrop of overseas energy scarcity amid Russia’s invasion of Ukraine. Gains for Henry Hub seem to suggest domestic prices trading “sympathetically” to the rallying Dutch Title Transfer Facility (TTF) in Europe, Tudor, Pickering, Holt & Co. (TPH) analysts said in a recent note. TTF “has continued to catch a bid to eye-watering levels despite having closed the gap to the five-year average on inventories,” the TPH analysts said. The analysts said they see “limited risk on our base case to the U.S. running out of storage this winter on normal weather.” However, “a higher TTF price presents a higher potential ceiling to Henry Hub should Old Man Winter show up in the Lower 48.” Where the market goes from here will depend in part on the timing of the 2 Bcf/d Freeport LNG terminal’s return to service, and also on domestic production trends, according to the TPH analysts. But a seemingly tame temperature outlook for the waning days of summer did not prevent what NatGasWeather characterized as “pure chaos” following a “quite bullish” storage report from the Energy Information Administration (EIA) Thursday. An 18 Bcf injection into U.S. storage for the week ended Aug. 12 fell notably shy of pre-report expectations, and the initial market reaction sent prices on the September contract as high as $9.663. However, a volatile session saw the front month dip back below $9.00 midday before eventually going on to settle a modest 5.6 cents lower at $9.188. “It seemed this was the data point that would finally take us to $10.00, but it was not to be, as the rally quickly met mass selling pressure yet again, just as has been the case every time we have moved over the $9.50 level,” NatGasWeather observed. “This marked the fourth week in a row that the directional miss of the EIA numbers was faded by the market, though this one, in our view, is the most surprising.” The supply/demand balance implied by the latest EIA print is “wicked tight” and would put the market on pace for an end-of-season storage level below 3.3 Tcf, according to the firm. .

Amid Lackluster Production and 'Robust, Resilient' Demand, $13 Natural Gas Said Possible - A confluence of entrenched domestic demand, mounting calls for U.S. exports of LNG and modest production growth – all factors forecast to endure – propelled natural gas futures above $9.00/MMBtu in August and could keep upward pressure on prices for years. Such was the assessment of analysts who spoke Tuesday at the LDC Gas Forum Rockies & West in Denver. Prices have more than doubled this year and recently approached the highest levels since 2008. ConocoPhillips’ Matthew Henderson, senior market analyst, said natural gas prices would inevitably ebb and flow with seasons and in response to major news developments. On the whole, though, the bull case is firmly intact given elevated cooling demand in an era of persistently hot summers, including most recently the third hottest July on record last month. At the same time, many utilities made long-term commitments to natural gas as a principal energy source, minimizing their alternatives. Now, as the United States marches on with coal plant retirements and an emphasis on cleaner energy, it is increasingly difficult to switch from gas to coal when prices for the former spike, as was the practice in the past, Henderson said. This effectively cements reliance on natural gas and adds a fixed demand element to the market. What’s more, he said, large-cap public exploration and production (E&P) companies are under pressure from Wall Street to pay down debt and return excess capital to investors – rather than ramp up output to capitalize on high prices. As such, production growth is modest this year and likely to remain so in coming years, according to Henderson, making it difficult for supply to keep pace with demand. E&Ps are increasing activity in the Permian Basin and in the Haynesville Shale, though at measured paces, Henderson said. Production in the Northeast, concentrated in the Marcellus and Utica shales, meanwhile, has tapered off to maintenance levels, he said, largely because of pipeline constraints. In aggregate, production is only ticking up at a time when more U.S. supplies are needed to meet both domestic demand and a growing global liquefied natural gas market. Energy Analytics consultant Laird Dyer agreed. He noted that demand for LNG, already strong heading into 2022 amid weak supply levels in Europe and Asia, was amplified this year following Russia’s invasion of Ukraine. European countries ratcheted up their calls for LNG as they moved to wean themselves off Russian gas in protest of the war. Dyer expects prompt-month natural gas futures to average $8 next year, essentially extending the lofty prices reached this year. That outlook is based on average weather during the coming winter. If conditions prove particularly cold over prolonged periods, or if there are weather-induced shocks to production such as late-season hurricanes or widespread winter freeze-offs, supply/demand imbalance could worsen substantially. Prices, Dyer said, may climb to $13 or higher. “We could see some pretty horrific numbers,” he told the audience in Denver. In fact, he added, had a fire not forced the Freeport LNG export facility offline in June, preserving about 2 Bcf/d for domestic consumption this summer, prices could have surged into the double-digits by now. Freeport is expected to reopen this fall and substantially more LNG capacity is expected to come online in 2024 to serve the global market. Still, Dyer said it was not clear that production could keep up. Demand is “robust, resilient and price inelastic,” Dyer said, while production is relatively lackluster.

US GOM Methane Emissions Much Higher Than Those In Permian - A new study has suggested that offshore oil and gas production in the U.S. Gulf of Mexico has substantially higher methane emissions than those from typical onshore production. Non-profit organization Carbon Mapper released the findings of airborne observations in the spring and fall of 2021 of 151 shallow water offshore oil and gas platforms in U.S. state and federal waters in the Gulf of Mexico. Researchers found that the methane loss rate from these shallow water sources is significantly higher than typical onshore production and disproportionally contributes to climate change – providing a potential focus for sustained monitoring and mitigation efforts. Specifically, the team calculated a methane loss rate of 23-66 percent from shallow offshore Gulf of Mexico operations compared to 3.3-3.7 percent reported by other studies of operations in the Permian basin. The team plans to conduct additional surveys of the broader population of platforms in the Gulf and selected international offshore production areas with aircraft and satellites to assess overall methane loss rates. Carbon Mapper collaborated on the research with the University of Arizona, NASA’s Jet Propulsion Laboratory, the University of Michigan, and Arizona State University. It is the first systematic application of a remote emissions-sensing technology that can detect methane emissions over water, and attribute methane emissions to specific infrastructure. Offshore oil and natural gas platforms are responsible for about 30 percent of global oil and gas production. Despite the large share, few studies have directly measured atmospheric methane emanating from these platforms due to their remote location compared to onshore production, and the technological challenges of observing methane emissions over water. These factors present unique challenges for oil and gas leak detection and repair programs and may undermine society’s ability to meet methane reduction targets such as the Global Methane Pledge. “Bottom-up estimates and gaps in observational data can result in significant undercounting of emissions from offshore oil and gas infrastructure,” said Alana Ayasse, Research Scientist with Carbon Mapper, and the University of Arizona. “This study underscores the importance of increased transparency and sustained remote monitoring in offshore oil- and gas-producing regions to inform mitigation action.” Many observed shallow-water offshore platforms and surrounding infrastructure exhibited super-emitter activity. Of the 151 targeted platforms and surrounding areas surveyed between the spring and fall, 62 pieces of infrastructure had an observable methane plume – over 10 kg/hr. According to Carbon Mapper, emissions from observed offshore sources were highly persistent. The offshore sources measured in this study were over twice as persistent – meaning how frequently emissions were detected at a given location – as methane emissions from onshore oil and gas infrastructure reported by other studies. Researchers revisited many of these platforms multiple times in the spring and fall of 2021 which provided an initial characterization of source persistence, and further observations will evaluate whether there is a long-term trend. Also, specific types of equipment were responsible for a disproportionate number of emissions. Using high-resolution imaging, the researcher attributed observed emissions primarily to tanks, satellite wells, pipelines, and vent booms that were visually identifiable – showing that a small number of observable emissions sources were responsible for most of the methane released into the atmosphere. The infrastructure observed was distributed evenly across state and federal waters, allowing the team to sample different regulatory structures.

LNG Exporter Downplays Emissions to Justify Expansion - DeSmogBlog --A major exporter of U.S. liquefied natural gas is “seeking to greenwash” its operations in order to portray gas exports as a climate solution and clear the way for further expansion, according to a new report.Global demand for gas has soared in the wake of Russia’s war in Ukraine, sparking a scramble by U.S. gas exporters to increase export volumes, with the backing of the Biden administration. But building out LNG infrastructure to address an energy crisis is at odds with governments simultaneously trying to slash emissions to address the climate emergency.In recent months, Cheniere Energy, the largest LNG exporter in the United States, has begun providingemissions data, which it calls “carbon emissions tags,” or CE tags, for its gas. The tags quantify the greenhouse gas emissions of a given LNG cargo, with the aim of easing buyers’ concerns. The CE tags include emissions from where the gas is drilled upstream, all the way down to the point of export on the coast. The logic is to offer transparency to buyers overseas by disclosing the emissions of each shipment, which would help to clean up the supply chain over time.But a new report from Oil Change International and Greenpeace USA says the program is riddled with flaws and is broadly aimed at portraying LNG as a clean fuel, rather than actually cleaning up the supply chain, at a time when gas developers are hoping to take advantage of the war in Ukraine to expand operations.“The industry realizes they have a problem with methane emissions,” Tim Donaghy, a senior research specialist for Greenpeace USA and a coauthor of the report, told DeSmog. He pointed to the 2020 decision by French energy company Engie to back out of a U.S. LNG deal over concerns about runaway methane emissions in American fracking fields. Donaghy said that event hammered home the message to the U.S. gas industry “that they do have to clean up their act, or at least be seen as making progress.”Cheniere has responded to growing climate concerns by pointing to a study that it funded that shows that emissions from its Sabine Pass facility in Louisiana could displace electricity generated by coal in China, cutting emissions intensity by 47 to 57 percent. Cheniere then introduced CE tags to quantify the emissions of its LNG cargoes.But Cheniere’s CE tags downplay the industry’s environmental impact, Donaghy said. They rely on EPAcalculations that have been shown to underestimate methane releases by shale drillers. The general rule of thumb is that if gas drillers are leaking more than 3.2 to 3.4 percent of the gas they produce, then gas is worse for the climate than coal. The EPA assumes a national methane leakage rate of about 1.4 percent. But it uses models, rather than actual measurements.Studies have shown that the EPA has consistently undercounted methane pollution from oil and gas operations. The Permian basin in West Texas and New Mexico is particularly dirty — a recent study pegged methane leaks at 9.4 percent, six times worse than EPA estimates, and offered evidence that Permian gas is vastly worse for the climate than coal.

Will Biden's climate bill really reduce LNG emissions? - The climate bill that President Joe Biden is expected to sign into law today will increase pressure on U.S. liquefied natural gas exporters to reduce methane emissions. But the extent of those reductions is an open question, thanks to a series of exemptions in the bill that could allow LNG facilities to skirt a new fee on methane leaks. The stakes for the U.S. LNG industry are enormous. The new fee, coupled with proposed EPA methane regulations, could help the industry counteract Europe’s new tax on carbon-intensive goods and secure a long-term market for the fuel. At the same time, it also could add new costs to U.S. natural gas supplies, potentially making exports more expensive. Either way, the industry must first figure out how the new fee will be implemented. Basic questions surrounding issues such as emissions reporting need to be resolved before the impact of the fee can be truly assessed, analysts said. Answering those questions will fall to EPA as it finalizes new methane regulations for oil and gas facilities. “I think the challenge is that no one knows what it means and where they stand right now,” said Arvind Ravikumar, a professor at the University of Texas, Austin, who studies methane emissions from oil and gas operations. The bill’s passage comes amid a U.S. LNG boom. The United States overtook Qatar as the world’s top LNG exporter during the first half of 2022, boosted by a series of terminal expansions and new facilities. The spike in American LNG shipments has been well timed for Europe, which is scrambling to find alternatives to Russian imports following Moscow’s invasion of Ukraine. Europe bought nearly two-thirds of U.S. LNG cargos during the first five months of the year, according to the Energy Information Administration. Fear of a fuel shortage this winter has pushed European concerns over methane emissions into the background. But U.S. LNG exports face long-term skepticism over the environmental profile of their fuel. In 2020, a French utility canceled a multibillion LNG deal over worries about flaring and leaky gas field equipment. Europe will institute a new carbon border adjustment beginning next year. The fee on carbon intense imports does not currently include LNG, but it is expected to expand over time to encompass oil and gas imports. The European Union currently is negotiating a proposal that would require domestic oil, gas and coal facilities to measure and report their methane emissions, detect and repair methane leaks and ban natural gas venting and flaring — a routine practice at oil wells that releases methane. It also aims to reduce emissions from imported gas by requiring importers to report on how the countries and companies where they source the fuel are working to measure and reduce emissions from their operations. Analysts said they don’t expect new regulations on both sides of the Atlantic Ocean to temper trade volumes between the United States and the European Union but rather help in getting methane leaks better controlled. “Between the fees and the closing of export markets for companies with higher leak rates, there would be a huge incentive for companies to achieve low leak rates,”

Freeport LNG Withdraws Force Majeure - Freeport LNG has withdrawn the force majeure that was declared for an explosion at the site after it was found that the definition would not hold true for the incident, Rystad Energy analyst Lu Ming Pang revealed in a market note sent to Rigzone. “Force majeure is typically declared only when production is impacted by unforeseeable circumstances outside of the producer’s control,” Pang said in the note. “Without force majeure, Freeport LNG may be required to compensate offtakers for their replacement cargoes, based on a case-by-case scenario,” Pang added. In the note, Pang also highlighted that Freeport LNG said this week that it aims for a partial restart in October, before returning to full capacity by the end of the year. “This is after arriving at an agreement with U.S. regulators last week, pending the execution of corrective measures on site,” Pang said. “The current recovery timeline closely follows the plan announced in June,” Pang added in the note. In its latest short term energy outlook (STEO), the U.S. Energy Information Administration outlined that average Henry Hub natural gas prices fell over the last two months primarily because of additional supply in the domestic market following the shutdown of the Freeport LNG export terminal on June 8. The STEO noted, however, that prices increased by almost 50 percent, from $5.73 per MMBtu on July 1 to $8.37 per MMBtu on July 29, because of continued high demand for natural gas from the electric power sector. “We expect the Henry Hub price to average $7.54 per MMBtu in the second half of 2022 and then fall to an average of $5.10 per MMBtu in 2023 amid rising natural gas production,” the EIA stated in the August STEO. In July, the Henry Hub spot price averaged $7.28 per MMBtu, down from $7.70 per MMBtu in June and $8.14 per MMBtu in May, the STEO highlighted.

Coast Guard reports 420-gallon oil spill in Texas waters - The U.S. Coast Guard is containing a reported oil spill of around 420 gallons in Tabbs Bay near Houston, according to a news releaseon Tuesday, August 17. More than 2,000 feet of hard boom and sorbent boom have been placed around the affected areas to contain and recover oil products.According to the release, Coast Guard Sector Houston-Galveston watchstanders received a report of the oil spill around 10:30 a.m. on Monday, August 16. Tabbs Bay is east of Houston near Baytown and La Porte. Pollution responders are overseeing a timely cleanup of the oil to mitigate environmental impacts through its coordination with partner agencies and the continued assessment of shorelines and waterways.There have been no reports of impact on wildlife at this time. The cause of the pollution has been identified and the source is secure. Officials did not reveal the cause of the pollution. Tabbs Bay has experienced oil spills before. In February 2020, an estimated 630 gallons of crude oil discharged from an out-of-service wellhead, according to a Houston station. At that time, 840 gallons of oily water were collected. Officials used vacuum trucks and a floating drum skimmer to collect and recover the crude oil and prevent impact on the environment and Houston Ship Channel.For the most recent spill, the Coast Guard and Texas General Land Office are investigating.

U.S. crude oil production down last week (Xinhua) -- U.S. crude oil production averaged 12.1 million barrels per day (b/d) during the week ending Aug. 12, down by 100,000 b/d from the previous week, U.S. Energy Information Administration (EIA) said Wednesday. The figure rose by 700,000 b/d over this time last year, according to the EIA. More than 80 percent of the U.S. crude oil production growth comes from the country's Lower 48 states, which does not include production from Alaska and the Federal Offshore Gulf of Mexico, said the EIA report. The United States has been a major oil producer in the past years with the help of its shale oil production growth. ■

Oil output in Permian to rise to record high in September -EIA - Oil output in the Permian in Texas and New Mexico, the biggest U.S. shale oil basin, is due to rise 79,000 barrels per day (bpd) to a record 5.408 million bpd in September, the U.S. Energy Information Administration (EIA) said in its productivity report on Monday. Total output in the major U.S. shale oil basins will rise 141,000 bpd to 9.049 million bpd in September, the highest since March 2020, the statistical arm of the Department of Energy projected. In the Bakken in North Dakota and Montana, the EIA forecast oil output will rise 21,000 bpd to 1.157 million bpd in September, the most since November 2021. In the Eagle Ford in South Texas, output will rise 26,000 bpd to 1.230 million bpd in September, its highest since April 2020. Total natural gas output in the big shale basins will increase 0.673 billion cubic feet per day (bcfd) to a record 93.835 bcfd in September, the EIA forecast. In the biggest shale gas basin in Appalachia, Pennsylvania, Ohio and West Virginia, output will rise to 35.486 bcfd in September, the highest since hitting a record near 36.0 bcfd in December 2021. Gas output in the Permian and the Haynesville in Texas, Louisiana and Arkansas will also rise to record highs of 20.584 bcfd and 15.835 bcfd in September, respectively.

Climate change? Inflation Reduction Act boosts US oil and gas industry — The U.S. oil industry hit a legal roadblock in January when a judge struck down a $192 million oil and natural gas lease sale in the Gulf of Mexico over future global warming emissions from burning the fuels.It came at a pivotal time for Chevron, Exxon and other industry players: The Biden administration had curtailed opportunities for new offshore drilling, while raising climate change concerns. The industry's setback was short-lived, however. The climate measure President Joe Biden signed Tuesday bypasses the administration's concerns about emissions and guarantees new drilling opportunities in the Gulf of Mexico and Alaska. The legislation was crafted to secure backing from a top recipient of oil and gas donations, Democratic Sen. Joe Manchin, and was shaped in part by industry lobbyists. While the Inflation Reduction Act concentrates on clean energy incentives that could drastically reduce overall U.S. emissions, it also buoys oil and gas interests by mandating leasing of vast areas of public lands and off the nation's coasts. And it locks renewables and fossil fuels together: If the Biden administration wants solar and wind on public lands, it must offer new oil and gas leases first.As a result, U.S. oil and gas production and emissions from burning fuels could keep growing, according to some industry analysts and climate experts. With domestic demand sliding, that means more fossil fuels exported to growing foreign markets, including from the Gulf where pollution from oil and gas activity plagues many poor and minority communities.To the industry, the new law signals Democrats are willing to work with them and abandon the notion fossil fuels could soon be rendered obsolete, said Andrew Gillick with Enverus, an energy analytics company whose data is used by industry and government agencies."The folks that think oil and gas will be gone in 10 years may not be thinking through what this means," Gillick said. "Both supply and demand will increase over the next decade."The result would be more planet-warming carbon dioxide – up to 110 million tons annually – from U.S.-produced oil and gas by 2030, with most coming from fuel burned after export, according to some economists and analysts. Others predict smaller increases.The law reinstates within 30 days the 2,700-square miles of Gulf leases that had been withheld. It ensures companies like Chevron will have the chance to expand and overrides the concerns of U.S. District Judge Rudolph Contreras that the government was "barreling full-steam ahead" without adequately considering global emission increases.The measure's importance was underscored by Chevron executives during a recent earnings call, where they predicted continued growth in the Gulf and tied that directly to being able "to lease and acquire additional acreage."

U.S. Oil And Gas Firms Made $74 Billion In Profits Last Year -- U.S. oil and gas companies generated profits worth $73.7 billion last year on the back of improving prices, with capital expenditure reaching $144.1 billion. This is one of the outtakes from a new report from EY titled “U.S. oil and gas reserves, production and ESG benchmarking study.” The study detailed the latest production trends and how the 50 largest public exploration and production companies can improve their ESG standing, but it also reported on things like profits, revenues, and cash returned to shareholders. This was also a substantial amount, at $18.1 billion in 2021, up by 122 percent from $8.1 billion a year earlier. The report noted that despite the higher prices that pushed profits and cash returns much higher, companies have been careful with capital expenditure because of the transition push. “Oil and gas companies have a challenging role to play: providing secure, affordable energy to consumers and customers globally while also embracing the urgent need to address climate change,” the report’s authors wrote. This is a challenging task even at the best of times, and these are not the best of times, which has made the situation rather complicated. “Therefore, despite the need for increased product now, the investments that historically follow sky-high commodity prices have not materialized,” the authors report. “In fact, the 2022 EY US oil and gas reserves, production and ESG benchmarking study found that expenditures for extensions and discoveries ranked at the second-lowest level in the last five years.” This makes the EY report the latest in an increasingly long series of reports documenting a major shift in the oil and gas industry as it adjusts to a chronically uncertain environment, in which they cannot know how long there will be demand for their product. Ironically, this uncertainty has been a big reason for the latest price surge that began last year because of that changing attitude that made oil and gas explorers and producers wary of spending too much on new supply.

U.S. Shale Faces More Than $10 Billion In Hedging Losses -U.S. shale oil producers are in line to suffer more than $10 billion in derivative hedging losses this year if oil prices remain around $100 per barrel, Rystad Energy research shows. Many shale operators offset their risk exposure through derivative hedging, helping them to raise capital for operations more efficiently. Those who hedged at lower prices last year are in line to suffer significant associated losses as their contracts mean they cannot capitalize on sky-high prices. Despite these hedging losses, record-high cash flow and net income have been widely reported by US onshore exploration and production (E&P) companies this earnings season. These operators are now adapting their strategies and negotiating contracts for the second half of 2022 and 2023 based on current high prices, so if oil prices fall next year, these agile E&Ps will be able to capitalize and will likely boast even stronger financials. Anticipating the significant negative impact of these hedges, shale operators made a concerted effort in the first half of this year to lower their exposure and limit the impact on their balance sheets. Many operators have successfully negotiated higher ceilings for 2023 contracts and based on current reported hedging activity for next year, even at a crude price of $100 per barrel, losses would total just $3 billion, a significant drop from this year. At $85 per barrel, hedged losses would total $1.5 billion; if it fell further to $65, hedging activity would be a net earner for operators. E&Ps typically employ derivative hedging to limit cash flow risks and secure funding for operations. However, commodity derivative hedging is not the only risk management strategy operators use. Rystad Energy’s analysis looked at a peer group of 28 US light tight oil (LTO) producers, whose collective guided 2022 oil production accounts for close to 40% of the expected US shale total. Of this group, 21 operators have detailed their 2022 hedging positions as of August. The group includes all public hedging activity in the sector as supermajors do not employ derivative hedging as a funding strategy, and private operators do not disclose their hedges publicly. “With huge losses on the table, operators have been frantically adapting their hedging strategies to minimize losses this year and next. As a result, we may not have seen peak cash flow in the industry yet, which is hard to believe given the soaring financials reported in recent weeks,” says Rystad Energy vice president Alisa Lukash.

US Shale Operators Not Capitalizing On High Crude Prices - US shale oil producers are in line to suffer more than $10 billion in derivative hedging losses this year if oil prices remain around $100 per barrel, Rystad Energy research shows. Many shale operators offset their risk exposure through derivative hedging, helping them to raise capital for operations more efficiently. Those who hedged at lower prices last year are in line to suffer significant associated losses as their contracts mean they cannot capitalize on sky-high prices. Despite these hedging losses, record-high cash flow and net income have been widely reported by US onshore exploration and production companies this earnings season. These operators are now adapting their strategies and negotiating contracts for the second half of 2022 and 2023 based on current high prices, so if oil prices fall next year, these agile E&Ps will be able to capitalize and will likely boast even stronger financials. Anticipating the significant negative impact of these hedges, shale operators made a concerted effort in the first half of this year to lower their exposure and limit the impact on their balance sheets. Rystad claimed that many operators had successfully negotiated higher ceilings for 2023 contracts and based on current reported hedging activity for next year, even at a crude price of $100 per barrel, losses would total just $3 billion, a significant drop from this year. At $85 per barrel, hedged losses would total $1.5 billion; if it fell further to $65, hedging activity would be a net earner for operators. E&Ps typically employ derivative hedging to limit cash flow risks and secure funding for operations. However, commodity derivative hedging is not the only risk management strategy operators use. Rystad Energy’s analysis looked at a peer group of 28 US light tight oil producers, whose collective guided 2022 oil production accounts for close to 40% of the expected US shale total. Of this group, 21 operators have detailed their 2022 hedging positions as of August. The group includes all public hedging activity in the sector as supermajors do not employ derivative hedging as a funding strategy, and private operators do not disclose their hedges publicly. “With huge losses on the table, operators have been frantically adapting their hedging strategies to minimize losses this year and next. As a result, we may not have seen peak cash flow in the industry yet, which is hard to believe given the soaring financials reported in recent weeks,” says Rystad Energy vice president Alisa Lukash. Operators currently have 42% of their total guided and estimated oil output for 2022 hedged at a West Texas Intermediate average floor of $55 per barrel. Overall, producers have hedged 46% of their expected crude oil output for the year. In the second quarter, companies reported an average negative hedging impact of $21 per barrel on their realized crude prices – the value they receive for production minus any negative hedging impact. For some operators like Chesapeake Energy and Laredo Petroleum, the impact has been higher, at above $35 per barrel. Fewer companies reported any significant effect on their derivatives contracts in the latest quarter compared to the previous three months. Still, an analysis of the difference in the hedging impact on realized prices per operator between the first and the second quarter shows that in most cases, second-quarter losses were stronger by $4 per barrel on average. The US onshore oil and gas industry’s hedging strategy has been closely tracked as a critical barometer for cash flows, particularly given the sharp price volatility over the past few years, allowing investors and lenders to make funding calls. Operators have already increased the cover for their expected oil volumes in 2023 to 17%, with many targeting 20% to 40% of output to be secured with derivatives. Significantly, 2023 contracts would limit hedging losses at $100 per barrel WTI to only $3 billion compared to $10.2 billion in 2022.

DNR: Enbridge shut down oil and gas pipeline again this week near Bad River tribe's reservation -For the second time in a week, a Canadian energy firm shut down a pipeline near the Bad River tribe’s reservation — this time to investigate crude oil staining on a weld of its pipeline. On Wednesday, Enbridge Inc. notified state regulators that it had shut down its Line 5 pipeline in an area near Ashland where the company reported contaminated soillast week, according to Trevor Nobile, a field operations director with the Wisconsin Department of Natural Resources. The pipeline spans around 645 miles and carries up to 23 million gallons of oil and natural gas liquids daily from Superior across northern Wisconsin and Michigan to Sarnia, Ontario. "The notification that we received in the information that was provided to the department on the evening of Aug. 10, it was described as a small area of staining on a pipe on a weld was discovered, and that Line 5 had been shut down so crews could evaluate and make repairs," Nobile said. Enbridge made the report around 5 p.m. Wednesday, and a DNR conservation warden visited the site at 10 p.m. "No material was released to soil or water at this time, based on the information provided," Nobile confirmed. The conservation warden didn’t observe any petroleum odors, stained soil or any water at the time of the site visit. An Enbridge spokesperson said repairs have since been completed, and the pipeline resumed operation Friday morning. "The cause of the stain is being investigated," said Juli Kellner, an Enbridge spokesperson. Enbridge notified the Pipeline Hazardous Materials Safety Administration about the repairs and the Bad River Band of Lake Superior Chippewa. Last week, Enbridge shut down Line 5 for three hours on Aug. 3 after crews conducting maintenance spotted a tablespoon of oil that had spilled from a valve site in the Ashland County town of Gingles. The site is about 1 mile from the reservation of the Bad River tribe.

Bureau of Land Management to pause oil, gas leasing on 2.2 million acres in Colorado - The Bureau of Land Management will pause oil and gas leasing on 2.2 million acres of Colorado public land after environmental groups alleged its current management plan failed to consider climate impacts, according to a settlement. The agreement was filed Thursday in Colorado federal court and requires the government to conduct a new environmental analysis of the climate impacts of oil and gas leasing on public lands in southwestern Colorado. The government also agreed to consider how the leases may impact the endangered Gunnison sage-grouse and its habitat. The Sierra Club, Center for Biological Diversity and others said in an August 2020 lawsuit that BLM had violated the National Environmental Policy Act, which requires the government to take a hard look at the environmental impacts of its leasing decisions, when it approved the current 20-year plan. The groups said the decision to allow leasing on these public lands would aggravate the climate crisis and that it would be "impossible" to address that impact without "completely transforming the way public lands are managed for fossil fuel exploitation." Advertise with usReport ad The groups also said the government failed to adequately consider the impacts leasing would have on the survival and recovery of the threatened Gunnison sage-grouse. The settlement pauses all new leasing in the area known as the North Fork Valley. The green groups, represented by Melissa Hornbein of the Western Environmental Law Center, say the plan puts the local culture revolving around family farms, wineries, recreational opportunities and wildlife at risk. "It's absolutely crazy for the BLM to be considering a management plan that opens up 95% of the available mineral estate in the area ... without really confronting the issue of where we are in the climate crisis," Hornbein told Reuters. A spokesperson for BLM declined to comment.

Court strikes down ruling that blocked Biden’s oil drilling pause - A federal appellate judge struck down a lower court’s decision that had stopped the Biden administration from pausing the auction of oil and gas drilling rights in federal lands and water, a key campaign pledge in the president’s plan for tackling climate change. On Wednesday, the U.S. Court of Appeals for the 5th Circuit vacated a district-court decision from last year in favor of Louisiana and a dozen other states, many of which rely on oil and gas royalties to fund their governments. Circuit Judge Patrick E. Higginbotham sent the case back to the lower court, writing that its initial decision stopping Biden’s moratorium on leasing was too vague to be valid. The latest ruling may help reinvigorate Biden’s efforts to slow global warming by reforming the federal government’s oil and gas leasing program. Emissions from fossil fuels extracted on federal lands account for nearly a quarter of the nation’s heat-trapping carbon-dioxide pollution. But the question of whether the oil and gas leasing program can be curtailed to address global warming has ping-ponged from one federal court to another, with none seemingly able to make a lasting decision. Curbing new extraction of oil and gas on public lands is further complicated by the politics of high gasoline prices as well as Democrats’ recently enacted climate, health-care and tax package. Biden signs sweeping bill to tackle climate change, lower health-care costs What happens next isn’t clear. By sweeping away the injunction, the appeals court gives the Biden administration a potential path to pause leasing again. But a compromise won by Sen. Joe Manchin III (D-W.Va.) in the new climate law mandates new oil and gas sales off the coast of Alaska and in the Gulf of Mexico. The legislation, called the Inflation Reduction Act, also tethers the construction of wind turbines along the East Coast and solar farms in many southwest deserts to ongoing oil and gas auctions, another painful concession for climate advocates. Interior Department spokeswoman Melissa Schwartz said the Biden administration is reviewing Wednesday’s ruling.

Biden Freeze on Oil and Gas Leases Reinstated -President Joe Biden won temporary permission to once again pause energy leasing on federal lands and waters, after a US appeals court found a trial judge’s order against the moratorium too vague to review. The court on Wednesday threw out the judge’s nationwide injunction forcing a restart of leasing from the Gulf of Mexico to Alaska and ordered the judge to revisit the issue. In the meantime, Biden’s pause stands. The ruling came in a dispute between the administration and 13 energy-producing states led by Louisiana that sued to force Biden to resume leasing he paused a week after taking office. After the lower court last year issued its preliminary injunction against the leasing moratorium, the government appealed. “We cannot reach the merits of the government’s challenge when we cannot ascertain from the record what conduct -- an unwritten agency policy, a written policy outside the executive order, or the executive order itself -- is enjoined,” the appeals court wrote on Wednesday. It isn’t clear what immediate effect the ruling will have. Under the just-enacted Inflation Reduction Act, which provides hundreds of billions of dollars to fight climate change, the Interior Department is required to hold two auctions of oil and gas leases in the Gulf of Mexico. The law also makes future renewable energy projects on federal lands and waters contingent on leasing. The government can issue new wind and solar rights only if it has recently sold new drilling rights too -- a requirement designed to spur more fossil fuel leasing despite Biden’s campaign pledge to stop permitting such projects on public lands. “It’s unfortunate we have to continue litigating policies by Biden that cause pain for American families, especially those crushing us at the pump,” Louisiana Attorney General Jeff Landry said in an emailed statement. A spokeswoman for the Interior Department said it was reviewing the ruling, “The practical impacts” of the ruling, and even of the case’s ultimate outcome, “may be minor” given those leasing mandates, said Erik Milito, president of the National Ocean Industries Association, which represents offshore oil and wind companies. Energy Demand Biden issued the moratorium so officials could examine the environmental impact of the leasing. Environmentalists have pressured the president to go further in reducing fossil fuel development on federal lands. Drew Caputo, vice president of litigation at the environmental advocacy group Earthjustice, called on the Interior Department to swiftly overhaul federal oil leasing. “We are in a climate emergency and cannot afford any new leasing that will further entrench the fossil fuel industry’s hold on our country’s energy future,” Caputo said.

Climate law may undermine Biden court win on oil leasing - -A court ruling yesterday cleared the way for President Joe Biden to once again pursue one of his earliest climate actions: A pause on federal oil and gas leasing designed to give the government time to study the program’s contributions to planet-warming emissions.But can a new ban actually be implemented?Not likely, observers say, because yesterday’s decision from the 5th U.S. Circuit Court of Appeals came one day after the president signed the Inflation Reduction Act, a major climate law committing the federal government to millions of acres of new onshore and offshore lease sales.The act is a “legislative mandate that now needs to be followed by [the Department of the] Interior,” said Kyle Tisdel, climate and energy director at the Western Environmental Law Center.He added: “At least for the next 10 years, how [Interior] manages its leasing program is sort of a done deal.”Among the provisions of the Inflation Reduction Act is a requirement that the Interior Department revive the massive and controversial Lease Sale 257 in the Gulf of Mexico, which another court previously rejected for inadequate environmental analysis.The act also requires Interior over the course of a decade to lease 2 million acres of public lands per year, or half of the acreage drillers nominate, whichever is smaller. Offshore, the agency is directed to offer 60 million acres of federal waters each year. These requirements are part of a provision for granting certain wind and solar energy permitting.Yesterday’s 5th Circuit ruling “does not change our existing expectation for the Biden Administration to pursue the smallest number of onshore and offshore lease sales necessary to enable green energy development on federal lands under requirements imposed by the” Inflation Reduction Act, said ClearView Energy Partners LLC in a note to clients.The 5th Circuit decision also follows Interior’s November 2021 release of its climate analysis of the leasing program — the impetus for Biden’s pause.Nicholas Bryner, a law professor at Louisiana State University, said the 5th Circuit ruling didn’t appear likely to change much on the ground when it comes to leasing, especially after the passage of the new climate law.He noted that the act required BOEM to grant Lease Sale 257 to the highest bidder 30 days after the law’s passage. The sale, which had been specifically referenced in the 5th Circuit leasing litigation, had been tossed out by another court for violating the National Environmental Policy Act — a decision the oil and gas industry is now fighting in the U.S. Court of Appeals for the District of Columbia Circuit.In a court filing yesterday in the D.C. Circuit, the Justice Department said that the passage of the IRA was relevant to the litigation, but it was still reviewing the scope of the law’s impact on the legal fight.

Coast guard monitoring oil spill off southern Vancouver Island | CBC News -U.S. and Canadian authorities say they're working together to manage an oil spill near San Juan Island, Wash. — just off the southern tip of Vancouver Island.The spill started Saturday after the fishing boat Aleutian Isle started sinking near Sunset Point, which is on the west side of San Juan Island.The U.S. Coast Guard (USCG) said in a statement that the vessel had nearly 9,840 litres (2,600 U.S. gallons) of oil and diesel on board. A nearly 2.8 kilometre-long sheen from the spill was visible in an aerial image tweeted out around 6 p.m. Saturday. "The vessel is more than 100 feet (30 metres) under water and is currently polluting," said a spokesperson from the Canadian Coast Guard. "The Canadian Coast Guard is working closely with the USCG and is ready to respond and ready to assist as required."All five people on board the fishing boat were rescued as it sank, according to the USCG's statement.The spill is raising concerns over the southern resident killer whales, which are severely endangered and swim in the Salish Sea. An update from the USCG on Sunday morning said the killer whales were located by researchers west of Port Angeles, Wash., which is a good distance south of the spill.

BLM reconsiders Trump-era midnight orders opening Alaska lands -- The Biden administration plans to conduct an in-depth analysis of a series of public land orders issued in the final weeks of the Trump administration that sought to open 28 million acres of federal lands in Alaska to oil and gas development and mining activity.The Bureau of Land Management will formally publish a notice of intent in tomorrow’s Federal Register to begin an environmental impact statement (EIS) studying so-called legal deficiencies in five public land orders signed in January 2021 by then-Interior Secretary David Bernhardt.The Biden administration in April 2021 placed those orders on a two-year moratorium while it analyzed the Bernhardt orders (Greenwire, April 15, 2021).The public land orders BLM will analyze collectively cover 28 million acres in portions of the “Bay, Bering Sea-Western Interior, East Alaska, Kobuk-Seward Peninsula, and Ring of Fire planning areas,” according to a advance notice in today’s Federal Register.Publication of the notice will kick off a 60-day public scoping period, running through Oct. 17, to gather public feedback on the major issues that BLM should analyze in the EIS.BLM said in press materials that the EIS would focus on addressing “the legal defects in the decision-making process,” in the five public land orders, “including ensuring compliance with the requirements of National Environmental Policy Act.”Issues that will be studied, according to today’s notice, include “possible failure to adequately evaluate impacts” of opening the lands to mining and drilling under the Endangered Species Act, as well as “failure to secure consent from the Department of Defense (DOD) with regard to lands under DOD administration,” and “failure to adequately analyze potential impacts on subsistence hunting and fishing.”Depending on the outcome of the EIS, BLM could fully or partially revoke the Bernhardt orders, or retain “some or all” of the Bernhardt withdrawals that would open the lands to development.Bernhardt signed the five public land orders in January 2021 during the final two weeks of the Trump presidency.But only one of the five public lands orders, PLO 7899, was published in the Federal Register, on Jan. 19, 2021. It covered 9.7 million acres west of the National Petroleum Reserve-Alaska along the Arctic Ocean and would have been opened to mining and oil and gas development on April 19, 2021 (Greenwire, Feb. 17, 2021).The other four orders — PLOs 7900, 7901, 7902 and 7903 — signed by Bernhardt on Jan. 15 and 16 last year “were never published in the Federal Register and have no effective date,” Interior said.The Biden administration’s decision to pause the Bernhardt orders last year riled Alaska Sen. Lisa Murkowski (R), as well as the National Mining Association, among others.Murkowski declined to vote last year to confirm BLM Director Tracy Stone-Manning’s nomination to lead the bureau due to what she alluded to at the time as Stone-Manning’s response to her questions about the public land orders and whether she supported the moratorium.

The Gulf of Mexico Has a Pirate Problem - Dryad Global’s latest Maritime Security Threat Advisory (MSTA) has outlined that the Gulf of Mexico is in the midst of a pirate problem. According to the MSTA, on August 7, pirates onboard two speedboats boarded and robbed a manned semi-submersible drilling rig in the Bay of Campeche approximately 28nm north of Paraiso. The MSTA also notes that, on August 10, a vessel was approached by suspected pirates when transiting inbound to Puerto Dos Bocas. “There has been an increase in the cadence of incidents in the Gulf of Mexico,” the MSTA states. “Since 22 May 2022, there have been six maritime events just within the Bay of Campeche. Three supply vessels have been attacked, and three oil platforms,” the MSTA adds. “Despite previously focusing on unmanned assets, there has been a noticeable evolution where pirates are boarding vessels or oil platforms when personnel are present,” the MSTA continues. A previous version of the MSTA, which was published last month, outlined that, in the Gulf of Mexico, reporting indicated that on July 16, pirates attacked five Pemex satellite platforms in the Cantarell Productive Field in the Bay of Campeche. “The Bay of Campeche remains the epicenter of maritime crime and piracy within the Gulf of Mexico,” the MSTA noted at the time. “Currently there is believed to be a significant degree of under-reporting of incidents within the Gulf of Mexico,” the MSTA added. At the time of writing, a U.S. State Department map warns travelers to exercise increased caution at every Mexican state bordering the Gulf of Mexico, except Taumalipas, which has a do not travel warning, and Yucatan and Campeche, which warn travelers to exercise normal precautions. Dryad Global’s latest MSTA also highlighted pirate activity in Iran and Sierra Leone. “Iranian state media claimed that Iranian naval vessels thwarted a pirate attack in the Red Sea on 10 August,” the MSTA stated. “This comes after reports last week that the Iranian navy thwarted a pirate attack in the Gulf of Aden. Beyond Iranian vessels, no such attacks have taken place against any commercial vessels within the area across a protracted timeframe,” the MSTA added.

Global Refining Capacity Set to Grow, But U.S. Gains Will Be Negligible - The cost of gasoline has garnered a lot of headlines since the start of 2022, with the blame for elevated prices falling on seemingly everything and everyone, from the Biden administration’s policies on oil exploration to Russia’s invasion of Ukraine, as well as decisions by major U.S. producers and OPEC not to swiftly boost oil production. Another can't-be-ignored culprit is the loss of significant U.S. refining capacity over the last few years, which has limited the ability of refiners to respond to the strong, post-COVID demand recovery by ramping up production. By and large, the refineries still operating have been running flat out. In today’s RBN blog, we look at the state of global refining, where new capacity is likely to be built, and the headwinds to future investment. About 1 MMb/d of North American refinery capacity reductions (blue-shaded row in Figure 1) have occurred since 2019, with an additional 400 Mb/d planned to be taken offline over the next two years, as we outlined in Already Gone, Part 1. The additional closures will, however, be almost exactly offset by two major U.S. refinery expansions, leading to essentially no net change in U.S. refining capacity through 2024. Following more than two decades of U.S. refining capacity growth, the tides shifted in 2019-20 as the push for the energy transition gathered steam and the pandemic caused a record decline in transportation fuel demand. In addition, negative market trends, competitive challenges (both domestic and international) and changing crude-supply dynamics caused refiners across the U.S. to comb through their assets for possible consolidation, conversion to biofuels production or even total plant closure. Facilities on the East and West coasts felt the most pressure, but even plants operating in previously attractive market environments started to face scrutiny.Looking forward, North American refining capacity will likely avoid the declines expected in much of the developed world, as North American refiners will continue to benefit from cost-advantaged access to U.S. and Canadian crude oil, low (relative) natural gas and electricity costs, a comparatively friendly regulatory environment, and growing Latin American demand.Unlike the U.S., Europe (green-shaded row in Figure 1) has experienced a long-term decline in refining capacity due to sluggish demand and decreased competitiveness. As we detailed in Already Gone, Part 2, the continent’s refining capacity (excluding Turkey and the Commonwealth of Independent States, or CIS, which includes eight countries that, with Russia, formed the old USSR) has fallen by almost 8 MMb/d since 1980. Most recently, Europe lost about 3 MMb/d of refinery capacity from 2006 through 2017 before a brief “European Spring,” inspired by lower crude costs and a bump in demand, led to a few years of better margins. The good times ended with the COVID-related lockdowns, and Europe has lost more than 700 Mb/d of refining capacity since the beginning of 2020 through complete and partial closures, with more declines expected by 2024. Capacity reductions are likely to keep happening after 2024 as refiners on the continent continue to be challenged by declining regional product demand and high natural gas, electricity, crude and labor costs. It’s worth noting that while European capacity has moved lower, capacity in the CIS and Turkey has generally ticked higher in recent years.Refining capacity in developed Asia and Oceania (gray-shaded row in Figure 1; defined here as Japan, South Korea, Taiwan, Australia, and New Zealand) has followed a similar path as Europe for most of the same reasons. These drops in capacity will continue as the trends driving the reduction are only intensifying.In contrast to Europe and developed Asia (and, to a lesser extent, the U.S.), the trends have been just the opposite for China, India and the Middle East (pink-shaded rows in Figure 1), with each adding refining capacity over the past decade. The most significant additions have come from China, which has seen capacity jump from about 14.5 MMb/d in 2014 to nearly 17 MMb/d in 2022, with an expectation that it will approach 18.2 MMb/d in 2024. India’s capacity is forecast to reach nearly 5.3 MMb/d in 2024, up about 1 MMb/d since 2014, and the Middle East is expected to hit 11.9 MMb/d in 2024, a 37% increase from 2014 levels. Total capacity in other parts of Asia Pacific has increased modestly since 2014, while capacity has been mostly flat in Africa and Latin America (though Latin America has suffered from declining refinery utilization — a topic for another blog).

Flotilla of Diesel Ships Heads to Europe -A fleet of ships carrying diesel, one of the world’s most important fuels, is heading for European markets facing energy-security threats from high temperatures, soaring gas prices, and Russian disruption. Five ships transporting close to 3 million barrels are poised to move from Asia to Europe so far in August, preliminary data from Vortexa show. That’s the most in five months on a barrel-per-day basis. Shipments from the Middle East to Europe are also set to expand. The rising flows of diesel -- used in industries, transport and for power -- toward Europe are a result of market dislocations caused by higher prices at the hub of Amsterdam, Rotterdam and Antwerp (ARA) relative to Asia, said traders. China’s sputtering economy and a seasonal demand lull in India also contributed to Asia’s oversupply, they added. Europe has been struggling with a historic drought that’s causing a plunge in water levels on the Rhine River. The waterway that links oil tanks in the ARA hub to consumers in inland Europe is currently impassable to most barges, creating a supply bottleneck that could prompt draw-downs in their stockpiles that will need to be replenished ahead of winter. Countries including Sweden and Germany have warned of rising oil consumption in a bid to replace pricey gas, while the region has been purchasing more coal from across the world. It’s still unclear, however, just how strongly Europe’s demand will rebound this year-end due to a slowdown in the region’s economy. Diesel that will load from India and North Asia in August takes close to a month to reach Europe, arriving at its destination just as summer comes to an end. Some of the vessels on the so-called arbitrage route to Europe include larger vessels such as Suezmaxes that can carry up to 1 million barrels of oil. “Traders are taking opportunity of the economies of scale to make the East-West arbitrage workable by loading their cargoes onto these larger tankers,” said Serena Huang, lead Asia analyst for Vortexa. Gas-to-oil switching is forecast to surge this year, with the International Energy Agency boosting its forecast for global oil demand growth by 380,000 barrels daily on the expectation that industry and power generators will switch fuels. The extra demand that prompted the revision is “overwhelmingly concentrated” in the Middle East and Europe, the agency said. Its bullish view was echoed by Goldman Sachs Group Inc. Additionally, the risk of Russian gas-supply disruptions and concerns over energy security are set to encourage more diesel stockpiling. Europe’s benchmark for gas has nearly tripled this year, soaring way beyond the 18% climb in oil prices during the same period.

European Gas Set for Another Weekly Gain - Natural gas in Europe headed for the longest run of weekly gains this year, intensifying the pain for industries and households, and threatening to push economies into recession. Benchmark futures eased on Friday after closing at a record high in the previous session. The market has tightened even more in recent weeks as extremely hot and dry weather disrupts fuel transportation via rivers and limits hydroelectric and nuclear power production. That’s boosting demand for gas at a time when Russian supply cuts are already slamming the region. It’s been an unusual and difficult summer for Europe. Prices and demand typically ease during the warmer months, helping the continent pump gas into storage and prepare for the winter. But Moscow’s supply reduction through all major pipeline routes and searing heat waves have kept gas prices about 11 times higher than they usually are this time of the year. “Abnormally high and extended dry spells are likely to be near-term multipliers in Europe’s energy crisis, with suppressed power sources increasing demand for gas and stoking upward price pressure,” Bloomberg Intelligence analysts wrote in a report. Dutch front-month contract, the European benchmark, were 2.1% lower at 236 euros a megawatt-hour at 9:05 a.m. in Amsterdam. Still, it is heading for a fifth straight weekly gain, the longest run since mid-December. The high prices have already forced about half of Europe’s zinc and aluminum smelting capacity to shut down over the past year, and more is set to go offline. Germany, among the worst affected, is risking an industry exodus as manufacturers of car parts, chemicals and steel struggle to absorb energy prices. The government has urged consumers to lower demand, and on Thursday cut sales tax on gas to temporarily ease the burden. Low water levels in the Rhine River has lead Shell Plc to cut production at its Rhineland oil refinery in Germany, the nation’s biggest oil-processing complex. Navigability through Europe’s most important commercial waterway has been hampered in recent days, but some respite may be seen during the weekend as water levels at a major waypoint are expected to rise. A prolonged and severe drought in Spain and Portugal is pushing baseload hydroelectric output to historical lows, prompting increased calls for gas-fired power, according to Bloomberg Intelligence.

Natural Gas Demand Outpaces Production - Natural gas demand in major consuming countries stood in June at 104 percent of year-ago levels, but production was flat compared to 2021 levels, new data from the Joint Organisations Data Initiative (JODI) showed on Wednesday. While U.S. natural gas production has been rising in recent months alongside LNG exports, Russian gas production has plummeted since Russia invaded Ukraine at the end of February.In June, Russian gas production plummeted 18 percent month on month, falling for three consecutive months. Russia’s gas output in June was at 70 percent of March levels, according to data from JODI, which compiles self-reported figures from countries.At the same time, consumption in the European Union and the UK slumped to a five-year seasonal low in June. LNG imports soared by 50 percent compared to June last year.High demand in Europe, high natural gas prices, and increased export capacity made the United States the world’s largest exporter of liquefied natural gas in the first half of 2022, the U.S. Energy Information Administration said last month. The United States is shipping record volumes of LNG to Europe to help EU allies in their efforts to fill gas storage ahead of the winter.The European Union and the UK inventories increased by 9 bcm – slightly less than the seasonal average build of 11 bcm – to stand 57 percent full at the end of June. According to data from Gas Infrastructure Europe, as of August 16, EU gas storage was 75 percent full. Storage sites in Germany, Europe’s biggest economy which is the most affected by the Russian cuts in deliveries via Nord Stream, were full at 77 percent.As Europe looks to replace Russian pipeline gas, global LNG exports increased by 17 percent in June compared to the same month of 2021. Total gas inventories increased by 28.5 bcm and stood 16.1 bcm below the five-year average, the JODI data showed.

Russia’s Natural Gas Production Falls For Three Consecutive Months - Russia’s natural gas production plunged by 18 percent in June compared to May, new data from the Joint Organisations Data Initiative (JODI) showed on Wednesday, cited by the International Energy Forum.Russia’s natural gas output in June was 30 percent below the March level, just after the Russian invasion of Ukraine, according to the data from JODI, which compiles self-reported data from countries.At the same time, Russian crude oil production was just 247,000 barrels per day (bpd)—or 2 percent—lower compared to before the war in Ukraine, according to JODI data. Russian gas exports have also been falling throughout this year.On Tuesday, Gazprom said that its natural gas exports slumped by 36.2 percent to 78.5 billion cubic meters between January and the middle of August, as deliveries to Europe plummeted.Natural gas production also fell, slipping 13.2 percent to 274.8 billion cubic meters between January 1 and August 15 compared to the same period of 2021, according to a Gazprom statement.Since the Russian invasion of Ukraine, Gazprom has slashed supply to European Union member states, including by cutting off deliveries to Poland, Bulgaria, and Finland. Two months ago, Russia drastically cut gas supply via the key Nord Stream pipeline to Germany to 40 percent of capacity. Following a 10-day regular maintenance period, Gazprom further slashed Nord Stream flows to 20 percent of the pipeline’s capacity at the end of July. Meanwhile, amid soaring prices, gas consumption in the EU and the UK combined fell to a five-year seasonal low in June, the JODI data showed. Imports of liquefied natural gas (LNG) surged by almost 50 percent in June compared to the same month of 2021, as Europe scrambles to procure alternatives to Russian pipeline supply. The EU, for its part, has reduced its dependence on Russian gas deliveries by 50 percent, but savings will be necessary to make up for the difference with alternative supplies. This is what the High Representative of the EU for Foreign Affairs and Security Policy, Josep Borrell, said earlier this month in a blog post. According to data from Gas Infrastructure Europe, as of August 16, EU gas storage was 75 percent full, with Germany’s storage filled at 77 percent.

German Refinery Reliant on Russia Now Using USA Oil -Germany’s Schwedt oil refinery has started processing US crude blended with Russian Urals, according to a person familiar with the matter. US crude brought in from Rostock on Germany’s Baltic coast currently accounts for about 20% of what the refinery is processing, the person said. The port recently took delivery of its first cargo of US oil in at least half a decade. Operator PCK couldn’t immediately be reached by phone for comment. The Schwedt refinery, partly owned by Moscow-based Rosneft PJSC, is located near the Polish border and has always relied on the Druzhba pipeline from Russia for crude supply. German Economy Minister Robert Habeck said previously it is the hardest refinery in Germany to wean off Russian oil supply. Because the facility was designed to process Russian oil shipped via Druzhba, “replacing those volumes is basically impossible both physically and technologically,” Rosneft’s press office said by email. Supplies through the pipeline from Rostock can meet no more than half of the refinery’s crude demand, according to Rosneft. Lower runs could lead to Schwedt incurring losses of some 300 million euros ($306 million) per year, the Russian crude producer said.

German Officials Warn Of Draconian Energy Regulations, "Extremists" Fueling "Mass Protests And Riots" -As queries for "firewood" have exploded on Google in Germany, and Deutsche Bank predicting that "wood will be used for heating purposes where possible. German Economy Minister and Vice Chancellor Robert Habeck - who previously called on residents to cut back on heating, visits to the sauna, and showers - announced on Friday that public buildings across the country won't be allowed to set heating above 19 degrees Celsius (66.2F) this fall. Exceptions will be made for hospitals and 'social facilities.'In an interview with Suddeutsche Zeitung, one of the country's largest daily newspapers, Habeck said that the new regulations would be part of the Energy Security Act - adding to previously announced bans on heating private pools.In addition, buildings and monuments will not longer be lit at night, and there will be curbs on illuminated advertising - while "more savings are also needed in the work environment," he added.Habeck's announcement comes just days after the head of Germany's grid regulator, Klaus Mueller, said that German families would need to cut 20% of their normal energy consumption in order to avoid gas shortages by December."If we don't save a lot and get extra fuel, we will have a problem," he told Welt am Sonntag in an interview last week.The situation has been brewing, as the bloc's reliance on Russian energy comes into conflict with sanctions over Russia's war in Ukraine - causing prices to skyrocket amid a decrease in Russian natural gas supplies to Europe.Meanwhile, German officials are preparing for civil unrest.In an interview with ZDF, Stephan Kramer - who heads the domestic intelligence service in the German state of Thuringia - warned that 'legitimate' protests over the energy crisis could be 'hijacked by extremists' (and definitely not just enraged average citizens).Kramer said that officials were bracing for protests over "gas shortages, energy problems, supply difficulties, possible recession, unemployment, but also the growing poverty right up to the middle class," adding that "extremists" which include "lateral thinkers" who rallied against pandemic lockdowns, and 'right-wing activists' who have been stirring the post over social media, could be at the heart of them."We're likely to be confronted with mass protests and riots," he continued. "We’re dealing with a highly emotionalized, aggressive, future-pessimistic mood in society, whose trust in the state, its institutions and political actors is fraught with massive doubts.""This highly emotional and explosive mood could easily escalate," the security chief continued, adding that the Covid-19 clashes would "probably feel more like a children's birthday party" by comparison.

Russia Gas Transit Payment Goes Through After Glitch - Russia’s payment to Ukraine for natural gas transit this month has gone through without problems, even after a glitch with a similar oil transaction, according to people familiar with the situation. State-run Gazprom PJSC sent its regular monthly payment to Ukraine’s NJSC Naftogaz Ukrainy last week and it has been accepted, according to people on both sides, who asked not to be named as the information isn’t public. Traders were on edge about possible disruptions to the crucial payment after shipments through one branch of the Druzhba oil pipeline were halted in early August after a financial transfer from Russia to Ukraine was snarled because of European sanctions. The issue was resolved last week. Representatives for Gazprom didn’t respond to a request for comment. Naftogaz had no comment. Russia is squeezing its gas supply to Europe, pushing energy prices to records and driving a cost-of-living crisis. Flows through the main pipeline, Nord Stream, are at just 20%, while transit through Ukraine is also well below usual.

Gas-To-Oil Switch May Not Be A Huge Catalyst For EU Crude Demand - Last week, oil prices finished the week in the green, gaining 3.5% after tumbling nearly 10% a week earlier thanks to a weakening dollar after better-than-expected inflation data altered interest rate expectations from the Fed. Unfortunately, the oil price rally has been snuffed out in a dramatic fashion. WTI and Brent crude have both declined more than 5% in Monday’s morning session to trade at $87.31/bbl and 93.16/bbl on demand fears as disappointing Chinese economic data renewed global recession concerns. China's central bank cut key lending rates in a bid to revive demand as the latest data showed the economy unexpectedly slowing in July–and the market wasn’t expecting it. China’s industrial output grew 3.8% in July from a year earlier, well below the 4.6% consensus on Wall Street. The grim set of figures is an indication that the world’s largest importer of crude is struggling to shake off the effects of Beijing’s Covid restrictions months earlier.Coupled with high oil price volatility, this is taking a heavy toll on oil prices, with Brent crude open interest this month down 20% compared to a year ago levels."Open interest is still falling, with some (market players) not interested in touching it because of volatility. That is, in my view, the reason resulting in higher volumes to the downside," UBS oil analyst Giovanni Staunovo has said, adding that the trigger for Monday’s drop was weak Chinese data. But a slowing Chinese economy might be just one of a host of bearish catalysts that might conspire to keep oil prices grounded if Europe’s natural gas stockpiles are any indication.Shortly after Russia invaded Ukraine in late February, dozens of Eurozone countries pledged to heavily cut Russian natural gas imports or halt them completely as soon as they can afford to. These countries took several aggressive measures to replenish their natural gas stockpiles ahead of the winter season, including reaching a political agreement to cut gas use by 15% through next winter.And now there's a growing sense that Europe might not only meet its gas targets but also exceed them. European governments had been worried that Russia's cut in supplies through its main gas pipeline to Germany would leave many of them with less than sufficient supplies for the winter season. However, many European nations have managed to build up ample gas storage by switching from gas to coal for some power plants, steadily curbing gas demand, and increasing imports of liquefied natural gas (LNG).

Russia's Gazprom to shut gas pipeline to Europe for 3 days - (AP) — A key Russian natural gas pipeline will shut down for three days of maintenance at the end of this month, the state-owned energy company Gazprom announced Friday, raising economic pressure on Germany and other European countries that depend on the fuel to power industry, generate electricity and heat homes. The latest shutdown will come a month after Gazprom restored natural gas supply through the pipeline to only a fifth of its capacity after a previous shutoff for maintenance. Russia has blamed the reductions through the pipeline on technical problems but Germany has called the shutoffs a political move by the Kremlin to sow uncertainty and push up prices amid the conflict in Ukraine. Natural gas prices rose on Friday after the announcement, and are now more than twice as high as a year ago. In a statement posted online, Gazprom said the planned shutdown from Aug. 31 to Sept. 2 is for “routine maintenance” at a key compressor station along the Nord Stream 1 pipeline, which links western Russia and Germany. Natural gas prices have surged as Russia has reduced or cut off natural gas flows to a dozen European Union countries, fueling inflation and raising the risk that Europe could plunge into recession. Germany’s Economy Ministry said in an email to The Associated Press that it had taken note of Gazprom's planned downtime for Nord Stream 1. “We are monitoring the situation in close cooperation with the Federal Network Agency" that regulates gas markets, the ministry said. “Gas flows through Nord Stream 1 are currently unchanged at 20%.” The newly announced maintenance shutoff raises additional fears that Russia could completely cut off the gas to try to gain political leverage over Europe as it tries to boost its storage levels for winter. Germany recently announced that its gas storage facilities had reached 75% capacity, two weeks before the target date of Sept. 1. Germans have been urged to cut gas use now so the country will have enough for the winter ahead. Gazprom said once the work is completed, the flow of gas through Nord Stream 1 will resume at its prior level of 33 million cubic meters, or just 20% of the pipeline’s capacity. The routine maintenance will be carried out jointly with Siemens specialists, Gazprom said, in a reference to its German partner, Siemens Energy.

Veteran Ships Drawn to Russian Oil Trade - The fallout from Russia’s invasion of Ukraine is still making waves in the shipping market, with more older tankers being deployed on the lucrative route hauling the nation’s oil from the Far East to China and India. At least four tankers 15 years or older have joined the pool of vessels delivering Russian oil from Kozmino since May, according to shipbrokers who asked not to be identified. The port usually handles about 30 cargoes of ESPO crude a month using Aframax vessels, which carry about 700,000 barrels. While Western sanctions against Moscow following the invasion put some shipowners off from handling the OPEC+ producer’s cargoes, the upheaval has inflated earnings for those still in the trade and lifted vessel valuations, too. Profits for shippers on the Kozmino-to-China route are still about triple the level seen before the outbreak of war, although they’ve eased slightly. Although ships that are 15 years old remain sea-worthy, they tend to be less efficient than newbuilds and may require more maintenance. Still, the short, five-day voyage from Kozmino to China, coupled with high profits from plying the route, have combined to attract the aged vessels. To draw business, these arrivals have been offering slightly lower prices, bringing down rates on the route, the shipbrokers said. The so-called lumpsum cost for a delivery from Kozmino into China is now about $1.5 million, a touch below the peak of $1.7 million seen in June and July, they said. The opportunities have stoked interest in used ships. So far this year, the value of older Aframax ships has increased by nearly 60%, with a 15-year-old tanker now worth about $29 million, according to VesselsValue data. Even after the recent dip in freight rates, prices are still “inflated compared to historic averages,” said Olivia Watkins, head valuations analyst at VesselsValue. That’s led to owners to want to take advantage, she said. So far this year, 58 Aframaxes have changed hands, 50% more than in the same period last year, according to VesselsValue. Some of the vessels new to the route were bought by shipowners registered in Vietnam and Hong Kong, according to data tracked by Bloomberg and shipbrokers.

Sakhalin-2 LNG Plant Asks Buyers to Pay Gazprombank - Russia has asked buyers from its Sakhalin-2 LNG plant to pay Gazprombank JSC, throwing customers including Japan and South Korea into a dilemma over sanctions that threaten shipments. Sakhalin Energy LLC, the new operator, sent settlement instructions to customers for paying in US dollars to Gazprombank, according to documents seen by Bloomberg. Gazprom PJSC owns just over 50% of Sakhalin Energy, while Gazprombank is the lending arm of Russia’s gas exporter. The step is the latest effort by Russia to consolidate control over its energy assets as President Vladimir Putin also limits flows into Russia’s biggest markets in Europe, in what is widely seen as the use of gas as a weapon. The majority of LNG shipments from Sakhalin-2 go to Japan, which relies on the facility for stable energy supplies. South Korea and Taiwan are also importers from Sakhalin-2. Payments were previously being made to non-Russian banks. The payments to Sakhalin would be made via the Bank of New York Mellon Corp., acting as the correspondent bank in the US, according to the Aug. 16-dated paperwork. Using a US bank as an intermediary may avoid potential sanctions. At least two LNG buyers are checking with their legal teams if they can make payments to Gazprombank without violating any sanctions, according to people with knowledge of the matter. Sakhalin Energy also provided an option to pay through the Moscow-based branch of Raiffeisenbank AO, but Gazprombank is preferred, said the people, who requested anonymity as the information isn’t public. Sakhalin Energy, Gazprombank and Raiffeisenbank’s Russia branch didn’t immediately respond to requests for comment. Bank of New York Mellon also didn’t respond.

Shell To Keep Prelude FLNG Shut Down Over Pay Dispute - Shell’s massive Prelude FLNG facility off Australia will remain shut in due to a pay dispute with unions still not being settled. Shell was forced to shut down the site and told customers it would be unable to supply LNG cargoes for the duration of work stoppages. The work stoppages began on June 10 and no cargoes have been shipped from the site in about five weeks. The protected industrial action was extended until September 1. Namely, unions are using an April pay deal with Japan's Inpex at its Ichthys LNG operation as a benchmark for talks with other oil and gas majors. Prelude is co-owned by Shell, Inpex, Korea Gas Corp, and Taiwan's state-run Chinese Petroleum Corp. One other bone of contention is the unions' demand that Shell ensures that it will not outsource jobs to contractors at lower rates than they pay their own staff for the same jobs. In Wednesday’s post on social media the Offshore Alliance, which represents workers from the Australian Workers' Union and the Maritime Union of Australia, said that it was in its 70th day of Protected Industrial Action in its campaign for job security and Tier 1 rates and conditions. According to the Alliance, Shell has incurred losses of around $1.3 billion in production since the dispute and shutdown began. That means that the losses stand at over $5 million per Prelude employee. Along with this, Shell has canceled the turnaround scheduled to commence in two weeks. “No company in Australian history has lost so much money in a bargaining dispute. Whatever Shell's Prelude bosses thought they could save by outsourcing permanent jobs to low-wage labor hire contractors has been exceeded 1000 times over in their ideologically bankrupt approach to bargaining negotiations. Our Prelude members have drawn a line in the sand on job security and have this week supported the extension of Protected Industrial Action until our bargaining claims are resolved,” Offshore Alliance said. Since the very start of LNG production Prelude has not been the luckiest facility around. Namely, the first problem in the facility occurred in February 2020 when an electrical trip caused Shell to shut down production. It was not brought back online until January 2021. Then, the facility experienced an unplanned event that resulted in a complete loss of power at the facility on December 2, 2021, which led to unreliable and intermittent power availability over three days. Inspectors determined that Shell did not have a sufficient understanding of the risks of the power system on the facility, including failure of mechanisms, interdependencies, and recovery. That meant that Prelude FLNG would be out for most of the first quarter of 2022. In late March, Australian watchdog NOPSEMA closed the investigation into the latest issues that caused Shell’s Prelude FLNG facility to halt production, clearing the path for restart. Shell finally resumed shipping liquefied natural gas from the Prelude FLNG facility in April.

Shell discharges five barrels of oil into Rivers environment - Shell Petroleum Development Company of Nigeria (SPDC) Ltd has discharged five barrels of crude oil from the Trans Niger Pipeline into Bodo community in Gokana Local Government of Rivers State. A Joint Investigation (JIV) report signed by the host community, National Oil Spill Detection and Response Agency (NOSDRA), Rivers State Ministry of Environment and SPDC disclosed the development. The JIV report said the Shell’s TNP discharged 98 water and two per cent crude into Bodo following the ongoing flushing of the TNP, with residual crude oil of about five barrels. Spokesman for SPDC Mr. Michael Adande said the impact of the spill within and outside the SPDC JV right of way was minimal, since the TNP had not transported crude oil since mid-June 2022. He said the report of the JIV would soon be available on the SPDC oil spills site.

Oil firms spill N711bn crude oil, degrade environment -Environmental right activists have raised the alarm over the continuous environment degradation as estimation puts total value of oil spilled by operators in the Niger Delta at N711bn. Data obtained by The PUNCH from the Nigerian Oil Spill Monitor, an arm of the National Oil Spill Detection And Response Agency, NOSDRA, revealed that a total of 23, 896 barrels crude oil was spilled by 18 firms last year. As of last year, Brent International was sold at an average of $71 per barrel at the international market, bringing total revenue lost by the companies to the menace to about $1.7m or N711bn. A breakdown of who spilled what showed that while Shell Petroleum Development Company, SPDC, spilled a total of 4097 barrels, Nigerian Agrip Oil Company, NAOC, spilled 1029 barrels. Mobil Producing Nigeria, MPN, spilled the most in the year under review with 12, 404 barrels, as Heritage spilled 344 barrels. The Nigerian petroleum Development Company, NPDC, recorded 1142 barrels; Eroton, E&P 4315 barrels; Seplat Energy, 44bbls; Chevron, 11bbls; ERL, 75 barrels; TotalEnergies, 47bbls, as First Energy spilled two barrels. Also, Platform reported one barrel; Midwestern, 19bbls; Neconde, 23bbls; Aitei E&P, 244bbls; ND West, 71bbls; ESSO, 27bbls; and NewCross E&P, one barrel. The NOSDRA’s data showed that SPDC reported a total of 147 spills in the year; NAOC ,106 spills; MPN, 30; Heritage, 19; NPDC, 11; Eroton E&P, 11; Seplat, 11; Chevron, 10; ERL, 7; TotalEnergies, 6; First, 4.

Exxon Inks India Offshore Exploration Deal With ONGC -U.S. supermajor ExxonMobil and Indian state-owned company Oil and Natural Gas Corporation (ONGC) have signed a Heads of Agreement for deepwater exploration on the East and West coasts of India.The Heads of Agreement document was signed by India’s Secretary of the Ministry of Petroleum & Natural Gas Shri Pankaj Jain on August 17, 2022, as well as the Director of Exploration at ONGC Shri Rajesh Kumar Srivastava and the CEO and Lead Country Manager for ExxonMobil India Monte Dobson.The collaboration areas focus on the Krishna Godavari and Cauvery Basins in the eastern offshore and the Kutch-Mumbai region in the western offshore.There has been a scientific exchange of exploration data in the last few years, which has led to this partnership. Collaboration between ONGC and ExxonMobil will be a strategic fit where ONGC’s knowledge and experience in these areas will be coupled with ExxonMobil’s global insights.“Partnerships between a National Oil Company like ONGC and an International Oil Company like ExxonMobil will bring tangible benefits in the entire energy value chain and open new vistas to Exploration & Production paradigm. This collaboration will boost our confidence in going further ahead in deepwater exploration on the east coast of India where the potential is quite significant,” Petroleum Secretary Shri Pankaj Jain said.

Street protests erupt across Bangladesh over fuel price hikes - Unprecedented fuel price increases announced on August 5—the highest in Bangladeshi history—have triggered nationwide protests by workers, students and the poor against the Awami League-led government. The price of petrol was increased by nearly 52 percent per litre, from 86 taka ($US 91 cents) to 130 taka ($US1.37), with diesel and kerosene prices rising by 42.5 percent. The price hikes, like those in many other countries, are a direct result of the US-NATO proxy war in Ukraine and the impact of the ongoing COVID-19 pandemic as workers and the poor are already struggling to deal with declining living conditions. According to media reports, protests erupted in Dhaka, the national capital, and other major cities, beginning the day after the price rises. Motorbike users and transport workers staged street demonstrations, chanting slogans against Prime Minister Sheik Hasina and demanding her government lower the prices. Mohammad Nurul Islam, a truck driver who transports vegetables, spoke to the BBC while queuing for petrol. “When I go to the market, I can’t buy enough food for my family. If the price of fuel keeps increasing like this, I won’t be able to look after my parents or send my children to school. If I lose my job, I might have to start begging in the street,” he said. One protester, Homammed Shajahan, who hires vans for a living, told Al Jazeera: “No one is renting our vans now because it costs more. It is really hard on us. See all the drivers are sitting idle. We cannot understand what the government is doing,” he said. The fuel price increases have driven up the cost of other essentials as well as bus and other transport fares. The New Indian Express reported on August 13 spiralling prices for 25 out of 26 basic items. Over the past month, the cost of rice has risen by 22 percent, farm-grown chickens 45 percent, onions 43 percent, eggs 20 percent and fish by 10 percent. Mamunur Rashid, an office janitor in Dhaka and with a family of six, told the newspaper that he was previously able to eat fish three times a week, but “now I only eat it once.”

Oil refiners in Asia's economic powerhouses aren't snapping up extra crude even with prices below $100 a barrel as inflation bites - Asian oil refiners are getting choosier about where they get their crude from, as inflation picks up across the supply chain, experts told Insider. State-owned energy giant Saudi Aramco told at least four North Asian buyers that it will supply full contract volumes of oil in September, sources with knowledge of the matter told Reuters. When an exporter allocates the full volume of a contract, traders usually interpret that as supply being roughly in line with demand. A cut in the allocation would signal a drop in demand, while an increase would reflect an improvement.The oil price has fallen below $100 a barrel and is around 30% below the multi-year highs of early March, right after Russia invaded Ukraine.But this is the second month in a row that Aramco has allotted the full amount to its North Asian customers, which include China, suggesting any tightness in the market may be easing.Data last month showed Russia's oil exports to China and India were 30% below their wartime peak, as buyers in the two countries reeled in their purchases. "Crude demand is clearly weakening as widespread inflation leads to further declines in purchasing power for Asian buyers," Ed Moya, senior analyst at OANDA said in response to Saudi Aramco allocating the full amount of crude. Saudi Arabia raised prices for Asian buyers to near record highs for August deliveries, reflecting some of the squeeze on supply as producers everywhere rush to fill any gaps left by a dropoff in Russian exports after Western sanctions. As refiners face lower margins for products such as gasoline, diesel and jet fuel, they're getting choosier about where they get their crude. Reports this week showed Asian buyers are snapping up cheap US crude as traditional Middle Eastern blends are starting to look a little pricier by comparison.South Korea and Indian refiners purchased about 16 million barrels of US crude so far this month, roughly double what they bought the previous month. Asian oil demand ramped up after Russia invaded Ukraine with countries like China and India taking advantage of super-cheap Russian exports that had fallen out of favor with lifelong European customers. But this has in turn raised the value of Russia's oil and buyers are once again in search of a better deal elsewhere. In mid-July, a surge in China's oil imports put Saudi Arabia on track to reach its highest level of total exports since April 2020, as China's COVID-19 measures began to ease. But with strict restrictions back in play, with millions under lockdown, it is taking denting crude demand together with inflationary pressures. "A big driver for Asian crude demand is the outlook for China and that is complicated given President Xi is sticking to his COVID strategy," Moya said.

Jordan launches probe into oil spill off southern coast - Jordanian authorities have launched probe into a vessel after it allegedly caused an oil spill on Sunday off the kingdom's southern coast, Trend reports citing Xinhua.Local authorities are working to contain the oil spill off the coast of the Aqaba container terminal, Jordan's only container port, Nidal Majali, an official with Jordan's Aqaba Special Economic Zone Authority, was quoted as saying by the state-run Petra news agency.The clean-up is expected to be finished in a few hours, Petra reported, without giving further details. The oil spill, which covered an area of 700 square meters, polluted some coral reefs and damaged equipment of several diving centers, local media reported.

Saudi Aramco profit surges 90% in second quarter amid energy price boom - Saudi oil giant Aramco reported a stunning 90% surge in second quarter net income and record half year results on Sunday, as high oil prices continue to drive historic windfalls for "Big Oil." Aramco said strong market conditions helped to push its second quarter net income to $48.4 billion, up from $25.5 billion a year earlier. The result easily beat analysts estimates of $46.2 billion. "Our record second-quarter results reflect increasing demand for our products — particularly as a low-cost producer with one of the lowest upstream carbon intensities in the industry," Aramco President and CEO Amin Nasser said. Aramco said half year net income soared to $87.9 billion, easily outpacing the largest listed oil majors, including Exxonmobil, Chevron and BP and other "Big Oil" companies, which are all benefiting from a commodity price boom. Oil prices surged above $130 dollars a barrel earlier this year, as the global energy crisis, made worse by supply disruptions stemming from Russia's invasion of Ukraine, roiled global markets and contributed to decades high inflation. "While global market volatility and economic uncertainty remain, events during the first half of this year support our view that ongoing investment in our industry is essential — both to help ensure markets remain well supplied and to facilitate an orderly energy transition," Nasser added. Aramco said it expects the post-pandemic recovery in oil demand to continue for the rest of the decade, despite what it called "downward economic pressures on short-term global forecasts." The blowout results are also a major windfall for the Saudi Arabian government, which relies heavily on its Aramco dividend to fund government expenditure. The Kingdom reported a $21 billion budget surplus in the second quarter. Aramco said it would maintain its dividend payout of $18.8 billion in the third quarter, covered by a 53% increase in free cash flow to $34.6 billion. Aramco is using its major gains to invest in its own production capabilities in both hydrocarbons and renewables, while also paying down debt. "We are progressing the largest capital program in our history, and our approach is to invest in the reliable energy and petrochemicals that the world needs, while developing lower-carbon solutions that can contribute to the broader energy transition," the company said. Aramco said it achieved total hydrocarbon production of 13.6 million barrels of oil equivalent per day in the second quarter, and was working to boost capacity from 12 million barrels of oil per day to 13 million barrels of oil per day by 2027.

Libya's crude oil production surpasses 1.2 million bpd - Libya's production of crude oil hit one million and 211 thousand barrels per day on Tuesday, the National Oil Corporation confirms. Earlier, the NOC Chairman Farhat bin Qadara attended a meeting to follow up on the implementation of the extraordinary budget of the state-run company, in the presence of Prime Minister Abdul Hamid Dbeibah. The PM revealed during the meeting a medium-term action plan extending from three to five years, in which all companies present their projects aimed at increasing production rates to two million barrels per day. Bin Qadara had confirmed earlier that increasing production levels is the main target of his team since taking over the NOC's management last month.

OPEC not to blame for soaring inflation, new chief says, citing underinvestment in oil and gas - New OPEC Secretary-General Haitham Al Ghais said Wednesday that the influential producer group is not to blame for soaring inflation, pointing the finger instead at chronic underinvestment in the oil and gas industry. "OPEC is not behind this price increase," Al Ghais told CNBC's Hadley Gamble. "There are other factors beyond OPEC that are really behind the spike we have seen in gas [and] in oil. And again, I think in a nutshell, for me, it is underinvestment — chronic underinvestment," he added. "This is the harsh reality that people have to wake up to and policymakers have to wake up to. Once that is realized I think then we can start to think of a solution here. And the solution is very clear. OPEC has a solution: invest, invest, invest," Al Ghais said. Earlier this year, Kuwait's Al Ghais was appointed for a three-year term as OPEC's secretary general. He succeeds Nigerian oil industry veteran Mohammad Barkindo, who died at the age of 63 last month just days before he was due to step down from the organization. The International Energy Agency said in June that global energy investment was on track to increase by 8% this year to reach $2.4 trillion, with most of the projected rise coming mainly in clean energy. It described the findings as "encouraging" but warned investment levels were still far from enough to tackle the multiple dimensions of the energy crisis. For oil and gas, the IEA said investment jumped 10% from last year but remains "well below" 2019 levels. It said today's high fossil fuel prices provided "a once-in-a-generation opportunity" for oil and gas-dependent economies to undergo a much-needed transformation. The IEA has previously said investors should not fund new oil, gas and coal supply projects if the world is to reach net-zero emissions by the middle of the century. To be sure, the burning of fossil fuels, such as oil, gas and coal, is the chief driver of the climate emergency. U.N. Secretary-General Antonio Guterres warned in April that it is "moral and economic madness" to fund new fossil fuel projects.

OPEC Chief sees high risk of oil squeeze amid bullish demand - Global oil markets face a high risk of a supply squeeze this year as demand remains resilient and spare production capacity dwindles, the new head of OPEC said. Fears over slowing consumption in China and the wider world - which have pushed crude prices 16% lower this month - have been exaggerated, OPEC Secretary-General Haitham Al-Ghais said. At the same time, producers in the Organization of Petroleum Exporting Countries and beyond are running out of extra supplies they can bring to market, Al-Ghais said. "We are running on thin ice, if I may use that term, because spare capacity is becoming scarce," Al-Ghais said. "The likelihood of a squeeze is there." International oil prices have retreated to near $90 a barrel amid signs of a slowing economy in China - where fuel use slumped to a two-year low in July - and a lackluster holiday driving season in the US. Still, the OPEC chief remains confident that world oil demand will increase by almost 3 million barrels a day this year, bolstered by China's return from Covid-related lockdowns. "China is still a source of phenomenal growth," he said. "We haven't seen China open up exactly -- there's a strict Covid Zero policy -- I think that will have an impact when China gets back to full steam."

"Running On Thin Ice": OPEC Head Warns Of Oil Squeeze - Crude oil prices have slumped to six-month lows, driven by a mounting wall of worries: US recession, China's zero-Covid policy and real estate sector implosion, Russian production recovering, US SPR releases, and the possibility of a nuclear agreement between Iran, the EU, and the US that could unleash new supplies into global markets. On Wednesday morning, the October contract of Brent on the Intercontinental Exchange tagged a six-month low of $91.58 a barrel while the new head of OPEC offered a sobering reality that global oil markets face an increased risk of a supply squeeze due to declining spare production capacity. OPEC Secretary-General Haitham Al-Ghais sat down with Bloomberg Televisionand said speculation fears over slowing consumption in China and the rest of the world had been greatly exaggerated. Al-Ghais said producers in OPEC are nearing the upper limits of additional supplies they can deliver to the market: "We are running on thin ice, if I may use that term, because spare capacity is becoming scarce. The likelihood of a squeeze is there." None of this should come as a surprise to readers, as we pointed out in June that WSJ's energy correspondent Summer Said that Saudi Arabia's production stands around 10.5 million bpd and has a production capacity ceiling of 12 million bpd. That means the potential output increase is only 1.5 million bpd. And another million bpd in five years. In other words, the Kingdom's ability to increase spare capacity appears limited. And here's where things get interesting: Al-Ghais remains confident global oil demand will increase by 3 million barrels per day as China reopens from Covid-related lockdowns. "China is still a source of phenomenal growth," he said. "We haven't seen China open up exactly -- there's a strict Covid Zero policy -- I think that will have an impact when China gets back to full steam." As explained by the OPEC head, the reason for a production capacity ceiling is that "chronic underinvestment for several years is really what's taken us to where we are today." On the subject of additional flows from Iran, he said that as long as they are released orderly, global oil demand will absorb those supplies. Ahead of the next OPEC+ meeting on Sept. 5, Al-Ghais said it's still too early what the 23-nation group will agree on: "We've demonstrated time and time again in the past that we're willing to do whatever it takes to do what the market really requires," Al-Ghais said. So the takeaway here is more confirmation that spare production capacity and rising global fossil fuel demand could squeeze markets when China reopens.

Oil Prices Plunge 5% As China's Economy Slows and Iran Talks Progress -- Global oil prices tumbled Monday after data showed China's economic engine sputtered in June and traders weighed the prospect of an increase in Iranian production.Both Brent and WTI crude, the international and US benchmark oil prices, dropped almost 5% as market participants bet China's demand for energy will be lower than previously expected.Brent was down 4.88% to $93.36 a barrel as of 7.17 a.m. ET, to trade at around its lowest level since February. WTI was 4.78% lower at $87.62 a barrel, around its lowest since January.Output at China's factories increased 3.8% in July, a slowdown from June's 3.9% rate and well below analysts' expectations, data showed overnight. Retail sales growth also cooled and youth unemployment hit a record high.China's central bank lowered two key interest rates Monday, as Beijing tries to boost an economy struggling under the weight of a property crisis and a strict zero-COVID policy.Bloomberg estimated that China's oil demand fell 9.7% in July, data that analysts said contributed to the sell-off on Monday."Crude oil futures trade lower after China's economic recovery unexpectedly weakened in July on renewed COVID lockdowns and after data from Bloomberg showed an apparent 10% year-on-year drop in oil demand last month," Saxo Bank commodities strategist Ole Hansen said. Hansen said signs of progress on the European Union's proposal to revive the Iran nuclear deal, which would increase output from the Middle Eastern country, was also driving prices lower. The EU has been pushing to save the deal, and Iran said it would lay out its position on the bloc's latest proposal by Monday night. Iran said it is keen to move forward as long as the US is realistic and flexible, according to reports.Oil prices have been on a wild ride in 2022, and Brent has soared as high as $140 a barrel after Russia invaded Ukraine in late February. High oil prices caused US gasoline to top $5 a gallon in June.Yet fears of a global recession have caused oil prices to fall sharply in recent weeks, with market participants particularly focused on Chinese and US demand.

WTI Slides Below $90 on Weak China Data, Iran Nuclear Talks - Oil futures nearest delivery registered sharp losses on Monday, although all petroleum contacts trimmed a portion of earlier declines. This came after bearish macroeconomic data out of China prompted a reassessment of Asian demand growth for the second half of the year, while tentative signs of a breakthrough in Iranian nuclear talks could lead to an end of Western sanctions on the country's crude-oil exports. After 17 months of back-and-forth diplomatic talks, U.S. and European negotiators appear to be closing in on some sort of resolution to Iran's nuclear deal that could see a revival of the 2015 Joint Comprehensive Plan of Action (JCPOA). Iranian Foreign Minister Hossein Amir Abdollahian said Tehran will deliver its final response to Brussels no later than midnight Monday, adding that "We are looking for a good, stable and strong agreement, but if the other party talks about plan B, we also have plan B," he warned, according to Iranian journalist Sarah Massoumi. While Iran doesn't publish figures for oil production or exports, analysts estimate that it already sells as much as 1 million bpd to China and other Asian countries that is being re-branded and disguised as oil sold by the third country. The government's budget plan forecasts daily sales of 1.4 million bpd for the year through March 2023 despite Western sanctions. On the macroeconomic front, Chinese industrial production and retail sales badly missed expectations in July, showing a protracted demand weakness despite the government's efforts to shore up growth. Battered by COVID-19 lockdowns, China's industrial output rose 3.8% from a year ago, lower than June's 3.9% and missing economists' forecast of a 4.3% increase. Oil refining also fell as plants shut for maintenance. Retail sales also grew at a much slower-than-expected pace of 2.7%, compared with expectations for a 5% advance, pointing to weakness in China's consumer spending. The overall jobless rate fell to 5.4% from 5.5%, but the unemployment rate among 16- to 24-year-olds has jumped to 19.9% -- the highest on record. Furthermore, data also showed that China's apparent oil demand last month was about 10% lower year-on-year. On a session, nearby-month delivery West Texas Intermediate fell $2.68 to $89.41 per barrel (bbl), and the ICE Brent contract for October delivery dropped $3.05 to $95.10 per bbl. NYMEX September RBOB declined 9.43 cents to $2.9517 per gallon, while the NYMEX September ULSD contract plummeted 7.75 cents to $3.4403 per gallon.

China’s surprise rate cut, economic slowdown send oil prices plunging - China’s central bank unexpectedly slashed rates Monday after data showed economic activity slowed broadly in July — including consumer spending and factory output — sending oil prices down sharply and reigniting concerns of a global downturn.The underwhelming performance signaled that the recovery is tapering off amid an array of economic challenges, including continuing fallout from the nation’s “zero covid” policy and real estate crisis. But the specter of falling demand from the world’s second-largest economy alarmed energy markets. Oil prices slid more than 4.6 percent, pushing West Texas Intermediate crude to $88 a barrel.Much like the conflicting priorities that central bankers in other countries are facing, Chinese policymakers are closely tracking inflation and rising debt levels. But a sputtering domestic economy appeared to take priority, prompting the People’s Bank of China to cut its medium-term lending rate to 2.75 percent, or 10 basis points, for its first reduction since January.The central bank “seems to have decided it now has a more pressing problem,” said Julian Evans-Pritchard, an economist who covers China for the economic research firm Capital Economics. The July data shows lackluster economic momentum and a slowdown in credit growth, “which has been less responsive to policy easing than during previous economic downturns. Figures for both retail sales and industrial production grew last month compared with the same month last year, rising 2.7 percent and 3.8 percent, respectively. But they fell well short of forecasts of 5 percent and 4.6 percent growth, and both metrics slowed compared with increases recorded in June, according to the National Bureau of Statistics.The developments threw Wall Street into a sour mood before stocks rallied. By the closing bell, the Dow Jones industrial average gained more than 151 points or 0.4 percent, to close at 33,912. The broader S&P 500 index rose 17 points, or 0.4 percent, to end at 4,297, while the tech-heavy Nasdaq increased nearly 81 points, or 0.6 percent, to settle just above 13,128.China's central bank cut key lending rates in a surprise move on Aug. 15 to revive demand as data showed the economy unexpectedly slowing in July. (Video: Reuters)“The momentum of economic recovery has slowed,” government spokesman, Fu Linghui, said during a news conference, the Associated Press reported. “More efforts are needed to consolidate the foundation of economic recovery.”For months, a large contingent of Chinese home buyers have refused to pay mortgages on properties they’ve bought but that developers have yet to finish, leading to sinking real estate values. The boycotts, which are tied to more than 100 delayed projects, have raised concerns the property market could collapse, a scenario that would undermine the nation’s financial system and have ripple effects for the global economy. For more than a decade, construction and real estate have helped fuel China’s astounding economic growth and bolstered an emerging middle class, underscoring the significance of the mortgage crisis and the damage the unraveling crisis could unleash.The economic slowdown is more fallout from Beijing’s efforts to contain coronavirus infections. Last year, China more than regained pre-pandemic economic activity, leading major economies in the recovery from the public health crisis, despite limitations on travel and the lower efficacy rates of the country’s coronavirus vaccines. But the rebound appears to have been short-lived.

Oil prices fall as recession fears, Iran production weigh on demand outlook - Oil prices have extended losses after weak US and Chinese data spurred fresh concerns about a potential global recession that could hit energy demand. Brent crude futures fell 90 cents, or 1 percent, to $94.20 a barrel by 00:03 GMT. WTI crude futures fell 81 cents, or 0.9 percent, to $88.60 a barrel. Oil futures fell about 3 percent during the previous session as demand expectations are lowered in light of a string of soft economic indicators in major economies. Signs that Iran is moving towards a nuclear deal added to the downward pressure on prices, with an agreement seen allowing the country to restart sales into the world market. Analysts said Tehran could provide 2.5 million barrels a day, giving a much-needed shot in the arm to supplies, which have been hammered by sanctions on Russia in response to its attacks on Ukraine. Libya has also boosted production, helping prices drop to six-month lows and wiping out the gains seen after the Ukraine conflict started. But analysts warned that there might still be some way to go on an Iran agreement owing to upcoming US elections. "A deal with Iran would likely not be popular with US voters and so is hard to envisage before the November mid-terms," said National Australia Bank's Ray Attrill. "Markets are currently prone to optimism, though, and hopes for a deal... have added to downward pressure on oil prices." Iran responded to the European Union's "final" draft text to save a 2015 nuclear deal on Monday, an EU official said, but provided no details on Iran's response to the text. The Iranian foreign minister called on the United States to show flexibility to resolve three remaining issues. China's central bank cut lending rates to revive demand as data showed the economy slowing unexpectedly in July, with factory and retail activity squeezed by Beijing's zero-Covid policy and a property crisis. China's fuel product exports will rebound in August to near the highest for the year so far after Beijing issued more quotas in June and July, although broader curbs are set to cap shipments at seven-year lows for 2022, analysts and traders said. In the United States, total output in the major US shale oil basins will rise to 9.049 million bpd in September, the highest since March 2020, the U.S. Energy Information Administration (EIA) said in its productivity report on Monday.

Brent, WTI Plunge 3% on Progress in US-Iran Nuclear Talks -- West Texas Intermediate futures settled lower for the third consecutive session on Tuesday amid signs of progress towards reviving a 2015 nuclear accord with Iran after European and U.S. diplomats signaled compromise over the lifting of sanctions on more than a million barrels of Iranian crude oil, while traders await the release of weekly inventory data in the United States with expectations for commercial crude stockpiles to have sustained a building pattern through the second week of August. Tuesday's lower settlements follow media reports pointing to an apparent breakthrough in Iranian nuclear talks after European diplomats confirmed this morning the receipt of an official response from Tehran, calling it a constructive proposal. The same sentiment was echoed today by U.S. State Department spokesperson Ned Price who said the White House is carefully studying the proposal and would continue to consult with EU partners on the next step. Last week, a State Department spokesperson hinted the White House was "ready to quickly conclude a deal on the basis of the EU's proposals." Arguably, Iran sells as much as 1 million bpd to China and other Asian countries with some of those exports rebranded and disguised as oil sold by a third country. The government's budget plan forecasts daily sales of 1.4 million bpd for the year through March 2023 despite Western sanctions. The European Union is clearly more interested in reaching a quick deal with Tehran than other parties to the accord, given that sanctions on Russian seaborne crude oil exports take effect in February 2023. Wire services suggest Iran is seeking some sort of guarantee from the Biden Administration that the country would be compensated should a future U.S. president pull out of the agreement. Mohammad Marandi, an adviser to the Iranian negotiating team at talks on the deal in Vienna, said on Tuesday, "The main issue facing the revival of the deal is the guarantees requested from the Iranian side ensuring Iran will be compensated in case future US administrations decide to withdraw again from the deal and while no real solution has been put forth." Al Jazeera, citing sources familiar with Iranian negotiators, this morning reported Tehran's written response to the U.S. proposal did not include demands from Tehran to remove the Islamic Revolutionary Guard Corps from the U.S. list of foreign terrorist organizations and for the International Atomic Energy Agency to drop investigations into undeclared nuclear sites. Those two demands from Tehran had previously held back a revival of the 2015 nuclear accord, with Washington refusing both demands and EU participating countries unwilling to relent on the demand for IAEA inspections. NYMEX September West Texas Intermediate fell $2.88 to a nearly seven-month low settlement on the spot continuous chart at $86.53 bbl, and ICE October Brent futures settled down $2.76 at a $92.34 bbl six-month low on the spot chart. NYMEX September RBOB fell 5.1 cents to $2.9007 gallon, while the NYMEX September ULSD contract advanced 3.99 cents to $3.4802 gallon.

Oil prices rise US$1 after drop in U.S. stockpiles -- Oil prices rose over $1 on Wednesday, rebounding from six-month lows hit the previous day, as an unexpectedly large drop in U.S. oil and gasoline stocks reminded investors that demand remains firm, if overshadowed by the prospect of a global recession. Brent crude futures were last up 82 cents, or 0.9%, to $93.16 a barrel by 0630 GMT. West Texas Intermediate (WTI) crude futures also rose 85 cents, or 1%, to $87.38 a barrel. The contracts slumped about 3% on Tuesday as weak U.S. housing starts data spurred concerns about a potential global recession. "A drawdown of U.S. gasoline stockpiles for a second straight week has reassured investors that demand is resilient, prompting buys," "Still, the oil market is expected to stay under pressure, with fairly high volatility, due to worries over a potential global recession," U.S. crude and fuel stocks fell in the latest week, according to market sources citing American Petroleum Institute figures on Tuesday. Crude stocks declined by about 448,000 barrels for the week ended Aug. 12. Gasoline inventories fell by about 4.5 million barrels, while distillate stocks were down by about 759,000 barrels, according to the sources. An extended Reuters poll showed on Tuesday that crude inventories probably dropped by around 300,000 barrels last week and gasoline stockpiles likely fell 1.1 million barrels, while distillate inventories rose. "There are a number of bearish factors and downside risks for oil at the moment, from the threat of recession to the poor data in China and the possibility of a nuclear deal between the U.S. and Iran," Oil supply could rise if talks to revive Iran's 2015 nuclear deal with world powers are successful, which would remove sanctions on Iranian oil exports, analysts said. The European Union and United States said on Tuesday they were studying Iran's response to what the EU has called its "final" proposal to save the deal after Tehran called on Washington to show flexibility. "When WTI prices were well north of $100, the revival of the Iranian nuclear agreement looked like a potentially winning mid-term issue but it appears to be a less compelling case in the current price and security context," "We would note that the Europeans are likely more incentivised to secure a deal given the looming supply shortage the continent faces when Russian sanctions come on in December." The EU will stop buying all Russian crude oil delivered by sea from early December and ban all Russian refined products two months later as part of sanctions imposed over Moscow's invasion of Ukraine.

WTI Spikes After Huge Crude Inventory Draw, US Crude Exports Hit Record High -- Despite hopes of an imminent Iran nuke deal (and the subsequent supply), oil prices are higher this morning after the new head of OPEC said gobal oil markets face a high risk of a supply squeeze this year as demand remains resilient and spare production capacity dwindles. “We are running on thin ice, if I may use that term, because spare capacity is becoming scarce,” OPEC Secretary-General Haitham Al-Ghais said. “The likelihood of a squeeze is there.” In the meantime, all eyes are on the official US data for signs of lagging demand (or not as gas prices have dropped). DOE:

• Crude -7.06mm - biggest draw since April 2022
• Cushing +192k
• Gasoline -4.64mm
• Distillates +766k

After 2 weeks of builds, US crude stocks crashed over 7 million barrels last week - the biggest draw since April. Cushing inventories rose for the 7th straight week and gasoline stocks also tumbled... The headline draw in crude stockpiles was boosted by the withdrawal of another 3.4 million barrels from the SPR last week. Total nationwide oil inventories — including commercial stockpiles and oil held in the SPR — fell by 10.46 million barrels in the week to August 12. That’s the biggest total crude draw since May. Additionally, US crude exports set a new record at 5M b/d. That’s from all the replacing that European refiners have been making to offset Russian oil. Gasoline demand rose once again last week and is now back near the year's highs... US crude production dropped modestly last week as the rig count has stabilized... WTI had rallied up to around $88 ahead of the official data and surged higher on the big draw...Graphics Source: Bloomberg

Oil Rallies as Inventories Fall; Gasoline Demand Recovers -- After volatile trading for most of the session, oil futures settled Wednesday with solid gains supported by a steep drop in U.S. commercial crude and gasoline inventories along with a rebound in gasoline demand that climbed to the highest level since the week leading up to the July 4th holiday in a sign that falling prices at the gas pump incentivized Americans to take on late-summer road trips. Other economic indicators released Wednesday also point to steady consumer demand for purchases at stores, online and restaurants, with core retail sales, which excludes cars and gasoline, rising 0.7% in July, matching the June increase, the Commerce Department said Wednesday. The incoming data suggests Americans are maintaining their spending habits despite the highest inflation in nearly four decades. Against this backdrop, the recent demand figures published by the U.S. Energy Information Administration look particularly encouraging for the final weeks of summer, showing weekly consumption climbing to the second highest rate this year at 9.348 million barrels per day (bpd), up 225,000 bpd or 2.4% from the previous week. On a four-week average basis, gasoline demand in the United States was still some 4.2% below last year's four-week average of 9.466 million bpd. The late-summer surge in gasoline demand runs counter to the weakness during the second half of June after the U.S. retail gasoline average topped $5 gallon for the first time on record. On Monday, Aug. 15, the Department of Transportation reported vehicle miles traveled on U.S. roads were down 4.8 billion miles or 1.7% in June compared with year prior. Since mid-June, retail gasoline prices have declined for nine consecutive weeks through Monday according to EIA data, falling below $4 gallon for the first time since the final week of February. The increase in gasoline consumption, along with strong exports at 902,000 bpd during the second week of August, 190,000 bpd above the three-year average, led to a 4.6-million-barrel (bbl) drawdown in gasoline stocks to 215.7 million bbl. Analysts expected gasoline inventories to have decreased by 900,000 bbl. U.S. commercial crude oil inventories fell 7.1 million bbl last week to 425 million bbl and are now about 6% below the five-year average, with the decline following an increase in commercial reserves of more than 9 million bbl since the final week of July. The sizable drawdown was realized as U.S. crude exports more than doubled from the previous week to a record high 5 million bpd during the week ended Aug. 12 while domestic crude production fell 100,000 bpd to 12.1 million bpd. A 3.4-million-bbl drawdown from the Strategic Petroleum Reserve was also the smallest draw from emergency reserves since late April. At the same time, the central bank indicated it could soon slow the speed of monetary tightening, while also acknowledging the vulnerable state of the economy and risk to the downside for economic growth. Following the minutes release, CME FedWatch Tool showed the probability for a 50-basis-point rate hike in September increased to almost 60% compared with 38.5% for a larger 75-basis-point hike. At settlement, NYMEX September West Texas Intermediate advanced $1.58 to $88.11 bbl, while ICE October Brent futures gained $1.31 to $93.65 bbl. NYMEX September RBOB gained 3.38 cents to $2.9345 gallon, while the NYMEX September ULSD contract rallied 13.72 cents to $3.6174 gallon.

Oil rises as US crude stocks data, tight supply from Russia raise concerns (Reuters) -Oil prices rose on Thursday as robust U.S. fuel consumption data and expected falls in Russian supply late in the year offset concerns that a possible looming recession could undercut demand. Brent crude futures climbed $1.43, or 1.5%, to $95.08 a barrel by 0900 GMT. U.S. crude futures gained $1.15, or 1.3%, to $89.26 a barrel. Prices rose more than 1% during the previous session, although Brent at one point fell to its lowest since February. Futures have fallen over the past few months, as investors have pored over economic data that has spurred concerns about a potential recession that could hurt energy demand. British consumer price inflation jumped to 10.1% in July, its highest since February 1982, intensifying a squeeze on households. China's refining output remained lacklustre in July as strict COVID-19 lockdowns and fuel export controls curbed production. Supporting prices, U.S. crude stocks fell by 7.1 million barrels in the week to Aug. 12, Energy Information Administration (EIA) data showed, against expectations for a 275,000-barrel drop, as exports hit 5 million barrels per day (bpd), the highest on record. Bans by the European Union on Russian seaborne crude in December and on products imports early next year could dramatically tighten supply and drive up prices, analysts warn. "The EU embargoes will force Russia to shut in around 1.6 million barrels per day (bpd) of output by year-end, rising to 2 million bpd in 2023," consultancy BCA research said in a note. "EU embargoes on Russian oil imports will significantly tighten markets and lift Brent to $119 a barrel by year-end." For now, however, Russia has started to gradually increase oil production after sanctions-related curbs and as Asian buyers have increased purchases, leading Moscow to raise its forecasts for output and exports until the end of 2025, an economy ministry document reviewed by Reuters showed. Russia's earnings from energy exports are expected to rise 38% this year partly due to higher oil export volumes, according to the document, in a sign that supply from the country has not been affected as much as markets originally had expected.

Oil Rises Again as Strong US Demand Eases Recession Fears - Oil rose for a second day as a bullish US stockpile report blunted concerns over the potential effects of an economic slowdown. West Texas Intermediate rallied above $90 a barrel after this week’s Energy Information Administration report offset concerns over a potential recession wrecking the oil market. Geopolitical tremors accelerated the rally as Ukrainian President Volodymyr Zelenskiy said he sees no end to the war without troop withdrawals during a meeting with Turkey’s President Recep Tayyip Erdogan. The EIA report surprised markets by signaling “the fundamentals may not be as negative to crude as thought just a week ago,” said Dennis Kissler, senior vice president of trading at BOK Financial. “However, traders are still worried about the overall economic outlook going forward, it’s keeping a very nervous trade to the futures market.” Prices are fluctuating partially because of declining market liquidity. Aggregate open interest over WTI contracts yesterday was the lowest since January 2015 at 1.54 million contracts. Crude is trading near the lowest level in more than six months after giving up the gains made since Russia’s invasion of Ukraine on fears of a global economic slowdown. Prices were even more hampered by the potential of a renewed Iran nuclear deal. The deal could bring back hundreds of thousands of barrels of Iranian crude could come back online per day once a deal is signed, bringing relief to a market starved for crude. WTI for September delivery rose $2.39 to settle at $90.50 in New York. Brent for October settlement climbed $2.94 to settle at $96.59 a barrel. European markets, which have been stretched due to the displacement of Russian barrels, will suffer additional tightness as Shell cuts its production at the biggest German refinery. The Rhineland oil refinery capacity was reduced due to low Rhine water levels. US crude exports reached 5 million barrels a day last week, surpassing a high set barely a month ago, EIA data show. The four-week average of gasoline supplied -- a proxy for demand -- rose to about 9.1 million barrels a day, coinciding with the longest streak of declines in pump prices since 2018.

Oil Futures Gain as Russia Halts Gas Exports to Europe -- Oil futures nearest delivery reversed higher in afternoon trade Friday following reports Gazprom, Russia's state-owned energy giant, plans to halt exports of natural gas into European Union starting Aug. 31 in a move that sent European natural gas prices to record-highs amid heightened concern over a deepening energy crisis this winter. Natural gas flows through the Nord Stream pipeline from Western Siberia to Europe will be closed for three days at the end of the month for maintenance, according to Gazprom's statement released Friday afternoon. The company cited "complex routine maintenance" of a single functioning turbine at the Portovaya compressor station as the reason behind the closure. Gas futures at Dutch Title Transfer Facility rose as much as 9% after the announcement as traders remain skeptical over Russia's further moves over the controversial pipeline after reducing flows to just 20% of capacity this month. Gas prices posted the longest run of weekly gains this year on Friday, intensifying the pain for industries and households, and threatening to push economies into recession. Earlier in the session, oil futures came under heavy selling pressure amid reports that multilateral talks aimed at reviving the 2015 nuclear accord with Iran entered its final stage this week after European Union sent a final draft proposal to Tehran and have received an official response. While details of the response have not been made public, Iran is said to have abandoned some of its core demands while requesting for certain guarantees from the U.S. and European Union that the deal would be not be broken again. Analysts are divided on how much oil Iran could bring to market in the short-term should sanctions be lifted since Iran doesn't publish figures for oil production or exports. Some analysts suggest the country still has the capacity to swiftly ramp up exports to its pre-2018 level of about 2 million barrels per day (bpd), while others suggest years of underinvestment and disrepair left room for the return of only a few hundred thousand at best. Underlining gains for the oil complex this week is weekly inventory data from the Energy Information Administration showing U.S crude oil exports hit 5 million bpd during the week-ended Aug. 12, the highest on record, according to the midweek data, with West Texas Intermediate trading at a steep discount to international benchmark Brent making purchases of U.S. crude more attractive to foreign buyers. Redirection of Russian crude flows from the European market could be one of the reasons behind the surge in crude-oil exports from the U.S. Gulf Coast. The strong pace of crude exports along with a surprise drop in U.S. oil production sent commercial crude oil stocks tumbling by 7.1 million barrels (bbl) during the week-ended Aug. 12, compared with expectations for inventories to rise by 100,000 bbl. Wednesday's inventory data was also supportive for the gasoline complex, showing demand for motor fuel climbed to the second highest rate this year at 9.348 million bpd, up 225,000 bpd or 2.4% from the previous week. On a four-week average basis, gasoline consumption was 4.2% below last year's four-week average of 9.466 million bpd. The recent demand figures might suggest that falling prices at the gas pump, down a ninth week per EIA data, has incentivized Americans to take late summer road trips. At settlement, NYMEX September West Texas Intermediate added 27 cents to $90.77 bbl, while ICE October Brent futures gained 13 cents to $96.72 bbl. NYMEX September RBOB decreased 0.86 cents to $3.0175 gallon, while the NYMEX September ULSD contract rose 5.08 cents to $3.7005 gallon.

Oil prices edge up, but suffer a loss for the week Natural-gas futures settle a fresh 14-year high Oil futures settled higher on Friday, but the potential for an Iranian nuclear deal that may lead to higher global supplies and the potential for a slowdown in energy demand kept prices lower for the week. Oil prices gave up early Friday declines, even with U.S. benchmark stock indexes lower as investors braced for more volatility amid concerns the Federal Reserve was far from done with interest rate increases. Much of the bearish pressure for oil this week came from the "dollar's hot streak, hitting one-month highs and gaining over 2.5% in the past 6 trading sessions," analysts at the Kansas City energy team at StoneX wrote in a Friday newsletter. Federal Reserve officials spoke of the need for further rate hikes and investors seemed to reassess Wednesday's minutes from the U.S. central bank's July meeting "as being more hawkish than before," they said. "It seems many officials are on board for another 50--75-point rate hike in September." Oil traders have fretted over the possibility of higher U.S. interest rates that could bring on a recession and cut demand for the commodity. Meanwhile, supporting a mixed price environment for oil, which rose Friday, but fell for the week, data Wednesday from the Energy Information Administration showed "robust demand, while Russia showed its robust ability to find new buyers" for its oil, Oil traders also kept an eye on developments tied to the Iran nuclear deal. A revival of the deal could lead the U.S. to lift sanctions on Iran which in turn would be allowed to contribute more oil to the global market. Elsewhere in energy trading, natural-gas futures finished higher after posting back-to-back losses. They topped Tuesday's settlement to mark a fresh 14-year high. Russia's state-owned energy exporter Gazprom said Friday that it would shut down the Nord Stream natural-gas pipeline to Germany for three days for maintenance later this month, according to The Wall Street Journal. Russian crude output holding up better than expected prompted Warren Patterson, head of commodities strategy at ING, to cut his oil forecasts in a note dated Friday titled "Sticky Russian oil output requires a crude rethink." ING's third and fourth-quarter Brent forecasts were cut from $118 a barrel and $125 a barrel to $100 and $97, respectively. ING's full-year 2023 Brent forecast has been reduced from $99 to $97, he said. "Since Russia's invasion of Ukraine, it has become more difficult to get transparency on Russian oil output with the government no longer publishing monthly data. However, the IEA estimates that Russian oil production was around 310Mbbls/d below prewar levels in July. The decline in output has been much more modest than many in the market were expecting, despite sanctions," said Patterson. "Stubborn Russian oil output and weaker than expected demand growth mean the oil market is likely to remain in surplus for the remainder of this year and into early next year, which should limit the upside in oil prices. Time spreads also point toward a looser market, with the backwardation in the prompt spreads narrowing significantly in recent weeks," he added.

Oil prices down 1.5% for the week on recession jitters --Oil prices steadied on Friday, but fell for the week on a stronger U.S. dollar and fears that an economic slowdown would weaken crude demand. Brent crude futures settled at $96.72 a barrel, gaining 13 cents. U.S. West Texas Intermediate crude ended 27 cents higher at $90.77. Both benchmarks fell about 1.5% on the week. Oil briefly jumped in volatile trade on comments made by Richmond Federal Reserve President Thomas Barkin that the Fed would balance its rate hike path with uncertainty over any impact on the economy. But crude pared its gains as investor concerns about upcoming rate hikes settled back in. Strength in the U.S. dollar hit a five-week high, which also capped crude's gains as it make oil more expensive for buyers in other currencies. "Although the oil complex has been able to shrug off a strong dollar on any given session, extended strong dollar trends will pose a major headwind against sustainable oil price gains," In a sign of easing oil supply tightness, the price gap between prompt and second-month Brent futures has narrowed by about $5 a barrel since the end of July to under $1. The spread for WTI has shrunk to a 39-cent premium from a nearly $2 premium in late-July. Haitham Al Ghais, the new secretary general of the Organization of the Petroleum Exporting Countries, told Reuters he was optimistic about oil demand into 2023. OPEC is keen to ensure Russia remains part of the OPEC+ group, Al Ghais said ahead of a Sept. 5 meeting. Supplies could tighten again when European buyers start seeking alternative supplies to replace Russian oil ahead of European Union sanctions that take effect from Dec. 5. "We calculate the EU will need to replace 1.2 million barrels per day of seaborne Russian crude imports with crude from other regions," consultancy FGE said in a note. Data earlier this week showed U.S. crude inventories fell sharply as world's top producer exported a record 5 million barrels of oil per day last week, with oil companies finding demand from European nations looking to replace Russian crude. However, the number of U.S. oil rigs, an early indicator of future supply, was unchanged at 601 this week, according to Baker Hughes Co, as energy companies slowly increase production to pre-pandemic levels with shale oil output in September expected to hit its highest since March 2020.

Saudi Arabia executions already nearly double from last year - — Saudi Arabia has executed 120 people in the first six months of 2022, according to a rights organization, nearly double the number put to death in all of last year despite its promises to reduce capital punishment. As early as 2018, Saudi Arabia’s de facto leader, Crown Prince Mohammed bin Salman, spoke of curtailing the death penalty, one of a string of public promises made by the young prince as he ramped up efforts to modernize the kingdom. After a major drop in 2020, 65 people were put to death in 2021; then in just the first six months of this year, the number of executions nearly doubled. By June, the numbers for this year had exceeded those of 2020 and 2021 combined, according to a statement from the European Saudi Organization for Human Rights (ESOHR) sent to media Aug. 9. “If Saudi Arabia continues to execute people at the same pace during the second half of 2022, they will reach an unprecedented number of executions, exceeding the record high of 186 executions in 2019,” the report stated. Most of the executions in 2022 took place on one day in March when 81 men were put to death in the single largest mass execution in years. New York-based Human Rights Watch quoted activists as saying that 41 of those killed belonged to the Shiite sect of Islam, whose adherents are largely seen as heretics by many hard-line Sunni Muslims in Saudi Arabia. Shiites have long complained of marginalization in the country and are viewed with suspicion by many Sunnis, who often see them as sympathizers of rival Iran, the world’s largest Shiite country. The ESOHR found that in the March mass execution, which the group said was the largest in Saudi history, 58 of the 81 men were executed for nonlethal offenses, and 41 were executed for participation in pro-democracy protests. None of the bodies were returned to the families, the group added. Families typically push to retrieve bodies of those executed but are frequently faced with stonewalling from the government. One reason may be that public funerals could turn into protests or the graves could become rallying points. In a statement that announced the mass execution in March, the Interior Ministry said the order was to carry out death sentences for “those who had embraced deviant thought, and other deviant methods and beliefs.” It linked some of the men to terrorist activities. Last August, seven United Nations officials penned a letter to the Saudi government concerning the cases of two Shiite men, Mohammed al-Shakhouri and Asaad Shubbar, who had been sentenced to death. The letter — signed by the special rapporteur on extrajudicial, summary or arbitrary executions, among others — said the trials of the two men “did not meet due process guarantees and [were] for crimes which do not appear to meet the ‘most serious crimes’ threshold as required under international law.” The two men were part of March’s mass execution. The ESOHR said this decision “exemplifies the opacity in Saudi Arabia’s criminal justice system.” According to the ESOHR’s data, collated from government announcements, 72 of this year’s executions were for “discretionary offenses,” crimes not specified in Islamic law, despite promises by Mohammed to end the use of the death penalty for such offenses.

Turkey Strikes Northern Syria, Killing At Least 17, As Cross-Border Offensive Looms - -Tuesday into Wednesday has witnessed heavy fighting between Kurdish YPG and Turkish forces along the Syrian border town of Kobane, at a moment Turkish President Erdogan's planned large scale cross-border offensive looms. Already there are Turkish media reports claiming that a Turkish military convoy has entered Jarablus, northern Syria - with unverified social media photos circulating that purport to show convoys amassing.Turkish shelling of Syrian Kurdish positions has reportedly killed and wounded civilians including a 14-year old child. And a series of airstrikes have hit Syrian government border posts, killing 17. However, it's unclear how many among these were Syrian national troops, Kurdish militia fighters, or pro-government militia members who fight alongside the army."Seventeen fighters were killed in Turkish air strikes that hit several Syrian regime outposts... near the Turkish border," one pro-opposition war monitor told Middle East Eye. Turkish military officials have said they've killed five Kurdish militants in the fresh assault.Turkey's defense ministry said one of its soldiers was killed in a Kurdish counter-strike with artillery. A statement said that on the Syrian side of the border "Thirteen terrorists were neutralized" in "retaliation".A Syrian government statement said meanwhile that "Any attack on a military outpost run by our armed forces will be met with a direct and immediate response on all fronts," according to state-run SANA.So far throughout the war in Syria, Turkey has conducted three major cross border operations going back to 2016, in efforts to prevent any level of Kurdish autonomy from forming, as part of what it deems border stabilization efforts. At the same time it has long supported jihadist groups which seek to ethnically cleanse Kurds, while at the same time trying to topple the Syrian government under Bashar al-Assad. Over the period, Turkey has seized hundreds of kilometers of Syrian sovereign territory and has effectively pushed the de facto border demarcating control some 30km deep into Syria. The United States, which has limited forces on the ground (most estimates are between 1,000 to 2,000 special forces soldiers), has tended to stay out of Turkey's way, despite Kurds making up the bulk of the US-backed and trained Syrian Democratic Forces (SDF). Poland is buying South Korean jets to replace aging Soviet fighters - On July 27, Poland signed one of its largest arms deals ever for more artillery, tanks, and aircraft to modernize its military amid heightened tensions in Europe.Warsaw's $14.5 billion deal with South Korea — the largest ever for South Korea's defense industry — includes 1,000 K2 Black Panther tanks, nearly 700 K9 self-propelled howitzers, and 48 FA-50 light c ombat aircraft.The size of the contract and Warsaw's decision to buy from anemerging military exporter also reflects thinking influenced by the fraught state of European geopolitics."The criminal assault carried out by the Russian Federation, targeting Ukraine, and the unpredictable nature of Putin means that we need to accelerate the equipment modernization even further," Polish Defense Minister Mariusz Błaszczak said in an interview with Polish outlet Defense 24.

Hopes Dim For 'Imminent' Nuclear Deal As US Blames Iran For Salman Rushdie Attack - Not for the first time, the past hours of optimistic reports surrounding a potential 'imminent' Iran nuclear deal appears to be premature as the Aug.15th EU deadline for Iran to accept the final text could come and go, given the latest statements out of the US administration:

• If Iran cannot accept a mutual return to JCPOA, US is fully prepared to continue vigorous enforcement of sanctions
• US will provide response on EU proposal to revive Iran nuclear deal privately to EU coordinator

There's clearly a threat of continued sanctions enforcement by the US here, signaling that even if Iran presents willingness to compromise, Washington might still not be ready to play ball. But the key plot twist within the last hour has centered on the US State Department's Ned Price for the first time referencing the Salman Rushdie assassination attempt in connection with a potential hold-up in implementing a final JCPOA deal...Ned Price: "It's no secret Iranian regime has been central to threats against #SalmanRushdie's life. We've heard Iran officials seek to incite violence... even recently with gloating that took place in aftermath of attack. It's absolutely outrageous, despicable‌ & intolerable." August 15, 2022 Rushdie, who was stabbed ten times on Friday by a New Jersey man with what appeared to be a motivation of religious extremism and terrorism, and is currently recovering in a New York hospital, has had a fatwa and bounty on his head from the Ayatollahs of Iran spanning back to 1989.

What Would Iran Deal Mean for Oil? A last-ditch attempt by Europe to revive the Iranian nuclear deal has stoked speculation that millions of barrels of oil are set to flood world markets. The return could be swift if Tehran’s previous comeback is any guide. Should an agreement materialize, Iran could ramp up sales within months, raising supply by hundreds of thousands of barrels a day before the end of the year, according to the International Energy Agency. That would help relieve a tight global market, which has been roiled by Russia’s invasion of Ukraine. When sanctions were eased following the 2015 deal, Iran’s crude output was restored more quickly and more completely than analysts had predicted. With no evidence of damage to oil fields or facilities, that feat may be repeated. The Persian Gulf nation also has an estimated 100 million barrels of crude and condensate in storage that can be released to the market almost immediately. Tehran has this week responded to a “final” proposal to reactivate the 2015 accord, and the European Union is now consulting the US on a “way ahead.” Seen as the last hope of rescuing the deal, the blueprint is aimed at limiting Iran’s nuclear activity in exchange for easing sanctions, including on its oil. The prospect of a quick return of Iranian supplies has helped keep benchmark Brent crude below $100 a barrel this month, a level it’s mostly exceeded since the start of the Ukraine war in February. Of the 100 million barrels of oil in storage, about 40 million to 45 million are crude and the rest condensate, a light oil that’s pumped out together with gas, according to Iman Nasseri, Dubai-based managing director of energy consultants FGE. Once stored oil is released, the bigger challenge will come in reviving dormant oil fields and arranging the contracts, vessels and insurance to ship those barrels. Yet Iran has continued to maintain many of its fields -- and key customer relationships -- during the years it’s been shut out of global trade. The country could add as much as 900,000 barrels a day of production within three months of sanctions being eased, and potentially pump near its full capacity of about 3.7 million barrels a day within six months, Nasseri said. Iran is producing about 2.5 million barrels of crude a day now, according to data compiled by Bloomberg. Following the 2015 deal, it took about three months to add 700,000 barrels a day and a year to get back to full capacity. That then fell apart with Donald Trump’s 2018 withdrawal from the agreement. The pace of Tehran’s renewed oil comeback will be closely watched, with fuel demand recovering from the pandemic, Russian supplies shunned by multiple buyers, and most of Iran’s fellow OPEC+ members struggling to boost output. Talks with world powers have dragged on for almost 18 months, dogged at various stages by political squabbles over terrorism sanctions, Iran’s demands for guarantees the US won’t again renege on the deal, Russia’s war on Ukraine and nuclear inspections. A revived agreement remains far from certain.

Goldman Says Iran Nuclear Deal Is Unlikely -A deal to revive a nuclear agreement between Iran, the EU and the US is unlikely to be struck in the near term, according to Goldman Sachs Group Inc., which said that even if a pact were agreed, additional oil wouldn’t flow until next year. “Our view continues to be that a deal is still unlikely in the short term, with a stalemate mutually beneficial,” analysts including Callum Bruce said in an Aug. 16 note. Even with a breakthrough, there would likely be a “phased implementation,” with barrels unlikely to return until the start of 2023 at the earliest, they said. Oil markets have been transfixed in recent days by the possibility that an agreement could be struck to save the Joint Comprehensive Plan of Action, a nuclear pact that was abandoned by former US President Donald Trump. Given that an accord could clear the way for Tehran to resume crude exports without US sanctions, global benchmark Brent closed on Tuesday at the lowest since February. At present obstacles remain, especially regarding so-called continuity guarantees the US is unable and unwilling to provide, the analysts said. In addition, Iran has “weak incentives” to agree given it’s already exporting about 1 million barrels a day while also making progress toward medium-term nuclear goals, they said. A return of Iranian supply would reduce the bank’s existing 2023 Brent forecast of $125 a barrel by $5 to $10, they said. Brent last traded at $92.49 a barrel.

Iran Confirms Drone Sale To Russia - But What Will It Buy In Exchange? - Small birds do not taste well and their small bones makes eating them a fickle. I will have overcome that though as I will now have to eat some crow.On July 12 Moon of Alabama headlined:No, Iran Will Not Deliver Armed Drones To RussiaIn March this year we were treated to an onslaught of obviously false claims that China would deliver weapons to Russia for the fight in Ukraine....Now an equally stupid claim was launched by the very same liar who launched the fake Chinese weapons claim. White House: Iran set to deliver armed drones to Russia - AP - Jul 7, 2022... Russia has absolutely no need to buy drones from Iran. Besides that it is dubious that Iran would be able to deliver some and certainly not 'several hundreds'.... The whole issues is just a talking point designed to put Iran and Russia into the same 'baddies' binder for Biden's talks in the Middle East. The countries there may not like Iran but they will certainly not allow for a condemnation of Russia. The whole idea is, as many others Sullivan had, stupid to begin with. So no, there will not be any Iranian drones going to Russia or fly over Ukraine.I, like the other Iran-watch writers I quoted, was wrong.Elijah J. Magnier, who has excellent contacts within the 'axis of resistance' led by Iran, reports:Russia buys 1,000 drones from Iran and expands the level of strategic cooperation