oil price at a 8 month low; US oil supply at a 19½ year low; distillates exports at a 51 month high; record low DUCs

oil prices at a 8 month low; US oil supplies at a 19½ year low; SPR at a 38 year low, distillates exports at a 51 month high; DUCs at a record low, completions at a three month low; DUC backlog is 4.4 months

oil prices fell for a fourth straight week and ended at an 8 month low as traders began to price in the effects of a monetary policy induced recession...after falling 1.9% to $85.11 a barrel last week as an elevated US inflation reading presaged this week's big interest rate hike, the contract price for the benchmark US light sweet crude for October delivery fell by more than 1.5% in Asian trading on Monday, pressured by expectations of weaker global demand and by U.S. dollar strength ahead of the expected large increase​s​ to interest rates, but reversed higher in afternoon trading in New York following industry surveys showing that OPEC and ​its ​10 allied partners missed their August production target, heightening concerns over tight ​global ​supplies​ to settle 62 cents higher at $85.73 a barrel, as traders weighed up the demand outlook amid easing Covid lockdown measures in China and the impact of slowing global growth...oil prices continued higher in overseas trading on the miss in OPEC+ production on Tuesday, but softened in New York ahead of monetary policy meetings by the Fed and the Bank of England that ​were expected to lead to aggressive rate hikes, and finished $1.28 lower at $84.45 a barrel as a strong U.S. dollar, rising yields and concerns over demand as the global economy slows weighed on crude prices, as trading in the October oil contract expired, and the more-active contract for November US light sweet crude fell $1.42 to $83.94 a barrel....after trading slightly lower overnight following an American Petroleum Institute (API) report of a modest build of crude oil inentories, oil prices jumped as much as 3.2% early on Wednesday after Russian President Putin announced a partial military mobilization, escalating the war in Ukraine and raising concerns ​about tighter oil and gas supply, but turned lower ahead of the noon hour in New York after EIA data reported U.S. crude and refined products inventories ​had ​increased sharply during the third week of September, while domestic demand remained a full 7% below last year's consumption rate, providing further evidence of demand destruction amid a broader economic slowdown, and then fell about 1% to a near two-week low of $82.94 a barrel in volatile trading after the Fed delivered another hefty rate hike that could reduce economic activity and demand for oil and as the U.S. dollar index surged to a 20 year high....however, oil prices bounced back in Asian markets on Thursday, as oil traders worried about tight supplies after Putin called up 300,000 reservists to fight in Ukraine and hinted that he was prepared to use nuclear weapons, and continued higher in New York as traders balanced concerns over short supplies this winter due to Putin's to cut oil exports to Europe, against sputtering demand fundamentals as central banks rush​ed​ to jack up interest rates to fight inflation, before paring the day's gains to settle 55 cents higher at $83.49 a barrel, hanging on for a slight gain after a slew of rate hikes around the world reaffirmed that central bankers would continue to fight inflation at the expense of economic growth...oil prices then tumbled 3% in overseas trading on Friday, as demand fears were stoked by rising interest rates and a stronger dollar​,​ and contined tumbling in US trading before settling $4.75, or 5.7% lower, at an eight month low of $78.74 a barrel, on fears that rising interest rates would tip major economies into recession, cutting demand for oil, and ​on ​a fresh twenty year high for the US dollar....oil prices thus finished down about 7.5% for the week, while the contract for November delivery, which had started the week at a 37​ cent​ discount to the expiring October contract, finished 7.1% lower...

At the same time, natural gas prices finished lower for a fifth consecutive week following the largest inventory increase of this year....after falling 2.9% to $7.764 per mmBTU last week on a bearish storage report and on the belief that a railroad strike had been averted, the contract price of US natural gas for October delivery continued lower in early trading on Monday, as analysts cited bearish technical momentum, and held near a six-week low through the session before settling 1.2 ce​n​ts lower at $7.753 per mmBTU on near record output and on forecasts for less demand over the next two weeks than had been expected....natural gas prices shed another 3.5 cents and settled at another six week low of $7.717 per mmBTU​ ​on Tuesday, despite a bout of near-term heat and a drop in production, on expectations ​that ​demand would decline when the Cove Point LNG plant in Maryland shuts for a couple weeks of maintenance in October...however, natural gas prices gained ground for the first time in five sessions on Wednesday as global supply doubts following Putin's threat ​to launch nuclear weapons overshadowed fading demand, and natural gas finished 6.2 cents higher at $7.779 per mmBTU...​but ​natural gas prices returned to the red on Thursday as a triple digit injection into storage exceeded expectations and eased concerns about winter supplies​, while prices finished 69.0 cents lower on the day in settling at a 10 week low of $7.089 per mmBTU...natural gas prices then followed oil prices lower on Friday and settled down 26.1 cents or 4% at $6.828 per mmBTU and thus finished 12.1% lower on the week, the biggest weekly percentage drop since June, and at another 10 week low...

The EIA's natural gas storage report for the week ending September 16th indicated that the amount of working natural gas held in underground storage in the US rose by 103 billion cubic feet to 2,874 billion cubic feet by the end of the week, which still left our gas supplies 197 billion cubic feet, or 6.4% below the 3,071 billion cubic feet that were in storage on September 16th of last year, and 332 billion cubic feet, or 11.3% below the five-year average of 3,125 billion cubic feet of natural gas that were in storage as of the 16th of September over the most recent five years....the 103 billion cubic foot injection into US natural gas working storage for the cited week was above all ​the ​estimates from Bloomberg survey of analysts, whose expectations called for an injection of between 80 and 99 billion cubic feet, and was quite a bit more than the 77 billion cubic feet that were added to natural gas storage during the corresponding week of 2021, and also more than the average injection of 81 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 September 16th showed that after a big jump in our oil imports and another large withdrawal of oil from our SPR, we were able to add oil to our stored commercial crude supplies for the 5th time time in 8 weeks, and for the 19th time in the past 43 weeks....Our imports of crude oil rose by an average of 1,155,000 barrels per day to average 6,947,000 barrels per day, after falling by an average of 988,000 barrels per day during the prior week, while our exports of crude oil rose by 25,000 barrels per day to average 3,540,000 barrels per day, which together meant that the net of our trade in oil worked out to an import average of 3,407,000 barrels of oil per day during the week ending September 16th, 1,130,000 more barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly unchanged 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 average​d a total​ of 15,507,000 barrels per day during the September 16th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,355,000 barrels of crude per day during the week ending September 16th, an average of 333,000 more barrels per day than the amount of oil than our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that a net average of 822,000 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 September 16th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 26,000 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 (+26,000) 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​ minor​ error of that ​size in this week’s oil supply & demand figures that we have just transcribed... however, since last week’s EIA fudge factor was at (+792,000) barrels per day, that means there was a 766,000 barrel per day difference between this week's balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes ​to supply and demand from that week to this ​one ​that are indicated by this week's report are off by that much, rendering them useless...but 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 822,000 barrel per day decrease in our overall crude oil inventories left our oil supplies at 857,932,000 barrels at the end of the week, which is our lowest total oil inventory level since March 21st, 2003, and therefore at a 19 1/2 year low.….Our oil inventories decreased this week as 163,000 barrels per day were being added to our commercially available stocks of crude oil while 986,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve. That draw on the SPR was another installment of the emergency withdrawal under Biden's "Plan to Respond to Putin’s Price Hike at the Pump" (sic), that was intended to supply 1,000,000 barrels of oil per day to commercial interests over a six month period up to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising, at least up until then, and was apparently up by 864,000 barrels per day from two weeks ago because the administration is now attempting to use the Strategic Petroleum Reserve to manipulate prices on a weekly basis....Including the administration's initial 50,000,000 million barrel SPR release earlier this year, their subsequent 30,000,000 barrel release, and other withdrawals from the Strategic Petroleum Reserve under recent release programs, a total of 228,989,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 26 months, and as a result the 427,158,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since August 10th, 1984, or at a 38 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 of the current release program​, now scheduled to run​ through 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 rose to an average of 6,368,000 barrels per day last week, which was 4.5% more than the 6,094,000 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 unchanged at 12,100,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 11,700,000 barrels per day, while Alaska’s oil production was 4,000 barrels per day lower at 430,000 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 20th 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 93.6% of their capacity while using those 16,355,000 barrels of crude per day during the week ending September 16th, up from their 91.5% utilization rate during the prior week, and a refinery utilization rate that's a bit above the normal range for mid-September. The 16,355,000 barrels per day of oil that were refined this week were 6.6% more than the 15,347,000 barrels of crude that were being processed daily during week ending September 17th of 2021 (after Hurricane Ida), but 1.0% less than the 16,513,000 barrels that were being refined during the prepandemic week ending September 20th, 2019, when our refinery utilization was at 89.9%, on the low side of the normal range for mid September...

With the increase in the amount of oil being refined this week, the gasoline output from our refineries was a bit higher, increasing by 6,000 barrels per day to 9,459,000 barrels per day during the week ending September 9th, after our gasoline output had decreased by 399,000 barrels per day during the prior week. This week’s gasoline production was still 1.9% less than the 9,643,000 barrels of gasoline that were being produced daily over the same week of last year, and  7.6% below the gasoline production of 10,240,000 barrels per day during the week ending September 20th, 2019, ie, during the year before the pandemic impacted US gasoline output. At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 217,000 barrels per day to 5,236,000 barrels per day, after our distillates output had increased by 12,000 barrels per day during the prior week. With that increase, our distillates output was 17.6% more than the hurricane impacted 4,454,000 barrels of distillates that were being produced daily during the week ending September 17th of 2021, and 4.7% more than the 5,000,000 barrels of distillates that were being produced daily during the week ending September 20th 2019...

With the increase in our gasoline production, our supplies of gasoline in storage at the end of the week ​rose for the 2nd time in 7 weeks; and for the 8th time out of the past thirty-three weeks, increasing by 1,570,000 barrels to 214,610,000 barrels during the week ending September 16th, after our gasoline inventories had decreased by 1,768,000 barrels during the prior week. Our gasoline supplies rose this week because the amount of gasoline supplied to US users fell by 172,000 barrels per day to 8,322,000 barrels per day, and because our imports of gasoline rose by 253,000 barrels per day to 775,000 barrels per day, while our exports of gasoline rose by 119,000 barrels per day to 1,189,000 barrels per day. But after 25 gasoline inventory drawdowns over the past 32 weeks, our gasoline supplies were still 3.2% lower than last September 17th's gasoline inventories of 221,616,000 barrels, and about 5% 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 12th time in 18 weeks and for the 22nd time in the past year, rising by 1,230,000 barrels to 116,020,000 barrels during the week ending September 16th, after our distillates supplies had increased by 4.219,000 barrels during the prior we​​ek. Our distillates supplies rose by less this week ​even with the ​production​ increase ​because the amount of distillates supplied to US markets, an indicator of our domestic demand, increased by 277,000 barrels per day to 3,409,000 barrels per day, and because our exports of distillates rose by 349,000 barrels per day to a fifty one month high of 1,758,000 barrels per day, while our imports of distillates fell by 18,000 barrels per day to 107,000 barrels per day.. But after forty-eight inventory withdrawals over the past seventy-four weeks, our distillate supplies at the end of the week were still 9.3% below the 129,343,000 barrels of distillates that we had in storage on September 17th of 2021, and about 18% below the five year average of distillates inventories for this time of the year...

Meanwhile, with the big jump in our oil imports and the big withdrawal of crude from the SPR, our commercial supplies of crude oil in storage rose for the 12th time in 22 weeks and for the 23rd time in the past year, increasing by 1,141,000 barrels over the week, from 429,633,000 barrels on September 9th to 430,774,000 barrels on September 16th, after our commercial crude supplies had increased by 2,442,000 barrels over the prior week. After those increases, our commercial crude oil inventories were still about 2% below the most recent five-year average of crude oil supplies for this time of year, but 30.6% above the average of our crude oil stocks as of the third weekend of September 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. And even though 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 September 16th were 4.1% more than the 413,964,000 barrels of oil we had in commercial storage on September 17th of 2021, while 12.9% less than the 494,406,000 barrels of oil that we had in storage on September 18th of 2020, and 2.7% more than the 419,538,000 barrels of oil we had in commercial storage on September 20th of 2019…

Lastly, with our inventories of crude oil and our supplies of all products made from oil near multi-year lows over the most recent months, we are continuing to watch the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR. With the increases we've already noted, 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, rose by 2,344,000 barrels this week, from 1,664,676,000 barrels on September 9th to 1,667,020,000 barrels on September 16th, after our total inventories had fallen by 2,943,000 barrels during the prior week. That left our total liquids inventories down by 121,413,000 barrels over the first 34 weeks of this year, and only about 0.1% from a 13 1/2 year low...   

This Week's Rig Count

The number of drilling rigs running in the US rose for the third time in eight weeks, and for the 84th time over the past two years during the week ending September 23rd, but they're still 3.7% below the prepandemic rig count....Baker Hughes reported that the total count of rotary rigs drilling in the US increased by 1 to 764 rigs this past week, which was also 243 more rigs than the 521 rigs that were in use as of the September 24th report of 2021, but was 1,165 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global market with oil in an attempt to put US shale out of business….

The number of rigs drilling for oil increased by 3 to 602 oil rigs during the past week, after the number of rigs targeting oil had increased by 8 during the prior week, and there are now 181 more oil rigs active now than were running a year ago, even as they 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 still down 11.9% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 2 to 160 natural gas rigs, which was still up by 61 natural gas rigs from the 99 natural gas rigs that were drilling during the same week a year ago, even as they were less than 10% 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 reports that two "miscellaneous" rigs continued drilling this week: 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....in the past, we've identified vari​ous​ "miscellaneous" as being exploratory, for carbon dioxide storage, and for utility scale geothermal projects...a year ago, there were was only one such "miscellaneous" rig running...

The offshore rig count in the Gulf of Mexico was up by one to 15 rigs this week, with all of this week's Gulf rigs drilling for oil in Louisiana's offshore waters....that's in contrast to a year ago, when only 8 Gulf oil rigs had restarted in the wake of Hurricane Ida...in addition to rigs drilling in the Gulf, we still have an offshore directional rigs drilling to between 5,000 and 10,000 feet for natural gas in the Cook Inlet of Alaska, while a year ago, there were two rigs drilling offshore from Alaska...

In addition to rigs running offshore, there are also four water based rigs drilling through inland bodies of water this week; those include a directional rig drilling to between 10,000 and 15,000 feet, inland in Galveston Bay​, ​Texas, a directional rig drilling for oil to between 5,000 and 10,000 feet in Cameron Parish, Louisiana; 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...a year ago, there were two rigs drilling on inland waters...

The count of active horizontal drilling rigs was down by 2 to 693 horizontal rigs this week, which was still 222 more rigs than the 471 horizontal rigs that were in use in the US on September 24th of last year, but just over half of the record 1,374 horizontal rigs that were drilling on November 21st of 2014....on the other hand, the directional rig count was up by 1 to 46 directional rigs this week, and those were up by 26 from the 20 directional rigs that were operating during the same week a year ago…at the same time, the vertical rig count was up by 2 to 25 vertical rigs this week, which was still down by 5 from the 30 vertical rigs that were in use on September 24th 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 September 23rd, the second column shows the change in the number of working rigs between last week’s count (September 16th) and this week’s (September 23rd) count, the third column shows last week’s September 16th 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 24th of September, 2021...

obviously, the biggest increase was in New Mexico, but to figure out what happened there, we have to first check the Rigs by State file at Baker Hughes for the changes in Texas Permian...there we find that there were three oil rigs removed from Texas Oil District 8, which covers the core Permian Delaware, but that there was an oil rig added in Texas Oil District 8A, which covers the northernmost counties of the Permian Midland...hence, those changes indicate a 2 rig decrease in the Texas Permian, and since the national Permian basin count was up by 1 rig, we can conclude that all the rigs added in New Mexico were set up to drill in the far west Permian Delaware....meanwhile, the ​overall ​Permian basin shows a decrease of one natural gas rig, leaving five, and an increase of two oil rigs, now totalling 339....furthermore, since there were no other changes elsewhere in Texas, the Permian rig drop accounts for this week’s decrease in that state.

in other states, the North Dakota rig count was down by one with the removal of an oil rig from the Williston basin, the Louisiana rig count was up by one with the rig addition in the adjacent Gulf of Mexico, and the Oklahoma count was up by one with the addition of two oil rigs in the Cana Woodford, the addition of an oil rig in the Arkoma Woodford, the addition of an oil rig in Mississippian shale, the removal of an oil rig from the Ardmore Woodford, the removal of an oil rig from the Granite Wash, and the removal of a rig from a basin elsewhere in Oklahoma that Baker Hughes doesn't track at the same time...note that the Mississippian rig count remained unchanged with the removal of an oil rig from that basin in Kansas...

for natural gas rig changes other than the gas rig removal from the Permian in Texas Oil District 8, it appear that two natural gas rigs were added in Pennsylvania's Marcellus, while a natural gas rig was pulled out of West Virginia's Marcellus, and another natural gas rig was removed from the Utica​ shale​ in Pennsylvania, thus leaving the Appalachian ​rig ​count unchanged....the natural gas rig count was still down by two, however, due to a gas rig removal from a basin not tracked by Baker Hughes, which could have been the one pulled out from Oklahoma...

DUC well report for August

Monday of last week saw the release of the EIA's Drilling Productivity Report for September, which included the EIA's August 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 26th consecutive month, as completions of drilled wells decreased while drilling of new wells increased in August, 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 16 wells, falling from a revised 4,299 DUC wells in July to 4,28​3 DUC wells in August, which was the lowest number of US wells left uncompleted on record, and also 26.3% fewer DUCs than the 5,812 wells that had been drilled but remained uncompleted as of the end of August of a year ago...this month's DUC decrease occurred as 953 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 revised 947 wells that were drilled in July, while 969 wells were completed and brought into production by fracking them, down by 3 from the 972 well completions seen in July, but up by 245 from the 716 completions seen in August of last year....at the August 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, ​virtuallly ​unchanged from the DUC well backlog of a month ago, which ​wa​s the lowest DUC backlog since March 2015, despite a completion rate that is nearly 15% below 2019's pre-pandemic average...

only the oil producing regions saw a net DUC well decrease during August, since the DUC well decrease in natural gas producing Appalachian basins was offset by 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 19, from 1,180 DUC wells at the end of July to 1,161 DUCs at the end of August, as 416 new wells were drilled into the Permian basin during August, while 435 already drilled wells in the region were being fracked....in addition, the number of uncompleted wells remaining in Oklahoma's Anadarko basin decreased by 7, falling from 716 at the end of July to 709 DUC wells at the end of August, as 65 wells were drilled into the Anadarko basin during August, while 72 Anadarko wells were completed....meanwhile, there was a decrease of 1 DUC well in the Bakken of North Dakota, where ​the number of ​DUC wells fell from 426 at the end of July to a record low of 425 DUCs at the end of August, as 76 wells were drilled into the Bakken during August, while 77 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 2, from 620 DUC wells at the end of July to 622 DUCs at the end of August, as 115 wells were drilled in the Eagle Ford during August, 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 9, rising from 345  at the end of July to 354 DUC wells at the end of August, as 119 wells were drilled into the Niobrara chalk during August, while 110 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 529 DUCs at the end of June to 521 DUCs at the end of August, as 89 new wells were drilled into the Marcellus and Utica shales during the month, while 97 of the already drilled wells in the region were fracked....on the other hand, the uncompleted well inventory in the natural gas producing Haynesville shale of the northern Louisiana-Texas border region rose by 8, from 483 DUCs in June to 491 DUCs by the end of August, as 75 wells were drilled into the Haynesville during July, while 65 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of August, 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 16 wells to 3,271 DUC wells, while the uncompleted well count in the major natural gas basins (the Marcellus, the Utica, and the Haynesville) was unchanged at 1,012 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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NEXUS windfall was less than expected for Northeast Ohio schools. A local auditor is fighting back - The NEXUS natural gas pipeline was completed in 2018 across parts of Northeast Ohio amid much controversy and environmental concerns. One of the main selling points was that it would generate millions of dollars in tax revenue for public entities near its path - primarily, school districts.But after years of appeals and negotiations between NEXUS and the state's tax officials about how much the pipeline is actually worth, that windfall isn’t panning out exactly the way it was supposed to. Now, one county auditor is taking action.“This is all my NEXUS stuff. It keeps growing,” Lorain County Auditor Craig Snodgrass said, chuckling, as he pointed out piles of paperwork in his office on a recent September morning.Snodgrass is trying to get clarification on a settlement earlier this year between Ohio’s department of taxation and the companies that operate the NEXUS pipeline, Enbridge and DTE Energy.Schools and other public entities, including libraries and municipal governments, receive tax revenue when utilities like pipelines are constructed nearby. When the NEXUS pipeline was completed in 2018, the state tax commissioner set the value of the pipeline at $1.4 billion statewide.Broken down across the 13 counties the pipeline runs through, that meant some school districts – including ones in Lorain, Medina, Stark and Summit – would receive millions of dollars each year.But NEXUS appealed the state’s valuation multiple times over the course of several years, disputing how much the pipe was actually worth. During that time, it paid schools just about 40% of the valuation.The state ordered an appraisal and settled with NEXUS in late June of this year, revaluing the pipeline for $950 million - about 58% of the initial valuation.That didn’t seem quite right to Snodgrass.Snodgrass appealed the settlement in September to give him more time to request documents and try to better understand how they got to that agreement, he said.“Hopefully we're going to be able to obtain some information that we otherwise weren't allowed to get, or {were} prohibited from getting, and hopefully come up with, you know, what is the right number? You know, at least to get a comfort level,” he said. “But until we actually get those documents,  it's just shooting in the dark.”Snodgrass hired third-party consultants to help him look into all of the appraisals and the state’s final valuation.If they find enough evidence to support Snodgrass’s suspicion that the pipeline is worth more, they’ll present their argument to the board of tax appeals. If they are successful, school districts could get closer to the revenues they were initially promised.

2 BP workers are dead after a major fire at an Ohio refinery, company says - Two people have died after a giant blaze broke out Tuesday at a British Petroleum refinery in Ohio, officials said. Images posted on social media showed huge flames and a column of black smoke at the Husky Toledo Refinery in the city of Oregon, just outside Toledo. BP had earlier said two staff members were injured in the fire on Tuesday night. A spokesperson confirmed early Wednesday that the two workers had succumbed to their injuries. "It is with deep sadness we report that two bp staff injured in a fire at the bp Husky Toledo Refinery have passed away," the spokesperson said. "Our thoughts are with the families and loved ones of these two individuals." They said all other staff members were accounted for and that an employee assistance team was onsite to support workers impacted by the incident. The spokesperson said the fire was extinguished Tuesday night at around 10:15 p.m. The refinery was "safely shut down," they said, and remains offline through Wednesday.

Toledo area oil refinery shut down after fire kills 2 — A fire at an oil refinery in northwest Ohio killed two people and the facility was shut down Wednesday, officials said. The fire started Tuesday night at BP's Husky Toledo Refinery, BP spokesperson Megan Baldino said in a statement. There was no word on how it started or the extent of the damage. Baldino said Wednesday that the two workers had died but did not provide their names or further details about the injuries they sustained. She said all other staff were accounted for and the plant was safely shut down. The refinery, just east of Toledo, can process up to 160,000 barrels of crude oil per day and “has been an important part of the region’s economy for more than 100 years,” according to BP’s website. In addition to its own fire department, the company said it worked closely with local fire crews. “Our highest priority remains the safety of our staff, the responders and the public,” Baldino said. BP announced last month it had agreed to sell its 50% interest in the Husky Toledo Refinery to its joint venture partner Cenovus Energy. The fire happened a few weeks after an electrical fire at a BP refinery in northwest Indiana, about 15 miles southeast of Chicago, caused the company to temporarily close that facility. No one was hurt.

BP Refinery In Ohio That Provides Gasoline For Midwest "Shut Down" After Fire - The BP-Husky Toledo refinery in Oregon, Ohio, was rocked by an "explosion" around 1830 local time, according to local news WTOL, citing witnesses. Videos posted on social media show the fire at the BP refinery.A BP spokesperson told Reuters the BP-Husky Toledo refinery in Oregon, Ohio, has been "safely shut down" in response to Tuesday night's fire. The fire's cause is still unknown, but sources told Reuters, "leaking fumes from a crude unit may have caused the ignition in another unit at the facility." The source added: "Workers finished a maintenance turnaround at the facility in recent weeks and the plant had resumed operating."The refinery processes up to 160,000 barrels of crude oil daily, providing the Midwest with gasoline, diesel, jet fuel, propane, asphalt, and other products.There's no word if the refinery will spark fuel shortages across the Midwest.

BP oil refinery fire in Toledo: Michigan gas prices surge 5 cents - An oil refinery fire and explosion Tuesday near Toledo that left two dead and forced the BP facility to shut down is raising additional concerns about how it will affect Midwest gasoline supplies and prices at the pump, which throughout most of the summer had been in decline. In one day, AAA spokeswoman Adrienne Woodland told the Free Press, the average gas price for regular unleaded in Michigan jumped 5 cents a gallon to $3.85, a result of the shutdown, according to the motor club's national analysts. AAA tracks prices nationwide.It's unclear, she added, how long higher prices will continue.But AAA's analysts predicted the Ohio refinery shutdown could continue for up to two weeks. One of about 130 in the United States, the Husky Toledo Refinery is unlikely to have a major effect on the nation’s average gas price, which, according to gasoline price tracker GasBuddy, fell to $3.64 on Monday in the 14th consecutive week of declines and longest downward streak since 2015.

Midwest Gasoline Prices Surge Following Deadly BP Refinery Fire - Bloomberg.com A refinery fire in Ohio caused gasoline prices in neighboring Indiana to post the largest overnight increase of any state, with Ohio itself and Michigan poised to follow. Average prices at the retail pump jumped nearly 6 cents a gallon in the Hoosier State, home to a major fuel hub supplying the upper Midwest, according to data from auto club AAA. The rise followed higher wholesale and rack prices, which surged by as much as 40 cents a gallon in some areas of Indiana, according to price reporting agency Opis. Spiking wholesale costs in nearby Ohio means retailers there will likely raise prices in the coming days, and Michigan may see an acceleration of retail gains already underway.

Fracking ban in Delaware River Basin survives Pa. GOP lawmakers’ challenge in federal court -Republican state lawmakers lost their bid to overturn a fracking ban in Northeast Pennsylvania enacted by the regulatory agency that oversees drinking water quality for about 15 million residents in four states. The 3rd U.S. Circuit Court of Appeals issued a ruling Friday that the lawmakers, led by state Sens. Gene Yaw and Lisa Baker, and the municipalities that joined don’t have standing to bring the case against the Delaware River Basin Commission. “In our view, the state senators and the Senate Republican Caucus lack standing because the legislative injuries they allege affect the state legislature as a whole, and under well-established Supreme Court caselaw, ‘individual members lack standing to assert the institutional interests of a legislature,’ ” the decision reads. The court said the municipalities lacked standing because the injuries claimed — lack of revenue from fracking operations — were “hypothetical.” The Republican lawmakers argued that the DRBC, which is governed by a federal compact and includes the governors of the four states that draw from the Delaware River, overstepped its legal authority in banning fracking in the basin, which includes the eastern part of Pennsylvania. Democrats and environmental groups applauded the ruling from judges L. Felipe Restrepo, Jane R. Roth, and Julio M. Fuentes. “In short, this case was nothing short of political posturing,” said the Delaware Riverkeeper Network’s Maya van Rossum. The decision on standing is precedential, meaning it binds all courts in the 3rd Circuit from allowing cases where individual lawmakers challenge policy. “It makes clear that these types of challenges by state legislators cannot go forward, the courthouse door is not open to them,” said Robert Wiygul, an attorney representing suburban Philadelphia Democratic senators who joined the case on the side of the DRBC. “They were trying to speak for the General Assembly as a whole.” The plaintiffs also tried to use the Environmental Rights Amendment of the Pennsylvania Constitution to argue in favor of their standing as “trustees” of the state’s natural resources. “The court cited how upside down and backwards that was,” Wiygul said. All four basin states — Pennsylvania, New Jersey, Delaware and New York — voted to ban fracking in February 2021.

Pennsylvania sees decline in natural gas rigs - Pittsburgh Business Times - Pennsylvania has lost two natural gas drilling rigs over the past month but it's still ahead of where the industry was a year ago.There were 23 rigs operating in the commonwealth in the natural gas drilling regions as of Friday, according to a count released weekly by Baker Hughes and Enverus. That's down from the high of 25 that has occurred in May, June, July and into early August. Pennsylvania's largest concentration of drilling rigs are in the southwestern part of the state but there are other rigs elsewhere in western Pennsylvania, plus the northcentral and northeast parts of the Marcellus Shale.A shortage of natural gas supply is keeping prices much higher than normal, about $8.81 per million BTU in August 2022. That's the highest monthly average since 2008 and is far and away above the $1.92 per million BTU as late as September 2020. But gas prices have steadily climbed as many natural gas producers, which are publicly traded, have not rapidly increased production. That's especially the case in Appalachia, where Marcellus and Utica shale gas pipelines have for the most part been filled.August's average Henry Hub natural gas spot price is more than twice as high as the $4.07 per million BTU that was recorded the same month a year ago. And, to be sure, there's more drilling going on now than September 2021: There were an average of 18 rigs operating in Pennsylvania a year ago.But after a year, Pennsylvania's loss has been W est Virginia's gain: Baker Hughes counts 13 rigs running in West Virginia, up from nine a year ago. Ohio is down year over year by one rig, from 12 in September 2021 to 11 today.

Climate law spurs CCS at new West Virginia gas plant - Competitive Power Ventures Inc. announced plans Friday to build a multibillion-dollar natural gas power plant in West Virginia with carbon capture technology, saying the project would not be possible without the new climate and energy law. The 1,800-megawatt project will be operational later this decade, according to CPV, a Maryland-based power generation development company. It joins a handful of power plants worldwide aiming to be equipped with carbon capture, which traps carbon dioxide emissions before they enter the atmosphere. Sen. Joe Manchin (D-W.Va.), who spoke Friday at CPV’s announcement in Charleston, W.Va., said the plant is a $3 billion investment that “will provide a thousand jobs when all is said and done.” He used the opportunity to stress the importance of ensuring the U.S. is “energy independent” amid Russia’s invasion of Ukraine and decision to cut off natural gas to Europe. Manchin and CPV pointed to the importance of the 45Q tax credit, which was expanded under the Inflation Reduction Act. For industry and power, the credit’s value increased from $50 to $85 per metric ton of CO2 stored through secure geological storage, and from $35 to $60 per metric ton of CO2 stored via enhanced oil recovery. “That makes the difference that makes a project like this work,” Manchin said Friday. “That’s the purpose, and that’s the reason.” Mahmoud Abouelnaga, a solutions fellow at the environmental think tank Center for Climate and Energy Solutions, said no operational natural gas combined-cycle facilities currently use carbon capture, utilization and storage (CCUS). “It is important to see more power generating facilities utilizing CCUS technology, especially in states that depend largely on fossil power like West Virginia,” Abouelnaga said in an emailed statement. Multiple companies are planning to outfit natural gas power plants with carbon capture, according to according to a databasemaintained by the Clean Air Task Force, an environmental group. The California Resources Corp. plans to add CCS to its Elk Hills power plant, for example, while 8 Rivers Capital LLC announced last year that it would build two emissions-free gas plants — one in Illinois and one in Colorado — using technology from NET Power LLC (Energywire, April 16, 2021). Globally, the only commercial-scale power plant currently operating with carbon capture is the Boundary Dam Power Station in southeastern Saskatchewan, Canada, which is coal-fired. The Petra Nova project in Texas entered a mothball status in May 2020 ((Energywire, July 11).

Oil wish list or renewables boost? Manchin bill may be both - The transition to a clean energy economy will involve trade-offs. Few are as stark as those in the permitting bill unveiled Wednesday by Sen. Joe Manchin, the West Virginia Democrat. The bill could provide a significant boost to transmission infrastructure, which is needed to ensure widespread renewable adoption. Where permitting a transmission line can now take a decade, the bill would limit federal environmental reviews to two years, put a statute of limitation of 150 days on legal challenges and give the Federal Energy Regulatory Commission more authority to permit transmission lines. But Manchin’s proposal could also lead to the construction of more fossil fuel projects, producing more greenhouse gas emissions and blunting attempts to green the U.S. economy. It would expand a program aimed at expediting federal permitting reviews to include offshore oil leases and approve the Mountain Valley pipeline, which would carry natural gas from West Virginia into Virginia. \ Whether the proposal can survive the House and Senate is an open question. The bill has scrambled traditional political alliances. Republicans and progressive Democrats are opposed. Clean energy developers are supportive. Most, though not all, environmentalists are against it. Greg Wetstone, president and CEO of the American Council on Renewable Energy, said permitting reform is needed to fully realize the emission-cutting benefits of the climate spending law Congress passed earlier this year. Rep. Raúl Grijalva (D-Ariz.) criticized the bill for mirroring the “wish lists” of the fossil fuel industry. “You can still see fossil fuel’s fingerprints all over the text: shortened public comment periods, fewer avenues for communities to fight back against projects polluting their communities, and weakened enforcement of bedrock environmental and public health laws,” said Grijalva, who chairs the House Natural Resources Committee. “These dangerous permitting shortcuts have been on industry wish lists for years.” Much of the climate benefits from permitting reform come from transmission. Integrating more wind and solar will require more long-range power lines that can move power from where it is being generated to the population centers where the electricity is being consumed. The National Academies of Sciences, Engineering and Medicine says the U.S. needs to boost transmission capacity 60 percent by the end of the decade to put the country on track for net-zero emissions by 2050. The U.S. has a checkered history of transmission development. It has had some success building new lines, particularly in the Midwest, where 16 of 17 projects planned over the last decade were permitted. But the country has also encountered a series of high-profile failures. An attempt to build a transmission line carrying hydropower from Canada into New England was first rejected by New Hampshire and then nixed by voters in Maine, only for the state’s high court to open the door for the project again. It remains in limbo (Climatewire, Sept. 6). A $4.5 billion line bringing wind from the Oklahoma Panhandle to Tulsa was scrapped in 2018, eventually replaced by a slightly scaled-back version of the project. Perhaps most infamous was an eight-year effort to build a 700-mile line connecting Oklahoma wind power to the East Coast via Tennessee. The project died in 2017 but not before its trials and tribulations were captured in the popular book “Superpower” by Texas Monthly reporter Russell Gold. Even when projects do succeed, it can take years. The Anschutz Corp. began planning a 732-mile line aimed at bringing Wyoming wind to Southern California in 2008. It received its last permit in 2020 after obtaining approvals from the Forest Service, Bureau of Land Management and Bureau of Reclamation, along with state and county regulators in four states. The project is still waiting on a notice to proceed from BLM, which is expected to arrive next year. .

The Missing Data Behind Manchin’s Dirty Pipeline Deal - As heatwaves and droughts scorched the country this summer, Democrats in Washington sold their Inflation Reduction Act (IRA) to voters as a tool to combat climate change. To deflect questions about why fossil fuel companies were celebratingthe bill, party leaders and their media acolytes pointed to studies — one by an institution with ties to fossil fuel giants — asserting that even with its provisions expanding oil and gas development, the legislation would result in a huge net reduction in greenhouse gas emissions.However, those studies did not take into account an agreement that Senate Majority Leader Chuck Schumer (D-N.Y.) says was an integral part of the IRA: Legislation to accelerate the construction of fossil fuel pipelines, which data show drive planet-warming emissions.Now, as Senate Democrats are moving to pass that pipeline side deal — and as some liberal pundits insist climate activists should halt their criticism of the agreement — lawmakers appear to be flying blind about the legislation’s environmental impacts.Congressional staffers and environmental groups tell The Lever that they have seen no reliable analyses comprehensively quantifying the climate effects of the initiative to expand oil and gas infrastructure, even though the bill is now moving forward, and even though a draft version of the pipeline bill has been in the public domain since early last month, before the IRA even passed.“Our modeling of the IRA was based on the final legislative text, and there was no permitting reform text to refer to so it was not explicitly considered,” John Larsen, partner at the consulting firm Rhodium Group, told The Lever. The Rhodium Group’s projections were widely cited as proof that Democrats’ IRA would significantly reduce emissions.We're building a reader-supported investigative news outlet that holds accountable the people and corporations manipulating the levers of power. Join our fight by becoming a free or paid subscriber today.The pipeline agreement, which is backed by the Biden administration, was originally negotiated between Schumer and Sen. Joe Manchin (D-W.Va.) — respectively Congress’s top recipients of utility and fossil fuel industry campaign cash.Though the final text of the measure is still secret, the leaked draft — which was emblazoned with the watermark of a powerful oil and gas industry lobbying group — elucidated the broad strokes of the deal: weakened environmental laws and expedited timetables to steamroll any opposition or delay when fossil fuel companies want to build pipelines through fragile ecosystems and local communities.And yet, the same Democratic lawmakers who waved around emissions projections to justify passage of the IRA have produced no similar estimates about the emissions implications of the pipeline deal that Schumer acknowledges was “part of the IRA.” “The fact that emissions projections for Schumer’s side deal have not been discussed either in private or in public point to the reality of what’s at stake here,” said Jim Walsh of the environmental group Food and Water Watch. “Schumer and Manchin’s deal is not talking about clean energy; it’s a fossil fuel payday. The leaked draft specifies the fast-tracking of 19 fossil fuel-related infrastructure projects. Any effort to spin that increased pollution as emissions reduction would be just that — spin.”

Manchin releases permitting reform package - Senate Energy and Natural Resources Chair Joe Manchin released his long-promised permitting reform plan this evening.Democratic leaders promised Manchin to pursue permitting reform legislation in exchange for supporting the Inflation Reduction Act. Senate Majority Leader Chuck Schumer (D-N.Y.) has vowed to include the permitting language in a continuing resolution to keep the government open.The West Virginia Democrat’s text reveals further details about provisions outlined in a draft summary released this summer. The latest bill, however, doesn’t stray far from Manchin’s long-standing demands.The legislation would direct federal agencies “to issue all approval and permits” for the nearly complete Mountain Valley pipeline, which would carry natural gas from West Virginia to Virginia.When it comes to National Environmental Policy Act reviews, the bill would direct the administration to instate shot clocks and page counts.The bill would create a White House priority list for key projects. It also includes requirements for transmission lines, water quality permits, hydrogen energy and mining, according to a summary.Previewing the legislation Tuesday, Manchin addressed concerns from environmentalists about hampering environmental reviews.Manchin said, “Do we throw caution to the wind? No. Did we make you go through the environmental process? Yes, we just accelerate the time.”Progressives have come out against the legislation and are particularly opposed to coupling it with a must-pass spending bill. And even though many Republicans have long supported permitting reform, they have repeatedly questioned Manchin’s effort.Manchin this week said some lawmakers who have been critical of the permitting reform push may be seeking revenge for his involvement in the Inflation Reduction Act (E&E Daily, Sept. 21).

Senator Joe Manchin unveils bill that would expedite federal energy projects -The US senator Joe Manchin released an energy permitting bill on Wednesday to speed up fossil fuel and clean energy projects. The bill is expected to be attached to a measure to temporarily fund the government that Congress must pass before 1 October. The legislation would require the federal government to issue permits for Equitrans Midstream Corp’s long-delayed $6.6bn Mountain Valley pipeline to take natural gas between West Virginia, Manchin’s home state, and Virginia. The wider funding bill needs approval of the House and Senate and to be signed by Joe Biden to become law. Manchin’s staff told reporters that he believed the funding bill will would get the 60 votes needed to pass the Senate with the permitting measure attached. The permitting measure from Manchin, a centrist Democrat and an important swing vote in the 50-50 Senate, would require Biden to designate 25 energy projects of strategic national importance for speedy federal review. The USelectricity grid needs expansion and fixes as some of its major transmission lines are 50 years old. Improving transmission lines would help renewable projects like wind and solar farms in rural areas get clean power to cities. Biden’s landmark climate and spending bill – what’s in it, and what got cut? Read more The bill also sets a two-year target for environmental reviews on energy projects that need to be completed by more than one federal agency. Progressive lawmakers and environmental groups have been concerned that the bill would speed fossil fuel projects while undermining US environmental laws. In the House of Representatives, 77 Democrats this month asked the House speaker, Nancy Pelosi, to keep the side deal out of the funding bill. Senator Tim Kaine, a Democrat from Virginia, said after the bill was released he could not support its “highly unusual provisions” regarding Mountain Valley pipeline. Kaine said they “eliminate any judicial review” for key parts of the pipeline approval process and strip jurisdiction away from a US court of appeals for cases involving it. He said he had not been included in talks about the measure, even though 100 miles (160km) of the pipeline would run through his state. While the bill would speed up the processes required by a bedrock US green law called the National Environmental Policy Act, which mandates reviews of major projects, “it doesn’t amend the underlying statutes”, a member of Manchin’s staff told reporters in a call. Getting at least 10 Republican senators to support the measure could be complicated after Senator Shelley Moore Capito, a Republican from Manchin’s state, issued her own bill this month more favorable to fossil fuels. Some Republicans were also concerned because Manchin voted for Biden’s Inflation Reduction Act, which contained $369bn for climate and energy security. Speaking about the unwillingness of some Republicans to support permitting, Manchin said on Tuesday: “If they’re willing to say they’re going to shut down the government because of a personal attack on me, or by not looking at the good of the country, that is what makes people sick about politics.”

Manchin permitting bill release fails to appease skeptics - Senate Energy and Natural Resources Chair Joe Manchin released his much-anticipated permitting reform bill Wednesday, but the text does not appear to have calmed the progressive rebellion and Republican indifference to the effort.The West Virginia Democrats’ text largely mirrors an outline released in recent weeks. It includes new timelines for permitting and a list of priority projects to accelerate. The bill also includes efforts to ease Clean Water Act and grid approvals, according to a summary.Democratic leaders now have to gather enough support to attach the legislation to an upcoming short-term government funding measure in order to fulfill their promise to Manchin, who sees the permitting language as going hand-in-hand with the recently enacted Inflation Reduction Act.But the odds of approving the bill only seem to be getting longer. Progressives remain adamant in their opposition. And one prominent Democrat slammed the proposal in the immediate aftermath of its release.“[The Mountain Valley pipeline section] is completely unacceptable,” Sen. Tim Kaine (D-Va.) told reporters Wednesday night. “I was not consulted about it. I will do everything I can to oppose it.”Manchin’s bill includes a mandate for agencies to approve the contentious Mountain Valley natural gas pipeline project from West Virginia to Virginia. Many Virginia communities have revolted against the venture.The Manchin bill would move the legal venue for challenges to Mountain Valley from the 4th U.S. Circuit Court of Appeals in Richmond to the U.S. Circuit Court for the District of Columbia Circuit.“Allowing a corporation that is unhappy about losing a case to strip jurisdiction away from the entire court that is handled the case is [unprecedented],” Kaine added. “It would open the door for massive abuse and corruption, so I can’t support it.”Manchin this week said the pipeline could spur more domestic production of natural gas that could help ease inflation as well as provide supplies for Europe amid shortages caused by the Russian invasion of Ukraine. Environment and Public Works Chair Tom Carper (D-Del.) — a key figure in the permitting reform negotiations — continued to endorse the overall effort but distanced himself from the Mountain Valley language, saying it was worked out between Manchin and Senate Majority Leader Chuck Schumer (D-N.Y.).

Joe Manchin’s Pipeline Deal Irks Both Parties, Snarling Spending Bill - The West Virginia Democrat is trying to attach an oil and gas permitting measure to must-pass spending legislation.— When Senator Joe Manchin III of West Virginia agreed in late July to supply his crucial vote allowing Democrats to pass their landmark climate change, health and tax legislation, heextracted a promise in return: Congress would pass a separate bill by the end of September making it easier to build a natural gas pipeline in his state.Now lawmakers in both parties are balking over a deal they insist they were never a part of, prompting a dispute that threatens to derail a government spending bill that must pass by next weekend to stave off a shutdown.Mr. Manchin has insisted that legislation to streamline the permitting of fossil fuel and energy infrastructure projects, including the West Virginia pipeline, be tied to the spending measure, which is expected to keep the government funded through mid-December.It is the latest chapter in long-running tensions between Mr. Manchin and liberal Democrats, who have bristled at how the West Virginian has used his swing vote in the evenly divided Senate to scuttle or whittle down President Biden’s agenda and, when he has agreed to go along, demanded hefty concessions for doing so. Senator Chuck Schumer of New York, the majority leader, has said he intended to attach the two bills, and the White House on Wednesday confirmed Mr. Biden’s support for the legislation in a statement.“Today, far too many energy projects face delays — keeping us from generating and shipping critical, cost-saving clean energy to families and businesses across America,” Karine Jean-Pierre, the White House press secretary, said in a statement. “This is an important step forward to further unlock the potential of these projects and the good-paying jobs they support.”The permitting bill, which would explicitly allow for the completion of the Mountain Valley Pipeline, a controversial gas project that passes through West Virginia, was left out of the climate legislation because it was being considered as a budget reconciliation bill, which allowed Democrats to shield the sprawling measure from a Republican filibuster but also strictly limited what could be included.After the climate legislation became law, dozens of liberal lawmakers expressed concerns about the permitting measure, warning against weakening environmental protections, including the National Environmental Policy Act, which requires the government to study the impacts to the environment of any highways, pipelines or other major federal projects.Senator Bernie Sanders of Vermont, the independent in charge of the Budget Committee, has said he would oppose Mr. Manchin’s legislation, meaning that at least 11 Republicans would need to back it in the 50-50 Senate to scale the 60-vote threshold to move it past a filibuster if the rest of the Democratic caucus backs it. Most Republicans have instead rallied around a more aggressive package unveiled by Senator Shelley Moore Capito, Republican of West Virginia.“I’ve never seen stranger bedfellows than Bernie Sanders and the extreme liberals siding with Republican leadership,” Mr. Manchin said at a news conference on Tuesday. “What I’m hearing is that this is like revenge politics, and basically revenge toward one person: me.”

Manchin: 'Revenge politics' could sink permitting reform - Senate Energy and Natural Resources Chair Joe Manchin is decrying forces aligning against his permitting overhaul effort, a sign of the long odds the legislation likely faces in passing Congress.The bill, long sought by the energy industry, is expected to be released later today.“I got to be honest with you, I’ve been around for a long time in state and federal politics, I’ve never seen stranger bedfellows than the Bernie Sanders and the extreme liberal left siding up with Republican leadership in Congress,” Manchin (D-W.Va.) said of opposition to the plan Tuesday. “I’ve never seen this.”He added, “It’s revenge toward one person — me.”Manchin’s comments on what he called “revenge politics” reflect the growing sentiment on Capitol Hill that the permitting plan won’t move on stopgap spending legislation, due by Oct. 1, as the West Virginia Democrat and his allies had hoped.While no lawmakers declared the legislation dead, they acknowledged both policy and political differences are complicating the effort, which might not be settled until after the November election or even into the next Congress.Republicans, who almost uniformly favor streamlining environmental reviews for energy projects, are nonetheless throwing cold water on the permitting idea.“I think the situation he’s in right now is entirely of his own making,” said Senate Minority Whip John Thune (R-S.D.), who like most Republicans has expressed frustration with Manchin for supporting the Democrats’ Inflation Reduction Act only after being promised a future vote on the permitting bill.Thune said it’s unclear if the Manchin proposal could get the support of 10 to 12 Senate Republicans needed to move the bill as part of the stopgap without the threat of a filibuster. Sixty votes are needed to advance most legislation in the Senate with each party controlling 50 seats.Senate Majority Leader Chuck Schumer (D-N.Y.) said yesterday he still planned on adding the permitting bill to the government funding bill, known as a continuing resolution, and getting it passed by the end of next week. He said he hoped Republicans would get behind it, too.Sen. John Kennedy (R-La.), the chamber’s top GOP energy appropriator, said he may back permitting reform on the CR depending on what’s proposed. But he acknowledged there’s “no question” that some GOP senators are mad at Manchin over the deal on the Inflation Reduction Act. “I think my side learned a good lesson in dealing with Manchin: You never let a dog guard your food, he’ll eat it,” he added.

Kaine says Mountain Valley Pipeline provision in Manchin bill 'could open the door to serious abuse and even corruption' - Virginia Sen. Tim Kaine (D) on Thursday sharply criticized a provision of a federal energy permitting reform bill that would force completion of the controversial Mountain Valley Pipeline, saying that “it could open the door to serious abuse and even corruption.” “If they demonstrate on the merits that they should be entitled to build a pipeline … then build it by all means,” Kaine said in a lengthy speech on the U.S. Senate floor. “But don’t embrace the need for permitting reform and then choose one project in the entire United States affecting my state and pull it out of permitting reform, insulating it from the normal processes.” The completion of the 303-mile Mountain Valley Pipeline, intended to carry gas from the Marcellus shale fields in West Virginia to southern Virginia, has been a political flashpoint in Virginia since it was first proposed in 2014. Opposition to the project has led to numerous court challenges, a settlement with Virginia over more than 300 environmental violations and the yanking of multiple federal permits by judges in the Richmond-based U.S. 4th Circuit Court of Appeals.. Today, most of the unfinished portion of the pipeline lies in Virginia’s Giles, Craig and Montgomery counties. This August, the project grabbed national attention when Sen. Joe Manchin, D-West Virginia, said he had agreed to support Democrats’ sweeping Inflation Reduction Act in exchange for approval of separate legislation to reform the nation’s energy permitting processes. A one-page summary of what the legislation would do included the completion of Mountain Valley. The text of the bill, which was released Wednesday, would require the federal government to issue outstanding permits for the project within 30 days, including authorizations from the U.S. Fish and Wildlife Service to protect endangered species, from the Bureau of Land Management to allow the pipeline to cross the Jefferson National Forest in Virginia and from the U.S. Army Corps of Engineers to approve its remaining crossing of federal waters. The legislation says that none of those actions would be subject to review by the courts. Additionally, it would transfer any other legal action related to the pipeline or challenges to the act itself from the 4th Circuit to the D.C. Circuit. On Thursday, Kaine said Congress should not interfere with specific judicial and administrative review cases and called the transfer of jurisdiction away from the 4th Circuit “a very, very dangerous precedent.” “What ground would there be for such a historic rebuke of my hometown federal circuit court, to say that just because they ruled against a powerful energy corporation, we will in an unprecedented way strip jurisdiction away from them in a pending case that is midstream and not allow them to hear it?” he asked.

Can Manchin Get The Votes He Needs For His Permitting Bill? | WVPB - U.S. Sen. Joe Manchin is building support on Capitol Hill for his permitting reform legislation for energy projects. But he’s still short of the votes he needs. Manchin released the text of his legislation on Wednesday. By Thursday, he appeared to pick up support for it on both sides of the aisle. Crucially, among them was his fellow West Virginian, Sen. Shelley Moore Capito. Capito could persuade her fellow Republicans to support Manchin’s bill – last week, he told reporters he was hoping she would. On the other hand, some of his fellow Democrats have said they won’t support it. That group includes Virginia Sen. Tim Kaine. The bill would fast-track the Mountain Valley Pipeline, which passes through Virginia and West Virginia. The 300-mile natural gas pipeline is a top priority for both Manchin and Capito. Republicans want some of the same permitting changes Manchin does, but some of them still feel burned by the Inflation Reduction Act, which Manchin negotiated over the summer. No Republicans voted for it. Senate Majority Leader Chuck Schumer plans to include Manchin's legislation in a must-pass spending package to keep the government open after Sept. 30. The deal has the support of House Speaker Nancy Pelosi and President Joe Biden. In addition to easing permits for the Mountain Valley Pipeline, Manchin's bill would also accelerate construction of new transmission lines for renewable energy — a key component of decarbonizing the electric power grid.

Manchin’s permitting reform deal on life support in face of GOP opposition | WKRN - The controversial permitting reform bill unveiled by Sen. Joe Manchin (D-W.Va.) late Wednesday has only a slim chance of passing the Senate next week, as Republicans don’t want to give the West Virginia senator a victory after he resurrected President Biden’s tax and climate agenda in late July. Republican senators, who had been shut out of negotiations over the permitting bill’s language, said Wednesday they don’t expect it to pass if attached to a short-term government funding bill that Senate Majority Leader Charles Schumer (D-N.Y.) plans to bring to the floor next week. GOP senators didn’t get a chance to look at the bill to reform permitting for energy projects until 6 p.m. Wednesday but predicted earlier in the day that if it fell short of a stronger permitting reform proposal offered by Sen. Shelley Moore Capito (R-W.Va.), they wouldn’t vote for it. Capito and Barrasso said Wednesday evening their staffs were reviewing the 91-page bill and said they would hold off on making final verdicts until they know more about it. Sen. John Barrasso (R-Wyo.) outlined multiple problems with the draft of Manchin’s bill that circulated earlier this summer during a presentation he delivered to a Senate Republican lunch Wednesday. His message to GOP senators was clear: Unless Manchin fixed multiple provisions that were problems for the fossil fuel industry, Republicans shouldn’t support it. Sen. John Cornyn (R-Texas), an advisor to the Senate GOP leadership, said he couldn’t see a government funding measure pass next week with Manchin’s permitting reform attached. “I don’t know what Sen. Schumer’s plans are, whether he’s going to attach it to the CR. I doubt it’s going to pass,” Cornyn said, referring to a short-term continuing resolution to fund the government. Capito, who has a competing permitting reform bill, said Wednesday afternoon that Manchin hasn’t shared any of the details of his legislation before it was made available to the media and general public. Republicans say they don’t want to reward Manchin by passing his permitting reform resolution because Schumer is bringing it to the floor as part of a deal he struck with the West Virginia senator in July to pass the Inflation Reduction Act, which implemented a 15 percent corporate minimum tax and included $369 billion in energy investments to combat climate change. “It’s going to be extremely difficult to do just because of the circumstances surrounding the deal that was made,” said Sen. Mike Rounds (R-S.D.). Rounds said he would take a close look at Manchin’s proposal if he’s willing to shift it substantially closer to the reforms that Capito has proposed but predicted that’s not likely to happen. “I’m not sure he’d have the support of Democrats then. I think that it’s going to be a very difficult deal to get done,” Rounds added. Even Democrats who support Manchin’s permitting reform bill say they won’t support it if it is rewritten to mirror Capito’s proposal as part of an effort to secure more Republican votes. Manchin will need more than 10 Republicans to pass his permitting reform bill, as several Democrats and Sen. Bernie Sanders (I-Vt.) have signaled opposition to marrying the Manchin permitting reform language with a short-term spending bill. Sen. Jeff Merkley (D-Ore.) is circulating a letter with the support of Sens. Elizabeth Warren (D-Mass.), Tammy Duckworth (D-Ill.), Cory Booker (D-N.J.) and Sanders urging Schumer to keep separate permitting reform and a short-term government funding bill that needs to pass by the end of next week. But Merkley on Wednesday stopped short of threatening to vote against the government funding resolution if it includes permitting reform. He explained that he drafted the letter to draw attention to the concerns environmental justice groups have over Manchin’s bill. Sen. Ed Markey (D-Mass.) has also released a statement saying the permitting reform language should not be added to must-pass legislation to keep the government funded. Sen. Tim Kaine (D-Va.) issued a statement Wednesday evening declaring his opposition to the Manchin bill because it would approve the construction of a hundred miles of the Mountain Valley Pipeline through his home state and he was not adequately consulted. “I cannot support the Mountain Valley Pipeline-related provisions in this legislative text. Over 100 miles of this pipeline are in Virginia, but I was not included in the discussions regarding the MVP provisions and therefore not given an opportunity to share Virginians’ concerns,” he said. Schumer was spotted having an intense conversation with Kaine just off the Senate floor shortly after the Virginia senator put out his statement. Schumer faces an even bigger problem on the Republican side of the aisle, where opposition to Manchin’s bill has coalesced over the last two weeks. Senate Minority Leader Mitch McConnell (R-Ky.) on Wednesday praised Capito’s permitting reform bill as a better option than Manchin’s. “Very predictably, this background deal is crumbling before our eyes,” McConnell said on the Senate floor, making reference to Schumer’s promise to pass Manchin’s permitting reform bill before the end of September. He predicted that Republicans would find Manchin’s bill insufficient to get enough domestic oil, gas and coal projects up and running to reduce the cost of mounting energy bills. “Every indication thus far suggests [it] will be weak reform in name only legislation,” he said. He promised all 50 Republicans would vote for Capito’s permitting reform bill if it’s included in the short-term funding measure instead of Manchin’s proposal. “If our colleague across the aisle wants real permitting reform, Sen. Capito’s fantastic bill only needs Sen. Manchin plus nine more Democrats to clear this chamber,” McConnell said. “Otherwise it would appear the senior senator from West Virginia traded his vote on a massive liberal boondoggle in exchange for nothing,” he said, referring to the Inflation Reduction Act, which passed in August because of Manchin’s support.

Lawmakers want to change permitting bill. Will they succeed? - The new permitting reform proposal is already facing calls from skeptical lawmakers who want to dramatically change it. Sen. Mark Warner (D-Va.) wants to alter language for a natural gas pipeline that runs through his state. Sen. Sheldon Whitehouse (D-R.I.) wants to speed up offshore wind projects. Republicans have doubts about the bill granting new powers to the nation’s top energy regulator and want the legislation to be closer to one introduced by one of their colleagues. Those gripes span the political spectrum and leave in serious doubt the fate of the legislation, which was introduced Wednesday by Energy and Natural Resources Chair Joe Manchin (D-W.Va.).Despite those doubts, Senate Majority Leader Chuck Schumer (D-N.Y.) has set a test vote next week. The intention is to tie the permitting bill to stopgap spending legislation. Schumer pledged to hold a vote on permitting as part of Manchin’s support for the climate-focused Inflation Reduction Act.“We’ve spent the last couple weeks trying to find common ground between our team, Sen. Manchin’s team and Sen. Schumer’s team, and I think our efforts to make sure any changes we made to accommodate the clean energy development were with respect to the environment and to hope we do no damage,” Environment and Public Works Chair Tom Carper (D-Del.) told E&E News.The permitting overhaul would speed environmental reviews for energy projects, prioritize transmission and make changes under the Clean Water Act, among numerous provisions (E&E Daily, Sept. 22).The effort picked up a crucial ally yesterday in Sen. Shelley Moore Capito (R-W.Va.), the ranking member on EPW.For her, the inclusion of a provision that would speed approval of Mountain Valley pipeline, a controversial West Virginia to Virginia natural gas project mired in environmental reviews and lawsuits, was key. Her vote is also seen as critical to bringing skeptical Republicans on board.But the Mountain Valley provision is also driving a wedge in rank-and-file Democrats. Sen. Tim Kaine (D-Va.) immediately announced his opposition to the provision, calling into question his support for the overall package if it remains. Key to his concerns is a provision that would move judicial jurisdiction of the pipeline.Sen. Tammy Duckworth (D-Ill.) said yesterday she also opposes the legislation for similar worries.“I’m still going through it, but this idea of being able to move jurisdiction from one court just because you don’t like the court’s decision, especially for the one pipeline,” Duckworth said. “Are we going to do that all across the country next?” 

Closer look at Lincoln County pipeline explosion, safety report You've seen the ads on TV and radio asking you to call 811 before digging, to make sure there's nothing in the ground. But you may never have thought about the possibility of a pipeline rupture. For people in the Indian Camp neighborhood in northern Lincoln County, that became a reality at 1:23 a.m. on Aug. 1, 2019. "I was in a daze when I woke up...just didn't know what was going on," Robbin Turner said, whose front door is less than 1,000 feet from the site of the rupture. One person is dead and five others hurt from a natural gas explosion in Lincoln County, Ky. on Aug.1. A 30-inch diameter pipe, part of an interstate natural gas pipeline from Texas to New York, ruptured and released 101.5 million cubic feet of natural gas. It also created a massive fireball."The shaking I thought --at first-- was the aftershock from a nuclear explosion. That's what my brain was telling me," Turner said. Turner saw flames shooting hundreds of feet in the air. It melted the vinyl on the side of her house, and melted paint on her and her husband's two trucks.The explosion killed 58-year-old Lisa Derringer, who was a grandmother and friend to many people in the neighborhood. Six others were hospitalized. Five homes were destroyed and another 14 were damaged.The National Transportation Safety Board (NTSB) released its final report on the explosionSept. 14, 2022.The independent governmental regulator found Enbridge, the pipeline operator, committed several errors in the lead up to the explosion, with many of those factors contributing to the deadly accident.Enbridge changed the Texas Eastern Transmission pipeline from a unidirectional line (going north) to a bi-directional line (flowing both ways) between 2014-2017. The NTSB found the company did not fully understand the changes in pressure and temperature this would create.Enbridge also underestimated the presence of "hard spots" in the pipeline according to the report.A hard spot is a point in a pipeline where metal is harder than the surrounding metal. This can cause a small heat system to occur, which increases temperature.

Kentucky Spending $30M on New NatGas Pipe to Expand Biz Growth - Marcellus Drilling News - There’s no wishy-washiness or shilly-shallying in Kentucky when it comes to building new natural gas pipelines. At least, there isn’t any prevarication under the current administration of Gov. Andy Beshear. Earlier this week, Beshear presented a ceremonial check for $30 million to fund the construction of a 53-mile, 16-inch natural gas pipeline to feed natgas to the southern Pennyrile Region in the western part of the state. The aim is to “support rapid business growth” in that area of the state. Business growth and jobs coming to Kentucky–thanks to Marcellus/Utica shale gas.

A Natural Gas Shortage Is Looming For The US - Last week, the media rushed to report that natural gas prices in the United States had fallen sharply after trade unions and railway companies reached a tentative deal that averted a potentially devastating strike. Indeed, natural gas prices fell by nearly a dollar per million British thermal units, helped by a respectable build in inventories. And yet, inventories remain below the seasonal average, exports are running at record rates, and producers are beginning to struggle to meet demand, both at home and abroad. Reuters’ John Kemp wrote in a recent column that domestic and international gas consumption had risen to record highs, and shale producers—the ones that account for the bulk of U.S. natural gas output—were having a hard time catching up with this demand.Meanwhile, although higher on a weekly basis, inventories remained at the second-lowest for this time of the year for the last 12 years, Reuters’ market analyst noted. He also added there were no signs of any improvement in the level of inventories despite the rise in prices.None of this suggests lower prices for natural gas are coming to either the United States or international markets as the northern hemisphere heads into winter. On the contrary, the latest figures suggest more financial pain for gas consumers. And they confirm, to an extent, forecasts made earlier this year.In the spring, the principals of investment firm Goehring & Rozencwajg said U.S. gas prices willconverge with international prices towards the end of 2022. They noted something few other analysts tend to mention: the concentration of much of U.S. gas production in a handful of fields, with just two—Marcellus and Haynesville—accounting for as much as 40 percent of the total.The Permian contributes another 12 percent of the U.S. total gas output, and the rig count in the Permian has been down for two weeks in a row, according to the latest data. Less drilling means less associated gas to add to the national total.Meanwhile, on the demand side, electricity generation in the United States is seen reaching a record high this year, Kemp noted in his column, driven by the post-pandemic economic rebound. A hotter summer also contributed. A cold winter would certainly push gas consumption even higher.Another contributor is the lack of alternative sources of electricity generation: coal plants are being retired, and droughts in many parts of the country have compromised its hydropower capacity, the Reuters analyst also noted.While this is happening at home, demand for gas continues strong across the globe, too, as everyone seeks to stock up on fuel for the winter. U.S. energy companies are exporting liquefied natural gas at record rates. And disgruntlement at home is beginning to rear its head.“We appreciate that the [Joe] Biden administration has been working with European allies to expand fuel exports to Europe. A similar effort should be made for New England,” a group of governors from New England wrote in a letter to Energy Secretary Jennifer Granholm this summer, per a Financial Times report.The governors then went on to call on the administration to make sure there was enough LNG for American consumers, essentially asking politicians to reduce LNG exports. This does not bode well for balance in the U.S. gas market.

How the gas industry capitalized on the Ukraine war to change Biden policy - The Russian tanks and armored vehicles had barely begun to roll into Ukraine before the fossil fuel industry in the US had swung into action. A letter was swiftly dispatched to the White House, urging an immediate escalation in gas production and exports to Europe ahead of an anticipated energy crunch. The letter, dated 25 February, just one day after Vladimir Putin’s forces launched their assault on Ukraine, noted the “dangerous juncture” of the moment before segueing into a list of demands: more drilling on US public lands; the swift approval of proposed gas export terminals; and pressure on the Federal Energy Regulatory Commission, an independent agency, to greenlight pending gas pipelines.By the winter of 2022, there should be “virtual transatlantic gas pipelines” flowing from the US to Europe, the authors envisioned.Six months on from the letter, Russia’s invasion has stalled and in places retreated, but the US gas industry has achieved almost all of its initial objectives. Within weeks, Joe Biden’s administration adopted the gas industry’s major demands as policy. They paved the way for new pipelines and export facilities, established a new taskforce to boost gas exports to Europe and approved $300m in funding to help build out gas infrastructure on the continent.“I can’t even begin to tell you how much the momentum has changed for companies in the United States that have wanted to bring their projects forward and just haven’t been able to get long-term contracts,” said a jubilant Fred Hutchison, president of LNG Allies, the industry group that sent the letter, just three weeks after both the military and lobbying pushes started.The rhetoric of the Biden administration, which styled itself as deeply committed to tackling the climate crisis, had “changed substantially” within just a week, Hutchison noted. Biden’s creation of the gas export taskforce was a “direct response to the proposal put forward by LNG Allies”, the group boasted in March.But the embrace of liquified natural gas – or LNG, gas that has been cooled to -260F (-160C), turning it into a liquid that can be shipped overseas – as an act of defiance to Putin has dismayed climate activists who warn it will lock in decades of planet-heating emissions and push the world closer to climate catastrophe.“The fact that just weeks after those demands were laid out, President Biden was turning industry wishes into policy is a damning indictment of a president who had promised to tackle the climate crisis,” said Zorka Milin, senior adviser at Global Witness, which shared a new report on the escalation in gas infrastructure with the Guardian.Milin said the US gas industry was “licking its lips” at the onset of the Ukraine war. “There is no doubt that Biden’s apparent capitulation to the gas industry has opened the door for these companies to continue to profit off the backs of those suffering in Ukraine, those living close to new gas infrastructure in the US and the millions affected by climate change globally,” she added. LNG Allies, which is the operating name of the US LNG Association but does not publicly disclose its members or donors, has notched a number of notable wins since the start of the war. The group wanted six specific gas export applications to be expedited, and within three weeks the US Department of Energy granted two of them, Cheniere Energy’s Sabine Pass project in Louisiana and its Corpus Christi operation in Texas.

Gas, a 'bridge fuel,' dominates U.S. power at any price - Natural gas prices are skyrocketing, and America is a captive customer. The idea that gas would lead the nation into a renewable revolution isn't evident in 2022. Surging natural gas prices normally result in booming coal generation. But 2022 isn't normal.Power companies are shrugging off the highest gas prices in over a decade as they ramp up electricity generation at U.S. gas plants, which are producing 7 percent more power through September compared to last year. Coal generation, by contrast, is down 8 percent.The unusual dynamic reflects the energy transition in America. Gas has long been referred to as the bridge fuel that would connect a period of declining coal usage to a future ruled by renewables. The U.S. is now stuck in the middle of that bridge, unable to tap the full promise of clean energy, nor turn back to coal after a decade of power plant retirements.The result is an inflexible dependence on gas, regardless of how much it costs, analysts say. “The retirement of coal plants and with the drought impact on hydro has left the reserve capacity margin thin in a lot of places and that has left a lot of reliance on gas,” said Ira Joseph, a longtime gas and power analyst. ...

Natural Gas Futures, Cash Prices Fail to Sustain Fresh Momentum - Coming off a 56.0-cent sell-off to close out last week’s trading, natural gas futures on Monday shrugged off recent bearish developments and reversed course, trading in positive territory most of the day. Still, futures lost momentum late, despite seasonally stout cooling demand forecast for this week, and the October Nymex gas futures contract settled at $7.752/MMBtu, down 1.2 cents day/day. November lost seven-tenths of a cent to $7.804. NGI’s Spot Gas National Avg. shed a half-cent to $7.035, though prices were up in several regions. Production held just shy of 100 Bcf/d on Monday, down slightly from the 2022 highs reached earlier this month, according to Bloomberg’s estimate. Weather-driven demand, meanwhile, was poised to mount “as unseasonably strong upper high pressure builds over the interior U.S. with highs of upper 80s and 90s,” NatGasWeather said. “An early fall weather system will race across the Great Lakes and Northeast late in the week for a few” heating degree days “to aid national demand.” Demand for U.S. LNG exports – from both Europe and Asia – also held strong to start the week. Analysts said consumption likely would remain elevated through the fall as countries across the northern hemisphere work to get more gas in storage to ensure supplies for winter. “Dependence on the gas market remains high” and liquefied natural gas demand is “very strong,” Rystad Energy senior analyst Fabian Rønningen said. LNG feed gas volumes hovered near or above 12 Bcf/d much of September, keeping U.S. export facilities in operation running near capacity. All of which leaves the market concerned about potentially precarious domestic supplies for winter, creating the upward price pressure early Monday. With shoulder season around the corner, though, it was not enough to propel futures into the green for the day.

U.S. natgas futures ease to 6-week low on record output (Reuters) - U.S. natural gas futures slid about 1% to a fresh six-week low on Tuesday on near record output and forecasts for less demand next week than previously expected. Prices were also held in check on expectations demand would decline next month when the Cove Point liquefied natural gas (LNG) plant in Maryland shuts for a couple weeks of maintenance in October. U.S. gas use has already been reduced for months by the ongoing outage at the Freeport 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 fell 3.5 cents, or 0.5%, to settle at $7.717 per million British thermal units (mmBtu), their lowest close since Aug. 8 for a third day in a row. That was also the first time the front-month declined for four consecutive days since December 2021. In the spot gas market, the premium of the Henry Hub benchmark NG-W-HH-SNL in Louisiana over the Waha hub NG-WAH-WTX-SNL in the Permian Shale in Texas rose to $2.71 per mmBtu on Tuesday, its highest since October 2020 as pipeline maintenance limits the amount of gas that can exit the Waha producing basin. That compares with an average premium of Henry Hub over Waha of $1.30 per mmBtu so far in September, 63 cents so far in 2022, $1.33 in 2021 and a five-year (2016-2020) average of 80 cents. Despite recent declines, gas futures were still up about 107% so far this year 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 Feb. 24 invasion of Ukraine. Gas was trading around $56 per mmBtu in Europe and $43 in Asia JKMc1. That was a 9% increase in European prices. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.9 bcfd so far in September from a record 98.0 bcfd in August. With the coming of cooler autumn weather, Refinitiv projected average U.S. gas demand, including exports, would slip from 91.6 bcfd this week to 90.1 bcfd next week. The forecast for next week was a little lower than Refinitiv's outlook on Monday. The average amount of gas flowing to U.S. LNG export plants rose to 11.3 bcfd so far in September from 11.0 bcfd in August. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG.

Natural Gas Futures Snap Losing Streak After Putin’s Veiled Nuclear Threat - Natural gas futures on Wednesday gained ground for the first time in five sessions as global supply doubts personified by Russia’s president and his threat of launching nuclear weapons overshadowed fading demand.The October Nymex gas futures contract settled at $7.779/MMBtu, up 6.2 cents day/day. November gained 5.5 cents to $7.827.NGI’s Spot Gas National Avg., however, slid 19.5 cents lower to $6.840 as cooler temperatures settled into the Lower 48.Before U.S. markets opened, Russian President Vladimir Putin announced plans to call up reserves and deploy hundreds of thousands of soldiers to support the Kremlin’s invasion of Ukraine – signaling the entrenched, seven-month war could drag on indefinitely. The conflict has rattled global energy markets, most notably interrupting Russian natural gas deliveries to Europe. Countries across the continent have since moved with haste to buy up U.S. exports of LNG – providing strong price support. A prolonged war would likely ensure long-term demand for American liquefied natural gas, and this provided futures a boost Wednesday, according to EBW Analytics. .“Europe is staring down aggressive curtailments of Russian gas supplies and rising consumer utility bills, necessitating austerity measures and beyond to bail out consumers and utilities and prevent a dangerous shortfall this winter,” RBN Energy LLC analyst Lindsay Schneider said.“Prices in continental Europe have now topped $20/MMBtu for a year…On top of the elevated prices, outrageous spikes higher and lower have become a semi-regular occurrence as the gas market struggles to find balance,” she added. “And high prices and volatility are not going anywhere anytime soon as Europe braces for a winter with little or even no Russian gas.” In a televised address Wednesday that was translated for the Associated Press (AP), Putin threatened to use Russia’s nuclear arsenal should the North Atlantic Treaty Organization (NATO) interfere in the war. Putin accused the West of “nuclear blackmail” and noted, without evidence, “statements of some high-ranking representatives of the leading NATO states” about the possibility of using nuclear weapons against Russia, according to the AP.“To those who allow themselves such statements regarding Russia, I want to remind you that our country also has various means of destruction … and when the territorial integrity of our country is threatened, to protect Russia and our people, we will certainly use all the means at our disposal,” Putin said. He added: “It’s not a bluff.”

Natural Gas Futures Flop Following Stout Storage Print; Cash Prices Follow Suit - Natural gas futures fell for the third time this week after the latest government inventory data showed the biggest boost to underground storage this year, reflecting waning demand and robust production. The October Nymex gas futures contract dropped 69.0 cents day/day and settled at $7.089/MMBtu. November fell 63.4 cents to $7.193. NGI’s Spot Gas National Avg. shed 45.5 cents to $6.385 as cooler weather arrived along with the official start of autumn on Thursday. National Weather Service (NWS) data showed comfortable high temperatures ranging from the high 60s to the low 80s across large swaths of the Lower 48 on Thursday, from California to the Midwest to the Northeast. More of the same was forecast for the weekend. At the same time, Bloomberg estimated production Thursday at 99.6 Bcf/d, just shy of the 2022 peak – and record high – above 100 Bcf/d reported earlier this month. The shift to heating demand, meanwhile, may take several weeks. The latest U.S. Energy Information Administration (EIA) storage report, released Thursday, provided further evidence that supply and demand are beginning to align after a scorching summer that had created doubts about the adequacy of domestic supplies. EIA reported an injection of 103 Bcf into natural gas storage for the week ended Sept. 16. The result exceeded analysts’ expectations and soothed market concerns about supplies for the coming winter. The build marked the largest of the year. EIA reported a 102 Bcf injection for the week ended June 3. That was the only other triple-digit increase of the year so far. The latest print topped expectations and historical averages, adding to bearish price sentiment. Prior to the report, major polls showed median estimates hovering around an injection in the 90s Bcf. EIA reported a year-earlier injection of 77 Bcf and a five-year average injection of 81 Bcf. The build for the Sept. 16 week lifted inventories to 2,874 Bcf. The Midwest led all regions with a build of 35 Bcf, according to EIA. The South Central posted an increase of 31 Bcf. It included a 19 Bcf injection into nonsalt facilities and an increase of 12 Bcf into salts. The East region posted an injection of 29 Bcf. Mountain region stocks rose by 5 Bcf, while Pacific inventories increased by 2 Bcf. Looking ahead, early estimates submitted to Reuters for the EIA print covering the week ending Sept. 23 ranged from injections of 65 Bcf to 98 Bcf, with a mean increase of 86 Bcf.

U.S. natgas falls 4% to 10-week low on oil price drop, mild forecasts (Reuters) - U.S. natural gas futures fell about 4% to a fresh 10-week low on Friday on a drop in crude prices and expectations the weather will remain mild into early October, keeping both heating and cooling demand low and allowing utilities to inject lots of gas into storage over the next few weeks. In addition, the U.S. National Hurricane Center (NHC) projected that Tropical Depression 9 will strengthen into a hurricane as it moves from the Caribbean Sea to the Gulf of Mexico over the next few days before hitting South Florida on Wednesday. With much of the nation's gas production located away from the Gulf of Mexico in shale basins like the Permian in West Texas and Appalachia in Pennsylvania, analysts said tropical storms were more demand-destroying events since they knock out power and can cause liquefied natural gas (LNG) export terminals to shut. Another factor weighing on gas prices was the expectation that demand would decline in October when the Cove Point LNG plant in Maryland shuts for a couple weeks of maintenance. Cove Point is consuming about 0.8 billion cubic feet per day (bcfd) of gas. U.S. gas use has already been reduced for months by the ongoing outage at the Freeport 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 fell 26.1 cents, or 3.7%, to settle at $6.828 per million British thermal units (mmBtu), their lowest close since July 14. Oil prices plunged about 5% to an eight-month low as the U.S. dollar hit its strongest level in more than two decades and on fears rising interest rates will tip major economies into recession. The gas price drop kept gas futures in technically oversold territory with a relative strength index (RSI) below 30 for a second day in a row. For the week, the gas contract fell about 12%, its biggest weekly percentage decline since June. That was also the first time the front-month fell for five weeks in a row since January 2019. Analysts at energy consulting firm EBW Analytics said recent gas price declines caused gas prices to fall below ethane prices, which should cause energy firms to capture ethane rather than rejecting it into gas pipes. That should reduce the amount of total gas (plus ethane) available to the market. Despite recent declines, gas futures were still up about 83% so far this year 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 Feb. 24 invasion of Ukraine. Gas was trading around $51 per mmBtu in Europe and $38 in Asia. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.7 bcfd so far in September from a record 98.0 bcfd in August. With cooler autumn weather coming, Refinitiv projected average U.S. gas demand, including exports, would slip from 92.4 bcfd this week to 91.4 bcfd next week and 88.7 bcfd in two weeks. The forecasts for next week was higher than Refinitiv's outlook on Thursday. The average amount of gas flowing to U.S. LNG export plants rose to 11.3 bcfd so far in September from 11.0 bcfd in August. That compares with a monthly record of 12.9 bcfd in March.

USA Could See Strong Hurricane Enter Gulf of Mexico by Mid-Week - Oil prices moved lower this week on economic concerns magnified by a decision to increase interest rates by the U.S. Federal Reserve. WTI fell to $82.40 per barrel at one point but managed to move back up over the $83 level. Brent hit two consecutive daily lows of $89.30 before rebounding to over the $90 mark. Early week, traders focused on a report that August permits for new houses were the lowest in two years sparked by increased material costs and higher mortgage rates scaring-off potential buyers. But the main focus this week was on the U.S. Fed as the decision was made to raise the federal funds rate by 0.75 percent in a continuing effort to curb inflation. The higher lending rates have been viewed as stunting economic growth and, in turn, demand for energy. A mostly bearish inventory report added to the downside push. On the bullish front, traders had to consider reports that the output of the OPEC+ group was 3.5 million barrels less than the quota amounts, as well as the possibility of Russia escalating their war with Ukraine. This week’s EIA Weekly Petroleum Status Report indicated that inventories of commercial crude rose for the third-straight week, adding 1.1 million barrels to 431 million and now just two percent below normal for this time of year. The API reported that inventories rose by one million barrels while the WSJ survey predicted a gain of 2.2 million barrels. Refinery utilization unexpectedly ticked higher to 93.6 percent, up 2.1 from 91.5 percent the prior week. Total motor gasoline inventories increased by 1.6 million barrels to 214.6 million barrels, decreasing to six percent below average. Distillates increased 1.2 million barrels to 117.3 million barrels, now at 18 percent below normal. Crude oil stocks at the key Cushing, OK, hub rose 343,000 barrels to 25 million barrels, or 33 percent of capacity. Imports of crude were 6.95 million barrels vs 5.8 million barrels the prior week, while exports were 3.54 million barrels per day, up from 3.52 million barrels per day the prior week. Exports of refined products were 6.7 million barrels per day. Volumes withdrawn from the Strategic Petroleum Reserve were 6.7 million barrels, which dropped the total inventory to 427 million barrels. Total reserves of the government’s oil, which are at 1984 levels, are now less than the total commercial inventory. The U.S. government has now sold about 218 million barrels in the past year. Meanwhile, the DOE is offering another 10 million barrels of SPR oil for delivery in November. U.S. oil production held at 12.1 million barrels per day vs 10.6 million barrels per day last year at this time. The U.S. oil and gas rig count increased three rigs last week to 763 for the first rise in three weeks. Rates for Very Large Crude Carriers (VLCCs) from the U.S. Gulf Coast to China increased by 39 percent just since early August based upon increasing demand. The UAE has moved-up its target of five million barrels per day to 2025 from an original date of 2030. The Emirates were in a prior dispute with Saudi Arabia over their desire to produce as much as they can while oil is in demand, fearing a global move away from fossil fuels in the future. Seaborne barrels of Russian Urals fell to their lowest level since September despite heavily discounted prices. The pending EU boycott of Russian crude may only worsen their situation. While hurricane season has yet to impact the U.S. Gulf of Mexico, Hurricane Fiona has her sights set on Eastern Canada which could disrupt a 300,000 barrel per day refinery in New Brunswick. Still, forecasters indicate the U.S. could see a strong hurricane enter the Gulf of Mexico by mid-week. In a major ‘about face’, the UK has lifted the ban on hydrofracturing as the country tries to deal with its energy crisis. All three major stock indexes got pummeled this week on the interest rate hike report and look to settle lower week-on-week. The U.S. dollar gained strength on the inflation-curbing measure which resulted in keeping crude from gaining much ground. Natural gas broke sharply to the downside on a bearish inventory report and moderating temperatures as we head into the fall season. After rising above $8.00/MMBtu at one point, Henry Hub September NYMEX futures traded down to near $7.00/MMBtu and look to settle lower on the week. The EIA Weekly Natural Gas Storage Report showed an injection of +103 Bcf last week vs forecasts calling for 69 Bcf. Total stored gas now stands at 2.87 Tcf, around -6.4 percent vs year-ago levels and -10.4 percent from the five-year average. There are essentially only five weeks of injection left before the official start of winter on November 1. Weekly injections would now have to average 165 Bcf to get to a total storage level of just 3.7 Tcf. By comparison, last November started at 3.6 Tcf while November 2020 was 3.96 and November 2019 was 3.7 Tcf. U.S. natural gas production last week hit a record high of 100 Bcfd. The polar vortex is circulating again ahead of the coming winter. The path of the North American Jetstream will determine just how far south this area of frigid temperatures will reach. Early models predict a normal seasonal pattern which will impact the Northeast and Upper-Midwest U.S. mainly.

Biden administration proposes revisions to offshore drilling safety regulations – The Biden administration has proposed offshore drilling safety measures that it said would help prevent oil spills and protect workers and the environment. The announcement came during a recent conference call between Interior Secretary Deb Haaland and reporters. The proposal aims to restore some of the safety provisions put in place by the Obama administration in 2016 following the 2010 oil spill in the Gulf of Mexico. The Trump administration had revised the rules in 2019 to reduce what the oil and gas industry said was a financial burden. The rule revisions would tighten technical requirements for blowout prevention systems and mandate speedier failure investigations. They also require companies to submit failure data directly to BSEE rather than to third parties. Under the new rule, inspections of such failures will also need to start sooner. Under the Trump administration, inspections needed to begin 120 days after a failure; they would now need to start in 90. Under the Obama rule, inspections had to be finished within 120 days. The proposal is open to public comment until Nov. 14. The Interior Department indicated that it would further tweak the rules, but the new proposal does not appear to be an exact replication of what was put forth during the Obama years. The Biden administration estimates that the changes will cost between $2.2 million and $2.4 million over a 10-year period.

Oil And Gas Jobs Are Bouncing Back In The Lone Star State - Two years ago, oil and gas companies in Texas were laying off employees amid the most severe downturn in the industry’s history. This year, job growth in America’s oil and gas heartland has been so strong that labor shortages have prevented the industry from expanding.According to the latest data, Texas added 2,600 new oil and gas jobs in August in the upstream sector. That was a decline from July when the upstream industry added 3,100 new jobs, but still a robust number and the latest proof that oil and gas companies are over the pandemic. “Upstream employment is growing steadily alongside the world’s demand for affordable, reliable energy. The Texas oil and natural gas industry continues to play its leadership role in enhancing national and energy security in our nation and for our trade allies around the world,” said the president of the Texas Oil and Gas Association, commenting on the numbers released by the Texas Workforce Commission.The data shows that since September 2020, the trough of the latest downturn, the upstream industry in Texas has added jobs at an average monthly rate of 1,943, for a total of 44,700 jobs added over the past two years. As of August, the total number of people employed by Texas upstream businesses stood at 201,700.Upstream oil and gas employment is growing strongly in New Mexico as well: Texas and New Mexico share the Permian basin, seen as the top performer in the U.S. shale patch. The New Mexico Department of Workforce Solutions expects employment in that sector to expand by 10.8 percent by 2028.Even with these strong employment growth rates, U.S. oil and gas is being plagued by a labor shortage that is interfering with growth plans, as frugal as these plans are. A lot of the limited production growth in the shale patch has been blamed on shareholders insisting they see some cash returns after years of backing drillers, but the lack of workers has also had a part to play.Back in April this year, the Wall Street Journal reported that the Permian was “running out of the workers, cash and equipment needed to produce more oil.” Author Collin Eaton noted that many workers who were let go during the pandemic simply did not return to their old jobs when those became available. Some, he noted, left mid-project to look for higher wages elsewhere.Since then, the number of oil and gas jobs has continued to grow, but not fast enough, it appears, compounded by shortages of materials and equipment, too. Shareholders in public companies are still the biggest culprit, according to analysts and to the companies themselves.

Natural Gas Drilling Eases Lower as Numbers Grow in Oil Patch -The U.S. natural gas rig count fell two units to 160 for the week ended Friday (Sept. 23), while a three-rig increase in the oil patch pushed the combined domestic tally one unit higher overall to 764, according to updated numbers from Baker Hughes Co. (BKR). The combined 764 active U.S. rigs as of Friday represents a 243-rig increase over year-earlier levels, according to the BKR numbers, which are partly based on data from Enverus.Total land drilling was unchanged week/week, while the Gulf of Mexico added one rig overall to raise its total to 15. Vertical drilling increased by two rigs, while one directional rig was added for the period. Partially offsetting was a two-rig decline in horizontal drilling, the BKR data show.The Canadian rig count climbed four units for the period to reach 215, reflecting gains of two oil-directed rigs and two natural gas-directed units. Canada’s rig count as of Friday was up 53 units over year-ago levels.Broken down by major drilling region, the Cana Woodford added two rigs week/week, while the Arkoma Woodford, Marcellus Shale and Permian Basin each added one rig. The Ardmore Woodford, Granite Wash, Utica Shale and Williston Basin each posted one-rig declines for the period.Counting by state, New Mexico picked up three rigs week/week, while Louisiana, Oklahoma and Pennsylvania each added one. On the other side of the ledger, Texas dropped two rigs from its total, while Kansas, North Dakota and West Virginia dropped one rig each, the BKR data show Domestic crude output stalled during the week-earlier period at a level below the 2022 peak, and far lower than the pre-pandemic high, according to updated data released earlier in the week by the Energy Information Administration (EIA)After climbing earlier in the summer, U.S. production flattened for the past four weeks at 12.1 million b/d, EIA said in its Weekly Petroleum Status Report. That kept output below the 2022 high of 12.2 million b/d and about 1 million b/d lower than the pre-pandemic pinnacle reached in early 2020.Exploration and production companies have boosted output from well below 12.0 million b/d in the pandemic’s immediate aftermath in 2021 and early this year. But they have done so cautiously amid political pressure to invest more in renewables and bouts of oil demand uncertainty.

Why U.S. Shale Producers Aren’t Riding To The Rescue Despite Tight Oil Supplies - The great U.S. shale machine has hit a wall. Drilling and fracking activity has flatlined, and some shale executives are warning that U.S. production growth may come in below expectations – perhaps by a lot. That’s bad news for oil markets that are already supply constrained. Spare capacity problems within the OPEC+ cartel are well-documented, an Iran nuclear deal that would unleash more Iranian oil onto global markets looks unlikely, and record crude oil releases from the U.S. Strategic Petroleum Reserve (SPR) are coming to an end in a couple of weeks, and a looming EU embargo is set to disrupt Russian oil exports further. The oil market is set to suffer another big supply crunch, which means a spike in prices. Despite intense market signals that more supply is needed, shale producers say a bailout is not in the cards. U.S. producers are doing everything they can under the circumstances. Indeed, shale executives are warning European policymakers that they can’t rescue Europe from a supply crunch if Russian output is further constrained. Shale producers will still enjoy substantial growth this year and next – it just may underwhelm market watchers compared to the high expectations and past performance. U.S. oil production has stagnated at around 12.1 million barrels daily for the past few weeks. That’s a considerable rebound after a decline to less than 10 million barrels a day when oil prices crashed during the pandemic. Still, it’s far from the 13 million barrels a day America was producing before the pandemic. More troubling, U.S. drilling and fracking activity has been flat since mid-June, with about 600 oil rigs operating over this span. The active oil rigs in the Permian Basin now number 316 – the lowest in four months. That suggests that the most prolific U.S. shale basin, the main driver of America’s oil production growth, is going through a significant slowdown, which points to sluggish volumes in the future. No one should be surprised if America fails to add the 1 million barrels per day this year that experts expected. Scott Sheffield, CEO of Pioneer Natural Resources, expects U.S. production to rise by just 500,000 barrels a day this year – and next year’s gains could fall well below the 800,000 barrels a day increase now foreseen by the U.S. Energy Information Administration. What’s going on here? Pre-pandemic, shale was single-handedly adding enough supply each year to meet global demand growth. Now, the sector appears to be coming up short. Part of this is down to supply chain issues, inflation, and infrastructure constraints – the sorts of things that give producers less bang for their buck and cause them to think twice about new investments. These issues have been problematic across the global economy for some time. What’s unique for the energy industry is the extreme volatility in commodity markets that we’ve seen recently. In the third quarter, so far, international benchmark Brent crude and U.S. marker West Texas Intermediate (WTI) are down about 20 percent for the worst quarterly percentage decline since the start of the pandemic in 2020. WTI was over $120 a barrel in June but dropped to $80 last month. It now trades at around $85 a barrel. That kind of whipsawing of prices gives pause to any producer thinking about making new capital outlays. Rising interest rates and fear of an economic recession are weighing on executives’ minds, despite the incentive of supply tightness in energy markets. Sheffield thinks oilfield inflation will remain steady at roughly 10 percent through 2023 but warns that diesel prices – required to power most drilling rigs and fracking equipment – are a potential driver of higher inflation. Diesel stockpiles have fallen on solid demand and exports, and U.S. supplies stand near five-year lows ahead of winter, a time of strong demand for this fuel type. There are also investor and political pressures holding back shale production. Wall Street is not blessing significant production increases at this time, preferring instead a low-production, high-profit model that prioritizes dividends and share buybacks. Compensation incentives for executives in the shale industry are now dominated by cash return targets rather than production growth targets. That means the low-growth model is baked into the sector. The Biden administration’s anti-fossil fuel policies and messaging have not helped the investment environment. The White House may ask producers for more supply today, but their policy priorities seek to eliminate the need for that additional supply within five years. This timeline is woefully short in an industry that often makes investments on timelines of 20 years or longer. Even for shale plays with shorter investment cycles, there’s little incentive to invest millions of dollars into new rigs and employees if companies don’t see a long-term return. It all adds up to something close to paralysis for the shale sector. With so many forces pushing and pulling at once, the prudent move in the minds of many executives is to do nothing – to wait and see how this crazy market pans out.

DOE Announces Notice of Sale of Additional Crude Oil From the Strategic Petroleum Reserve | Department of Energy -- Notice is Part of Biden-Harris Administration’s Continued Action to Protect American Consumers and Address the Global Supply Disruption Caused by Putin’s Energy Price Hike — The U.S. Department of Energy’s (DOE) Office of Petroleum Reserves today announced a Notice of Sale of up to 10 million barrels of crude oil to be delivered from the Strategic Petroleum Reserve (SPR) in November 2022. This Notice of Sale is part of President Biden’s announcement on March 31, 2022 authorizing the sale of crude oil from the SPR as continued support to help address the significant market supply disruption caused by Putin’s war on Ukraine and aid in lowering energy costs for American families. The President’s announcement authorized DOE to release up to 180 million barrels from the SPR to serve as a wartime bridge as domestic production—which is expected to reach a new record next year—ramps back up. This historic release of SPR crude has already provided approximately 155 million barrels of crude oil supply to the U.S. economy—resulting in certainty of supply for American consumers. Today’s announcement will bring the total to 165 million barrels out of the 180 million barrels the President authorized in March. DOE plans to release up to 10 million barrels of sweet crude oil with deliveries in November 2022 from the Big Hill and West Hackberry SPR storage sites. DOE must receive bids for this notice no later than 10:00 a.m. Central Time on September 27, 2022. Contracts will be awarded to successful offerors no later than October 7, 2022.
The sale will be conducted with the following crude oil options from the following two SPR sites:

• Up to 5 million barrels from Big Hill
• Up to 5 million barrels from West Hackberry

The SPR is the world's largest supply of emergency crude oil, and the federally owned oil stocks are stored in underground salt caverns at four storage sites in Texas and Louisiana. The SPR has a long history of protecting the economy and American livelihoods in times of emergency oil shortages. A recent analysis from the Department of the Treasury estimates that SPR releases this year, along with coordinated releases from international partners, have reduced gasoline prices by up to about 40 cents per gallon compared to what they would have been absent these drawdowns. Since June 2022, retail gas prices have dropped for more than thirteen consecutive weeks.

U.S. to sell up to 10 mln bbls of oil from SPR for Nov. delivery - The US Energy Department said on Monday it will sell up to 10 million barrels of oil from the Strategic Petroleum Reserve, for delivery in November, extending the timing of a plan to sell 180 million barrels from the stockpile to tame fuel prices. President Joe Biden's plan announced in March of the largest release of oil from SPR in history had aimed to sell 180 million barrels by the end of October. So far, only 155 million barrels have been sold and the next sale will bring the total to 165 million barrels, the department said. The sale will be of oil low in sulphur, known as sweet crude, from the SPR's sites in Big Hill, Texas and West Hackberry, Louisiana. Contracts will be awarded no later than Oct. 7. The SPR holds oil in heavily-guarded former salt caverns along the Gulf of Mexico coast. There is no date set for selling a full 180 million barrels. "As we look to the future, I think what you're seeing right now is us evaluating the current market dynamics and making sure that our releases align with the needs," a senior Biden administration official told reporters in a call about the sale. High gasoline prices have been a vulnerability for the Biden administration and the deliveries will take place in the same month as the Nov. 8 midterm elections in which the president's fellow Democrats hope to keep control of Congress. US gasoline pump prices have fallen from above $5.00 a gallon in June to about $3.68 today.

Arizona Woman Sentenced to Six Years in Prison for Conspiracy to Damage the Dakota Access Pipeline– An Arizona woman was sentenced today in federal court to six years in prison for Conspiracy to Damage an Energy Facility. Ruby Katherine Montoya, age 32, was ordered to serve three years of supervised release to follow her prison term and pay $3,198,512.70 in restitution.According to court documents, Montoya, and co-defendant Jessica Reznicek, as early as November 8, 2016, and continuing until May 2, 2017, conspired with other individuals to damage the Dakota Access Pipeline at several locations within the Southern District of Iowa, Northern District of Iowa, and the District of South Dakota. Specifically, Montoya admitted to damaging and attempting to damage the pipeline by: (1) using an oxyacetylene cutting torch to burn holes in the pipeline, and (2) setting fire to pipeline instrumentation and equipment in Mahaska, Boone, and Wapello Counties within the Southern District of Iowa.U.S. Attorney Richard D. Westphal stated, “The sentence imposed today demonstrates that any crime of domestic terrorism will be aggressively investigated and prosecuted by the federal government. The seriousness of the defendant’s actions – that occurred multiple times, at different locations, resulting in over $3 million dollars in restitution – warranted the significant prison sentence imposed by the Court and should deter others who think of engaging in such criminal acts.”Following the sentencing, FBI Omaha Special Agent in Charge Eugene Kowel said, “The sentence received by Ruby Montoya sends a clear message that those who commit violence through an act of domestic terrorism will be identified, investigated, and prosecuted. The FBI is committed to protecting the American people. We will continue to work with our law enforcement partners to bring domestic terrorists to justice.” Montoya’s co-defendant, Jessica Reznicek, was sentenced to 96 months imprisonment on June 30, 2021.

The long legal saga of DAPL arsonist Ruby Montoya --A week after FBI agents ransacked her bedroom in August 2017, Ruby Montoya sat before a videographer. Just steps away from the rooms where FBI agents had hauled dozens of bags and boxes from the Des Moines Catholic Worker House where Montoya lived, the 27-year-old addressed his questions with a preternatural calm.“You really put your life on the line. How do you feel about the whole ordeal?” he asked. “I don’t have kids,” she explained. “I don’t have any obligations like that, and I saw a necessity to act in a different way that I believe is more effective.” That “way” entailed a series of arsons that Montoya and her friend and Catholic Worker housemate, Jessica Reznicek, committed along the route of the Dakota Access Pipeline a few months earlier. Beginning on election night 2016 and continuing intermittently through early May 2017, the women ignited oil-soaked rags to try to destroy heavy machinery. They also lit acetylene torches to burn holes in the 1,172-mile-long pipeline, which at the time was under construction but nearing completion. Though the women were never apprehended by law enforcement while taking these actions, they failed to stop completion of the pipeline. So, that July, Montoya and Reznicek called a press conference and took credit for the arsons, even though they knew doing so would expose them to felony prosecution. “If we have any regrets, it is that we did not act enough,” the women said in their joint statement, which was intended to steer attention toward the threat the pipeline posed to drinking water sources along its route from North Dakota to Patoka, Illinois. (This pipeline has leaked at least five times since it began carrying oil in May 2017.)“We anticipated the repercussions of every action that we took,” Montoya told another interviewer that same summer. “We were fully prepared going into it, in that mental mind game of, ‘I’m driving myself to jail right now.’” Despite expressing their willingness to surrender themselves to authorities in the weeks following their credit claim and the FBI raid that followed, law enforcement officials did not bring charges for more than two years. By early September 2019, the women were a thousand miles apart. Reznicek lived with nuns and attended daily mass at the St. Scholastica monastery in Duluth, Minnesota. Montoya taught grades 3 and 4 at the Running River Waldorf School in Sedona, Arizona.By that month’s end, however, a grand jury had indicted both women on nine identical federal felonies. Each faced a maximum 110 years in jail — one of the most aggressive prosecutions of environmental activists in U.S. history. After accepting a plea deal, Reznicek was sentenced to eight years in prison last year. Half of those years are the result of a controversial terrorism enhancement that the government applied to her sentence.On Thursday, more than five years after admitting to her crimes, Montoya was sentenced to six years in federal prison. Her sentenced was lengthened by a terrorism enhancement similar to Reznicek’s. After Montoya was sentenced, she was immediately handcuffed by U.S. Marshals and escorted out of the federal courtroom in Des Moines, Iowa.*

More than 8,000 gallons of oil spill in Williams County after pipeline ruptures - — An estimated 8,400 gallons of crude oil spilled from a pipeline in Williams County, N.D., on Tuesday, Sept. 20, according to a news release from the state Department of Environmental Quality. Stealth Oilwell Services, a third-party contractor, struck a pipeline owned by Enable Bakken Crude while digging in the ground. Enable Bakken Crude is a subsidiary of Texas-based Energy Transfer, which operates the Dakota Access Pipeline. The spill about 14 miles south of Tioga impacted agricultural land, but no oil flowed into water sources, according to paperwork filed by an Energy Transfer employee. If severe enough, oil spills can render affected farmland unusable for years after the fact. The pipeline was shut down after the spill, and workers have recovered most of the spilled oil. Department officials will continue inspecting the site and monitoring remediation efforts, according to the release.

Judge approves $230M settlement in California oil spill case — A judge has approved a $230 million lawsuit settlement by the owners of a pipeline that spilled more than 140,000 gallons of crude oil into the ocean off California in 2015, lawyers announced Thursday. A federal judge in Los Angeles gave final approval on Tuesday to a settlement of a class-action suit that blamed All American Pipeline, L.P. and Plains Pipeline, L.P. for the May 2015 spill off the Santa Barbara coast. The corroded undersea pipeline ruptured north of Refugio State Beach in Santa Barbara County, northwest of Los Angeles. All American Pipeline later estimated that 142,800 gallons spilled. It was the worst California coastal oil spill since 1969. It blackened popular beaches for miles, killing or fouling hundred of seabirds, seals and other wildlife and hurting tourism and fishing. “Due to failed maintenance and extensive pipeline corrosion, the pipeline ruptured and spilled, devastating the fishing industry and soiling coastal properties from Santa Barbara County to Los Angeles County,” said a press statement from the law firms that filed the suit. People who believe they may be entitled to some of the money have until Oct. 31 to submit claims.

California relied heavily on natural gas during Sept heat wave -EIA - During an extreme heat wave in early September, the California power grid relied on natural gas for almost half of its electricity generation to meet peak demand, the U.S. Energy Information Administration said on Wednesday.For brief periods during the week of Sept. 4, natural gas accounted for up to 60% of theCalifornia Independent System Operator fuel mix, compared with 32% for the year prior to the record-setting demand week, the EIA said. CAISO typically relies on natural gas, hydroelectric power, and electricity imports to meet peak demand, the EIA said, adding that less efficient and costlier natural gas units are often the last resort.During the hours between 5 p.m. and 9 p.m., when cooling demand peaks and solar energy output wanes, the share of natural gas in the mix rose to more than half for the week of Sept. 4, CAISO data showed.Meanwhile, the share of lower carbon-emitting sources, such as solar, wind and nuclear, dropped to 24% for the week of Sept. 4, from 40% for the year up to that week, the data showed.The grid operator avoided rolling outages by urging customers to conserve energy for 10 consecutive days through the heat wave, as homes and businesses in the drought-stricken region cranked up their air conditioners.

U.S. Refiners May Soon Purchase More Canadian Crude - Canada’s benchmark heavy oil price could soon see a boost as U.S. refiners are expected to return to buying large volumes of Canadian crude once the massive releases from the Strategic Petroleum Reserve (SPR) by the Biden Administration end in October, traders and analysts tell Reuters. The U.S. Administration authorized in March the release of 1 million barrels per day (bpd) from the SPR over a period of six months in a bid to lower oil prices and potentially boost domestic production through contracts with companies to purchase future oil at fixed prices. The SPR releases are a response to the disruption of global oil markets caused by Russia’s invasion of Ukraine and subsequent Western sanctions that have led to soaring oil and gas prices. Since the 180-million-barrel SPR release over six months is mostly of sour crude, the discount of Western Canadian Select (WCS)—the benchmark price of oil from Canada’s oil sands delivered at Hardisty, Alberta—relative to the U.S. benchmark WTI has widened this summer. With the expected end of the SPR releases next month, U.S. refiners are set to boost imports of crude from Canada and from other producers of sour and heavier crudes. “When the SPR releases finish, these refiners will look to lean harder again on Canadian barrels or seaborne imports,” Matt Smith, lead oil analyst for the Americas at Kpler, told Reuters. This would narrow the discount of the Canadian oil benchmark to the U.S. benchmark, analysts say. This summer, the WCS discount has widened to $20 per barrel below WTI. Last year, the WTI-WCS price differential averaged $12.78 per barrel, according to the Alberta Energy Regulator. Before the market turmoil caused by the Russian invasion of Ukraine and the SPR releases in the U.S. in response to the high oil prices, the regulator expected the WTI-WCS price differential to average $14.00 per barrel this year.

Petroperu says latest oil spill stemmed from sabotaged pipeline — Peru's state-run oil company Petroperu Sunday reported an attack against the Norperuvian Oil Pipeline (ONP) in the jungle region of Loreto had caused a spill triggering environmental contingency protocols. “Police authorities and Petroperu have been able to confirm that the crude oil leak that spread along the Cuninico river and reached the Marañon river on Friday was the result of an intentional 21-centimeter cut to the pipe,” the company said in a statement. The Cuninico is a major tributary to the Marañon river, which in turn is a major contributor to the Amazon river. “The cut has been sealed with a metal clamp to contain the hydrocarbon,” the company also reported. Petroperu reported the presence of traces of crude oil in the Cuninico river, in the Loreto region (northern jungle), after complaints of contamination from native communities. “Six communities do not have water to drink or to prepare their food,” said indigenous “apu” (leader) Galo Vásquez of the Cuninico people. The Prosecution has launched a probe into the causes of the incident. Petroperu has reported 10 attacks on its pipeline in Loreto since January, which have caused oil spills. The pipeline has recorded at least 29 acts of sabotage since 2014, according to the National Society of Mining, Petroleum, and Energy. The company also noted that 19 barriers have been installed so far to prevent the spread of hydrocarbons while dialoguing with local groups “to continue with the containment and cleaning work.” “To this end, the personnel crews carry out patrolling and supervision work in order to identify other sectors of the river that require the installation of this containment equipment. In the same way, the definitive repair of the pipeline will be carried out,” Petroperu pointed out.

Where Is the Most Dangerous Offshore Region for Oil, Gas Right Now? -The answer to that question really depends on the sector of oil and gas where you work, Dryad Global Chief Executive Officer Corey Ranslem told Rigzone.“If you look at the oil rigs then it would be the Bay of Campeche in the Gulf of Mexico,” Ranslem said. “We have seen the number and types of attacks increase over the past year along with the level of violence. Assailants are now armed and are increasing the number of attacks against oil rigs in this region,” Ranslem added.“If you manage tankers there are two areas in the world designed as high risk, the Gulf of Guinea and Libya. Just in the past week we’ve seen fighting pick up on the outskirts of Tripoli. We also saw a recent boarding on a cargo ship in the anchorage off Guinea,” Ranslem continued.When asked if there is anything oil and gas workers can do to stay safe in these regions, Ranslem offered some practical advice.“Stay vigilant and keep a good visual and radio watch,” he said.“The other major recommendation is to have a plan in place of how to deal with the intruders in these situations. Right now, we aren’t seeing kidnappings like we did off Somalia, but that doesn’t mean it can’t happen,” Ranslem added. Ranslem has 27 years of experience in the public and private sector working with ports, cargo lines, cruise lines and large yachts, Dryad Global’s website highlights. He is a veteran of the U.S. Coast Guard and is a recognized expert in U.S. Federal Court in maritime security, the site shows.

Aker BP picks compatriot firm for oil spill monitoring system - Norway’s oil and gas company Aker BP has selected compatriot technology supplier Vissim to develop an expanded digital platform for future oil spill monitoring and detection system on the Norwegian continental shelf. Vissim will develop a software solution that integrates input from a number of different oil spill detection sources, including radars, satellites, and sensors on subsea production equipment, and combine them into one visual overview. The solution will be applied to all Aker BP-operated assets on the Norwegian continental shelf. Additionally, it will integrate meteorological data to allow Aker BP to plan for so-called compensating measures in connection with its offshore operations. Vissim’s oil spill detection system is said to be based on its comprehensive OCEAN data platform that enables AI and machine learning.

More Than 5 Million People In UK Go Without Food To Pay Energy Bills - Millions of Britons have faced impossible choices in recent months as the cost-of-living crisis has worsened, with 5.6 million people, or 11%, having gone without food because of the rising cost of living as energy and food prices soar, the Money Advice Trust charity said in a new report on Wednesday. As of August 2022, a fifth of UK adults, or 21%, were behind on one or more household bill, the report found. That’s up from 15% in March 2022. Unsurprisingly, energy was the most common bill for people to be behind on, with 1 in 9, or 11%, currently in energy arrears. And 1 in 9 adults in the UK say that their energy supplier had increased their monthly payments to a level they could not afford. As of August, a total of 10.9 million people are behind on household bills, which is an increase of 3 million people since March 2022, Money Advice Trust said. “My energy costs are huge now so I’m in debt for the first time. I can’t afford school uniform for my kids. I can’t afford to care for my disabled child adequately,” one respondent in the survey said. Moreover, 5.9 million people, or 11%, said they had gone without heating, electricity, or water in the past three months as a result of the rising cost of living, the report showed. The UK’s new Prime Minister Liz Truss has a $147 billion (£130 billion) plan to freeze household energy bills at their current levels. As the energy and cost-of-living crisis in the UK deepens, the Truss government is looking to avoid an 80% planned surge in the so-called price cap on household energy bills set to kick in in October. Truss is looking to freeze the annual household bill for gas and electricity at the current level of $2,235 (£1,971) or below.

UK Government Lifts Shale Gas Production Moratorium - The UK department for Business, Energy and Industrial Strategy (BEIS) has announced that, to bolster the UK’s energy security, the government has lifted the moratorium on shale gas production in England and confirmed its support for a new oil and gas licensing round. BEIS revealed that the government will consider future applications for hydraulic fracturing consent, adding that developers will need to have the necessary licenses, permissions and consents in place before they can commence operations. The department highlighted that the decision to lift the shale moratorium comes alongside the publication of the British Geological Survey’s (BGS) scientific review into shale gas extraction, which was commissioned earlier this year. The review recognized that we have limited current understanding of UK geology and onshore shale resources, BEIS noted, adding that “it is clear that we need more sites drilled in order to gather better data and improve the evidence base”. BEIS stated that lifting the pause on shale gas extraction will enable drilling to gather this further data, “building an understanding of UK shale gas resources and how we can safely carry out shale gas extraction in the UK where there is local support”. The department also revealed that a new licensing round is expected to be launched by the North Sea Transition Authority (NSTA) in early October. This round is expected to lead to over 100 new licenses and the NSTA is expected to make a number of new blocks of the UK Continental Shelf available, BEIS outlined. The department also revealed that the UK is scaling up renewables, nuclear, and lower carbon energy sources “to boost Britain’s energy security in the long term”. “In light of Putin’s illegal invasion of Ukraine and weaponization of energy, strengthening our energy security is an absolute priority, and, as the Prime Minister said, we are going to ensure the UK is a net energy exporter by 2040,” Business and Energy Secretary Jacob Rees-Mogg said in a government statement. “To get there we will need to explore all avenues available to us through solar, wind, oil and gas production - so it’s right that we’ve lifted the pause to realize any potential sources of domestic gas,” he added. Commenting on the UK’s latest shale development, Charles McAllister, the director of policy, government and public affairs at industry body UK onshore oil and gas (UKOOG), said, “UKOOG welcomes the new Written Ministerial Statement, which formally lifts the moratorium on hydraulic fracturing in England and seeks to better support the industry throughout the life cycle of development”. “UK shale gas offers evident economic, environmental and geopolitical benefits not provided by a continued over-reliance on energy imports. The BGS report clearly states that more data collection is needed in the UK and we are ready to provide proposals to government to do just that,” he added. McAllister noted that UKOOG continues to support the UK’s transition to net zero and said “every single costed net zero compliant scenario recognizes the need for natural gas and oil throughout and at the outcome of our 2050 goal”. “The development of a UK shale gas industry, amongst other technologies, provides a credible path for the UK to become an energy exporter by 2040, following on from 2021 where the UK produced the least amount of energy in over 50 years,” he said. Also commenting on the UK’s shale news, Cuadrilla Resources Limited CEO Francis Egan said, “I am very pleased that the government has quickly and decisively followed up the Prime Minister’s announcement of two week ago with … [the] WMS”. “Communities across the North of England stand to benefit most from … [the] announcement. Cuadrilla is determined that a portion of all shale gas revenue should be delivered to local residents as a community dividend. This would mean each producing shale gas site could generate potentially hundreds of millions of pounds for local households, families, and communities,” he added.

Thousands Take To The Streets In Belgium Against Soaring Energy Prices - Thousands of people protested against soaring electricity prices and costs of living in the Belgian capital Brussels on Wednesday, following a similar protest the day before in Slovakia, and earlier this month in the Czech Republic. In what has been dubbed “a national day of action”, as reported by the Associated Press, some 10,000 people protested across the country, demanding solutions to soaring electricity and natural gas prices and skyrocketing costs of living. According to AP, citing a Belgian media poll, at a time when electricity and gas bills have nearly doubled from a year ago, some 64% of Belgians are concerned they may not be able to pay their energy bills. In June, some 70,000 Belgium workers also took to the streets, protesting sharp spikes in the cost of living. On Tuesday, similar protests were launched in Slovakia, where several thousand rallied in the capital Bratislava against high inflation. The anti-government protests were organized by the leftist opposition, but also joined by far-right forces. Protesters blame the government’s support of Ukraine for soaring inflation. In the first week of September, mass protests also rocked the Czech Republic, with some 70,000 people gathering in the capital Prague to demonstrate against the government for skyrocketing costs of living in a move the Czech prime minister warned had been influenced by Russian propaganda. Risk consultancy Verisk Maplecroft’s civil unrest index shows that more than half of the 198 countries covered by the index saw an increase in civil unrest in the past quarter. “The world is facing an unprecedented rise in civil unrest as governments of all stripes grapple with the impacts of inflation on the price of staple foods and energy,” principal analyst Torbjorn Soldvedt said.

Portugal says could face shortage if Nigeria does not deliver all LNG due - Portugal could face supply problems this winter if Nigeria does not deliver all the liquefied natural gas (LNG) it is due to, the European Union country's environment and energy minister said on Monday. Asked whether with many countries now looking for alternatives to Russian gas there was a chance that Nigeria might not meet its LNG supply volumes, Duarte Cordeiro said that while the government had given Lisbon assurances that it would do so, "there is a risk of it not complying". "From one day to another, we may have a problem, such as not being supplied the volume of gas that is planned," Cordeiro told a conference in Lisbon hosted by CNN Portugal. Cordeiro did not say what would prevent Nigeria supplying the LNG it was contracted to. Oil and gas output in Nigeria has been throttled by theft and vandalism of pipelines, leaving gas producer Nigeria LNG Ltd's terminal at Bonny Island operating at 60 per cent capacity. Nigeria LNG, which is owned by state-oil company NNPC Ltd, Shell, TotalEnergies and Eni, did not immediately respond to a request for comment. Although Portugal has its gas reserves at 100 per cent of storage capacity, Cordeiro said that if fewer Nigerian LNG deliveries materialised, it would have to look for alternative supplies. With other European countries doing the same, this would likely lead to higher imported gas prices, he said. Portugal last year imported 2.8 billion cubic meters of LNG from Nigeria, or 49.5 per cent of total imports, while the United States was the second-largest supplier with a share of 33.3 per cent. Its other suppliers include Trinidad and Tobago, Algeria, Qatar and Russia, the latter accounting for just 2 per cent last year. Portugal is "diversifying its suppliers to increase the country's energy security", Cordeiro said, adding that it is adopting strategies to lower gas consumption, while boosting its already high production of electricity through renewables. "Portugal has been preparing, like all of Europe, for what will be a difficult winter," he said, urging the European Commission to move forward with the implementation of a joint gas purchasing platform and defining import prices. .

Greenpeace Activists Block Unloading Of Russian Gas In Finland - Activists from Greenpeace Nordic have stopped the ship Coral Energice from unloading its cargo of Russian fossil gas at an LNG terminal in Röyttä, Tornio, Northern Finland. Greenpeace activists in kayaks prevented the ship from docking while climbers occupied the cranes that were supposed to unload the gas from the ship. The activists also demanded from the Finnish government to immediately stop imports of Russian fossil gas. “It’s completely unacceptable that Russian fossil gas is still allowed to flow into Finland, more than six months after Putin began his invasion of Ukraine. The Finnish government and prime minister Sanna Marin must ban all Russian fossil fuel imports immediately. The state-owned company Gasum should not be allowed to continue funding the war in Ukraine”, says Olli Tiainen, climate and energy campaigner at Greenpeace Nordic. Finnish state-owned company Gasum is importing gas from Gazprom and Novatek to Finland and Sweden. According to Greenpeace, importing is being done sometimes directly, but more recently, via a more intricate arrangement where the gas is first transshipped to other vessels at sea. Gasum’s customers in Finland include maritime and shipping operators as well as forest and steel industry companies. Finnish prime minister Sanna Marin stated earlier this year that Finland would be able to cut off all Russian fossil fuel imports fast and the minister for state ownership steering Tytti Tuppurainen commented in August that the LNG imports from Russia should be stopped because Finland, as well as all of Europe, should not be dependent on Russian energy. “Talks about the end of Russian gas imports have now been heard for months, but Gasum is still operating as if the war didn’t exist. The current energy crisis in Europe is caused by Russia’s aggression, and it should be a turning point for Finland and all of Europe. Now is the time we really need to transition away from fossil fuels that fuel both conflicts and crises,” Tiainen added.

Europe's real-time experiment in energy contraction - European society is currently undergoing a real-time experiment in energy contraction. Sanctions imposed on Russia in the wake of the Russia-Ukraine conflict have led to a dramatic reduction in imports of Russian oil and natural gas. The Europeans are still receiving some Russian oil via pipeline though that flow was reduced last month. The reasons for the decline in natural gas deliveries from Russia—deliveries not prevented by Western sanctions—are disputed with each side accusing the other of being the cause. Those of us who have been warning about the coming energy stringency believed that it would result from the rising cost of extracting hydrocarbons—and the inability to bring new production online faster than production is declining from existing wells. In Europe, we are getting an early preview of what such a future looks like when a society is unprepared for a sudden decline in the availability of oil and natural gas.The loss of Russian natural gas imports is shaping up to be nothing less than catastrophic for Europe. Just two years ago the price of gas at the Dutch Title Transfer Facility, Europe's most liquid natural gas market, was hovering around €11 per megawatt hour. At the close last Friday the price was almost 17 times higher at just under €188. At one point in late August the price spiked to €349. In the decade prior to the outbreak of the pandemic, the highest price ever seen for the TTF was a little over €29. Prior to the Russian invasion of Ukraine, Russian natural gas constituted 45 percent of all natural gas imports to Europe according to the International Energy Agency. So dependent is Europe on imports of natural gas that Russian imports accounted for 40 percent of TOTAL European consumption.The Russian government has indicated that it is willing to provide gas to Europe once again. All Europe need do is ask and promise to pay its bills (in rubles). For obvious reasons, European governments don't want to strengthen Russia's finances. Beyond this, any renewed flows of gas could be terminated or curtailed as a way to punish Europe if it does not become more flexible on a settlement in Ukraine. This is the backdrop in Europe going into the fall and winter seasons when heating demand for natural gas will rise. That means prices will likely rise and many businesses will likely fail as energy costs overwhelm them. Already smelters and ammonia producers have closed or significantly reduced operations as high energy prices have made those operations unprofitable. Electricity supply—much of which in Europe is generated by gas-fired power plants—is likely to be inadequate leading to blackouts and brownouts. If European businesses are forced to close due to high energy prices during the coming winter, there will likely be widespread unemployment. An economic recession then seems possible. One writer believes the economic effects will be more like a depression.

The Unintended Consequences Of The EU Energy Emergency Plan - This week saw the European Commission's President Ursula von der Leyen do something that would have probably been considered the opposite of democracy just a few years ago. She proposed that governments impose a ceiling on certain energy producers' revenues and add a windfall profit for Big Oil majors. Called "a solidarity contribution" or "a crisis contribution," the windfall tax's aim is the same as the aim of the revenue ceiling: manage energy costs in a runaway inflation environment and get some additional money to, according to the plan, distribute among those who most need it. Like all grand plans, however, unintended consequences abound with this one, and one of the gravest is the discouragement of oil and gas investments at a time when global oil and gas investments are already lower than they should be in light of demand projections. JP Morgan's head of global energy strategy said it this week in an interview with Bloomberg. "If you're planning your capital budget, you have to think twice now that you have a new risk," Malek told Bloomberg. "It encourages majors to return cash to shareholders as they use that free cashflow that could have been used in investment." Per plans, the EU seeks to "raise" some $140 billion from windfall taxes on non-gas electricity generators and oil gas, and coal companies for their "extraordinary record profits benefiting from war and on the back of consumers," to quote Von der Leyen.Reaction from the industry was swift. Austria's OMV said the consequences of such measures could be huge, adding that it was unfair to base the windfall levy proposal on oil companies' profits from the last three years since these were not normal times, Reuters reported, quoting CEO Alfred Stern."We will keep an eye on that, as it can already have a massive impact," Stern told media, noting, however, that the exact impact was difficult to glean because the proposal has yet to be fleshed out.Per von der Leyen's State of the Union speech, in which she listed the windfall tax among measures to cope with the energy crisis, the idea is to tax oil and gas companies with 33 percent of any current-year profits that were 20 percent above the company's average earnings for the last three years.OMV's Stern noted that the last three years included two pandemic years when a lot of companies in the oil and gas industries struggled to stay afloat, let alone post a profit, with oil prices falling as low as $25 per barrel. If what JP Morgan's Malek predicts is correct, this would mean less energy security for the future with less new oil and gas production outside Russia. The key, Malek told Bloomberg, was whether the levy would stay for years or be quickly removed once the money was raised.

Europe, More Than Putin, Must Shoulder The Blame For The Energy Crisis -- The same arrogant, self-righteous posturing from the West that fueled the Ukraine war is now plunging Europe into recession Outraged western leaders are threatening a price cap on imports of Russian natural gas after Moscow cut supplies to Europe this month, deepening an already dire energy and cost-of-living crisis. In response, Russian President Vladimir Putin has warned that Europe will “freeze” this winter unless there is a change of tack. In this back-and-forth, the West keeps stepping up the rhetoric. Putin is accused of using a mix of blackmail and economic terror against Europe. His actions supposedly prove once more that he is a monster who cannot be negotiated with, and a threat to world peace. Denying fuel to Europe as winter approaches, in a bid to weaken the resolve of European states to support Kyiv and alienate European publics from their leaders, is Putin’s opening gambit in a plot to expand his territorial ambitions from Ukraine to the rest of Europe. Or so runs the all-too-familiar narrative shared by western politicians and media. In fact, Europe’s arrogant, self-righteous posturing over Russian gas supplies, divorced from any discernible geopolitical reality, reflects precisely the same foolhardy mindset that helped provoke Moscow’s invasion of Ukraine in the first place.It is also the reason why there has been no exit ramp – a path to negotiations – even as Russia has taken vast swaths of Ukraine’s eastern and southern flanks – territory that cannot be reclaimed without a further massive loss of life on both sides, as the limited Ukrainian assault around Kharkiv has highlighted.The western media has to carry a major share of the blame for these serial failures of diplomacy. Journalists have amplified only too loudly and uncritically what US and European leaders want their publics to believe is going on. But maybe it is time that Europeans heard a little of how things might look to Russian eyes. The media could start by dropping their indignation at “insolent” Moscow for refusing to supply Europe with gas. After all, Moscow has been only too clear about the reason for the shutdown of gas supplies: it is in retaliation for the West imposing economic sanctions – a form of collective punishment on the wider Russian population that risks violating the laws of war.The West is well practiced in waging economic war on weak states, usually in a futile attempt to topple leaders they don’t like or as a softening-up exercise before it sends in troops or proxies. Iran has faced decades of sanctions that have inflicted a devastating toll on its economy and population but done nothing to bring down the government. Meanwhile, Washington is waging what amounts to its own form of economic terrorism on the Afghan people to punish the ruling Taliban for driving out US occupation forces last year in a humiliating fashion. The United Nations reported last month that sanctions had contributed to the risk of more than a million Afghan children dying from starvation. There is nothing virtuous about the current economic sanctions on Russia either, any more than there is about the blackballing of Russian sportspeople and cultural icons. The sanctions are not intended to push Putin to the negotiating table. As US President Biden made clear in March, the West is planning for a long war and he wants to see Putin removed from power.Rather, the goal has been to weaken his authority and – in some fantasy scenario – encourage his subordinates to turn on him. The West’s game plan – if it can be dignified with that term – is to force Putin to overextend Russian forces in Ukraine by flooding the battlefield with armaments, and then watch his government collapse under the weight of popular discontent at home. But in practice, the reverse has been happening, just as it did through the 1990s when the West imposed sanctions on Iraq’s Saddam Hussein. Putin’s position has been bolstered, as it will continue to be whether Russia is triumphing or losing on the battlefield.

Yanis Varoufakis: Time to Blow Up the Electricity Markets --The blades of the wind turbines on the mountain range opposite my window are turning especially energetically today. Last night’s storm has abated but high winds continue, contributing extra kilowatts to the electricity grid at precisely zero additional cost (or marginal cost, in the language of the economists). But the people struggling to make ends meet during a dreadful cost-of-living crisismust pay for these kilowatts as if they were produced by the most expensive liquefied natural gas transported to Greece’s shores from Texas. This absurdity, which prevails well beyond Greece and Europe, must end.The absurdity stems from the delusion that states can simulate a competitive, and thus efficient, electricity market. Because only one electricity cable enters our homes or businesses, leaving matters to the market would lead to a perfect monopoly – an outcome that nobody wants. But governments decided that they could simulate a competitive market to replace the public utilities that used to generate and distribute power. They can’t.The European Union’s power sector is a good example of what market fundamentalism has done to electricity networks the world over. The EU obliged its member states to split the electricity grid from the power-generating stations and privatize the power stations to create new firms, which would compete with one another to provide electricity to a new company owning the grid. This company, in turn, would lease its cables to another host of companies that would buy the electricity wholesale and compete among themselves for the retail business of homes and firms. Competition among producers would minimize the wholesale price, while competition among retailers would ensure that final consumers benefit from low prices and high-quality service. Alas, none of this could be made to work in theory, let alone in practice. The simulated market faced contradictory imperatives: to ensure a minimum amount of electricity within the grid at every point in time, and to channel investment into green energy. The solution proposed by market fundamentalists was twofold: create another market for permissions to emit greenhouse gases, and introduce marginal-cost pricing, which meant that the wholesale price of every kilowatt should equal that of the costliest kilowatt.The emission-permit market was meant to motivate electricity producers to shift to less polluting fuels. Marginal-cost pricing was intended to ensure the minimum level of electricity supply, by preventing low-cost producers from undercutting higher-cost power companies. The prices would give low-cost producers enough profits and reasons to invest in cheaper, less polluting energy sources.

Germany To Nationalize Struggling Uniper In Deepening Energy Crisis - Germany on Wednesday announced a move to nationalize struggling natural gas supplier Uniper SE as it strives to keep the industry functioning in the wake of a global energy crisis, according to Reuters. Uniper is Germany's largest importer of Russian NatGas and has suffered tremendous losses after Russian energy giant Gazprom slashed Nord Stream 1's pipeline capacity to zero, forcing the utility to purchase natgas outside contracts on the open market at record high prices. Berlin agreed to purchase the remaining stake owned by Uniper's parent company, Finnish utility Fortum Oyj for $1.69 (1.70 euro) per share. Buying Fortum's stake means Germany will own 99% of Uniper. The cost of nationalization comes as Berlin is set to inject 8 billion euros, equivalent to around $8 billion, into the utility. The move is to keep the lights on across German homes and businesses as the risk of power rationings increases. "This step has become necessary because the situation has worsened significantly."The state will do everything necessary to keep systemically important companies in Germany stable at all times," Robert Habeck, Germany's economy minister, said Wednesday.Uniper shares crashed by as much as 39% to 2.55 euros. Shares are down 93% on the year... In July, Berlin injected a whooping 15 billion euros ($14.95 billion) to save the utility though the move to nationalize ahead of winter shows further deterioration in energy security for Europe's largest economy.Here's what Markus Rauramo, CEO and President of Fortum, said about the deal:"Under the current circumstances in the European energy markets and recognising the severity of Uniper's situation, the divestment of Uniper is the right step to take, not only for Uniper but also for Fortum."The role of gas in Europe has fundamentally changed since Russia attacked Ukraine, and so has the outlook for a gas-heavy portfolio. As a result, the business case for an integrated group is no longer viable."

Russian energy giant Gazprom may be able to withstand Western sanctions by buying back its bonds, Barclays says - High natural gas prices have put Gazprom on track for sky-high profits this year – and the state-run energy giant may use the extra cash to better insulate itself from Western sanctions, according to Barclays.Natural gas prices have soared this year as Moscow choked off supply to Europe via key pipelines, including Nord Stream 1. Benchmark Dutch TTF natural gas futures have scored a series of records, hitting a high of 346 euros ($346) per megawatt hour in August.Gazprom reported profits of 2.5 trillion rubles ($42 billion) in the first six months of this year, meaning it's already surpassed last year's $29 billion. Even conservative estimates suggest it has already made more than $70 billion from gas sales this year, according to Barclays."High gas prices have provided Gazprom with financial flexibility," said a team led by energy analyst Amarpreet Singh in a recent research note."On conservative estimates, Gazprom has already generated more revenue from gas sales in 2022 than in the whole of 2021, which was already the most profitable for the group in recent years."Barclays said all signs point to the energy giant reinvesting the profits to reduce its foreign debts, which could make it more resilient to Western sanctions.On August 11, Gazprom's finance arm requested changes to contracts for its dollar-denominated bonds, which the bank sees as a precursor to the company buying back its non-ruble debts. "Gazprom is exploring a strategy to buy back its eurobond curve," Singh's team said. "It is seeking consent on a number of its bonds, which would allow it to buy back directly, avoiding issues caused by Russian capital controls and European sanctions."

Russia Sets Out How Much It's Going to Cut Gas Flow - Russia set out just how much its gas flows to the global market will fall in the next three years -- and the numbers underscore the scale of the challenge facing Europe’s energy consumers. Annual pipeline gas exports are set to drop by almost 40% to 125.2 billion cubic meters in 2023-2025, according to the nation’s three-year draft plan, seen by Bloomberg. Pipeline gas exports is estimated at 142 billion cubic meters this year, the draft showed. Russia’s gas giant Gazprom PJSC has been reducing flows to Europe -- historically its biggest market -- for months amid the region’s sanctions over the invasion of Ukraine. Some European customers were cut off after refusing to comply with the Kremlin’s demand to be paid in rubles for supplies. Russia has also cut shipments to the region through major pipelines, citing Western sanctions and technical reasons. That left the region with capped flows via Ukraine and deliveries via the second leg of TurkStream as the last remaining routes for supplies to the continent. The budget draft doesn’t provide a breakdown of the export markets. However, based on historic data and current flows, Turkey may become the single largest client of Gazprom on the continent. Last year Russia gas producer exported almost 27 billion cubic meters to Turkey. China could become the second-largest buyer of Russian pipeline gas next year. The deal between Gazprom and China National Petroleum Corporation envisions a gradual increase of supply via the Power of Siberia pipeline to around 21 billion cubic meters in 2023 from some 15 billion to 16 billion targeted for this year. Based on the assumptions above and given annual supplies of some 30 billion cubic meters to former Soviet Union nations, about 45 billion cubic meters of gas could be delivered to the European market. That equates to some 123 million cubic meters per day. Russia currently exports to Europe some 80 million cubic meters per day. Those figures are subject to change as Gazprom makes the final decision on supplies based on market conditions, client requests, and potentially further escalations of Russia’s standoff with the West. Russia expects crude exports to increase slightly, despite Europe halting most purchases from the nation. The three-year budget draft projects 250 million tons of crude to be exported next year, up from 243 million tons seen delivered this year, with 255 million tons and 260 million tons to be shipped in 2024 and 2025 respectively. Shipments of oil products, however, are seen declining to 113 million tons in 2023, from a projected 130 million tons this year, according to the draft.

Putin says Russia's not responsible for the EU's energy crisis — it just needs to 'push the button' on the Nord Stream 2 pipeline to get more natural gas - Russian President Vladimir Putin denied Russian responsibility for Europe's energy crisis and said the EU can simply turn on the new Nord Stream 2 pipeline if it wants more natural gas from his country."The bottom line is, if you have an urge, if it's so hard for you, just lift the sanctions on Nord Stream 2, which is 55 billion cubic metres of gas per year, just push the button and everything will get going," said Putin after the Shanghai Cooperation Organisation summit in Uzbekistan on Friday, per Reuters.He also criticized the "green agenda" — the EU's renewable energy push — which he said started the energy crisis even before the war in Ukraine.The Nord Stream 2 natural-gas pipeline runs in parallel to Nord Stream 1, a key pipeline that delivers fuel from Russia to Europe. The $11 billion Nord Stream 2 pipeline was completed in September, and stands to double Russia's gas flows to Europe. However, Nord Stream 2 has never been operational because Germany shelved the project in February, days before Russia invaded Ukraine.The EU is staring at an energy crisis this coming winter as Russia supplies about 40% of Europe's natural gas, most of which is transported via pipelines. In 2021, Russia exported about 155 billion cubic meters of the fuel to Europe — more than one-third of which came from the Nord Stream 1 pipeline, according to Reuters.In early September, Russia state gas giant Gazprom completely turned off supply to Europe via Nord Stream 1. Gazprom and the Kremlin have consistently insisted that the slowing of gas flows was due to technical reasons. European natural-gas prices have more than doubled from a year ago, but have fallen from their record high of 345 euros ($344) in August, lately as countries on the continent met their winter storage targets ahead of schedule. Dutch TTF gas futures, the benchmark, were down just over 7% at 174.25 euros on the ICE index Monday.

Trump: Germany could soon cease to exist because of its heavy energy dependence on Russia - Former US President Donald Trump has said that Germany could soon cease to exist as a country because of its heavy energy dependence on Russia. Trump on Saturday said he had told former German Chancellor Angela Merkel that her country’s dependence on Russia’s energy could soon lead to a“surrender” of Germany to Moscow. He claimed that he had long warned Berlin about such a threat about the Nord Stream 2 pipeline, recalling that he even once gave the then-chancellor a white flag to "surrender" to Russia. "If you're getting 72% of your energy from Russia, here is the white flag, because you will be surrendering very quickly. Who the hell thought it was gonna happen this fast, right?" Trump said. The former president made the remarks during a rally in Youngstown, Ohio, saying the Nord Stream 2 pipeline, which was supposed to pump Russian gas to Germany, would make Berlin even more dependent on Russian energy exports. Berlin halted the Nord Stream 2 gas pipeline project, which was designed to double the flow of Russian gas heading directly to Germany, in response to Russia’s military campaign in Ukraine. Trump cited the "bad things" which have happened between Berlin and Moscow in the past as proof that Germany should not have relied so heavily on Russia. Trump went on to say, “Germany now is going back to the old-fashioned stuff, including coal,” despite its previous pledges to go green. “But they have no choice, they won’t have a country, they won’t have a country left,” Trump added. Earlier this month, German Chancellor Olaf Scholz rejected the possibility of Berlin suspending gas imports from Russia even though only small volumes are currently coming in. Western governments, not least the European countries, have been experiencing a worsening energy crisis. Germany, along with other European Union countries, is scrambling to support homes and industries, since Russian energy giant, Gazprom, has drastically cut the deliveries through the Nord Stream 1 natural gas pipeline to about 20 percent of its capacity to the continent in late February.

Trump claims Germans could be 'left without land' due to energy crisis - The Germans could be “left without a country” because of the reduction in Russia’s energy supply, former President Donald Trump said Saturday at his Save America meeting in Youngstown, Ohio. He added that he had long warned Germany of such a threat, recalling that he even once gave former Chancellor Angela Merkel a white flag to “surrender” to Russia. other choice. The 45th US president spoke after German Chancellor Olaf Scholz earlier this month rejected the possibility that Berlin would suspend gas imports from Russia, even though only small volumes are currently coming in. He added that Berlin had made timely decisions about the storage of gas in Germany’s underground gas storage facilities, the launch of coal-fired power plants and the construction of liquefied natural gas terminals. The German chancellor also argued that “if Russia stops supplies, which it continues to reduce, we can increase supplies from Norway, the Netherlands, from Western European direction.” The comments came after Russian gas giant Gazprom announced it had received a warning from the country’s technical watchdog Rostekhnadzor about a failure of the only remaining working engine for the Nord Stream 1 gas pipeline, and that the facility has been shut down indefinitely until the facility is closed. problems have been resolved. Nord Stream 1, the main pipeline supplying Europe with Russian natural gas, has been running at 40% of its capacity since mid-June and at 20% from the end of July. shortly after Russia launched its ongoing special operation to demilitarize and de-nazify Ukraine on February 24. g that Western sanctions had led to the suspension of Nord Stream 1’s activities. He underlined that Moscow and Gazprom “have committed to and continue to abide by their obligations and contracts”, but that they “simply cannot meet at the moment to the restrictions and sanctions” imposed by the US and its allies. The impact of the sanctions gas and electricity prices rose to record levels in Europe amid record high inflation, including in Germany, where it rose to a 40-year high of 8.8 percent in August. also warned against taking a hot shower daily. Leading Munich-based think tank Ifo, meanwhile, has warned that the surge in energy prices is “devastating” the German economy and could lead to a 0.3% decline in the German economy. gross domestic product next year, a significant deterioration from an estimate of 3.7% growth, made in June.

Who Buys Russian Oil Now? New Markets Could Absorb Half Crude Shunned by EU - Russia could find new markets for about half of the crude exports that will be banned by the European Union from December, according to energy-data firm Kpler. Indonesia, Pakistan, Brazil, South Africa, Sri Lanka and some countries in the Middle East could together buy as much as 1 million barrels a day of crude from Russia in the coming winter, Kpler said in a research note.

Efforts ongoing to restore gas leak at oil well in Sangama – NUPRC The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said it has been notified of a gas leak incident on the Nigerian Petroleum Development Company’s (NPDC), Well 6, in Sangama community, Bonny Local Government Area of Rivers State. A statement from the NUPRC said efforts are being made alongside other relevant agencies to deal with the situation. The statement signed by Engr. Gbenga Komolafe, Commission’s Chief Executive said the incident which was reportedly observed on September 3, 2022 at about 13:30 hours, was reported by the Nigerian National Petroleum Company Exploration & Production Limited (NNPC E&P LTD) on September 9, 2022. He said a Joint Investigation visit (JIV) was carried out on September 11, by a team from NUPRC, National Oil Spill Detection and Response Agency (NOSDRA), Rivers State Ministry of Environment as well as Community representatives with the Nigerian Police Force (NPF) in attendance. During the joint investigation visit, the commission said, “the team observed a gas leak from one of the valves on the wellhead. A closer look revealed that the Anode valve on the wellhead had been tampered with. It was adjudged by the regulators to have been caused by third party interference. “However, the community did not agree with the regulators and as a result would not sign the joint investigation report in spite of the technical explanation by the team. This prompted the team to reconvene on September 15, 2022 when, after an extensive discussion, all stakeholders eventually signed the incident report.

Shell, community differ on cause of oil leak in Bayelsa community - The Shell Petroleum Development Company (SPDC) has said that the reported oil spill from its flow station at Diebu, Bayelsa State, was from a residual spill traced to an old sabotaged facility. The Peremabiri Community on 24 August reported that the leak polluted the environment, causing untold hardship to the fishing settlements. The Media Relations Manager of SPDC, Bola Essien-Nelson, however, said on Tuesday that the reported leak was from an old incident. According to Mrs Essien-Nelson, SPDC on 4 May received a report of a theft on a section of its Diebu Creek Oil Well 6 flow line, resulting in an oil leak. “The well and Diebu Creek flow station (facility) have not been in operation since February 26, when the facility was shut due to the unavailability of the Trans Niger Pipeline. “A Joint Investigation Visit (JIV) to the site revealed that the incident was caused by third-party interference and theft of SPDCJV property. “A cleanup of the free phase oil was immediately carried out, while assessment of the residual impact is scheduled to happen in November when water levels are expected to be low enough to allow for the impact assessment. “This will be followed by remediation of the site after due approval of the Remediation Action Plan by The Nigerian Upstream Petroleum Regulatory Commission. “On August 26, SPDC received a report of an oil sheen sighted at the same site of the May 4 incident. “The community believes that this oil sheen is the result of a new spill. This is not the case. “A follow-up JIV conducted on September 6 revealed that the sheen was the residual impact from the same sabotage/vandalism of May 4,” Mrs Essien-Nelson said. The News Agency of Nigeria (NAN), however, learnt that an operational mishap from the flow station discharged the crude into the company’s right of way. A field report of the JIV by the National Oil Spills Detection and Response Agency sighted by NAN indicated that the leak was due to an operational mishap, which discharged crude oil within SPDC’s operational area with no impact on the third-party area. JIV is a statutory step by oil firms, host communities and regulators to ascertain the cause, volume and area impacted after every oil spill Return Koma, who represented the Peremabiri community in the JIV, told NAN that SPDC officials and the regulators were unanimous that the incident was being investigated as a result of equipment failure. He said that an operational mishap on 24 August at Diebu Creek Flow Station, operated by SPDC, discharged a yet-to-be ascertained volume of crude into the environment. Mr Koma, who is the Peremabiri Community Development Committee Chairman, however, said that the JIV could not arrive at the quantity of spilled crude and so did not sign the JIV report. “We have conducted the JIV, they accepted responsibility for the leak at the flow station and another one at nearby Well 6, (and) both were due to equipment failure. “We were unable to agree on the volume of spilled crude and so did not sign the report,” Mr Koma said.

UN secretary general says 'polluters must pay,' calls for extra tax on fossil fuel profits - The U.N. secretary general said Tuesday that developed economies should impose an extra tax on the profits of fossil fuel firms, with the funds diverted to countries affected by climate change and households struggling with the cost-of-living crisis. In a wide-ranging address to the U.N. General Assembly in New York, Antonio Guterres described the fossil fuel industry as "feasting on hundreds of billions of dollars in subsidies and windfall profits while households' budgets shrink and our planet burns." Fossil fuel firms and their "enablers" needed to be held to account, he went on to state. "That includes the banks, private equity, asset managers and other financial institutions that continue to invest and underwrite carbon pollution." It also included what he called "the massive public relations machine raking in billions to shield the fossil fuel industry from scrutiny." Despite the remarks, Guterres appeared to acknowledge the reality of the current situation, in which coal, oil and gas continue to play a crucial role in the modern world, in both developed and emerging economies. "Of course, fossil fuels cannot be shut down overnight," he said. "A just transition means leaving no person or country behind. But it's high time to put fossil fuel producers, investors and enablers on notice." "Polluters must pay. And today, I am calling on all developed economies to tax the windfall profits of fossil fuel companies." Guterres said that these funds should be re-directed to "countries suffering loss and damage caused by the climate crisis; and to people struggling with rising food and energy prices." Guterres' speech on Tuesday reinforced comments he made back in August, when he said it was "immoral for oil and gas companies to be making record profits from this energy crisis on the back of the poorest people and communities and at a massive cost to the climate." "The combined profits of the largest energy companies in the first quarter of this year are close to 100 billion U.S. dollars," he added. "I urge all governments to tax these excessive profits and use the funds to support the most vulnerable people through these difficult times." The notion of imposing a windfall, or one-off, tax on energy companies has gained traction in some quarters over the past few months, with the sector recording huge profits amid a spike in commodity prices, while many homes and businesses struggle with rising energy bills and a wider cost-of-living crisis.

US climate envoy Kerry cautions against long-term gas projects in Africa -U.S. climate envoy John Kerry cautioned against investing in long-term gas projects in Africa as countries in the region, some hoping to tap recent oil and gas discoveries, wrestle with how to power their development with clean energy. “We are not saying no gas,” Kerry told Reuters on the sidelines of an African environment ministers’ conference in Dakar, Senegal, on Thursday. “What we are saying is, over the next few years, gas replaces coal or replaces oil,” the former secretary of state and Democratic presidential candidate said, adding that gas can be used as a transition to cleaner energy sources. Also read: Stellar cross border payment to address African crypto market But after 2030, it will be important to capture the emissions from gas too, Kerry added. Continued financing of oil and gas projects in Africa has become a key issue for the countries, which they plan to push during a United Nations climate summit in Egypt in November. Senegal and other countries in the region aim to start producing oil and gas, which they hope will help boost their electricity production, power industries and curb energy poverty. Over 600 million people, or 43% of Africa’s population, lack access to electricity, most of them in sub-Saharan Africa, according to the International Energy Agency.

UN gets funds needed to salvage derelict oil tanker off Yemen - The UN now has all the funds needed to start an emergency operation to prevent a massive oil spill from the derelict Safer oil tanker in the Red Sea off Yemen. David Gressly, the UN resident and humanitarian coordinator for Yemen, said on Wednesday that donors have pledged all of the $75 million required for phase one of the UN plan — an emergency operation to transfer oil from the decaying tanker to a safe vessel, reports Xinhua news agency. He said the donation has surpassed the required $75 million. The UN Development Programme is actively working on the first contracts to initiate the salvage operation. There will be a period of a few weeks of mobilization for that, followed by a four-month operation to stabilize the Safer for the work to transfer oil to a second vessel, and then for completing the work of phase two — a permanent storage solution, said Gressly. The progress was announced after a high-level event on the Safer tanker, co-chaired by the Netherlands, the US and Germany, on Wednesday. To begin work on the emergency operation as soon as possible, the UN needs donors to convert all of the pledges to cash. As of Sunday, $59 million had been disbursed or was in the process of being disbursed. The UN also needs a further $38 million for phase two. The original budget for the plan was reduced by $31 million largely because of the adoption of a double-hull vessel tethered to a buoy system as the safe long-term solution. The system is the fastest to implement and most flexible of the three long-term replacement options that were considered, according to the UN. The Safer, currently carrying more than 1 million barrels of oil, has been moored off the port of Hodeidah since 1988 as a crude oil storage and offloading platform. It has not been inspected or maintained since 2015. In May 2020, seawater leaked into the engine room. A temporary fix by divers from the Safer corporation succeeded in containing the leak. But the fix was not supposed to hold for long.

Kuwait’s KNPC to spend $4.2bln on new oil projects - State-owned Kuwait National Petroleum Company (KNPC), the OPEC producer’s downstream investment arm, is planning to pump nearly 1.3 billion Kuwaiti dinars ($4.2 billion) into new projects as part of its long-term development strategy stretching until 2040, a newspaper reported on Wednesday. KNPC has just updated the strategy to include new projects which could comprise more gas facilities, upgrading refining production and building of scores of new petrol pumps, the Arabic language daily Alanba said, quoting official sources. “The sources affirmed that KNPC has updated its 2040 strategy to include new projects and initiatives that will achieve all targets set in that strategy,” the paper said. New projects will lift the Gulf country’s domestic crude refining output to 1.6 million barrels per day by 2025, increase gas production and ensure greater local private sector participation in the hydrocarbon projects, the report said. It quoted the sources as saying KNPC has chalked out a plan for “gas treatment” and that there could be a need for the construction of a sixth LPG production unit and additional petroleum products storage facilities. “KNPC’s new strategy also confirmed plans to build 181 petrol stations to cater for domestic demand until 2040,” the report said, adding that 18 stations have already been constructed through the emirate.

Global Oil Demand Dropped By Over 1 Million Bpd In July - Global oil demand fell by an estimated 1.1 million barrels per day (bpd) in July this year the latest data from the Joint Organizations Data Initiative (JODI) showed on Monday. Historically, global oil demand normally rises rather than falls in July. The demand decline was driven by drops in consumption in China, India, Indonesia, developed European economies, and Saudi Arabia, according to JODI, which compiles self-reported data from many countries. The July fall in demand is in contrast to the five-year average for the month of July, excluding the pandemic years of 2020-2021, which shows demand rising seasonally by an average of 350,000 bpd, the Riyadh-based International Energy Forum (IEF) said. As a result of lower demand in July, global product inventories in July increased by 63 million barrels—more than three times the average seasonal increase. Crude inventories increased counter-seasonally by 9 million barrels. However, global crude and product inventories were still nearly 438 million barrels below the five-year average, the JODI data showed. In Saudi Arabia, demand fell counter-seasonally by 192,000 bpd in July, which was the first monthly decline since February. Chinese oil demand dropped by 191,000 bpd in July and was 655,000 bpd below year-ago levels. However, Chinese demand was still 135,000 bpd above July 2019 levels, according to the JODI data. Chinese demand was hit by the snap COVID lockdowns which have discouraged travel this summer. China is even expected to see its oil demand fall in 2022 for the first time in more than three decades. “Growth in global oil demand continues to decelerate, weighed down by renewed Chinese lockdowns and an ongoing slowdown in the OECD,” the International Energy Agency (IEA) said in its closely watched Oil Market Report last week. The IEA revised down its growth estimate for 2022 by 110,000 bpd from last month’s assessment and now expects global oil demand to grow by 2 million bpd this year.

Oil prices fall more than 1.5% on demand fears and strong dollar - (Reuters) -Oil fell by more than 1.5% on Monday, pressured by expectations of weaker global demand and by U.S. dollar strength ahead of possible large increases to interest rates, though supply worries limited the decline. Central banks around the world are certain to increase borrowing costs this week and there is some risk of a blowout 1 percentage point rise by the U.S. Federal Reserve. [MKTS/GLOB] "The upcoming Fed meeting and the strong dollar are keeping a lid on prices," said Tamas Varga of oil broker PVM. Brent crude for November delivery fell $1.49, or 1.6%, to $89.86 a barrel by 1002 GMT. U.S. West Texas Intermediate (WTI) for October dropped $1.57, or 1.8%, to $83.54. A British public holiday for the funeral of Queen Elizabeth was expected to limit activity on Monday. Oil also came under pressure from hopes of an easing of Europe's gas supply crisis. German buyers reserved capacity to receive Russian gas via the shut Nord Stream 1 pipeline, but this was later revised and no gas has been flowing. Crude has soared this year, with the Brent benchmark coming close to its record high of $147 in March after Russia's invasion of Ukraine exacerbated supply concerns. Worries about weaker economic growth and demand have since pushed prices lower. The U.S. dollar stayed near a two-decade high ahead of this week's decisions by the Fed and other central banks. A stronger dollar makes dollar-denominated commodities more expensive for holders of other currencies and tends to weigh on oil and other risk assets. [USD/] The market has also been pressured by forecasts of weaker demand, such as last week's prediction by the International Energy Agency that there would be zero demand growth in the fourth quarter. Despite those demand fears, supply concerns kept the decline in check. "The market still has the start of European sanctions on Russian oil hanging over it. As supply is disrupted in early December, the market is unlikely to see any quick response from U.S. producers," ANZ analysts said. Easing COVID-19 restrictions in China, which had dampened the outlook for demand in the world's second-biggest energy consumer, could also provide some optimism, the analysts said.

Oil Futures Reverse Higher as OPEC Misses Output Quota -- Oil futures advanced in afternoon trade Monday, with all petroleum products finishing the session higher. This followed industry surveys showing the Organization of the Petroleum Exporting Countries and 10 allied partners missed their August production target, heightening concerns over tight supplies on the global market. OPEC+ oil production fell short of its target level by a record 3.58 million barrels per day (bpd) in August, according to an industry survey released Monday, which has significantly widened the gap between the group's pledged output and delivered production. The coalition's 10 participating OPEC members, led by Saudi Arabia, accounted for 1.399 million bpd of the August shortfall, while their non-OPEC partners underproduced by 2.185 million bpd. Russia, severely constrained by Western sanctions, missed the target by a massive 1.252 million bpd, with deeper losses expected later this year with the onset of a European Union-wide embargo on Russian seaborne crude exports. Within OPEC, Nigerian production was 700,000 bpd short of its August quota amid ongoing infrastructure issues and security concerns. OPEC+ August production quota was 43.854 million bpd. OPEC+ agreed on a 100,000-bpd increase for September, which will be effectively reversed in October. Officials have repeatedly highlighted dwindling capacity within the group and the need for additional investment globally in the oil and gas sector. The OPEC+ Joint Technical Committee studies market conditions that feed the group's policy decisions will next meet on Oct. 4 ahead of the Oct. 5 ministerial meeting to determine November's production policy. November Brent futures on the Intercontinental Exchange settled $0.65 higher at $92 per barrel (bbl). October West Texas Intermediate futures on NYMEX, which expires Tuesday afternoon, advanced $0.62 to $85.73 per bbl Monday, with the November contract settling with a $0.37 discount to the expiring contract. NYMEX ULSD October futures rallied 13.83 cents to settle the session at $3.3108 gallon, and the front-month RBOB contract gained 4.84 cents for a $2.4641-per-gallon settlement. The U.S. dollar index, which has an inverse relationship with WTI, strengthened for the third session, finishing Monday at 109.982. Earlier this month, the dollar index spiked to a 110.785 more than 20-year high amid rising bets that the Federal Reserve will have to hike interest rates aggressively this week, and at their two remaining meetings in 2022 to draw down excess liquidity from the market. The hotter-than-expected August CPI reading caught the market off-guard, dashing expectations that the Federal Reserve would quickly gain control of rising prices this year, and begin cutting the key overnight lending rate as soon as 2023. The August reading suggests, however, inflation is stickier than previously appreciated by the market, likely forcing the central bank to continue to lift rates aggressively and holding them higher for longer.

Oil Prices Settle Higher as Easing China Lockdowns Stoke Demand Hopes - U.S. crude oil prices cut losses to settle higher Monday as investors weighed up the demand outlook amid easing Covid lockdown measures in China and the impact of slowing global growth. On the New York Mercantile Exchange crude futures climbed 62 cents to settle at $85.73 a barrel, while on London's Intercontinental Exchange, Brent gained 65 cents to settle at $92.00 a barrel. Oil prices had started the session on the back foot, down more than 3% as investors worried that further Federal Reserve tightening expected later this week will slow global growth further and pose an even bigger threat to oil demand. The Fed is forecast to raise its benchmark rate by 0.75% this week and release fresh projections on inflation and economic growth as well as updated forecasts on future rate hikes that will likely show higher for longer rates and slowdown in growth. Sentiment on oil prices was boosted by easing COVID restrictions in major cities in China, the largest importer of oil. Chengdu, a major Chinese city with about 21 million inhabitants, reopened after a two-week lockdown. The positive start to the week for oil prices followed a more than 2% decline last week after the International Energy Agency cut its forecast on oil demand and anticipated growth to stop in the fourth quarter. The IEA cut its forecast for demand growth this year by 110,000 barrels per day (bpd) to 2 million bpd. The pressure on oil prices from weaker demand and higher supply isn’t likely to continue for the long term as major oil producers and ongoing geopolitical tensions could provide some respite. “Weakening economic activity and forecasts is likely to stall the post COVID recovery in oil demand but prices could see upward support from OPEC+ market management, post COVID demand recovery, unplanned outages in oil and power generation and more geopolitical tension,” Credit Suisse said in a recent note as it maintained its near-term WTI forecasts for the fourth quarter of $87 per barrel.

Oil prices up but expected US Fed rate hike paints bearish picture (Reuters) -Oil prices ticked up on Tuesday as OPEC and its allies keep producing less than their quotas, but were headed for a fourth monthly decline ahead of an expected further U.S. interest rate hike which may curb economic growth and fuel demand. Brent crude futures for November settlement were up 41 cents, or 0.5%, to $92.41 a barrel at 0939 GMT. U.S. West Texas Intermediate crude for October delivery was at $85.82 a barrel, up 9 cents. The October contract will expire on Tuesday and the more active November contract was at $85.53, up 17 cents, or 0.2%. A sign of underlying tight supply, a document from the Organization of Petroleum Exporting Countries and allies led by Russia showed the group fell short of its output target by 3.583 million barrels per day (bpd) in August - around 3.5% of global oil demand. Meanwhile, the impasse over a revival of the Iran nuclear deal is also continuing to keep that country's exports from fully returning to the market. Still, both Brent and WTI are headed for their worst quarterly drops in percentage terms since the beginning of the coronavirus pandemic. The dollar remained firm near a two-decade high versus major peers on Tuesday, making oil more expensive for holders of other currencies, amid a slew of central bank meetings around the world this week. The U.S. Federal Reserve on Wednesday is likely to raise interest rates by another 75 basis points to rein in inflation. While other major economies are tightening, China, the world's second-largest oil user, on Tuesday left its benchmark lending rates unchanged as it tries to balance supporting its sluggish economic growth against the weakening yuan. The Bank of England will announce rates on Thursday. Fears of aggressive central bank tightening are still driving concerns about a "quickly weakening global economy" and pressuring crude prices, said Edward Moya, senior market analyst at OANDA, in a note. U.S. crude oil stocks are estimated to have risen last week by around two million barrels, a Reuters poll showed. U.S. vehicle travel in July fell 3.3% from a year earlier, dropping for a second month. The U.S. Energy Department will sell up to 10 million barrels of oil from the Strategic Petroleum Reserve for delivery in November, extending the timing of a plan to sell 180 million barrels from the stockpile to tame fuel prices.

Oil Falls Ahead of Interest Rate Hikes Expected This Week | Rigzone - Oil fell ahead of several global interest-rate decisions that are expected to bring further monetary tightening. The Fed and other central banks from Europe to Asia are expected to deliver interest-rate hikes this week as they seek to tame rampant inflation that’s hit demand. Liquidity thinned, leading to volatile price swings, while a stronger dollar has added to headwinds. Brent crude futures settled near $91, taking cues from declining equity markets that minimally trimmed losses later in the day. “Macro-economic pressures from the Federal Reserve set to raise interest rates this week has added pressure back on the US stock market which seems to be capping crude prices,” said Dennis Kissler, senior vice president at Bok Financial Securities. “Near term, prices are vulnerable to the Fed’s rate rises and more Strategic Petroleum Reserve releases scheduled through November.” Crude has lost about a third of its value since early June, erasing all the gains made in the wake of Russia’s invasion of Ukraine, amid concerns that a global slowdown will hit demand. The potential for increased supply has also weighed on the outlook. The US said Monday it would offer an additional 10 million barrels of oil from its strategic reserves in November, ahead of plans by the European Union to ban Russian crude in December. Still, Saudi Aramco warned that when the global economy recovers the world’s spare oil production capacity could be eliminated. The company’s chief executive officer said that by the time the world realizes the issue it may be too late to change course. WTI for October delivery, which expired Tuesday, dropped $1.28 to settle at $84.45 a barrel in New York. The more-active November contract fell $1.42 to $83.94. Brent for November settlement dropped $1.38 to $90.62 a barrel. Investors also are considering the prospect of higher Iranian crude flows should protracted talks on reviving a nuclear deal reach a conclusion. Discussions on efforts to resurrect an accord on the sidelines of the United Nations General Assembly in New York are “a possibility,” Foreign Ministry spokesman Nasser Kanaani said at a press conference. Elsewhere, Russia’s seaborne crude exports fell sharply in the first half of September. Crude shipped from its ports dropped by almost 900,000 barrels a day in two weeks, to 2.54 million barrels a day in the week to Sept. 16, from 3.42 million in the seven days to Sept. 2.

API Sees Crude, Product Inventory Builds - The American Petroleum Institute (API) reported a build this week for crude oil of 1.035 million barrels, while analysts predicted a bigger build of 2.321 million barrels. The build comes as the Department of Energy released 6.9 million barrels from the Strategic Petroleum Reserves in the week ending September 16, leaving the SPR with 427.2 million barrels. In the week prior, the API reported a build in crude oil inventories of 6.035 million barrels after analysts had predicted a draw of 200,000 barrels. WTI fell on Tuesday prior to the data release. At 3:16 p.m. ET, WTI was trading down $1.54 (-1.80%) on the day at $84.19 per barrel—a roughly $2 per barrel decrease on the week. Brent crude was trading down $1.40 (-1.52%) on the day at $90.60—a $2 decrease on the week. U.S. crude oil production data for the week ending September 9 stayed the same for the third week in a row at 12.1 million bpd, according to the latest weekly EIA data. The API reported a build in gasoline inventories this week of 3.225 million barrels for the week ending September 16, compared to the previous week's 3.23 million-barrel draw. Distillate stocks saw a build of 1.538 million barrels for the week, on top of last week's 1.75-million-barrel increase. Cushing inventories were up by 510,000 barrels this week. Last week, the API saw a Cushing increase of 101,000 barrels. Official EIA Cushing inventory for the week ending September 9 was 24.648 million barrels, down from 24.783 million barrels in the prior week. Oil prices were flat after the release, with WTI trading at $4.19 (-1.80%) and Brent trading at $90.93 (-1.16%).

Oil Spikes as Putin Threatens Nuclear Response in Ukraine -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange spiked more than 2% early Wednesday in reaction to Russian President Vladimir Putin's announcement to partially mobilize Russian military forces for deployment to Ukraine and threatening the use of Russia's nuclear arsenal in a major escalation in the seven-month conflict. Oil spiked, the U.S. dollar surged, nearing a fresh 20-year high, and the euro plummeted after Putin raised stakes in his unprovoked conflict in Ukraine, calling on 300,000 reserve soldiers and threatening to use "all instruments at the disposal" to defend Russia's territorial integrity. The new phase in the conflict follows an earlier announcement from the leaders of self-proclaimed republics of Donbass, Lugansk, Kherson, and Zaporizhiya to hold referendums on joining Russia as early as Friday, Sept. 23. The plan closely mirrors the annexation of the Crimea that was quickly approved by the Russian government in 2014. However, referendums in eastern Ukraine could be used by Russia to claim that Ukrainian attacks to liberate its own territory amount to attacks on Russia itself, a troubling development. Separately, the American Petroleum Institute reported late Tuesday commercial crude oil inventories increased by a smaller-than-expected margin during the week ended Sept. 16, while refined fuels stocks spiked amid signs of accelerated demand destruction. Domestic crude stocks increased 1.035 million barrels (bbl) in the reviewed week said API, compared with estimates for a 2.2-million-bbl draw. Stocks at the Cushing, Oklahoma, tank farm, the NYMEX delivery point for West Texas Intermediate futures, rose 510,000 bbl. API data further showed gasoline supply increased 3.22 million bbl in the week profiled, missing estimates for a 500,000 bbl decline, while distillate inventories rose 1.538 million bbl, more than three times calls for a 500,000-bbl-increase. In financial markets, U.S. equity futures rose slightly ahead of the Federal Open Market Committee's announcement on interest rates scheduled for 2 p.m. EDT at the conclusion of their two-day meeting. Central bank officials are expected to approve a third consecutive increase of 0.75% in the federal funds rate, while signaling interest rates will go higher and stay there longer to bring inflation under control. In Europe, money markets are rapidly dialing up calls for the Bank of England to deliver two outsized rate increases by the end of the year, with traders placing around a 60% chance of a 0.75% increase on Thursday. That would be the bank's largest increase since 1989, when it jacked up borrowing costs. Near 7:45 a.m. EDT, WTI futures for November delivery advanced above $86 bbl, up $2 in overnight trading, while the international crude benchmark Brent contract for November on ICE rallied to $92.66 bbl. NYMEX ULSD October futures gained 1.82cts to $3.904 gallon, and the front-month RBOB contract spiked 5cts to $2.4978 gallon.

US Gasoline Pump-Prices End Record Losing Streak As End Of SPR Drain Looms - Crude prices remain higher this morning ahead of the official inventory data, but have pared gains from overnight anxiety related to Putin's escalating war rhetoric, as traders focused more on the impact of The Fed. “Macro markets are definitely the elephant in the room right now with rates and the dollar really keeping a lid on crude rallies,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management. Adding to bearish sentiment, China issued a giant new quota to export refined fuels, according to a local industry consultant, which could weigh on oil product markets. API

• Crude +1.035mm
• Cushing +510k
• Gasoline +3.225mm
• Distillates +1.538mm

DOE

• Crude +1.141mm
• Cushing +343k
• Gasoline +1.57mm
• Distillates +1.23mm

Confirming API's data, the official inventory data showed crude stocks rising for the 3rd straight week and inventory builds across the entire complex... The 1.14 million-barrel build in commercial crude stockpiles was more than offset by the withdrawal of 6.9 million barrels from the Strategic Petroleum Reserve. The net result was a nationwide crude draw of 5.76 million barrels in the week to Sept. 16. US crude production was flat week-over-week as rig counts continue to stagnate.,..

Oil prices slide 1% after U.S. Fed raises interest rates --Oil prices fell about 1% to a near two-week low in volatile trade on Wednesday after the U.S Federal Reserve delivered another hefty rate hike to quell inflation that could reduce economic activity and demand for oil. The Fed raised its target interest rate by 75 basis points for the third time to a 3.00-3.25% range and signalled more large increases to come. Risk assets like stocks and oil fell on the news, while the dollar rallied. Brent crude futures settled 79 cents, or 0.9%, lower at $89.83 a barrel, its lowest close since Sept. 8, while U.S. West Texas Intermediate (WTI) crude fell $1.00, or 1.2%, to $82.94, its lowest close since Sept. 7. Earlier in the session, oil gained over $2 a barrel on worries about a Russian troop mobilization before dropping over $1 on a strong U.S. dollar and lower U.S. gasoline demand. U.S. gasoline demand over the past four weeks fell to 8.5 million barrels per day (bpd), its lowest since February, according to the U.S. Energy Information Administration (EIA). "The stand-out data point is the continuing weakness in gasoline demand. It's really what's been haunting this market," The U.S. Energy Information Administration reported a 1.1 million barrel increase in crude stocks last week, half the build analysts forecast in a Reuters poll. Russian President Vladimir Putin called up 300,000 reservists to fight in Ukraine and backed a plan to annex parts of the country, hinting he was prepared to use nuclear weapons. U.S. President Joe Biden accused Russia of making "reckless" and "irresponsible" threats to use nuclear weapons. Oil prices soared to a multi-year high in March after the Ukraine war broke out. European Union sanctions banning seaborne imports of Russian crude will come into force on Dec. 5. "Much of today's downside appeared related to strength in the U.S. dollar and we still view near-term U.S. dollar direction as a critical component in assessing near-term oil price direction," analysts at energy consulting firm Ritterbusch and Associates said. The dollar was on track for its highest close in over 20 years against a basket of other currencies, making oil more expensive for buyers using other currencies. Signs of a recovery in Chinese demand gave prices a lift early in the session.In the United States, however, the economic news was not so good. Existing home sales dropped for the seventh straight month in August as affordability deteriorated further amid surging mortgage rates. In Europe, "government are increasingly intervening in energy markets in an attempt to stave off economic crisis," analysts at energy consulting firm EBW Analytics said in a note. Germany agreed to nationalize natural gas company Uniper SE , while the British government said it would cap wholesale electricity and gas costs for businesses.

Oil Gains as Traders Balance Supply Fears, Weak Demand - Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange moved higher early Thursday as traders balanced concerns over short supplies this winter, stoked by threats from Russian President Vladimir Putin to cut oil exports to Europe, against sputtering demand fundamentals as central banks rush to jack up interest rates to fight inflation. The global financial system has not seen a cycle of such aggressive monetary tightening since perhaps the early 1980s when central banks were forced to continue raising interest rates even as their economies sputtered. The Bank of England this morning raised its benchmark lending rate by 50 basis points in a seventh consecutive hike this year to slow a relentless rise in consumer prices. Higher rates come as the United Kingdom faces an energy crisis and a recession forecast while the UK's new Prime Minister, Liz Truss, presses forward with a set of economic reforms. The policy action follows similar rate increases from the central banks of Norway and Switzerland among others where consumer prices accelerated at the fastest clip since the creation of the European Union. On Wednesday, the Federal Open Market Committee delivered a 75-basis-point hike for the third consecutive meeting this year and admitted there will be below-trend growth in the medium term. Fed officials on Wednesday cut growth projections, raised their unemployment outlook and repeatedly spoke of the painful slowdown that's needed to curb price pressures that are running at the highest levels since the 1980s. Goldman Sachs economists have since raised their forecast for the Federal Reserve's pace of interest rate hikes amid Powell's hawkish comments. The investment bank now expects rate hikes of 75 basis points in November, 50 basis points in December, and 25 basis points in February for a peak target range for the federal funds rate of 4.5% to 4.75% compared with 4% to 4.25% before this week's FOMC meeting, economists led by Jan Hatzius said in a research note. On the bullish side, traders continue to monitor developments in eastern Ukraine after Putin ordered the partial mobilization of reserve troops alongside renewing threats to use Russia's nuclear arsenal against any country that compromises Russian territorial integrity. During a televised address to the nation, Putin claimed "collective West attempts to break up Russia in many different pieces," comparing it to the breakup of the Soviet Union in 1991. Near 7:45 a.m. EDT, the U.S. Dollar Index, which has an inverse relationship with West Texas Intermediate, continued higher to 110.865 after reaching 111.360 on Wednesday -- the highest trade since May 2002. WTI futures for November delivery advanced to $84.10 barrel (bbl), up $1.20, while the front-month Brent contract gained to $91.05 bbl. NYMEX ULSD October futures added 7.4 cents to $3.4078 gallon, and the front-month RBOB contract gained 4.97 cents to $2.5362 gallon.

Oil Rises Slightly as Economic Outlook Concerns Mount - Oil clung to a slight gain after a slew of rate hikes around the world reaffirmed central bankers would continue to fight inflation at the expense of economic growth. West Texas Intermediate settled near $83 a barrel, sticking close to the previous day’s close. Equity markets fell under the weight of multiple interest rate hikes from Norway to South Africa, putting a lid on oil prices. Markets are largely following macroeconomic indicators after the Fed boosted rates by 75 basis points for a third straight time, casting a shadow on oil’s demand outlook. Traders are “waiting for the next headline to dictate market direction here,” “You’re looking for some kind of fundamental part of the puzzle to change dramatically to put the bid in.” Crude remains on track for its first quarterly decline in more than two years on concerns that demand may be crimped by an economic slowdown. Nonetheless, geopolitical risks to supply and OPEC’s readiness to support prices with production cuts have provided a floor of sorts. OPEC would consider additional cuts if crude prices fall because current levels are affecting the budgets of some members, Nigeria’s oil minister Timipre Sylva told Bloomberg Thursday, Data this week showed that signs of economic slowdown are mounting, as US gasoline and diesel demand fell to the lowest seasonal levels in more than a decade. The Energy Information Administration also reported nationwide US crude stockpiles and those at the key storage hub at Cushing, Oklahoma, expanded last week. WTI for November delivery rose 55 cents to $83.49 a barrel at market close in New York. Brent for November settlement gained 63 cents to settle at $90.46 a barrel. Traders are also watching bullish indicators for the coming months, including an escalation of Russia’s invasion to Ukraine that prompted EU member states to push for the adoption of a price cap on Russian oil before its sanctions take effect in December. The sanctions could further crimp supplies. Russian President Vladimir Putin has previously said Russia would not supply commodities to nations that introduce price caps.

Oil prices down 3% with recession fears in focus - Khaleej Times - Oil prices fell on Friday as demand fears were stoked by rising interest rates and a stronger dollar, though losses were capped by Moscow's mobilisation campaign in its war with Ukraine and apparent deadlock in talks on reviving the Iran nuclear deal.Brent crude futures fell $2.81, or 3.11%, to $87.65 a barrel by 1051 GMT. U.S. West Texas Intermediate (WTI) crude futures were also down, retreating by $2.93, or 3.51%, to $80.56.Front-month Brent and WTI contracts were down 4.03% and 5.37% respectively over the past week.Global equities hit a two-year low on Friday while the dollar index reached its highest level in two decades, putting downward pressure on oil."Recession fears, further rate hikes and the consequent dollar strength trumps geopolitical tension," said Tamas Varga, oil analyst at PVM Oil Associates."The upside in oil will be limited while the dollar is strong, albeit the weekend's staged referendum in the eastern part of Ukraine could further increase tension between Russia and the West, especially if Ukrainian allies provide additional help for Ukraine to reclaim these territories."Russia launched referendums on Friday aimed at annexing four occupied regions of Ukraine, which Kyiv called an illegal sham that it said included threats to residents if they do not vote.After the US Federal Reserve raised interest rates by a hefty 75 basis points on Wednesday, central banks around the world followed suit with hikes of their own, raising the risk of economic slowdowns.A downturn in business activity across the euro zone deepened in September, a survey showed, suggesting that a recession is looming as consumers rein in spending to contend with a cost of living crisis.In Britain, meanwhile, the pound fell to a 37-year low and government bonds crashed after the new finance minister announced historic tax cuts and huge increases to borrowing. On the oil supply side, efforts to revive the 2015 Iran nuclear deal have stalled as Tehran insists on the closure of the U.N. nuclear watchdog's investigations, a senior U.S. State Department official said, easing expectations of a resurgence of Iranian crude oil exports.

Oil slides 6% on heightened recession worries and a fresh 20-year high for the US dollar-- Oil prices on Friday tumbled to a nine-month low as recession fears swept throughout global risk assets and the US dollar continued this year's ascent to reach a fresh two-decade high against major currencies. West Texas Intermediate crude fell as much as 6.1% to $78.42 per barrel, the first break below $80 a barrel since January 11. Brent crude, the international benchmark, lost 5.3% to $85.50, its lowest price since January 24. WTI and Brent crude were veering toward steep weekly losses, of about 8% and 7%, respectively. "The threat of a global recession continues to weigh on oil prices, with widespread monetary tightening over the last couple of days fueling fears of a significant hit to growth," "Central banks now appear to accept that a recession is the price to pay for getting a grip on inflation, which could weigh on demand next year." The Federal Reserve on Wednesday and the central banks of the UK, Norway and Switzerland on Thursday each raised interest rates to deal with elevated inflation as prices for energy and food have increased this year. The Federal Open Market Committee in aiming to slow activity in the world's largest economy is expected to stretch its rate-hiking cycle into 2023 and foresees hitting a peak interest rate of 4.6%. Recession worries hurt stock markets in Europe, Asia, and the US on Friday. The S&P 500 dropped by nearly 2%. Oil prices were also lower as the US dollar continued to march higher. The US Dollar Index flew up by more than 1% on Friday, pushing past 112 to reach a fresh 20-year high. Dollar-denominated oil prices can be hurt by gains in the greenback's value as it makes the commodity more expensive to purchase by holders of foreign currencies. The dollar index, which tracks the greenback's performance againstthe euro, the Japanese yen, the British pound, theCanadian dollar, the Swedish krona, and the Swiss franc, was on course to rise by nearly 3% this week. The gains were fueled by the Fed's rate hike this week of 75 basis points, the third consecutive meeting to mark a jumbo-sized increase in the fed funds rate. Rising Treasury yields on the back of the Fed's latest rate hike have fueled demand for dollars. Meanwhile, European Union officials are rushing to reach a deal on capping prices for Russian oil after President Vladimir Putin stepped up Moscow's aggression against Ukraine, according to a Bloomberg report Friday. The EU's embargo on seaborne Russian crude is set to start on December 5.Global oil supplies remain tight but the proposed price cap might lead to a lower supply of Russian oil, UBS Global Wealth Management said Friday. "Officials in the Kremlin, including deputy prime minister Alexander Novak, have pointed out that Russia would not sell oil to countries adhering to a price cap," "We see this as a credible threat, and if Russia were to withhold barrels from the market, we think oil prices could move above $150/bbl for an extended period." The firm's base case is for oil prices to rise to $110 barrels by the end of 2022 and to $125 a barrel by March.

Oil plunges to 8-months low on strong dollar, looming recession fears - (Reuters) -Oil prices plunged about 5% to an eight-month low on Friday as the U.S. dollar hit its strongest level in more than two decades and on fears rising interest rates will tip major economies into recession, cutting demand for oil. Brent futures fell $4.31, or 4.8%, to settle at $86.15 a barrel, down about 6% for the week. U.S. West Texas Intermediate (WTI) crude fell $4.75, or 5.7%, to settle at $78.74, down about 7% for the week. It was the fourth straight week of declines for both benchmarks, the first time this has happened since December. Both were in technically oversold territory, with WTI on track for its lowest settlement since Jan. 10 and Brent for its lowest since Jan. 14. U.S. gasoline and diesel futures were also down more than 5%. The U.S. Federal Reserve raised interest rates by a hefty 75 basis points on Wednesday. Central banks around the world followed suit with their own hikes, raising the risk of economic slowdowns. "Oil tanks as global growth concerns hit panic mode given a chorus of central bank commitments to fight inflation. It seems central banks are poised to remain aggressive with rate hikes and that will weaken both economic activity and the short-term crude demand outlook," aid Edward Moya, senior market analyst at data and analytics firm OANDA. The U.S. dollar was on track for its highest close against a basket of other currencies since May 2002. A strong dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies. "We had the dollar exploding higher and pushing down dollar-denominated commodities like oil and growing fears over the looming global recession that is coming as the central banks raise interest rates," said John Kilduff, partner at Again Capital LLC in New York. The euro zone's downturn in business activity deepened in September, a survey showed, suggesting a recession looms as consumers rein in spending and as governments urge energy conservation following Russia's moves to cut off European supply. Wall Street's main indexes slid more than 2% on Friday as investors feared the U.S. Federal Reserve's hawkish policy actions to quell inflation could trigger a recession and dent corporate earnings. The dollar <.DXY> index reached its highest in over two decades, pressuring oil prices. Russia launched referendums aimed at annexing four occupied regions of Ukraine, raising stakes of the war in what Kyiv called a sham. On the supply side, efforts to revive the 2015 Iran nuclear deal have stalled as Tehran insists on closure of the U.N. nuclear watchdog's investigations, a senior U.S. State Department official said, easing expectations of a resurgence of Iranian crude oil exports.