2,150,000 bpd unwanted oil produced globally in September; OPEC's output 1,354,000 bpd short of their quota

2,150,000 barrels per day of unwanted oil were produced globally in September, even as OPEC's output was 1,354,000 barrels per day short of their quota; US Strategic Petroleum Reserve was at another 38 year low, US gasoline demand was at an 8 month low.

oil prices fell for the first time in three weeks as traders took profits while fears of a global recession outweighed concerns about supplies...after jumping 16.5% to a five week high of $92.64 a barrel last week after OPEC agreed to cut their production by 2 million barrels per day, the contract price for the benchmark US light sweet crude for November delivery ​dipped in Asian trading on Monday, as traders took profits after a report on slowing economic activity in China re-ignited concerns about falling global fuel demand. and continued ​sinking as New York traders also booked profits to settle $1.51 lower at $91.13 a barrel as fears of a global recession outweighed potentially tighter oil supplies....sentiment continued to deteriorate Tuesday, after the World Bank President and the International Monetary Fund Director both warned of a growing risk of global recession and ​warned that inflation remained a continuing problem​, ​and oil prices settled $1.78 or 2% lower at $89.35 a barrel, as traders fretted about a further Covid hit to demand in China, and fears of further monetary policy tightening also weighed...oil prices moved a bit higher early Wednesday as a slight pullback in the dollar and supply tightness caused by OPEC's output cuts and disruptions to Russian oil production helped support oil prices, but turned south in afternoon trading to again settle lower by $2.08 at $87.27 a barrel, after OPEC lowered its global demand projections through 2023, citing extended COVID-19 restrictions in China along with elevated inflation and rising interest rates in Europe and the United States....US oil prices held those losses in overnight trading after the the API reported big increases in crude and gasoline inventories, and then ​tumbled 1.5% on Thursday morning following the release of new CPI data that showed core inflation in the US had risen to the highest level in four decades, but then rallied more than 1.5% in early afternoon trading Thursday despite EIA inventory data that showed commercial crude and gasoline stockpiles increased by a much larger-than-expected marginduring the week-ended Oct. 7, partly due to another large transfer of crude oil from the nation's Strategic Petroleum Reserve to the commercial side. and settled $1.84 or 2% higher at $89.11 a barrel as traders discerned a bullish clue in the combination of a big distillate draw, another big SPR draw and a reversal in exports....however, oil prices moved lower again early Friday as global recession fears and weak oil demand, especially in China, outweighed support from the large cut to the OPEC+ supply target, and then accelerated th​at decline in afternoon trading Friday amid a sharply stronger U.S. Dollar Index that had rallied in response to fresh data pointing to expanding inflationary pressures in the coming months, with a large jump in the number of active oil rigs in the United States adding to the selling pressure. and settled $3.50 lower at $85.61 a barrel...oil prices thus fell four of five trading days ​this ​week​ ​and ended down 7.6% ​from last week's close, as a darkening economic outlook overcame OPEC’s efforts to support prices and partly reversed last week's rally....

Meanwhile, natural gas prices finished lower for an eighth consecutive week on improving inventories heading into winter​,​ following another near recrod injection of gas into stoarge... after falling 0.3% to $6.748 per mmBTU last week following the largest inventory increase on record for this time of year, the contract price of US natural gas for November delivery dipped on Monday in volatile early trading as forecasts for higher gas demand over the next two weeks were outweighed by record production levels, and then took out a key psychological support​ ​level in settling 31.3 cents lower at $6.435 per mmBTU amid robust supply and a steadily improving winter storage picture...natural gas prices recovered some of those losses on a technical bounce on Tuesday and settled up 16.1 cents at $6.596 per mmBTU, as weather models trended a little colder, with a blast of chilly air expected to arrive in the Midwest and Northeast early next week...that bounce was undone on Wednesday as expectations for another massive storage injection sent the November Nymex contract price down 16.1 cents to $6.435 per mmBTU on record output and reduced LNG exports that should allow utilities to keep injecting more gas into storage than usual in coming weeks....however, despite the EIA's report of another near record injection of natural into storage on Thursday, natural gas prices jumped 30.6 cents, or almost 5% to a one-week high of $6.741 per mmBTU, on forecasts for colder weather​ and a boost heating demand over the next two weeks....but natural gas prices almost reversed that gain again on Friday, falling 28.8 cents to $6.453/mmBTU, amid a warming weather outlook and rising inventories, as the arrival of chilly weather on the East Coast hadn’t led to widespread heating loads, and thus ended 4.4% lower on the week, ​and ​down eight weeks in a row for the first time since February 2001.

The EIA's natural gas storage report for the week ending October 7th indicated that the amount of working natural gas held in underground storage in the US rose by 125 billion cubic feet to 3,231 billion cubic feet by the end of the week, which still left our gas supplies 126 billion cubic feet, or 3.8% below the 3,357 billion cubic feet that were in storage on October 7th of last year, and 221 billion cubic feet, or 7.8% below the five-year average of 3,452 billion cubic feet of natural gas that were in storage as of the 7th of October over the most recent five years....the 125 billion cubic foot injection into US natural gas working storage for the cited week was in line with the forecast for an injection of 123 billion cubic feet in a Reuters poll of analysts, ​but was well more than the 86 billion cubic feet that were added to natural gas storage during the corresponding week of 2021, and also well more than the average injection of 82 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 October 7th indicated that after another big oil release from our Strategic Petroleum Reserve, an extraordinary decrease in our oil exports​,​ and a modest decrease in our refining, we had oil left to add to our stored commercial crude supplies for the 4th time time in 6 weeks, and for the 20th time in the past 46 weeks, despite a decrease in oil supplies that could not be accounted for....Our imports of crude oil rose by an average of 116,000 barrels per day to average 6,063,000 barrels per day, after falling by an average of 502,000 barrels per day during the prior week, while our exports of crude oil fell by 1,679,000 barrels per day to average 2,872,000 barrels per day, which together meant that the net of our trade in oil worked out to an import average of 3,191,000 barrels of oil per day during the week ending October 7th, 1,795,000 more barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly 100,000 barrels per day lower at 11,900,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have averaged a total of 15,091,000 barrels per day during the October 7th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,683,000 barrels of crude per day during the week ending October 7th, an average of 279,000 fewer barrels per day than the amount of oil that our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that a net average of 313,000 barrels of oil per day were being added to 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 October 7th appear to indicate that our total working supply of oil from net imports and from oilfield production was 904,000 barrels per day less than what was added to storage plus 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 (+904,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been an omission or error of that magnitude in this week’s oil supply & demand figures that we have just transcribed...moreover, since last week’s EIA fudge factor was at (+1,486,000) barrels per day, that means there was a 582,000 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 th​ose comparisons 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 313,000 barrel per day increase in our overall crude oil inventories came as an average of 1,411,000 barrels per day were being added to our commercially available stocks of crude oil, while 1,099,000 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 from its inception to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising, at least up until then, and has been fluctuating wildly in recent weeks 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 247,450,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 27 months, and as a result the 408,699,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since June 15th, 1984, or at a new 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. 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 6,341,000 barrels per day last week, which was 3.8% more than the 6,453,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be 100,000 barrels per day lower at 11,900,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day lower at 11,500,000 barrels per day, while Alaska’s oil production was 3,000 barrels per day lower at 432,000 barrels per day but had no impact on the final rounded national total. US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 9.2% below that of our pre-pandemic production peak, but was 22.7% 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 89.9% of their capacity while using those 15,683,000 barrels of crude per day during the week ending October 7th, down from their 91.3% utilization rate during the prior week, but within the normal utilization rate range for early October. The 15,683,000 barrels per day of oil that were refined this week were still 4.1% more than the 15,061,000 barrels of crude that were being processed daily during week ending October 8th of 2021, and 1.6% more than the 15,436,000 barrels that were being refined during the prepandemic week ending October 11th, 2019, when our refinery utilization was at 83.1%, below the normal range for early October...

With the decrease in the amount of oil being refined this week, the gasoline output from our refineries was quite a bit lower, decreasing by 846,000 barrels per day to 9,168 ,000 barrels per day during the week ending October 7th, after our gasoline output had increased by 389,000 barrels per day during the prior week. This week’s gasoline production was 4.5% less than the 9,605,000 barrels of gasoline that were being produced daily over the same week of last year, and 0.8% below the gasoline production of 9,240,000 barrels per day during the week ending October 4th, 2019. At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 325,000 barrels per day to 4,863,000 barrels per day, after our distillates output had increased by 230,000 barrels per day during the prior week. Even with that decrease, our distillates output was 3.3% more than the hurricane impacted 4,706,000 barrels of distillates that were being produced daily during the week ending October 8th of 2021, and 3.7% more than the 4,688,000 barrels of distillates that were being produced daily during the week ending October 11th 2019...

Even with the decrease in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the 3rd time in 10 weeks; and for the 9th time out of the past thirty-six weeks, increasing by 2,022,000 barrels to 207,460,000 barrels during the week ending October 7th, after our gasoline inventories had decreased by 4,728,000 barrels during the prior week. Our gasoline supplies rose this week because the amount of gasoline supplied to US users fell by 1,189,000 barrels per day to a 8 month low of 8,276,000 barrels per day, and​ ​because our imports of gasoline rose by 219,000 barrels per day to 699,000 barrels per day​,​ while our exports of gasoline rose by 256,000 barrels per day to 1,052,000 barrels per day. But after 26 gasoline inventory drawdowns over the past 33 weeks, our gasoline supplies were still 6.1% lower than last October 8th's gasoline inventories of 223,107,000 barrels, and about 8% below the five year average of our gasoline supplies for this time of the year…

Meanwhile, with the decrease in our distillates production, our supplies of distillate fuels decreased for the 9th time in 22 weeks and for the 31st time in the past year, falling by 4,853,000 barrels to 106,063,000 barrels during the week ending October 7th, after our distillates supplies had decreased by 3,443,000 barrels during the prior week. Our distillates supplies fell by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, increased by 265,000 barrels per day to 4,370,000 barrels per day, while our exports of distillates fell by 390,000 barrels per day to 1,266,000 barrels per day, while our imports of distillates fell by 2,000 barrels per day to 79,000 barrels per day.. After fifty-one inventory withdrawals over the past seventy-seven weeks, our distillate supplies at the end of the week were 18.0% below the 129,307,000 barrels of distillates that we had in storage on October 8th of 2021, and about 23% below the five year average of distillates inventories for this time of the year...

Meanwhile, after the decrease in refining and the decrease in our oil exports, our commercial supplies of crude oil in storage rose for the 13th time in 25 weeks and for the 31st time in the past year, increasing by 9,879,000 barrels over the week, from 429,203,000 barrels on September 30th, to 439,082,000 barrels on October 7th, after our commercial crude supplies had decreased by 1,356,000 barrels over the prior week. After this week's increase, our commercial crude oil inventories rose to just 1% below the most recent five-year average of crude oil supplies for this time of year, and were almost 32% above the average of our crude oil stocks as of the beginning of October 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 October 7th were 2.8% more than the 426,975,000 barrels of oil we had in commercial storage on October 8th of 2021, while 10.2% less than the 489,109,000 barrels of oil that we had in storage on October 9th of 2020, and 3.2% more than the 425,569,000 barrels of oil we had in commercial storage on October 4th 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 inventory increases we've already noted for this week, 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, inched up by 343,000 barrels this week, from 1,637,354,000 barrels on September 30th to 1,637,697,000 barrels on October 7th, after our total inventories had fallen by 16,198,000 barrels during the prior week. That left our total liquids inventories down by 150,736,000 barrels over the first 40 weeks of this year, and just 0.02% above a 17 year low...  

OPEC's Report on Global Oil for September

Wednesday of this week saw the release of OPEC's October Oil Market Report, which includes the details on OPEC's & global oil data for September, and hence it gives us a picture of the global oil supply & demand situation after China had ended their most restrictive Covid lockdowns, and while oil supplies from Russia continued to be constrained by Western sanctions, but before tighter monetary policy globally had begun to impact demand...September also marked the first month after OPEC and aligned oil producers had completely unwound the production cuts put in place to offset the demand destruction caused by the Covid pandemic, at which time they agreed to increase their output by an inconsequential 100,000 barrels per day....with August's production increase, the cartel's output should have been restored to the level it was at before the Covid-related production cuts began, but as we've noted in the past, they are still far short of their quota, and remained so with this report.....note that with the course and impact of the Ukraine war and the future course of the Covid pandemic largely unknown, the demand projections made in this report will have a much greater degree of uncertainty than they would have during normal, more stable times, so a grain of salt is appropriate...

The first table from this month's report that we'll review is from the page numbered 47 of this month's report (pdf page 57), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings below indicate...for all their official production measurements, OPEC has used an average of production estimates by six or more "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures....as of the June report, the consultancy Wood Mackenzie and the research and intelligence firm Rystad Energy were also added to OPEC's secondary sources.....

As we can see on the bottom line of the above table, OPEC's oil output increased by 146,000 barrels per day to 29,767,000 barrels per day during September, up from their revised August production total that averaged 29,621,000 barrels per day....however, that August output figure was originally reported as 29,651,000 barrels per day, which therefore means that OPEC's August production was revised 30,000 barrels per day lower with this report, and hence OPEC's September production was, in effect, 116,000 barrels per day higher than the previously reported OPEC production figure (for your reference, here is a copy of the table of the official August OPEC output figures as reported a month ago, before this month's revision)...

According to the agreement reached between OPEC and the other oil producers at their Ministerial Meeting on July 18th, 2021, the oil producers party to that agreement were to raise their output by a total of 400,000 barrels per day each month through December 2021, (later bumped up to 432,000 bpd) which was subsequently renewed at monthly meetings to include further 400,000+ barrel per day production increases through the first six month of this year...with the OPEC agreement reached on June 3rd, they agreed to further increase their output for July and August each by half of the 432,000 barrels per day they had scheduled as an increase in September, at the end of which all of the production cuts they had initiated at the onset of the pandemic would be restored....hence, their September production was to be the first month where their output should have begun to exceed their prepandemic levels...while OPEC's actual September increase of 146,000 barrels per day was more than the increase they had committed to, several OPEC members continued to be well short of what they were expected to produce, as we'll see in the next table...

The adjacent table was originally included as a downloadable attachment to the press release following the 31st OPEC and non-OPEC Ministerial Meeting on August 3rd, 2022, which set OPEC's and other aligned oil producers' production quotas for September... since war torn Libya and US sanctioned producers Iran and Venezuela have been exempt from the production cuts imposed by the joint agreement that has governed the output of the other OPEC producers, they are not shown in this list, and OPEC's quota excluding them is aggregated under the total listed for the 'OPEC 10', which you can see was expected to be at 26,753,000 barrels per day in September....therefore, the 25,399,000 barrels those 10 OPEC members actually produced in September were 1,354,000 barrels per day short of what they were expected to produce during the month, with Nigeria and Angola accounting for a large part of this month's shortfall, while only the UAE, Kuwait and Gabon were able to produce what was expected of them...

+ + +

Recall that the original 2020 oil producer's agreement was to jointly cut their oil production by 23%, or by 9.7 million barrels per day, from an October 2018 baseline for just two months early in the pandemic, during May and June of 2020, but that initial 9.7 million bpd production cut agreement was extended to include July 2020 at a meeting between OPEC and other producers on June 6th, 2020....then, in a subsequent meeting in early July of that year, OPEC and the other oil producers agreed to reduce their supply cuts by 2 million barrels per day to 7.7 million barrels per day for August 2020 and subsequent months, which thus became the agreement that governed OPEC's output for the rest of 2020...the OPEC+ agreement for their January 2021 production, which was later extended to include February, March and April's output, was to further ease their supply cuts by 500,000 barrels per day to a reduction of 7.2 million barrels per day from that original October 2018 baseline...then, during a meeting on April 1st of last year, OPEC and the other oil producers that are aligned with them agreed to incrementally adjust their oil production higher each month for the following three months by a pre-set amount for each country, thus extending their joint output cut agreement through July 2021....production levels for August and the following months of last year were to be determined by a July 1st OPEC meeting, but that meeting was adjourned on July 2nd due to a dispute between the UAE and the Saudis over the 2018 reference production levels on which the cuts are based, and a subsequent attempt to restart that meeting on July 5th was called off....so it wasn't until July 18th 2021 that a tentative compromise addressing August 2021's output quotas was worked out, allowing oil producers in aggregate to increase their production by 400,000 barrels per day in August, and again by that amount in each of the following months, and also to boost reference production levels for the UAE, the Saudis, Iraq and Kuwait beginning in April 2022, and which made the cartel's effective monthly production increase 432,000 barrels per day after that time....OPEC and other producers then agreed to increase their production in January 2022 by a further 400,000 barrels per day in a meeting concluded on the 2nd of December, 2021, and reaffirmed their intention to continue that policy with another 400,000 barrel per day increase in February at a meeting concluded January 4, 2022...subsequent monthly meetings from February through May served to step up their production by 400,000 barrels per day each month......however, in a meeting held on June 2nd, they agreed to bring forward the 432,000 barrel per day increase they had already scheduled for September, with that increase to be split evenly between July and August...hence, the production quota increase for both July and August was set at 648,000 barrels per day, which would have left each member's production back at the October 2018 baseline...hence, the new quota set after September's 100,000 barrels per day increase shown above would have represented a small increase from that October 2018 baseline, which had been their record year previously, and which still stands as the record, as they've been unable to match it since...

The next graphic from this month's report that we'll look at shows us both OPEC's and worldwide oil production monthly on the same graph, over the period from October 2020 to September 2022, and it comes from page 48 (pdf page 58) of OPEC's October Oil Market Report....on this graph, the cerulean blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale....

Including this month's 146,000 barrel per day increase in OPEC's production from their revised production of a month earlier, OPEC's preliminary estimate is that total global liquids production increased by a rounded 930,000 barrels per day to average 101.48 million barrels per day in September, a reported increase which came after August's total global output figure was apparently revised down by 750,000 barrels per day from the 101.3 million barrels per day of global oil output that was estimated for August a month ago, as non-OPEC oil production rose by a rounded 800,000 barrels per day in September after that downward revision, with 600,000 barrels per day of September's production growth coming from Eurasia ex-Russia, the OECD Americas, and the OECD Europe, while oil production in Russia and in a number of other countries declined...

After that 930,000 barrel per day increase in September's global output, the 101.48 million barrels of oil per day that were produced globally during the month were 5.66 million barrels per day, or 5.9% more than the revised 95.82 million barrels per day that were being produced globally in September a year ago, which was the second month of the monthly 400 million barrel per day production increases that OPEC and their allied producers initiated as the fourth policy reset in response to the global demand recovery in the wake of the early pandemic lockdowns (see the October 2021 OPEC report (online pdf) for the originally reported September 2021 details)...with this month's increase in OPEC's output fairly small compared to the global increase, their September oil production of 29,767,000 barrels per day amounted to 29.3% of what was produced globally during the month, down from their revised 29.4% share of the global total in August, which had originally been reported at 29.3%, before this month's large downward revision to global totals for that month....OPEC's September 2021 production was reported at 27,328,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year produced 2,439,000 barrels per day, or 8.9% more barrels per day of oil this September than what they produced last September, when they accounted for 28.5% of a much smaller global output total...

With the increases in both OPECs and global oil output that we've seen in this report, the amount of oil being produced globally during the month was significantly more than the expected global demand, as this next table from the OPEC report will show us....

The above table came from page 26 of the October Oil Market Report (pdf page 36), and it shows regional and total oil demand estimates in millions of barrels per day for 2021 in the first column, and then OPEC's estimate of oil demand by region and globally quarterly over 2022 over the rest of the table...on the "Total world" line in the fourth column, we've circled in blue the figure that's relevant for September, which is their estimate of global oil demand during the third quarter of 2022....OPEC has estimated that during the 3rd quarter of this year, all oil consuming regions of the globe have used an average of 99.33 million barrels of oil per day, which is a rounded downward revision of 330,000 barrels per day from their estimate 99.67 million barrels per day for 3rd quarter demand of a month ago (that revision is circled in green)...but as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were producing 101.48 million barrels per day during September, which would imply that there was a surplus of around 2.150,000 barrels per day of global oil production in September, when compared to the demand estimated for the month...

in addition to figuring that September oil surplus implied by this report, the downward revision of 750,000 barrels per day to August's global oil output that's implied in this report, combined with the 330,000 barrels per day downward revision to 3rd quarter demand that we've circled in green, means that the 1,630,000 barrels per day global oil output surplus we had previously figured for August would now be revised to a surplus of 1,210,000 barrels per day....on the other hand, the 330,000 barrels per day downward revision to 3rd quarter demand means that the surplus of 330,000 barrels per day we had previously figured for July would have to be revised to a surplus of 660,000 barrels per day...

Note that in green we have also circled a downward revision of 290,000 barrels per day to OPEC's previous estimates of second quarter demand...based on that upward revision to demand, our previous estimate that there was a surplus of 280,000 barrels per day in June would now be revised to a 570,000 barrels per day surplus, while the oil shortage of 130,000 barrels per day that we had previously figured for May would have to be revised to a surplus of 160,000 barrels per day, and finally, that the 270,000 barrels per day global oil output surplus we had previously figured for April would have to be revised to a surplus of 560,000 barrels per day...

Also note that in orange we've also circled an upward revision of 110,000 barrels per day to 2021's demand, which also means that the supply shortfalls that we previously reported for last year would have to be revised....while we're not inclined to go back and recompute the shortages for each month of 2021, we do have adequate totals for last year from our prior reports such that we can estimate an aggregate revision for the year...after the release of OPEC's January Oil Market Report four months ago, we had complete and revised data for all of 2021, and found that the world was short 527,910,000 barrels of oil during the year, which worked out to an average shortage of 1,446,300 barrels of oil per day....OPEC's February 2022 Oil Market Report then revised aggregate global demand for 2021 higher by 10,000 barrels per day, OPEC's March Oil Market Report revised 2021's demand higher by 90,000 barrels per day, OPEC's April Oil Market Report revised 2021 demand higher by 70,000 barrels per day, and then May's Oil Market Report revised that 2021 demand figure higher by another 100,000 barrels per day....hence, by May we had revised our estimate of 2021's total oil shortage to 537,765,000 barrels...therefore, with this month's 110,000 barrels per day upward revision to 2021's demand, the oil shortage for last year would now be 577,915,000 barrels, or an avergae of 1,583,329 barrels per day....we're still far from running out, however, because the quantities of oil being produced globally during the pandemic of 2020 still averaged over 1.1 trillion barrels, or over 3 million barrels per day more than anyone wanted...

This Week's Rig Count

The number of drilling rigs running in the US rose for the fifth time in eleven weeks, and for the 86th time over the past 107 weeks during the week ending October 14th, but even so, they're still 3.0% below the prepandemic rig count....Baker Hughes reported that the total count of rotary rigs drilling in the US increased by 7 rigs to 769 rigs this past week, which was still 226 more rigs than the 543 rigs that were in use as of the October 15th report of 2021, but was 1,160 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 8 to 610 oil rigs during the past week, after the number of rigs targeting oil had decreased by 2 during the prior week, and there are 165 more oil rigs active now than were running a year ago, even as they amount to just 37.9% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are still down 10.7% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 1 to 157 natural gas rigs, which was still up by 59 natural gas rigs from the 98 natural gas rigs that were drilling during the same week a year ago, even as they were only 9.8% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….

Other than those rigs targeting oil and natural gas, Baker Hughes also reports that two "miscellaneous" rigs continued drilling this week: 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....While we have seen no details on either of those, in the past we've identified various "miscellaneous" rigs 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 1 to 13 rigs this week, with all of this week's Gulf rigs drilling for oil in Louisiana's offshore waters....that's 1 rig more than the 12 Gulf rigs running a year ago, when 11 of those were drilling for oil offshore from Louisiana and one was deployed for oil offshore from Texas...in addition to rigs drilling in the Gulf, we still have an offshore directional rig drilling to between 5,000 and 10,000 feet for natural gas in the Cook Inlet of Alaska, while a year ago, the rig drilling offshore from Alaska had shut down for the winter...

In addition to rigs running offshore, there are still three water based rigs still drilling through inland bodies of water this week; those include a directional rig drilling to between 10,000 and 15,000 feet, inland in St Mary Parish, Louisiana, a directional rig drilling for oil to between 5,000 and 10,000 feet in Cameron Parish, Louisiana; and a directional rig drilling for oil at a depth greater than 15,000 feet in Terrebonne Parish, Louisiana....a year ago, there were two rigs drilling on inland waters...

The count of active horizontal drilling rigs was up by 8 to 705 horizontal rigs this week, which was also 224 more rigs than the 481 horizontal rigs that were in use in the US on October 15th of last year, but just 51.3% of the record 1,374 horizontal rigs that were drilling on November 21st of 2014....on the other hand, the directional rig count was unchanged at 41 directional rigs this week, and those were still up by 9 from the 32 directional rigs that were operating during the same week a year ago…meanwhile, the vertical rig count was also unchanged at 23 vertical rigs this week, which was down by 7 from the 30 vertical rigs that were in use on October 15th 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 October 14th, the second column shows the change in the number of working rigs between last week’s count (October 7th) and this week’s (October 14th) count, the third column shows last week’s October 7th 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 15th of October, 2021...

We​'ll start by noting that this week saw an increase of 5 oil rigs and a decrease of a natural gas rig in basins that Baker Hughes doesn't even track, so those don't even show up on the basin table above...next, to determine what happened in New Mexico, we first check the Rigs by State file at Baker Hughes for the changes in Texas Permian...we find that there were six oil rigs added in Texas Oil District 8, which covers the core Permian Delaware, but that there was an oil rig pulled out of Texas Oil District 8A, which covers the northernmost counties of the Permian Midland...hence, those changes indicate a 5 rig increase in the Texas Permian, and since the national Permian basin count was up by just 1 rig, we can conclude that all four rigs pulled out of New Mexico had been drilling in the far west Permian Delaware....elsewhere in Texas, there was a rig pulled out of Texas Oil District 1, and there was another rig pulled out of Texas Oil District 4, which would account for the two natural gas rigs pulled out of the Eagle Ford shale....at the same time, there were two rigs added Texas Oil District 2, one of which would account for an oil rig added in the Eagle Ford at the same time...those changes leave the Eagle Ford shale with 67 oil rigs and four natural gas rigs, and leave the Texas count up by 5 rig ​on the Permian basin additions...

the three rig increase in Wyoming might well account for part of the increase of oil rigs in basins that Baker Hughes doesn't track; it might also include an offset to the rig decrease in Colorado, if that rig had been pulled out of the DJ Niobrara chalk of the Rockies' front range...although the Oklahoma count remained unchanged, the state saw the addition of an oil rig in the Ardmore Woodford, and the removal of one each gas and oil rigs from the Arkoma Woodford, while the North Dakota rig count remained unchanged because the oil rig added in the Williston basin was set up in Richland County, Montana, where there are now two rigs deployed.....elsewhere, the Louisiana rig count was up by one with the oil rig addition in the adjacent Gulf of Mexico, the Alaska count was down one with an oil rig removal from the North Slope, the Ohio rig count was up by two with natural gas rig additions in the Utica shale, while another natural gas rig was added in Pennsylvania's Marcellus.....

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Fact-checking J.D. Vance on Tim Ryan’s record on fracking – PolitiFact – The candidates in one of the nation’s hottest midterm races — the contest for an open U.S. Senate seat in Ohio — came out swinging in an Oct. 10 debate, with Republican J.D. Vance and Democratic Rep. Tim Ryan accusing each other of being dishonest.Here, we’ll examine an exchange involving Ryan’s stance on natural gas production. It’s an issue of importance to Ohio, which ranks as the nation’s sixth-biggest producer of natural gas.Vance raised energy policy in the debate’s opening exchange, saying that Democrats have "gone to war" against the domestic energy sector. Ryan countered by citing provisions of the Inflation Reduction Act, which President Joe Biden signed Aug. 16, that Ryan said go "all in on natural gas."He continued, "I’ve been a natural gas proponent since I’ve been in Congress. And we have to get this right. We need to increase our production of natural gas. I support streamlining the permitting process around natural gas so we can get it around the country, lower costs for businesses, and ship it to Europe to stick our finger in Vladimir Putin’s eye."Vance, however, wasn’t buying Ryan’s claim that he’s championed natural gas production.Vance said, "Tim Ryan just told a big fib. He said he supported Ohio’s natural gas industry and he’s always done so. And yet Tim Ryan when he ran for president, two years ago, you supported banning fracking both on public lands and generally speaking." Synopsis: Ryan, as a 2020 presidential candidate, spoke about regulating fracking and even halting it if the industry cannot keep local residents safe. He said he’d “absolutely” consider banning fracking on federal lands and voted to stop the processing of fracking applications for drilling sites off California’s coast. However, Ryan’s full record of statements and policies show his focus has been on leveraging natural gas as a transitional fuel and a source of revenue and jobs for Ohio, while reducing environmental risks. See the sources for this fact-check.

Seven Years Later, Students for Energy Justice Continue Protests Against NEXUS Pipeline -On Oct. 2, Students for Energy Justice, organized a walk against the NEXUS pipeline. The climate justice student group focuses on supporting communities impacted by fossil fuel emissions. A group of approximately 20 SEJ members and students walked to the pipeline, which is located near the Oberlin Recreation Complex 20 minutes south of campus. During the walk, they discussed fracking, eminent domain, and past community activism against the pipeline. In 2014, Spectra Energy moved forward with its proposal to construct the pipeline and was met with swift condemnation from the Oberlin community, along with claims that the pipeline would violate the 2013 Oberlin Community Bill of Rights. This Bill of Rights was a product of Oberlin’s participation in Ohio’s community rights movement, which sought to create legislation that enables community self-governance. In Oberlin, this meant ensuring the protection of the College and City from the environmental harm of pipelines, fracking, and other hazards to public safety. In later years, these principles were put to the test by motions passed against the Bill of Rights. Throughout 2015, bills were passed blocking citizen initiatives, including the Community Bill of Rights protecting Oberlin from environmental hazards. In response to the 2015 motions, SEJ members began protesting by instituting community charters and city ordinances to prevent the construction of the pipeline. Up until 2018, the group attended City Council hearings about the construction of the NEXUS pipeline. Despite SEJ-led efforts, the project went into operation in September 2018. The NEXUS pipeline delivers gas supplies starting in southeastern Michigan, through northern Ohio, and up to Ontario, Canada. The pipeline travels directly through Oberlin city limits and is designed to carry up to 1.5 billion cubic feet of natural gas daily. College second-year Sydney Paunan attended the walk and took note of the area surrounding the pipeline. “It runs by residential areas, soccer fields, the bike path, and a senior care facility,” Paunan said. “Plus, the areas in the blast zone have high concentrations of low-income residents and residents of color. That was not an accident. All of these people and community spaces would be directly impacted were there to be a leak or explosion.”

Greens Urge EPA To End Ohio's Oversight Of Fracking Wells – Law360 -- Environmentalists have asked the U. S. Environmental Protection Agency to revoke the state of Ohio's ability to regulate wastewater injection wells, arguing that lax oversight is allowing toxic sludge to threaten water quality and safety in the Appalachians. . . .

Environmental advocates want U.S. EPA to take charge of regulating oil and gas waste injection wells in Ohio - cleveland.com - A collection of environmental organizations is asking the U.S. Environmental Protection Agency to take over regulation of oil and gas waste injection wells in Ohio, a role that has been handled by the Ohio Department of Natural Resources since 1983.A petition filed earlier this week by the Buckeye Environmental Network, Sierra Club, Earthjustice and a number of other community groups in Ohio, claims ODNR has failed to adequately protect poor communities from the harmful effects of the injection wells and is in violation of the federal Safe Drinking Water Act.Most of the 226 oil and gas waste injection wells in Ohio are in the eastern part of the state, south of Youngstown, and 48% of the waste disposed in them comes from Pennsylvania and West Virginia, said James Yskamp, an Ohio-based attorney with Earthjustice, which is headquartered in California.The injection wells are for disposing of wastewater generated from the extraction of oil and gas through horizontal fracturing and conventional vertical drilling.Federal action is needed to prevent Ohio from continuing to regulate injection wells “in a manner that endangers underground sources of drinking water, disproportionately impacts low‐income Appalachian Ohioans and deprives those most impacted by Class II disposal wells of the opportunity to participate in major decisions,” states the petition’s executive summary.The wastewater contains radioactive material and heavy metals that naturally exist deep in the ground and may also possibly contain PFAS (otherwise known as forever chemicals) and other harmful ingredients of fracking fluid, Yskamp said.The concerns about the injection wells have been around for a long time, Yskamp said, and many involve flaws in the permit scheme that allow for wastewater injected into the wells to potentially contaminate groundwater or rise to the surface and pollute surface streams. For example, those seeking a permit do not have to provide what’s called a “zone of influence calculation,” he said, which is performed by experts to determine how far wastewater could potentially migrate. Nor are permit seekers required to determine the depth of any underground sources of drinking water near a proposed injection site, he said.Furthermore, enforcement of ODNR’s regulations is inadequate because the agency does not have “unilateral authority” to issue penalties, he said, and instead must rely on the Ohio Attorney General to do so. That makes for a cumbersome process that rarely gets done and results in the same violations over and over again.Another big flaw, he said, is that the “public participation process is really a sham,” Yskamp said. “The permit to construct a well is noticed to the public, but the decision to allow the well cannot be appealed.” The permit to begin injecting into a well can be appealed, he said, “but that is not noticed to the public in anyway.”

Ohio groups petition U.S. EPA to revoke state's regulation of oil and gas waste disposal wells - A coalition of 27 environmental and civil rights groups has petitioned the U.S. EPA to take away Ohio’s authority to regulate oil and gas waste disposal wells. The groups, which includes the Sierra Club, Buckeye Environmental Network, Ohio NAACP chapters, and Ohio Poor People’s Campaign, claim that the state’s failure to take enforcement action against companies that violate regulations is endangering drinking water sources and disproportionately burdening low-income Appalachian communities. In 1983, the U.S. EPA granted the Ohio Department of Natural Resources (ODNR) primary enforcement authority, known as primacy. This gave ODNR oversight over the state’sClass II injection well program, which is part of the Safe Water Drinking Act. Class II wells are deep underground, where waste from the oil and gas industry is disposed. In some states, like Pennsylvania, EPA largely regulates these wells. “A lot has changed since then [1983],” said Earthjustice attorney Megan Hunter, whose name appears on the petition.She’s talking about the rise of unconventional gas development, called fracking, in Ohio, and with it, the “enormous increase in the amount of oil and gas waste,” Hunter said at a press conference. “Operators currently produce billions of tons of waste annually, and much of this waste ends up in Class II wells in Ohio.” “The waste injected into these wells is radioactive and contains toxic levels of various organic and inorganic pollutants, including PFAS, also known as forever chemicals,” she continued. “As this petition lays out, Ohio’s program has failed to safely manage this huge influx of waste.”The petition describes how the state’s Class II program contains numerous technical deficiencies, like over-pressurization of waste as it is pumped underground, and failure to locate migration pathways, require information on the local geology, and require characterization of the waste that is being injected, which has led to what the petition calls “serious” consequences. “These consequences include oil and gas waste making its way to the surface miles away from injection well sites, polluting the environment, and endangering underground sources of drinking water,” Hunter said. The petition describes how ODNR fails to enforce violations of the program, explaining that the agency lacks tools, “such as unilateral penalty authority, that are necessary to bring violators into compliance,” said another Earthjustice attorney, James Yskamp. When ODNR attempts to issue penalties, it seeks them through the Attorney General’s office, “a cumbersome process that cannot timely address most violations at Class II wells,” according to the petition, and one that “ODNR has used to address problems at Class II disposal wells fewer than six times in the program’s 39‐year history.” READ MORE:

• Group finds PFAS ‘forever’ chemicals used in Ohio oil and gas wells
• Why Frack Wastewater Injected Underground Doesn’t Always Stay There
• More Ohioans Want Some Say in Siting Drilling Waste Injection Wells

Strs Ohio Lowers Stake in The Williams Companies, Inc. (NYSE:WMB) - Strs Ohio reduced its stake in shares of The Williams Companies, Inc. (NYSE:WMB – Get Rating) by 43.9% in the second quarter, according to its most recent disclosure with the Securities and Exchange Commission. The firm owned 53,636 shares of the pipeline company’s stock after selling 41,915 shares during the quarter. Strs Ohio’s holdings in Williams Companies were worth $1,673,000 at the end of the most recent quarter. Other large investors have also recently made changes to their positions in the company. Pendal Group Ltd raised its holdings in shares of Williams Companies by 3.0% in the second quarter. Pendal Group Ltd now owns 148,976 shares of the pipeline company’s stock valued at $4,650,000 after acquiring an additional 4,369 shares in the last quarter. Spire Wealth Management raised its holdings in Williams Companies by 1,967.3% in the second quarter. Spire Wealth Management now owns 193,168 shares of the pipeline company’s stock worth $6,029,000 after purchasing an additional 183,824 shares in the last quarter. RNC Capital Management LLC raised its holdings in Williams Companies by 18.8% in the second quarter. RNC Capital Management LLC now owns 17,095 shares of the pipeline company’s stock worth $534,000 after purchasing an additional 2,700 shares in the last quarter. Rice Partnership LLC raised its holdings in Williams Companies by 9.8% in the second quarter. Rice Partnership LLC now owns 57,108 shares of the pipeline company’s stock worth $1,782,000 after purchasing an additional 5,103 shares in the last quarter. Finally, First Bank & Trust raised its holdings in Williams Companies by 3.2% in the second quarter. First Bank & Trust now owns 71,215 shares of the pipeline company’s stock worth $2,222,000 after purchasing an additional 2,182 shares in the last quarter. 85.40% of the stock is owned by hedge funds and other institutional investors. (NB: STRS Ohio is the State Teachers Retirement System of Ohio)

School, houses evacuated in Dayton after crews break gas line - Multiple homes and a school had to be evacuated Wednesday afternoon when a construction crew boring into the sidewalk ruptured a gas line. The large gas leak was reported just after 12:30 p.m. in the first block of Richmond Avenue. Residents from multiple homes and the Richard Allen Preparatory school on Salem Avenue had to be evacuated due to the high presence of gas in the area, said Dayton Fire Department Director and Chief Jeff Lykins. CenterPoint Energy crews clamped the natural gas line break less than three hours after the line was hit. Residents were to be able to return to their homes once fire crews made sure gas wasn’t pooling in the area, Lykins said. Fire crews went into each house to check basements for accumulating gas. They found a concentration of gas in one basement, but cleared it out, the chief said. “We’re checking to make sure there’s no pools of standing gas,” Lykins said. said. “We’re using fans to blow out any underground areas where pools of gas could accumulate. “We’re fortunate that it is breezy today, so not a lot of pooling. The leak was obviously below ground which makes it a little more difficult in locating the leak. When it does pool it’s going to pool underground, so we have to get in those lower areas to identify where it could be pooling.” Lykins didn’t have the exact number of residences that were evacuated, but said it was almost the entire block.

9 New Shale Well Permits Issued for PA-OH-WV Sep 26-Oct 2 | Marcellus Drilling News - Just nine new permits to drill shale wells were issued across the three Marcellus/Utica states for Sept. 26 to Oct. 2. Pennsylvania turned in the second week in a row of very low new permits–just three issued, all of them to different companies in different counties. Ohio issued just four new permits, with two of them going to Encino Energy in Carroll County. And West Virginia issued just two new permits, both to Southwestern Energy in Brooke County. Ascent Resources, Bradford County, Brooke County, Carroll County,Chesapeake Energy, Coterra Energy (Cabot O&G), Encino Energy, Energy Companies, Guernsey County, Jefferson County (OH), Range Resources Corp, Southwestern Energy,Susquehanna County, Utica Resources, Washington County

Investment is Leaving the Marcellus/Utica, Heading to Haynesville --Marcellus Drilling News -Capital from private investors and banks is leaving (or rather, not entering) the Marcellus/Utica region and is, instead, heading to the Gulf Coast–in particular, capital investment is heading to the Haynesville Shale in Louisiana and East Texas. That was the observation of several speakers at the recent Hart Energy America’s Natural Gas conference. According to Kevin Little, senior vice president for natural gas at Macquarie Energy, the lack of pipelines and infrastructure in the M-U is not just keeping the gas in the region, the lack of pipelines is keeping investment (for more drilling) out. Here is the real tragedy: “U.S. LNG export capacity is primed to ramp up and the largest, most economic natural gas basin [the M-U] is left out of the action, unable to increase production to meet the higher demand.”

See where toxic PFAS have been used in Pennsylvania fracking wells - —Toxic “forever chemicals”, also known as PFAS, have been used in at least eight oil and gas wells in Pennsylvania, but the exact location of those wells has never been publicly disclosed — until now.Experts say it’s possible that communities where PFAS (per- and polyfluoroalkyl substances) have been used by the oil and gas industry could face contamination of soil, groundwater and drinking water — and that contamination could be widespread.The chemicals don’t break down naturally, so they linger in the environment and human bodies. Exposure is linked to health problems including kidney and testicular cancer, liver and thyroid problems, reproductive problems, lowered vaccine efficacy in children and increased risk of birth defects, among others.Last year, a report by the environmental health advocacy group Physicians for Social Responsibility revealed that PFAS have been used in hydraulic fracturing and other types of oil and gas extraction across the U.S. for at least a decade, and an EHN investigationpublished in August documented PFAS contamination in one Pennsylvania fracking community resident’s drinking water.A 2021 op-ed in the Philadelphia Inquirer revealed that the chemicals were used in at least eight wells in Pennsylvania, but did not disclose the location of the wells. Physicians for Social Responsibility recently published a new report on the use of PFAS in Ohio oil and gas wells. In a footnote, that report listed the location for all eight Pennsylvania wells where well operators reported using PFAS in public fracking chemical disclosures.The Pennsylvania wells where PFAS have been used are located in the following communities:

• Chippewa Township, Beaver County (population 7,953)
• Donegal Township, Washington County (population 2,192)
• Independence Township, Washington County (two wells) (population 1,515)
• Pulaski Township, Lawrence County (three wells) (population 3,102)
• West Finley Township, Washington County (population 813)

The operators for all eight wells reported using polytetrafluoroethylene, or PTFE, which is a type of PFAS marketed as Teflon, in fracking fluid. PFAS may also be used during other phases of oil and gas extraction that don’t require any kind of public disclosure. It’s likely that the chemicals have been used in additional Pennsylvania oil and gas wells, but a lack of transparency makes it impossible to know.PFAS are likely being used in oil and gas wells throughout the country, but little research exists on how widespread the practice is and whether it’s causing drinking water contamination. Most existing research on PFAS has focused on other sources of the chemicals, like firefighting foam used at airports and military bases and industrial emissions. Investigations have found drinking water contamination in communities across the country.

Everything - Appalachian Hydrogen Hub May Have It All, Including Support from a Key Senator - The U.S. Department of Energy has laid out a clear set of criteria for the six to 10 clean hydrogen hubs it will select next year to receive up to $8 billion in federal support. For example, DOE wants at least one hub to use renewable energy to make hydrogen, another to use nuclear power, and another to use fossil fuels with carbon capture and sequestration (CCS). It also wants diversity among hydrogen end-users — geographic diversity too (at least two hubs must be in areas with the greatest natural gas resources) — and the department says it will give extra weight to proposals likely to create the most opportunities for skilled training and long-term employment. Yet another factor that’s sure to boost the prospects for hydrogen hub proposals in the heart of the Marcellus/Utica Shale is the looming presence of West Virginia Senator Joe Manchin, the Energy & Natural Resources Committee chairman who helped make hydrogen hub funding — and the rest of last year’s $1-trillion-plus infrastructure bill (and this year’s Inflation Reduction Act) — a reality. In today’s RBN blog, we discuss the hydrogen hub proposals now under development in northern West Virginia, western Pennsylvania and eastern Ohio.Over the past few weeks we’ve been reviewing the DOE’s hydrogen hub selection process — now getting under way in earnest — as well as a number of what we see as the leading proposals. We started with a look at the proposed Houston Hydrogen Hub, then followed that up with blogs on planned clean-hydrogen hubs in the Corpus Christi area and Southern California. Most recently, in Halo, we examined plans for a regional hub in Louisiana, Oklahoma and Arkansas and reviewed the details in DOE’s September 22 Funding Opportunity Announcement (FOA), which officially launched the process of receiving and reviewing hydrogen hub proposals and, ultimately, deciding which proposals should receive federal dollars. As we said then, concept papers from hub proponents are due November 7, while full applications must be submitted to the DOE by April 7, 2023. The department expects to notify the winners in the fall of 2023 and complete award negotiations with them in the winter of 2023-24. Most of the selected proposals would each receive between $500 million and $1 billion in federal support, though it is possible that a proposal could receive as little as $400 million or as much as $1.25 billion, again depending on its size and need.Today, it’s Appalachia’s turn, and we suspect that Manchin may be asking, “What took you so long?” After all, as the title of this blog suggests, it could be argued that a hydrogen hub centered in northern West Virginia and reaching into nearby areas in Pennsylvania and Ohio would have just about everything the feds are looking for: vast reserves of natural gas (and coal), a handful of steam methane reformers (SMRs) at refineries, CCS potential, a slew of existing and potential hydrogen end-users (more on this in a moment), an impressive array of gas pipelines and other supportive infrastructure, and — of special interest to Manchin — the promise of economic development and, with it, the creation of thousands of good-paying jobs.

Inside the environmental justice movement's big win - Environmental justice activists consider their success in stopping passage of a permitting reform bill last month their movement’s highest profile achievement to date. The question now is whether they can do it again. In the coming weeks, they’ll have to stop Democrats from negotiating with Republicans on a revised permitting proposal that could get attached to must-pass legislation. At the same time, advocates are pushing for a House floor vote on a landmark environmental justice bill that would carry enormous symbolic weight. It’s all a test for members of a coalition that’s been steadily building power and influence for years, who say last month’s victory was a gamechanger for their cause — one that could have enormous consequences for climate legislation and policymaking. “They’re emboldened now,” said Rep. Raúl Grijalva (D-Ariz.), chair of the House Natural Resources Committee, of the activists. “They coalesced and were able to stop a foregone conclusion. That is significant on many levels.” That “foregone conclusion” was the terms of an agreement between Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.) and Senate Majority Leader Chuck Schumer (D-N.Y.), sanctioned by the White House. The deal was that, in exchange for Manchin’s vote on the party’s historic climate and social spending package, Schumer would attach Manchin’s permitting proposal to a stopgap federal spending bill. Manchin’s proposal would have set shorter timelines for National Environmental Policy Act reviews, limit the ability for citizens to launch judicial challenges for proposed energy projects and approve the controversial Mountain Valley pipeline. Progressives saw it as directly undermining the core tenets of H.R. 2021, the “Environmental Justice for All Act,” which passed the Natural Resources committee along party lines in July. That bill would, among other things, dramatically expand the public comment period before permits can be issued, plus provide legal recourse to affected frontline communities. The legislation is, advocates say, the responsible way to reform the permitting process. Activists rallied on this point from the sidelines of the permitting reform negotiations. And a group of House and Senate Democrats amplified those voices and threatened to withhold their votes on the continuing resolution, thereby threatening a government shutdown weeks before the midterm elections. Then, hours before a scheduled procedural vote in the Senate, Manchin saw his proposal wouldn’t pass and declared defeat — at least for the moment. Not only had activists pushed  many Democrats to break ranks, Republicans who might have supported the measure otherwise decided against bailing Manchin out. While Grijalva, the lead sponsor of the “Environmental Jusrice for All Act,” was the face of the opposition on Capitol Hill, the victory was one to be shared with — and substantially credited to — the environmental justice community. “There’s not going to be any relaxing on the part of these organizations, and for that matter myself, in terms of what comes next,” Grijalva said. “They’re going to be here from now on. They have integrated the question of justice into all these points in a very powerful way, and from now on it’s going to be part of the decision.”

After the demise of Manchin's dirty deal, what comes next? -First of all, the side deal to the Inflation Reduction Act (IRA), agreed to by Senators Schumer and Manchin and no one else, showered unwarranted love on our unfriendly neighbor, the risky and unnecessary Mountain Valley fracked Gas Pipeline. We also quickly recognized that the diabolical deal was an arrow aimed at the heart of grassroots environmental and climate movements, and it was a bullseye.Since an unlikely alliance of tribal nations, white landowners, Big Green groups, Democratic donors, grassroots community groups, students, elders and just plain rank and file activists convinced President Obama to reject the Keystone XL tar sands pipeline, pro-fossil pipeline forces have been apoplectic. We anti-pipeline activists were nuts, stupid, and unrealistic. Amazingly, the KXL pipeline fighters held the line for four years of Trump, even though he approved it on his first day as president. And in those years a funny thing happened: “The Keystone effect”—an industry term for the hassle of building fossil fuel infrastructure—spread. The fights against the DAPL pipeline in North Dakota, Enbridge Line 3 in Minnesota, Pacific Connector in Oregon, and the Atlantic Coast in Virginia were intense. Industry won sometimes, but not always. Which seemed to bug them. MVP—Joe Manchin’s Most Valuable Pipeline—was the biggest project in a long stall mode, its fate unknown.If they couldn’t beat us fairly in the regulatory system that had worked for them in the past, then weakening, sidestepping and bypassing the National Environmental Policy Act (NEPA), the centerpiece of US environmental legislation, would be the way. Also weakening the Clean Water Act. Also green lighting oil and gas pipelines as a matter of course. Also moving to a different court if you didn’t get the ruling you wanted. All of this was in the Dirty Deal, and it became not only the GOP agenda, but also that of a significant bloc of Democrats. When the side deal was announced, one of the listservs of climate campaigners had a little contest on what to name it. Pipeline Pollution Bill. Sore Loser Bill. Eviscerate Environmental Legislation in a Fit of Pique Bill. In the end, most people called it the Dirty Deal. Remember, the Inflation Reduction Act, while celebrated by most environmental groups, was itself a far cry from its original conception as a multi-trillion-dollar Green New Deal. That was watered down to the Build Back Better bill. Then there were broken promises and machinations that killed Build Back Better, orchestrated by, you guessed it, Joe Manchin. This monumental boondoggle masquerades as climate action reform, but it’s actually a reprise of the cop-out known as All the Above; a pretense that we can fight climate change while simultaneously expanding the production of fossil fuels that are the primary cause of climate change. So the Dirty Deal poured salt into some wounds. And the Dirty Deal seemed like a done deal, in other words, a loser of a campaign. It took some nerve to decide to fight it. What made us tick is that it threatened many communities, which came together for a common purpose while continuing their local efforts.From the moment we learned of it, we had as many as eight calls per day to strategize and coordinate with groups around the country. Those calls ranged from fundraising to speaking to Senate staff, to strategizing with other community leaders.One of the things we decided to do was bring activists to Washington on Sept 8th. Just to pull off our part, we at Seven Directions of Service spent a lot of time fundraising. We were able to bring 60 people to DC by giving them a free ride on the bus and a meal. These are people who live along or near the MVP route, people whose lives are directly affected not only by climate change but by the pipeline itself.Another factor was the commitment of some of the green groups. Greenpeace pulled most of its staff off of non-essential work and had them work on killing the Dirty Deal full time. Our Revolution mobilized its members to contact Senators. Sunrise Movement, Center for Biological Diversity, and many more used their knowledge of how things work on Capitol Hill to help us figure out which Senators and Members of Congress we could sway, and how. We learned how important it is to have connections with Senate staff, how to present our case, and how to build momentum within Congress.13 Executive Directors of green groups got arrested protesting the Dirty Deal. 10 people got arrested during a 100-person blockade of Senator Schumer’s office in New York City.Behind the scenes, great activists worked to help us navigate, pull together logistics, and understand the risks of arrests. We know it’s not over. The central ideas in the Dirty Deal—keeping the fossil fuel era alive as long as possible, side stepping and weakening environmental regulations, sacrificing communities facing these risky projects, will come back and they’ll dress themselves up as permitting reform and climate action. We’ll be ready.

Non-Profit Org Warns Oil and Gas Fumes Cause Cancer: Virginia Industry Org Says, Nay -A non-profit organization has warned residents of West Virginia that exposure to oil and gas fumes can increase their risk of developing cancer, but an organization representing these industries disagrees.Over half of West Virginia's counties are shown on a map in the Clean Air Task Force report to be above the level of concern for cancer risks set by the EPA.The report comes as fresh data from the US Energy Information Administration was made public on Wednesday, showing that gas production in the US surpassed previous records in 2021.The data in the Clean Air Task Force Report is contested by the Gas and Oil Association of West Virginia.Although the report was released in September, it is noted that this analysis is of data that the EPA collected in 2017.Experts from CATF explained that they updated the data to a more recent date using EPA projections and trends on the gas and oil industry.According to the Energy Information Administration, 1/3 of all natural gas generated in the United States is produced in the Appalachian Basin, which includes Ohio, West Virginia, and Pennsylvania.Charlie Burd, executive director of the Gas and Oil Association of West Virginia, said that West Virginia is perched atop the Marcellus and Utica shale, which may contain the nation's richest natural gas deposits.Burd cites a different CATF report that appears to demonstrate that while West Virginia's natural gas production increased between 2018 and 2020, greenhouse gas emissions decreased.He claimed that the gas and oil industries in Appalachia reduced emissions by about 70% as an outcome of the voluntary agreements that the industry has with the Department of Energy and EPA. Burd further said that the company is extremely proud of West Virginia's production of the cleanest natural gas in the entire world.They believed that if given the chance to produce more, they will do more than any other location to reduce emissions.The cited report is being examined by the EPA. The EPA proposed a rule in November 2021 that would substantially lower methane and other harmful air pollution from both existing and new sources in the natural gas and oil industry. This includes air toxins such as benzene, toluene, ethyl benzene, and xylene. The agency held a three-day public hearing after receiving close to half a million written comments and responses on the proposal. The EPA has created a supplemental proposal that may revisit, improve, or expand on the specifics of the one we released in November after reviewing those comments. In the upcoming weeks, the EPA intends to release the supplemental proposal open for public review and comment.

How fossil fuel firms use Black leaders to ‘deceive’ their communities - Pastor Geoffrey Guns was sceptical when asked to join the community advisory board for a gas pipeline, but decided it was his duty to advocate for the Black communities that would be affected by the fossil fuel expansion project. The Virginia Reliability Project (VRP) is a proposal by the Canadian fossil fuel company behind the Keystone XL pipeline to expand and upgrade gas infrastructure through tribal lands, fragile waterways and underserved neighbourhoods in south-east Virginia. Almost 50% of the population along the VRP route live below the poverty line and more than half are people of colour. TC Energy claims the expansion will create thousands of local jobs and that community engagement is core to the company’s mission. For this reason, Guns, a senior pastor at the Second Calvary Baptist church in Norfolk, joined the advisory board along with several other local Black religious leaders. “If they’re asking us to rubber-stamp this, then there should be economic benefits for Black folks and minorities. But all we heard was talk without any actual commitment to equity in contracts for minorities,” said Guns. On the VRP website, under a tab labelled community voices, TC Energy lists endorsements from influential figures, including Black state-elected officials who praise the economic benefits promised by the company for communities of colour. Several of the community voices received financial contributions from the company and its registered lobbying firm, which is legal but not mentioned. It’s not the first time fossil fuel companies have looked to influential Black leaders to smooth the way for polluting oil and gas projects that disproportionately affect people of colour, Indigenous communities and low-income neighbourhoods.The National Association for the Advancement of Colored People (NAACP), the historic civil rights organisation which fights for equal access to housing, voting rights and education, has published a list of common tactics used by the fossil fuel industry to manipulate communities, which often exacerbate climate injustices.The NAACP’s “fossil fueled foolery” primer warns people to be vigilant of companies that co-opt local leaders and organisations that misrepresent the interests and opinions of communities. It’s also common for oil and gas companies to finance political campaigns and pressure elected officials to garner their support.The NAACP acted after some of its local chapters, which operate with significant autonomy, were exposed supporting power plants and pipelines.The VRP is no exception.Emails seen by the Guardian show that James Minor, president of the NAACP’s Richmond chapter, lobbied on behalf of TC Energy, asking local politicians to sign ghostwritten letters supporting the pipeline expansion in the months before the application was submitted to a federal regulator.Minor is also one of eight voting members on the Virginia Marine Resources Commission – the state agency responsible for issuing water permits, which the project requires. In June, he voted in favor of a separate TC Energy permit request before the permitting commission.Minor, who is employed by the city of Richmond, wrote messages from a private email address, opening with “hello from team VRP” - the acronym for the Virginia Reliability Project. “Recently, we posted new community benefit overview documents … Please take a look and consider sharing with your networks,” said one email, obtained using the Freedom of Information Act.“This is a blatant conflict of interest and what seems to be an extremely troubling attempt by TC Energy to tilt the environmental review of the project in its favor,” said Itai Vardi, research manager at the Energy and Policy Institute (EPI), a fossil fuel industry watchdog group, which shared the emails with the Guardian. Minor denies any conflict.Similar emails were sent to separate elected officials by TC Energy consultant Esmel Meeks, a local Black political consultant who previously headed a now defunct group funded by the oil and gas trade association American Petroleum Institute. Meeks, who recruited Pastor Guns to the advisory board, said it was a “sincere effort to gather honest feedback about the project”.

US Gas Exports Primed to Soar, but Constrained Appalachia Can't Meet the Moment —Infrastructure constraints in the Marcellus and Utica shale plays are not just keeping the natural gas in, they are keeping capital out, Kevin Little, senior vice president for natural gas at Macquarie Energy, said at Hart Energy’s recent America’s Natural Gas conference. “The regulatory burdens are creating a dislocation in the markets,” Little said. “Whereas, the Marcellus and Utica led in the terms of growth through 2019, now, we’re expecting this to shift down to Texas-Louisiana—specifically, in the immediate term, Haynesville. “You’re just seeing a shift in capital away from Marcellus and Utica down to the Gulf Coast.” Good for the Gulf Coast in terms of its gas industry expansion, but not so good for Appalachia or, really, for anybody. U.S. LNG export capacity is primed to ramp up and the largest, most economic natural gas basin is left out of the action, unable to increase production to meet the higher demand. The result will be higher prices both domestically and internationally, adding to the pressure on struggling European economies. Agreements to supply LNG, already on the rise, accelerated following Russia’s invasion of Ukraine in February. But the growth in U.S. export capacity really starts when the Golden Pass terminal comes online in 2024, Little said, and peaks in 2026. The U.S. exports about 11 Bcf/d of gas at the moment, he said, a figure that will jump to 13 Bcf/d when Freeport LNG is able to fully return to service. Maquarie forecasts an expansion to 25 Bcf/d by the end of 2027. U.S. gas production, now around 100 Bcf/d, will creep up to 103 Bcf/d by the end of the year and rise to 110 Bcf/d by the end of 2023, Little said. The problem, he said, is the shift in production growth. The Haynesville is showing strong production growth, as is the Permian Basin from associated gas, an uptick in gas drilling in the Eagle Ford and even a small resurgence in the Barnett. There are expectations of growth in the Midcontinent, too. Just not in the Marcellus and Utica. The culprit is the old pipeline constraints bugaboo. More production can’t come online until more takeaway comes online and more takeaway won’t come online because states in the Northeast simply won’t allow it. It wasn’t always this way. “It really wasn’t that long ago—2018-2019—we built a significant amount of new pipeline capacity coming out of the Northeast,” Little said. “In just three years, we built 12 Bcf/d of new pipeline capacity and several of them were major projects, including the Rover pipeline, Nexus, Atlantic Sunrise and then the Leach Xpress and Gulf XPress.” At the time, there were fears of an overbuild in the Marcellus and Utica, but the plays proved the markets wrong very quickly. Production grew by more than 9 Bcf/d in 2018-2019, easily backfilling all of the new capacity. And from the gas production boom in the Northeast sprung the first wave of Gulf Coast LNG expansion (debut of Cheniere’s Sabine Pass LNG, construction of Cameron LNG and Freeport LNG facilities). Then, up north, things went south. Pushback against midstream infrastructure took the form of states like New York and New Jersey used Section 401 of the Clean Water Act to delay or deny certification of projects like the Constitution pipeline and Northeast Supply Enhancement project. CPV Valley Energy’s ultimately successful effort to build an eight-mile lateral pipe took years in court and massive cost overruns. Even wins at the Supreme Court became Pyrrhic victories when the Atlantic Coast and Penn East pipelines were canceled. “If you have to get an act of Congress to get your permits to build a pipeline, if you’ve got to go to the Supreme Court and you still can’t build a pipeline, this is not a great environment to build midstream infrastructure,”

Chicago may end natural gas hookups for new homes, businesses - As Chicagoans maneuver around torn-up streets and sidewalks while utility crews install new underground gas pipelines, City Hall announced a climate-fighting plan Thursday that envisions the end of fossil fuel hookups to homes and buildings. Mayor Lori Lightfoot’s administration announced more than two dozen recommendations from outside advisers representing advocacy, business and labor interests to cut emissions from homes and buildings that add to the climate crisis. Among the recommendations, Chicago would require new residential or commercial construction to be built without any gas or other fossil fuel-burning equipment, such as heating systems or appliances. A “fossil fuel mitigation fee” would be added to construction that chooses to use gas. That proposal is being made even as utility Peoples Gas is spending billions of dollars to lay hundreds of miles of new underground pipes across the city and plans to do so through 2040. In a statement, the utility said it is “reviewing the report and believe the mission of the [city advisory group] is well intended.” The utility is exploring its own plans for reducing greenhouse gas emissions, the statement added. “It’s clearly pointing toward a future where Chicago is not on the gas system, and that’s good. It’s where we want to go,” said Abe Scarr, a member of the city’s advisory group and director of public interest advocacy organization Illinois PIRG. Many of the recommendations would need to be put into new policy goals by Lightfoot, but some can be acted on relatively soon thanks to millions of dollars in federal funding largely from the COVID-19 stimulus package last year, said Angela Tovar, the city’s chief sustainability officer. Buildings account for more than two-thirds of greenhouse gas emissions in Chicago, Tovar added, noting the urgency to act.

Natural Gas Futures Tumble Below Key $6.50 Threshold on Improving Winter Supply Outlook - Spot gas prices posted a mix of moderate gains and losses, with the exception of the Northeast, where next-day gas was sharply higher. NGI’s Spot Gas National Avg. edged up 7.5 cents to $5.550. With production near 100 Bcf/d and little in the way of weather demand to significantly move the price needle, bulls had a hard time maintaining the early price gains they achieved early in Monday’s trading session. Weather models over the weekend were a little chillier with a mid-October cold front sliding into the northern United States, as was expected. However, even with the added projected demand, the pattern was far from bullish, just not as bearish as the data showed Friday, according to NatGasWeather. The Global Forecast System’s midday run, meanwhile, trended slightly warmer by not seeing quite as chilly the weather system advancing into the Midwest and Northeast early next week, the forecaster said. Until then, demand is expected to be light through Thursday before a cool shot exits the Northern Plains and tracks across the Great Lakes, Ohio Valley and Northeast Friday-Sunday for a minor bump in national demand. A reinforcing cool shot is set to follow but is now warmer based on the latest models. In fact, much of the weather data continues to favor mostly mild weather through the Oct. 20-23 period, although cooler trends could show up in time to add several total degree days/Bcf in demand, according to NatGasWeather. For at least a few more weeks, it appears that fundamentals point to continued weakness in the gas market. In addition to the mostly moderate weather pattern in place, production has generally topped 100 Bcf/d after fluctuating in the mid- to high 90s Bcf/d throughout the summer. The additional output has made its way into underground storage, which had struggled for much of the injection season to close the gap to the five-year average.

U.S. natgas rises 3% on technical bounce, higher demand forecasts (Reuters) - U.S. natural gas futures rose about 3% on Tuesday from a near three-month low in the prior session on a technical bounce, forecasts for higher gas demand over the next two weeks than previously expected, and renewed concerns about a possible rail strike. A rail strike could boost demand for gas by threatening coal supplies to power plants. A union representing employees who build and maintain tracks said its members rejected the tentative contract deal with a committee representing major U.S. freight railroads. Coal fuels about 20% of U.S. power generation. About two-thirds of the nation's coal-fired power plants receive their coal by rail. When coal or any other fuel is not available for power generation, energy firms usually burn more gas to produce power. Gas already provides about 37% of U.S. electricity. That gas price increase came despite near record output and forecasts for continued milder-than-normal weather that will allow utilities to keep injecting more gas into storage than usual in coming weeks. Recent drops in demand from storm-related power outages and reduced liquefied natural gas (LNG) exports have also weighed on gas prices. Hurricane Ian left more than 4 million homes and businesses in Florida and 1.1 million in North and South Carolina without power after hitting Florida in late September. It took utilities in Florida more than a week to restore power to some customers in the hardest hit areas. Gas demand was also reduced by outages at LNG export plants, including Berkshire Hathaway Energy's 0.8-billion-cubic-feet-per-day (bcfd) Cove Point in Maryland for about three weeks of planned work starting Oct. 1 and Freeport LNG's 2.0-bcfd plant in Texas for unplanned work after an explosion on June 8. Freeport LNG expects the facility to return to at least partial service in early to mid-November. Front-month gas futures rose 16.1 cents, or 2.5%, to settle at $6.596 per million British thermal units (mmBtu) on the New York Mercantile Exchange (NYMEX). On Monday, the contract closed at $6.435, its lowest since July 12. Data provider Refinitiv said average gas output in the U.S. Lower 48 states have risen to 100.1 bcfd so far in October, up from a monthly record of 99.4 bcfd in September. With cooler weather coming, Refinitiv projected average U.S. gas demand, including exports, would rise from 92.6 bcfd this week to 96.1 bcfd next week. Those forecasts were higher than Refinitiv's outlook on Monday.

U.S. natgas falls 2% to near 3-month low on record output (Reuters) - U.S. natural gas futures fell about 2% to a near three-month low on Wednesday on record output and reduced liquefied natural gas (LNG) exports that should allow utilities to keep injecting more gas into storage than usual in coming weeks. That price drop came despite forecasts for colder weather and higher heating demand over the next two weeks than previously expected. Major LNG outages include Berkshire Hathaway Energy's shutdown of its 0.8-billion-cubic-feet-per-day (bcfd) Cove Point LNG export plant in Maryland for about three weeks of planned maintenance on Oct. 1 and the ongoing shutdown of Freeport LNG's 2.0-bcfd plant in Texas for unplanned work after an explosion on June 8. Front-month gas futures fell 16.1 cents, or 2.4%, to settle at $6.435 per million British thermal units (mmBtu). That matched the close on Oct. 10, which was the lowest settle since July 12. In a bet on cold weather next winter, traders boosted the premium of futures for November 2023 over October to 37 cents, its fifth record high in a row. U.S. futures are up about 73% so far this year as soaring global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading at $45 per mmBtu in Europe and $35 in Asia. Prices in Europe fell to a three-month low of $44.25 on Oct. 7 as strong LNG imports boosted the amount of gas in storage in northwest countries to over 90% of capacity. That compares with an all-time high of $90.91 on Aug. 25. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 100.1 bcfd so far in October, up from a monthly record of 99.4 bcfd in September. With colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would jump from 92.5 bcfd this week to 98.3 bcfd next week. The forecast for next week was higher than Refinitiv's outlook on Tuesday. The average amount of gas flowing to U.S. LNG export plants fell to 10.9 bcfd so far in October from 11.5 bcfd in September. 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. So far this year, most U.S. LNG has gone to countries in Europe as they wean themselves off Russian energy.

Natural Gas Futures Shrug off EIA Data, Jump 30 Cents Thursday - Weeks away from the official start of the winter season in the natural gas market, futures traders brushed off the latest government inventory data in favor of coming cold and, perhaps, in sympathy with higher commodity markets. The November Nymex natural gas futures contract settled Thursday at $6.741/MMBtu, up 30.6 cents on the day. December futures rose 28.7 cents to $7.053. Natural gas cash prices retreated across the United States but were stronger north of the border in Canada. NGI’s Spot Gas National Avg. fell 26.0 cents to $5.535. Based on Thursday’s price action along the Nymex futures curve, traders may be getting accustomed to the triple-digit storage builds that have hit the market over the past month and need a little more to get their fire going. The Energy Information Administration (EIA) dropped another whopper on Thursday, reporting a 125 Bcf injection for the week ending Oct. 7 that easily surpassed both the 86 Bcf year-earlier injection and the five-year 82 Bcf build average. The build, though, was right in line with the median of estimates ahead of the EIA report and came in far below the highest projection for a 137 Bcf injection. Price action was muted soon after the report, with a modest bump possibly indicating the market was happy the injection wasn’t closer to the high end, according to NatGasWeather’s Rhett Milne, meteorologist. Nevertheless, the storage data was overwhelmingly bearish. As important, the South Central region, which had trailed all others in refilling, injected a massive 55 Bcf into storage and chopped in half the deficit to the five-year average, according to EIA. The build included a 28 Bcf addition to salt stocks and a 26 Bcf addition to nonsalts. The Midwest and East followed with injections of 36 Bcf and 26 Bcf, respectively, EIA said. Mountain region stocks increased by 6 Bcf. Pacific inventories rose by 2 Bcf. Total working gas in storage rose to 3,231 Bcf as of Oct. 7, which is 126 Bcf below year-earlier levels and 221 Bcf below the five-year average, according to EIA. Looking ahead to the agency’s next report, participants on the online energy chat Enelyst said another 100-plus Bcf/d injection was likely, though estimates were around 105 Bcf/d given some pockets of chilly air in the Midwest and East Coast this week. Higher wind generation week/week also needs to be considered, according to Enelyst’s Het Shah, managing director. “Wind was brutally low for the week ending Oct. 7,” he said. Meanwhile, production was slightly lower at minus 0.3 Bcf/d, while residential/commercial demand was up 1.5 Bcf/d, power generation was up 0.3 Bcf/d and Canadian imports were down 0.5 Bcf/d, according to Shah. Given all those stats, he pegged the next storage injection at 109 Bcf.

U.S. natural gas futures decline for 8th week on record output | BOE Report - U.S. natural gas futures fell about 4% to a near three-month low on Friday as record output and reduced liquefied natural gas (LNG) exports allowed utilities to inject much bigger than normal amounts of gas into storage for the winter over the past month. That put the contract down for an eighth week in a row for the first time since February 2001. Major LNG outages include Berkshire Hathaway Energy's shutdown of its 0.8-billion-cubic-feet-per-day (bcfd) Cove Point LNG export plant in Maryland for about three weeks of planned maintenance on Oct. 1 and the continuing shutdown of Freeport LNG's 2.0-bcfd plant in Texas for unplanned work after an explosion on June 8. There are at least three vessels heading to Freeport, according to Refinitiv data, including Prism Brilliance (expected to arrive Oct. 18), Prism Diversity (Oct. 27) and Seapeak Methane (Nov. 22), prompting some traders to believe Freeport will return in November. Others in the market, however, believe the plant's return will be delayed. Officials at Freeport said they remain on track to return the plant in November. Front-month gas futures fell 28.8 cents, or 4.3%, to settle at $6.453 per million British thermal units (mmBtu), close to the three-month low of $6.435 settles on Oct. 10 and Oct. 12. For the week, the contract was down about 4%, bringing its losses over eight weeks to around 35%. Despite the weeks of declines, U.S. futures were up still about 74% so far this year as soaring global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading at $40 per mmBtu in Europe and $35 in Asia. That puts European forwards down about 8% and on track for their lowest close since June 28 as strong LNG imports have boosted the amount of gas in storage in countries in the northwest part of the continent to healthy levels above 90% of capacity. European prices hit an all-time high of $90.91 on Aug. 25. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 99.9 bcfd so far in October, up from a monthly record of 99.4 bcfd in September. Refinitiv projected average U.S. gas demand, including exports, would jump from 92.8 bcfd this week to 99.3 bcfd next week with the coming of colder weather before sliding to 97.2 bcfd in two weeks with the return of milder temperatures. The forecasts for this week and next week were higher than Refinitiv's outlook on Thursday. The average amount of gas flowing to U.S. LNG export plants fell to 10.9 bcfd so far in October from 11.5 bcfd in September. 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.

Experts: U.S. LNG Growth Could Slow Next Year -While American LNG is poised for long-term growth, next year could see a slowing of domestic natural gas demand due as infrastructure and expansion plans experience limitations, Natural Gas Intelligence reports, citing experts on the sidelines of a Gulf Coast energy forum.Central for Liquefied Natural Gas (CLNG) executive director Charlie Riedl told NGI that while LNG dynamics are expected to accelerate this decade, buoyed by Russia’s invasion of Ukraine, facility and pipeline expansion will be “mission critical”, with a focus on connecting the Permian Basin and the Haynesville Basin to LNG export terminals.Experts note that while new projects are underway, the timing will see a lag.The Freeport LNG export facility continues to be out until at least early November after a fire in June. When it does restart, it would return some 2 billion cubic feet per day to the market. Aside from that, however, experts told NGI that no other expansions of export capability are on the books for two years, with Exxon’s Golden Pass LNG–in cooperation with QatarEnergy–not slated for initial startup until 2024.Right now, the market is gearing up for a slight pause as LNG expansion catches up with the longer-term prospects here.Speaking on the sidelines of the three-day forum, Easy Daley Analytics’ Rob Wilson told NGI that Gulf Coast LNG export capacity is set to increase gradually through 2025, but that slower near-term expansion growth could impact natural gas producers as new projects lag behind market dynamics.“I think it will be March and April, when storage ramps up, and we see levels reach significantly above historical averages,” Wilson told NGI.For 2023, Wilson predicts that while demand from Asia and Europe will continue to be high, U.S. natural gas producers will see lower prices as the market waits for demand to catch up with supply.

Michigan Environmental Groups Oppose Oil Pipeline Project Under Great Lakes - The long-running feud between Canadian energy giant Enbridge and a coalition of Michigan environmentalists and tribal nations has reached another milestone. Enbridge is proposing to build a tunnel to carry an oil pipeline under the Straits of Mackinac, which connects Lake Michigan with Lake Huron. The U.S. Army Corps of Engineers recently held three “scoping” meetings as part of evaluating the project’s environmental impact. Sean McBrearty, campaign coordinator for the environmental group Oil and Water Don’t Mix, said digging a tunnel for an oil pipeline under the Great Lakes is a recipe for disaster. “They’re talking about building this directly under the profile of the existing pipeline,” McBrearty explained. “A tunnel would not only be horribly hazardous to any workers inside the tunnel and to the project, but could potentially even cause an oil spill in the pipeline above it.” Enbridge claimed if the project is halted, fuel prices in the region will soar, but McBrearty noted the company’s own analysts said the effect would be negligible. Enbridge has a history of ecological disasters, including a 2010 spill in Michigan, sending more than a million gallons of crude oil down a 35-mile stretch of the Kalamazoo River. McBrearty argued it is too risky to trust them on the tunnel project. “We’re asking the Army Corps to really take a look at Enbridge’s corporate history,” McBrearty noted. “Which includes the Kalamazoo oil spill, where essentially negligence at Enbridge caused one of the largest inland oil spills in U.S. history.” Enbridge has structured its corporate operations through a network of dozens of U.S. subsidiaries, which McBrearty warned could leave Michiganders holding the bag. “If this pipeline ruptures, if something goes wrong, there’s actually a good chance that Enbridge’s subsidiaries could just go bankrupt,” McBrearty cautioned. “Taxpayers would be left paying for a major oil cleanup in the Great Lakes.” He added the Corps of Engineers has received thousands of comments, most of them opposing Line 5. The agency is accepting public comments through the end of this week, but has not said when the report will be published.

Line 5 foes want 'broad, thorough review' of tunnel project as Army Corps wraps public ... The final public input session for a federal environmental review of the Line 5 tunnel project concluded Thursday evening, with around 100 concerned citizens from Michigan, Minnesota, Wisconsin, Ohio, Illinois, New Jersey, Canada and more arguing for and against the merits of a new, tunnel-encased Line 5 pipeline replacement.The sentiments for and against the tunnel were split fairly evenly. The majority of pro-tunnel comments came from industry workers, individuals on fixed incomes and those worried about propane and gas prices. Opponents to the project and Line 5 as a whole ranged from tribal citizens to policy experts and environmentally concerned citizens, and urged the U.S. Army Corps of Engineers (USACE), Detroit District to implement the most thorough review possible.Originally scheduled for three hours, the meeting went two hours longer than planned due to a large influx of individuals wishing to speak.The EIS scoping and Section 106 input period will continue through Oct. 14, and those who wish to submit comments regarding the EIS scope may do so by that date either electronically or in written comments.Written comments: Line 5 Tunnel EIS, 16501 Shady Grove Road, P.O. Box 10178, Gaithersburg, MD 20898The meeting — the third of its kind over the last month — is part of USACE’s process of scrutinizing the Canadian pipeline company Enbridge’s proposed project to the highest level of federal environmental review. With public comment open from Aug. 15 and closing on Oct. 14, USACE is seeking input on what should be considered during the course of the Environmental Impact Statement (EIS) scoping process.An EIS involves a lengthy process, and was not Enbridge’s preferred development as the company had favored a less intensive form of review.After the Detroit District considers the tunnel project’s alternatives, cumulative impacts, geographic context and more under the National Environmental Protection Act (NEPA) following public comment, the agency will then prepare a draft EIS before embarking on another 60-day comment period expected in fall 2023.The final EIS will then be prepared, after which a minimum of a 30-day waiting period will begin in summer 2024. A record of decision will finally be established in fall 2024 — two years from now.That judgment will determine whether USACE will issue, issue with modification or deny Enbridge’s permit altogether.Meanwhile, the original Line 5 continues to age and attract environmental concern. Built in 1953, the oil pipeline originates in Northwest Wisconsin and continues for 645 miles into Michigan’s Upper Peninsula, under the Straits of Mackinac and out into Canada near Port Huron.*Both the current pipeline and its proposed replacement are opposed by all 12 federally recognized tribes in Michigan, in addition to tribes inWisconsin that are fighting the pipeline as it passes through their treaty territory.Indigenous water protectors from tribes in Michigan, Wisconsin and Minnesota all spoke during the public input session Thursday.“Consultation is not consent and they [the tribes] are saying no,” one participant said.Another participant, climate justice organizer Andy Pearson from Minnesota, said the Detroit District need only look into what’s happened with Enbridge’s Line 3 pipeline in Minnesota to know whether to trust the Canadian company.“Let our experience serve as a warning that this company will try to make you believe that they’ve done their due diligence when they have not. A mountain of assurances is not worth much once irreversible damage has been done,” Pearson said.

U.S. judge rejects last challenge to Enbridge's Line 3 - A federal judge has rejected claims by environmental groups and Ojibwe bands that the Army Corps of Engineers failed to adequately review Enbridge's Line 3 pipeline. The controversial 340-mile oil pipeline across Minnesota opened a year ago, but one lawsuit challenging it had yet to be concluded — until Friday. "The court concludes that the Corps complied with its obligations to assess the environmental consequences associated with its permits to Enbridge," wrote Judge Colleen Kollar-Kotelly of the U.S District Court for the District of Columbia. The Minnesota Public Utilities Commission (PUC), the state's primary pipeline regulator, approved Line 3 in early 2020. The Minnesota Pollution Control Agency (MPCA) approved a state water permit later that year. Pipeline opponents appealed those decisions. But state courts rejected their challenges in 2021, while the pipeline was being constructed. "Like Minnesota state government regulators, agencies, our courts and so-called leaders, the federal court has again failed Indian people and Minnesota's most pristine waterways and landscapes," wrote Winona LaDuke, head of the indigenous environmental group Honor the Earth, in a statement. Enbridge, in statement, said it was pleased with the latest court decision. The company said the decision "acknowledges the thorough, inclusive and science-based review of the Line 3 Replacement Project by the U.S. Army Corps of Engineers." It also cited public participation and consultation with tribes. The new Line 3 replaced a 1960's Enbridge pipeline that was corroding and operating at only 50 % capacity due to safety concerns. The pipeline transports a particularly viscous Canadian oil to Enbridge's terminal in Superior, Wis. Pipeline opponents say the new Line 3, which partly follows a new route, has opened a new region of Minnesota lakes, streams and wild rice waters to oil spill degradation, as well as exacerbating climate change. The Army Corps issued its water and wetlands permit for pipeline construction in November 2020, allowing Enbridge to drill beneath rivers and to discharge dredged material. Soon thereafter, the Corps was sued by the Red Lake and White Earth bands and three environmental groups: Honor the Earth, Friends of the Headwaters and the Sierra Club. They claimed the Corps did not properly evaluate the pipeline's impact on climate change and that the agency should have conducted its own environmental impact statement (EIS) on Line 3 — instead of relying on an EIS done by the state. Their suit also alleged that the Corps failed to fully assess Line 3's impacts on the tribes' treaty rights to hunt, gather and fish. Judge Kollar-Kotelly rejected all of those contentions. She agreed with the Corps' argument that it regulates only the construction of the pipeline, and therefore has no purview over climate change effects caused by Line 3's operation.

'Strongest Climate Bill Ever' May Increase Oil and Gas Production in New Mexico - While President Joe Biden’s $737 billion Inflation Reduction Act (IRA) aims to address a cornucopia of American ills, arguably its most important aspect is how it jump-starts the country’s fight against climate change. It attacks the country’s carbon emissions from both ends — consumption and production — with one primary tool: money. A lot of money: $369billion, to be exact, much of that devoted to helping people, companies and government agencies buy more things that create less carbon pollution. That has many activists hailing the bill as a historic step forward on climate action, but not everyone is sold on the strategy.“All of these environmental organizations are singing its praise, ‘The strongest climate bill ever passed!’” says Sharon Wilson, a senior field advocate at Earthworks in Texas. “It is also the shittiest climate bill ever passed. Because it is the only climate bill that’s ever passed.”There is only one climate punishment in the IRA: a new Methane Emissions Reduction Program (MERP) that levies a methane tax on oil and gas producers who exceed strict limits on how much they can emit the potent greenhouse gas. But the program may have the ironic consequence of increasing oil and gas production — and methane emissions — in New Mexico.The MERP allows Environmental Protection Agency (EPA) administrators to use and enforce state rules when they meet or exceed what is written in the federal regulations. And since New Mexico already has some of the strictest oil field emissions regulations in the country, companies may choose to expand operations there with the clear, well-known regulatory system that is already in place, one that is likely to get a nod from the EPA.But there’s also another, more practical reason why producers may want to go there: While the state has the rules, it hasn’t matched those rules with an increase in oil field monitoring and enforcement, and historically, the EPA hasn’t been a strong enforcer, either.Reducing emissions from the consumer end will certainly, eventually, reduce greenhouse gas levels overall. Yet reducing production-side emissions — which are primarily composed of methane — could have a larger, quicker effect on lowering the country’s greenhouse emissions. As the International Energy Agency wrote earlier this year, “Methane emissions from oil and gas operations must be the first to go.” That’s because methane — the main component of natural gas — is more than 80 times more potent than carbon dioxide as a heat-trapping greenhouse gas.

U.S. Oil, Natural Gas Dealmaking Hits Quarterly High with Possible Uptick On Horizon - Upstream mergers and acquisitions (M&A) among U.S. oil and gas companies totaled more than $16 billion in transacted value during the third quarter, the highest quarterly tally so far this year, according to Enverus Intelligence Research (EIR).Overall though, M&A activity has been sluggish, particularly in the Permian Basin, amid price volatility and undervaluation of exploration and production (E&P) company stocks, said EIR, a subsidiary of Enverus.“While the business environment for E&Ps has been mostly great in 2022, that hasn’t translated to a bonanza of dealmaking,” said EIR director Andrew Dittmar. “Companies are using the cash generated by high commodity prices to pay down debt and reward shareholders rather than seeking out acquisitions. And when companies do make offers on assets, the bids are often disappointing to potential sellers.”Dittmar added, “To reach $16 billion of M&A value in 3Q2022 required not only a couple more typical operated shale deals, but also transactions like a public mineral company merger and the largest California deal in decades.” The largest deal of the quarter was EQT Corp.’s $5.2 billion purchase of THQ Appalachia I LLC (Tug Hill) and THQ-XcL Holdings I LLC from Quantum Energy Partners. “While the deal saw most of its value ascribed to existing production and midstream assets, it also included around 300 untapped drilling locations targeting the Marcellus and Utica” shales, said the EIR team.Devon Energy Corp. followed a similar strategy with its $1.8 billion acquisition of Eagle Ford Shale pure-play Validus Energy. The purchase from Pontem Energy Capital was “mostly for the value of its current production while adding incremental inventory,” the EIR team said.The Validus deal was the largest in the Eagle Ford since 2018. Like EQT’s purchase of Tug Hill, “yet another example of a private equity company finding an exit,” researchers said.Dittmar said investors “still seem skeptical of public company M&A and are holding management to high standards on deals…Investors want acquisitions priced favorably relative to a buyer’s stock on key return metrics like free cash flow yield to give an immediate uplift to dividends and share buybacks.” He added, “Given how cheaply public E&Ps are trading, it can be a tall order to strike deals that are even more favorably valued than a buyer’s stock. That also limits how much money a buyer can pay for undeveloped locations that may not generate a return until drilled years later.” Other major deals during the quarter included the nearly $4 billion sale of Aera Energy, a venerable California joint venture between Shell plc and ExxonMobil, to Germany’s IKAV. The third quarter also saw the nearly $2 billion acquisition of Brigham Minerals by Sitio Royalties.

Enverus: Third-Quarter US Upstream M&A Tops $16 Billion - JPT - The third quarter of 2022 showed that not all roads lead to the Permian Basin when it comes to mergers and acquisitions (M&A), according to a recent report by Calgary-based analytics firm Enverus Intelligence Research. US upstream M&A deals reached more than $16 billion in transacted value in the quarter, the best showing of 2022, Enverus said, adding that it was achieved despite the oil and gas price volatility, lack of market recognition of E&P stocks, and a “surprising dearth of deals in the usually prolific Permian Basin. The $16 billion third quarter M&A is down from $18.6 billion in the same quarter a year ago. Andrew Dittmar, director at Enverus Intelligence Research, noted that rather than seek out acquisitions, companies are using the cash generated by high commodity prices to pay down debt and reward shareholders. “And when companies do make offers on assets, the bids are often disappointing to potential sellers. To reach $16 billion of M&A value in 3Q22 required not only a couple more typical operated shale deals, but also transactions like a public mineral company merger and the largest California deal in decades,” he said. The largest acquisition of the quarter was US independent EQT’s purchase of West Virginia producer Tug Hill and associated XcL Midstream, both backed by Quantum Energy Partners, for $5.2 billion. In addition to picking up existing production and midstream assets, EQT with the transaction picked up around 300 untapped drilling locations in the Marcellus and Utica shale plays. EQT’s purchase of Tug Hill and XcLMidstream is the largest Appalachian deal since its $6.7 billion acquisition of Rice Energy in 2017, helping to drive M&A in the Eastern region to a 5-year high, according to Enverus. Devon Energy’s acquisition of the Pontem Energy Capital’s Validus Energy for $1.8 billion was the largest in the Eagle Ford play since 2018. According to Enverus, the purchase, along with the Tug Hill deal, is yet another example of a private-equity company finding an exit. Both EQT and Devon purchased production-centric deals delivering free cash flow yields of around 30%, making the transactions immediately accretive to their distribution programs. “Investors still seem skeptical of public company M&A and are holding management to high standards on deals. Investors want acquisitions priced favorably relative to a buyer’s stock on key return metrics like free cash flow yield to give an immediate uplift to dividends and share buybacks,” said Dittmar. “Given how cheaply public E&Ps are trading, it can be a tall order to strike deals that are even more favorably valued than a buyer’s stock. That also limits how much money a buyer can pay for undeveloped locations that may not generate a return until drilled years later.” A major contributor to the $16 billion of third-quarter M&A was even further from the usual flow of upstream deals in one of the most mature and regulatory- challenging oil regions of the country. The sale of Aera Energy, a joint venture between Shell and Exxon in California, to Germany-based IKAV for nearly $4 billion ended those companies’ historic involvement in the state’s petroleum business, according to Enverus. The first merger between public mineral and royalty companies rounds out the third-quarter deals.The nearly $2 billion acquisition of Brigham Minerals by Sitio Royalties unites two companies with similar market positioning, outlooks, and valuations that were positioned to be rivals. “These two companies were poised to go head-to-head for the best M&A opportunities driving up prices,” noted Dittmar. “Instead, they will now have the power of a larger platform in the competitive minerals space.”

U.S. Oilfield Services Employment Increases in September, Though Pace of Hiring Slows - Employment in the U.S. oilfield services and equipment sector rose by an estimated 2,566 jobs to 640,767 in September after adjustments to August numbers, according to an Energy Workforce & Technology Council analysis of federal data. The advance continued a trend as the industry rebounds from the slowdown imposed in 2020 by the coronavirus pandemic. But the pace of gains in the sector did slow, as did job growth overall last month, according to data from the Bureau of Labor Statistics (BLS).“As the energy services sector continues to rebuild the workforce from pandemic losses, the September increases are encouraging in the face of lower job increases across the country,” said council CEO Leslie Beyer.Initial BLS data had shown that oilfield services and equipment sector employment rose by 6,865 jobs to 648,914 in August. However, following new revisions, the August adjusted number was 638,201. Across all sectors, employers added 263,000 jobs in September. That was down from a 315,000 gain in August and marked a second-consecutive monthly easing.Still, gains in September put OFS employment at the highest level since September 2021, pushing the sector toward the 706,528 total reached in February 2020, prior to the coronavirus-imposed lockdowns that crippled demand that year.“The industry is producing at almost pre-pandemic levels,” Beyer said.The U.S. oil and gas industry shed more than 160,000 direct jobs in 2020, with nearly half of those losses coming in Texas amid the fallout of the pandemic, an assessment of the sector by Texas Independent Producers & Royalty Owners Association showed.The pandemic jolted the industry in the spring of 2020, when government lockdowns ordered to slow the spread of the virus froze travel and choked off demand for transportation fuels made from oil. Crude prices plummeted and producers quickly curtailed output in response. Production declines necessitated spending cuts and layoffs that resulted in a notably smaller workforce.U.S. crude production averaged 11.3 million b/d in 2020, down 1.0 million b/d from 2019, a result of well curtailment and lower drilling, according to Energy Information Administration (EIA) data. Output had reached a record of 13.1 million b/d in early 2020, just prior to the pandemic’s arrival in North America. The industry bounced back before the end of 2021 and continued to recover ground this year.U.S. production climbed to a 2022 peak of 12.2 million b/d during the past summer and held around 12.0 million b/d in September, according to EIA.

Oil Activity Gains Push U.S. Drilling Numbers Higher in Updated BKR Count - Driven by gains in the oil patch, the U.S. rig count jumped seven units higher to 769 for the week ended Friday (Oct. 14), according to the latest tally from oilfield services provider Baker Hughes Co. (BKR). Changes domestically included an eight-rig increase in oil-directed rigs, partially offset by a one-rig decline in natural gas-directed drilling. Six rigs were added on land in the United States, with one rig added in the Gulf of Mexico. Horizontal drilling increased by seven units, while directional and vertical drilling totals were unchanged for the week. The 769 active U.S. rigs as of Friday are up from 543 rigs running in the year-earlier period, according to the BKR numbers, which are partly based on data from Enverus. The Canadian rig count rose one unit to end the week at 216, up from 168 in the year-earlier period, according to BKR. Changes there included a two-rig increase in oil-directed drilling, partially offset by a decline of one natural gas-directed rig. Looking at changes by major drilling region, the gassy Utica Shale picked up two rigs for the period, while two rigs exited the Arkoma Woodford. The Ardmore Woodford, Marcellus Shale, Permian Basin and Williston Basin each added one rig for the period, while the Eagle Ford Shale dropped one rig from its total. Counting by state, Texas saw an overall increase of five rigs week/week, countered by a four-rig decline in New Mexico’s latest tally. Wyoming added three rigs, while Ohio added two. Louisiana and Pennsylvania each added a rig to their respective totals; Alaska and Colorado each dropped a rig, the BKR data show. Oil and natural gas permitting climbed in September from August by 26% and rose nearly 60% from a year ago, ending the third quarter on a positive note, according to recent analysis from Evercore ISI. Analysts said there were 809 more requests to drill in September month/month. The Permian led the way, rebounding by 47% from August, with 538 more requests. “September’s permit count increased to 3,915, up 26% from August’s total of 3,106,” Evercore analysts noted. “This represents a 60% increase from September 2021’s numbers, a 223% jump from 2020’s and a 11% increase from 2019’s levels.”

Has U.S. DUC Count Bottomed? Growth Said Possible in 2023 -- After tumbling by more than half since 2020, the number of drilled but uncompleted wells (aka DUCs) may have hit a bottom late this summer, but some growth could materialize into 2023, according to the latest tally by the U.S. Energy Information Administration (EIA). The EIA’s September Drilling Productivity Report showed that after reaching more than 8,800 in the second quarter of 2020, the number of DUCs steadily declined by an average of 227 DUCs/month during 2021 and by 82 per /month during 2022. The Permian Basin has led all other regions in reducing the DUC count, while the Appalachian Basin also has seen a significant decrease. “The decline in DUCs in most major U.S. onshore oil- and natural gas-producing regions indicates that more wells are being completed and fewer new wells are being drilled,” said EIA analysts Jozef Lieskovsky and Troy Cook in a recent note. [Want today’s Henry Hub, Houston Ship Channel and Chicago Citygate prices? Check out NGI’s daily natural gas price snapshot now.] The EIA researchers pointed out that oil and natural gas producers since 2020 have shifted their spending to existing operations because of continued market uncertainty and limited access to new investment capital. As such, the number of completed wells has risen from a low of 253 in June 2020 to 969 in August. The DUC count, meanwhile, slid to 4,283 in August, according to EIA. This is the lowest number recorded since the agency began estimating DUC inventories in October 2013. Notably, however, the August tally included an increase of 16 DUCs month/month. While this was the smallest addition since July 2020, the increase could signal a turning point in producer behavior. The EIA said the Haynesville Shale has been the only region to see a slight increase in the number of DUCs. Wells in the gassy play have climbed by 100 since 2Q2020 because of growth in gas demand from new LNG facilities along the Gulf Coast. Meanwhile, drilling for both oil- and natural gas-directed wells has increased in the United States this year, which has slowed the DUC decline and may lead to a rebound in DUC inventory ahead. Baker Hughes Co. data shows gas-directed rigs total 160 as of Sept. 30, an increase of 53 so far this year. Oil-directed rigs total 602, up 481. “It’s just a matter of when, not if,” East Daley Analytics’ Rob Wilson, vice president of analytics, told NGI. Wilson attributed the projected rise in the number of DUCs to a function of gas production growth exceeding demand coming online. He noted that liquefied natural gas demand is expected to rise by 3 Bcf/d once Cove Point returns from a planned maintenance outage, Freeport resumes operations following a shut-in since early June and Calcasieu Pass commences full operations at its facility. “Prices and rig activity justify supply growth well in excess of that demand growth, filling storage quicker than the market expects,” Wilson said. “We have already seen Henry Hub futures strip come down materially over the past month, and we think there’s more downside, which will incentivize gas-focused producers to keep unhedged growth volumes in the ground as a secondary form of storage.” Wilson said while it’s not ideal for producers to turn to DUCs instead of selling their supply into the market, “it’s better sometimes to keep growth in ground and sell at a higher price when LNG demand calls for it.”

Biden is blamed for downturn in new oil drilling, but fossil fuel companies are the ones hitting pause -- OPEC+’s decision this week to slash oil production – and now the looming threat of higher gas prices – has pushed Republican rhetoric into familiar territory: President Joe Biden’s green policies are making Americans pay more at the pump. Republicans in Congress have slammed Biden’s attempts since he took office to curb new oil drilling in the US and grow the country’s clean energy infrastructure. A fresh volley of criticism came after this week’s OPEC+ move. In an interview with Fox Business, Sen. John Barrasso of Wyoming said the Biden administration is “attacking American energy.” Sen. Lisa Murkowski of Alaska said in a statement Wednesday that the administration must “reverse course and work with our energy producers, instead of against them” to lower prices at the pump.But energy experts tell CNN recent attempts to open up new parts of the US to oil drilling have failed mainly because of the lack of interest from oil companies themselves, rather than Biden’s “green” policies.New exploration for oil and gas has fallen sharply worldwide this year. Still bruised by an oil-price crash prolonged by the Covid pandemic, fossil fuel companies are now focusing on areas they know will make money, and far less on exploring for new locations to drill.“I would say it’s 60% financial markets are telling them ‘no,’” said Robert McNally, president of energy consulting firm Rapidan Energy Group and an energy adviser to former President George W. Bush. “It’s 30% they’re still fearful of another bust, and then 10%, ‘the politicians, they’re not going to make it easy for me.’”There is perhaps no better evidence of this shift than in the Arctic National Wildlife Refuge, which for decades had been a Republican focus for new oil drilling. Congressional Republicans successfully reopened ANWR to oil drilling in a 2017 bill, but when the lease sale happened in the final days of the Trump administration, only three companies offered bids – one of which was Alaska’s state-owned energy corporation. The other companies that bid ended up canceling their leases this year.The ANWR sale “was a total bust,” said Erik Grafe, an attorney for environmental law firm Earthjustice. “There were no oil majors who bid on leases.” In May, the Biden administration canceled an offshore drilling lease sale in Alaska’s Cook Inlet, owing to “lack of industry interest.” The Inflation Reduction Act will force the Interior Department to offer it again by the end of the year, but there aren’t expected to be many – if any – bids on it.Oil and gas companies around the world are driving this trend as they approach new oil and gas exploration tepidly. Total acreage of new oil and gas leases has fallen to “near all-time lows,” according to an analysis from Norwegian energy firm Rystad.Rystad expects a total of 44 global lease sales to be completed in 2022, the lowest level since 2000. As of August, 21 lease sales were completed globally, just half of what was held in the same period the previous year.

Munich Re to stop its backing for new oil, gas fields – — (AP) — Munich Re, one of the world's biggest insurance companies, said Thursday that it will stop backing new oil and gas fields beginning next April. The company said it will also no longer invest in or insure new oil pipelines and power plants that weren't already under construction by Dec. 31, 2022. Munich Re said the moves were part of its effort to reduce the harmful impact its business has on the environment. The burning of oil and gas is one of the main sources of greenhouses gases fueling climate change. Munich Re provides so-called reinsurance contracts that help other insurers spread risks. It also invests the insurance premiums it receives from customers and third-party assets, making it a major institutional investor.

Crude oil spills into Mountrail County (KXNET) –Energy company Phillips 66 has informed the ND Department of Environmental Quality (NDDEQ) of a recent crude oil spill occurring in Mountrail County. According to Phillips 66, the incident occurred in a facility about one mile southwest of Palermo on Monday, October 10. Their initial report states that 286 barrels of crude oil (approximately 12,012 gallons) were spilled, with an unknown amount entering a wetland within the area. Personnel from NDDEQ are currently inspecting the site and will continue to monitor the situation. The cause of the spill has not yet been identified.

With fracking promising a quick energy boost, can Colombia say no? - “For the first time ever, there is a government that is against fracking,” says Amarilys Llanos Navarro. An activist and lawyer with the Cesar Without Fracking and Gas Movement, an anti-extractivist movement in Colombia’s northern department of Cesar, is referring to Gustavo Petro, who took office as president in August and has vowed to ban fracking. Anti-fracking legislation has never managed to pass Colombia’s parliament. But in August, several NGOs put forward a bill prohibiting fracking across the country, including controversial pilot projects testing the feasibility of fracking, shale gas and tar sands extraction. With the change in government and broad support against extractivism, Navarro says she’s hopeful that this time the bill will pass. Fracking first came to prominence in Colombia in 2014, when the government of Juan Manuel Santos introduced regulations to promote commercial production. The Colombia Free of Fracking Alliance (ACLF), a civil society movement of about 100 organizations, including Navarro’s, has been campaigning against the practice since 2016. “The argument that mining generates employment is not true,” Navarro says. Fracking is now promising the same things as coal mines did 30 years ago in her home department of Cesar, she tells Mongabay. But while Cesar has the highest coal production in the country, contributing to about 2% of national GDP, it remains the fourth-poorest of Colombia’s 32 departments, with the second-highest unemployment rate. “These are extremely poor territories where the promise of development has not arrived and where the social and environmental impacts associated with extractives have [taken] a heavy toll,” Navarro says. Fracking has already been banned in several countries like Australia, France, Germany, and Spain. Petro says fracking isn’t viable in Colombia because of its environmental impacts, and adds his government plans to accelerate the transition to clean energies.

Britons set for huge £1,000 boost as fracking companies offer rewards - Millions of Britons could be set for a massive boost as under new plans, companies looking to harness shale gas in the UK through fracking, could offer households £1,000 to allow for the practice to take place in their neighbourhood. Under plans backed by the Government, drilling companies could soon go door to door in local communities to offer financial benefits to allow fracking in the region. Upon becoming Prime Minister in September, Liz Truss announced an end to the ban on shale gas extraction, or fracking, and vowed to only allow it in communities that supported the controversial practice. Currently, for fracking companies to conduct exploratory drilling activity, they would need at least 50 percent community support. Thus under current proposals, fracking companies are looking to convince residents to back the energy extraction process by going door-to-door and offering cash incentives. If they acquire enough votes in their favour, the companies will begin exploration, following which if they find that shale gas can be extracted, the companies would then offer those who own the land under which fracking takes place royalties to share in the proceeds, according to the Telegraph. The two-step idea is currently being explored in Department for Business, Energy and Industrial Strategy, which is scrambling to boost the UK's energy security and is looking to increase its domestic gas supply through increased North Sea drilling and bringing back fracking. Business Secretary Jacob Rees-Mogg said: "In light of Putin's illegal invasion of Ukraine and weaponisation 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.

Cash For Fracking: UK Households May Receive Payouts For Allowing Fracking - UK households could soon receive cash payouts for allowing fracking in their neighborhoods, media reported on Monday. The UK may have lifted its long-running ban on fracking last month, but its fracking industry still has one big hurdle that it must overcome: local opposition. Fracking has been criticized for its reported ties to earthquakes and other environmental damage, and has fallen out of favor. The practice’s sullied reputation has led to its ban in several countries, including France, Germany, Spain, and until recently, the UK. Despite its pariah status, fracking managed to make its way into the hearts and minds of Texans to eventually become the backing behind the United States’ rise to stardom within the global oil and gas industry. Fracking was able to make inroads in the U.S. shale patch precisely because locals benefited from the fracking activity by way of receiving money from the oil and gas taxes that the states collected, which then flowed into the areas that allowed it. That those areas benefited greatly from the fracking dollars cannot be denied. Now Britain, too, is taking a page from the U.S. shale handbook: paying households £1,000 for allowing fracking in their areas. But the money will come directly from drillers rather than from industry tax revenue. Drilling companies could soon go door to door in Britain, according to media reports on Monday, offering money in exchange for fracking support. When the UK’s new Prime Minister Liz Truss removed the fracking ban last month, she did so with one caveat: it would only be allowed in communities that showed at least 50% support. Drillers must now gain half the residents over to the controversial practice in order to commence drilling.

Lancashire has 17 fracking licences as PM lifts ban | Lancashire Telegraph - As the Prime Minister has said about the possibility of fracking returning to Lancashire, there are a number of areas in which more sites could be built. Data has shown that there are 17 fracking licences in the county – including three in East Lancashire. Since her appointment, the new Prime Minister Liz Truss has said she is looking to re-open fracking sites amid the energy crisis. Cuadrilla hydraulic fracturing site at Preston New Road shale gas exploration site in Lancashire A map created by Friends of the Earth that shows were fracking could take place and groups who are against fracking, The red shows the areas where fracking could take place. The purple pins are where anti-fracking groups are located. Credit: Friends of the Earth Currently, there are just two fracking sites in the UK, both of which are in Lancashire, but the Government ordered that these be sealed in 2019. The licences mean that if needed more fracking sites could be constructed in parts of Lancashire. Firm Cuadrilla, which operates the Preston New Road and Elswick sites, had been under instruction to plug its wells in Lancashire by the end of June 2022, but the North Sea Transition Authority (NSTA) has given them until the end of June 2023 to evaluate options. Cuadrilla hydraulic fracturing site at Preston New Road shale gas exploration site in Lancashire Protesters (left to right) Tina Rothey, Tracey Booker, Julie Daniels with dog Lizzie and Pauline Jones at the fracking site in Preston New Road, Little Plumpton, near Blackpool. Credit: PA Many in Lancashire are heavily opposed to fracking, with locals from the Preston New Road site in Little Plumpton having chained themselves to the fence and protested 24/7 outside the site until the ban. Speaking on BBC Radio Lancashire on September 29, the Prime Minister insisted that fracking would only return with local consent, however many campaigning groups have already been very vocal about their anger at the plans. Lancashire MPs, including Conservative MPs Mark Menzies and Scott Benton, have objected to the plans for a potential return of fracking in the county.

Wirral Council votes unanimously to oppose fracking - Liverpool Echo - Wirral Council has unanimously voted to oppose “all conventional gas extraction” on the peninsula including fracking. The vote was proposed by Councillor Liz Grey, chair of Wirral’s environment committee and was carried at a full council meeting last night, October 10. Cllr Grey's motion said: “There is no scientific evidence that fracking is safe for local communities” and could put Wirral at “risk of earthquakes.” During an earlier debate on protecting Wirral’s green belt from housing, Cllr Allan Brame said the “two issues go hand in hand.” He said: “The Conservatives are trying to pretend that the exploration of fracking is not a threat to Wirral’s green belt when in fact it is.” A licence for oil and gas exploration was granted in 2008 and covers the Dee Estuary and much of south and west Wirral is expected to expire in 2039. Despite comments recently made by three Conservative councillors that said it was a “pathetic attempt at public manipulation” to say Wirral is at risk of fracking, the motion passed unanimously.

Guest post: Who are the real Luddites? – Drill or Drop - The moratorium on fracking is being lifted, therefore I can only assume that Liz Truss and her government no longer wish to remain in power! Have they not noticed the spread of anti-fracking campaigns across the country since 2013? The climate emergency? I speak from experience in Balcombe. When oil and gas come knocking at the door, local communities very quickly discover what bad neighbours they are; from broken promises on noise and traffic to damaged wells. After an avalanche of objections, West Sussex County Council unanimously voted ‘no’ to more work from Angus energy in Balcombe. According to the West Sussex Joint Minerals Plan, it’s clear such exploration should not be happening here. And yet the company can appeal and has. We now wait for the final decision from someone in a government office. If they overturn the council’s refusal it would make a mockery of local democracy. There are already rumblings that fracking sites could be considered Nationally Significant Infrastructure Projects, which would bypass normal planning requirements. What community would willingly say yes, after all? Or are government and the industry assuming people will take bribes in exchange for lowering their air quality, supersized trucks rumbling past their schools and being kept awake by the sound of drilling and worry of earthquakes? It makes me sick to think of Jacob’s Rees-Mogg’s oily salesmen going door to door to try and prove they have community consent. We’ve had our fair share of misleading industry spin first-hand in Balcombe. Rees-Mogg calls opponents of fracking Luddites. Tell that to Repower Balcombe, a community energy collective set up in the year that Cuadrilla came here. It has been able to donate thousands to local community lighting projects with its profits. No-one has protested, no air has been sullied with fumes, no-one has been kept up at night and there is no risk of earthquakes. Solar energy has turned profits in Balcombe, not climate changing fossil fuels. Who then are the real luddites trying to resurrect dinosaur technology?

Fracked off: Industry body furious over fracking's net zero snub --The UK’s onshore energy body has slammed the reported omission of fracking from the Government’s net zero review, raising concerns over the consistency of its approach to energy policy. UK Onshore Oil and Gas (UKOOG) criticised the decision as “premeditated” and “wholly unjustified.” Charles McAllister, director of policy, told City A.M.: “It is impossible to conduct a fair review of the economic case for Net Zero without examining gas supply out to 2050, and it is therefore obvious that the development of the abundant shale gas resources in the North of England should be a material consideration.” Last month, Tory MP Chris Skidmore was appointed by Business Secretary Jacob Rees-Mogg to lead a four-month review of the UK’s net zero target. He will look to establish the best business and energy security case for historic cuts to carbon emissions over the next three decades. However, the review will not include fracking. The review will instead focus on six elements, including energy security, alongside talking with the wind, solar and nuclear industries, and hearing how small and medium businesses can afford to cut emissions. Skidmore confirmed to The Times last month that he did not consider fracking to be a “significant energy source” that helps the maintain security of supply. He has also warned energy investors that investing in the fracking industry “will leave you with stranded assets,” and is instead urging a push for renewables. His comments and omission of fracking in the review of net zero appear at odds with the Government, which lifted the three-year moratorium in September as it scrambles to shore up domestic energy supplies. Prime Minister Liz Truss has consistently talked up the prospect of fracking and its role in meeting the UK’s energy needs, and has vowed to “get gas flowing within six months.” When lifting the fracking ban, Rees-Mogg argued the UK needed to “explore all avenues available” to boost energy security. He said: “It’s right that we’ve lifted the pause to realise any potential sources of domestic gas.”

European Energy Market Spooked By $1.5 Trillion Liquidity Crisis -As Europe continues to grapple with a daunting energy crisis, European energy markets still face a liquidity disaster, with financial institution exposure to fossil fuels and record levels of margin calls sounding the alarm bells. According to Norway’s Equinor ASA (NYSE: EQNR), European energy trading is under severe strain by margin calls of at least $1.5 trillion, putting extra pressure on governments to provide more liquidity buffers.Aside from fanning inflation, the energy crisis is sucking up capital to guarantee trades amid wild price swings. Energy prices have been fluctuating over such a broad range that many firms are now struggling to manage margin calls, making them demand additional collateral to guarantee trading positions while also forcing traders to secure multi billion-euro credit lines."Liquidity support is going to be needed. This is just capital that is dead and tied up in margin calls. If the companies need to put up that much money, that means liquidity in the market dries up and this is not good for this part of the gas markets," Helge Haugane, Equinor's senior vice president for gas and power, has told Bloomberg. Haugane has noted that derivatives trading is where support will be needed, and added that the $1.5 trillion estimate is actually a conservative one.A report by the Brussels-based NGO Finance Watch reveals that the 60 largest banks in the world have fossil fuel exposures of ~$1.35 trillion with more than half of this total exposure on the books of Asian banks. However, the report notes that the 22 European banks featured in the analysis account for $239 billion of credits doled out to finance fossil fuel activities, with North American banks carrying a comparable amount.Finance Watch has also calculated how much additional capital these banks would need to properly account for the risk of these fossil fuel exposures becoming stranded assets. The report says that although EU and North American banks have about the same amount of fossil fuel exposures, EU banks would need significantly more capital to cover the risk since they are backed by significantly less equity.But will European banks be able to step up to the plate? Finance Watch has argued that banks should back fossil fuel exposures with additional capital. The NGO advocates for a risk-weight of 150%, meaning that every loan given to companies for existing fossil fuel activities would have to be backed by 12% of capital.Back in September, the European Banking Authority (EBA) issued a response to the European Commission regarding current high levels of margin calls and excess volatility in the European energy markets. The European Commission had asked the European Banking Authority (EBA) to consider, among other questions, ‘‘…any other possible measures to minimize the liquidity challenges currently faced by energy companies, including ways to improve the transparency, volatility and predictability of margin calls, in particular intraday.’’To which the ECB’s response was:‘‘The EBA has not identified any potential changes to the prudential framework, which can effectively help alleviate the current situation. This reflects the fact that most of the binding constraints that the EBA has identified stem from existing internal risk management limits and constraints decided upon by banks and/or central clearing counterparties (CCPs) as a result of their risk appetites and sustained flows of business with customers and counterparties. Banks are, however, facing significant liquidity draws--including in USD--in some cases with quite short notice when there are significant market movements. Efforts to provide more transparency around margin calls would, therefore, be welcome.’’ Looks like more European countries might have to go the German way with governments directly stepping in with subsidies and other relief measures, something that has not gone well with many of its neighbors.

Europe's gas prices reach three-month low as consumer demand and industrial production decline - Europe's gas prices have reached a three-month low, as demand from industry and households declines. Prices at the Dutch Title Transfer Facility (TTF), Europe's leading trading hub, were on Monday morning hovering around €150 per megawatt-hour, falling at times below that mark, after settling at €156 on Friday. The last time prices fell below the €150 threshold was in early July. It comes as the European Commission announced the EU's gas storage facilities, which are essential for extra demand during winter, were at more than 90% capacity. The relatively good news offers the bloc a much-needed respite in its fight to contain the energy crisis. The latest prices represent a far cry from the €349 all-time record hit in late August, a month that raised the alarm across capitals and fuelled calls for an EU-wide cap on wholesale gas prices. Prices, however, remain exceptionally high: a year ago, the TTF showed gas at €38 per megawatt-hour. Expensive gas prices have a spill-over effect on Europe's entire energy sector. As the most expensive fuel needed to meet all power demands, gas determines the final price of electricity. As gas prices soar, so do electricity bills for households and companies. The EU is exploring different avenues,including targeted price caps and an alternative benchmark to the TTF, in order to lessen the influence of gas prices on electricity, but member states are still divided on what is the most suitable – and less risky– path to follow. The downward trend in gas prices is set to guide the ongoing debate and could serve as an argument for member states, like Germany and the Netherlands, which have advocated for more cautious methods rather than forceful market intervention. "Declining gas prices are due to storages being now almost full and by mild temperatures so far," Simone Tagliapietra, a senior fellow at the Bruegel think tank, told Euronews. "Importantly, markets are seeing the demand decline, namely in the industrial sector."

Spanish LNG imports up in September - Spanish LNG imports rose 39 percent in September when compared to the same month last year, according to data by the country’s LNG terminal operator, Enagas. LNG imports totaled about 24.5 TWh in September. Including pipeline imports from Algeria and France, gas imports reached about 35.2 TWh last month, down from some 36 TWh in September last year, Enagas said in its monthly report. Gas demand rose on the back of higher demand for power generation. Demand for power generation rose 54.1 percent to 15.7 TWh in September while conventional demand dropped 38 percent to 12.4 TWh, the LNG terminal operator said. Enagas operates a large network of gas pipelines and has four LNG import plants in Barcelona, Huelva, Cartagena, and Gijon. It also owns 50 percent of the BBG regasification plant in Bilbao and 72.5 percent of the Sagunto plant. The firm is working to launch its El Musel LNG facility in Gijon with the capacity to unload and load 100 carriers per year. Spanish LNG regasification terminals unloaded 27 cargoes last month, eight shipments more compared to the same month last year, according to Enagas. US remains the biggest supplier of LNG to Spain with some 6 TWh or about 17 percent of the total imports in September. US LNG supplies rose slightly from 5.9 TWh last year. Volumes from Nigeria and Russia each reached some 5.3 TWh. Nigeria volumes increased from 2.8 TWh in September last year while Russia did not supply any LNG cargoes to Spain in September last year, Enagas data shows. Other LNG sources in September include Angola, Trinidad an Tobago, Cameroon, Egypt, Qatar, and Indonesia, Enagas said. Spanish LNG terminals loaded about 1 TWh in September, down 45 percent when compared to the last year, while the number of truck loads dropped 37.6 percent to 732, the data shows.

LNG Market Facing Its Most Violent Year Yet -The LNG market is facing its most violent year yet, and there are still winter risks ahead. That’s what BofA Global Research stated in a new report sent to Rigzone, adding that TTF and JKM prices hit record highs of $99/MMbtu and $70/MMbtu in late August and that prices have nearly halved since. “Russian pipeline gas flows to Europe totaled 123mn mt in 2021, but this supply has nearly dried up as of October, save for small volumes to eastern Europe,” BofA Global Research noted in the report. “This lost gas supply accounted for ~30 percent of Europe’s gas demand and seven percent of its total energy demand (EJ) in 2021. The EU rushed to replace these volumes via the LNG market, which is just over 3x the size of Europe’s newfound gas void, pushing LNG prices higher this year,” BofA Global Research added in the report. “Europe’s gas inventories are in a strong position ahead of winter thanks to forced stockpiling, but cold weather in the EU or Asia could turn the tables, creating chaos in the LNG markets once again,” the company continued. In the report, BofA Global Research noted that global LNG supply growth is set to slow from 15mn mt year on year in 2022 to 12mn mt in 2023. The U.S. is set to drive supply growth year on year in 2023 thanks to the Freeport LNG restart and the year on year effect of Calcasieu Pass’ ramp up this year, BofA Global Research outlined in the report. In a separate market note sent to Rigzone on October 11, Rystad Energy Vice President Emily McClain highlighted that U.S. LNG exports are “critical for global balances”. In a Rystad note sent to Rigzone on October 5, McClain said weekly LNG imports into Europe were at their highest levels since early May, “with imports averaging 2.6 million tons in September’s second half and up 26 percent compared to previous week’s average of two million tons”.

Europe Facing Record High LNG Shipping Rates, Running Out Of Storage Capacity - A lack of ships is the latest challenge for buyers of liquefied natural gas (LNG) this winter, as Europe prepares for a season without Russian energy supplies and shipping rates are hitting records highs, according to a Bloomberg report. European countries are actually paying to keep LNG-loaded ships nearby as onshore storage facilities are maxed out. The scramble to charter fleets of ships to carry LNG has sparked fears that many buyers will not have enough ships capable of transporting the fuel from exporters.Demand for LNG in Europe surged by 65 percent for the first eight months of 2022 compared to the same period in 2021, the International Energy Agency (IEA) said in its third quarter Gas Market Report released on Oct. 3.LNG shipments are now being sought from suppliers like the United States, Nigeria, and Qatar.In June, the EU imported more gas from the United States than from Russia for the first time in its history, after Moscow reduced its exports to Europe following sanctions, according to OilPrice.com.As much as 70 percent of all U.S. natural gas exports were sent to Europe in September, up from 63 percent in August, according to Reuters.Meanwhile, nations in Northeast Asia and South America are also beginning to charter LNG-bearing ships in preparation for the winter, adding additional pressure.States in New England, which are dependent on LNG imports for the winter to supplement energy supplies, are being forced to compete against European buyers, Seeking Alpha reported.The cost to charter an LNG-carrying ship in the Atlantic Ocean rose to $397,500 per day on Oct. 11, Bloomberg reported.The new record for Atlantic LNG freight rates topped the previous record of $374,000 per day set on Oct. 3.This is an increase of over $306,500 per day, or 337 percent, compared to the 2021 shipping rate of $91,000 per day, and a 500 percent increase since the beginning of 2022, according to Spark Commodities.The LNG shipping price assessor said this broke last year’s all-time record high from the Pacific Ocean during the height of the supply chain crisis.Rates are expected to rise as traders and utilities proceed to hoard more natural gas, which is presenting a hurdle to buyers this winter.The race to buy LNG—and charter vessels to carry it—could create the next big shortage in the energy market, say analysts and traders.LNG exporters in Asia are now selling gas directly from their ports rather than offering to ship the fuel, due to the shipping shortage.Buyers who lack LNG transport are being forced to pay extremely high rates to ferry the fuel, or in certain cases are failing to find any ships at all.There are few vessels left to charter through the rest of the year, and those that are still available are charging astronomical rates, according to LNG traders.

Dutch dilemma: What is Europe willing to do for more natural gas? - This coming fateful winter season in Europe is likely to include a lively debate about whether the Dutch should make a perilous trade-off on behalf of an energy-starved Europe. So far, the Dutch have been firm about closing one of the world's largest natural gas fields, Groningen, no later than 2024—even in the face of severe European gas shortages resulting from the loss of gas from Russian pipelines. The reason for that firmness has to do with the damage earthquakes are inflicting on the buildings located above and around the field, earthquakes related directly to withdrawal of Groningen's gas. In the northeastern part of the country, some 1200 earthquakes have severely damaged 27,000 buildings to the point that they are uninhabitable. About 3,300 structures have been demolished. A 2015 study reported that 152,000 homes need to be reinforced. As a result the government has been reducing gas withdrawals to mitigate the problem with an eye toward closing the field. Closing the field also comports with the government's greenhouse gas reduction goals.But, will the Dutch be able to withstand calls for increasing production from Groningen as the European winter arrives?The Dutch government has sort of left itself an out saying that production could be resumed after a planned 2024 permanent shutdown as a last resort if Dutch households were faced with running out of natural gas. It's worth noting that Groningen still has large reserves—some 450 billion cubic meters of gas (15.8 trillion cubic feet) which is the equivalent of more than one year of European Union consumption. But, the field, which opened in 1963, is now more than 80 percent depleted. However, even at the reduced rate of production set back in 2015 of 27 billion cubic meters per year, that gas could help supply Dutch households and export customers in other countries for another 16 years. But, production has been capped at 2.8 billion cubic meters for the coming year in advance of the planned shutdown in 2024. High natural gas prices are affecting the Netherlands just as they are most other European countries. The sprawling Dutch greenhouse industry, for example, which uses a large amount of gas to heat its greenhouses, is under extreme financial pressure. Bakeries, too, use a lot of natural gas for obvious reasons, and many are close to failure as energy bills approach 10 times what bakeries paid just two years ago. And, Dutch households which are filled with appliances and furnaces that burn methane—installed during the era of cheap gas—are suffering as well. European Union ministers are meeting in Prague this week to discuss how to address Europe's energy crisis. Will the Netherlands ultimately give in to calls for increasing natural gas production? Will the country forever turn its back on a resource worth €750 billion as of Friday's market close? The coming winter will test Dutch resolve.

Nord Stream gas leaks: What happened and why Europe suspects sabotage - Two subsea pipelines connecting Russia to Germany are at the center of international intrigue after a series of blasts caused what might be the single largest release of methane in history — and many suspect it was the result of an attack.An initial crime scene investigation last week into what caused the gas leaks on the Nord Stream 1 and 2 pipelines reinforced suspicions of "gross sabotage."As investigations continue, many in Europe suspect the incident was the result of an attack, particularly as it occurred during a bitter energy standoffbetween the European Union and Russia.The Kremlin has repeatedly dismissed claims it destroyed the pipelines,calling such allegations "stupid" and "absurd," and claiming that it is the U.S. that had the most to gain from the gas leaks.The White House has denied any involvement in the suspected attack. On Sept. 26, a flurry of detonations on two underwater pipelines connecting Russia to Germany sent gas spewing to the surface of the Baltic Sea. The explosions triggered four gas leaks at four locations — two in Denmark's exclusive economic zone and two in Sweden's exclusive economic zone.The magnitude of those explosions was measured at 2.3 and 2.1 on the Richter scale, respectively, Swedish and Danish authorities said, and likely corresponded to an explosive load of "several hundred kilos."Neither of the Nord Stream pipelines was transporting gas at the time of the blasts, although they both contained pressurized methane — a potent greenhouse gas.Remarkably, the signature of the gas bubbling at the surface of the Baltic Sea could be seen from space.A satellite image of the Nord Stream leak in the Baltic Sea, captured on Sept. 26, 2022.Climate scientists described the shocking images of the methane erupting from the burst as a "reckless release" of greenhouse gas emissions that, if deliberate, "amounts to an environmental crime."At the time, Denmark's armed forces said video footage showed the largest gas leak created a surface disturbance of roughly 1 kilometer (0.62 miles) in diameter, while the smallest leak caused a circle of approximately 200 meters.The Nord Stream gas pipelines have become a focal point of tensions between Russia and Europe in recent months, with Moscow accused of weaponizing gas supplies in a bid to gain sanctions relief amid its onslaught in Ukraine.

Sweden completes investigation of Baltic Sea pipeline leaks - (AP) — Sweden’s domestic security agency said Thursday that its preliminary investigation of leaks from two Russian gas pipelines in the Baltic Sea “has strengthened the suspicions of serious sabotage” as the cause and a prosecutor said evidence at the site has been seized. The Swedish Security Service said the probe confirmed that “detonations" caused extensive damage to the Nord Stream 1 and Nord Stream 2 pipelines last week. Authorities had said when the leaks off Sweden and Denmark first surfaced that explosions were recorded in the area. The agency, which said what happened in the Baltic Sea was “very serious,” didn't give details about its investigation. But in a separate statement, Swedish prosecutor Mats Ljungqvist said “seizures have been made at the crime scene and these will now be investigated.” Ljungqvist, who led the preliminary investigation, did not identify the seized evidence. Ljungqvist said he had given “directives to temporarily block (the area) and carry out a crime scene investigation." Now that the initial probe is completed, a blockade around the pipelines off Sweden will be lifted, he said. The governments of Denmark and Sweden previously said they suspected that several hundred pounds of explosives were involved in carrying out a deliberate act of sabotage. The leaks from Nord Stream 1 and 2 discharged huge amounts of methane into the air. Last week, undersea explosions ruptured Nord Stream 2 and its sister pipeline, Nord Stream 2, at two locations off Sweden and two off Denmark. The pipelines were built to carry Russian natural gas to Germany. Danish authorities said the two methane leaks they were monitoring in international waters stopped over the weekend. One of the leaks off Sweden also appeared to have ended. Russian President Vladimir Putin accused the West of attacking the pipelines, which the United States and its allies have vehemently denied, noting that Russia has the most to gain in wrecking havoc on Europe's energy markets. Separately the Swedish coast guard said “the remaining emissions is more or less unchanged,” and that it was returning to its ordinary environmental rescue operations.

Germany opens investigation of Baltic gas pipeline blasts - (AP) — German prosecutors on Monday opened an investigation into the suspected sabotage of two gas pipelines built to bring Russian gas to Germany under the Baltic Sea. Undersea explosions late last month ruptured the Nord Stream 1 pipeline, which until Russia cut off supplies at the end of August was its main supply route to Germany. They also damaged the Nord Stream 2 pipeline, which never entered service as Germany suspended its certification process shortly before Russia invaded Ukraine in February. German federal prosecutors, who investigate national security cases, said they have opened an investigation against persons unknown on suspicion of deliberately causing an explosion and anticonstitutional sabotage. Prosecutors said that there is sufficient evidence that the pipelines were damaged by at least two deliberate detonations, and the aim of their investigation is to help identify the perpetrator or perpetrators as well as a possible motive. The German investigation comes on top of a probe in Sweden. A prosecutor there said last week that evidence had been seized at the site. The governments of Denmark and Sweden previously said they suspected that several hundred pounds of explosives were involved in carrying out a deliberate act of sabotage. The leaks from Nord Stream 1 and 2 discharged huge amounts of methane into the air. German federal prosecutors said the reason for them getting involved as well is that an attack on energy supplies could affect Germany's external and domestic security. On Sunday, authorities said that two German boats had set off for the area where the leaks occurred to look into what happened. Russian President Vladimir Putin has accused the West of attacking the pipelines, which the United States and its allies vehemently denied.

Germany’s gas price cap: A gift for large corporations and the rich --The Gas Price Commission set up by the German government presented a proposal on Monday for cushioning high natural gas and energy prices with government money. It envisions lavish cash gifts for large corporations and the wealthy, while the poor, ordinary earners and small businesses will still be unable to absorb the skyrocketing costs despite government aid. 24 million private households and small businesses are expected to bear the full brunt of higher gas prices in the heating-intensive winter months of January, February and possibly March. The tariff has risen from around 7 cents per kilowatt hour before the sanctions against Russia were imposed to between 20 and 30 cents. For December, the Commission proposes a one-time payment equal to this September’s monthly bill. This is a highly arbitrary value, as the September bill for many households was still based on the old prices. The main beneficiaries are wealthy villa owners with high gas consumption, who are treated in the same way as tenants of small apartments. A certain “watering can subsidy” was unfortunately unavoidable, commented the chairmen of the commission, “economic expert” Veronika Grimm, the president of the BDI industry association, Siegfried Russwurm, and the chairman of the IG BCE chemical workers union, Michael Vassiliadis, with a shrug. It will not be until March or April that private customers and small and medium-sized enterprises will be able to purchase 80 percent of their previous year’s consumption at its government-subsidized price of 12 cents. That is still almost twice as much as before the Ukraine war. For anything above that, they will have to pay the full market price. In total, this is expected to cost the state around €66 billion by the end of April 2024. A further €30 billion is earmarked for subsidizing around 25,000 large companies with an annual consumption of over 1.5 megawatt hours, which will start benefiting from subsidized prices as early as January 1. They will be guaranteed a gas price of 7 cents per kilowatt hour for 70 percent of the previous year’s consumption. BDI President Russwurm claims that this is roughly equivalent to the 12 cents for private consumers, since it is a pure procurement price and not the gross tariff including taxes and fees, as is the case for private customers. But it is obvious that large corporations are being favoured. Here, too, the Commission is acting according to the watering-can principle. Highly profitable corporations benefit from the state money just as much as those threatened with bankruptcy.

Germans told to stop whining, wear 2 sweaters and have candles and flashlights ready in case of blackouts this winter - Germans should stop whining and be prepared with sweaters and candles this winter in case of blackouts amid the energy crisis, according to politician Wolfgang Schäuble.In an interview on Tuesday with Bild-TV, the former finance minister and president of the German government said Germans should "just put on a sweater, or maybe a second sweater" in the event of a freezing-cold winter."You don't have to whine about it, you have to recognize that a lot of things can't be taken for granted," he told the news channel.European leaders have raised concerns about the possibility ofpower cuts this winter because of the squeeze in energy supplies. "That's why you should always have a few candles, matches and a flashlight at home," Schäuble told Bild-TV.The 80-year-old also warned Germans not to assume the government could solve financial problems such as soaring inflation and energy costs."If we suggest to people that everything is unlimited, we are overexploiting. Then people get the impression that the state can do everything – that is not sustainable," Schäuble told Bild-TV.Russia continues to hold back natural gas supplies to Europe after the West imposed sanctions on Moscow for invading Ukraine. As a result of the shortages, energy prices have sky-rocketed, leaving some people struggling to afford food and other basic items.European retailers, banks, and other businesses have already implemented energy-saving measures, such as switching off illuminated advertisements for 18 hours, keeping doors shut, and turning off fountains, ahead of potential shortages.Meanwhile, some governments have introduced rules aimed to keep energy use to a minimum. For example, Germany banned heated swimming pools and Spain restricted heating to a maximum temperature of 19 degrees Celsius in public buildings.

Gazprom CEO Warns EU: "Whole Towns Could Freeze" This Winter - Even though Europe's natural gas storage for this winter is nearly full, the head of Russian energy Gazprom PJSC still warned European households could freeze in the event of a cold snap, according to Bloomberg. "Winter can be relatively warm, but one week or even five days will be abnormally cold, and it's possible that whole towns and lands, god forbid, will freeze," Gazprom CEO Alexey Miller said at Russian Energy Week in Moscow. Miller said during peak winter demand days, Europe could experience a gap of 800 million cubic meters of NatGas per day, or about one-third of its total consumption. The figures were from a report by unidentified analysts. Natgas to Europe is stable so far this week, albeit at reduced levels over the past year. Shipments via Ukraine are one of the last remaining Russian supply lines to western Europe after the bombing of Nord Stream pipelines. Even though NatGas shipments have dwindled and pushed many European economies to the brink of recession, inventories across the continent are nearly full at 91%. The good news is EU storage is above a 10-year average of 71% for this time of year. Dutch front-month gas futures, a European benchmark, has been nearly halved since late August on relief from inventories and hopes of a warmer winter. But new data from the European Centre for Medium-Range Weather Forecasts (ECMWF) outlines that a high-pressure system over western Europe could bring colder weather, less wind, and less rainfall. Less wind would reduce the generation of renewable power. Gazprom's CEO said EU NatGas inventories could be drained to 5% full in March... "Sure, Europe will survive, but what will happen by the time of gas injection" into storage before winter of 2023 and 2024."It will be clear then that energy crisis has come not for a short period of time."It appears Europe's energy crisis is far from over... The UK is already warning about its inability to import enough NatGas this winter, threatening to unleash power blackouts across its grid.

European Natural Gas Prices Mixed Amid Flood of Supplies, Market Intervention – LNG Recap - LNG continues to flood Europe, pushing the Title Transfer Facility (TTF) to a three-month low in intraday trading on Monday when the prompt month contract again finished lower. Fundamentals on the continent are comfortable for the moment, with storage inventories nearly 91% full and above the five-year average. Warmer weather is also expected to continue gripping the region over the next two weeks. Suppliers continue to offer spot cargoes in Asia as well, where the Japan-Korea Marker (JKM) has been weak. JKM futures prices fell along with TTF last week and spot prices were in the high $20/MMBtu range Monday, despite a force majeure on supplies from the Malaysia liquefied natural gas terminal that could cut three cargoes monthly. Weakness in the Asian market has also helped to keep European prices from climbing and “guarantees LNG supply to Europe will remain strong in the near future,” said analysts at Engie EnergyScan. While the November TTF contract finished about 2% lower Monday, prices along the rest of the curve finished higher and settled above $48/MMBtu. A series of meetings among European Union leaders is scheduled this month and next to decide on further measures to limit the impacts of this year’s soaring energy costs on consumers and businesses. “The market remains very uncertain as several intervention plans that influence gas are still very much up in the air,” said trading firm Energi Danmark in a Monday note. The European Commission is reviewing options to curb natural gas prices, including the possibility of establishing a corridor with suppliers for lower prices on the continent and ways to limit the overall costs of imports or the influence of gas in power markets.

Israel to allow natural gas extraction off Gaza - Israel has responded to Egyptian efforts to allow the Palestinian Authority to produce natural gas off the coast of Gaza, the Al-Monitor website reported on Sunday, a report confirmed by a PL executive committee member. Egypt has been holding secret bilateral talks for several months after years of Israeli objections to producing natural gas off the coast of Gaza for security reasons. The field in question, located about 19 miles west of the Gaza coast, was discovered in 2000 by British Gas (now BG Group) and contains more than 1,000 billion cubic feet of natural gas. The cost of its development is estimated at $1.2 billion. The senior Egyptian intelligence official told Al-Monitor on condition of anonymity that "an Egyptian security delegation discussed for several months with the Israeli side the issue of allowing natural gas production off the coast of Gaza. The delegation was finally able to reach a compromise that would benefit all parties involved." On February 21, 2021, the Palestinian Authority and Egypt signed a memorandum of understanding on offshore gas field development in Gaza.

Egypt is set to take part in developing Gaza's offshore gas field: officials - Egypt is aiming to take over development of Gaza's offshore natural gas field, Egyptian and Palestinian officials said, in what would be a boost for the cash-strapped Palestinian economy. While Egypt and Israel have been producing gas in the eastern Mediterranean for years, the Gaza Marine field, about 30 km (20 miles) off the Gaza coast, has remained undeveloped due to political disputes and conflict with Israel, as well as economic factors. The project was last in the hands of oil major Shell , which gave up its stake in 2018. The Palestinians have been looking for a new foreign group to take over. Palestinian companies would keep at least 55per cent of the shares, according to a cabinet decision at the time. Egypt's state-owned gas company EGAS began talks last year with the Palestine Investment Fund PIF and the Consolidated Contractors Company CCC, a coalition of companies that are licensed to develop the field, officials said. An Egyptian intelligence official told Reuters in Cairo EGAS, in cooperation with Palestinian authorities, will develop the offshore field. The Egyptian security official, who asked not to be named, said Cairo has been in negotiations for about two months with Israel, which together with Egypt maintains a blockade on Gaza and would likely have to green light the project. Egypt's petroleum ministry did not respond to a request for comment, and EGAS could not immediately be reached. Israel's energy ministry, asked about development of the field, said it was not aware that any decision had been made. Israel has said in the past it supports the field's development. "These talks are progressing positively. Once a detailed and final agreement is reached, it will be announced after obtaining the official approvals according to the established rules," said one Palestinian official familiar with the talks with the Egyptians. The Gaza Strip is run by the Islamist group. Most of its 2.3 million residents live in poverty and it suffers from rolling blackouts. Gas from Gaza Marine would help fuel the coastal strip's power plants and kickstart the economy. A second Palestinian official said Cairo has also been in contact with Hamas officials to secure their approval. "Cairo's strategic role as a mediator between Israel and the Palestinians over decades makes talks easier," the official told Reuters. "Development may take time to start once an agreement is concluded. The project would be a vital tool to improve Palestinian economy," he added. Gaza Marine is estimated to hold over 1 trillion cubic feet of natural gas, much more than is needed to power the Palestinian territories and could potentially be exported.

Israel, Lebanon agree on historic maritime border deal - — Israeli and Lebanese leaders appear to have agreed to a U.S.-brokered deal that will let both countries exploit gas fields in the eastern Mediterranean, potentially ending a decades-long dispute over their maritime border, easing growing military tensions and providing a desperately needed source of income to Lebanon’s collapsing economy. The agreement, which needs formal approval in both countries, was hailed by leaders in Beirut and Jerusalem as a historic breakthrough. It is the first agreement on border demarcation between the two nations. “This is an historic achievement that will strengthen Israel’s security, inject billions into Israel’s economy, and ensure the stability of our northern border,” Israeli Prime Minister Yair Lapid said in a statement Tuesday. Lebanese leaders have yet to make an official announcement on the deal, but President Michel Aoun said in a tweet Tuesday that “the final version of the offer is satisfactory for Lebanon and answers its demands and preserves its rights to its natural wealth.” Officials hope the agreement, if finalized, will cool intensifying tensions along the frontier. Hezbollah, the Iran-allied militant group that controls southern Lebanon, has threatened to attack a new offshore gas facility that Israel is readying for production in what Lebanon claims are disputed waters. The group has launched drones toward the gas field more than once, including three unmanned aircraft that were shot down by Israel in early July. In the face of Hezbollah’s threats to strike should Israel begin pumping natural gas from the Karish Field, Defense Minister Benny Gantz put troops on high alert after the maritime border talks ran into last-minute disputes last week. Hezbollah, which along with its allies holds the largest bloc in the Lebanese parliament, had no immediate comment on the draft of the agreement. In a speech late Tuesday, Hezbollah leader Hassan Nasrallah cautioned that “Until we sign, we must be careful in light of the contradictory Israeli positions.” The agreement would define only the offshore boundary between the sworn enemies, not the 50-mile land border that remains in dispute after multiple wars and continues to be patrolled by a United Nations monitoring force after more than four decades. The maritime frontier has proved to be equally contentious in recent years, particularly after gas deposits were discovered in the seabed inside the 330-square-mile region. Israel, which has already developed gas fields in nearby waters, strung a line of buoys three miles out from a rocky cliff near the U.N. headquarters. Beirut condemned the move as a unilateral provocation. Resolving the dispute — which has gained urgency as the risk of conflict rose and Lebanon’s economic free fall has grown more critical — has been a regional priority for the Biden administration. The president’s special envoy, Amos Hochstein, brokered talks over the past year with the goal of giving countries fair access to the area. The deal comes as gas discoveries are remaking the energy map of the Mediterranean just as Europe is looking for alternate sources in the wake of Russia’s invasion of Ukraine. Gas diplomacy may also be thawing Israel’s tense relationship with Turkey, for example, as the two countries seek to revive long-abandoned plans for a pipeline through Turkey to Europe.

Russia proposes gas hub in Turkey to redirect Nord Stream supplies --Russian President Vladimir Putin has proposed a plan for a European gas hub in Turkey to shift gas supplies intended for the damaged Nord Stream pipelines to the Black Sea, reported Reuters.The proposal to build more subsea natural gas pipelines to Turkey comes following a recent discovery of gas leaks in the Nord Stream 1 and 2 pipelines that are intended for the supply of Russian natural gas to Germany.Putin was quoted by Bloomberg News as saying: “We could transfer to the Black Sea the lost Nord Stream volumes that used to be transited across the Baltic Sea.Putin said the new Black Sea links to Turkey could become the main Russian gas-export route for Europe.Putin added: “It’s economically viable, and considering the recent events, the security level there is significantly higher.”With the halt of gas flow via the Nord Stream pipelines, Russia has only two operating routes for Europe- via one line of the TurkStream link under the Black Sea that runs towards Turkey, and another through Ukraine.Gazprom CEO Alexey Miller said the firm is ready to build additional gas links under the Black Sea toward Turkey.Miller also recommended creating a gas trading hub on the EU-Turkish border.

Shell Says Norway Gas Flows Are Normal After Hoax Threat - Shell Plc confirmed that gas is flowing normally following a hoax threat at the Norwegian Nyhamna processing facility earlier on Thursday. Norway police were called to the Ormen Lange site to investigate a possible threat but said they found no evidence. Authorities in Europe are particularly on edge after detonations were carried out recently on the Nord Stream pipelines from Russia. The Ormen Lange field and the Nyhamna plant are two major facilities, key for Norway’s supplies to Europe. There’s already increased scrutiny around energy infrastructure in the region after the recent blasts in the Baltic Sea. On Wednesday, Russia’s President Vladimir Putin warned all energy infrastructure in the world is at risk after the Nord Stream sabotage. Shell in Norway was “informed by the police about an unclear situation in the proximity of the Nyhamna gas plant,” a spokesperson said. “As a precaution, the gas plant was evacuated and Shell’s emergency response organization was mobilized.” Europe is already facing a winter with reduced gas flows from Russia. A further disruption to supplies could mean wide-spread shortages and skyrocketing prices. Gas storage levels are higher than usual but a spell of cold weather or a prolonged outage could make the situation precarious. Nyhamna processes natural gas from the Shell-operated Ormen Lange field and accounts for about 20% of the UK’s supplies. Export capacity is currently 84 million standard cubic meters of gas a day, according to Gassco, which runs the facility.

Malfunction Hits Shell Pernis Refinery Unit Amid Fuel Crunch - Europe’s largest oil refinery suffered a malfunction, a potential source of jitters for the continent’s refined fuels market where supply has already been hit by industrial action. The compressor of fluid catalytic cracker unit 2 tripped on Oct. 12 due to the loss of power supply, according to a fire safety alert from the region’s Rjinmond Veilig service. Known as FCC units, the conversion plants are typically used to make refined products such as gasoline. Shell Plc’s Pernis plant near Rotterdam has been flaring elevated amounts of gas following the incident, triggering 200 complaints from the public, DCMR, an environmental regulator, said in a notice on its website. The plant is also an important source of diesel within Europe. The continent can ill afford material disruption to refined petroleum supply, given a European Union ban on purchases from Russia that’s due to start in early February. Strikes over pay in France have knocked out a swath of the nation’s fuelmaking, crunching supply. BP Plc is carrying out planned work on the FCC at its Rotterdam refinery, which is next to Pernis in Europe in terms of size. Shell said in a statement that governments have been informed about the incident, but didn’t elaborate on what processing capacity was affected or what it would mean for fuel supply. “I can only tell you that we expect the nuisance will continue for the time being and that try to minimize the nuisance for the people in the vicinity,” a Shell spokesman said.

EU humiliated as bloc handed Putin over £87bn since start of Ukraine war despite sanctions - The EU has been exposed for handing Russia over €100billion (£87billion) amid the war in Ukraine for energy imports, despite scrambling to cut ties with Vladimir Putin. Since Russian troops first descended on their neighbouring country back in mid-February, imports of gas, coal and oil have continued to pour into the bloc, laying bare Europe's staggering dependence on Russian fuels that continue to generate huge revenues for the Kremlin. For the first six months of the conflict, the Kremlin banked an eye-watering €158billion (£138billion) from fossil fuel exports. According to estimates from the Centre for Research on Energy and Clean Air (Crea), an independent Helsinki-based research group, the EU imported 54 percent of this, worth around €85billion (£75billion). And despite receiving only a fraction of the gas from Russia compared with volumes delivered in 2021, the bloc was still handing Putin the same amount of cash as prices were sent soaring. In fact, the volume of Europe's fossil fuel imports from Russia has been slashed by half since the invasion as a result of both harsh western sanctions such a coal embargo, and due to deliberate gas cuts from Russia which hiked up prices. But despite the plummeting imports, which it was hoped would deal a blow to Putin and hamstring his war efforts, Crea has estimated that the EU still imports around €260million (£228million) worth of Russian fossil fuels every day. Lauri Myllyvirta, leqad analyst at Crea, said: "While capping prices and limiting imports from Russia, it’s essential for European countries to accelerate the shift from fossil fuels to clean energy. This year has revealed the reliance on fossil fuels as a fundamental national security and economic vulnerability." This comes after the EU agreed to impose a price cap on Russian oil last week as part of a sanctions package that European Commission President Ursula von der Leyen claimed would "make the Kremlin pay". In what was the eighth round of harsh measures taken against Moscow to punish it for launching its brutal attack on Ukraine, EU ministers reportedly agreed on the measure following the Russian President's threat to use nuclear weapons amid the conflict. Ms von der Leyen said: "We have moved quickly and decisively. We will never accept Putin’s sham referenda nor any kind of annexation in Ukraine. We are determined to continue making the Kremlin pay." But while the EU scrambles to scupper its dependence on Russian fuels, completely cutting ties with Moscow could risk shortages, higher prices, and even energy blackouts. And with some nations within the 27-member bloc being more dependent on Russian energy than others, furious EU bust-ups have appeared to delay quicker action from being taken.

Price-Setting Talks for Russian Oil Cap Plan Set to Start -Countries working to impose a price cap on Russian oil will meet over the next several weeks to determine the specific price ceilings for the country’s crude oil and refined products, according to a senior US Treasury official. The official, briefing reporters this week on condition of anonymity, declined to speculate on specific levels, but stressed that finding agreement on those price levels was the next important step. Partners in the plan include the US, European Union and other governments in the Group of Seven countries such as Japan. The discussions come at a challenging time for oil markets. Members of the OPEC+ group, which includes Russia, decided earlier this month to lower their collective output by 2 million barrels a day, driving prices higher. Treasury officials have earlier said the price level for crude needed to be above Russia’s average cost of production -- which government budget figures put at about $44 a barrel -- in order to encourage continued output. Brent crude, the global benchmark, was trading around $92 a barrel on Wednesday. A separate person familiar with G-7 talks said meetings of a price-setting body would start in the second half of October with government officials from participating countries. The group would first aim to set a ceiling for crude, and then consider a cap on products, the person said. EU restrictions on Russian sales later this year are expected to further tighten supplies, a situation the price cap plan is designed to alleviate. The EU has banned imports of Russian oil and will also prohibit its companies from providing financing and insurance services for seaborne cargoes of Russian petroleum, starting Dec. 5 for crude and Feb. 5 for refined products. The EU will also ban its companies from providing shipping services for Russian oil, contingent on the G-7 implementing the price-cap plan. The cap regime would allow buyers of Russian oil to access European services, but only if their purchase price falls below caps set by the US and its allies.

Putin orders seizure of Exxon-led Sakhalin 1 oil and gas project --Russian President Vladimir Putin signed a decree on Friday that establishes a new operator for the Exxon Mobil Corp-led Sakhalin-1 oil and gas project in Russia's Far East. Putin's move affecting Exxon's largest investment in Russia mimics a strategy he used to seize control of other energy properties in the country. The decree gives the Russian government authority to decide whether foreign shareholders can retain stakes in the project. Exxon holds a 30% operator stake in Sakhalin-1, with Russian company Rosneft, India's ONGC Videsh and Japan's SODECO as partners. Oil production at the Sakhalin-1 project fell to just 10,000 barrels per day (bpd) in July from 220,000 bpd before Russia invaded Ukraine. Exxon has been trying to exit its Russia operations and transfer its role in Sakhalin-1 to a partner since March, after international sanctions imposed on Moscow. Russia's government and Exxon have clashed, with the oil producer threatening to take the case to international arbitration. Exxon declined to comment on Friday's decree. Japan's SODECO was not immediately available to comment, but an official of the industry ministry, which owns a 50% stake in the firm, said it was gathering information and talking with partners. Japan has stopped buying crude from Russia since June. Exxon took an impairment charge of $4.6 billion in April for its Russian activities and said it was working with partners to transfer Sakhalin-1's operation. It also reduced energy production and moved staff out of the country. In August, Putin issued a decree that Exxon said made a secure and environmentally safe exit from Sakhalin-1 difficult. The U.S. producer then issued a "note of difference," a legal step prior to arbitration. Friday's decree said the Russian government was establishing a Russian company, managed by Rosneft subsidiary Sakhalinmorneftegaz-shelf, that will own investors' rights in Sakhalin-1. Foreign partners will have one month after the new company is created to ask the Russian government for shares in the new entity, the decree said. Putin used a similar strategy in a July decree to seize full control of Sakhalin-2, another gas and oil project in the Russian Far East, with Shell and Japanese companies Mitsui & Co and Mitsubishi Corp as partners.

Petronas pipeline leak hit part of Malaysia's LNG exports: sources -- Contracts to export Malaysian liquefied natural gas (LNG) that sources gas from the northern Borneo state of Sabah are under force majeure following a pipeline leak, trade sources said on Friday. Malaysia LNG, majority owned by Petronas, declared force majeure on LNG supplies to its customers due to a leak on the Sabah-Sarawak Gas Pipeline on Sept. 21, a Mitsubishi Corp spokesperson said on Thursday. This came after Petronas declared force majeure on gas supplies to Malaysia LNG, in which Mitsubishi also owns a stake. The disruption comes ahead of the Northern Hemisphere's winter season, a peak demand period when countries aim to ensure sufficient LNG for heating while facing the threat of energy supply disruptions from Russia this year. One source familiar with the matter, referring to Sabah, said only supply from the affected pipeline had been disrupted, adding: "There's still plenty more gas coming from Sarawak." The 512-kilometre Sabah-Sarawak Gas Pipeline transports gas from the Sabah Oil and Gas Terminal to Petronas' LNG complex at Bintulu in Sarawak where LNG is exported. The JKM price for November delivery gained on Thursday after the force majeure declaration. It rose to $32.503 per million British thermal units (mmBtu), up $3.628/mmBtu from the previous day, according to Platt's JKM LNG price assessment, yet remained much lower than record levels hit in August. "Currently, the force majeure is estimated to affect about two to three cargoes a month to Japanese buyers, which accounts for about only 3 per cent of the average total of Japanese LNG imports during October to December," said Ryhana Rasidi, gas and LNG analyst at Kpler. "However, while we haven't seen an uptick in Japanese buyers seeking replacement cargoes, the sentiment could easily change if the disruption turns out to be longer than expected."

Leak detected in pipeline that brings crude oil to Germany - (AP) — An oil leak was detected on a pipeline in Poland that's the main route through which Russian crude reaches Germany, the pipeline's Polish operator said Wednesday. The operator, PERN, said it detected a leak in the Druzhba pipeline on Tuesday evening 70 kilometers (45 miles) from the central Polish city of Plock. It said the cause of the leak wasn't known. The incident follows leaks late last month in the Nord Stream 1 and 2 gas pipelines running along the Baltic seabed, and amid an energy standoff between Russia and the West over Russia's invasion of Ukraine. Denmark and Sweden say those natural gas pipelines were attacked with large amounts of explosives. The Druzhba pipeline, which in Russian means “Friendship,” is one of the world’s longest oil pipelines. After leaving Russia, it branches out to bring crude to points including Belarus, Ukraine, Poland, Hungary, Austria and Germany. A Polish government security official, Stanislaw Zaryn, said the leak could be the result of an accident, but that officials were still investigating and were looking at all possible explanations. “Different scenarios are possible. We don’t exclude any of them,” he told The Associated Press. Firefighters were working in cornfields near the village of Zurawice to determine the exact point of the leak, according to a spokesman for firefighters, Brig. Karol Kierzkowski. He told the state news broadcaster TVP Info that approximately 400 cubic meters of spilled crude had been pumped out, and transmission along the line had been blocked off. Germany’s Economy Ministry said that Berlin’s supplies are currently secure, with two German refineries continuing to receive supplies via the Druzhba pipeline. It said reserves at those two refineries have been increased in recent weeks, and that both can, if needed, be supplied via the German port of Rostock and the Polish port of Gdansk. Last year, Russia accounted for around 35% of Germany’s crude oil supply. But that proportion has been reduced following Moscow's invasion of Ukraine in February. Germany's focus now is on phasing out the remaining supplies before a European Union embargo on most Russian imports goes into effect. An European Union embargo on most Russia oil goes into effect on Dec. 5.

Leak detected on another Russian pipeline connecting to Europe, but Poland says it looks accidental - Polish pipeline operator PERN said Wednesday that a leak detected on one of its Druzhba pipelines bringing oil from Russia to Europe was likely caused by an accident. The leak was detected on Tuesday evening on one of the two lines of the Western section of the pipeline, PERN said in a statement. The incident occurred roughly 70 kilometers (about 43 miles) from the central Polish city of Plock.PERN said pumping on the damaged line, which delivers oil to Germany, was immediately switched off and the scene had been secured. Pumping through the other line continued as normal, the company said. The cause of the incident is not yet known, but the Polish government said the damage caused was probably accidental. Mateusz Berger, Poland's top official in charge of energy infrastructure, told Reuters via telephone that there were no grounds to believe the leak was caused by sabotage. "Here we can talk about accidental damage," Berger said. The Druzhba pipeline, which translates as "friendship" in Russia, is one of the biggest oil pipeline networks in the world, delivering crude from Russia to much of central and eastern Europe including Germany, Austria, the Czech Republic, Hungary, Belarus, Poland and Slovakia. It comes just over two weeks after a series of blasts on two subsea gas pipelines connecting Russia to Germany triggered what might be the single largest release of methane in history. Nord Stream gas leaks An initial crime scene investigation led by Sweden's national security service said the gas leaks on the Nord Stream 1 and 2 pipelines reinforced suspicions of "gross sabotage." Many in Europe suspect the Nord Stream gas leaks were the result of a deliberate attack, particularly as the blasts came amid a bitter energy standoff between the European Union and Russia. The Kremlin has repeatedly dismissed claims it destroyed the pipelines, calling such allegations "stupid" and "absurd," and claiming that it is the U.S. that had the most to gain from the gas leaks. The White House has denied any involvement in the suspected attack.

Poland sees no signs of interference in oil pipeline spill -- The Polish operator of an oil pipeline says there are "no signs of any third-party interference" related to a leak in a pipeline that is the main source of crude oil from Russia to Germany. PERN, the operator, said in a statement late Wednesday that its technical services had located the site of the spill after removing most of the contamination from the area. "Based on first findings and the manner in which the pipeline was deformed, it appears that at this point there are no signs of any third-party interference," PERN said. "However, more detailed analyses are underway to determine the cause of the incident and to repair the pipeline so that crude oil pumping can be restarted as soon as possible." PERN detected a leak in the Druzhba pipeline on Tuesday evening 70 kilometers from the central Polish city of Plock. The Druzhba pipeline, which in Russian means "Friendship," is one of the world's longest oil pipelines. After leaving Russia, it branches out to bring crude to points including Belarus, Ukraine, Poland, Hungary, Austria and Germany. The incident follows leaks late last month in the Nord Stream 1 and 2 gas pipelines running along the Baltic seabed, and amid an energy standoff between Russia and the West over Russia's invasion of Ukraine. Denmark and Sweden say those natural gas pipelines were attacked with large amounts of explosives, and the discovery of another leak so soon in an oil pipeline had raised concerns.

With A Third Of French Gas Stations Experiencing "Supply Shortages", Energy Giant Seeks Urgent Wage Talks - Just days after we reported that France had tapped its strategic fuel reserves to resupply a growing number of gas stations that had run dry due to a nearly two-week long strike of refinery workers, with Government spokesman Olivier Veran urging consumers not to panic-buy only to achieve the opposite results, on Sunday the French Energy ministry announced that almost a third of French petrol (that's gasoline for US readers) stations were experiencing "supply difficulties" with at least one fuel product (up from 21% on Saturday), as French energy giant TotalEnergies offered to bring forward wage talks, in response to union demands, as it sought to end the strike that has pushed French to the bring of a historic energy crisis."Provided the blockades will end and all labor representatives agree, the company proposes to advance to October the start of mandatory annual wage talks," it said in a statement. The talks were initially scheduled to start in mid-November.In response, Union representatives earlier told Reuters the strikes staged by the CGT, historically one of France's more militant unions, would continue even as unions said they are willing to begin negotiations next week.They have disrupted operations at two ExxonMobil sites as well as at two TotalEnergies sites, sending French gasoline inventories sliding. Over roughly two weeks of industrial action, France's domestic fuel output has fallen by more than 60%, straining nerves across the country, as waiting lines grow and supplies have run dry.France’s Minister of Transport Clement Beaune said that there was no problem with supply in France on Saturday. He said shortages are a “localised phenomena, related to social movements", while urging companies and trade unions to act with "responsibility".On Friday, as refinery strikes continued for a tenth day, the country's energy minister Agnes Pannier-Runacher said that "over 80% of the petrol stations are functioning as normal", adding there were "significant supply tensions" in some regions, particularly along the border with Belgium where fuel currently costs more. Since then that 80% has dropped to 70%."The Government is doing its utmost to restore the situation to normal as soon as possible", Pannier-Runacher said in a statement on Saturday. "A solution to this conflict must be found as soon as possible", he added.Meanwhile, long queues formed at inner-city and suburban service stations in and around the capital as early as Wednesday, with lines stretching back to the main A1 motorway heading northwards out of the city, according to a Reuters reporter.

Russia’s Oil Revenues Drop To The Lowest Level This Year - Falling crude oil prices and declining oil exports resulted in a $3.2-billion drop in Russia’s oil revenues to $15.3 billion for September, the lowest monthly oil export revenue for Moscow this year, the International Energy Agency (IEA) said on Thursday. Total crude oil and oil product exports out of Russia fell by 230,000 barrels per day (bpd) to 7.5 million bpd in September, the IEA said in its Oil Market Report out today. The September oil export level was 560,000 bpd lower compared to Russia’s oil exports before the invasion of Ukraine, the agency estimated. Russian oil exports to the European Union fell by 390,000 bpd in September compared to August, the IEA’s data showed.“With less than two months to go before a ban on Russian crude oil imports comes into effect, EU countries have yet to diversify more than half of their pre-war import levels away from Russia,” the agency noted. The IEA also warned that the EU embargo on crude oil imports from Russia and the ban on maritime services that go into effect in early December could lead to further production losses from Russia.Putin, as well as Deputy Prime Minister Alexander Novak, have said that Russia would not export oil to countries joining the proposed price cap on Russian oil. Despite the lowest oil income for this year in September, Russia’s revenues “were still higher than the average monthly revenue in 2021,” which stood at $14.9 billion, the IEA said in its monthly report.As of September, the EU had already imported more than $97 billion (100 billion euros) worth of fossil fuels from Russia since the Russian invasion of Ukraine, the think-tank Centre for Research on Energy and Clean Air (CREA) said in a reportearlier this month.“Russia’s fossil fuel exports resumed dropping in September, with estimated revenue falling 14% from August. The largest losses were in gas exports to Europe, and in crude oil exports globally,” CREA said.

Indian refiners scout for oil deals ahead of EU ban on Russian crude - Indian state refiners plan to lock-in more of their crude supplies in term deals, worried that tighter Western sanctions on Russia, including from the EU, could curb future supplies in already tight markets, sources at state refiners said. Indian Oil Corp, the country's top refiner, and Bharat Petroleum Corp are seeking term deals with countries, including the United States, industry sources said. "We are preparing for a back up plan. When the world is uncertain because of Russia-Ukraine conflict we need to have all options open," said an official at one state refiner. The move towards term deals marks a shift in refiners' purchasing strategy, which had been geared towards maximising spot purchases in past years when supplies were abundant. "Due to the Russian-Ukraine conflict, we expect a possibility of tight oil markets and a change in flows with most Middle Eastern crude going to meet need of European markets so we need to diversify our oil sources," said a source at another state refiner. India's dependence on spot purchases allowed Indian refiners to snap up discounted Russian oil shunned by some Western buyers over Moscow's Ukraine invasion in February. India, which rarely used to buy Russian oil, has emerged as Moscow's second-largest oil customer after China. But a European Union ban on Russian crude imports from Dec. 5 will drive European refiners to buy more Middle East oil, putting them in competition with Asian buyers. To secure supplies, IOC last month signed its first six-month oil import deals with Brazil's Petrobras for 12 million barrels and Colombia's Ecopetrol for 6 million barrels. BPCL has signed an initial deal with Petrobras as it seeks to diversify oil sources. Supplies for IOC under the two deals will begin from October, said several of the sources who are familiar with the matter. IOC is also looking for more short-term supplies, including a contract for US oil, they added. IOC already has an annual deal that provides an option to buy 18 million barrels of US oil. Of these, IOC has already bought about 12 million barrels so far this year, they said. Sources said BPCL, which has already ramped up US oil purchases, is looking for more term contracts.

Tamboran Resources denies using 'intimidation' to access cattle station, fronts fracking senate inquiry - The chief executive of a gas company pushing to frack the Northern Territory's Beetaloo Basin has rejected allegations the company used "intimidation" to gain access to properties for drilling. Key points: Tamboran Resources last month acquired Origin Energy's exploration interests in the Beetaloo Basin Its chief executive Joel Riddle told the inquiry the company didn't break any laws by moving equipment onto a cattle station without consent He "categorically" denied any suggestion the gas company wasn't respectful in its dealings with the station owners Tamboran Resources, which owns Sweetpea Petroleum, has been at the centre of a stoush with pastoralists in the basin, about 500 kilometres south-east of Darwin, who do not want fracking to go ahead on their properties. The stand-off escalated earlier this year when Sweetpea Petroleum cut through fences at Tanumbirini Station against the wishes of the cattle station owners, Rallen Australia. Chairing a Senate inquiry in Canberra on Monday, Greens senator Sarah Hanson-Young said Tamboran Resources was "in a legal dispute with Rallen". "It's been put to this committee that your [company's] modus operandi is ... intimidation," she told Tamboran Resources chief executive Joel Riddle. "You cut fences to access the property — fences that are not yours — and you entered this property without approval. Speaking to the inquiry, Mr Riddle said it was "categorically false that we've done anything to pressure anyone". 'Fossil fuels falling away', analyst saysto frack for gas in the Northern Territory's Beetaloo Basin could be an early indicator of "fossil fuels falling away", according to an energy analyst. "We respect the rights and views of all pastoralists in the Beetaloo," Mr Riddle told senators. Mr Riddle also said the company did not break any laws by entering Tanumbirini Station and moving equipment onto the property without Rallen's consent. "Pastoralists have surface rights in the Beetaloo, other companies have mineral rights, other companies have geothermal rights — we have oil and gas exploration rights," he said. "No one party has a veto over rights of others."

FG stops Trans Niger Pipeline spillage, mulls remediation - The Federal Government, on Sunday, said it had clamped and stopped oil spillage from the 180,000 barrel per day Trans Niger Pipeline, saying that environmental remediation would commence in the affected communities. It said the oil spill into the Bodo community in Rivers State, where the TNP was ruptured, had been successfully contained. The government disclosed this through its National Petroleum Investment Management Services, a subsidiary of the Nigerian National Petroleum Company Limited. In a series of tweets via his official Twitter handle on Sunday, the Group General Manager, NAPIMS, Bala Wunti, described the stoppage of oil spill from the pipeline as a milestone for NNPC. He said, “Today, we achieved another great milestone on my second trip (within a week) to Bodo community. The faulty section of the Trans Niger Pipeline was clamped, and the spillage was successfully stopped. “With the completion of repairs, environmental remediation will commence in earnest. We will all go to bed feeling better tonight, knowing that the oil spill into the Bodo community has successfully been contained and that NNPC Limited trust rebuilding efforts with our beloved host community has fully taken shape and is paying off.”

Nigeria loses $150m daily to pipeline vandalism – Chief Financial Officer (CFO) Nigerian National Petroleum Corporation (NNPC) Limited Umar Ajiya has said Nigeria loses $150 million in revenue every day. Ajiya said the pipeline vandalism and sideline production were factors behind the loss. He spoke Wednesday during an interview with Arise TV monitored in Abuja, saying the development had prevented Nigeria from benefitting from the high oil price. Ajiya said that 100 barrels of crude oil could be sent, but probably only 10 barrels would be received at the terminals. He said the oil companies can no longer tolerate such theft levels, consequent upon which they declared force majeure, causing the Nigerian government revenue loss. “At a point in this country, we had reached 2.3 to up to 2.7 million barrels per day just before the COVID-19 pandemic, but with the incessant vandalism and theft, our operators can no longer tolerate such theft levels that you send 100 barrels and you probably get 10 barrels at the terminals.

NNPC discovers illegal pipeline routed into the sea for crude oil theft - The Nigerian National Petroleum Company (NNPC) Limited has revealed the discovery of an illegal oil pipeline that is routed into the sea and used in stealing crude oil. TheNewsGuru.com (TNG) reports that the Group Chief Executive Officer of NNPC Limited, Mele Kyari made the disclosure at a meeting with Senate ad hoc committee on oil theft in Nigeria on Tuesday. Kyari said the discovery was made with the help of its private security partners, further disclosing that the illegal oil pipeline had probably operated for the last nine years. According to him, the illegal oil pipeline is about four kilometres long, stressing that the route did not get to its terminal. Speaking during the meeting, Kyari also disclosed that the company has deactivated 395 illegal refineries in its efforts to curb oil theft in the country. The NNPC GCEO, who raised an alarm over the scale of oil theft, and vandalism of assets in recent times described the crime as calamitous. “We have deactivated 395 illegal refineries, we have taken down 273 wooden boats, we have destroyed 374 illegal reservoirs, we destroyed 1,561 metal tanks. “We have sized over 49 trucks and burnt them down, we have discovered illegal oil pits of 898 so far, and 1,219 cooking sites have been taken down,” he said. He said crude theft by vandals has brought down Nigeria’s oil production to around 1.2 million barrels per day from 1.8 million. He said that It was not true that the difference between 1.2 million barrels and its potential budget level of 1.8 million barrels was been stolen.

Nigerian oil theft line did not begin at export terminal, NNPC says -An oil theft point that operated undetected in Nigeria for an estimated nine years ran from the Trans Escravos pipeline in the country's Delta state and not the Forcados export terminal as previously stated, the state oil company said on Sunday. Large-scale theft from the nation's pipelines has throttled exports, forced some companies to shut in production and crippled the country's finances. Last week, the NNPC's Chief Executive Mele Kyari said a four-kilometre (2.49 miles) theft line ran from the Forcados terminal, which exports one of Nigeria's main crude grades, into the sea. An NNPC spokesman said on Sunday the theft point ran from the Trans Escravos pipeline, which can feed the Forcados export terminal, after Kyari on Saturday posted photos and video to Twitter of a visit to the theft point site along with General Lucky Irabor, Nigeria's Chief of Defence Staff. The pictures showed the men inspecting pipelines that appeared to have been buried underground. Kyari tweeted that they also inspected the Afremo platform, which was potentially the exit point for the diverted crude, without giving details. He said the discovery of the theft line showed Nigeria's coordinated intervention was paying off. In August, NNPC awarded contracts to companies including those owned by former militants to crack down on oil theft. NNPC's comments on Sunday concur with those from SPDC, the Nigerian subsidiary of oil major Shell, which operates the Forcados terminal. It said in a statement last week the theft pipeline was approximately 30 kilometres away from the Forcados terminal and not on the path of its pipelines.

Oil theft in Nigeria under reported- Oilfield expert - According to a report released by the Nigeria Extractive Industries Transparency Initiative (NEITI) in November, the economy suffered losses of over $38.5 billion from the threat between 2009 and 2018. The report was the outcome of a study on oil theft carried out by the Nigeria Natural Resource Charter (NNRC). Without doubt, and for the first time since discovery of crude oil, Nigeria has been in a situation whereby when oil prices go up significantly, globally, it does not translate into improved earnings for the country, but a deteriorating fiscal situation. The country, this year alone, appears to have lost track of the number of pipeline sabotage incidents as it has become the norm. It was as a resulted of this that the National Petroleum Company Limited awarded a pipeline protection contract worth N48billion yearly to Ekpemupolo a.k.a Tompolo, a former Nigeri Delta militant. The award had elicited criticism, but Mele Kyari, Group Chief Executive Officer (GCEO) of NNPCL, had said the Federal Government made “the right decision,” as events over the years have shown that the decision is rather a convenient one considering how the government has been handling issues of oil theft and vandalism. Debo Adeniran, Chairman centre for anti-corruption and open leadership, CACOL) reacting to the award of pipeline contract to the former Niger Delta militant on This Morning, Thursday with Yori Folarin said he believes the difference is coming out, even with the recent revelation by Tompolo’s firm and his workers.

China accelerates oil, gas projects to ensure energy supply in winter - Oil and gas production has exceeded 10 million tons in the Fuman Oilfield area, a main crude oil block located in the Tarim Oilfield in Northwest China's Xinjiang Region, marking a breakthrough for China's ultra-deep oil and gas development amid efforts to consolidate the nation's energy security. Since 2022, four 1,000-ton-level wells and 45 100-ton-level wells have been drilled within the Fuman Oilfield, with a drilling success rate of over 95 percent as the fastest developed deep oilfield in China, the country's state-owned energy giant China National Petroleum Corp (CNPC) said on Sunday. The Fuman Oilfield covers an area of 17,000 square kilometers, the same size as Beijing. Total oil and gas resources from the field stand at more than 1 billion tons in what is the deepest and largest ultra-deep crude oil production area in China, according to a CCTV report. As the oil and gas reserves in the Fuman Oilfield are buried in an ultra-deep layer of 7,000 to 10,000 meters on average, it requires drills to go through rock barriers to reach extractable resources. According to CNPC, it has drilled 45 8,000-meter-level ultra-deep wells this year and is developing drilling technology for wells of 10,000-meter-level to support deep exploration. Tarim Basin, where the Fuman Oilfield is located, is the largest ultra-deep oil and gas production base in China, producing more than 15 million tons of oil and gas each year. In the first nine months of this year, oil and gas production in the Tarim Oilfield reached 24.69 million tons, a net increase of 1 million tons year-on-year, a record high for this period. According to an official blueprint, the Tarim Oilfield will strive to produce 40 million tons of oil and gas annually by 2025 and 50 million tons by 2035. Progress has been made in other projects across the country to ensure energy stability in winter. In North China, State Power Investment Corp's Inner Mongolia branch, responsible for coal supply for North China's Inner Mongolia Autonomous Region, and neighboring Jilin and Liaoning provinces, has begun shipments of 2 million tons of coal for local farmers and townships to ensure a warm winter. In Shanghai, a liquefied natural gas facility expansion in the Yangshan Deep Water Port has been approved, a step closer to the start of construction, thepaper.cn reported. With an investment of 17 billion yuan ($2.38 billion), the project will add capacity of 6 million tons a year. The project, which includes wharf engineering facilities, receiving stations and gas pipelines, is expected to be put into operation by 2030. China's energy supply is generally balanced and stable and the winter energy supply is ensured, Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Sunday. This comes in sharp contrast with Europe, which likely faces a colder winter amid soaring energy prices.

NIGC to increase gas exports to Iraq - - - Head of the National Iranian Gas Company (NIGC) Dispatching Department announced an increase in Iran’s gas exports to Iraq in the current Iranian calendar year (began on March 21). Mohammadreza Joulaei made the remarks in a meeting with senior officials of the Iraqi Ministry of Electricity that was held in Isfahan, central Iran on Sunday, Shana reported. “Our relationship with Iraq is a strategic one,” Joulaei said in the meeting. Referring to the negotiations made in the meeting, the official said: “Annual and quarterly meetings are held with the officials of the Iraqi Ministry of Electricity to discuss the gas export contract with this country, so technical and operational issues of this contract were also discussed in this meeting.” Referring to the beginning of the cold season in Iran and the increase in gas consumption in the domestic sector, the NIGC official stated: “Considering the amount of consumption in the last six months and the demand increase in the next six months, the necessary technical and operational investigations have been carried out so that we do not have any problems for exports and the gas export is going to be carried out according to the agreement made with the Iraqi parties.” Ahmed Musa, spokesman for the Iraqi Ministry of Electricity, said on Sunday that his country paid all its debts for gas imports to Iran, adding an Iraqi delegation is visiting Iran to discuss an increase in gas imports. In an interview with Iraqi News Agency (INA), Mousa said that his country imports 20 million cubic meters of gas from Iran every day and that Iraq needs more gas now. The official added that his country has no debts to Iran over the gas imports, adding: "Negotiations, meetings, and visits to Iran are ongoing with the aim of coordination on an increase in gas imports."

Saudi Aramco to keep full oil supplies to North Asia in Nov despite OPEC+ cuts - Saudi Aramco has told at least five customers in North Asia they will receive full contract volumes of crude oil in November, several sources with knowledge of the matter said on Monday. The full supply allocation comes despite a decision by the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, to lower their output target by 2 million barrels per day. Saudi Energy Minister Abdulaziz bin Salman had said the real supply cut would be about 1 million to 1.1 million bpd. Analysts expect Saudi Arabia, the United Arab Emirates and Kuwait to shoulder much of the production cuts because other OPEC+ members are falling behind output targets.

OPEC Returns Fire, Takes Aim At Biden's SPR Release With Clear Message - Last week, Saudi Arabia’s Minister of Energy, Prince Abdulaziz bin Salman Al Saud, reiterated the longstanding Saudi stance that they don’t focus on price; it’s all about supply and demand for OPEC’s leading swing producer. But that’s not the whole story.The real message that came out of last week’s OPEC meeting is clear: Saudi Arabia and OPEC are the world’s crude oil swing producers; they are the ones who want to be in control, and in fact are largely in control, of short-term oil prices. Long term oil prices are determined by tectonic shifts in production, much of which is out of Saudi - or any single individual or entity’s - control. Think about the development of shale and horizontal drilling technologies that the U.S. developed and implemented to catapult the U.S. into the top spot as the world’s preeminent oil producer - that process was deployed globally over many years across vast production fields and is not something that can be controlled by a singular decision by any one person, producer, country or company. It was the result geologic engineering advancements, long-term economics, and government policies inside the U.S. that allowed it to happen.That said, Saudi Arabia stands alone in its ability to turn on or off the oil taps on short notice. Saudi Arabia is also the big daddy in OPEC by virtue of the fact that it controls the overwhelming amount of production relative to other OPEC members. It is the world’s undisputed swing producer.President Biden has stepped into the fray with his use of the Strategic Petroleum Reserve (SPR) as a means of having the U.S. act as a swing producer of oil as well. Releasing oil from the SPR is, in fact, the only way a U.S. President can directly affect the short-term supply of oil because the U.S. operates under a free market system. Oil producers make their own choices as to how much oil to produce and when, and those decisions are driven by market economics and government policies.The Saudis are also the world’s preeminent petro-economists. They know the fundamentals of the global oil markets better than anyone, and they try to maintain a delicate balance between supply and demand while keeping oil prices high enough to stimulate continued (and additional) oil production but low enough to keep from destabilizing the global economy which, in turn, would hurt oil demand. By backing the latest OPEC production cut, the Saudi’s are clearly signalling their belief that the global economy is weakening and that oil demand will slow as a result.But headlines about the U.S. use of its SPR are what are in focus right now, and the Saudis clearly feel the need to send an additional message. The Saudis know they are likely to win the long-term oil production battle as western nations continue to deemphasize carbon based fuel use with policies that actively discourage, and in some cases actually punish, investment in traditional carbon based fuel production, including crude oil and natural gas. They are secure with their long-term positioning and likely dominance of global oil markets far into the future. But right now short term considerations are also in play, and the Saudis feel that the U.S. has overstepped its bounds by releasing oil from the SPR to relieve prices.President Biden clearly has crossed the red line in Saudi Arabia’s swing producer turf, and the Saudi message is brutally pragmatic: President Biden’s continued use of SPR inventories as a price cap for crude oil is a Sisyphean task, courtesy of the Saudis and OPEC.

OPEC Aligns with Russia - Today the OPEC+ oil cartel announced it will cut output by 2 million barrels a day, beginning in November. Since the world currently consumes about 100 million barrels of oil a day, this will be a cut of about 2%. OPEC is short for the Organization of Petroleum Exporting Countries. It includes 13 member states, led by Saudi Arabia, and produces 44% of the world’s oil. Eleven other countries work alongside OPEC and make up OPEC+. Those additional countries include Russia, and together with OPEC, they control more than half of the world’s oil, about 55% of it. OPEC+ countries cooperate to reduce market competition and raise prices. The decision of OPEC+ to cut production is not simply about prices. It is about the ongoing struggle over democracy playing out in Ukraine, as the Ukrainians fight off the Russian invaders. The Russian economy depends upon oil sales, and the U.S. and European Union have sought to cut into that money to hurt Russia’s ability to continue its attack in Ukraine. A day ago, after Russia illegally annexed four regions of Ukraine, the 27 member nations in the European Union joined the G7 (which is made up of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) to set a price cap on Russian oil, in addition to another round of sanctions. Theoretically, this plan should have enabled countries that need Russian oil for heat this winter to get it, while keeping the prices low enough to starve Putin’s war efforts. Russia is co-chair of OPEC+ and is desperate for oil money, on which its economy depends. That economy is crumbling under international sanctions, and Russia’s oil production has dropped about a million barrels a day at the same time that the country has been forced to discount its oil to sell it. As Russia’s invasion of Ukraine is failing, it needs more money, and Russia asked for the OPEC+ cuts to increase prices. “It’s clear that OPEC+ is aligning with Russia with today’s announcement,” White House press secretary Karine Jean-Pierre said, and OPEC+ delegates said the move was, indeed, a big win for Russia. Biden took heat earlier this year when he traveled to Saudi Arabia to ask leaders to increase production, in part to ease gas prices here in the U.S., which soared after the economy came roaring back after the worst of the pandemic passed and after Putin invaded Ukraine. At the time, the Saudis increased production slightly, but this announced cut makes Saudi Arabia’s rejection of Biden’s request clear, even though the Saudi energy minister, Prince Abdulaziz bin Salman, said that OPEC+ was simply trying to stabilize markets in the face of a cooling global economy.

OPEC oil cuts bad for global economy, Treasury Secretary Janet Yellen tells Financial Times - (Reuters) – U.S. Treasury Secretary Janet Yellen said a decision by the OPEC+ grouping to cut oil production was “unhelpful and unwise” for the global economy, especially emerging markets, the Financial Times said on Sunday.“We’re very worried about developing countries and the problems they face,” Yellen told the newspaper in an interview.She also criticized allies for being slow to send financial aid to Ukraine.“The pace of transferring money to Ukraine is far too slow,” Yellen added, pointing out that some countries that had pledged assistance had not got round to disbursing it.

Biden's Options To Counter OPEC+ Are Limited - This week, OPEC+ made a decision unprecedented in its history and the history of OPEC. The extended cartel approved production cuts of 2 million bpd at a time of steady demand, tight supply, and runway inflation in the world’s biggest economies. More significantly, perhaps, OPEC+ made this decision despite Washington’s numerous attempts to change the mind of the cartel leaders, notably Saudi Arabia and the UAE.Just a day before the OPEC+ meeting, CNN reported that all available human resources in the administration had been mobilized, with the White House “having a spasm and panicking,” per one unnamed official.Top officials such as Amos Hochstein and Janet Yellen had been tasked with talking the Saudis and the Emiratis out of a production cut. Talking points included a not too thinly veiled threat of reputational and foreign relations damage: “There is great political risk to your reputation and relations with the United States and the west if you move forward.” Yet the Saudis and the Emiratis did just that. They went forward.Commentators were quick to note the move was a slap in the face of the United States and the collective West. It is the West that needs cheaper oil the most right now as the European Union embargoed Russian crude and fuels and the U.S. Democratic administration needs cheap gasoline ahead of the midterms to have a chance of retaining its party majority in Congress, however slim.In a symbolic affirmation of a major geopolitical alignment change, the Saudi energy minister, Prince Abdulaziz bin Salman, accused Reuters of bad reporting and refused to answer questions from the agency at a news conference after the OPEC+ meeting and pretty much waved off suggestions by CNBC’s Hadley Gamble that OPEC+ was siding with Russia and weaponizing oil at a time when the global economy needed it.In short, OPEC+ bluntly demonstrated it can do whatever it feels it needs to do to protect its own interest, even if this means going against the interests of its traditional allies, including its biggest one.As Bloomberg’s Javier Blas put it in a commentary piece after the meeting,“The US and its Western allies need to pay attention. For the first time in recent energy history, Washington, London, Paris and Berlin don’t have a single ally inside the OPEC+ group.” One might argue that this tectonic change in geopolitics is more important for the future of the world than the war in Ukraine, although these are certainly not isolated from each other.Saudi Arabia has already stated its desire to join the BRICS alliance in what can hardly be interpreted as anything less than a declaration of support for the Russia/China bloc. Its closest ally at home, the UAE, tends to follow Riyadh’s foreign policy, so it is on board with this distancing from the West and forging closing relations with a symbolic East and a very literal group that represents a substantial portion of global GDP.So, the world’s largest oil producers after the U.S. are turning their backs on their once geopolitical friends and siding with the enemy, to put things bluntly and simply. That talking point for the Biden top team cited above may sound like a threat, but what specific form would that threat take?So far, the response has been quite general. In an official statement, President Biden said on Wednesday that he was “disappointed by the shortsighted decision by OPEC+ to cut production quotas” and threatened to consider moves to “reduce OPEC’s control over energy prices.”

Biden escalates feud with Saudi Arabia, warning of 'consequences' for cutting oil production in coordination with Russia - President Joe Biden said Saudi Arabia will face "consequences" for cutting oil its production targets, something that he said benefits Russia. The OPEC+ group of oil producing nations said last week that it would cut oil production by two million barrels a day, a move which enraged the White House, which has been struggling to tame inflation and decrease gas prices.The OPEC+ group includes Saudi Arabia and Russia — the two biggest oil producers after the US itself — as well as numerous other oil-producing countries.Reducing supply tends to force prices higher because there is less to go around.Biden spoke warned Saudi Arabia in an interview with CNN on Tuesday: "There's going to be some consequences for what they've done, with Russia.""I'm not going to get into what I'd consider and what I have in mind. But there will be – there will be consequences."Biden already had a fraught relationship with Saudi Arabia.The two nations' long alliance has been increasingly fractious in recent years. Issues include Saudi human-rights abuses — particularly the killing of Jamal Khashoggi — US support for a nuclear deal with Iran, and Biden's initial hostility to Crown Prince Mohammed bin Salman, which was partially rowed back in a recent visit.An increase in oil prices benefits Russia at a time when the US and Western nations are trying to punish the country for its invasion of Ukraine.White House spokesperson Karine Jean-Pierre responded to the news of the cuts last week by saying it was "clear" that OPEC+ was "aligning with Russia".US officials warned Saudi Arabia that it would be seen as taking Russia's side if OPEC+ cut its production, but Saudi Arabia dismissed the warnings and proceeded, The Wall Street Journal reported.Russia on Sunday praised OPEC+ for cutting its oil production targets.Saudi Arabia's foreign minister said on Tuesday that the OPEC+ decision was taken only for economic reasons, Reuters reported.Biden's hardened stance on Saudi Arabia is a big shift from his repeated engagement with the Kingdom and Crown Prince Mohammed bin Salman.Some Democratic lawmakers said the OPEC+ decision shows that the US needs to reconsider its relationship with Saudi Arabia, which receives extensive military assistance from the US.John Kirby, spokesman for Biden's national security council, said on Tuesday that Biden was willing to start re-evaluating that relationship immediately.

Biden threatens 'consequences' for Saudi Arabia after OPEC cut, but his options are limited - President Joe Biden is angry at Saudi Arabia for its decision to slash oil production along with its OPEC allies against U.S. wishes, and he's made no secret of it. With the global economy on a knife-edge and energy prices high, Washington sees the kingdom's move – which it made in coordination with Russia and other oil-producing states – as a snub and a blatant display of siding with Moscow. The oil producer group in early October announced its largest supply cut since 2020, to the tune of 2 million barrels per day from November, which its members say is designed to spur a recovery in crude prices to counter a potential fall in demand. For this, Biden said in an interview with CNN on Tuesday that there would be "consequences." He did not go into further detail as to what those consequences might be. But what are the Biden administration's options, and could they backfire? The Saudi-U.S. relationship was founded, broadly speaking, on the principle of energy for security. Washington has since the 1940s provided billions of dollars in military and security aid to Saudi Arabia. But in recent years, and particularly since the Obama administration began making diplomatic inroads with Iran, Riyadh feels the U.S. commitment to its security has waned. "The truth is, neither side has been holding up their end of the bargain for nearly 10 years now," Michael Stephens, an associate fellow at the Royal United Services Institute in London, told CNBC. "And what you're seeing, I think, are permanent fractures in the relationship that are based on the fact that neither side really sees as much strategic benefit in the other as they did 20 years ago," Stephens said, adding that Saudi Arabia's OPEC oil production cut "is a reflection of that." The potential "consequences" Washington can put into action include cutting its military support to the Saudi kingdom, and going after OPEC with U.S. laws. Indeed, just one day before Biden's comments, Sen. Bob Menendez, D-N.J., chairman of the Senate Foreign Relations Committee, demanded that the U.S. immediately halt all cooperation with Saudi Arabia — including weapons sales. "The United States must immediately freeze all aspects of our cooperation with Saudi Arabia, including any arms sales and security cooperation beyond what is absolutely necessary to defend U.S. personnel and interests," Menendez said in a statement. In an earlier interview with CNBC, Sen. Chris Murphy, D-Conn., asked, "What's the point of looking the other way when the Saudis chop up journalists and repress political speech inside Saudi Arabia if when the chips are down, the Saudis effectively choose the Russians over the U.S.?" Even Sen. Bernie Sanders, I-Vt., weighed in, demanding in a tweet that: "If Saudi Arabia, one of the worst violators of human rights in the world, wants to partner with Russia to jack up US gas prices, it can get Putin to defend its monarchy. We must pull all US troops out of Saudi Arabia, stop selling them weapons & end its price-fixing oil cartel."

Biden has another chance to get tough on the Saudis. But will he and Congress act on it? - When then-Democratic presidential nominee John F. Kerry was preaching a tough-on-the-Saudis message in 2004, my colleague Glenn Kessler asked a senior Saudi diplomat how worried the kingdom was.The diplomat smirked: “That ends as soon as the new president gets his first security briefing.” That has certainly been the story of the Biden administration thus far. Despite President Biden’s campaign-trail pledge to turn Saudi Arabia into a “pariah” over the gruesome assassination of Washington Post global opinions columnist Jamal Khashoggi, Biden hasn’t followed through. He took some relatively minor steps, including releasing a report that confirmed the sordid details of the butchering and blamed Crown Prince Mohammed bin Salman. But this summer, there he was, meeting with the Saudis in hopes of alleviating high gas prices, fist-bumping the crown prince in a way that projected quite the opposite of “pariah.”Yet suddenly, Biden has been presented with a second chance to make good on his promise — or at least come closer to it. And he’s getting some not-so-gentle nudging in that direction, both by circumstance and from high-profile members of his party.The decision last week by OPEC Plus to reduce oil production in a way that could further drive prices up and help Russia fund its war in Ukraine has set off bipartisan calls for action. But particularly strong are the comments of some top Democrats.Last week, it was the No. 2 Senate Democrat, Richard J. Durbin (Ill.). He cited not just Khashoggi and the OPEC Plus decision, but also “unanswered questions about 9/11.” He added: “It’s time for our foreign policy to imagine a world without this alliance with these royal backstabbers.”Senate Foreign Relations Committee Chairman Robert Menendez (D-N.J.) followed that up Monday by accusing the Saudis of choosing “war criminal” Vladimir Putin over the United States. He said he would use his post to halt “any cooperation with Riyadh until the kingdom reassesses its position with respect to the war in Ukraine.”There appear to be two main options on the table: scaling back defense cooperation and arms sales, and targeting OPEC itself. But one of them is much more readily available — to the point where it would seem to be just sitting there waiting for Congress to pass it. That would be what’s known as the No Oil Producing and Exporting Cartels Act, or NOPEC. The bill, which would explicitly give the Justice Department the power to sue oil cartels for antitrust violations and market manipulation, has been introduced in each Congress for more than two decades. And it has occasionally gained some momentum — particularly during times when gas prices are high.Versions of it were approved by the House in both 2007 and 2008, and by the Senate in 2007 — each time with at least 70 percent of the chamber voting in favor. But then-President George W. Bush threatened to veto it, so it never became law. The current bill already passed out of the Senate Judiciary Committee this Congress by a vote of 17-4 in May, while another version passed out of the House Judiciary Committee by a voice vote.The question from here is how much will there is to vote on a bill that the past suggests would pass both chambers quite easily. Durbin, the No. 2 Senate Democrat, is pushing hard for just that. He said last week that NOPEC should be passed in the lame duck, and hereiterated Tuesday that it must be passed.

NOPEC Bill Won't Bring Oil Prices Down - “Nobody f*cks with a Biden,” said the U.S. president, and the oil ministers of the member countries of the Organization of the Petroleum Exporting Countries (OPEC+) replied, “Hold my beer.” OPEC+ then proceeded to approve production cuts of 2 million barrels per day, despite a full court press by the administration in the weeks leading up to the decision, and raised the price of oil for the U.S., lowered it for Europe, and left it unchanged for Asia. According to National Security Advisor Jake Sullivan, “the President is disappointed by the shortsighted decision by OPEC+ to cut production quotas” and “the Biden Administration will also consult with Congress on additional tools and authorities to reduce OPEC+’s control over energy prices,” neglecting to mention that Biden administration decisions to cancel the Keystone XL pipeline and to stop issuing new oil and gas leases on public lands gave OPEC+ the upper hand. Apparently, a fist bump only gets you so far. There followed a lot of “how dare they!” by the great and good, but OPEC+ was having none of it. The day before the announcement, the Saudi energy minister dressed down a Reuters reporter for shoddy work by his colleague who claimed that Russia and Saudi Arabia (the Kingdom) conspired to price oil at $100 per barrel, and later explained OPEC+ was being proactive as the West is attacking inflation with higher interest rates which, in turn, may cause a recession and drive down oil demand (and price). Amin Nasser, Saudi Aramco’s chief executive officer, explained that the leading cause of today’s energy crisis is years of underinvestment in oil and gas production and that the situation will be worse when the global economy rebounds from the current slowdown. The OPEC+ decision was no doubt based on market fundamentals but part was likely fallout from Biden calling Saudi Arabia and its crown prince, Mohammed bin Salman (MbS), a “pariah” for the killing of activist and Muslim Brotherhood sympathizer Jamal Khashoggi. It probably sounded great on the campaign trail but there is no avoiding the crown prince in America’s dealings with the Kingdom. OPEC+ was said to have “sided with the Russians” – perfect fodder for cable news shows - but it was just looking after its own interest. Also overlooked was the fact that the Saudis worked hard to get Russia, a major oil producer, into OPEC+ to ensure its moves would be in harmony with the organization - which it finally did in 2016 - and to ensure U.S. firms did not dominate the oil market – a pretty reasonable move, actually, for an economic competitor. American critics demanded the U.S. cancel maintenance contracts for U.S.-supplied military equipment and, days later, three Democrat congressmen introduced a bill to remove U.S. troops and air defense systems from the United Arab Emirates (UAE) and the Kingdom, and two other Democrat legislators introduced a bill that would halt all arms sales to Riyadh. Congress may resurrect the No Oil Producing and Exporting Cartels Act (NOPEC), which would remove the sovereign immunity for OPEC+ as a group and for its individual member states in U.S. courts, leaving them open to prosecution under U.S. anti-trust legislation, or referral for investigation by the World Trade Organization. Of course, NOPEC could also send oil prices higher and end the dominance of the petrodollar, especially if Saudi Arabia prices oil sales to China, its biggest customer, in Yuan, and de-pegs oil from the dollar. What the Biden administration and its confederates are not mentioning (and are hoping voters forget) is that American decisions put America in this spot.

Democratic duo proposes banning arms to Saudi Arabia over OPEC cuts - A pair of Democratic lawmakers is proposing the U.S. halt arms sales to Saudi Arabia in response to oil production cuts from the Organization of the Petroleum Exporting Countries (OPEC).Rep. Ro Khanna (D-Calif.) and Sen. Richard Blumenthal (D-Conn.) penned an op-ed in Politico Sunday calling on Congress to cut off arms sales to the leading OPEC country until it reverses its “embrace” of Russian President Vladimir Putin.“Members of Congress are already talking about how best to respond. Some propose extending domestic antitrust laws to international commerce. Others propose reviving a GOP initiative to withdraw U.S. troops from Saudi Arabia. But that idea has failed previously given that the U.S. would rather have its own troops there than Russian or Chinese troops,” the lawmakers wrote.“A simpler, far more urgent move to fortify U.S. national security would be to pause all U.S. military supplies, sales and other weapons aid to Saudi Arabia.”Democratsexcoriated Saudi Arabia over the OPEC decision, coming less than three months after President Biden visited Saudi Arabia, where he asked the country’s leaders to increase oil production to help counter the impact of Russia’s war in Ukraine.“We give Saudi Arabia 70% of their weapons,” Khanna said on Twitter Friday. “For them to drive up energy prices for the American people is outrageous. It’s simple. If the Saudi-led OPEC+ doesn’t reverse their decision, the US should stop sending them weapons.”The OPEC+ coalition of 13 member nations and 11 non-members, including Russia, announcedlast week that it would bring down production by 2 million barrels, raising concerns about the move pushing up prices at the pump in the U.S. Blumenthal toldPolitico earlier this week that there remains “an opportunity to persuade the Saudis that you’re making a gigantic mistake here,” adding that he hopes the Biden administration will “be aggressive” in using U.S. leverage.President Biden said on Wednesday he was “disappointed” by the OPEC+ move, while the White House accused Riyadh of “aligning with Russia” with the move.The Biden administration has said it is reviewing its options to respond, while renewing calls for oil companies to reduce prices.Khanna and Blumenthal argued that Saudi Arabia could not easily find new weapons suppliers, giving the US significant leverage.“Maybe it is worth considering some ancient Russian wisdom ourselves. Over a century ago, Russian playwright Anton Chekhov warned, ‘Knowledge is of no value unless you put it into practice.’ Perhaps the same is true about leverage. It is of no value unless used,” they wrote.

'Enough Is Enough': Top Senate Democrat Vows to Block All Future Arms Sales to Saudis - The Democratic chair of the Senate Foreign Relations Committee pledged late Monday to block all future U.S. weapons sales to Saudi Arabia as backlash over OPEC's decision to cut oil production and push up gas pricescontinues to grow on Capitol Hill.Sen. Bob Menendez (D-N.J.), who has veto power over foreign arms sales, said in a statement that OPEC's plan to slash production by two million barrels a day in a bid to prop up oil prices amounts to a "decision to help underwrite Putin's war." Russia, an OPEC ally, stands to benefit from higher oil prices without having to reduce its own production."It's time for our foreign policy to imagine a world without this alliance with these royal backstabbers.""The United States must immediately freeze all aspects of our cooperation with Saudi Arabia, including any arms sales and security cooperation beyond what is absolutely necessary to defend U.S. personnel and interests," Menendez said Monday. "As chairman of the Senate Foreign Relations Committee, I will not green-light any cooperation with Riyadh until the kingdom reassesses its position with respect to the war in Ukraine. Enough is enough."With his statement, Menendez—a war hawk—joined progressive lawmakers such as Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Calif.) in demanding an end to U.S. military aid to the Saudis, the largest buyer of American weaponry.On Sunday, Khanna and Sen. Richard Blumenthal (D-Conn.) announced legislation that would "immediately halt all U.S. arms sales to Saudi Arabia." Last week, three House Democrats introduced a bill that would require the removal of U.S. troops and missile defense systems from Saudi Arabia and the United Arab Emirates, a leading member of the OPEC cartel.Over the past several years, the U.S. has approved tens of billions of dollarsworth of weapons sales to the Saudis as they've waged a catastrophic war on Yemen, sparking a massive humanitarian crisis. The U.S. has also cooperated with the Saudis militarily in other ways, including by refueling the oil kingdom's warplanes, supplying fighter jet parts, and teaming up with the country's murderous leadership to build high-tech bomb parts.Recent congressional efforts to block arms sales to the Saudis—including major deals approved by the Biden administration—have fallen short, but the OPEC decision could mark a key turning point as top Democratic lawmakers demand a complete reevaluation of U.S.-Saudi relations.Just over a year ago, Menendez notably opposed a Senate resolution that aimed to block a $650 million sale of missiles to the Saudis. The bipartisan resolution ultimately failed to clear the upper chamber.In a statement last week, Sen. Dick Durbin (D-Ill.)—the chamber's second-ranking Democrat and a supporter of previous attempts to block arms sales to the Saudis—declared that "it's time for our foreign policy to imagine a world without this alliance with these royal backstabbers.""From unanswered questions about 9/11, the brutal murder of journalist Jamal Khashoggi, and the exporting of extremism, to dubious jailing of peaceful dissidents and conspiring with Vladimir Putin to punish the U.S. with higher oil prices, the Saudi royal family has never been a trustworthy ally of our nation," Durbin said.

UAE president to meet Putin in Russia, a week after OPEC+'s deep output cuts - The president of the United Arab Emirates, Sheikh Mohamed bin Zayed al-Nahyan, will head to Russia on Tuesday to meet his counterpart Vladimir Putin.According to UAE state media WAM, both leaders will be discussing the countries' "friendly relations," alongside "regional and international issues and developments of common interest."The UAE ruler's visit comes a week after OPEC+, an alliance of oil producers which includes Russia and the UAE, agreed to impose deep output cuts to shore up crude prices despite calls from the U.S. to pump more to bolster the global economy.The Kremlin had on Sunday praised the organization's decision to slash output. Kremlin spokesperson Dmitry Peskov said that the move was a "balanced, thoughtful and planned work of the countries, which take a responsible position within OPEC," according to Russian media outlets.The cut had strained relations between the oil cartel and the United States.The White House said in a statement that President Joe Biden was "disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin's invasion of Ukraine." Following the announcement of the UAE leader's visit, Dubai's former finance chief said on Twitter that Mohamed was heading to Russia to "[defuse] a European war that exhausted the world."

Explainer: Why Russia Stands to Gain Most From OPEC+ Oil Production Cuts -- (Reuters) – OPEC+ surprise deep oil production cuts agreed this week are set to benefit Russia most while tightening supply to the West already suffering from record energy prices. OPEC+ and the West traded blame on Wednesday after the group reduced supply by a steep 2 million barrels per day or 2% of global supply in an already tight market. OPEC’s leader Saudi Arabia said it was merely reacting to the soaring interest rates in the West where the central banks such as the U.S. Federal Reserve are “belatedly” reducing liquidity, triggering a dollar rise and making oil cheaper. Washington accused OPEC of siding with Russia and called the decision short-sighted saying the world was already suffering from high energy costs due to Russia’s invasion of Ukraine. OPEC+ includes 13 members of the Organization of the Petroleum Exporting Countries and 11 allies led by Russia. On Thursday, oil market watchers said that based on pure maths and OPEC+’s latest production data Russia was indeed set to benefit most from the decision. Moscow won’t have to reduce a single barrel of output as it is already producing well below the agreed target while benefiting from higher oil price which will be achieved through cuts mainly by OPEC Gulf producers. “The winner is Russia while the loser is the global consumer who does not need higher energy prices going into an economic slowdown,” The Kremlin said on Thursday the cuts were aimed at market stabilisation and confirmed OPEC+’s credentials as an organisation responsible for market stability. The cuts of 2 million bpd represent over 4 percent of OPEC+’s overall target production of 43.8 million. But the group has already been struggling to produce at targets before the cut, pumping 3.6 million barrels per day short of its output goals in August. The main laggards in the past few years have traditionally been Angola and Nigeria due to poor investment. In recent months, they were joined by Russia, which came under severe Western sanctions following its invasion of Ukraine and was pumping 9.9 million bpd in September versus its target of 11 million bpd.

IEA Warns of Global Recession, Slowing Oil Demand; U.S. Consumption Drops - A plan to slash oil production in November could send prices soaring, exacerbate already entrenched inflation in the United States and Europe, and push the global economy into a recession, the International Energy Agency (IEA) said Thursday. IEA researchers pointed to a recent OPEC-plus decision to cut oil output by 2 million b/d next month. The researchers said the move could drive supply/demand out of balance and bolster prices as inflationary headwinds threaten to cripple consumer spending and, by extension, major economies.The U.S. Department of Labor on Thursday said the consumer price index, a key measure of inflation, increased 8.2% in September from the same month a year earlier. That was down from a 2022 peak of 9.1% in June but still four times the level that Federal Reserve Bank (Fed) officials said is healthy. Lofty energy costs – including natural gas prices that doubled this year — have propelled inflation. The Fed has raised interest rates multiple times this year to slow inflation.“The relentless deterioration of the economy and higher prices sparked by an OPEC-plus plan to cut supply are slowing world oil demand,” IEA said in itsmonthly oil report. “With unrelenting inflationary pressures and interest rate hikes taking their toll, higher oil prices may prove the tipping point for a global economy already on the brink of recession.” The oil cartel, composed of Saudi Arabia-led OPEC and allies including Russia, helped to drive up Brent crude prices more than 10% after its announced move last week. Further increases are widely expected when the producer group presses ahead with the output cuts next month. President Biden, along with myriad other U.S. politicians from both sides of the aisle, assailed the OPEC-plus decision. In addition to supply concerns, they said it would bolster Russia’s energy complex as the Kremlin wages war in Ukraine – a conflict the United States opposes. The sobering outlook from IEA, the Paris-based energy watchdog, came on the same day that the U.S. Energy Information Administration (EIA) said domestic crude supplies were rising while demand fades amid slowing economic activity. Overall petroleum demand in the United States was down 7% week/week at 19.3 million b/d for the week ended Oct. 6, EIA said in its latest Weekly Petroleum Status Report. U.S. oil production last week, meanwhile, fell by 100,000 b/d to 11.9 million b/d, EIA said. That pushed output further below the 2022 high of 12.2 million b/d and the record level of 13.1 million b/d reached in March 2020.U.S. commercial crude inventories, excluding those in the Strategic Petroleum Reserve (SPR), increased by 9.9 million bbl last week, EIA said. At 439.1 million bbl, stocks were only 1% below the five-year average after trailing historic norms by much wider margins over the summer months.

Five Day Oil Rally Ends as Recession Fears Rebound | Rigzone -Oil markets slipped as concerns of slowing demand again came to the fore, adding resistance to a rally spurred by OPEC+’s output cut. West Texas Intermediate settled at $91 a barrel, ending a five-day run of gains in which futures climbed 17%. A tighter supply outlook following last week’s OPEC+ meeting gave crude its biggest weekly gain since March, but fears the US Federal Reserve will go on boosting rates to quell inflation caused equity markets to decline and the dollar to strengthen, making commodities that are priced in the currency less appealing. “Crude is in a corrective phase from last week’s $9/bbl rally,” “Overall global economic activity is expected to slow.” The US Fed has signaled a potential fourth 75 basis point hike in November. A US jobs report last week further rekindled concerns about continuing interest rate hikes. Oil markets continue to be buffeted by concerns about the global economy and the cuts announced by the Organization of Petroleum Exporting Countries and its allies. Traders are closely watching for demand signals as growth is likely to suffer from central banks’ monetary policy. OPEC+’s output cuts, which drew rebuke from the US, could turn out to be much smaller in reality, but a slew of leading banks said it could still send prices higher this year. WTI for November delivery dipped $1.51 to settle at $91.13 a barrel. Brent for December settlement fell $1.73 to $96.19 a barrel. Key oil-market gauges have shown signs of increased bullishness since the OPEC+ decision last week. The spread between the nearest two December contracts for Brent -- a much-watched marker of the market’s health -- rallied to the strongest level since June. At the same time, options markets have seen a flurry of bullish call trades. On Friday, Brent options volumes were the highest since March as traders placed a series of wagers on rising prices.

Oil slips as recession fears outweigh tight supply prospects - Oil prices edged lower on Monday as investors weighed economic storm clouds that could foreshadow a global recession, and erode fuel demand, against potentially tighter supply. Brent crude futures fell 69 cents, or 0.7%, to $97.23 a barrel. West Texas Intermediate crude declined by 36 cents, or 0.4%, to $92.57 a barrel. U.S. Federal Reserve Chicago President Charles Evans said there was a strong consensus at the Fed to raise the target policy rate to around 4.5% by March and hold it there. Stubbornly higher rates, which are aimed at giving the U.S. central bank time to evaluate the impact of inflation and allow clogged supply chains to clear, limited oil prices. Oil prices also struggled under a strengthening U.S. dollar , which rose for a fourth session. A stronger dollar makes crude more expensive for non-American buyers. The prospect of tightening OPEC+ oil supplies limited declines in prices. But signs that the group's de facto leader, Saudi Arabia, would continue to serve Asian customers at full levels lowered expectations of the cuts' impact. Saudi Aramco has told at least seven customers in Asia they will receive full contract volumes of crude oil in November ahead of the peak winter season, several sources with knowledge of the matter said. The Organization of the Petroleum Exporting Countries and allies including Russia, together known as OPEC+, decided last week to lower their output target by 2 million barrels per day. Brent and WTI posted their biggest weekly percentage gains since March after the reduction was announced. However, the cut has spurred a flurry of activity in the options market - but with more U.S. bettors opting for a bearish stance, data from CME Group showed. Concerns over still relatively robust demand as the pandemic has eased meeting potentially scarce supply have been deepened as the European Union late last week endorsed a G7 plan to impose a price cap on Russian oil exports. The complicated new sanctions package could end up shutting in considerable supplies of Russia crude, analysts have warned. "A recessionary economic outlook will lead to lower oil demand," Fitch Ratings said on Monday. "However, we expect pricing volatility to remain high in the short term as geopolitical factors, such as further sanctions leading to a reduction in Russian exports." Those political factors could alter supply patters and cause greater price volatility, Fitch said. Meanwhile, services activity in China during September contracted for the first time in four months as COVID-19 restrictions hit demand and business confidence, data showed on Saturday. The slowdown in China adds to growing concerns over a possible global recession triggered by numerous central banks raising interest rates to combat high inflation.

Oil Extends Losses As Demand Concerns Weigh --Oil prices extended losses on Tuesday, after having fallen nearly 2 percent in the previous session. Benchmark Brent crude futures fell 2.1 percent to $94.17 a barrel, while WTI crude futures were down 2.4 percent at $88.98. Investors fretted about a further hit to demand in China, as COVID infections ticked up ahead of 20th Party Congress and authorities vowed to stock to the zero-COVID policy. World Bank President David Malpass and International Monetary Fund Managing Director Kristalina Georgieva both warned of recession risks, raising concerns over global demand. Fears of further monetary policy tightening also weighed after Chicago Fed president Charles Evans said there is a strong consensus at the Federal Reserve to raise the target policy rate to around 4.5 percent by February and hold it there for most of 2023. Separately, Fed Vice Chair Lael Brainard laid out a case for exercising caution, saying that previous rate increases were starting to slow the economy and the full brunt of tighter policy would not be felt for months to come.

Oil Settles Lower on China COVID Flare-Up, Recession Fear (Reuters) -Oil prices settled 2% lower on Tuesday, extending the previous session's almost 2% decline, as recession fears and a flare-up in COVID-19 cases in China raised concerns over global demand. World Bank President David Malpass and International Monetary Fund Managing Director Kristalina Georgieva warned on Monday of a growing risk of global recession and said inflation remained a continuing problem. Brent crude settled down $1.90, or 2%, to $94.29 a barrel while U.S. West Texas Intermediate crude settled down $1.78, or 2%, to $89.35. "There is growing pessimism in the markets now," Oil surged early this year, bringing Brent close to its record high of $147 as Russia's invasion of Ukraine added to supply concerns, but prices have slid on economic fears. U.S. crude oil stockpiles were expected to have risen last week after having fallen the prior two weeks, a preliminary Reuters poll showed on Tuesday. Fears of a further hit to demand in China also weighed. Authorities have stepped up coronavirus testing in Shanghai and other large cities as COVID-19 infections rise again. Oil also came under pressure from a strong dollar, which hit multi-year highs on worries about interest rate increases and escalation of the Ukraine war. [USD/] A strong dollar makes oil more expensive for buyers with other currencies and tends to weigh on risk appetite. Losses were limited, however, by a tight market and last week's decision by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, to lower their output target by 2 million barrels per day. President Joe Biden is re-evaluating the U.S. relationship with Saudi Arabia after OPEC+ announced last week it would cut oil production, White House national security spokesman John Kirby said on Tuesday. "An undersupply is even looming next year because the production cut is supposed to apply until the end of 2023, according to the OPEC+ decision," a Commerzbank report said.

Oil Edges Higher As Dollar Eases Ahead Of Fed Minutes --Oil prices rose slightly on Wednesday after two consecutive sessions of losses. Prices received some support amid the threat of tighter supplies from OPEC and its partners. The upside, however, remained capped by growing risks of a global recession and tightening Covid-19 curbs in China. Benchmark Brent crude futures rose 0.4 percent to $94.66 a barrel, while WTI crude futures were up 0.2 percent at $89.53. A slight pullback in the dollar and supply tightness caused by OPEC and allies-led output cuts and disruptions to Russian oil production helped support oil prices. On Tuesday, U.S. President Joe Biden warned Saudi Arabia that there would be "consequences'' for following the Riyadh-led alliance's move to cut oil production. His remarks came a day after White House officials said the administration must immediately freeze all cooperation with Saudi Arabia, including arms sales. Diesel prices are soaring in Europe and the United States, spurring a fresh bout of inflationary pressure ahead of a winter that is expected to see major supply disruption. The energy crisis in Europe is threatening to escalate into a global price war, German business paper Handelsblatt said. Citi Research expects U.S. crude prices to average $96 a barrel and Brent prices to average $101 per barrel in 2022 in response to tightening supplies due to the output cut.

WTI, Brent Fall 2% after OPEC Slashes World Demand Outlook - West Texas Intermediate futures fell for the third consecutive session on Wednesday after Organization of the Petroleum Exporting Countries lowered its global demand projections through 2023, citing extended COVID-19 restrictions in China along with elevated inflation and rising interest rates in Europe and the United States. Wednesday's lower settlements in the crude complex follow the release of OPEC's Monthly Oil Market Report which revised lower its 2022 global demand projections by 500,000 bpd to reflect softening economic growth across key demand centers. With this, global oil demand is now expected to grow by about 2.6 million bpd this year, down from 3.4 million bpd seen just three months ago. For 2023, world oil demand growth was revised down 360,000 bpd to 2.34 million bpd, with developed countries that are part of the Organization for Economic Cooperation and Development accounting for just 400,000 bpd of that increase compared with 2 million bpd coming from non-OECD nations. The monthly report somewhat defends Saudi Arabia's decision alongside 12 other OPEC countries and 10 non-OPEC oil producers led by Russia to slash OPEC+ output quotas by 2 million bpd beginning next month because of lower demand expectations. OPEC revised lower non-OPEC liquids production by 340,000 bpd in the fourth quarter to 66.78 million bpd, and expects output in 2023 at 67.13 million bpd, revised down 380,000 bpd from September. For the first quarter of 2023, non-OPEC liquids production was revised down a sizable 600,000 bpd to 66.56 million bpd. MOMR determined "solid increases in oil and gas rig counts and high fracking activity" in the United States are expected to support strong output, but "[l]ower-than-expected tight oil production in recent months necessitated a downward revision to the US liquids supply growth." OPEC said, "severe inflationary pressure, coupled with logistical bottlenecks and shortages of material and labour, are posing additional challenges." Further weighing on the complex, Reuters reported this week rising lockdowns and various degrees of controlling population movement in China amid an increase in infections blamed on greater domestic travel earlier in October. Citing the findings of Japan's Nomura Holdings, Reuters said 36 cities in China were under various degrees of lockdown or control affecting 196.9 million people on Monday, up from 179.7 million the prior week. At settlement, NYMEX November WTI futures were down $2.08 to $87.27 bbl, and ICE December Brent futures declined $1.84 to $92.45 bbl. NYMEX November ULSD futures settled up 0.20 cents at $3.9328 gallon, and the November RBOB contract gained 0.30 cents for a $2.6303 gallon settlement.

WTI Holds Losses After Big Crude, Gasoline Build - Oil prices fell for the 3rd straight day after OPEC/EIA cut their global demand growth forecasts amid recession fears“Risks are skewed to the downside, with slowing growth in the global economy,” OPEC’s Vienna-based research department said in the report. Combined with “a possible resurgence of Covid restrictions in China and elsewhere,” the oil market may miss out on the typical seasonal uptick in consumption, it said.Still, the demand revision from OPEC is eclipsed by the size of the cut announced by the cartel."This combination, in our view, probably supports elevated crude oil prices over the next 12 months -- but recession risk remains," said Stewart Glickman, analyst at CFRA, in a note.For now we look at signs of demand destruction in the API data... API

• Crude +7.054mm (+2.2mm exp)
• Cushing -750k
• Gasoline +2.008mm (-2.1mm exp) - biggest build since July
• Distillates -4.560mm (-2.3mm exp) - biggest draw since March 2022

We suspect some of this data is affected by Hurricane Ian, but for now, Crude stocks surged over 7mm barrels last week (well above expectations) - remember there was a 7.7mm drain from SPR. Gasoline inventories built (notably different from the draw expected) and distillates drew down more than expected...WTI was hovering around $87 ahead of the API print and rallied modestly on the data then gave it all back...

Oil Prices Crumble As Core U.S. Inflation Hits 40-Yr High - Oil prices fell on Thursday morning following new CPI data that showed core inflation in the United States had risen to the highest level in four decades. WTI crude prices fell 1.57% to $85.90, while Brent crude fell 1.16% to $91.38 per barrel on the news, which showed CPI came in higher than anticipated, renewing fears that the Federal Reserve could aggressively raise interest rates in November. That interest rate hike could further stymie economic growth, easing the demand for crude oil. Core inflation—a measure of price increases excluding food and energy costs—rose 6.6% over the last year—a level not seen since 1982, the US Labor Department shared on Thursday. Total inflation, which includes food and energy, rose 8.2% in September from September 2021. To compare, CPI rose 8.5% in July and 8.3% in August, from the respective year-ago periods. September’s inflation figures would have been worse had it not been for gasoline prices which fell in the month. The gasoline price index fell 4.9% in September. “The energy index declined 2.1 percent in September after falling 5.0 percent in August,” the US Labor Department Summary said. “The gasoline index fell 4.9 percent over the month following a 10.6-percent decrease in August. (Before seasonal adjustment, gasoline prices fell 5.6 percent in September.) However, the index for natural gas increased in September, rising 2.9 percent after increasing 3.5 percent in August. The electricity index also increased over the month, rising 0.4 percent,” adding that the energy index rose 19.8 percent over the past 12 months. “The gasoline index increased 18.2 percent over the span and the fuel oil index rose 58.1 percent. The index for electricity rose 15.5 percent over the last 12 months, and the index for natural gas increased 33.1 percent over the same period.” U.S. retail prices for a gallon of gasoline were down on Thursday from Wednesday but are still up from the month-ago levels. On Thursday, gasoline prices averaged $3.913 per gallon, compared to $3.707 per gallon a month ago. Along with the crude oil price slide on Thursday, US stock futures fell. The dollar and Treasury yields rose. The inflation numbers portend an aggressive move by the Federal Reserve next month.

WTI Extends Gains As Production Slows, Despite Biggest Crude Build In 19 Months -- Oil prices extended losses this morning after the hotter-than-expected CPI amid global recession fears and on the heels of yesterday's OPEC/EIA demand growth outlook cuts and a bigger than expected crude inventory draw reported by API. However, after US cash equity markets opened, crude prices rebounded, erasing all the earlier losses“We just had this bigger than expected CPI number, which is a big demand destruction number, and we have fallen apart accordingly,” said Robert Yawger, director of the futures division at Mizuho Securities USA in New York.“If we post anything larger than 7 million in the EIA, you’re probably going to see this thing track lower again.”While some of this data is likely impacted by Hurricane Ian, it still paints a useful picture of where demand really is... DOE

• Crude +9.879mm (+2.2mm exp) - biggest build since March 2021
• Cushing -309k
• Gasoline +2.022mm (-2.1mm exp)- biggest build since July 2022
• Distillates -4.853mm (-2.3mm exp)- biggest draw since March 2022

The official data confirmed API's report with crude stocks soaring most since March 2021 last week, a distillates draw and gasoline build...The gain in US crude stocks at nearly 10m bbl was mainly because of the plunge in exports.US crude exports have slumped after staying strong for two weeks. The decline of over 1.6m b/d sent outflows to the lowest since August.Gasoline inventories remain the lowest seasonally since 2014, while on the West Coast, supplies are the lowest in over a decade.US refineries, which had been operating with over 90% of capacity for months, are now at 89.9%. Rates are the lowest since April with fall maintenance in full swing. The SPR saw a huge 7.7mm barrel drain last week (3rd largest ever) as the Biden administration grows increasingly desperate... the biggest 3 week drain ever...

Oil rises on bullish supply cues as markets mull inflation data - Oil rallied for the first time this week after a US crude report flagged potential bullish drivers, momentarily shrugging off hotter-than-expected inflation data. West Texas Intermediate futures settled near $89 a barrel after draws from distillate stockpiles and US strategic oil reserves signaled the potential for market tightness on the horizon, despite a larger-than-forecast 9.9 million barrel build in crude inventories. US equities recovered and Treasury yields fell back from highs as traders mulled the Federal Reserve’s next moves following the inflation report that bolstered the likelihood of further interest rate hikes, potentially threatening the growth outlook. “It’s a super bearish headline, but if you look at the underlying data, it tells a different story,” said Matt Sallee, portfolio manager at Tortoise when referring to this week’s Energy Information Administration report. “The combination of a big distillate draw, another big SPR draw and then a reversal in the exports -- I think if you back those things out, this was probably a more bullish report.” WTI futures sank over the prior three sessions on recession fears and moved below the 50-day moving average in intraday trading Wednesday and earlier Thursday, indicating the potential for higher prices. Earlier in the session, the International Energy Agency warned that production cuts agreed earlier this month by the Organization of Petroleum Exporting Countries and its allies risk causing oil prices to spike and tipping the global economy into recession. The IEA report came as the outlook for global supply becomes ever more clouded. On Wednesday, the US cut its estimates for domestic oil output, making significant reductions to its 2023 estimates. Meanwhile, some Biden administration officials are growing concerned that a plan to cap the price of oil purchased from Russia may backfire, particularly after recent OPEC+ supply cuts. Crude rallied in the immediate aftermath of the cartel’s decision, pushing prices back up toward $95 amid a tighter supply outlook. Traders have also been grappling with risks to energy infrastructure after the Nord Stream pipeline was sabotaged and Russian President Vladimir Putin said any infrastructure in the world is at risk after the incident. WTI for November delivery rose $1.84 to settle at $89.11 a barrel. Brent for December settlement climbed $2.12 to $94.57 a barrel. There’s been a flurry of bullish oil option activity in recent days, with WTI call option volumes on Wednesday hitting the highest since 2019. The increase was driven in part by a series of wagers that prices could rally into the $120s. On Wednesday, minutes from the Federal Reserve showed officials committed to raising interest rates to a restrictive level in the near term and holding them there to curb inflation, potentially slowing growth.

US energy agency revises down oil price forecast for 2022, 2023 - The US Energy Information Administration (EIA) revised down its 2022 and 2023 forecast for global Brent crude oil prices on Thursday, citing macroeconomic uncertainty and decreasing petroleum demand. In the October Short-Term Energy Outlook (STEO), the EIA revised down the price of Brent crude for 2022 to an average of $102.09 per barrel and American benchmark West Texas Intermediate (WTI) to $95.74 a barrel in 2022. In the report last month, these figures were $104.21 and $98.07, respectively. For next year, the Agency expects the price of Brent crude to average $94.58 per barrel, and WTI to average $88.58 per barrel. The EIA said that crude oil prices have been subject to high levels of uncertainty due to geopolitical factors, uncertain OPEC+ production, and concerns that a global recession could reduce crude oil demand. 'We lowered our price forecast for 2023 by $2 per barrel compared with last month’s forecast, which largely reflected a 0.5 million barrels per day reduction in our forecast for global oil consumption in response to a lower forecast for global GDP from Oxford Economics,' it explained. The EIA noted that the possibility of petroleum supply disruptions and slower-than-expected crude oil production growth continues to create the potential for higher oil prices, while the possibility of slower-than-forecast economic growth creates the potential for lower prices. Crude oil output in the US is predicted to average 11.75 million barrels per day (bpd) in 2022, up from 11.25 million bpd in 2021. In 2023, crude oil output in the country is expected to set a record at 12.36 million bpd. The previous record set in 2019 was 12.3 million bpd. OPEC’s output is estimated to average 34.08 million bpd in 2022 and 34.37 million bpd in 2023. It predicts that non-OPEC liquids production will be 65.82 million bpd in 2022 and 66.36 million bpd next year. Thus, global crude oil production will average 99.9 million bpd in 2022 and 100.73 million bpd in 2023. The agency forecast that global oil demand grew by 2.1 million bpd and will reach 99.55 million bpd at the end of the year and 101 million bpd next year.

Oil prices fall more than 3% on recession worries --Oil prices plummeted more than 3% on Friday as global recession fears and weak oil demand, especially in China, outweighed support from a large cut to the OPEC+ supply target. Brent crude futures dropped $2.94, or 3.1%, to settle at $91.63 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell $3.50, or 3.9%, to $85.61. The Brent and WTI contracts both oscillated between positive and negative territory for much of Friday but fell for the week by 6.4% and 7.6%, respectively. U.S. core inflation recorded its biggest annual increase in 40 years, reinforcing views that interest rates would stay higher for longer with the risk of a global recession. The next U.S. interest rate decision is due on Nov. 1-2. U.S. consumer sentiment continued to improve steadily in October, but households' inflation expectations deteriorated a bit, a survey showed. The U.S. dollar index rose around 0.8%. A stronger dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies. In U.S. supply, energy firms this week added eight oil rigs to bring the total to 610, their highest since March 2020, energy services firm Baker Hughes Co said. China, the world's largest crude oil importer, has been fighting COVID-19 flare-ups after a week-long holiday. The country's infection tally is small by global standards, but it adheres to a zero-COVID policy that is weighing heavily on economic activity and thus oil demand. The International Energy Agency (IEA) on Thursday cut its oil demand forecast for this and next year, warning of a potential global recession. The market is still digesting a decision last week from the Organization of the Petroleum Exporting Countries and allies, together known as OPEC+, when they announced a 2 million barrel per day (bpd) cut to oil production targets. Underproduction among the group means this will probably translate to a 1 million bpd cut, the IEA estimates. Saudi Arabia and the United States have clashed over the decision. Meanwhile, money managers raised their net long U.S. crude futures and options positions by 20,215 contracts to 194,780 in the week to Oct. 11, the U.S. Commodity Futures Trading Commission (CFTC) said.

Oil Sells Off as Inflation Metrics Point to More Rate Hikes -- Oil futures nearest delivery on the New York Mercantile Exchange and Intercontinental Exchange Brent crude accelerated losses in afternoon trade Friday amid a sharply stronger U.S. Dollar Index that rallied in response to fresh data pointing to expanding inflationary pressures in the coming months, with a large jump in the number of active oil rigs in the United States adding to the selling pressure. Baker Hughes Friday afternoon said the number of active oil-targeted rigs in the United States climbed eight to 610 in the week-ended Friday. That's the highest level since late March 2020 and one of the largest weekly increases since before summer and follows a downgrade in this year's domestic oil production by the Energy Information Administration on Wednesday. In their monthly Short-term Energy Outlook, EIA forecast U.S. oil production this year at 11.7 million barrels per day (bpd), and for output to increase to a record high 12.4 million bpd in 2023. All major forecasting agencies, including Organization of the Petroleum Exporting Countries and International Energy Agency, downgraded their global oil demand projections for the remainder of the year, citing slowing economic growth and rising interest rates. IEA now projects global oil demand will contract by 340,000 bpd in the current fourth quarter, pressing year-over-year consumption growth to 1.9 million bpd in 2022 and to 1.7 million bpd next year. In its Monthly Oil Market Report, OPEC cuts its global oil demand outlook for this year by 460,000 bpd from its projection in September. . Earlier this week, the International Monetary Fund released its World Economic Outlook downgrading global economic growth, projecting a slowdown from 2021's 6% expansion rate to 3.2% this year and 2.7% in 2023. For the United States, IMF cut its growth projection for this year by 0.7% from July's outlook to 1.6% following a 5.7% expansion in 2021, and to further slow to 1% in 2023. In financial markets, U.S. dollar index powered higher against a basket of foreign currencies to settle the session at 113.202, pressuring front-month West Texas Intermediate futures. Renewed strength in the U.S. dollar follows the release of consumer sentiment index from University of Michigan Friday morning that showed inflation expectations unexpectedly climbed in early October. Median expected year-ahead inflation rate rose to 5.1%, with increases reported across age, income, and education, adding to the inflation fears. Consumer expectations for heightening and enduring inflation are problematic for Federal Reserve officials, as it prompts consumers to buy now, expecting price increases in the weeks and months ahead. This, in turn, feeds inflation, meaning the Fed will need to remain aggressive in lifting the federal funds rate. Friday's consumer sentiment report followed the release of consumer price index for September on Thursday by the Bureau of Labor Statistics which confirmed market fears that inflation in the U.S. economy is becoming more entrenched, broadening into the services sector that generally comprise about 80% of economic output. Core CPI, excluding volatile food and gasoline prices, surged to 6.6% in September -- the highest reading since 1982. Following the CPI release, the CME Group's Fed Funds futures shows a 96.6% chance for the central bank to raise interest rates by another 75 basis points during their Nov. 1-2 meeting, which would be the fourth consecutive rate increase of this magnitude. At settlement, NYMEX November WTI futures fell $3.50 to $85.61 per barrel (bbl), and ICE December Brent futures dropped $2.94 to $91.63 bbl. NYMEX November ULSD futures retreated 11.46 cents to $3.9802 gallon, and November RBOB futures dropped 7.25 cents to $2.6309 gallon.

Oil prices tumble 7.6%; economic outlooks darken - Darkening economic outlooks overcame OPEC+’s efforts to support prices with a 2-million-barrel-a-day production cut and sent oil prices tumbling 7.6% this week. West Texas Intermediate on the New York Mercantile Exchange fell four of five trading days, starting with a $1.51 drop Monday, an additional $1.78 fall Tuesday and a $2.08 decline Wednesday. Prices managed to gain $1.84 Thursday before giving that gain – and then some – Friday by sinking $3.50 or 3.9% to close at $85.61, down from $92.64 at last Friday’s close. The posted price ended the week at $82.09, according to Plains All American. Natural gas prices were also lower on the NYMEX, falling three of five trading days. The trading week got off to a rough start with a 31.3-cent plunge. That was followed by a 16.1-cent gain Tuesday, which was given back Wednesday. A 30-cent gain Thursday was almost erased by Friday’s 29-cent drop. Natural gas futures at the Henry Hub on NYMEX ended the week at $6.453 per Mcf, down from $6.748 at last Friday’s close. “The crude demand outlook continues to have bearish drivers from the world’s two largest economies, as the US seems like it will be driven to a recession by the inflation-fighting Fed and China will not likely have any major pivots with their zero COVID policy,” While US economic activity isn’t going to fall off a cliff, he wrote, it is weakening. The more immediate bearish driver for oil is the risks of more lockdowns from China, he added. “WTI crude should find some support at the $85 level, but if that breaks, technical selling could target the $82.50 region,” he concluded. The US Energy Information Administration forecast crude prices will remain below $100 through 2023 despite OPEC’s cuts as limited demand growth will partially offset price increases that would normally result from those production cuts. Though natural gas prices have retreated from 14-year highs, the EIA is forecasting they are still high enough to case consumer pain during the winter season, which it sets at October 2022 to March 2023. Approximately 90% of all US homes are heated primarily by natural gas or electricity, and higher wholesale prices for natural gas will lead to higher retail prices for both natural gas and electricity this winter. The EIA noted that the Henry Hub natural gas spot price on Sept. 30 was $6.40 per million British thermal units (MMBtu), which is 36% higher than last winter’s average. These price increases contribute to the forecast that residential natural gas prices this winter will be 22% higher than last winter and that residential electricity prices will be 6% higher than last winter. The agency’s base case scenario has the average household spending $931 during the winter season, up 28%. If winter is 10% colder, that rises to $1,096, up 51% over the previous winter. If winter is 10% warmer, expenditures fall to $862, up 19% over the previous year.

Australian government to detain women repatriated from Syria - Like the Liberal-National Coalition government before it, Australia’s Labor government is exploiting laws passed under the flag of the US-led “war on terror” to override basic democratic and legal rights. Last week, the government made it known, through the pages of the Murdoch media’s Australian newspaper, that 16 Australian women and 42 children would be repatriated after years of detention in hellhole conditions in northeastern Syria, only for the women to be detained immediately upon arrival in Australia. Syrian children hold hands as they wait for toys to be donated in a refugee camp for displaced people run by the Turkish Red Crescent in Sarmada district, on the outskirts north of Idlib, Syria, Friday, Nov. 26, 2021. [AP Photo/Francisco Seco] These wives and children of dead or former Islamic State (ISIS) members have been detained in tent encampments since the defeat of ISIS in March 2019. Previously, the Coalition government callously refused point blank to help them, resulting in illnesses and deaths among the children. But the Labor government has now taken a different tack. According to the newspaper, Labor’s “national security committee of cabinet convened in Canberra on Tuesday to discuss final details.” Some of the women are to be charged with terrorism-related criminal offences for entering Syria. The others will face courts to be subjected to control orders. These orders will force them to wear ankle monitoring devices and allow the police and the Australian Security Intelligence Organisation (ASIO) to monitor their social media activity, internet use, communications, movements and associates. Supposedly, family and kinship groups will care for some children in the short term, while others will be placed in state care. Reportedly, 25 of the children are eight years or younger, and the youngest is just two. This will be the largest yet use of control orders, which override basic freedoms such as speech, movement, association and communication, and can reach the level of complete home detention. The police only have to assert that such an order would “substantially assist in preventing a terrorist act.” That is far less than evidence of criminal intent, let alone any plan or act. Control orders were introduced in 2005 by the Howard Coalition government, with Labor’s support, as a supposed response to an unspecified dire terrorist threat. But they have always been designed for wider use. Under the more than 120 “counter-terrorism” laws rubber stamped by Australia’s parliament since US President George W. Bush declared the “war on terror” in 2001, terrorism is defined so broadly that it can cover many forms of anti-government political activity. The Labor government is paving the way for the broader imposition of control orders, while also responding to “security” concerns expressed in Washington about the Syrian detention camps becoming a focus for ongoing anti-US sentiment throughout the Middle East. An October 3 the Australian editorial stated: “Security is paramount. That is why the US is keen to see the camps emptied as soon as possible, fearing a fresh security crisis could arise in such a hothouse environment.” Accordingly, senior Labor minister Bill Shorten told Nine media outlets that national security was the government’s paramount priority in repatriating the women and children. “I just want to reassure people it’s about national security first,” he said. For all the media demonisation of the women, ISIS is largely a creation of the drive by US imperialism and its allies to overturn the regime of Syrian President Assad. The real aim was, and remains, to secure control over the entire Eurasian landmass, where the US confronts Russia and China.

Iran opposes arming parties in Ukraine war - — In a meeting with the Polish Deputy Foreign Minister Pawel Jablonski late on Sunday, Iranian Foreign Minister Hossein Amir Abdollahian once again underscored that Tehran has not supplied any party with weapons to be used in the war in Ukraine. Amir Abdollahian reiterated that the principled position of Iran is to oppose arming any of the parties in the war with the aim of stopping the conflict. Several media reports have spoken of Iran providing drones to Russia during the Ukraine war. Iran’s top diplomat has explicitly rejected all these reports. Tehran is seeking a peaceful resolution of the Russia-Ukraine war, as evidenced by its efforts to deliver a peace initiative to the parties engaged in the war on July 31. The mediation was asked by the French President Emmanuel Macron during one of his phone calls with his Iranian counterpart, Ebrahim Raisi. Previously, in a phone conversation with his Hungarian counterpart Peter Szijjarto on July 22, Amir Abdollahian reiterated that Iran supports diplomatic solution to spell the end of the Ukraine war. During the meeting, the two diplomats also exchanged views on the horizons of cooperation between the two countries in various political, economic, and cultural fields as well as consular issues. The Iranian foreign minister welcomed the activation of relations between the two countries in various fields and said there are no restrictions in promoting bilateral relations and using the existing capacities. Meanwhile, the Polish deputy foreign minister expressed his gratitude to the Iranian foreign minister for explaining Iran’s views on issues of mutual interest, and explained Warsaw’s views on various issues, including bilateral relations and important regional and international issues.