natural gas fell 23% to 7 month low; US oil supplies at 20½ year low; oil+products supplies at 17½ year low; record low DUCs

natural gas prices fell 23% to a 7 month low; US oil supplies at a 20½ year low; Strategic Petroleum Reserve at a new 38 year low; total oil + oil products supplies at a 17½ year low; record low DUCs, with DUC backlog at 4.5 months

oil prices finished the week lower for a second straight week, but prices for both contracts cited as the price of oil during the week finished higher....after falling 7.6% to $85.61 a barrel last week as fears of a global recession outweighed concerns about supplies and as traders took profits after the prior week's 17% spike, the contract price for the benchmark US light sweet crude for November delivery was mostly steady in Asian trading on Monday, as China's continuation of loose monetary policy was offset by fears that high inflation and energy costs could drag the global economy into recession, and then edged higher in New York on bargain hunting following the rapid price dive toward the end of last Friday’s session, but erased the early session gains in afternoon trading and settled 15 cents lower at $85.61 a barrel as analysts said the backdrop of sticky high inflation resulting in increasingly more hawkish Fed policy for the foreseeable future and the subsequent rise in recession fears would likely keep a lid on prices....oil prices steadied & then edged higher in early Asian trade on Tuesday as a weaker U.S. dollar lent support, although rising shale production and fears that stubbornly high inflation could lead the world economy into a recession limited gains, but then turned lower in New York following reports suggesting that the Biden administration was planning to release another 10 or 15 million barrels (bbl) from U.S. Strategic Petroleum Reserves, to try to offset the 2 million barrel per day production cut announced by OPEC+ earlier this month. and then tumbled in afternoon trade to settle $2.64 or 3% lower at $82.82 a barrel, on fears of higher U.S. oil supplies combined with an economic slowdown, and of lower Chinese fuel demand after China indefinitely delayed release of economic reports originally scheduled to be published on Tuesday...oil prices advanced early Wednesday after American Petroleum Institute data showed across-the-board draws from commercial crude and products inventories, then rallied further after the EIA report showed weekly declines in both domestic crude and gasoline supplies, and settled $2.73, or 3.3% higher at $85.55 a barrel, as oil traders shrugged off President Biden's remarks about taming energy prices....oil prices opened mixed in early Asian trading on Thursday as traders balanced caution over tightening supply against lower demand projections. but then moved nearly $2 higher before US markets opened after China signaled it would be easing its strict Covid policy, a policy which had destroyed domestic oil demand and held onto part of those gains to settle 43 cents higher at $85.98 a barrel after a speech by President Biden on additional releases from the Strategic Petroleum Reserve failed to secure investor confidence that the market would be balanced this winter, as trading in the November oil contract expired and the contract price for the US benchmark crude for December delivery, which became the new front-month contract as of the close, settled a penny lower at $84.51 a barrel...with the media now quoting the price of the December oil contract, oil was nearly flat in early trading on Friday, as speculators weighed concerns about steep inflation against optimism that China could see energy demand tick up, but then followed a soaring stock market higher in afternoon trading to settle with a 54 cent gain at $85.05 a barrel, as hopes for stronger Chinese demand and a weakening U.S. dollar outweighed concern about a global economic downturn and the impact of interest rate rises on fuel use...while quoted oil prices thus finished 0.7% lower on the week, that was largely due to the expiration of the higher priced November contract, which had been priced as much as $1.50 higher than December oil before expiration; the contract price for the benchmark US light sweet crude for December delivery actually finished 0.5% higher...

natural gas prices, on the other hand, fell every day this week and finished lower for a ninth consecutive week on mild weather forecasts, expectations of easing demand, and rapidly rising inventories ...after falling 4.4% to $6.453 per mmBTU last week on improving natural gas inventories heading into winter, the contract price of US natural gas for November delivery tumbled on Monday on forecasts for a dramatic warm-up to follow the current snowy, chilly week, plummeting 45.4 cents or 7% to $5.999 per mmBTU, the first settle below $6 since early July, with a collapse in European natural gas forwards also contributing to the ​price ​drop... natural gas prices fell further on Tuesday as the cold snap hitting the Lower 48 at that time – expected to quickly dissipate – fell short in drumming up the expected heating demand, with gas prices settling 25.4 cents lower at $5.745 per mmBTU...natural gas prices fell another 28.3 cents, or nearly 5%, to another 3 month low at $5.462 per mmBTU Wednesday, as record gas field output and reduced LNG exports again allowed utilities to inject more gas into storage than usual...but natural gas prices inched up early Thursday in a mixed reaction to a EIA report showing a larger-than-expected storage build, with traders also assessing upcoming seasonal demand, but reversed to settle the session 10.4 cents lower at $5.358 per mmBTU, buckling under the weight of one triple-digit shoulder season storage injection after another...natural gas prices then dropped 39.9 cents, or ​by ​another 7% on Friday​,​ to a seven-month low at $4.959 per million BTU, as widespread warmth was forecast to continue even longer, limiting gas demand, thus leaving prices down 23.2% over the week, their biggest weekly decline since falling 24% in December 2021..

The EIA's natural gas storage report for the week ending October 14th indicated that the amount of working natural gas held in underground storage in the US rose by 111 billion cubic feet to 3,342 billion cubic feet by the end of the week, which still left our gas supplies 106 billion cubic feet, or 3.1% below the 3,448 billion cubic feet that were in storage on October 14th of last year, and 183 billion cubic feet, or 7.8% below the five-year average of 3,525 billion cubic feet of natural gas that were in storage as of the 14th of October over the most recent five years....the 111 billion cubic foot injection into US natural gas working storage for the cited week was above the average forecast for an injection of 105 billion cubic feet in a Reuters poll of analysts, and was well more than the 91 billion cubic feet​ that were added to natural gas storage during the corresponding week of 2021, and substantially more than the average injection of 73 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 14th indicated that after a sizable increase in our oil exports and a modest decrease in our oil imports, we needed to pull oil out of our stored commercial crude supplies for the 6th time time in 10 weeks, and for the 27th time in the past 47 weeks, despite another big oil release from our Strategic Petroleum Reserve and despite another ​million barrels per day ​of oil supplies that could not be accounted for....Our imports of crude oil fell by an average of 156,000 barrels per day to average 5,908,000 barrels per day, after rising by an average of 116,000 barrels per day during the prior week, while our exports of crude oil rose by 1,266,000 barrels per day to average 4,138,000 barrels per day, which together meant that the net of our trade in oil worked out to an import average of 1,770,000 barrels of oil per day during the week ending October 14th, 1,422,000 fewer barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly 100,000 barrels per day higher at 12,000,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have  averaged a total of 13,770,000 barrels per day during the October 14th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,550,000 barrels of crude per day during the week ending October 14th, an average of 132,000 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 756,000 barrels of oil per day were being pulled out of the varied 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 14th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 1,025,000 barrels per day less than what our oil refineries reported they used during the week. To account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+1,025,000) 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...however, since most everyone treats these weekly EIA reports as gospel, and since these figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably accurate by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

This week's 756,000 barrel per day decrease in our overall crude oil inventories left our oil supplies at 842,492,000 barrels at the end of the week, which was our lowest total oil inventory level since December 14th, 2001, and therefore at a new 20 1/2 year low.….Our oil inventories decreased this week as an average of 246,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while 509,000 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 ​has been attempting to use the Strategic Petroleum Reserve to manipulate prices on a weekly basis​.​ this week Biden announced a final 15,000,000 barrel release from the Strategic Petroleum Reserve while simultaneously announcing he'd buy crude to replenish the SPR if prices fall to or below the $67-72 a barrel range​, effectively putting a floor under oil at that price​.....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 251,014,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 27 months, and as a result the 405,135,000 barrels of oil ​that ​still remain in our Strategic Petroleum Reserve is now the lowest since June 1st, 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 December, will remove almost a third of what remained in the SPR when the program started, and leave us with what would be less than a 20 day supply of oil at today's consumption rate...

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,092,000 barrels per day last week, which was 4.1% less than the 6,352,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be 100,000 barrels per day higher at 12,000,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 11,600,000 barrels per day, while Alaska’s oil production was 24,000 barrels per day lower at 408,000 barrels per day, but had no impact on the final rounded national total. US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 8.4% below that of our pre-pandemic production peak, but was 23.7% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021...

US oil refineries were operating at 89.5% of their capacity while using those 15,550,000 barrels of crude per day during the week ending October 14th, down from their 89.9% utilization rate during the prior week, but within the normal utilization rate range for​ mid October. The 15,550,000 barrels per day of oil that were refined this week were still 3.7% more than the 14,990,000 barrels of crude that were being processed daily during week ending October 15th of 2021, but 2.0% less than the 15,865,000 barrels that were being refined during the prepandemic week ending October 18th, 2019, when our refinery utilization was at 85.2%, a bit below the normal range for mid October...

Even with the decrease in the amount of oil being refined this week, the gasoline output from our refineries was somewhat higher, increasing by 213,000 barrels per day to 9,381,000 barrels per day during the week ending October 14th, after our gasoline output had decreased by 846,000 barrels per day during the prior week. This week’s gasoline production was still 6.7% less than the 10,060,000 barrels of gasoline that were being produced daily over the same week of last year, and 7.1% below the gasoline production of 10,098,000 barrels per day during the week ending October 18th, 2019. At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 160,000 barrels per day to 5,023,000 barrels per day, after our distillates output had decreased by 325,000 barrels per day during the prior week. With that increase, our distillates output was 13.7% more than the hurricane impacted 4,417,000 barrels of distillates that were being produced daily during the week ending October 8th of 2021, and 5.4% more than the 4,765,000 barrels of distillates that were being produced daily during the week ending October 18th 2019...

Even with the increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 8th time in 11 weeks; and for the 28th time out of the past thirty-seven weeks, decreasing by 114,000 barrels to 209,368,000 barrels during the week ending October 14th, after our gasoline inventories had increased by 2,022,000 barrels during the prior week. Our gasoline supplies fell this week because the amount of gasoline supplied to US users rose by 402,000 barrels per day to 8,678,000 barrels per day, and because our imports of gasoline fell by 224,000 barrels per day to 475,000 barrels per day, while our exports of gasoline fell by 271,000 barrels per day to 781,000 barrels per day. And after 27 gasoline inventory drawdowns over the past 34 weeks, our gasoline supplies were 3.8% lower than last October 15th's gasoline inventories of 217,739,000 barrels, and about 7% below the five year average of our gasoline supplies for this time of the year…

Meanwhile, with the increase in our distillates production, our supplies of distillate fuels increased for the 14th time in 23 weeks and for the 22nd time in the past year, rising by 124,000 barrels to 106,187,000 barrels during the week ending October 14th, after our distillates supplies had decreased by 4,853,000 barrels during the prior week. Our distillates supplies managed to rise this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, decreased by 298,000 barrels per day to 4,072,000 barrels per day, and because our exports of distillates fell by 222,000 barrels per day to 1,044,000 barrels per day, and because our imports of distillates rose by 32,000 barrels per day to 111,000 barrels per day.. But after fifty-one inventory withdrawals over the past seventy-eight weeks, our distillate supplies at the end of the week were 15.3% below the 125,394,000 barrels of distillates that we had in storage on October 15th of 2021, and about 20% below the five year average of distillates inventories for this time of the year...

Meanwhile, after the decrease in our oil imports and the increase in our oil exports, our commercial supplies of crude oil in storage fell for the 13th time in 26 weeks and for the 31st time in the past year, decreasing by 1,725,000 barrels over the week, from 439,082,000 barrels on October 7th to 437,357,000 barrels on October 14th, after our commercial crude supplies had increased by 9,879,000 barrels over the prior week. After this week's decrease, our commercial crude oil inventories fell to 2% below the most recent five-year average of crude oil supplies for this time of year, but were 29.7% more than the average of our crude oil stocks as of the middle 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 14th were 2.5% more than the 426,544,000 barrels of oil we had in commercial storage on October 15th of 2021, while 10.4% less than the 488,107,000 barrels of oil that we had in storage on October 16th of 2020, and 1.0% more than the 433,151,000 barrels of oil we had in commercial storage on October 18th of 2019…

Finally, 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 also  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, fell by 6,097,000 barrels this week, from 1,637,697,000 barrels on October 7th to 1,631,600,000 barrels on October 14th, after our total inventories had inched up by 343,000 barrels during the prior week. That decrease left our total liquids inventories down by 156,833,000 barrels over the first 41 weeks of this year, and at the lowest level since April 1st, 2005, or at a 17 1/2  year low...  ...

This Week's Rig Count

The number of drilling rigs running in the US rose for the sixth time in twelve weeks, and for the 87th time over the past 108 weeks during the week ending October 21st, but they're still 2.8% below the prepandemic rig count....Baker Hughes reported that the total count of rotary rigs drilling in the US increased by 2 rigs to 771 rigs this past week, which was also 229 more rigs than the 543 rigs that were in use as of the October 22nd report of 2021, but was 1,158 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 2 to 612 oil rigs during the past week, after the number of rigs targeting oil had increased by 8 during the prior week, and there are now 169 more oil rigs active now than were running a year ago, even as they amount to just 38.0% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are still down 10.4% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations was unchanged at 157 natural gas rigs, which was still up by 58 natural gas rigs from the 99 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 14 rigs this week, with 12 of this week's Gulf rigs drilling for oil in Louisiana's offshore waters, and two new rigs drilling for oil offshore from Texas....that's one more rig than the 13 Gulf rigs running a year ago, when 12 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, 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 3 to 708 horizontal rigs this week, which was also 226 more rigs than the 482 horizontal rigs that were in use in the US on October 22nd of last year, but just 51.5% of the record 1,374 horizontal rigs that were drilling on November 21st of 2014....meanwhile, 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…on the other hand, the vertical rig count was down by 1 to 22 vertical rigs this week, which was also down by 6 from the 28 vertical rigs that were in use on October 22nd 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 21st, the second column shows the change in the number of working rigs between last week’s count (October 14th) and this week’s (October 21st) count, the third column shows last week’s October 14th 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 22nd of October, 2021...

to first determine what happened in New Mexico and Texas, we start by checking the Rigs by State file at Baker Hughes for the changes in Texas Permian...we find that there were four oil rigs added in Texas Oil District 8, which covers the core Permian Delaware, but that rigs in all other Texas Permain districts were unchanged...hence, since that indicates a 4 rig increase in the Texas Permian, and since the national Permian basin count was unchanged, we can conclude that all four rigs pulled out of New Mexico had been drilling in the far west Permian Delaware....meanwhile, there were no other changes in land based rigs elsewhere in Texas, but with the addition of 2 oil rigs offshore, the Texas rig count was up by 6...

elsewhere, the two rigs added in Colorado and the rig added in Wyoming would account for the three rig increase in the Denver-Julesburg Niobrara chalk of the Rockies' front range, while the oil rig pulled out of Utah had been drilling in the Uintah basin, where all of Utah's recent activity has been centered... lastly, the Louisiana rig count was down by one with the removal of an oil rig from the adjacent Gulf of Mexico...

DUC well report for September

Monday of last week saw the release of the EIA's Drilling Productivity Report for October, which included the EIA's September data on drilled but uncompleted (DUC) oil and gas wells in the 7 most productive shale regions (click tab 3)....that data showed a decrease in uncompleted wells nationally for the 27th consecutive month, as completions of drilled wells decreased while drilling of new wells increased in September, but remained well below average pre-pandemic levels...for the 7 sedimentary regions covered by this report, the total count of DUC wells decreased by 10 wells, falling from a revised 4,343 DUC wells in August to 4,333 DUC wells in September, which was the lowest number of US wells left uncompleted on record, and also 22.8% fewer DUCs than the 5,613 wells that had been drilled but remained uncompleted as of the end of September of a year ago...this month's DUC decrease occurred as 958 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during  August, up by just one from the revised 957 wells that were drilled in August, while 968 wells were completed and brought into production by fracking them, down by 8 from the 976 well completions seen in August, but up by 181 from the 787 completions seen in September of last year....at the September completion rate, the 4,333 drilled but uncompleted wells remaining at the end of the month represents a 4.5 month backlog of wells that have been drilled but are not yet fracked, ​up from the 4.4 month DUC well backlog of a month ago, which was the lowest DUC backlog since March 2015, despite a completion rate that is ​still 15% below 2019's pre-pandemic average...

only the oil producing regions saw a net DUC well decrease during September, since the DUC well decrease in natural gas producing Appalachian basins was more than offset by a DUC well increase in Haynesville shale....the number of uncompleted wells remaining in the Permian basin of west Texas and New Mexico  decreased by 14, from 1,117 DUC wells at the end of August to 1,103 DUCs at the end of September, as 416 new wells were drilled into the Permian basin during September, while 430 already drilled wells in the region were being fracked....in addition, the number of uncompleted wells remaining in Oklahoma's Anadarko basin decreased by 8, falling from 722 at the end of August to 709 DUC wells at the end of September, as 64 wells were drilled into the Anadarko basin during September, while 72 Anadarko wells were completed....meanwhile, there was a decrease of 1 DUC well in the Bakken of North Dakota, where the number of DUC wells fell from 426 at the end of August to a record low of 425 DUCs at the end of September, as 77 wells were drilled into the Bakken during September, while 78 of the drilled wells in the Bakken were being fracked....at the same time, DUCs in the Eagle Ford shale of south Texas decreased by 3, from 593 DUC wells at the end of August to 590 DUCs at the end of September, as 109 wells were drilled in the Eagle Ford during September, while 112 already drilled Eagle Ford wells were fracked....on the other hand, DUC wells in the Niobrara chalk of the Rockies' front range increased by 15, rising from 362 at the end of August to 377 DUC wells at the end of September, as 126 wells were drilled into the Niobrara chalk during August, while 111 Niobrara wells were completed....

among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 10 wells, from 562 DUCs at the end of August to 552 DUCs at the end of September, as 89 new wells were drilled into the Marcellus and Utica shales during the month, while 99 of the already drilled wells in the region were fracked....on the other hand, the uncompleted well inventory in the natural gas producing Haynesville shale of the northern Louisiana-Texas border region rose by 11, from 513 DUCs in August to 524 DUCs by the end of September, as 77 wells were drilled into the Haynesville during September, while 66 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of September, DUCs in the five major oil-producing basins tracked by this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) decreased by a net total of 11 wells  to 3,257 DUC wells, while the uncompleted well count in the major natural gas basins (the Marcellus, the Utica, and the Haynesville) was up by one to 1,076 wells, although as this report notes, once into production, more than half the wells drilled nationally will produce both oil and gas...

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Utica Shale Academy expanding again – The Utica Shale Academy is expanding again after acquiring the former Huntington Bank building in Salineville. Superintendent Bill Watson said the site at 50 E. Main St., which is only a stone’s throw from the current Hutson Building location, will be utilized for career and workforce development with a classroom, offices and a hands-on work area while the Hutson Building will house the career-tech skills training and online curriculum.“We purchased the building in partnership with Youngstown State University with funds from a $300,000 capital budget bill allocation, thanks to Ohio Sen. Michael Rulli and Rep. Tim Ginter [both R-Salem],” Watson said. “The idea is to utilize it during the day for students and we can open it to businesses and university and work symbiotically. It has been a longtime since the school, businesses and university have collaborated.”He added that the two-story structure was acquired earlier this month and includes between 5,000 to 6,000 feet of room that will lodge robotics in the basement for YSU’s use, plus the bank teller space will be retrofitted to work on equipment such as Kubota Tech Diesel Mechanics Smart Sensors and Programmable Logic Controls (PLC’s) to support the Governor’s 5G Initiative that intends to create thousands of jobs over the next decade.“We have permits for the welding lab and have broken ground, and then it should be completed by November,” he said. “Once we retrofit the garage area, we will update the heat, air conditioning and add bathrooms.”The bank has not operated since around 2020 and the site sat dormant since that time, but USA officials hoped to use the space and expand learning opportunities for students in preparation for the workforce. Watson said they also have been working with the Sustainable Opportunity and Development (SOD) Center in Salem and Ohio Department of Job and Family Services’ Comprehensive Case Management and Employment Program (CCMEP), and USA even provides Mahoning-Columbiana Training Association services for out-of-school youth to assist with training and job placement. About 40 people are presently involved and Watson said several are already employed with Summitville Tile.“Through CCMEP, we provide mentor training and placement in jobs,” he continued. “Right now, we are working on obtaining background checks and we are working with SafeSchools to send them out to the workforce.”

Alleging continual pollution, advocates ask U.S. EPA to take over Ohio injection well permitting - Appalachian Ohio is a primary dumping ground for natural gas fracking waste. Nearly half of it is coming from neighboring states. A battle is underway to try to strip the Ohio Department of Natural Resources from its hold on the permitting process for these injection wells.A coalition of environmental activists and community groups in Southeastern Ohio are calling on the U.S. EPA to take over oil and gas waste injection well permitting from the ODNR, pointing to the millions of barrels of fracking waste being injected into Ohio ground, and continual pollution incidents.“Ohio’s Class II well program contains numerous technical deficiencies that have allowed for underregulated oil and gas waste disposal which has resulted in serious consequences to human health and the environment,” attorneys from EarthJustice, the Sierra Club of Ohio, and various community groups say in their petition to the EPA asking them to begin the rulemaking process to revoke Ohio’s primacy over its Class II program “due to the longstanding and systemic failures.”Horizontal hydraulic fracturing, or fracking, is a method of oil-and-gas drilling that produces pressure fractures in rock formations that stimulate the flow of natural gas or oil. Due to big increases in natural gas production from fracking over the last 15 years, Ohio has become a hot spot for both the extraction of gas, and the injection of waste from the process back into the ground. Both are largely taking place in Ohio’s eastern and southeastern counties.Class II wells inject waste fluids that are brought to the surface during the fracking process. In Ohio, the ODNR Department of Mineral Resources Management has been given sole regulatory authority of oil and gas drilling disposal under Ohio Revised Code.As a result of the exponential increase in natural gas production, operators produce billions of tons of waste annually in the United States. In Ohio, Pennsylvania, and West Virginia, gas production increased from 1.4 billion cubic feet per day in 2008 to nearly 24 billion cubic feet per day in 2017, according to the U.S. Energy Information Administration.

Latest Attack from Left on M-U Fracking – Block Ohio Injection Wells | Marcellus Drilling News - Here’s the latest ingenious way radicalized anti-fossil fuelers are attempting to cut off and strangle the Marcellus and Utica shale industry: Deny drillers any kind of means to dispose of the brine (naturally occurring water from the depths) that comes out of the borehole for years after a well is drilled. One of the best, most environmentally safe ways to dispose of brine is via injection wells. Antis are trying to strip Ohio’s right to regulate injection wells in the Buckeye State, hoping if the feds take over, many of those wells would get shut down.

Environmentalists Fear a Massive New Plastics Plant Near Pittsburgh Will Worsen Pollution and Stimulate Fracking - Fifteen years after Pennsylvania’s natural gas industry began to raise worries about air and water pollution, the industry’s critics now fear a new source of harmful emissions from the fledgling petrochemical industry, which is poised to become a major customer for the state’s abundant gas reserves. In a state that has long nurtured the extraction of oil, coal and now gas, environmentalists warn that a vast new Shell plant on the banks of the Ohio River 30 miles north of Pittsburgh will add to air and water problems in a region that has endured decades of pollution from the steel and coal industries. The plant, which is expected to open before the end of 2022, will convert ethane, a form of natural gas, into ethylene, a building block for plastics. The operation will produce millions of tons of tiny plastic pellets called “nurdles” which opponents predict will leak into the Ohio River and beyond during shipment, and will contribute to a flood of plastics that are polluting the world’s oceans and clogging landfills. After being lured to Pennsylvania with the promise of $1.6 billion in state tax credits, and being awarded a state air permit to issue more volatile organic compounds than that emitted by the Clairton Coke Works, a notorious local polluter, the “cracker” plant appears to be getting the same easy ride from state officials as the fracking industry did starting in the mid-2000s, critics say. The Shell plant, in Monaca, will take ethane, a liquid hydrocarbon separated from fracked natural gas, and “crack” its molecules to make ethylene and polyethylene resin pellets called nurdles, which are melted down and turned into all things plastic, from bottles to car parts. “We are seeing a lot of these things repeat themselves with the cracker, and with the specter of petrochemical development in the region,” said Alison Steele, executive director of the Environmental Health Project, a nonprofit that has been monitoring the health impacts of the region’s natural gas industry, and representing affected residents, since 2012. Steele said the new plant has already received favorable treatment from state officials, including Democratic Gov. Tom Wolf, and may enjoy the same status as the natural gas industry that supplies it when it begins operating soon. She argued that gas-industry regulations are based not on safety but on what constitutes acceptable risk for operators and state officials. Regulations are often lax, and may not be effectively enforced by officials who focus on the industry’s creation of jobs rather than its threats to public health, she said. “The promise of economic benefits has very often driven the conversation, and caution around health impacts have made less of an appearance or been overshadowed,” she said. Pennsylvania’s fossil fuel industry has long been favored by the Republican-controlled state legislature. In 2012, it passed the wide-ranging Act 13, which curbed local government rights to use zoning to control gas-industry development in their towns, authorized the state to preempt local ordinances, and allowed the industry to prevent the public disclosure of fracking chemicals that were suspected of harming public health. Steele said state policy does not reflect how the oil and gas industry affects public health. “There’s a persistent gap between what’s known and what’s done with that knowledge,” she said. “If there has been a body of scientific evidence, which now there absolutely is, it has not been incorporated into a policy approach.”

Why The U.S.' Largest Shale Gas Basin Misses Out On The LNG Boom - Regulatory hurdles are stymieing growth in natural gas production in the Marcellus-Utica basin, the largest U.S. gas-producing region, which is set to miss out on the expected boom in American liquefied natural gas (LNG) exports in the coming years. Not only is Marcellus-Utica missing the opportunity to export and monetize natural gas in a world scrambling for LNG supply, but it is also unable to provide more natural gas to the regions close to it in New England, analysts and the pipeline industry say. In one of the most ironic twists in American energy these days, the U.S. Northeast is importing LNG from foreign producers to meet its gas demand. New England’s predicament is the result of the regulatory hurdles the U.S. states in the Northeast have posed to natural gas pipeline infrastructure, the Interstate Natural Gas Association of America says. The association calls for permitting reform and regional support to pipeline companies that are ready to build infrastructure but have seen a lot of projects delayed and tied up in lengthy court battles, which have swelled costs. One such project was the Atlantic Coast project, a pipeline from West Virginia to North Carolina along a route that had to pass through the Appalachian Trail in Virginia. In the summer of 2020, despite a major win on the right-of-way issue at the U.S. Supreme Court, the developers of the pipeline definitely scrapped the project due to ongoing delays and major cost overruns.“This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States. Until these issues are resolved, the ability to satisfy the country’s energy needs will be significantly challenged,” the top executives of Dominion Energy and Duke Energysaid at the time. Over the past few years, developers haven’t proposed many new gas pipelines in the U.S. Northeast due to permitting issues and bans from states such as New York.The midstream infrastructure capital has shifted from Marcellus-Utica down to the U.S. Gulf Coast, Kevin Little, senior vice president for natural gas at Macquarie Energy, said during Hart Energy’s America’s Natural Gas conference.Projects for LNG exports are now being developed in Texas and Louisiana, and despite the fact that greenfield natural gas projects are tough to develop even in Texas and Louisiana, America’s LNG exports are set to double by 2027, Little said.On the East Coast, the hurdles are greater. “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,” the expert said, as carried by Hart Energy.

EDITORIAL: Pollution subsidized - Republican & Herald, Pottsville, Pa. - Shell Pipeline Co. and a pipeline contractor, Minnesota Limited, have agreed to pay a $670,000 fine for pollution they generated during the construction of the Falcon Pipeline in Western Pennsylvania. The state Department of Environmental Protection conducted 67 inspections of the pipeline when it was under construction and found that sediment and drilling fluids had leaked into the Ambridge Reservoir, Raccoon Creek, the Ohio River and more than a dozen smaller streams. Although the case indicates vigilance by the DEP, it says the opposite about the state Legislature. The Falcon pipeline connects gas processing plants in Ohio and Pennsylvania with the massive Shell petrochemical refinery in Beaver County. The plants separate ethane from other gases and liquids extracted from the Marcellus Shale, and ships the ethane to the petrochemical refinery. The refinery converts the ethane into plastic pellets. Remarkably, while suing the pipeline for environmental violations, the state government also heavily subsidizes the Shell refinery with $1.7 billion in tax credits. Since first awarding the credits a decade ago, the Legislature has gone all in on such subsidies, awarding them for similar but smaller projects around the state, including for a pipeline in Schuylkill County. None of those subsidies are contingent upon environmental compliance. So, for example, the Shell petrochemical refinery's subsidies aren't affected by the related pipeline's fine, which amounts to a miniscule fraction of the public subsidy. Lawmakers should adopt rules that preclude state taxpayers from having to subsidize pollution.

For the first time, natural gas production linked to lower birth weights in a national study – EHN - Across the U.S., birth weights have declined as rates of natural gas production have increased, according to a new, first-of-its-kind national study. While previous studies linked increases in fracking and natural gas production to lower birth weights in high-producing states like Texas and Pennsylvania, this is the first to examine associations across states where extraction occurs.“Those single-state studies are important, but you have to consider whether that information is generalizable to other parts of the country,” Summer Sherburne Hawkins, an associate professor at the Boston College School of Social Work and senior author of the study, told EHN. “With our study, we’re able to say that this is not unique to a specific state, but is true across the country.”The study, published in the journal Preventive Medicine Reports, found that every 10% increase in natural gas development in U.S. counties is associated with a corresponding decrease in average birth weight of 1.48 grams, or 0.003 pounds. Among women of color, the impact was more significant: With every 10% increase in natural gas production, Asian babies’ average birth weight decreased by 2.76 grams, or 0.006 pounds; and Black babies’ average birth weight decreased by 10.19 grams, or 0.02 pounds.“That might not seem like a lot, but in some parts of the U.S. rates of natural gas production are increasing by thousands of percentage points over a very short period of time,” Hawkins said. “Lots of states are considering increasing production and this research allows us to predict the potential implications for public health.”Low birth weight is associated with higher rates of infant mortality, poor lung development, problems with growth and cognitive development, and increased risk of health problems later in life, including diabetes, heart disease, high blood pressure and developmental disabilities.

US oil and gas M&A hits 2022 high in third quarter — on only a handful of deals - Mergers and acquisitions (M&A) activity in the US oil and gas sector hit its highest levels of 2022 in the third quarter, despite an increasingly difficult environment for transactions. A new report from Enverus Intelligence Research said M&A activity surpassed $16 billion in the third quarter, even though the vast majority of capital spent was in a handful of transactions. Nearly $13.9 billion of the total came in just five deals — and none of them was in the Permian basin, normally the most heavily transacted of all US oil and gas regions. EQT’s $5.2 billion acquisition of producer Tug Hill and associated XcL Midstream in Appalachia was the largest oil and gas transaction in the US during the third quarter.

Zeldin’s support for fracking would unlock jobs and energy security for New York . . . forget about it under Hochul - New York’s gubernatorial race is tightening, and when you look at the issues that affect people’s day-to-day lives, it’s not surprising a Quinnipiac University survey shows Republican Lee Zeldin surging in this bluest of blue states. Crime and jobs: “Am I safe?” and “Can I feed my family?” As New York brings these worries to the ballot box, its recent history tells a clear story: The state is dying a slow, blue death with elected officials ignoring the need for real job opportunities coupled with their blasé approach to violent crime. New York City has lost 336,000 people in the past two years, and during the last Census period from 2010 to 2020, 70% of upstate towns declined in population. Far be it from me to provide advice to Gov. Kathy Hochul’s team, but if she wants to win, she needs a playbook. When it comes to crime: Look at the Giuliani model. New Yorkers remember feeling safe, and they want to again. When it comes to jobs, look at the Pennsylvania model: And by that, I mean oil and gas jobs and fracking. Fracking: that scary word that, when uttered three times in a mirror, may conjure up Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez spinning exaggerated tales of climate-change death. Eco-leftists often declare that “whole communities” are suffering from fracking, yet they’re unable to name one.

New England Risks Winter Blackouts as Gas Supplies Tighten – WSJ -- New England power producers are preparing for potential strain on the grid this winter as a surge in natural-gas demand abroad threatens to reduce supplies they need to generate electricity. New England, which relies on natural-gas imports to bridge winter supply gaps, is now competing with European countries for shipments of liquefied natural gas, following Russia’s halt of most pipeline gas to the continent. Severe cold spells in the Northeast could reduce the amount of gas available to generate electricity as more of it is burned to heat homes. The region’s power-grid operator, ISO New England Inc., has warned that an extremely cold winter could strain the reliability of the grid and potentially result in the need for rolling blackouts to keep electricity supply and demand in balance. The warning comes as executives and analysts predict power producers could have to pay as much as several times more than last year for gas deliveries if severe weather creates urgent need for spot-market purchases. “The most challenging aspect of this winter is what’s happening around the world and the extreme volatility in the markets,” said Vamsi Chadalavada, the grid operator’s chief operating officer. “If you are in the commercial sector, at what point do you buy fuel?” Power producers in New England are limited in their ability to store fuel on site and face challenges in contracting for gas supplies, as most pipeline capacity is reserved by gas utilities serving homes and businesses. Most generators tend to procure only a portion of imports with fixed-price agreements and instead rely on the spot market, where gas prices have been volatile, to fill shortfalls. The New England ISO expects that the grid can weather a mild-to-moderate winter without significant reliability challenges. However, it has warned that electricity demand could threaten to surge beyond available supply after multiple sustained periods of severely cold weather, which would result in calls for conservation similar to those issued in California in September during a regionwide heat wave.

Extreme Cold May Trigger Power Blackouts Across New England - Last month we informed readers, "New England's Power Crisis Set To Return." Fast forward to today, as US Northeast temperatures steadily decline as heating demand increases, New England power producers warn grid strains are inevitable as natural gas supplies tighten.New England consists of six states in the US Northeast, Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. The region faces a power crisis every winter because its power grid relies on NatGas and lacks pipeline infrastructure for domestic flows. Over the years, NatGas pipeline infrastructure has been delayed, blocked, or abandoned, which means the region's power-grid operators have to compete in international markets for supplies. WSJ reported that power-grid operator, ISO New England Inc., warned a colder-than-normal winter "could strain the reliability of the grid and potentially result in the need for rolling blackouts to keep electricity supply and demand in balance." ISO New England's top executives said if power producers have to increase NatGas deliveries due to severe weather drawing down supplies, it would indicate they would be paying international spot-market purchases. "The most challenging aspect of this winter is what's happening around the world and the extreme volatility in the markets," said Vamsi Chadalavada, the grid operator's chief operating officer. "If you are in the commercial sector, at what point do you buy fuel?"One major problem is that power producers have limited NatGas storage facilities and lack pipeline capacity reserved mainly by utilities serving homes and businesses. Power producers procure a portion of supplies with fixed-price agreements and mostly rely on spot markets. "Anybody who is depending on the spot market for their natural-gas supply is probably going to have a pretty significant sticker shock," said Tanya Bodell, a partner at consulting firm StoneTurn who advises energy companies in New England.We pointed out last year, "New England Is An Energy Crisis Waiting To Happen," and the worsening supply woes in Europe and the world means NatGas spot markets will be elevated through the cold season. New England had the bright idea to decommission coal, oil, and nuclear generators, leaving the grid exposed to NatGas. New England ISO figures show about 5,200 megawatts of that capacity have retired in the last decade. The region's power mix changes have left it increasingly reliant on international NatGas spot markets. State governors have asked US Energy Secretary Jennifer Graholm to waive the Jones Act and allow foreign-owned tankers to ship LNG from the US Gulf region. All of this has led to New England residents facing some of the highest electricity bills in years. Heating season is already underway.

FERC meeting: Glick warning, 'self-dealing' and pipeline win - Consumers are going to “suffer” this winter as energy costs continue to climb, the head of the Federal Energy Regulatory Commission said Thursday. Driving the spike in energy costs are high fuel prices worldwide and relatively low growth in natural gas production in the U.S., among other factors, according to FERC staff. One major natural gas price benchmark — the Henry Hub — is currently 30 percent higher than what it was last winter. In the coming months, FERC must be vigilant in ensuring that energy companies don’t take advantage of the situation by manipulating energy and power markets, Chair Richard Glick said. “People are going to suffer, whether it be folks that are using natural gas for heating, or on the electricity side, because we know natural gas prices have a significant upward pressure on electricity prices,” said Glick, a Democrat. Glick spoke on the issue at the commission’s monthly meeting, where FERC staff presented an annual winter energy assessment for the U.S. The five-person commission also issued a permit for a contested natural gas pipeline in Kentucky and Indiana and announced a policy that Glick said could help prevent “self-dealing” among utilities and other companies with corporate ties. Glick’s comments on power and fuel prices came as President Joe Biden is also seeking to lower energy costs ahead of the midterm elections. Earlier this week, the administration said it would release an additional 15 million barrels of oil from the country’s emergency reserves to try to bring down energy prices (Energywire, Oct. 19). All regions of the U.S. appear to have enough generation resources to meet electricity demand this winter, barring a prolonged period of extreme cold, FERC staff said. Most of the country is forecast to experience a mild winter, with the exception of the Northwest and Northern Plains. Still, the agency is projecting that “supply issues” could pose energy challenges for several regions. Specifically, New England’s supply of natural gas remains constrained, as has been the case in past winters. “Ongoing rail service issues” have the potential to disrupt shipments of coal in several U.S. regions, FERC staff said in the report. Labor supply challenges and the closure of coal mines are putting additional pressure on coal resources, the report continued. This year, coal plants made up the majority of generation retirements, as has been the case for several years now, according to FERC’s findings. At the same time, between March of this year and next February, the U.S. is expected to add nearly three times more new energy capacity than the amount that will retire during the same period. The vast majority of the new resources are solar and wind projects. Commissioner Mark Christie said he was concerned that “dispatchable” generation — such as coal, natural gas and nuclear power plants — were retiring too soon without enough new generation to replace it. Not only are coal retirements leading to a reliability problem, but they’re also putting upward pressure on natural gas prices, since natural gas power plants are the most viable replacement for coal, said Christie, a Republican. “This is an issue that’s going to continue — it’s not going away,” Christie said.

New Jersey sues oil companies for deceiving the public about climate change – WHYY - New Jersey filed a lawsuit against five oil companies and a trade organization, saying the companies knowingly deceived the public about their contributions to global warming. New Jersey Attorney General Matthew Platkin said internal industry documents show Exxon Mobil, Shell Oil, Chevron, BP, and ConocoPhillips all hid their knowledge that burning fossil fuels contributes to climate change. “Based on their own research, these companies understood decades ago that their products were causing climate change and would have devastating environmental impacts down the road,” said Platkin in a statement. “It’s long overdue that the facts be aired in a New Jersey court, and the perpetrators of the disinformation campaign pay for the harms they’ve caused.” The lawsuit alleges the trade group, American Petroleum Institute, designed public relations campaigns aimed at convincing the public that climate change does not exist and creating confusion and doubt about the role of oil and gas. New Jersey says this drove continued fossil fuel use that has already devastated the state’s coastal communities with rising seas and increasingly severe storms, along with extreme heat. The New Jersey Department of Environmental Protection, and the Division of Consumer Affairs joined the Attorney General’s office in filing the complaint in Superior Court in Mercer County. “Our shore communities have had to rebuild boardwalk landmarks, construct large dunes and devise other engineering solutions to recover from and respond to devastating storms,” said Cari Fais, acting director of the Division of Consumer Affairs.

Big Oil makes new bid for Supreme Court climate showdown - Lawyers for the oil and gas industry are asking the Supreme Court for help in a second climate liability lawsuit, arguing that without the justices’ intervention, U.S. energy policy “may be decided by juries in state courts.” Attorneys for Chevron Corp., BP PLC and Exxon Mobil Corp. on Friday petitioned the justices to overturn a lower court decision that delivered a procedural victory to the city of Baltimore, which is suing the companies to pay potentially hundreds of billions of dollars for spewing emissions that have led to flooding, erosion and other climate impacts (Climatewire, April 8).The companies’ plea marks the second such request from the oil industry in recent months, and — if the case becomes one of the tiny few that the justices grant — it would provide the Supreme Court a second shot at a jurisdictional question that for years has stymied Baltimore’s climate liability lawsuit and nearly two dozen others like it.In response to a related Supreme Court petition stemming from a similar lawsuit from Colorado governments, the justices on Oct. 3 invited the Biden administration to share its views on whether climate liability lawsuits belong in the state courts where they were originally filed or in federal courts, where oil and gas companies believe they are more likely to prevail (Greenwire, Oct 3).Companies involved in BP v. Baltimore asked that the Supreme Court hold on to their petition pending a ruling in the Colorado case, Suncor Energy Inc. v. Boulder County, which involves a court decision that sided with several Centennial State governments (Climatewire, June 9).The justices are expected to decide whether to accept or reject the Boulder petition after the Biden administration weighs in. It takes the vote of four justices to grant a petition, and most requests are denied.In the Baltimore petition, oil industry attorneys noted that before President Joe Biden took office, the federal government “expressed the view that climate change claims similar to those alleged here are removable” to federal court “because they are inherently and necessarily federal in nature.” They referred to the Trump administration’s stance on the jurisdictional dispute. The Biden administration has yet to give its opinion, although the president promised during his campaign to support the climate litigation (Climatewire, Jan. 19). Local governments from Rhode Island to Hawaii are suing the oil and gas industry, claiming companies deceived consumers by lying about the effects of burning fossil fuels.The payout from the legal actions is potentially huge — if the municipal challengers can move the litigation past the question of whether the claims should be heard in state or federal court. Baltimore originally filed its climate liability lawsuit in 2018.The procedural issue in the climate cases has reached the Supreme Court once before, with the justices siding with industry in their 2021 ruling in BP v. Baltimore that said appellate judges must consider a wider range of arguments in favor of federal jurisdiction (Climatewire, May 18, 2021).A new string of losses for the companies at the federal level has prompted their requests for a second round of intervention by the high court.

Haynesville Continues to Pace Natural Gas Production Growth in Latest EIA Modeling - Driven by the Haynesville Shale and the Permian Basin, natural gas production from seven key Lower 48 plays is set to surge 554 MMcf/d from October to November to more than 95 Bcf/d, according to updated modeling from the Energy Information Administration (EIA). In its latest Drilling Productivity Report (DPR), published Monday, EIA said it expects Haynesville natural gas production to reach 16.078 Bcf/d in November, a 200 MMcf/d month/month increase. Permian natural gas output is expected to climb 127 MMcf/d to 21.057 Bcf/d over the same period. The DPR also tracks changes in the Anadarko and Appalachian basins, as well as in the Bakken, Eagle Ford and Niobrara shales. Among those other regions, notable natural gas production increases are also expected from the Eagle Ford (91 MMcf/d) and Appalachia (89 MMcf/d) between October and November, with smaller gains expected from the Bakken (33 MMcf/d), Niobrara (13 MMcf/d) and Anadarko (1 MMcf/d), the DPR data show. The latest DPR models a combined 104,000 b/d of oil production growth among the seven regions from October to November, with output projected to rise to 9.105 million b/d. EIA modeled the largest month/month gains from the Permian (50,000 b/d), Bakken (22,000 b/d) and Eagle Ford (18,000 b/d) regions. The Anadarko (6,000 b/d), Niobrara (6,000 b/d) and Appalachia (2,000 b/d) regions are also expected to raise oil output during the period, according to EIA. EIA’s tally of drilled but uncompleted (DUC) wells among the seven regions declined 10 units overall to 4,333 from August to September, the latest DPR data show. DUC totals decreased in the Permian (down 14), Appalachia (down 10), Anadarko (down eight), Eagle Ford (down three) and Bakken (down one) regions. On the other side of the ledger, the Niobrara (up 15) and Haynesville (up 11) regions added to their respective DUC backlogs, according to EIA. EIA’s DPR makes use of recent rig data along with drilling productivity estimates and estimated changes in production from existing wells to model changes in production from the seven regions.

Sempra Infrastructure gets extension to build Texas Port Arthur LNG export plant - The US Federal Energy Regulatory Commission (FERC) has approved a request from Sempra Infrastructure for an extension to complete construction of a Port Arthur, Texas, liquefied natural gas (LNG) export plant and pipelines. The extension gives the company more than an extra four years, moving the deadline from April 2024 to June 2028.When FERC originally approved construction of the plant in April 2019, the company had five years to complete the project. However, filing its request for an extension in July this year, the company noted that pandemic impacts, including adverse market conditions and supply chain issues, had caused construction delays.After the drop in demand for LNG during the pandemic, demand has risen this year, largely because Europe is looking to replace Russian fuel that it cut off after Russia’s invasion of Ukraine.

Indigenous Leaders in Texas Target Global Banks to Keep LNG Export Off of Sacred Land at the Port of Brownsville - When Juan Mancias was a child, his grandmother told him the story her parents told her, of the place at the Great River’s end. All good things ended up there, she said, carried from the high deserts across 1,000 miles to the sea, where they spilled across a vast delta, teeming with life. There, Mancias’ grandmother told him, the first woman was born from all the good things that washed down the river. And there, more than 60 years later, developers now want to build two export terminals, one priced at over $15 billion, to sell fracked Texas gas on international markets. Mancias, chairman of the Carrizo Comecrudo tribe, has spent his last year engaged in a global campaign to thwart the liquified natural gas (LNG) facilities proposed for his people’s sacred site. Supported by the Sierra Club, a coalition of Indigenous leaders and local organizers have traveled Europe lobbying customers and funders that developers need for their buildout in the Rio Grande Valley, a historically marginalized zone along the Mexican border in Texas. It’s not just a legendary paradise for Mancias’ people, it also holds the remains of an ancient village, Garcia Pasture, dubbed by the World Monuments Funds as “one of America’s premier archaeological sites.”“When you steal the land, you’re stealing us. And you’re taking away our identity, because you fence it off and you dont allow us into the land where our ancestors are buried, where we remember our ceremonies and rituals,” said Mancias, 68.Since the fracking boom, developers of Texas shale gas have eyed undeveloped patches along the Gulf Coast for massive terminals to liquify and export the gas on ocean-going tankers. The campaign has managed for years to thwart financing agreements, dissuade committed customers, cause one terminals’ cancellation and years of delays on the remaining two. The Covid slump in energy prices helped their case. But the war in Ukraine has energized markets again, and empowered projects’ search for funders. “The situation in Ukraine is the latest attempt by investors to justify LNG export terminals that are unnecessary, uneconomic, and unwanted,” said a new report by the Sierra Club’s Lower Rio Grande Valley Group, released on Tuesday. “Even as banks pledged to align their lending and investment with a low carbon future, they continue to finance fracked gas around the world.”The International Energy Agency has said that new investments in fossil fuels must end immediately for the world to meet its goals on carbon emissions reductions. According to the new Sierra Club report, the gas pipeline and two export terminals proposed for the Rio Grande delta would produce as much carbon as 40.4 million cars per year. Two export terminals are currently proposed in adjacent green lots in Cameron County at the Port of Brownsville, which doesn’t currently have a petroleum sector (but has hosted Elon Musk’s SpaceX Starbase since about 2015): Rio Grande LNG, owned by Houston-based NextDecade and priced at $15.6 billion; and Texas LNG, owned by Houston-based Glenfarne Group. Both were initially slated to begin operations next year, but both are still seeking financing to begin construction and remain years away from completion. NextDecade, owner of Rio Grande LNG, did not respond to a request for comment sent Friday. The company has said the Rio Grande facility would produce “a lower carbon intensive” liquified natural gas through a combination of carbon capture technology, net-zero electricity and “responsibly sourced gas.”

U.S. natgas futures drop 7% to 3-month low on milder forecasts (Reuters) - U.S. natural gas futures dropped about 7% to a three-month low on Monday with a collapse in European forwards and on forecasts for milder U.S. weather and lower demand next week than previously expected. "Gas market bears have multiple price-setting mechanisms to drive prices lower. The two biggest influencers continue to revolve around record-high dry gas production and recently lacking temperature demand, resulting in several back-to-back triple-digit weekly gas storage builds," analysts said. U.S. gas futures have already been declining for the past eight weeks on record output and reduced liquefied natural gas (LNG) exports that have allowed utilities to inject much bigger than normal amounts of gas into storage over the past month. 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. Freeport expects the facility to return to at least partial service in early to mid-November. There are at least three vessels currently 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. U.S. LNG exports could start to rise later this week if Cove Point returns to service as some traders expect. Front-month gas futures for November delivery fell 45.4 cents, or 7.0%, to settle at $5.999 per million British thermal units (mmBtu), lowest close since July 6. That was the biggest daily percentage drop since Sept. 22 when prices fell about 9%. In a bet on colder weather in December, the premium of futures for December 2022 over November 2022 NGX22-Z22 jumped to record high of around 48 cents per mmBtu. Despite weeks of declines, U.S. futures were still up about 61% 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 $38 per mmBtu in Europe and $31 in Asia. That puts European forwards down about 8% for the day and on track for their lowest close since June 16 as strong LNG imports boosted the amount of gas in storage in Northwest Europe to healthy levels above 90% of capacity. European prices hit an all-time high of $90.91 on Aug. 25. The average amount of gas flowing to U.S. LNG export plants fell to 11.0 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.

With Demand Disappointing, Natural Gas Futures Prices Tumble Further - In another stunning move, natural gas futures plummeted further on Tuesday as the current cold snap hitting the Lower 48 – expected to dissipate by week’s end – appears to be falling short in drumming up demand. Traders also brushed off a huge decline in natural gas production given most of it was tied to maintenance work. The November Nymex futures contract settled at $5.745/MMBtu, down 25.4 cents day/day and bringing the two-day loss to 70.8 cents. Spot natural gas prices were mostly higher with another couple of days of chilly weather in the forecast. NGI’s Spot Gas National Avg. tacked on 14.5 cents to $5.745. Funny how weather dominates natural gas trading even when there is little to speak of. While heavy snow arrived in the Windy City on Monday and was set to pile up in the Northeast beginning Tuesday, market observers said demand thus far is falling short of expectations. “I thought we would see some improvement as these first ‘real’ heating degree days hit, but, so far, the scrapes still look pretty weak,” Vortex Commodities CEO Brian Lovern told NGI. The underwhelming gas demand comes as temperatures on Tuesday morning dipped into the single digits in parts of Minnesota and North Dakota and in the low double-digits in other areas of the Midwest. Combined with gusty winds, AccuWeather said real-feel temperatures slid a few degrees below zero. Farther east, some snowflakes were spotted as early as Monday night in the eastern Great Lakes region and the central Appalachians, with larger amounts expected on Tuesday. However, several areas were not expected to see temperatures fall below the freezing mark, according to AccuWeather. That said, New York City and many other locations are likely to experience their lowest temperatures since late April or earlier in the spring, AccuWeather said. As the cold air shifts eastward, another step down in temperature is in store by Wednesday morning. Some of the lowest temperatures of the cold outbreak are expected to occur on Wednesday and Thursday night, according to the forecaster. A clear sky and a decrease in winds after sunset should allow temperatures to plummet outside of the major East Coast cities. Widespread lows in the 20s to lower 30s are in store for the interior Valleys, with near-freezing temperatures over the ridges. Temperatures are expected to begin climbing by the end of the week, though, quickly sapping demand in the process. The high in Chicago could reach a balmy 70 by Friday, while New York City should reach the upper 60s by Saturday. “The weather pattern looks quite tame in the medium range, as well, which is not helping any bull case, so here we are in the $5.70s,”

Nymex Natural Gas Futures Curve Disintegrates on Moderate Weather, Rising Storage Trajectory Natural gas bears extended their streak to four on Wednesday, slashing futures prices even further amid renewed disagreement in the models regarding a late-October weather system as well as lofty production. The November Nymex gas futures contract settled at $5.462/MMBtu, down 28.3 cents on the day. Notably, steep double-digit losses extended through all of 2023.Spot gas prices were sharply lower across the board as this week’s cold snap was seen thawing shortly. NGI’s Spot Gas National Avg. plummeted 53.5 cents to $5.210.That futures prices have declined for four straight sessions is significant given much of the United States is in the middle of a cold snap that’s brought temperatures below freezing and led to heavy snowfall in some areas. Even Houston woke up to 40-degree lows on Wednesday morning.Still, with the current chill expected to moderate beginning Friday, and production holding near recent highs despite fall season maintenance activities, traders saw no reason for a recovery. If anything, the next round of government inventory data may send prices down another few notches if the injection comes in near expectations.Interestingly, the November contract was trading not far from Wednesday’s levels a year ago. Only at that time, prices were in the early stages of a sustained rally that eventually lifted futures to $10 in August.This time around, there’s not much in the near-term outlook for bulls to hang their hat on.After a string of four triple-digit builds, the Energy Information Administration (EIA) is poised to report another 100-plus Bcf addition to inventories. Ahead of the EIA report, scheduled to be released at 10:30 a.m. ET on Thursday, analyst estimates ranged widely amid robust production and stronger wind generation during the reference period ending Oct. 14. Reuters polled 13 analysts, whose estimates ranged from injections of 95 Bcf to 118 Bcf, with a median forecast of 106 Bcf. Both Bloomberg and theWall Street Journal had a tighter range of projections, with a median injection of 103 Bcf and an average injection of 102 Bcf, respectively.A build near these levels would easily surpass the 91 Bcf injection recorded in the year-earlier period, as well as the five-year average of 73 Bcf.Meanwhile, weather forecasts pointed to moderate weather ahead that could further pad stocks. Maxar’s Weather Desk said the six- to 10-day outlook leans slightly cooler in the central United States and in the West, while warmer in the eastern half through day nine. However, cooler air could arrive in the Midcontinent in the middle of the period. “The models diverge for how much cooling may occur for then, lending lower confidence,”

U.S. natgas edges up but still near 7-month low after big storage build (Reuters) - U.S. natural gas futures inched up in choppy trade on Thursday, hovering near their lowest since March, after a mixed reaction to a federal report showing a larger-than-expected storage increase last week, with investors also assessing upcoming seasonal demand. Front-month gas futures NGc1 edged up 2.9 cents, or 0.5%, to $5.49 per million British thermal units (mmBtu) by 11:38 a.m. EDT (1538 GMT), after sliding to $5.253 per mmBtu. The U.S. Energy Information Administration (EIA) said utilities added 111 billion cubic feet (bcf) of gas to storage during the week ended Oct. 14, more than the 105 bcf build analysts forecast in a Reuters poll and substantially more than the year-ago weekly build of 91 bcf and a five-year (2017-2021) average increase of 73 bcf. It was also the fifth week in a row that stockpiles increased by over 100 bcf. "There's been so much selling pressure over the last week or so that we were bound to see some (short) covering at some point," but there’s time for the market to react further this session. Looking toward November, "if we don't see a bullish weather pattern start to set up for the early start of winter, that could result in additional price volatility because we'll see selling subsequently," DiDona said. U.S. gas futures remain up about 42% this year as soaring global gas prices have fed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading at $34 per mmBtu in Europe and $30 in Asia. The market "is getting extremely over-sold and even though we've seen some sizable injections, supplies are still too low going into winter and if the weather changes, if we get some cold weather as some people are predicting in November or December, the market could change," Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 99.5 bcfd so far in October, up from a monthly record of 99.4 bcfd in September. With milder weather coming, Refinitiv projected average U.S. gas demand, including exports, would fall from 100.6 bcfd this week to 95.5 bcfd next week.

U.S. natgas slumps to 7-month low as losses extend into a ninth week (Reuters) - U.S. natural gas futures dropped 7% on Friday to a seven-month low after falling for nine weeks in a row in a move that could help cut U.S. consumer heating costs this winter. Prices have been falling for weeks due to forecasts for mild weather, record output and low liquefied natural gas (LNG) exports that have allowed utilities to inject more gas into storage than usual ahead of winter. Gas prices have plunged about 59% during the past nine weeks. "Gas production has been strong and the ongoing shutdown of the Freeport LNG plant has allowed for a big comeback in storage. It was not too long ago that some folks were worried about whether we would have enough gas in storage for this winter," Freeport LNG in Texas shut for unplanned work after an explosion on June 8. Front-month gas futures fell 39.9 cents, or 7.4%, to settle at $4.959 per million British thermal units (mmBtu), their lowest close since March 21. That also put the front-month down for a sixth day in a row for the first time since February 2021 and kept it in technically oversold territory. For the week, the contract dropped about 23%, its biggest weekly decline since falling 24% in December 2021. Despite weeks of losses, U.S. gas futures were still up about 33% 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. The drop in gas prices should help reduce U.S. costs this winter for the 60 million homes that use gas for heat. Lower gas costs should also help reduce costs for the 54 million homes that use electricity for heat since about 38% of the nation's power comes from burning natural gas. The U.S. Energy Information Administration projected homes burning gas for heat would spend about 29% more this winter than last year, while homes using electric for heat would spend about 10% more. About 88% of the nation's 130 million homes use either gas or electricity for heat. Gas was trading at $33 per mmBtu in Europe and $32 in Asia. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 99.5 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 fall from 100.1 bcfd this week to 94.2 bcfd next week with the coming of milder weather, before rising to 96.9 bcfd in two weeks as the weather cools. The forecast for this week and next were lower than Refinitiv's outlook on Thursday.

Permian, Bakken, Eagle Ford To Set "Recent" Production Records In November -- Doesn't Get Me Excited -- October 17, 2022 - From SeekingAlpha today:

• oil production in the Permian Basin is forecast to rise by ~50K bbl/day to a record 5.45M bbl/day in November, the U.S. Energy Information Administration said Monday in its latest productivity report.
• total U.S. crude oil output is expected to increase by 104K bbl/day to more than 9.1M bbl/day in November, its highest since March 2020, the EIA report said.
• the EIA also sees oil output in the Bakken shale rising by 22K bbl/day to 1.19M bbl/day next month, the most since December 2020, and
• in the Eagle Ford shale adding 18K bbl/day to 1.22M bbl/day, its highest since April 2020.
• with oil "on the verge of exploding higher," Chevron (CVX) and Devon Energy (DVN) are two "top-tier picks," Leo Nelissen writes in an analysis published recently on Seeking Alpha.

"Exploding higher": I believe the analyst is talking about the price of oil "exploding higher," not that production would surge. Let's do the percentage change:

• 104K bbl/day to more than 9.1M bbl/day in November:
• 104,000 / 9,000,000 = 104 / 9,000 = 1% -- doesn't get me excited
• 22,000 / 1,000,000 = 22 / 1,000 = 2% -- doesn't get me excited
• that 104,000 bopd -- compare that to the Biden administration releasing 10x that amount the past six months, one million bopd released

US to announce release of 15M barrels of oil from strategic reserve -The U.S. will release 15 million barrels of oil from its strategic reserve, Biden administration officials plan to announce Wednesday.The 15 million barrels are the final tranche of a disbursement of 180 million announced in March and come as energy prices threaten to rise again less than a month before Election Day.Rising prices have emerged as a drag on Democrats as polls show the economy is one of the issues most top of mind for voters as they head to the ballot box. Early voting began in some states this week.The sale comes after OPEC+ announced a production cut of 2 million barrels of oil per day earlier in October. Oil prices had dipped as low as $75 per barrel in September before rebounding after the OPEC announcement to more than $90. West Texas Intermediate crude is now at $83 per barrel.Asked about the possibility of limiting oil exports, officials also said they’re keeping “all tools on the table.”The U.S. oil reserve is now at its lowest level since the mid-1980s, and senior administration officials announced Tuesday evening a plan to buy back crude oil to replenish the Strategic Petroleum Reserve, sending a market signal to producers to keep pumping oil ahead of the midterm elections in November.Officials said repurchases would begin when prices are between $67 and $72 per barrel, indicating that the administration would like to see the price of oil decline. Presiden Biden wants the energy sector to “take the signal and increase production” and to make sure that they are giving “the consumer the appropriate price” as they are “taking these profits,” one senior administration official said.“The profit that energy refining companies are now capturing on every gallon of gasoline is about double what it typically is at this time of year, and the retailer margin over the refinery price is more than 40 percent above the typical level,” administration officials said in a statement. “These outsized industry profit margins – adding more than $0.60 to the average price of a gallon of gas – have kept pump prices higher than they should be. Keeping prices high even as input costs fall is unacceptable, and the President will call on companies to pass their savings through to consumers – now,” the statement continued.The Department of Energy will also institute a rule that allows it to enter fixed-price contracts through competitive bids for crude oil products to be delivered at futures dates.Geopolitical forces are bearing down on energy markets now as the Northern Hemisphere prepares for winter.The war in Ukraine is playing out in the European energy supply, which has been heavily dependent on Russian gas exports in the past. Reports of pipeline sabotage came in over the summer as fighting intensified between Russia and Ukraine.OPEC’s production cut resulted in accusations against its most influential member, Saudi Arabia, that it was siding with Russia in the war. Chinese demand for imported also may also be ramping up as the country continues to lift various COVID-19 restrictions.

Biden Admin To Announce Another 15 Million Barrel SPR Release Before Midterms - Oil markets are drifting sideways this morning after the Biden administration plans to release 10-15 million barrels of crude from the Strategic Petroleum Reserve in a bid to suppress gasoline and diesel prices at the pump ahead of the next month's congressional elections, Bloomberg said citing people familiar with the matter. President Biden's upcoming announcement of up to 15 million barrels, one of the largest ever, comes as 180 million barrels have been drained from the nation's emergency stockpile since May. For context, the Biden administration has cut the SPR to a record low 22 days worth of supply... That is not what you want to see when liberal war hawks are gunning for nuclear war. On Sunday, White House economic adviser Jared Bernstein said Biden was still mulling over the final SPR release figures. He told Fox News the reserve is 50% full. "The fact is there is capacity to use the SPR to deal with some of the energy shocks we're seeing in the world. But I'm not saying we will. That's up to the president to decide, he hasn't made that decision yet," Bernstein said. Last Tuesday, David Turk, the Energy Department's deputy secretary, said, "We still have some additional ability to use the SPR over the coming weeks and months as needed." Turk said the administration was willing to move forward with an export ban on refined products in response to OPEC+'s decision to cut production.But while the Biden admin was reluctant to pursue an export ban, a move that would send oil prices higher over the long run, it had fewer qualms about potentially extending its SPR drain.Sources told Bloomberg White House officials have been discussing with oil companies, including ConocoPhillips and Exxon Mobil Corp., about what to expect in future SPR releases while encouraging crude production and boosting the capacity of refined fuels. The US' only problem is that refining capacity has been reduced over the years, and also, there's seasonal maintenance underway. We outlined in the summer: US Refining Bottleneck The Culprit For Your Gas Pump Pains."The administration has a small window ahead of midterms to try to lower fuel prices, or at least demonstrate that they are trying," one of Reuters' sources familiar with the White House deliberations. "The White House did not like $4 a gallon gas, and it has signaled that it will take action to prevent that again," they said.

US to complete 180-million barrel SPR drawdown, lay out plan to replenish oil reserve | S&P Global Commodity Insights - The US Department of Energy will issue a notice to sell up to 15 million barrels of crude from the Strategic Petroleum Reserve Oct. 19, completing the largest-ever drawdown from the emergency stockpile, and finalize a plan to giving it more buying power to replenish the SPR in the future, senior Biden administration officials said Oct. 18.The DOE is offering up to 3 million barrels of sour crude and up to 12 million barrels of sweet crude from Big Hill and Bryan Mound in Texas and West Hackberry in Louisiana for delivery in December. Bids are due by 10 am CT Oct. 25, and contracts will be awarded no later than Nov. 1, the department said in a press release.The sale wraps up President Joe Biden's historic commitment to release 180 million barrels, or roughly 1 million b/d, from the SPR from April through the end of October. Some 165 million barrels of crude have already been delivered or committed for delivery under the release to help mitigate global supply disruptions caused by Russia's invasion of Ukraine and help lower energy costs.Oil futures climbed following the announcement of the release, with NYMEX front-month crude trading $1.18 higher at $84.00/b late Oct. 18. NYMEX crude had settled down $2.64 at $82.82/b prior to the announcement, in part on expectations that an SPR release was in the works. "How effective the SPR release will be may well depend on whether other [countries] join as we saw earlier this year ... At the time, oil was trading at much higher levels, well above $100/b," "At current prices, the average driver will spend about $60 per month less than they would have if [gasoline] prices had stayed at that peak level," a senior administration official said on a call with reporters Oct. 18. Biden is expected Oct. 19 to also reiterate his call for the oil industry to do its part to address the pain at the pump exacerbated by the Russia-Ukraine war."The profits that energy refining companies are now capturing on every gallon of gas is about double what it typically is at this time of year, and reseller margins over the refinery price are more than 40% above typical level," the administration official said, contending that these record profits have kept pump prices higher than they should be as oil prices have come down."Tomorrow the president will reiterate that outsized profit margins are inappropriate, especially at a time of war, and will call on companies to pass their savings through to consumers," the official said. The DOE will also formally announce Oct. 19 "its intent to do the SPR repurchases to add to global crude oil demand at times when WTI crude oil is at or below $67/b-$72/b" in order to protect taxpayer interests and encourage more near-term production, a second senior administration official said."We think that's an important signal for producers that the SPR will be part of helping to moderate and stabilize price flows not only when prices are going high but when prices are going low, and using the SPR in that responsible manner," the second official said. The Biden administration also took steps to ease efforts to refill the emergency oil stockpile, with plans to allow fixed-price forward purchases of crude oil. The move builds on a May announcement to buy back 60 million barrels of crude for the SPR — or one-third of the massive drawdown — at lower prices in the future.

Starved of new talent: Young people are steering clear of oil jobs -In late May, António Guterres, the secretary-general of the United Nations, stood in blue graduation robes in front of a podium at Seton Hall University in South Orange, New Jersey. Looking out at the thousand-plus graduating seniors, Guterres told them that the world was facing a climate catastrophe — and it was up to them to stop it.“As graduates, you hold the cards. Your talent is in demand from multinational companies and big financial institutions,” Guterres said in the commencement address. “But you will have plenty of opportunities to choose from, thanks to the excellence of your graduation. So my message to you is simple. Don’t work for climate wreckers. Use your talents to drive us towards a renewable future.”If they hadn’t heard the advice from Guterres, they might have gotten the idea that digging up ancient oil deposits was not a promising career path from somewhere else. The billionaire Bill Gates recently predicted that oil companies “will be worth very little” in 30 years; CNBC’s loudest finance personality, Jim Cramer of Mad Money, has declared he’s “done” with fossil fuel stocks. It’s part of a larger social reckoning that threatens to make business harder for oil companies. Big Oil is becoming stigmatized as awareness grows that its environmentally-friendly messaging, full of beautiful landscapes and far-off promises toerase (some) of its emissions, doesn’t match its actions. Well over half of millennials say they would avoid working in an industry with a negative image, according to a survey in 2020, with oil and gas topping the list as the most unappealing. With floods, fires, and smoke growing noticeably worse, young people have plenty of reasons to avoid working for the brands that brought you climate change. This poses a hiring challenge for oil companies, with much of their current workforce getting closer to retirement. For years now, consulting firms have been warning the industry that it faces a “talent” gap and surveying young people to figure out how they might be convinced to take the open positions. Meanwhile, solar and wind power are booming and luring young people who want a job that fits with their values. In 2021, according to the business group E2, 3.2 million Americans worked in clean energy industries like renewables, electric vehicles, and energy efficiency — 3.5 times the number that worked in fossil fuels. And this is likely just the beginning: Congress recently passed the Inflation Reduction Act, which is expected to cause an explosion of climate-related jobs.“I do feel that there’s this big pincer movement coming for the fossil fuel industry — you know, they’re going to be pinched in lots of different directions,” said Caroline Dennett, a safety consultant who publicly quit working for Shell earlier this year because the company was expanding oil and gas extraction projects. “And that’s exactly what we need.”

U.S. E&Ps Hedging Less, Moving Cautiously with Bank Redeterminations Underway - The U.S. oil and natural gas industry is hedging less to avoid leaving money on the table, but overall, operators appear less optimistic regarding their ability to borrow funds, according to a new survey. “Strong oil and gas prices are not directly resulting in strong borrowing base increases,” Haynes and Boone LLC researchers said in their fall 2022 Borrowing Base Redetermination Survey. “Despite oil and natural gas prices reaching heights not seen since 2014 (in the case of oil) and 2008 (in the case of natural gas), respondents are not expecting robust borrowing base increases in fall 2022. “A meaningful percentage of respondents are predicting that borrowing bases will stay flat or even decrease slightly.” The fall survey captured polling through September of 103 executives at exploration and production (E&P) firms, financial institutions, oilfield services companies, private equity firms and professional service providers. Haynes Boone researchers asked executives to predict the E&P industry’s future borrowing capacity. The survey, conducted in the spring and fall since April 2015, attempts to offer a forward-looking view about the projected financial state of the U.S. energy market.“Our latest survey indicates that producers should not expect significant increases in their reserve-based lending credit availability,” said Haynes Boone partner Kraig Grahmann, co-head of Energy Transactions Practice Group. “Indeed, a meaningful percentage of survey respondents are predicting that borrowing bases will stay flat or even decrease slightly.”In contrast, the spring 2022 survey “reflected greater optimism, with a majority of industry respondents expecting double-digit percentage increases in borrowing bases of 20% or more,” researchers noted. “Very few respondents at that time expected borrowing bases to decrease.”

Baker Hughes Expects Oil Patch Bottlenecks To Subside Next Year - The world's third-largest oilfield services provider stated in a corporate update Wednesday that the worst supply chain issues "should be behind us," as this could indicate US crude production could meaningfully increase in 2023. Baker Hughes Co. reported third-quarter results and posted a loss, compared with a profit last year, hit largely by $230 million in restructuring costs and impairment charges after a recent reorganization announcement. During the quarter, Baker Hughes said it would "simplify its organization" and restructure its four product companies to concentrate on two reporting businesses. The company formally restructured into two reporting business segments early this month. "The macro outlook has grown increasingly uncertain as the global economy is dealing with strong inflationary pressures, a rising interest rate environment, and sizeable fluctuations in global currencies," Baker Hughes CEO Lorenzo Simonelli said in a statement. Despite the macroeconomic headwinds, "we remain positive on the outlook for oil and gas," Simonelli continued. The company's oilfield service was in a rebound, up 17% in the quarter compared to the same period last year. Sales in the unit are at the highest since the first quarter of 2020, when the pandemic closed the economy and collapsed the oil and gas industry. The oil patch has struggled to bring on new crude production for the last two years because of supply chain bottlenecks. Many frackers have been unable to find hydraulic fracturing equipment, which led to dismal crude production growth. However, Simonelli pointed out: "2022 has presented some unique challenges for Baker Hughes, and as we head towards 2023 we believe many of the key challenges should be behind us." This could suggest that bottlenecks in the oil patch may wane next year and result in meaningful production increases.

Helmerich & Payne Looks to Reactivate More North American Drilling Rigs in 2023 - Tulsa-based drilling technology expert Helmerich & Payne Inc. (H&P) is facing some inflationary pressures, but it still plans to reactivate up to 16 rigs by the end of March, CEO John Lindsay said. In a preview of fiscal 4Q2022 and full-year results, which are scheduled for Nov. 17, Lindsay offered a positive outlook for more drilling early next year. The reactivated North American rigs, “for appropriate prices and terms,” would take the company’s rig count to “an upper target of 192” for fiscal 2023. That would compare to 175 active rigs at the end of September. H&P has set initial fiscal year 2023 capital expenditures (capex) at $425-475 million. The capex budget represents “a sizable sequential increase,” Lindsay said. It also highlights “the capital-intensive nature of H&P’s business, as well as planned international expansion.” The company’s North America Solutions segment accounts for about two-thirds of the expected spend in 2023, with the reactivation of H&Ps top-of-the-line, super-spec FlexRigs. Six of the 16 idled rigs to be activated would be “converted to a walking configuration,” Lindsay noted. Maintenance capex per rig also “is expected to modestly exceed the high-end of the historic normalized range.” CFO Mark Smith said the North America Solutions segment’s fiscal 2023 capex budget “is adversely impacted by higher maintenance capex, which looks to modestly exceed the historic range of $750,000 to $1 million per rig per year. “The fiscal 2023 range is expected to be between $1.1 million and $1.3 million/active rig. The reasons for this are twofold,” Smith said. “One is due to the reduced spending during the pandemic years in which time the company judiciously preserved capital spending by utilizing component equipment from idle rigs; we now must make up for those capital spending deferments…” The second reason is because of the “current inflationary environment and supply chain challenges that the industry is experiencing,” Smith said. North America Solutions direct margins for fiscal 4Q2022 are expected to be in the “high end of the previous expected range of $185-205 million.” Offshore Gulf of Mexico direct margins are still projected at $9-11 million. H&P also is working to expand its international presence and operations in fiscal 2023.

Private Investors Again Looking At Oil And Gas After Prices Rise -So far this year, private capital funds worldwide investing in fossil fuels — oil, gas, and natural gas — have raised a combined $27.9 billion compared with a total of $19.4 billion in all of 2021, Preqin data show. Investors are attracted to the energy sector and expected returns because prices are on the rise, pushed up by the ongoing war in Ukraine, pinched supplies, and lower investment in fossil fuels when prices were lower. The U.S. Energy Information Administration recently predicted that U.S. households will pay more for energy this year to heat their homes this winter versus a year ago. Households will pay 28% more for natural gas, 27% more for heating oil, 10% more for electricity, and 5% for propane. Meanwhile, in Europe gas prices in the first half of 2022, rose fourfold and coal prices rose more than threefold from the same period in 2021, according to the IEA. Pensions & Investments data show that Quantum and NGP have already received commitments for their new oil and gas strategies. Oregon Investment Council, which oversees the $93.3 billion Oregon Public Employees Retirement Fund, Tigard, in April committed $200 million to Quantum Energy Partners VIII and $50 million to a sidecar, both focused on investing in energy companies in the oil and gas upstream, midstream, oil field service and power generation sectors. The council also committed $150 million to NGP's new oil and gas fund, NGP Royalty Partners II, plus another $50 million to a sidecar fund. The $11.8 billion Sacramento County (Calif.) Employees' Retirement System is also an investor in the new NGP fund. Blackstone invested in traditional and energy transition assets through its $30 billion infrastructure business as well as its private equity energy and private credit energy businesses. The firm is currently in the market raising its fourth private equity energy fund, Blackstone Energy Partners IV, P&I data shows. To be sure, asset owners and their managers never really left oil and gas investments entirely behind since many energy transition strategies include exposure to hydrocarbon investments. "'Energy transition has become a very broad term," said Adam Toczylowski, private markets consultant at Meketa Investment Group, said. “Energy transition offerings vary from those that exclude any type of oil and gas investments to those that include upstream — referring to the exploration and production of oil and gas — and/or natural gas to replace coal.”

EPA, enviro groups file last flurry of comments for Army Corps’ review of Line 5 tunnel ⋆ As the U.S. Army Corps of Engineers (USACE), Detroit District, wrapped up the first comment period Friday for its forthcoming review of Enbridge’s Line 5 tunnel project, the last flurry of comments recently filed include those from the U.S. Environmental Protection Agency (EPA) and several prominent Michigan and Midwest environmental groups.The EPA, the Michigan Climate Action Network (MiCAN) and the Environmental Law & Policy Center (ELPC) all recommended that USACE assess alternatives to the Line 5 tunnel while reviewing the project as a whole.Other recommendations include those regarding environmental justice, tribal resources, climate change, impacts to endangered species and habitats and more.USACE has had three public meetings since Aug. 15 as part of the process, which subjects the Canadian pipeline company’s proposed project to the highest level of federal environmental review. USACE will now use the public comments received over that time to frame their draft Environmental Impact Statement (EIS).An EIS involves a lengthy process, and was not Enbridge’s preferred development as the company had favored a less intensive form of review. The agency will next prepare a draft EIS, embark on another 60-day comment period expected in fall 2023, prepare a final EIS and establish a 30-day waiting period in summer 2024. A record of decision is expected to be given in fall 2024 — two years from now. For their part, MiCAN and the ELPC filed formal comments on Line 5 primarily suggesting that the agency needs to consider climate impacts and alternatives that do not cross the environmentally-sensitive Straits of Mackinac. “This is an early stage, but the Corps has got to get this right,” said Scott Strand, senior attorney for the ELPC. “If the Corps decides now that it will not do anything more than compare the environmental risks of the tunnel with the environmental risks of the existing pipelines, the Corps will be doing both itself and the public a grave disservice.”The existing Line 5 continues to age and attract environmental concern. The nearly 70-year-old 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 and tribes in Wisconsin.Gov. Gretchen Whitmer and Attorney General Dana Nessel, both Democrats, have battled with Enbridge over the last few years to have the company decommission the existing pipeline before building a tunnel-enclosed replacement. So far, Enbridge has kept the pipeline operating.“It is the Corps’ responsibility to consider alternatives that support the demand for a rapid transition to renewable energy, not lock us into building more fossil fuel infrastructure,”

Enbridge will pay $11 million to settle pipeline violations — Enbridge Energy, the owner and operator of the Line 3 pipeline project in northern Minnesota, will pay more than $11 million after investigations identified water quality violations and three aquifer breaches related to the pipeline’s construction, state regulators said Monday.The Minnesota Pollution Control Agency and Department of Natural Resources announced the results from investigations of water quality violations and aquifer breaches related to the construction project.Combined with the previous DNR actions, and in partnership with Fond du Lac Band of Lake Superior Chippewa, the investigations have resulted in more than $11 million in payments, environmental projects, and financial assurances from Enbridge, according to the state agencies.The Minnesota agency investigation found that Enbridge violated regulations when it discharged construction storm water into wetlands and inadvertently releasing drilling mud into surface water at 12 locations in June and August of 2021. The DNR also finalized agreements with Enbridge to address three aquifer breaches related to Line 3 construction. Minnesota Attorney General Keith Ellison also said Monday he has filed a misdemeanor criminal charge against Enbridge in Clearwater County District Court for taking water without a permit at the Clearbrook aquifer. A statement from Enbridge said that the charge will be dismissed following one year of compliance with state water rules. Enbridge said $7.5 million of the $11 million will be used to provide financial assurances and fund multiple environmental and resource enhancement projects. “At the start of this project, the MPCA issued our most stringent water quality certification to date and permits that were strong, enforceable, and protective — and this enforcement action holds Enbridge accountable for the violations that occurred during construction,” said MPCA Commissioner Katrina Kessler. Environmentalist Winona LaDuke, applauded the action taken by the state and attorney general, but added the agencies failed Minnesota’s natural resources and tribal treaty rights by allowing the project to continue. “Remember that the aquifer is still hemorrhaging water and the level of contamination is increasing,” the executive director of Honor the Earth said.

Summit Midstream Tripling Natural Gas Processing Footprint in Colorado’s DJ with $305M in Deals - Summit Midstream Partners LP has agreed to acquire Outrigger DJ Midstream LLC and the operating subsidiaries of Sterling Energy Investments LLC for about $305 million total in cash to expand in Colorado. The Outrigger DJ assets in Weld County, CO, within the Denver-Julesburg (DJ) Basin, comprise a 60 MMcf/d cryogenic natural gas processing plant, about 70 miles of low-pressure gas gathering lines, roughly 90 miles of high-pressure gas gathering lines, 12,800 hp of field and plant compression, and about 30 miles of crude oil gathering pipelines. The Sterling subsidiaries, known collectively as Sterling DJ, are in Weld and Logan counties, and in Cheyenne County, NE. They include three cryogenic processing plants with nameplate capacity of 100 MMcf/d, about 450 miles of gas gathering lines, 8,500 hp of field compression, freshwater rights, and about 40 miles of subsurface freshwater delivery infrastructure. “These highly value- and credit-accretive transactions create a strategic franchise position in the DJ Basin that we believe will generate significant free cash flow growth for Summit in the coming years while immediately enhancing the quality and availability of services for our combined customer base in the region,” said Summit CEO Heath Deneke. The acquisitions allow “the integration of our underutilized Hereford gathering and processing system with the capacity constrained Sterling DJ and Outrigger DJ systems,” Deneke added. “Combining operations of the three systems will create significant commercial and operating synergies and will provide substantial running room to grow dedicated producer volumes in the coming years with minimal capital expenditure requirements,” the CEO noted. “Outrigger DJ and Sterling DJ customers are expected to connect over 75 new wells in 2023 and are well-positioned to sustain and potentially grow that level of development activity in the coming years with more than 675 active permits currently held on dedicated acreage.” The transactions, which are slated to close by year’s end, would triple Summit’s DJ gas processing capacity and add an estimated 505,000 dedicated leased acres in rural Weld County, according to the company.

Large oil project asks to inject wastewater into Wyo. aquifer - A Dallas-based oil and gas company is asking EPA to allow it to inject millions of barrels of briny wastewater from thousands of planned wells on Wyoming public lands into a deep water aquifer. The proposal from Aethon Energy has been complicated for years over the question of what to do with the wastewater, with environmental groups saying the oilfield waste could contaminate future drinking water sources. Bone-dry Wyoming is no stranger to water wars from fossil fuel development, such as accusations in the early 2000s that water from coal bed methane polluted surface waters. The state has said the produced water from the coal bed methane boom had little impact on water quality. Disputes can even bubble up to the national level, as when the Obama administration’s EPA found a possible correlation between hydraulic fracturing and polluted drinking water outside the small town of Pavillion. That finding continues to be disputed, with the state repeatedly concluding that fracking was not to blame (Greenwire, Dec. 27, 2019). The Aethon Energy and Burlington Resources Oil and Gas Co. project is not far from Pavillion. In 2020, the Bureau of Land Management gave the companies approval to expand production of the Moneta Divide oil field. The project calls for drilling up to 4,250 wells. Roughly 67 percent of the land is managed by BLM, while 10 percent is Wyoming state lands, and the remainder is private. Over its 65-year life, the Moneta Divide project is expected to produce 18.16 trillion cubic feet of natural gas and 254 million barrels of oil. It would also produce tremendous volumes of salty water — up to 1.4 million barrels a day at peak production. Over the years, Aethon has deployed or proposed various strategies to dispose of its water waste, including releasing diluted water into nearby creeks, treating the water and using shallow injection wells. But to manage the volumes of produced water projected as production ramps up at Moneta Divide, the company says it needs to inject wastewater into deep formations.

Analysts Say TC Energy Could Divest Keystone Oil Pipeline --TC Energy Corp. could sell billions of dollars of assets to help fund projects in Mexico and Western Canada and may even seek the divestiture of its Keystone oil pipeline to the Gulf Coast, according to analysts. The Canadian company may look to monetize its liquids pipelines as well as smaller gas pipelines with targeted proceeds of as much as C$4 billion ($2.9 billion), RBC Capital Markets analyst Robert Kwan said in a note Monday, citing a recent meeting with TC’s Chief Financial Officer Joel Hunter. Separately, Tudor Pickering & Co. analysts said they see the possibility of the company shoring up its balance sheet with asset sales. A sale of the liquids pipeline would be an “ESG-accretive divestiture” and “the major prize in right-sizing the balance sheet,” analyst Matthew Taylor said in a note Tuesday, upgrading his rating on the stock to buy from hold. TC Energy declined to comment, saying in an email that it doesn’t comment on rumors or speculation. The company has faced challenges in recent years including the cancellation of its expansion of the Keystone XL pipeline after US President Joe Biden pulled a key permit for the project on his first day in office. The company has also experienced a 70% cost overrun in the Coastal GasLink pipeline, which is being built to supply LNG Canada, a massive natural gas export project in British Columbia. TC’s stock price fell to a 19-month low in Toronto earlier this month. The company is primarily focused on natural gas pipelines and power generation. It built the first phase of the 600,000-barrel-a-day Keystone pipeline system more than a decade ago. In recent years, concern about greenhouse gas emissions has prompted some investors to shun oil-sands assets.

Harold Hamm To Acquire Continental Resources For $26.96 Billion - In what we're sure won't be the last oil and gas acquisition deal over the next few quarters, Continental Resources founder Harold G. Hamm is going to be acquiring the company for $26.96 billion, according to multiple reports Monday morning. The consideration amounts to $74.28 per share. Continental shares spiked Monday in the pre-market session on the news. The acquisition price will include $0.28 "in lieu of Continental’s anticipated dividend for the third quarter of 2022", Bloomberg reported. Continental shares were up about 8% on the news Monday morning. The company's press release says: Continental Resources, Inc. today announced that it has entered into an Agreement and Plan of Merger with Omega Acquisition, Inc., an Oklahoma corporation, an entity that is owned by Continental's founder, Harold G. Hamm. Pursuant to the Merger Agreement, Merger Sub will commence a tender offer to purchase any and all of the outstanding shares of Continental's common stock at $74.28 per share, other than (i) shares of common stock owned directly or indirectly by Mr. Hamm and the Hamm family and (ii) shares of common stock underlying unvested equity awards issued pursuant to Continental's long-term incentive plans. Based on the shares outstanding as of October 12, 2022, the tender offer would be for approximately 58 million shares of common stock. It marks a 15% premium to the stock's closing price of $64.50 on June 13, 2022, the day before Hamm's family made its initial offer for the company. There is no financing condition to the deal, Bloomberg noted. The acquisition is going to be financed using cash on hand and borrowings that are already available via a revolver. Hamm will also enter into a new term loan facility to help close the financing for the deal, the report says. Hamm sits on the board of Continental and already owns about 83% of the company's common stock with his family. Continental's board acted "on the unanimous recommendation of a special committee consisting solely of independent and disinterested directors", the press release says.

North Dakota Oil, Natural Gas Production Flat as Bakken Operators in Maintenance Mode - North Dakota’s natural gas production averaged 3.09 Bcf/d in August versus 3.1 Bcf/d in July, according to the latest figures from the state’s Department of Mineral Resources (DMR). The slight dip was mainly because of a processing plant outage, DMR’s Lynn Helms, Oil and Gas Division director, told reporters. The natural gas capture rate held steady at 94%, in line with recent months as most Bakken Shale operators have sought to stamp out routine gas flaring. Natural gas output in North Dakota is mostly a byproduct of oil production, which also was flat month/month at 1.07 million b/d, DMR data show. The state’s drilling rig count stood at 43 as of Thursday, compared to monthly counts of 45, 46 and 45 for July, August and September, respectively. By comparison, the rig count in New Mexico – home to a large swath of the Permian Basin – stood at 113 as of Thursday, Helms noted. “People continuously ask, ‘Well where did all the rigs go?’ They went to the Permian,” Helms said. “And so Texas and New Mexico have seen, with the high oil prices, a continuous increase in drilling activity, unlike North Dakota.” North Dakota’s tally of drilled but uncompleted wells stood at 477 as of August, up from 465 in July. However, drilling permits and well completions both increased in September, Helms said. Operators in North Dakota requested 65 drilling permits in September, compared to 53 in July and 102 in August. Well completions in September totaled 81, versus 74 in July and 66 in August, based on preliminary data. Because of the uptick in completions, “we would seriously anticipate we’re going to see an increase in production for the September report, which will come next month,” said Helms. The number of active hydraulic fracturing crews in the state stood at 15 for the week ended Oct. 14. North Dakota boasted an all-time high 17,616 producing wells as of August, according to preliminary estimates, although production is below historic highs. “That just speaks to a mature play where we’re just replacing the decline” of existing wells, Helms said. Helms indicated the state’s most attractive oil resources are behind the DUC wells that operators are waiting to drill until sufficient gas capture infrastructure is in place, “and underneath these federal leases that we just can’t seem to unlock.” Helms said larger producers in the Bakken Shale such as Hess Corp. and ConocoPhillips are mostly planning to hold their production flat in 2023. Continental Resources Inc. “is looking at maybe a bit of growth,” as is Devon Energy Corp., he said. For the state as a whole, Helms said he expects flat to 2% output growth next year. As for natural gas, the Energy Information Administration is forecasting Bakken natural gas output to average 3.19 Bcf/d for September and 3.22 Bcf/d in October. On the regulatory front, Helms said DMR was informed by the Department of Justice that the Bureau of Land Management (BLM) is planning to announce a new rule by the end of October to restrict flaring and venting of natural gas on federal acreage. “It is just a continuous game of what’s next with the Department of Interior in terms of erecting barriers to increased oil and gas production on federal lands,” Helms said. He noted that BLM did not hold any oil and gas lease sales during the third quarter. The Mineral Leasing Act requires BLM to hold quarterly onshore lease sales in states where eligible lands are available.

ExxonMobil to offload US refinery to Par Pacific for $310m -ExxonMobil and its affiliates have agreed to sell the Billings refinery and associated marketing and logistics assets in the US to Par Pacific Holdings in a deal worth $310m.The sale also includes a 65% stake in an adjacent cogeneration facility and an expansive PADD IV and V marketing and logistics network.Exxon’s logistics assets considered for sale include the wholly owned 55,000 barrels per day (bpd) Silvertip Pipeline, a 40% stake in the 65,000bpd Yellowstone refined products pipeline, and seven refined product terminals. Par Pacific president and CEO William Pate said: “This acquisition will significantly enhance our scale and geographic diversification and underpins our focus on pursuing strategic growth initiatives.

ExxonMobil Buys Two Pipelines from Company Responsible for 2015’s Refugio Oil Spill - ExxonMobil has purchased a 123-mile stretch of two pipelines — 901 and 903 — from Plains All American Pipeline, the responsible party for the May 2015 pipeline rupture and oil spill that effectively shut down all oil production off the coast of Santa Barbara County at Las Flores Canyon. ExxonMobil and county energy planners have confirmed the sale took place, but the sale price is not being publicly released. The deal now puts ExxonMobil directly in the driver’s seat in seeking permits to replace the two stretches of corroded pipeline needed to get the company’s oil from its processing plant at Las Flores canyon to Sisquoc and from Sisquoc to refiners located in Pentland. The acquisition comes just a few months after the Santa Barbara County Board of Supervisors voted 3-2 to deny ExxonMobil’s request to truck its Las Flores Canyon oil to Pentland. ExxonMobil vowed to sue the county for that denial, but the rejection puts greater urgency on ExxonMobil’s need to get the defective pipeline replaced. The permit application process for Pipelines 901 and 903 promises to take many years — seven is the rough estimate — and involve multiple state, federal, and local jurisdictions. It is currently stalled pending the submission of certain information needed to reactivate the preliminary environmental review process. In May 2015, 2,940 barrels of oil escaped from Plains All American’s Line 901 — determined to have become badly corroded — along the Gaviota Coast, with about 500 barrels making it into the ocean. Since several oil companies relied on that pipeline for their offshore production, the rupture effectively put them either out of commission, like ExxonMobil, or out of business, like Venoco. Venoco’s lawsuit against Plains is still wending its way through the county’s court system — though breaching for procedural rulings this week — as is a parallel lawsuit filed by the State Lands Commission. A month ago, Plains All American settled a class-action lawsuit with members of the local fishing industry for loss of business inflicted by the spill to the tune of $230 million. What difference it makes that ExxonMobil has taken ownership of the pipelines in question remains to be seen. County energy planners say they have yet to meet with the new owners over the matter. Linda Krop with the Environmental Defense Center noted that Plains All American is currently on the hook to fund a major restoration effort for the terrain impacted by the Refugio Oil Spill. Will ExxonMobil assume that responsibility, she wondered, or will it remain with Plains?

ExxonMobil gets Central Coast oil pipelines tied to spill - Two crude oil pipelines on the Central Coast owned by beleaguered company Plains All American have been acquired by oil giant ExxonMobil. “ExxonMobil has signed an agreement with Plains All American Pipeline to acquire lines 901 and 903 located in Santa Barbara, San Luis Obispo and Kern counties,” said Julie L. King, an ExxonMobil spokeswoman. “A team from ExxonMobil Pipeline Company will conduct a thorough inspection of the pipelines to determine how to safely and responsibly return them to service.” On May 19, 2015, Plains’ pipeline 901 ruptured near Refugio State Beach, spilling up to 630,000 gallons, or 15,000 barrels, of crude oil onto the shoreline and into the ocean. Plains was found criminally liable in 2018 for the oil spill because of failed maintenance and extensive pipeline corrosion.According to the Justice Department, the discharge was caused by Plains’ failure to address external corrosion and have adequate control-room procedures in place, and was further exacerbated by Plains’ failure to respond properly. In Santa Barbara, a Superior Court judge in 2019 ordered Plains to pay a$3.3 million criminal fine for the Refugio oil spill. The spill devastated the fishing industry and polluted coastal properties from Santa Barbara County to Los Angeles County. Plains All American Pipeline also in May of this year agreed to settle a class-action lawsuit, and pay $230 million to fishers, fish processors, and shoreline property residents damaged by the Refugio oil spill in 2015. Linda Krop, chief counsel for the Environmental Defense Center, has questions about the acquistion of the 123-mile pipeline route.“We will continue to monitor the county’s environmental review process, and ask if there will be any changes to the project,” Krop said. “Our goal is to make sure that the county discloses all of the impacts of the pipeline project, including the impacts from restarting the platforms.”

Possible oil spill in Long Beach under investigation – The U.S. Coast Guard and Long Beach Fire Department are investigating the source of a possible oil spill in Long Beach near Alamitos Beach. Witnesses reported seeing tar balls on the shoreline around 4:30 p.m. Friday, Oct. 14 near the 400 block of East Shoreline Drive, and fire department officials joined the Coast Guard in responding to the scene, U.S. Coast Guard Petty Officer Aidan Cooney said. “When our team arrived there was no oil or any tar balls along the shoreline and any oil that was in the water had dissipated,” Cooney said. Cooney said the source of the slick was unknown.

OC oil spill: Pipeline operator agrees to pay $50 million --The company that operates an underwater oil pipeline that gushed thousands of gallons of crude into the ocean off Huntington Beach last year has settled a class-action lawsuit for $50 million, according to court records obtained Tuesday.The court papers were filed at 10 p.m. Monday, according to attorney Wylie Aitken, the lead lawyer for the plaintiffs. Of the $50 million Amplify Energy will pay to settle the lawsuit, $37 million will go to a class of fishers, $9 million will go to property owners and about $7 million goes to the tourism industry such as whale watching companies, Aitken said.The settlement also includes multiple steps to try to prevent such a spill from happening again, Aitken said.According to the agreement, Amplify Energy will increase training to comply with state laws "to notify and update all appropriate response agencies of any release or threatened release of a hazardous material or pollutant substance from any pipeline, conveyance system, or any other operation of defendants in the state of California, as required by law." Amplify also agreed to notify the state Office of Emergency Services "and any local unified environmental program or agency."The company agreed to improve its "leak detection system." For the next four years, the company will also notify the state's Office of Emergency Services "of each leak detection alarm." The company will also "conduct actual visual inspections of the pipeline semiannually rather than one inspection every two years as required by law," for the next four years.The company also agreed to spend at least $250,000 for "pipeline related procedures" before the pipeline is restarted. And Amplify will increase staffing on the Elly platform to provide for three control room operators (an increase of one per crew) and three plant operators (an increase of one per crew) over the next three years.

MARAD Letter Reveals New Details About Latest Unusual Jones Act Waiver in Puerto Rico -A determination letter from the U.S. Department of Transportation’s Maritime Administration is shedding new light on the Jones Act LNG waiver issued by the Department of Homeland Security earlier this week, including the urgency and speed at which it was requested and then issued over the weekend.The letter was sent last Sunday, October 16, by MARAD Administrator Rear Adm. Ann Phillips to W. Richmond Beevers at the U.S. Customs and Border Protection in response to an urgent request submitted on Saturday for a U.S.-flag market availability survey required of MARAD as part of the Jones Act waiver process.Based on details on the letter, the waiver request was made to the CBP on Saturday, Oct. 15, by Naturgy Aprovisionamientos (Naturgy) and AES Andres, a Dominican power company, asking for a waiver for the next-day delivery of 30,000 cbm of LNG from the Dominican Republic. CBP sent the availability survey request to MARAD that same day along a two-hour deadline of 5 p.m. Saturday. The “temporary and targeted” waiver was granted the next day on Sunday, October 16, by DHS Secretary Alejandro Mayorkas to “address the unique and urgent need for liquified natural gas in Puerto Rico.”The waiver was the second issued under unusual retroactive circumstances by the DHS in response to Hurricane Fiona relief efforts. The first was requested by BP in late September to allow a foreign tanker, theGH Parks, to deliver diesel to the island. At the time of the request, GH Parks had already departed the U.S. with the cargo. News of its arrival in Puerto Rico caused public and political outcry leading up to the waiver’s approval days later, which prompted a furious response from American maritime industry interests who called it out as being illegal and unjustified. From Phillips’ letter, we’re now learning that in both cases the waivers were requested after the cargoes had already departed the U.S. mainland on foreign-flagged vessels—presenting a situation Rear Adm. Phillips notes is “novel and problematic.” “As with the previous waiver, the decision to approve was made in consultation with the Departments of Transportation and Energy to assess the justification for the waiver request and based on input from the Governor of Puerto Rico and others on the ground supporting recovery efforts,” Secretary Mayorkas said in a statement announcing the LNG waiver.

Diesel Crisis Deepens As Inventories Fall To Dangerous Levels -While the OPEC+ agreement to cut crude oil production and the U.S. reaction to it dominate headlines, a much more immediate crisis is getting worse by the day.Global diesel and other distillate fuel stocks have been on the decline for a while now, and there is no reversal of this trend in sight. Demand, on the other hand, has been growing, leading to a widening shortage.The situation has become so grave that U.S. buyers have begun snapping up diesel cargos originally sailing for Europe.Reuters reported earlier this month that at least three tankers carrying diesel from the Middle East had changed their course mid-journey and were now traveling to the United States. And this new competition is about to intensify.The foundation of the shortage is the gap between refining capacity and fuel demand. The pandemic saw a lot of refineries close, especially in the United States. It wasn’t just the pandemic itself—the anticipation of a boom in demand for EVs that would render a lot of refining capacity obsolete also had a part to play, as Reuters’ John Kemp noted in a column last week.This boom has yet to materialize, however. In the meantime, fuel demand remains robust, resulting in a shortage. In Europe, there have been contributing factors, such as the French refinery workers’ strike, which has made the shortage much worse than it would have been otherwise, and the upcoming planned maintenance-related refinery closuresEurope is currently buying a lot of Russian diesel to fill the gap, but this will have to stop next February as the embargo on Russian fuels kicks in, further aggravating an already complicated situation with the supply of middle distillates in a major consuming regionArgus reported this week that Europe is in for a major diesel supply shock because of low inventories and strong demand. And the level of inventories had a lot to do with the unplanned outages at European refineries before maintenance season, including the four-week drop in French fuel output amid the workers’ strike.On top of that, the article quoted traders as saying there has been little incentive to build diesel inventories in the current market situation: diesel is strongly backwardated right now, so from the perspective of refiners and commodity traders, there is little sense in stockpiling.In the United States, meanwhile, distillate stocks have fallen to 106 million barrels, which is the lowest since records of these stocks began back in 1982, Reuters’ Kemp reported. Europe is doing a little better, with distillate stocks at 360 million barrels at the end of September, the lowest seasonal since 2007.The U.S. has been exporting a lot of diesel to troubled Europe, but now things are changing, and not just because cargoes are being diverted from Europe to the U.S. coast. Refiners in the United States are bracing for a possible ban on fuel exports.

What ‘Backwardation’ Has to Do With US Diesel Squeeze - A crisis is once again brewing in the US for the diesel fuel that powers trucks and heats homes. Global shortages and a market phenomenon known as backwardation are frustrating Biden administration efforts to bolster dangerously low domestic inventories and keep prices from soaring as winter approaches. Officials are now considering steps like export restrictions that would be unprecedented -- and that critics say could well backfire. The country is down to 25 days of diesel supply with stockpiles at their lowest level for this time of year in records going back to 1993. In the Northeast, where more people burn fuel for home heating than anywhere else in the country, inventories are a third of their typical levels heading into winter. National Economic Council Director Brian Deese called the levels “unacceptably low.” By late October, diesel prices had risen for more than two weeks to 50% above where they were a year ago. Backwardation and contango are names for curve structures that map traders’ guesses about what a given contract will be worth in the future. In the former, the curve is downward sloping, meaning prices are expected to fall in the future; in the latter, it’s the reverse and upward sloping. Right now, traders are paying more for prompt deliveries than longer-term ones. This backwardated market structure incentivizes suppliers to sell now instead of holding onto the product. In October, the diesel curve had become so backwardated that sellers risked losing as much as 30 to 40 cents a gallon holding onto the product until the next month, compared with less than 1 cent at the same time last year. Not only was the spread unusually large, but the backwardation had lasted unusually long: Typically the diesel market flips into contango in the summer, allowing suppliers to replenish fuel ahead of peak harvest and heating season. This year, that never happened. Refiners in Texas and Louisiana can export diesel out of the Gulf Coast to buyers in Latin America and Europe for an immediate profit -- and they have been doing just that. The market backwardation means domestic deliveries that take longer are risky. This is a key reason that the country’s major fuel pipeline connecting Gulf Coast refiners and East Coast consumers was underused for months while East Coast seasonal diesel stockpiles languished at record lows -- the product can lose a lot of its value in the two to three weeks it takes to move through the pipeline. Diesel supplies have also tightened due to a steady decline in East Coast refining capacity in recent years, which has made the region more reliant on overseas imports, some of which come from across the Atlantic -- Europe and Russia. Shipments from both sources have dried up/decreased. Europe is exporting less fuel as it grapples with the sharp drop in oil and natural gas imports from Russia, and sanctions imposed by the US after Russia’s invasion of Ukraine have stopped shipments from there. At the same time, US seasonal demand for diesel is at the highest level since 2007. Farmers are burning the fuel to harvest crops, residents of the Northeast are filling up their heating oil tanks before prices rise even more and trucks moving goods on the country’s highways have geared up ahead of the holiday shopping season.

Mexico plans 2023 oil hedge at $68.70/bl - Pemex's annual oil hedging program will remain in place next year to protect its revenues against any declines in global crude prices, Mexico's finance ministry confirmed yesterday. "For 2023, we have an oil hedging program that will kick in if oil prices drop below $68.70/bl," finance undersecretary Gabriel Yorio told a committee in congress yesterday. Each year, the finance ministry undertakes a series of secretive deals — thought to be the largest of their kind — to hedge oil revenues in the event of a decrease in crude prices. The hedge typically covers 250mn bl, or the equivalent of annual net exports. Previous hedges have cost around $1bn. The hedge was key to propping up federal revenues during the first year of the Covid-19 pandemic that briefly pushed crude futures prices into negative territory for the first time. Crude prices have since surged, with the Mexican crude basket averaging $95.80/bl so far this year, up by 46.7pc on last year's $65.30/bl average and over one and a half times the $36.24/bl average during the peak of the pandemic in 2020, according to Pemex data. Oil revenues are expected to contribute Ps1.3 trillion ($64.6bn) to federal income next year, with the Mexican basket price — that reflects a mix of its export grades — forecast at $68.70/bl and production targets of 1.87mn b/d. The target is ambitious given August's output of 1.67mn b/d. Since 2017, state-owned Pemex has contracted its own separate hedge that covers around 14pc of output, director Octavio Romero said previously.

Brazil hit record gas production in September - Brazil produced a record amount of natural gas in September but reinjected almost half of it back into wells. Total gas production amounted to 143.1mn m³/d in the month, a 2.2pc increase from August, according to preliminary data from oil and gas regulator ANP. Output last month was up by 7.3pc from a year earlier. Reinjection, in which gas is pumped back into wells to enhance oil recovery or to avoid flaring and the release of CO2, accounted for almost 69mn m³/d of gas output in September. That was down by 0.9pc from August while rising by 2.8pc from September 2021 levels. Reinjection hit a record in August, at 69.6mn m³/d. Gas consumption on platforms rose sharply to 51.3mn m³/d, more than triple the amounts consumed in the previous month and in September 2021. Gas available to the market was 56.7mn m³/d, a 6.4pc increase from the prior month and up by 16pc from September 2021. Gas flaring fell to 3.2mn m³/d, a 4pc drop from the prior month and a 21pc slump from the same month last year.

TotalEnergies selects px Group to operate North Sea gas pipeline - TotalEnergies E&P UK, a unit of French energy company TotalEnergies, has contracted UK-based engineering company px Group to operate the Seal gas pipeline in the North Sea. Operational for more than 20 years, the 474km-long SEAL pipeline is deemed to be a ‘critical component’ of the UK’s energy supply and energy security. The 20-year contract has been awarded to Energy24, a px Group business, and is effective from 1 August this year. The pipeline transports gas from the Elgin Franklin platform in the North Sea’s Central Graben Area to the Bacton gas terminal on the Norfolk coast.

Anti-oil protesters throw tomato soup on van Gogh’s Sunflowers -On Friday, two anti-oil activists threw two cans of tomato soup over Vincent van Gogh’s Sunflowers (1888) at the National Gallery in London. The pair, Phoebe Plummer, 21, from London, and Anna Holland, 20, from Newcastle, are supporters of Just Stop Oil. The latter is a coalition of groups demanding that the British government “immediately halt all future licensing and consents for the exploration, development and production of fossil fuels in the UK.” Just Stop Oil has been staging protests in recent weeks, “part of a longer plan of disruption in London that will continue for the rest of this month.” During last Friday’s action, Plummer asked onlookers, “Is art worth more than life? More than food? More than justice?” She went on, “The cost-of-living crisis is driven by fossil fuels. Everyday life has become unaffordable for millions of cold, hungry families. They can’t even afford to heat a tin of soup. Meanwhile, crops are failing and people are dying in supercharged monsoons, massive wildfires and endless droughts caused by climate breakdown. We can’t afford new oil and gas, it’s going to take everything. We will look back and mourn all we have lost unless we act immediately.” Holland said, “UK families will be forced to choose between heating or eating this winter, as fossil fuel companies reap record profits. But the cost of oil and gas isn’t limited to our bills. Somalia is now facing an apocalyptic famine, caused by drought and fueled by the climate crisis. Millions are being forced to move and tens of thousands face starvation. This is the future we choose for ourselves if we push for new oil and gas.”

Defiant campaigners vow to fight against 'threat' of fracking - Express.co.uk - When Cuadrilla first proposed test drilling on the picturesque Fylde coast in Lancashire, it didn't go down too well with residents. They responded by objecting: fiercely and vociferously. A group of headscarf-wearing grandmothers formed a ragtag group known as Nanas Against Fracking and joined forces. They lobbied Lancashire County Council's meeting in Preston with banners and noisy marches through the city watched by amused onlookers. On a grey day at Cuadrilla’s former Preston New Road well this week, just hours before the chaotic vote in the Commons as PM Liz Truss desperately clung to power, the Nanas returned in force. Retired school administrator, Jill Walton, from the village of Inskip, said of her three grandchildren: "I don’t want them to live with poisoned air, poisoned water and water poisoned land - that’s before you get to the earthquakes." She criticised Ms Truss’s Government for breaking a Tory manifesto promise not to allow fracking unless the science proved it was safe. Ms Walton said: "[The Government] should insulate houses, instal more solar panels and get battery technology going so people can have a power supply when the sun isn’t shining." More than a dozen campaigners from Nanas Against Fracking and Frack Free Lancashire returned to the former fracking site in a field off the A583 between Blackpool and Preston on Wednesday (October 19). Under grey skies and with a chill wind blowing in from the Irish Sea, locals protested by the side of the road yards from a now capped fracking well, playing Queen’s "Another One Bites the Dust" from a loudspeaker. Brandishing bright yellow "No fracking" placards and a banner reading "No means no", the group shared homemade chocolate brownies as passing motorists sped past, beeping their horns in a show of support. The message from the campaigners was clear: Don’t expect an easy time of it if you try and frack here again. The message came ahead of a rough ride for former Prime Minister Liz Truss’s Government which defeated Labour’s bid to ban fracking amid farcical scenes in the House of Commons. The motion was defeated by 230 votes to 326, with a majority of 96. Conservative whips initially said the vote on whether to allocate Commons time to consider legislation to stop shale gas extraction was being treated as a confidence motion in Ms Truss’s embattled Government.

Basildon MP John Baron calls vote on fracking 'a shambles' of which there 'can never be a repeat' - An Essex MP has branded a vote on the use of fracking "a shambles" following allegations of bullying behaviour and the chief government whips allegedly quitting before returning to post. John Baron, Tory MP for Basildon and Billericay, said Downing Street needs "to get a grip and bring in more experienced hands". Mr Baron's comments refer to the incident in Westminster on Wednesday night which- saw speculation that chief whip Wendy Morton and her deputy Craig Whittaker had resigned in fury at the handling of a vote on a Labour motion over fracking. It came after climate minister Graham Stuart told the Commons minutes before the vote that “quite clearly this is not a confidence vote”, despite Mr Whittaker earlier issuing a “100 per cent hard” three-line whip, meaning any Tory MP who rebelled could be thrown out of the parliamentary party.

Fracking: What's all the fuss about it in the UK? - The UK’s world of politics plunged deeper into turmoil on Wednesday night after a debate on frackingled to alleged physical altercations between Prime Minister Liz Truss’ aides and lawmakers from her own Conservative Party.Last month, Truss’ government formally lifted a ban on fracking for shale gas that had been in place for England since 2019, arguing that strengthening the country’s energy supply was an “absolute priority.” The main opposition Labor Party brought forward a motion to restore the ban, but some Conservative members of parliament reported they were bullied, even manhandled, into voting in line with Truss. But what exactly is fracking, and why is it so contentious? Here’s what you need to know.Following Russia’s invasion of Ukraine, European gas prices have surged to record highs and Britain is subsidizing bills for households and businesses at a predicted cost of more than 100 billion pounds ($110.4 billion).Britain is heavily reliant on natural gas, which will take years to reduce. Gas heats around 80% of the country’s homes and on some days it can be used to generate almost 50% of the country’s electricity. The government is seeking to increase domestic gas production, which has been in decline, to reduce its reliance on imports. The industry body Offshore Energies UK says that without new investment, Britain will have to import around 80% of its gas by 2030, up from around 60% now.How much gas could be produced? Scientists say this is still unclear. Since only few test wells have been drilled, there are no estimates of proven reserves to confidently predict how much shale gas would be technically and economically viable to extract by fracking. The government has said that the only way to assess this is to allow drilling to start. “Lifting the pause… will enable drilling to gather this further data, building an understanding of UK shale gas resources and how we can safely carry out shale gas extraction in the UK,” a statement from the Department for Business, Energy and Industrial Strategy (BEIS) said last month. Why is it controversial? Injecting fluids at high pressure can cause tremors in the Earth, while people in the communities affected are also concerned about the impact on the landscape, tourism and agriculture. Shale gas is also a fossil fuel and campaigners say that extracting more fossil fuels goes against the country’s target to reach net zero emissions by 2050. It also uses a large amount of water and environmental groups have raised fears over possible groundwater contamination.

Explained: The fracking debate that became the last straw for the Liz Truss govt - Six weeks into her term as the English premier, Liz Truss has resigned from her position, conceding that she had not only failed to deliver on her electoral promises but also lost the faith of her party. In doing so, Truss has set the record for the shortest term as PM in British history. The 24 hours that led up to her resignation were characterised by utter chaos, with resignations (and rumours of resignations) coming in left right and centre as Truss struggled to keep her sinking ship afloat. While there were ultimately multiple factors that led to the quick and spectacular demise of the Truss government, the straw that broke the proverbial camel's back was a contentious vote on formally banning the practice of fracking in the UK. To give a bit of context, fracking is a controversial method of extracting oil and gas from shale rock. The practice was halted in the UK in 2019 after it faced stiff opposition from environmental groups and concerns over regular earth tremors in and around the fracking sites. Later, the Labour party introduced a bill in British Parliament to permanently ban the practice, a bill that was at least verbally supported by many in the Conservative party as well. However, in September this year, amidst rising energy prices, Lizz Truss announced that her administration would be lifting the moratorium as part of a raft of measures to stabilise UK energy prices. On Wednesday, the Labour party pushed for a vote on banning the practice and chaos ensued. According to the reports, several senior Tories had already vowed to oppose Truss and support the Labour bill ahead of the vote on Wednesday. There were also reports of Conservative party members being told that the vote was, in effect, a confidence vote and a loss here would somehow signify the fall of the Tory government. Predictably, riled-up Conservative MPs voted to defeat the Labour bill calling for a ban, with the final result being 326 votes against the ban and 230 for it. What is surprising is that more than 40 Conservative MPs still voted in favour of the ban, regardless of the rumours of a hidden confidence vote. Also Read - UK inflation accelerates to 40-year-high amid food cost rise Even more shocking, there were several alleged eyewitness accounts of Tory MPs being 'bullied and physically manhandled' ahead of the vote to follow the party line.Amidst all this confusion, there were also rumours of Chief Whip Wendy Morton being so furious with the farcical turn of events that she threatened to resign but was later compelled to stay on.

Natural Gas Forecast: EU Storage Progress, Warm Weather Deal Blows To US, EU Prices - Natural gas prices in Europe and the United States dropped sharply on Monday, helping to ease concerns for the commodity heading into the winter months. A backdrop composed of warmer-than-usual weather and ahead-of-schedule inventory buildups in the US and the EU has helped to cool speculative pressure on the commodity at a critical time. According to a draft proposal reported by Reuters, the European Union appears ready to move forward with a“dynamic” price cap for LNG. The Agency for Cooperation of Energy Regulators (ACER) would be tasked with implementing the price cap. The ACER's mandate would target prices at the Dutch Title Transfer Facility (TFF)—the virtual pricing point for EU natural gas. The exact effectiveness of a price cap remains debated, but for now, the market appears to see it as a bearish price development. Still, EU governments would need to reach a consensual agreement on the move, which Germany may oppose. Meanwhile, the bloc has made better-than-expected progress on its inventory buildup, with AGSI-GIE data showing that EU storage levels rose above the 92% mark as of October 15. So far, October has been a mild month in terms of temperatures across most of Europe—a welcome development for the energy situation. If the weather remains mild, it should keep prices depressed even if the EU stumbles on implementing price cap measures. US prices are falling amid mild temperatures. The National Weather Service's 8 to 14-day temperature outlook shows a high probability for above-average temperatures across the eastern half of the United States. That should temper gas demand. Moreover, the NWS sees above-normal precipitation across the western US, which would bolster the supply of hydroelectricity. Another notable market development comes from Africa, where Nigeria LNG Ltd. announced a force majeure due to flooding at its Bonny Island LNG facility. The company procures over 20 million tons of liquified natural gas (LNG) per year. However, the extent of disruption from the force majeure is not fully realized yet, although the company said it was working to limit operational disruptions. The market seems unfazed, but a prolonged outage may provide a tailwind to prices if the chances for an extended outage rise. .

Danes confirm 'extensive damage" to Baltic Sea pipelines - (AP) — Danish officials on Tuesday confirmed that there has been “extensive damage” to the Nord Stream 1 and 2 gas pipelines in the Baltic Sea off Denmark and that the cause of the damage was “powerful explosions.” In a statement, the Copenhagen Police said it had carried out a number of preliminary investigations of what it called “the crime scenes," with assistance from Denmark's Armed Forces and in collaboration with, among others, the Danish security and intelligence agency. “It is very serious, and this is by no means a coincidence. It doesn’t just seem planned, but very well planned,” Danish Defense Minister Morten Bødskov told broadcaster TV2. The intelligence agency and the police have decided to set up a joint investigation group which will handle the further investigation of the incidents, the police said, adding it was “not possible to say when the investigation can be expected to be completed.” Earlier this month, the Swedish domestic security agency said its preliminary investigation of two further leaks closer to its coast “has strengthened the suspicions of serious sabotage” and a prosecutor said evidence at the site has been seized. Swedish newspaper Expressen published Tuesday what it claims is a video of the damaged pipelines off Sweden and said that at least 50 meters (165 feet) of the metal pipe appears to be missing The four leaks occurred in international but within the exclusive economic zone of Denmark and Sweden. The damaged Nord Stream pipelines discharged huge amounts of methane, a potent greenhouse gas, into the air for several days..

'Powerful explosions' triggered major gas leak on Russian pipelines, Danish police say - A preliminary investigation into gas leaks from two underwater pipelines connecting Russia to Germany found "powerful explosions" caused the damage, Copenhagen Police said Tuesday. The findings appeared to be similar to a crime scene investigation carried out by Sweden's national security service earlier this month, which reinforced suspicions of "gross sabotage."A flurry of detonations on the Nord Stream 1 and 2 pipelines on Sept. 26 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.Danish police said a joint group, including The Norwegian Police Intelligence Service, would be set up to handle further investigations of the incidents."It is still too early to say anything about the framework under which the international cooperation with e.g. Sweden and Germany will run, as it depends on several actors, including which authorities handle the case in the various countries," the statement said Tuesday.Danish police said it was not possible to say when the investigation was likely to be completed.Many in Europe suspect the Nord Stream gas leaks were the result of an attack, particularly as it occurred during 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.

Denmark says ‘powerful explosions’ caused the Nord Stream pipeline leaks. Danish authorities said on Tuesday that “powerful explosions” had caused the Nord Stream 1 and 2 natural gas pipelines to rupture three weeks ago, but declined to say who might have caused them.In announcing the results of their initial investigation, the Copenhagen Police echoed Swedish investigators, who reported this month that the leaks on the undersea pipelines, built to carry gas to Germany from Russia and transiting close to Sweden and Denmark, sprung from detonations that they strongly suspected were acts of sabotage.German authorities, who have been conducting their own investigation, have refused to comment on their findings, citing national security concerns.Three weeks after the explosions on the bed of the Baltic Sea, European investigators have said little about who was responsible for the blasts that, according to images taken by an undersea drone, commissioned by the Swedish tabloid Expressen, tore away 164 feet of one of the steel-and-concrete pipes on Nord Stream 1.“There are grooves in the seabed where the pipes were, where you can see broken objects that look like pieces of piping,” Trond Larsen, the drone operator, told Expressen. “We searched the area with the camera, but were unable to find the other end of the pipe.”The images, which could not be independently verified, showed two distinct lines, with a gaping expanse between them.“It takes an extreme force to bend such thick metal in the way we see,” Mr. Larsen said.Explosions seem to have occurred at separate locations on the Baltic Sea floor — one in Sweden’s exclusive economic zone, northeast of the island of Bornholm, and another southeast of the same island, but in international waters that fall in Denmark’s exclusive economic zone.The Copenhagen Police said in a statement that it had investigated “the crime scenes in the Baltic Sea” with help from the Danish Defense Ministry, Denmark’s national intelligence agency, known as PET, and the Danish Armed Forces. The police, along with PET, will further investigate the incidents, it said, and will work with authorities in other countries, including Sweden and Germany. The police did not specify when the investigation would conclude.Nord Stream AG, the company that owns and operates the Nord Stream 1 pipeline, said on Oct. 4 that its inability to secure necessary permits from Denmark and Sweden had prevented it from inspecting the pipeline. A survey vessel chartered by the company was also still waiting for approval from the Norwegian Ministry of Foreign Affairs to depart, it said.The company did not respond to calls seeking comment on Tuesday.At the time of the blasts, the pipelines were filled with methane, and the gas gushed into the sea. Although filled, the pipelines had become caught in the tensions ensnaring Germany and Russia due to the war in Ukraine, and no gas was reaching Germany.Political leaders in Europe, the United States and Russia have suggested that the incident was a deliberate act, but no one has produced evidence revealing the perpetrator, or how the blasts could have been carried out. Poland and Ukraine have both openly blamed Russia, which, in turn, has accused the United States. Both Moscow and Washington have strongly denied involvement.The blasts severed a critical energy link between Russia and Western Europe, although neither was actively transporting gas at the time — Russia had recently throttled back Nord Stream 1, citing technical issues, while Nord Stream 2 had not yet become fully operational.In the weeks since the explosions, countries surrounding the Baltic and North Seas have increased security patrols on the waters. Norway, which has become Europe’s most important source of natural gas since Russia invaded Ukraine, has also sent in troops to reinforce its offshore energy infrastructure.

Sahra Wagenknecht: Government refuses information on pipeline attack - (translation) Sahra Wagenknecht, opposition politician in the German parliament, asked the German government for information on the attack on the Northstream pipelines, and got this reply: «"For reasons of the state's well-being" no further information will be provided. "After careful consideration, the federal Government has come to the conclusion that further information cannot be provided – not even in classified form – for reasons of the state's well-being." The reason for this is the "third-party rule" for international cooperation of the intelligence services. According to this, the international exchange of knowledge is subject to particularly strict secrecy requirements. "The information requested thus affects confidentiality interests that are so in need of protection that the state's well-being outweighs the parliamentary right to information and the right of members of Parliament to ask questions must exceptionally take precedence over the confidentiality interest of the federal government.“ In plain language: there are probably findings that the members of the Bundestag are not allowed to learn. For this reason, the German government does not answer Wagenknecht's question "which NATO ships and troops" have been in the areas where the damage occurred since the suspension of gas supplies by Nord Stream 1, and which Russian ships and troops were sighted during that period. This answer, too, "would involve the disclosure of information that would have a particular impact on the welfare of the state," writes the Federal Foreign Office. Therefore, a classification and deposit of the requested information is also out of the question, "since even the low risk of becoming known cannot be accepted".»

Brussels proposes further emergency measures to address Europe’s mounting energy crisis. — The European Union unveiled a fresh proposal on Tuesday for emergency measures to tackle the energy crisis that has rocked the continent, sending utility prices soaring and threatening Europeans with bankruptcy.Europeans depend on natural gas to heat their homes and to keep their industry going. Before Russia invaded Ukraine, imports from Moscow amounted to 40 percent of E.U. countries’ gas consumption. But to punish the bloc for its support for Ukraine, Russia has been toying with its energy supply, a tactic that has contributed to punishing heating and electricity prices.Ursula von der Leyen, the president of the European Commission — the E.U. executive arm, which drafts Europe-wide legislation — said on Tuesday that Europe’s response to what she called a “severe knock-on effect” of Russia’s war in Ukraine should be more solidarity.“We are stronger when we act together,” Ms. von der Leyen told reporters while presenting the proposals.The draft legislation comes after weeks of intense debate among member countries, which have pushed in shifting coalitions for various potential solutions to the crisis, including a controversial price cap on natural gas.On Tuesday, the commission shied away from a straightforward cap, and focused instead on joint purchasing of gas, cutting down further on gas consumption, and strengthening fuel sharing between countries in case Russia turns off the taps completely. It also proposed limited interventions in the energy market to rein in prices.E.U. countries have different energy mixes and policies, and experts warned that finding a “fit for all” solution to the complex crisis might not be feasible. But the energy market is regulated at E.U. level, and the commission has been under increasing pressure from national governments to come up with a stronger collective response.Beyond technicalities, the issue of how to shield Europe from soaring energy prices is deeply political. Reducing the amount of gas imported from Russia has left a gap in the E.U. market, and despite a frenzied hunt for other energy sources, supply across the bloc does not match demand. The question remains about who is going to foot the bill for this mismatch, and how.In order to find a compromise, the commission proposed creating a new way to price natural gas inside the bloc. But a new pricing mechanism will take months to design. In the meantime, the commission suggested there should be the option of a price limit as a last resort in emergencies, but it did not elaborate on technical details.So far, member countries have focused mainly on subsidies for struggling businesses and households, and last month the bloc adopted an emergency tax on revenues of energy companies in order to partially finance the handouts. But E.U. members do not have equal fiscal firepower, and there was a growing concern among poorer countries that they would be left behind.

The EU wants to limit spiking gas prices after 'excessive' moves this summer - The European Union is working on new measures to prevent extremely high gas prices after "excessive" levels seen this summer, in a move that could have major implications for European consumers. The European Commission, the executive arm of the EU, proposed Tuesday setting a limit on daily gas trading levels. The aim is to avoid price spikes, which can lead to higher energy bills for households. The front-month gas price at the Dutch TTF hub, a European benchmark for natural gas trading, reached historic levels in late August, when the price of natural gas jumped to 341 euros ($334) per megawatt hour, from around 45 euros a year earlier. Prices have come down since then as EU nations have taken steps to improve their energy supply, but they remain relatively high on an historic basis and are a major problem for the European economy. European natural gas prices were trading around 120 euros per megawatt hour Tuesday. "We are in a high price global reality," a senior EU official, who did not want to be named due to the discussions still being underway, told reporters Tuesday. The same official added that the summer's "excessive" prices "had a significant impact on the European economy and European consumers." The potential gas trading limits are, however, meant to be temporary. A second EU official also told reporters that the commission wants to do "something meaningful, but not harmful" to the market. Speaking earlier this month, European Commission President Ursula von der Leyen said: "We should consider a price limitation in relation to the TTF in a way that continues to secure the supply of gas to Europe and to all Member States and that would demonstrate that the EU is not ready to pay whatever price for gas," according to Reuters. The commission also proposed Tuesday the setting up of a new benchmark for trading liquified natural gas (LNG). "The TTF is linked to pipeline gas prices, but it is not accurate as most countries use LNG," the second official said, adding that the idea is not to replace the current benchmark for natural gas but rather creating a new one that only takes into account LNG. The commission said this new benchmark should be in place next spring, when EU nations will be focused on bolstering their gas storage levels in time for the winter. EU heads of state are gathering in Brussels Thursday to discuss the new proposals. Critics have said the 27 member states are taking too long to address the energy crisis jointly. Supporters, however, argue that the EU has taken a number of meaningful steps since Russia's invasion of Ukraine to boost its energy security. The EU used to import about 40% of its natural gas from Russia; that number is now at around 7%.

The EU is considering shelling out 40 billion euros to quell energy inflation as supply shortages continue - The European Union is considering shelling out 40 billion euros, or $39.2 billion, to help households and companies amid soaring energy inflation, Bloomberg reported.That will come out of the bloc's existing cohesion funds, with 500 billion euros originally earmarked to shield households and businesses from the energy crisis. The new measure will allow small- and medium-size firms to access financial support, and it will help fund government programs to help consumers pay their energy bills. It's expected to be important this winter, when supply shortages could deplete most of Europe's fuel storage and drum up prices, experts say.The budget, which was expanded by 200 billion euros last week, faced concerns over the sustainability of EU debt. More debt could fuel recession risks, Reuters reported, which caused Germany to initially hold back support for the debt expansion.But the government needs to take action considering the pain high prices will bring, EU cohesion and reform chief Elisa Ferreira said at an event on Tuesday, in regards the new 40 billion euro spending measure."Cohesion policy is not the European crisis response instrument, but nevertheless we had to react when citizens were really struck … We could not ignore the difficulties member states, small and medium companies and families are facing with present energy prices," she said. Only a fifth of the existing funds have been spent so far, according to Reuters. EU leaders are set to discuss earmarking the additional 40 billion euros for combating energy inflation at a summit this week, where they'll also be reviewing other proposals to lessen the pain of rising energy prices.

EU Commission Is Pushing EU Countries to Accept Joint Gas Purchases, Just As It Did With COVID-19 Vaccines - That those vaccine purchases are now under investigation by EU Public Prosecutors doesn’t seem to matter. The Commission wants a direct role in EU Member States’ purchases of gas and, if possible, weapons. As winter fast approaches in the northern hemisphere, the European Commission is looking for a way to cushion the blow of the brutally self-destructive sanctions regime it itself played a large part in imposing on Europe’s largest energy provider, Russia. The Commission’s new plan will have the added bonus of further expanding its influence and power over economic policy and decision making in the EU.This is one of the perverse paradoxes of Europe’s current predicament: the weaker the EU becomes, the stronger the Commission’s role grows within it, and the more centralized and unaccountable the bloc’s decision making becomes. Now the Commission is trying to strong-arm EU Member States to accept joint purchases of gas for future gas storage. The ostensible goal of the plan is to secure better terms from energy suppliers as well as reduce the risk of EU countries outbidding each other for energy contracts. But it also represents yet another encroachment on member state sovereignty. As the German daily Süddeutsche Zeitung reported on Monday, if the plan is implemented, energy demand will be pooled through an EU energy platform operated by the Commission itself (machine translated): The Brussels authority is likely to present a corresponding draft law as early as Tuesday, together with other initiatives aimed at lowering the high [gas] prices. These include, for example, a price cap on an important gas trading center… The energy platform is intended to bundle the purchasing power of the EU Member States when they buy [natural gas] in 2023 and 2024 in order to refill the storage facilities before the heating season. The states should secure better prices in negotiations with producing countries instead of outbidding each other. Germany and the Netherlands are apparently already on board with the plan, though Germany has expressed reservations about the idea of capping gas prices. Berlin is concerned, quite rightly, that trying to cap the price of gas across the EU may leave the bloc struggling to attract sufficient supply from global markets, which is a problem they already face to the nth degree. Of course, the frantic fiddling of the European politicians and bureaucrats who set this crisis in motion and have steadfastly refused to reverse course even as the crippling economic costs have mounted, is unlikely to make much of a difference at this stage. As Yves noted yesterday in her preamble to the post, “Is the UK About to Hit the Wall?”, the European Commission is dithering with the fantasy of technocratic fixes, which is likely to result in disruptive, unplanned rationing in the form of blackouts. According to the article in Süddeutsche Zeitung, the Commission wants to compel member states by EU law to use the platform to fill at least 15% of the volume of their gas storage facilities: The fact that only around 15% of the demand will bundled is because there are already long-term contracts in place for a large share of the gas storage volumes. It is all about filling the remaining gaps and securing good deals along the way. There are a total of 160 underground storage facilities in the EU in 18 member states. Germany accounts for more than a fifth of the total capacity. Berlin had long expressed doubts as to whether joint purchases would work, but recently changed tack and called for the platform to be strengthened. This is happening now.And the Commission already has a model of sorts to fall back on — its €71 billion vaccine procurement program:As with the procurement of the COVID-19 vaccines, the commission would negotiate contracts with suppliers. The final decision as to whether to accept the offer or not would then be made by the individual governments. This is where the flaws of the plan become glaringly apparent. As I have reported for NC since December 2021 (here, here,here and here), the European Commission’s purchase of 4.6 billion COVID-19 vaccines has been beset by a litany of procedural irregularities and alleged misconduct. Last Friday (October 14), the European Public Prosecutor’s Office (EPPO) announced it had launched an investigation into the purchases, citing the “extremely high public interest” in the matter as justification for taking the “exceptional” step of confirming the investigation on its website.

European Gas Falls as EU Leaders Unite to Back Crisis Measures - -- Natural gas in Europe declined after leaders came together to back urgent measures, including a price cap, to contain the energy crisis that’s engulfed the economy. Benchmark futures fell 11% on Friday, posting a third straight weekly loss. The politicians asked the European Commission to propose a “temporary dynamic price corridor,” and said they would pursue a framework to cap the price of gas in electricity generation. They also want to take steps to avoid extreme price spikes and use the EU’s joint purchasing power in negotiations with sellers. “We sent also a clear signal to the market,” European Council President Charles Michel said. “I’m confident that there will be an effect very soon.” The European Union presented the united front after German Chancellor Olaf Scholz yielded to pressure from other member states for a gas price cap. He had earlier warned such as limit could endanger supply at a time when the region needs all it can get. But countries including France, Italy and Poland had been pushing hard for a cap as dwindling Russian supplies bring the threat of shortages and blackouts. The bloc’s energy ministers will meet next week to continue trying to hash out the details of the various plans. French President Emmanuel Macron said the aim is to have explicit mechanisms laid out in the next two to three weeks. Dutch front-month gas, the European benchmark, settled at €113.58 per megawatt-hour, falling 20% in the week. The UK equivalent contract dropped 8.9% on Friday, while year-ahead German power fell 2.9%. Market’s Relief The outcome of the summit will bring some relief to markets, with gas prices still three times higher than the five-year average for this time of the year. They have eased more than 60% from their August peak, as Europe started the winter heating season with almost full reservoirs and strong liquefied natural gas flows. But traders will wait for more details about the design of the EU plan, especially as a price cap has previously remained elusive because of concerns it will encourage gas sellers to look elsewhere. There are other risks. Cold snaps and any disruption to existing supply from the US or Norway could drive prices much higher, said Nikoline Bromander, an analyst at Rystad Energy. Buyers in Asia are preparing for the winter by stepping up purchases of LNG, which Europe has heavily depended on to replace Russian fuel. For now, the weather remains mild and forecasts point to strongly above-normal temperatures across continental Europe next week.

Europe Praying for a Mild Winter and Friends in Far Flung Places -Europe prays for a mild winter and friends in far flung places, from the U.S. freeport facility to private Chinese companies that may be able to increase LNG exports to Europe during the heating season. That’s according to Rystad Energy Analyst Nikoline Bromander, who made the comment in a market note sent to Rigzone on Tuesday. “After a volatile few months, European natural gas prices have been falling through September and October and are currently at their lowest level since June 2022, reaching $40 per million British thermal units (MMBtu) on the Netherlands-based Title Transfer Facility (TTF) … [on 17 October],” Bromander said in the note. “Underground storage levels in Europe are continuing to build alongside policy efforts within the European Union to stabilize end-user prices. The European Commission (EC) is considering intervening in the market to increase stability and liquidity and ease the upwards pressure on the European gas market,” Bromander added. “Until then, with the gas withdrawal season approaching fast, market participants will be hoping to avoid any major supply outages and abnormally cold weather which would hit certain European nations, such as Germany, at the worst possible time. Asia and the U.S. are presently sitting comfortably when it comes to supply and storage levels, though this could change as winter approaches,” Bromander continued. In the note, Bromander highlighted that European gas demand has continued its year-on-year decline “following measures put in place by the EC and demand destruction”. “For the coming week, milder temperatures are expected across Continental Europe, which is expected to further depress demand for gas,” Bromander said, adding that falling demand is enabling Europe to build storage levels ahead of the winter withdrawal season. “European storage facilities are now 92 percent full, well ahead of the EU’s 1 November target, compared to 77 percent at the same time last year,” Bromander said in the note. In a separate market note sent to Rigzone earlier this month, Rystad Energy Vice President Emily McClain stated that, “with Europe’s winter season now in sight, gas markets are snug but by no means cozy”.“Global gas supply has tightened further following damage to the Nord Stream 1 and 2 pipelines last week. Europe’s gas market participants are now looking to storage injections to safeguard inventories through winter,” McClain stated in the note. “However, while European storage levels are shaping up nicely, an early or extended winter could yet send gas stocks sledding downward, pushing prices higher,” McClain warned.

France, Spain and Portugal strike deal to build new subsea gas pipeline - Spain, Portugal, and France have agreed to build a new subsea pipeline for the transportation of hydrogen and gas between Barcelona, Spain, and Marseille, France.The agreement for the Green Energy Corridor has been signed between Spanish President Pedro Sánchez, French President Emmanuel Macron, and Portuguese Prime Minister António Costa.Named BarMar, the proposed project would replace the plan to extend the MidCat pipeline to connect the Iberian Peninsula to the rest of Europe. France opposed the MidCat pipeline, saying that the project would take too long to complete and would not help in addressing short-term supply issues.

France begins to export gas to Germany --France is exporting natural gas to Germany for the first time as part of an energy solidarity agreement aimed at resolving the EU's largest economy's months-long supply issue.According to a statement issued on Thursday by French grid operator GRTgaz, the gas pipeline linking the two nations near the French border settlement of Obergailbach has begun pumping an initial daily volume of 31 gigatons. Based on statistics from the French Ministry of Energy Transition, the quantity is predicted to gradually climb to a daily maximum of 100 gigatons-hours, or less than 2% of Germany's total gas consumption.The single interconnector between France and Germany, located at Obergailbach, was originally built to transport gas to France, but the parties have completed the required alterations to reverse the flow.The nations inked an energy solidarity agreement last month, with France promising to assist Germany with its gas supply. In exchange, Germany is expected to assist France when necessary.“If we did not have European solidarity and an integrated, united market right now, we would have serious problems,” French Leader Emmanuel Macron stated.“This is a good and important sign of European solidarity,” German Economy Minister Robert Habeck stated, highlighted that “it shows that in a spirit of solidarity even difficult technical issues can be resolved.”

Pileup Of LNG Tankers Stranded Off Spain Coast - Spain has declared an “exceptional operational situation” as several dozen LNG tankers are stuck in line for its regasification terminals, significantly exceeding available slots, according to OilPrice.com. This week, Spain has made only six unloading slots available Reuters reported, citing unnamed sources, but there are more than 35 LNG carriers idling off its coast. The country has six LNG import and regasification terminals and is the biggest LNG importer in the EU. The tanker pileup highlights Europe’s problem with LNG import capacity that prompted Germany to urgently strike a deal for the construction of two floating facilities so it can receive LNG directly.The region has had to find alternative supplies, including LNG, but the arrival of multiple cargoes of the superchilled fuel has exposed Europe's lack of "regasification" capacity, as plants that convert the seaborne fuel back to gas are operating at maximum limit.If the backlog is not cleared soon those ships may start looking for alternative ports outside Europe to offload their cargo.Meanwhile, there is more LNG floating off the European coast, Reuters reported, citing more sources, suggesting the 35-strong tanker crowd off Spain is only part of the actual pile-up."Floating storage levels in LNG shipping is at all time high levels with slightly more than 2.5 million tonnes tied up in floating storage," Flex LNG Management chief executive Oystein Kalleklev told Reuters.An LNG analyst from ICIS confirmed to Reuters there were a lot of LNG carriers idling off the Spanish and UK coast and circling the Mediterranean. And while they do that, the gas they carry cannot be used or put into storage. According to ICIS’ Alex Froley, however, insufficient regasification capacity is not the only reason for the pile-up: prices for later deliveries of LNG in Europe are some $2 per mmBtu higher than current prices, which may have motivated some traders to keep their cargo on the water until late November or early December.

LNG Vessels Floating Offshore Europe Multiplying as Customers Stash Natural Gas Before Winter --An unprecedented number of LNG vessels are floating offshore Europe as regasification terminal congestion and whipsawing prices further complicate the supply situation. At least 22 ships loaded with liquefied natural gas had been moored on Wednesday for more than five days around European regasification hubs, according to data from Kpler. The majority of the ships were centered around the Mediterranean Sea (11) and the Spanish province of Cádiz (6). Kpler’s Charles Costerousse said the analytics firm had not seen this many LNG vessels floating around Europe since it began collecting data in 2018. “Bottlenecks at European terminals can happen, but it is relatively rare and is typically due to weather issues or maintenance, and certainly not at this level,” Costerousse said. The cause of the glut and how it may impact the destination of the cargoes “is quite tricky,” he said, since a vessel’s final destination and slot availability at terminals aren’t always known. However, the record volumes of LNG drawn to the continent could be causing “more congestion at ports likely due to slot unavailability.” Many of Europe’s existing LNG import terminals are in Spain and Portugal, where gas is transported north via pipeline. Germany and other countries previously dependent on Russian gas have been investing in floating terminals that could increase import capacity as soon as early 2023. Much of the gas currently floating offshore of Europe was procured from the United States, according to Kpler data, as Europe maintains its price premium over the Japan-Korea Marker (JKM). The Dutch Title Transfer Facility (TTF) benchmark for gas in Europe reversed its weeks-long decline Thursday. Prompt TTF contracts had previously fallen in price by 50% compared to the start of the month on reports of high European storage and mild forecast. Trading firm Energi Danmark wrote European gas could see a bullish return “on signs of lower wind output across Europe during the coming weeks.” The TTF price for gas in December closed Thursday at around $44/MMBtu, up from $39.273 on Wednesday.

China Halts Resales Of Russian LNG To European Buyers --A month and a half ago, we made a startling discovery: China was aggressively reselling LNG imports from Russia, the country's fourth-largest supplier of LNG so far in 2022 having surpassed both Indonesia and the US, to Europe and thanks to the continent's unprecedented desperation for gas, it was charging pretty much whatever markup it wanted.But maybe not any more.According to Bloomberg, Chinese state-owned energy giants have been recently told by authorities to stop reselling liquefied natural gas cargoes (certainly those from Russia) to gas-starved Europe, in what could be a blow to the European hopes of continuous high inflows of LNG as the winter approaches. China's National Development and Reform Commission (NDRC), the country's top planning body, told the country’s state-held LNG importers including Sinopec, PetroChina, and CNOOC, that they should stop reselling LNG cargoes and keep them to ensure Chinese gas supply this winter, Oilprice reported citing Bloomberg sources. In recent months, as we reported first in August, Chinese LNG importers have been selling their excess inventories to Europe and reaping substantial profits from the sales because of lackluster demand in China. Chinese domestic demand has been squashed by rolling waves of city-wide Covid lockdowns and a slowdown in economic growth.As a result, Chinese sales of LNG have been a relief to the European market so far this year. But as China now moves to cater to its own energy security this winter, Europe’s precarious LNG supply - much of which was a function of continued Chinese reselling of embargoed Russian gas - could dwindle just ahead of the winter heating season.Gas prices in Europe have dropped from record highs and hit on Monday the lowest level in three months after the EU was reportedly looking to introduce measures to limit the market volatility of the benchmark European natural gas prices at the Dutch TTF hub. According to a draft document that Bloomberg News has seen, the European Commission is set to propose measures to limit extreme price spikes in derivatives trading; it isn't exactly clear how Europe - which is desperately short any and all commodities heading into the winter - will actually enforce any price or volatility caps. European gas storage sites were 92% full as of October 16, according to data from Gas Infrastructure Europe. The storage sites were filled faster than the EU and many individual members had initially planned. Although gas in storage alone will not be enough to see an economy such as Germany’s through the winter, the faster-than-planned gas storage filling has eased somewhat supply concerns, for now. Also, as most industry watchers have realized, the big risk is not this winter but that of 2023.

Gazprom CEO Says All Nord Stream NatGas Could Be Redirected To Turkey - Russia's natural gas supplies to Europe via the Nord Stream pipeline system will likely not be restored and could be redirected in pipelines via the Black Sea to Turkey. Russian energy giant Gazprom PJSC CEO Alexei Miller told Russian television on Sunday that NatGas supplies via Nord Stream will be redirected to Turkey if the necessary infrastructure is constructed. He said, "You know, nothing's impossible": "We're talking about those volumes which we have lost thanks to the acts of international terrorism against the Nord Stream pipelines, so these can be significant volumes," Miller told Russian television, quoted by Russian state-owned news agency Sputnik."I'd like to remind you that we have the experience of preparing for the implementation of the South Stream project, which was originally planned to have a capacity of 63 billion cubic meters [per year]. Therefore, if we're talking even about the technical documentation for the development of the route, for South Stream - all this was already done at one time," Miller continued.South Stream was a project that began construction in 2012 but was canceled in 2014 due to European sanctions and restrictions by Brussels. The $20 billion, 1,500-mile-long pipeline network would've been able to transit 63 billion cubic meters of NatGas per year via the Black Sea to Bulgaria. It was eventually replaced by TurkStream, which became operational in 2020.

Europe is running low on diesel when it needs it most - Europe's tanks are running low on diesel, making the market vulnerable to wild price volatility, with sanctions against Russia threatening to deliver the biggest supply shock in living memory in less than four months. Independent gasoil inventories in the Amsterdam-Rotterdam-Antwerp (ARA) region fell by 10pc in one week in early October. That undid a brief recovery in the region's stocks, compounding a 43pc decline in total Dutch diesel inventories in the year to July 2022. They were 33pc lower in July than in the same month of 2019. These statistics show the problem most starkly because ARA has outsized oil storage capacity, but the trend is the same everywhere. Germany had 10pc less diesel inventories in July than a year earlier and 7pc less than in the same month of 2019. The UK had 12pc less than a year earlier and 30pc less than in 2019. Overall middle distillate inventories in the 16 major European countries surveyed by Euroilstock were 11pc lower in September year on year and 13pc lower than in 2019. That figure includes kerosine, but mostly reflects diesel and gasoil. These volumes never get near zero, because of day to day operational needs. But the layer of discretionary inventories on top has been disappearing. This has been a key cause of high and volatile diesel prices. Without inventories, buyers cannot be flexible. They need to secure supply on a tight schedule to be sure of fulfilling their own contracts for onward sale. When prompt prices rise because of a supply disruption, buyers cannot wait for it to pass and pay whatever it takes. Traders said there is no incentive for most participants to build or even maintain these discretionary inventories, because of the enormous cost of doing so in such a steeply backwardated market. Backwardation — meaning prompt prices above those for later delivery — signals fundamental pressures on the market. For the past year, the backwardation has reflected the great cost and difficulty of refining diesel. The most efficient way to meet marginal demand has been to draw on inventories instead. Spiking natural gas prices in autumn 2021 created moderately steep backwardation because they raised refiners' energy costs and the cost of the hydrogen input to some key diesel production processes. Gas prices have soared in recent months. Emissions allowances have grown much more expensive for European refiners at the same time. And as gasoline became oversupplied in Europe in the summer, diesel buyers had to compensate refiners for the losses they were making on other products as they raised crude runs. This dynamic is likely to re-emerge over the winter. Available refining capacity has shrunk. A wave of wholesale decommissioning and conversion to bioprocessing during the pandemic was followed by fires, explosions and malfunctions this year as refiners tried to maximise middle distillate output under heatwave conditions. Most recently, French strikes have immobilised more than 5pc of Europe's refining capacity for four weeks. The inventory crunch is not universal. Some firms are known to be stockpiling, in spite of the high financial cost, because they perceive such a severe risk of supply disruption in the coming months. The two German refineries supplied with Russian crude through the northern leg of the Druzhba pipeline are examples of this. At the national level, European policymakers have dipped into strategic reserves several times already this year. The International Energy Agency (IEA) co-ordinated a multinational release to calm markets in the aftermath of the Russian invasion of Ukraine. Then when refineries in Austria and Hungary shut down unexpectedly over the summer, the governments of both countries released some reserves. When strikes closed most of the French refining system in September and October, the government there did the same. But all the shocks that have prompted European reserve releases so far are smaller than the one coming this winter, when Europe will stop Russian imports by law. The more reserves that are used in the meantime, the less there will be to stabilise markets later.

Diesel Hits Chaos Mode - The world’s diesel market is once again flashing signs of chaos, undermining the global economy with a fresh bout of inflationary pressure. Powering trucks, trains and ships that drive industry, the fuel is commanding huge buy-it-now premiums in Europe. Beset by worker strikes over pay at French oil refineries that lasted over three weeks, the continent is struggling to be ready for a ban on imports from key supplier Russia that’s 3 1/2 months away. The US has the lowest seasonal inventories in data that began in 1982 going into winter. The chaos is the last thing Europe needs alongside sky-high energy prices, but there could be worse to come. Officials in the Biden administration have pressed fuel producers to curtail overseas exports and chastised them for low diesel stockpiles. “It’s extremely tight, end user stocks are extraordinarily low,” said Gary Ross, a veteran oil consultant turned hedge fund manager at Black Gold Investors LLC. “I don’t know where resupply comes from. Diesel is the industrial product of the world, so it’s not going to help an already weakened economic environment.” At one point this week, traders were paying premiums of as much as $160 a ton -- more than $20 a barrel -- to obtain a physical barge-load of the road fuel in Europe. That’s a sign of tight inventories. It compares with $24 a ton a month earlier. In New York, the physical market is so tight that premiums surged there too. The market has been in a bullish backwardation trading pattern since last August. The structure means sellers are losing money when they hold onto supplies. The market often flips into contango -- the opposite of backwardation where future prices are higher -- in the middle of the year, incentivizing suppliers to build up inventory in the summer ahead of the harvest and heating season. Diesel is the engine of the global economy. It is used for transportation, heating and industrial processes, meaning that a rise in prices can lift everything from the price of heating a house to the cost of finished goods. “At a macroeconomic level, higher oil process increase inflation and reduce economic growth,” said Mark Williams, research director for short term oils at WoodMackenzie Ltd. “The rising costs of diesel fuel therefore impacts everybody, as diesel prices affect direct manufacturing, transportation and heating costs. As diesel prices rise, so do the costs of goods which in general are passed onto consumers.” The state of the market may ring alarm bells in Berlin, Paris -- and even Moscow. Even last month, Europe got two-fifths of its diesel imports from Russia. For its part, Russia continues sending about 80% of its shipments of the fuel to Europe. With a shortage of specialist ice-strengthened tankers that can export from Russia’s Baltic Sea ports in winter, there’s also a question about how easily the petroleum industry supply chain will be able to get those supplies to alternative markets. The market has been in various states of chaos ever since the invasion of Ukraine triggered uncertainty about what would happen to diesel flows. But with the EU ban -- a punishment for Vladimir Putin’s war -- getting ever closer, strikes in France were not what the market needed. The industrial action, which began in late September, got so bad that the French government has requisitioned striking workers to get fuel distributed. Almost a third of the country’s filling stations were facing shortages at one point this week. “We could easily end up with a squeeze into the winter.”

EU Plays Hardball With Serbia Over Its Russia Ties -Much like Ankara, Belgrade has tried to stay above the fray in the conflict between NATO and Russia. While Serbia doesn’t share the same geographic significance and isn’t a member of NATO like Turkey, it is one of Russia’s strongest allies in Europe, and is now receiving the same pressure to choose a side.Comments from European leaders describe how Serbia’s long-term goal of joining the EU is at risk due to its friendliness with Moscow.In the more immediate term, Belgrade is facing an economic fallout from newly restricted energy supplies, and the move risks inflaming tensions between longtime adversaries Croatia and Serbia and within Bosnia where both countries support ethnonationalist parties.The most recent round of EU sanctions prohibits the transport of Russian oil across Croatia to Serbia, one of the few European countries not to join the sanctions party against Moscow. FromEuractiv:Until recently, Serbia had hoped that Croatia’s pipeline operator JANAF would continue to ship Russian crude oil, brought to Croatia on oil tankers, to NIS, in line with an agreement signed in January. This came to an end with the latest sanctions agreement.In Prague for the inaugural meeting of the European Political Community, Serbian President Aleksandar Vucic told reporters that Croatia had “already boasted and taken credit for the full ban on Russian oil transport.”Serbia has no outlets to the sea and will therefore be forced to pay much higher prices to import oil than they would have with its deal with Russia.“Croatia does not create our foreign policy,” Serbian President Aleksandar Vucic said. “It is created by our citizens, through their democratically elected representatives.”The Croatian Prime Minister Andrej Plenkovic, meanwhile, said “Serbia cannot sit on two stools and expect progress on its European path while disrespecting sanctions against Russia.” Serbia is in a tough spot as the EU is its top trading partner while Russia comes in second. 63% of Serbia’s overall trade in 2019 was done with the European Union. Russia and China rank respectively on second and third places but at considerably lower trade levels – ten times lower than trade between Serbia and the EU, but Serbia has relied on Russian gas and oil imports.

Pipeline Carrying Russian Oil To Germany Repaired After Leak Detected In Poland - The Polish operator of the Druzhba oil pipeline said it had fixed a leak that had caused part of the pipeline from Russia to Germany to be shut. The operator, PERN, said in a statement on October 15 its technical services "restored the full functionality of the damaged line of the pipeline, which supplies crude oil to the company's German customers." "An investigation into the cause of the leak is ongoing," it added. The leak was detected on October 11 near the village of Zurawice in central Poland. The company had said earlier that preliminary checks indicated the leak was probably accidental. The German government said on October 12 that oil deliveries were continuing to two key refineries despite the leak. The discovery of the leak came amid security concerns over Europe's energy supplies after the Nord Stream gas pipelines in the Baltic Sea recently sprang leaks that officials both in the West and Russia say were caused by sabotage. Europe also faces a severe energy crisis as a result of Moscow's invasion of Ukraine, which has cut supplies to many countries. The Druzhba (Friendship) pipeline network pumps oil from the Urals to Europe through a northern branch that runs through Poland and a southern branch that runs through Ukraine.

OPEC+ Made The Russian Oil Price Cap Strategy Very Risky -The idea of placing a cap on the price of Russian oil as a means of reducing the country’s oil revenues was first floated by U.S. Treasury Secretary Janet Yellen in the spring. Since then, the idea has grown into a full-blown plan involving, besides the U.S., its partners from the G7 and the European Union. And it just got a lot riskier.Earlier this month, OPEC+ caused a stir in Washington by agreeing to reduce its oil production quota by 2 million bpd and its actual production by some 1 million bpd. Most of the cut would come from Saudi Arabia, the UAE, and Kuwait, meaning the physical supply of oil would tighten globally.Oil prices rose on the news but quickly subsided on persistent concerns about a slowdown in global economic growth and the increasing likelihood of several large consumers suffering through a recession.In Washington, discussions of the Russian oil price cap have continued, but now some in the Biden administration are beginning to worry that it could backfire.Bloomberg reported on the worries of some White House officials last week, saying that after the OPEC+ production cut decision, volatility in the oil market had increased markedly, and a price cap on Russian crude could lead to a spike in prices rather than a decline.Another fear, and quite justified, is Russia making good on its warning that it could choose to stop selling oil to any country that has implemented a price cap on its oil. This would certainly lead to higher oil prices, with UBS estimating recently that the jump could see Brent hit $125 per barrel.“The Russians were clear: ‘If you force us to accept the price cap, we’re simply not going to deliver crude to you,” the head of UBS Global Wealth Management commodities Dominic Schnider told CNBC.According to Schnider, the cap could see global supply fall by another 1 million bpd as a result of the price cap, if it is indeed ever implemented, pushing crude well above $100 per barrel. The spokeswoman of the National Security Council, Adrienne Watson, told Bloomberg the news that some in the White House had serious misgivings about the oil price cap was “false.”She went on to say that the administration team “are full steam ahead on implementing a price cap on Russian oil with strong support from the G-7 and other partners. It is the most effective way to ensure that oil continues to flow into the market at lower prices and supply meets demand.” Yet, it has been clear from the beginning that the G7 alone could not really make a price cap work, chiefly because they have already banned imports of Russian oil. So it was essential to get consumers such as China and India on board, which has so far proved tricky.Indeed, India’s The Hindu reported this month, quoting Janet Yellen, that there were no attempts to convince other countries outside the G7-EU coalition to join the price cap. This happened just a couple of months after Yellen went on a tour in Asia that was partially designed to convince India and China to join the capIn addition to the quite real danger of further supply shocks, there are other challenges for the price cap as conceived, including the exact way of implementing it in a world with shipping transport rules that offer a range of ways to circumvent such caps.“It is very optimistic to believe this [price cap] can work,” Ben McWilliams, an energy analyst at Brussels-based think tank Bruegel told Euronews this month.“In fact, I don’t believe even the architects think it will work perfectly. They just prefer a ‘leaky system’ in which Russia can still make some profit above the cap rather than a scenario in which Russia is completely forced off market.”

Russia Removes Exxon From Major Oil And Gas Project - Russia has removed Exxon as a shareholder from the Sakhalin-1 oil and gas project and transferred its stake to a Russian business entity.Exxon said this amounted to expropriation and that it had pulled out from Russia as a whole, the Wall Street Journal reported.Exxon had a 30-percent stake in Sakhalin-1 but a week ago President Vladimir Putin signed a decree with which a new entity was set up to manage the operations of the Far East oil and gas project. The decree allowed the Russian government to distribute the stakes in the project and kick out foreign partners if they saw fit.Exxon was on its way out anyway, however. Shortly after Russian troops entered Ukraine in February, Exxon said it was going to pull out from Russia and make no more investments there.In April, the U.S. supermajor declared force majeure at the Sakhalin project, cutting output from some 220,000 bpd to just 10,000. Production was also affectedby Exxon’s refusal to accept local insurance coverage for the tankers transporting the crude from Sakhalin Island.Meanwhile, Reuters reported yesterday that India’s ONGC was considering taking a stake in the new entity operating Sakhalin-1. The Indian state oil major was a shareholder in the consortium running Sakhalin-1 before Exxon’s pullout and wanted to retain its interest in the project, Reuters reported, citing unnamed sources."ONGC Videsh will protect its share in the project, which means it will take a stake in the new entity," one of the sources said.The Sakhalin-1 project is also important for Japan. Despite a sanction drive among its Western partners, Japan has stated it could not afford to stop buying oil and gas from the Sakhalin development. Two Japanese companies are also shareholders in Sakhalin-1 and have been offered to retain their stakes in the new entity, managed by a subsidiary of Rosneft.

Middle East imports more Russian gasoil in September -Gasoil inflows from Russia to the Middle East have increased substantially as Russian diesel and gasoil exports to northwest Europe were falling as term contracts expired. At 268,000t, September gasoil imports from Russia were significantly higher from 145,000t in August. The UAE was the main importer with 198,000t, followed by Yemen taking 38,000t and Iraq 26,000t, according to Vortexa. Firms that are still buying Russian volumes on term contracts are slowly phasing out purchases, in preparation for the EU's ban on Russian oil products from January. A halt in oil products from Russia is forcing European buyers to seek higher volumes from the Mideast Gulf, India and the US, in order to meet demand. The Middle East remained a major outlet for Russian oil products in September, despite cargo arrivals falling from a record monthly high of 1.4mn t in August. The total volume of product cargoes, including gasoline, naphtha, gasoil and fuel oil, declined to 1.06mn t last month. But imports are still significantly higher than 250,000-450,000t of products that the Middle East typically received before the armed conflict with Ukraine started in February. The quickly-formed surplus of Russian products, formed as international sanctions and restrictions started to squeeze deliveries to traditional buyers in Europe and the US, forced Russia to find alternative consumption markets and sell cargoes at significant discounts to benchmark prices. "Russia has a limited storage capacity for its product surplus and is forced to sell on the cheap", a trader said. "Discounts are steep enough for buyers to make profit, despite long journeys, especially from the ports in the Baltic to the Middle East."

China's Oil Imports Soar As Beijing Prepares To Supply European Fuel Demand - Crude oil imports into Asia jumped in September. Normally such news would spark hope for demand and, consequently, prices, but this time it’s more complicated. And it has less to do with Asian demand than demand in Europe. Oil imports in Asia rose by more than 2 million barrels daily last month, Reuters’ Clyde Russell reported in his latest column, noting that the bulk went to China and Singapore. He then went on to point out that both China and Singapore had gone through refinery maintenance in August and utilization rates were up in September. On the one hand, it’s the normal preparation for winter. On the other, the EU has an embargo on Russian crude coming into effect in less than two months and then an embargo on fuels two months after that.Europe is already grappling with a diesel shortage as it shuns Russian fuels ahead of the embargo and as the global supply of the fuel remains limited. This has contributed to fears of demand destruction by excessive prices, but it has also reinforced fears of a recession due to the fuel crunch.The U.S. could maybe increase its fuel shipments to Europe, according to executives from major commodity trading houses quoted in a recent report by Energy Intelligence, especially since Russian fuels will be rerouted to other destinations, including Asia and South America, satisfying some of the demand there. And some of these Russian fuels will go to Europe but come from China.It is a somewhat ironic twist in the Europe-Russia story that Russian oil will not literally stop flowing into Europe, whatever Europe does to stop that flow, even if it is willing to pay a steep price for it. As already evidenced by fuel flows from India to Europe, the latter has no problem with Russian refined products as long as they don’t come from Russia itself.This will likely continue happening because whatever geopolitical games are being played, physical demand for oil products is likely to remain robust until prices become prohibitive. Even then, demand destruction will not happen overnight. A case in point is France, where strikes have paralyzed more than half of the country’s refining capacity, and yet people are queuing to fill up their tanks.It is a double irony that the European Union might need to rely on China for its winter fuel supplies. After all, following the example of the U.S., the EU has also spoken against China’s rising domination of various global markets. It is not seen as a friend in Europe. Yet it is a vital supplier of commodities without which the EU will collapse.

Govt in talks for long-term Namibian crude contracts -India, the world’s third biggest oil importer, is looking to secure a long-term crude oil supply deal from Namibia, which is being hailed for one of the world’s largest oil finds in recent years, said two people aware of the development. This is part of India’s aggressive energy-sourcing diversification playbook. India’s plan of charting new geography to meet its energy needs comes against the backdrop of French energy majors TotalEnergies and Shell Plc making “giant" oil discoveries. India has been trying to diversify its energy supplies with Indian Oil Corp. recently signing a long-term contract to procure crude oil from Colombia’s state-run Ecopetrol SA and Brazil’s state-run Petroleo Brasileiro SA (Petrobras). “There has been a huge find in Namibia in February this year. We get some oil from Namibia but not in a large quantity. This is a long-term contract that we are looking for as it sequesters us from the vagaries of the global energy markets," said a senior Indian government official, one of the two people mentioned above, requesting anonymity. TotalEnergies is the operator with a 40% working interest in Block 2913B that covers around 8,215 sq km in Namibia’s deep offshore. The other partners are QatarEnergy (30%), Impact Oil and Gas (20%), and state-run National Petroleum Corporation of Namibia or NAMCOR (10%). With 45% working interest, Shell is the operator of PEL 0039 that covers around 12,000 sq km in Namibian deep offshore and has QatarEnergy (45%) and NAMCOR (10%) as partners. The Namibian discoveries may contain recoverable reserves of around 6.5 billion barrels of oil equivalent, according to the research firm Wood Mackenzie.

Oil theft: Sept crude oil production drops by 24.73% - NIGERIA’S crude oil production crashed by 24.73 percent in September 2022 to 937,766 barrels per day, compared to 1.246 million barrels per day recorded over the corresponding month in 2021, the latest data from the Federal Government has shown. According to data released by the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, crude and condensate production for September 2022 was 1.137 million barrels per day, compared to 1.179 million barrels produced in August 2022. Condensate productions are not part of Nigeria’s quota set by OPEC at 1.8 million barrels per day. NUPRC data showed that the highest production in September came from Qua Iboe at 4.976 million barrels followed by Escravos at 3.272 million barrels during the month. With the country battling to curb the activities of oil thieves and pipeline vandals that have crippled its oil industry, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, NNPCL, Mr. Mele Kyari has explained that what is stolen is not the difference between OPEC quota and the production figure. Kyari disclosed that all major oil trunk lines have been shut down due to the activities of oil thieves and pipeline vandals. “Today our production is around 1.23 million barrels per day. We have a proven production capacity of 2.49mbpd. But since Covid abated and the acts of vandals returned, we saw this gradual decline in our production to the point of 1.2mbpd. “That means we can easily produce 2.49mbpd but we can’t do it because of acts of vandals. Now it doesn’t mean that the difference between 2.49m and 1.23m is stolen. As we speak, all our major trunk lines are shut down, which means we are not flowing crude oil in these lines. We could do it and it doesn’t mean crude is stolen. When the lines are running, you can lose a substantial part of that volume up to 200,000 barrels.

Nigeria Discovers Fresh Illegal Oil Pipeline with 400,000 bpd in Niger Delta - The oil theft crisis that has greatly sabotaged Nigeria’s economy by drastically reducing revenue generation keeps unraveling. Illegal oil pipelines serving as conduit to oil thieves have been uncovered recently, yet more are unfolding. During the week, Tantita Security Services Nigeria Limited, a private security company owned by famous Niger Delta ex-militia leader, Government Ekpemupolo aka Tompolo, which was contracted by the federal government of Nigeria to secure the pipelines, said it has discovered more massive illegal crude oil pipelines attached to Trans Forcados Export Trunkline. Reports said the newly discovered illegal pipeline was connected to the 48-inch Trans Forcados Export Trunkline in Burutu Local Government Area. The discoveries are coming weeks after the Nigerian National Petroleum Corporation Limited disclosed that “a 4-kilometer pipeline from the Forcados export terminal has been used to steal oil for nine years, resulting in the theft of hundreds of thousands of barrels of oil per day.” The illegal four-kilometer crude oil pipeline, which is said to belong to Shell Petroleum Development Company (SPDC), appears to have triggered the discovery of bigger points of stealing. The oil theft, which has reduced Nigeria’s oil production output by nearly half, is believed to have been aided by Nigerian security agents. The newly discovered illegal plug point is reportedly located directly behind a military security post and it is less than a kilometer to the Forcados Export Terminal in Ogulagha community. The report said the illegal pipeline was linked to another abandoned pipeline riser located within the vicinity and owned by AGIP Petroleum Company Ltd. According to the discovery, the oil thieves have been using the abandoned AGIP facility to ferry condensed crude oil to the sea for export. Though the federal government’s decision to engage Tompolo’s Tantita Security Services in a multi-billion naira contract to secure the oil pipelines has been questioned, as he is believed to be part of the problem, it has been yielding unusual results. Last week, the company apprehended a vessel named MT Deima with International Maritime Organization with number 7210525, while it was loading crude oil illegally along the Escravos River in Delta State. The arrested vessel was handed over to the security operatives under the Operation Delta Safe Joint Task Force, who didn’t spare more time before they set it ablaze. The newly discovered point of stealing, the Forcados Terminal located in Ogulagha, Burutu Local Government Area, is the largest so far. It is said to have a nameplate capacity to export 400,000 barrels per day. It receives crude oil from the Forcados Oil Pipeline System, which is the second largest pipeline network in the oil-producing region, after the Bonny Oil Pipeline System in the Eastern Niger Delta.

Algeria and OPEC endorse cut in oil production – Algeria's Minister of Energy and Mines, Mohamed Arkab, and OPEC Secretary General Haitham Al-Ghais have endorsed the cut in oil production agreed this month by the OPEC+ alliance, Anadolu has reported. Arkab met Al-Ghais in Algiers on Sunday and discussed the international oil market as well as the development prospects in the short and medium term, in the face of uncertainties that have affected the global oil market for several weeks now, explained the ministry. "They expressed their full confidence in the positive impact of the recent production cut agreement." The OPEC+ alliance announced on 5 October a reduction in oil production by 2 million barrels per day, starting as soon as 1 November. The endorsement of the cut by Algeria and OPEC follows severe US criticism of Saudi Arabia, the leader of OPEC, which Washington accused of siding with Russia in its war against Ukraine and of coercing some other nations into supporting the move. Saudi Foreign Minister Prince Faisal Bin Farhan, however, denied that the decision had any political connotations. "It was," he insisted, "purely economic."

OPEC+ Insists Its Production Cut Was Not Political - Multiple OPEC+ producers defended the group’s decision to reduce production in November in a wave of statements on Sunday and Monday, in what looked like a coordinated response to U.S. criticism of the cut.The United States said last week there would be some consequences for Saudi Arabia for its decision together with Russia to steer OPEC+ into a large oil production cut after OPEC+ endorsed earlier this month a decision to reduce the headline production target by 2 million barrels per day (bpd) as of November.A day after U.S. President Joe Biden threatened “there will be consequences” for OPEC+’s decision, Saudi Arabia came out with a statement that expressed “its total rejection” of Biden’s and other statements from Washington with regard to the decision.“This decision was taken unanimously by all member states of the OPEC+ group,” a statement from Saudi Arabia’s Foreign Ministry said last week.Other OPEC+ producers, including the United Arab Emirates, Iraq, Kuwait, Oman, Bahrain, and Algeria also issued statements on Sunday and Monday, in which officials defended the cut as necessary for the market and reiterated the decision taken by the group was unanimous. On Sunday, Iraq’s state oil marketing company, SOMO, said in a statement carried by Reuters, “There is complete consensus among OPEC+ countries that the best approach in dealing with the oil market conditions during the current period of uncertainty and lack of clarity is a pre-emptive approach that supports market stability and provides the future the guidance it needs.”The UAE’s Energy Minister Suhail al-Mazrouei wrote on Twitter on Sunday, “I would like to clarify that the latest OPEC+ decision, which was unanimously approved was a pure technical decision, with NO political intentions whatsoever.”Algeria’s Energy Minister Mohamed Arkab told Reuters in a statement the decision was “a purely technical response based on purely economic considerations.”

OPEC Members Line Up To Back Oil Production Cut After US Claims Against Saudi Arabia - OPEC+ member states lined up on Oct. 16 to endorse a steep production cut agreed upon this month following accusations from top Biden administration officials against the Saudi government. Iraq, the second-largest producer in OPEC, said the move was based on economic indicators and done unanimously.“There is complete consensus among OPEC+ countries that the best approach in dealing with the oil market conditions during the current period of uncertainty and lack of clarity is a pre-emptive approach that supports market stability and provides the future the guidance it needs,” Iraq’s state oil agency said in a statement.Oman and Bahrain also said in separate statements that OPEC+ had been unanimous in deciding on the 2 million barrels per day reduction several weeks ago. Algeria’s energy minister called the Oct. 5 decision “historic,” and he and OPEC Secretary General Haitham Al Ghais, currently visiting Algeria, expressed their full confidence in it, Algeria’s Ennahar TV reported.Those statements came after White House and Pentagon spokesman John Kirby accused Riyadh of pushing other countries into making the oil production cut during the last OPEC meeting.“The Saudi foreign ministry can try to spin or deflect, but the facts are simple. The world is rallying behind Ukraine in combating Russian aggression,” Kirby said in a statement last week, claiming that “more than one” member of OPEC+ disagreed with the oil production cut. He didn’t provide examples, however.But the Saudi kingdom rejected those allegations, saying that those statements “are not based on facts” and that it had made its decision “purely on economic considerations.”

Oil prices steady as recession fears counter positive Chinese signals Oil prices were steady on Monday as China's continuation of loose monetary policy was offset by fears that high inflation and energy costs could drag the global economy into recession. Brent crude futures rose 17 cents, or 0.2%, to $91.80 a barrel by 0915 GMT, recovering from a 6.4% fall last week. U.S. West Texas Intermediate crude was at $85.67 a barrel, up 6 cents, or 0.1%, after a 7.6% decline last week. China's central bank rolled over maturing medium-term policy loans on Monday while keeping the interest rate unchanged for a second month, in a signal that the central bank would continue to maintain loose monetary policy. Beijing would also greatly increase domestic energy supply capacity and step up risk controls in key commodities including coal, oil and gas, and electricity, a senior National Energy Administration official said on Monday. China will further increase reserve capacities for key commodities, another state official told a news conference in Beijing. Oil found support from a combination of factors, including Chinese President Xi Jinping's comments at the Party Congress that reassured accommodative policies for the economy, a positive sign for demand outlook, CMC Markets analyst Tina Teng said. China is expected to release trade and economic data this week, with third-quarter GDP growth possibly set to rebound from the previous quarter, but 2022 threatening to be China's worst performing year in almost half a century. Meanwhile a strong U.S. dollar and further interest rate increases from the U.S. Federal Reserve limit price gains. St. Louis Fed President James Bullard said on Friday inflation had become "pernicious" and difficult to arrest, and warranted continued "frontloading" through larger rate increases of three-quarters of a percentage point. Inflation in the United States remains stubborn and growth in European Union countries is due to weaken to half a percent, Gita Gopinath, a senior official at the International Monetary Fund said on Monday. Oil supply is due to remain tight after OPEC and allies like Russia pledged on Oct. 5 to cut output by 2 million barrels per day, as a war of words between OPEC's de facto leader Saudi Arabia and the United States could foreshadow more volatility.

Oil Futures Finished Lower on Monday in What Was a Volatile Trading Session Oil futures finished lower on Monday in what was a volatile trading session. Oil prices were moved by fears that high inflation and energy cost could drag the global economy into recession, offsetting China’s continuation of loose monetary policy. Meanwhile, U.S. inflation remains a hot topic and with the U.S. Federal Reserve set to raise interest rates at least into next year, there are fears that demand destruction will escalate. Chinese trade and third-quarter GDP data, along with September activity data, are due to be released on Tuesday, with quarterly growth possibly rebounding from the previous quarter but annual growth threatening to be China's worst in almost half a century. Oil supply is likely to remain tight after OPEC and allies including Russia pledged on Oct. 5 to cut output by 2 million barrels per day while a war of words between OPEC's de facto leader Saudi Arabia and the United States could foreshadow more volatility. November delivery lost 15 cents per barrel, or 0.18% to $85.46. Brent for December delivery lost one cent per barrel, or 0.01% to $91.62. Petroleum products finished mixed, with RBOB Gasoline for November. delivery losing 3.78 cents per gallon, or 1.44% to $2.5931 and heating oil for November delivery gaining 10.50 cents per gallon, or 2.64% to $4.0852. OPEC+ member states endorsed the steep cut to its output target agreed this month after the White House accused Saudi Arabia of coercing some other nations into supporting the move. Saudi King Salman bin Abdulaziz said the kingdom was working hard to support stability and balance in oil markets, including establishing and maintaining agreement of the OPEC+ alliance. Saudi Arabia’s Defense Minister and King Salman's son, Prince Khalid bin Salman, also said the decision to reduce output by 2 million bpd was unanimous and based on economic factors. His comments were backed by ministers of several OPEC+ member states including the United Arab Emirates. The UAE’s Energy Minister, Suhail al-Mazrouei, wrote on Twitter: "I would like to clarify that the latest OPEC+ decision, which was unanimously approved, was a pure technical decision, with no political intentions whatsoever." Meanwhile, Iraq’s SOMO said "There is complete consensus among OPEC+ countries that the best approach in dealing with the oil market conditions during the current period of uncertainty and lack of clarity is a pre-emptive approach that supports market stability and provides the guidance needed for the future." Kuwait Petroleum Corporation Chief Executive, Nawaf Saud al-Sabah, also welcomed the decision by OPEC+ and said the country was keen to maintain a balanced oil market. Oman and Bahrain said in separate statements that OPEC had agreed unanimously on the reduction. Algerian Energy Minister, Mohamed Arkab, called the decision "historic" and said that he and OPEC Secretary General Haitham Al Ghais expressed full confidence in it. The OPEC Secretary General later told a news conference that the organization targeted a balance between supply and demand rather than a specific price. According to the EIA, U.S. total shale regions oil production for November is seen increasing by 103,000 bpd to 9.104 million bpd compared with an increase of 127,000 bpd in October. Energy Aspect analyst, Amrita Sen, said the oil market is worried that further releases from the SPR could add pressure to prices. She said that the Biden administration could release another 100 million barrels. She also noted the SPR was not intended to relieve price pressures and is instead meant to address emergency supply constraints.

Oil Futures Mixed as Biden Eyes Another Release From SPR - New York Mercantile Exchange oil futures and Brent crude traded on the Intercontinental Exchange moved mixed early Tuesday following reports suggesting the Biden administration is planning to release another 10 million to 15 million barrels (bbl) from U.S. Strategic Petroleum Reserves to offset a large production cut announced by OPEC+ earlier this month that is seen further tightening market fundamentals. Additionally, concerns over the health of the global economy and subsequent demand destruction across major economies in Europe, Asia, and North America have further weighed on the oil complex. Bloomberg News reported Tuesday morning the Biden administration is considering a new sale of emergency crude oil from the nation's reserves to keep gasoline prices depressed ahead of midterm elections in November. The release would be an extension of the 180 million bbl drawdown program that started in the spring. According to people familiar with the decision, the White House is now considering how to replenish commercial stockpiles and whether to limit oil exports. The potential sale would come 14 days after Organization of the Petroleum Exporting Countries together with Russia-led partners agreed to cut oil production by 2 million barrels per day (bpd) beginning in November. According to various reports, the Saudi-led coalition defied calls from the Biden administration to not reduce oil production ahead of an EU embargo on Russian seaborne oil exports and G7 price cap on Russian energy sales that is expected to go into effect on Dec. 5. Russian officials have repeatedly warned that Moscow would halt all energy exports to any country that participates in a price scheme.. For their part, OPEC+ officials defended the decision to cut oil production by 2 million bpd next month as a preemptive measure to counter accelerated demand destruction in some of the world's largest economies. IMF forecast economies representing more than a third of global output will likely contract next year, while the world's three largest economies -- the United States, European Union, and China -- will essentially stall. Overall, IMF projects 2.7% growth in 2023, down from 3.2% this year. Separately, the British government led by Liz Truss made a massive budget U-turn on Monday after appointing a new finance minister Jeremy Hunt, which included a reversal of her flagship tax cuts along with capping an energy price guarantee for UK households by a year to April 2023. The British pound rallied, the euro jumped 1.24% against the U.S. dollar, while the greenback retreated below the key 112-level on Monday after Hunt erased most of the 45-billion pound "mini-budget" on Monday, sparking a rally in U.S. and UK bond markets. Near 7:30 a.m. EDT, NYMEX November West Texas Intermediate futures traded little changed near $85.50 bbl, and ICE December Brent futures edged higher to $91.80 bbl. NYMEX November ULSD futures advanced 3.62 cents to $4.1214 gallon, and November RBOB futures declined 1.29 cents to $2.5802 gallon.

Oil prices settle lower on U.S. supply, lower China demand - Oil prices settled lower on Tuesday on fears of higher U.S. supply combined with an economic slowdown and lower Chinese fuel demand. Brent crude futures settled down $1.59, or 1.7%, to $90.03 per barrel, while U.S. West Texas Intermediate (WTI) crude settled down $2.64, or 3.1%, to $82.82 per barrel. China, the world's top crude oil importer, indefinitely delayed release of economic indicators originally scheduled to be published on Tuesday, indicating to the market that fuel demand is significantly depressed in the region. "It's not a good sign when China decides not to publish economic figures," . China's adherence to its zero-COVID policy has continued to increase uncertainties about the country's economic growth, . Oil prices were also pressured by reports that the U.S. government would continue releasing crude oil from reserves. The Biden administration plans to sell oil from the Strategic Petroleum Reserve in an effort to cool fuel prices before next month's congressional elections, sources told Reuters on Monday. In addition, U.S. crude oil stocks were expected to have risen for a second consecutive week, a preliminary Reuters poll showed on Monday. Output in the Permian Basin of Texas and New Mexico, the biggest U.S. shale oil basin, is forecast to rise by about 50,000 barrels per day (bpd) to a record 5.453 million bpd this month, the Energy Information Administration said. Investors had been increasing long positions in futures after OPEC+ agreed to lower output by 2 million barrels per day, ANZ Research analysts said in a note. Several members of the oil producer group have endorsed the cut after the White House accused Saudi Arabia of coercing some nations into supporting the move, a charge Riyadh denies.

WTI Holds Biden-SPR-Release Losses After API Data Shows Small Crude Draw - Oil prices were lower on the day on reports that the US is planning additional releases of Strategic Petroleum Reserve crude in response to OPEC+ cuts and OPEC+ defending its cuts due to teh growing risk of a global recession.."Transferring SPR crude oil from emergency reserves to commercial tanks now would likely not help in lowering retail gasoline prices, or do so only marginally," "Such a policy does not make sense."And for now we will keep an eye on inventory levels for signs of demand problems. API:

• Crude -1.26mm:
• Cushing +890k
• Gasoline -2.17mm
• Distillates -1.09mm

After last week's huge crude build, API reported a very small crude draw this week (and products also saw drawdowns)...WTI was hovering around $82.50 ahead of the API data and drifted very modestly higher after the small crude draw... Shortly after the close, CNBC reported that 'sources' confirmed President Biden will announce yet more releases from the SPR tomorrow.Bloomberg reported that the Biden administration is moving toward a release of at least another 10 million to 15 million barrels of oil from the SPR. That will take the SPR to even more record-er lows in terms of supply. The bigger drivers lowering U.S. gasoline prices, however, were "sharply lower demand from China amid its zero-COVID policy that has stymied economic activity, and reduced transportation demand as millions of citizens were either locked down or had other restrictions reduce their mobility," DTN's Milne said."Domestically, climbing inflation, including high gasoline prices, has led consumers to reduce their driving."The problem is "not a lack of crude oil but a lack of refining capacity," said Milne.

Oil prices rise in tight market as US sets release of more reserves -Oil prices rose on Wednesday as caution over tightening supply countered the negative impact of uncertain Chinese demand growth and news that the United States will release more crude from its reserves. Brent crude futures for December settlement were up $1.54, or 1.6%, to $91.56 a barrel by 12:47 p.m. EDT (1647 GMT). U.S. West Texas Intermediate crude (WTI) for November, that is expiring on Thursday, was at $84.55 a barrel, up $1.73, or 2.1%. In the previous session, the benchmarks hit a two-week low on reports that U.S. President Joe Biden plans to release 15 million barrels of oil from the Strategic Petroleum Reserve (SPR). Biden is set to speak at 1:15 p.m. EDT (1715 GMT) on efforts to lower fuel costs in the United States, which have dropped over the last two weeks but remain higher than a month ago. U.S. crude inventories fell unexpectedly last week - down 1.7 million barrels, weekly government showed, against expectations for a build of 1.4 million barrels. SPR levels fell 3.6 million barrels to just over 405 million, the lowest since May 1984. [EIA/S] Meanwhile, U.S. refiners were still operating at higher rates than usual for this time of year, running at 89.5% of capacity. "Oil is taking it as a positive as we got a surprise drawdown even with another SPR release," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "Refinery runs came in stronger than anticipated. Supplies are still dangerously tight which should give us some support." A pending European Union ban on Russian crude and oil products and the output cut from the Organization of the Petroleum Exporting Countries and other producers including Russia, a group known as OPEC+, of 2 million barrels per day also supported prices. The EU's sanctions on Russian crude takes effect in December, and sanctions on oil products will take effect in February. "Prices need to rise above $100 a barrel in the coming months to slow demand growth and restore the supply-demand balance, in our view, given that oil inventories stand at a multi-year low," said UBS analysts in a note. China this week postponed the release of some key economic data, a highly unusual move that stoked fears of weak growth. There were also some signs of resurgent Chinese oil demand, including private mega refiner Zhejiang Petrochemical Corp (ZPC) and state-run ChemChina receiving further import quotas.

The Market Reacted to a Report from the Energy Information Administration - Oil futures climbed on Wednesday, with U.S. prices up by more than 3%. The oil market rebounded as the tug-of-war between concerns over supply and fears over demand continue the back-and-forth price action that has been a feature of the past few weeks. The market reacted to a report from the Energy Information Administration, which showed weekly declines in both domestic crude and gasoline supplies, while President Joe Biden has announced the release of 15 million barrels of crude from the nation's Strategic Petroleum Reserve - to complete the 180 million barrel release announced in the spring. West Texas Intermediate crude for November delivery rose $2.73, or 3.3%, to settle at $85.55 a barrel. The contract expires at the end of Thursday's trading session. Brent crude futures for December settlement LCOc1 ended up $2.38, or 2.6%, to $92.41 a barrel. U.S. West Texas Intermediate crude (WTI) for November, which is expiring on Thursday, ended at $85.55 a barrel, up $2.73, or 3.3%. U.S. President Joe Biden announced a plan to sell 15 million barrels from the SPR by year’s end and refill the stockpile when prices fall. He said extra oil could also be made available for sale if needed. He said the U.S. will refill the SPR when oil prices are at or below $70/barrel. The U.S. President also urged the oil industry to increase its production and investment and offer consumers the appropriate price. The Biden administration’s plan aims to add enough oil supply to the market to prevent price spikes that could hurt consumers and businesses, while also assuring the country’s producers that the government will buy the oil if prices fall too low. A U.S. Treasury official said new steps from G7 countries to cap Russian oil sales at an enforced low price will not be replicated against OPEC producers. The official added that the U.S. has communicated to representatives of OPEC to reassure them of those limits to its plans. IIR Energy reported that U.S. oil refiners are expected to shut in 1.7 million bpd of capacity in the week ending October 21st, increasing available refining capacity by 157,000 bpd. Offline capacity is expected to decrease to about 1.1 million bpd in the week ending October 28th. A CGT union representative said industrial action at three of TotalEnergies' French refineries, the La Mede, Feyzin and Normandy refineries is continuing as well as at the Dunkirk fuel storage site. Earlier, a local CGT representative said that the strike at the Donges refinery ended after workers voted to end their strike. Separately, French Energy Transition Minister, Agnes Pannier-Runacher, said there are signs of a general improvement in the supply of petrol to service stations in France, but the situation in the Paris/Ile-de-France area remains difficult amid the strike. Platts is reporting that a third of Libyan crude oil production could be shut-in as southern tribesman were threatening to close the key oil fields, the 300,000 b/d Sharara field and also the 70,000 b/d El Feel oil field.

Oil Rises as Biden’s Energy Remarks Fail to Pacify Markets -- Oil rose as traders shrugged off President Joe Biden’s remarks about taming energy prices. West Texas Intermediate futures rose 3.3% to settle above $85 a barrel. In a speech on Wednesday, Biden confirmed the US is releasing 15 million barrels from the nation’s strategic reserve but didn’t announce any other steps that might pull back prices, such as plans to curb fuel exports.. “Biden did not ban product exports which was something many in the market have been worried about.” Prices have traded within a narrow band since late-September amid fluctuating risk sentiment in broader markets. The mixed picture is evident in the futures curve: While key timespreads are indicating supply restraints, several gauges have softened to the weakest levels since late September. For now, the market is caught between bullish OPEC+ production cuts and a major slowdown in global growth that’s weighed on prices. Meanwhile, forthcoming European Union sanctions on Russian oil exports could send shockwaves through the global tanker market, and have already caused some Indian refiners to halt spot purchases before the latest sanctions take effect early December. “Liquidity and risk deployment is low and investor positioning has been subdued,” “Global inventories remain tight, but the global macro backdrop is arguably the weakest in a decade.” US crude stockpiles dropped 1.73 million barrels last week, the Energy Information Administration said Wednesday. Four-week seasonal demand for distillate fuels soared to the highest since 2007 while inventories remain the lowest point on record for this time of year.

Oil Prices Climb As China Signals An Easing Of Covid Restrictions -Oil prices rose early on Thursday after China signaled an easing of its strict Covid policy, which has battered market sentiment in recent months. As of 6:46 a.m. ET on Thursday, WTI Crude prices were rising by 1.67% at $86.98, and the international benchmark, Brent Crude, was up 1.41% to trade at $93.72.China’s strict Covid measures could be partially eased, which could be supportive of oil prices.The Chinese city of Xi’an, for example, home to more than 13 million residents, has said it would implement Covid control measures only in risk areas instead of city-wide “static management”, CN Wire reported on Thursday, citing the city’s health authorities. Just this past Sunday, Chinese President Xi Jinping signaled that the country’s zero-Covid policy would remain in place for the time being.Yet, officials in China are discussing the idea of reducing the mandatory quarantine for travelers into China to seven from 10 days, Bloomberg News reported today, quoting sources with knowledge of the discussions. The zero-Covid policy is not only isolating China from the rest of the world, but it weighs on market sentiment in the whole commodity complex, considering the fact that China is the world’s largest consumer of raw materials and the biggest importer of crude oil.Early on Thursday, oil prices were up despite the announcement of more SPR releases coming, as there are concerns that the strategic reserves for emergencies are estimated to now contain oil for only 22 days of consumption in case of an actual emergency.Prices were also pushed higher on Thursday by Wednesday’s weekly U.S. oil inventory report by the EIA, which showed a decline of 1.7 million barrels in crude oil, a small draw in gasoline stocks, and a slight increase in distillates.Commenting on the weekly data, analysts at Saxo Bank noted on Thursday that “Four-week seasonal demand for distillate fuels soared to the highest since 2007 while inventories remained at the lowest point on record for this time of year.” Despite the small increase of 124,000 barrels in distillate stocks, which include diesel, “there are still concerns going into winter over distillate inventories as they are at their lowest levels in at least 25 years for this time of year,” ING commodity strategists Warren Patterson and Ewa Manthey said on Thursday.

Oil Futures Ended on a Mixed Note Thursday -Oil futures ended on a mixed note Thursday, with the November U.S. benchmark contract ending higher on its expiration day, but the December contract little changed. Oil found some support from reports that China is looking to cut the duration of quarantine for inbound visitors, in a sign that perhaps the government might be looking to try and mitigate some of the worst effects of its zero-COVID policy. The reality is it's unlikely to make much difference given that as the weather gets colder, COVID infection rates are only likely to increase. U.S. benchmark West Texas Intermediate crude for November delivery rose 43 cents, or 0.5%, to settle at $85.98 a barrel. The December WTI contract, which is the new front-month contract as of the close, settled at $84.51, down by a penny for the session. Brent Crude for December delivery lost three cents per barrel, or 0.03% to $92.38. RBOB Gasoline for November delivery lost 0.44 cent per gallon, or 0.17% to $2.6478, while heating oil for November delivery lost 14.75 cents per gallon, or 3.78% to settle at $3.7568. Technical Analysis: WTI rallied early in the session on Thursday as it tried to pull away from the 10 and 50-day moving averages. As of now, the December contract is trending within a symmetrical triangle, which carries with it a period of sideways trading. Traders are still grappling with recent production cuts by OPEC+ and slackening demand set for by fears of a global economic slowdown. Feelings on these two fronts have traders flip-flopping, making it difficult to form sizeable positions. Until a definitive direction on this market can be decided on, we expect to see continued sideways trading. Resistance is seen at $86.97, $87.43 and above that at $90. Support is seen at $85, $82, and $81.30. Fundamental News: Citi Research said the SPR sales help rebalance the oil market, with more to come. It said coordinated SPR releases and especially U.S. SPR releases have been meaningful for easing prices. The EPA reported that the U.S. generated 501 million biodiesel blending credits in September, up from 453 million in August. It also reported that the U.S. generated 1.13 billion ethanol blending credits in September, down from 1.27 billion in August. A CGT union representative said workers at TotalEnergies ended their strikes at all but two sites in France on Thursday, adding that morning staff at the Normandy and Feyzin refineries were the only ones to continue the stoppage. While roughly one in five petrol stations in France is still grappling with shortages, supplies have been improving after the government increased imports and requisitioned some staff following almost four weeks of disruption. Colonial Pipeline Co is allocating space for Cycle 61 shipments on Line 2, its main distillate line from Houston, Texas to Greensboro, North Carolina.

Oil near flat as inflation concerns contend with China's quarantine ease - Oil prices were near flat on Friday, as market participants weighed concerns about steep inflation with optimism that China could see energy demand tick up.Brent crude futures lost 5 cents to trade at $92.33 a barrel by 00:02 GMT. U.S. West Texas Intermediate futures rose 7 cents to trade at $84.58 a barrel.Brent was on track for a weekly gain of 0.7%, while WTI was expected to fall 1.3%.To fight inflation, the U.S. Federal Reserve is trying to slow the economy and will keep raising its short-term rate target, said Federal Reserve Bank of Philadelphia President Patrick Harker on Thursday.Meanwhile, Beijing is considering cutting the quarantine period for visitors to seven days from 10 days, Bloomberg news reported on Thursday, citing people familiar with the matter.China, the world's largest crude importer, has stuck to strict COVID-19 curbs this year, which weighed heavily on business and economic activity, lowering demand for fuel.A looming European Union ban on Russian crude and oil products, as well as the output cut from the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, have supported prices recently. OPEC+ agreed on a production cut of 2 million barrels per day in early October.

Oil, Stocks Gain on Reports FOMC Mulls Slowing Rate Hikes -- With the U.S. dollar falling sharply in afternoon trading Friday, oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange advanced in step with a soaring stock market. The gains came after the Wall Street Journal reported some Federal Reserve officials are considering slowing the pace of rate hikes toward the end of year to reassess the impact of tightening monetary policy on the broader economy. The Federal Open Market Committee is expected to raise federal funds rates by another 0.75% at their Nov. 1-2 meeting, which would be the fourth consecutive rate hike of this magnitude in as many meetings. Fed officials are raising rates at the most aggressive pace since the early 1980s, and some of them are becoming increasingly concerned about a deep recession as rate hikes work themselves into the economy. "I worry that if the way you judge it is another bad inflation report must be that we need more rate hikes ... that puts us at somewhat greater risk of responding overly aggressive," said President of Chicago Federal Reserve Charles Evans this week. "We will have a very thoughtful discussion about the pace of tightening at our next meeting," Fed Governor Christopher Waller said in a speech earlier this month. Other Fed officials are frustrated with the lack of progress in curtailing inflation despite tighter monetary conditions. "Given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4% by the end of the year," said Philadelphia Fed President Patrick Harker in remarks Thursday in Vineland, New Jersey. In response to Friday's reports, investors sharply reduced bets on another 0.75% rate increase in December, down from 77% seen just a day ago to 45.4% today, showed CME Fed's Watch Tool. This week also saw increased volatility in global financial markets partly because political turmoil in Great Britain spilled into currency and bond markets, pressuring the oil complex. Financial markets are likely to remain volatile in the coming days until the United Kingdom selects a new prime minister, but the hope is the departure of embattled UK Prime Minister Lizz Truss could bring back credibility to the UK government. Also in Europe, European leaders agreed Friday to a temporary price corridor for natural gas transitions to prevent "extreme volatility and excessive prices" by blocking gas transactions above a certain level." They also said they would pursue a temporary framework to cap the price of gas in electricity generation, including a cost and benefit analysis. Natural gas in Europe fell, with benchmark futures traded at Dutch's Title Transfer Facility declining as much as 4.8% on Friday and headed for a third straight weekly loss. Before Vladimir Putin's invasion of Ukraine, the EU got 40% of its gas imports from Russia's vast pipeline network that have been depressing the wholesale gas prices on the continent. Today, the share of Russian gas on European market has fallen to 7.5%. At settlement, West Texas Intermediate futures advanced $0.54 to $85.05 per barrel, and the international crude benchmark for December delivery finished $1.12 per barrel higher at $93.50 per barrel. ULSD futures for November delivery rallied 7.55 cents to $3.8323 a gallon, and November RBOB futures rose 1.42 cents to $2.6620 per gallon.

Ramaphosa confirms Saudi Arabia wants to join Brics family --Saudi Arabia has expressed its interest in joining the Brics bloc.This was revealed by President Cyril Ramaphosa during his two-day state visit to the kingdom on Sunday.“The Crown Prince (prime minister Mohammad bin Salman bin Abdulaziz al Saud) did express Saudi Arabia’s desire to be part of Brics and they are not the only country,” said Ramaphosa.He confirmed this on Sunday during an engagement with the media.Brics held its first summit in 2009, with SA joining the following year. The bloc has generally been seen as an alternative to the dominance of the western economies.“We did say that Brics having a summit next year under the chairship of South Africa in SA and the matter is going to be under consideration.“A number of countries are making approaches to Brics members, and we have given them the same answer that it will be discussed by the Brics partners and thereafter a decision will be made.”

Biden Tells Iran Protesters “Keep Fighting” As Tehran Says Unrest Driven By US, Saudis --Iran protests have been persisting and growing fiercer since the September 16 death of 22-year old Mahsa Amini, who had been detained by police in Tehran for not adhering to the country's strict Islamic dress code. The "anti-hijab" protests which are raging and lately taking over university campuses across various cities are now coming under increased international media coverage. Now in their fifth week, the protests and ongoing clashes with security forces have left over 230 Iranians dead, including reportedly with casualties among police as well.Multiple hundreds of demonstrators have also been arrested. Increasingly, Iranian authorities are blaming the Islamic Republic's "enemies" - including the United States, Israel, and Saudi Arabia - for fomenting what have morphed into raging anti-government unrest. This theme of Tehran is likely to gain more traction among broader swathes of the Iranian population which have by and large remained on the sidelines after on Monday President Joe Biden issued a message of support for the protests...Biden says in unscripted comment that he visited Saudi Arabia and Israel in August to firm up Iran strategy. “Everyone thought I went to the Middle East because of oil, it was because of Iran,” he says. Regime will cite as “proof” America behind protests pic.twitter.com/ibXvCZ3Lqa Biden made the off-the-cuff statements to activists and reporters, describing of his July visit to Saudi Arabia, "Everyone thought I went to the Middle East because of oil, it was because of Iran." Biden praised the "incredible courage" of the protesters, and when asked by an activist to issue a message to Iranians in the streets, he said: "Keeping fighting, we're with you."This past week has seen the first instances of the US president personally issuing such specific support to the anti-regime protests, and it's certainly going to be noticed in Tehran, given officials there have already said the "riots" are a US-backed plot.

Iran Condemns EU Sanctions, Vows To Reciprocate - Spokesman of Iran's Foreign Ministry Nasser Kanaani strongly condemned the latest European Union sanctions against a number of Iranian people and entities, saying that the Islamic Republic will soon reciprocate and impose sanctions against relevant European individuals and entities, reports citing . Kanaani made the announcement on Monday hours after the EU imposed sanctions on 11 Iranian people and 4 entities over the recent unrest in the country, accusing them of human rights violations. The spokesman described the EU measures a violation of international law and blatant interference in Iran's internal affairs. He said that it is a matter of deep regret that the EU has made this wrong, unconstructive decision which is totally invalid and rejected. Kanaani said that the move is based on political motives, and unfounded and distorted information, as well as allegations made by enemies of the Iranian nation and their affiliated media outlets. The spokesman also said the move indicates a continued hostile policy towards Iran, and is a sign of using human rights issue as a tool to achieve political purposes. He said that the Iranian nation has already regarded the European Union as a great violator of human rights over its accompanying and non-practice on illegal US sanctions and its so-called maximum pressure campaign against Iran. Kanaani dismissed all accusations leveled against the Iranian individuals and entities targeted by the EU measures, saying that Tehran will soon announce and impose sanctions on relevant European people and entities in response.

Saudis Announce $400M In Ukraine Aid After Biden Said US 'Re-Evaluating' Ties With Kingdom - Saudi state media announced Saturday that the kingdom will provide $400 million in humanitarian aid to Ukraine, following a Friday phone call between Crown Prince Mohammed bin Salman and President Volodymyr Zelensky.SPA stated of the call, "The crown prince expressed the kingdom's readiness to continue efforts of mediation and support everything that contributes to de-escalation," in reference to the over seven-month long invasion of Ukraine.The timing of the new aid is raising eyebrows at a moment there are growing calls in US Congress to freeze all new military arms and equipment sales to Riyadh, and after the White House just days ago confirmed President Biden will re-evaluate ties with Saudi Arabia."We are reviewing where we are; we’ll be watching very closely, talking to partners and stakeholders," State Department spokesman Ned Price price said Tuesday, following the Saudis having led the way in getting major oil producers to cut petroleum output, crucially also ahead of mid-term elections in the US.As reported previously by Al Jazeera of Price's press briefing:He added that President Joe Biden had previously spoken of the need to “recalibrate” ties with Saudi Arabia to better serve the US – a position that Price said was underscored by the recently announced oil cuts."Our guiding principle will be to see to it that we have a relationship that serves our interests. This is not a bilateral relationship that has always served our interests," Price said.Price went so far as to charge the OPEC is essentially supporting Russia's aggression in Ukraine "against the interests of the American people" in this latest move.