oil up 17% on OPEC supply cut; US oil supplies at 20½ year low; gasoline supplies at 8 year low; total oil+products supplies at a 17 year low

oil price jumps 17% on OPEC supply cut; natural gas stores see largest autumn increase on record; US oil supplies at a 20½ year low; SPR at a 38 year low; gasoline supplies at eight year low with gasoline demand at a 9 month high; total oil + oil products supplies at a 17 year low..

oil prices rose every day this week and finished at a 5 week high after OPEC agreed to cut their production by 2 million barrels, thus taking 2% of global oil supplies out of circulation...after rising 1.0% to $79.49 barrel last week as Hurricane Ian disrupted Gulf of Mexico production and the EIA reported across the board inventory drawdowns, the contract price for the benchmark US light sweet crude for November delivery jumped more than 3% in early Asian trade on Monday, as OPEC+ considered cutting output by more than 1 million barrels a day, its biggest production cut since the pandemic hit, and continued higher on that news in New York trading to settle $4.14, or 5.2% higher at $83.63 a barrel, with gains also fueled by reports of a sudden escalation of fighting in Ukraine, following a series of defeats for Russian forces....after continuing to rally as the dollar edged lower in Asian trading Tuesday, oil prices backed off a half percent on conflicting signals from OPEC in London trading, but then edged up again in New York as expectations that OPEC+ would agree to a large cut in crude output on Wednesday offset concerns about the global economy, and settled $2.89 higher at $86.52 a barrel, the highest close in almost three weeks, in reaction to reports indicating the Organization of the Petroleum Exporting Countries and allied partners would announce a production cut of 2 million barrels per day (bpd) starting in November to backstop a slide in oil prices...oil prices flipped between modest gains and losses early Wednesday ahead of the OPEC+ meeting in Vienna as traders parsed through reports suggesting Saudi Arabia and Russia were about to approve deep production cuts, and then surged more than 2% in mid morning trade after EIA data showed total US crude oil and fuel inventories declined for a second straight week, while demand for gasoline surged to over 9 million barrels per day for the first time since early August. and ended the Wednesday session $1.24 higher $87.76 a barrel, their highest price in three weeks, after OPEC+ agreed to reduce output by 2 million barrels a day and U.S. data revealed a second straight weekly decline in crude supplies...oil prices were little changed early Thursday after OPEC pointed to the uncertainty that surrounds the global economic and oil market outlook, and noted 'the need to enhance the long-term guidance for the oil market.' and settled with a gain of 69 cents, or 0.8%, at $88.45 a barrel, as the OPEC cuts came just ahead of a European Union embargo on Russian oil and would squeeze supplies in an already tight market...oil prices dipped back toward $88 a barrel in Australia early Friday, weighed down by concerns over a global economic slowdown and aggressive rate hikes by central banks, but were up 1.1% by the time markets opened in India, after Barclays said that the agreement reached by OPEC+ members to slash output should cultivate further energy price advances, and then rose sharply in New York after Moscow threatened to cut all oil exports to any country that participates in a US initiative to cap the price of Russian energy sales, and settled $4.19 or 5% higher at $92.64 a barrel, continuing to find support from the OPEC+ decision earlier in the week to cut output by 2 million barrels per day from November...oil prices thus finished at a 5 week high, gaining nearly 17% on the week, which was their largest weekly jump since the first week of March, when oil had posted its greatest one week dollar value increase on record at the onset of the Russian foray into Ukraine..

On the other hand, natural gas prices finished lower for a seventh consecutive week following the largest inventory increase on record for this time of year...after falling 3.2% to $6.766 per mmBTU last week on hurricane related demand destruction and on another above normal addition to storage, the contract price of US natural gas for November delivery opened Monday’s session at $6.800 but quickly lost ground as trading got underway, as a plethora of weak market signals – including the potential for five straight triple-digit storage injections – sent prices down as much as 46 cents, before they partially recovered to settle 29.6 cents lower at $6.470 per mmBTU, still the lowest in nearly 12 weeks, on record output and forecasts for lower demand over the next two weeks due to ongoing storm-related outages and a reduction in liquefied natural gas (LNG) exports....but natural gas prices rallied on Tuesday, despite the unsupportive near-term outlook, on a big drop in production due maintenance and operational issues, as the November contract price finished 36.7 cents higher at $$6.837.per mmBTU...natural gas prices continued to climb on Wednesday, despite the bearish near-term fundamentals, following oil prices higher after OPEC's big production cut, but pulled back after rising past $7 to settle with a 9.3 cent gain at $6.930 per mmBTU...natural gas prices strengthened for a third straight day on Thursday despite EIA inventory data that indicated the third largest storage injection in more than 20 years, and the largest ever for autumn, and settled 4.2 cents higher at $6.972 per mmBTU on forecasts for cooler weather and higher heating demand next week...natural gas futures retreated in early trading Friday on expectations of more exceptional storage injections before winter, and settled 22.4 cents lower at $6.748 per mmBTU on continued milder than normal weather, as production returned to record levels, and hence prices finished 0.3% lower on the week...

The EIA's natural gas storage report for the week ending September 30th indicated that the amount of working natural gas held in underground storage in the US rose by 129 billion cubic feet to 3,106 billion cubic feet by the end of the week, the third largest increase on record, which still left our gas supplies 165 billion cubic feet, or 5.0% below the 3,271 billion cubic feet that were in storage on September 30th of last year, and 264 billion cubic feet, or 7.8% below the five-year average of 3,370 billion cubic feet of natural gas that were in storage as of the 30th of September over the most recent five years....the 129 billion cubic foot injection into US natural gas working storage for the cited week was much higher than the forecast for an injection of 113 billion cubic feet in a Reuters poll of analysts, and was more than the 114 billion cubic feet that were added to natural gas storage during the corresponding week of 2021, and also well more than the average injection of 87 billion cubic feet of natural gas that had typically been added to our natural gas storage during the same week over the past 5 years.... 

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending September 30th indicated that after a sizable decrease in our oil imports and a modest increase in our refining, we needed to pull oil out of our stored commercial crude supplies for the 5th time time in 10 weeks, and for the 26th time in the past 45 weeks, despite another big oil release from our Strategic Petroleum Reserve and despite another increase in oil supplies that could not be accounted for....Our imports of crude oil fell by an average of 502,000 barrels per day to average 5,947,000 barrels per day, after falling by an average of 498,000 barrels per day during the prior week, while our exports of crude oil fell by 95,000 barrels per day to average 4,551,000 barrels per day, which together meant that the net of our trade in oil worked out to an import average of 1,396,000 barrels of oil per day during the week ending September 30th, 407,000 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 unchanged 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 13,396,000 barrels per day during the September 30th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,961,000 barrels of crude per day during the week ending September 30th, an average of 210,000 more 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 1,079,000 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 September 30th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 1,486,000 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 (+1,486,000) 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... in other words, the EIA could not account for the source of more than 9% of the oil used in the US this week...but since most everyone treats these weekly EIA reports as gospel, and since these figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably accurate by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

This week's 1,079,000 barrel per day decrease in our overall crude oil inventories left our oil supplies at 845,592,000 barrels at the end of the week, which was our lowest total oil inventory level since January 4th, 2002, and therefore at a 20 1/2 year low.….Our oil inventories decreased this week as an average of 194,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while 885,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve. That draw on the SPR was another installment of the emergency withdrawal under Biden's "Plan to Respond to Putin’s Price Hike at the Pump" (sic), that was intended to supply 1,000,000 barrels of oil per day to commercial interests over a six month period up to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising, at least up until then, and has been fluctuating wildly in recent weeks because the administration is now attempting to use the Strategic Petroleum Reserve to manipulate prices on a weekly basis....Including the administration's initial 50,000,000 million barrel SPR release earlier this year, their subsequent 30,000,000 barrel release, and other withdrawals from the Strategic Petroleum Reserve under recent release programs, a total of 239,758,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 26 months, and as a result the 416,389,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since July 6th, 1984, or at a 38 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs had already drained those supplies considerably over the past dozen years, even before the Biden administration's SPR releases. The total 180,000,000 barrel drawdown of the current release program, now scheduled to run through November, will remove almost a third of what remained in the SPR when the program started, and leave us with what would be less than a 20 day supply of oil at today's consumption rate...

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,284,000 barrels per day last week, which was 2.6% less than the 6,453,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at 12,000,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 11,600,000 barrels per day, while Alaska’s oil production was 2,000 barrels per day higher at 435,000 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 91.3% of their capacity while using those 15,961,000 barrels of crude per day during the week ending September 30th, up from their 90.6% utilization rate during the prior week, and close to a normal utilization rate for the end of September.   The 15,961,000 barrels per day of oil that were refined this week were 1.4% more than the 15,744,000 barrels of crude that were being processed daily during week ending October 1st of 2021, and 1.9% more than the 15,656,000 barrels that were being refined during the prepandemic week ending October 4th, 2019, when our refinery utilization was at 86.4%, below the normal range for early October...

With the increase in the amount of oil being refined this week, the gasoline output from our refineries was quite a bit higher, increasing by 389,000 barrels per day to 10,014,000 barrels per day during the week ending September 30th, after our gasoline output had increased by 166,000 barrels per day during the prior week. This week’s gasoline production was 6.9% more than the 9,366,000 barrels of gasoline that were being produced daily over the same week of last year, but 0.5% below the gasoline production of 10,066,000 barrels per day during the week ending October 4th, 2019, ie, during the year before the pandemic impacted US gasoline output.  At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 230,000 barrels per day to 5,188,000 barrels per day, after our distillates output had decreased by 278,000 barrels per day during the prior week. With that increase, our distillates output was 8.6% more than the hurricane impacted 4,778,000 barrels of distillates that were being produced daily during the week ending October 1st of 2021, and 7.3% more than the 4,835,000 barrels of distillates that were being produced daily during the week ending October 4th 2019...

Even with the increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 7th time in 9 weeks; and for the 27th time out of the past thirty-five weeks, decreasing by 4,728,000 barrels to an eight year low of 207,460,000 barrels during the week ending September 30th, after our gasoline inventories had decreased by 2,422,000 barrels during the prior week. Our gasoline supplies fell by more this week because the amount of gasoline supplied to US users rose by 640,000 barrels per day to a 9 month high of 9,465,000 barrels per day, while our imports of gasoline fell by 45,000 barrels per day to 480,000 barrels per day and while our exports of gasoline fell by 189,000 barrels per day to 796,000 barrels per day. After 26 gasoline inventory drawdowns over the past 33 weeks, our gasoline supplies were 4.3% lower than last October 1st's gasoline inventories of 221,809,000 barrels, and about 9% below the five year average of our gasoline supplies for this time of the year…

Likewise, even with the increase in our distillates production, our supplies of distillate fuels decreased for the 8th time in 20 weeks and for the 31st time in the past year, falling by 3,443,000 barrels to 110,916,000 barrels during the week ending September 30th, after our distillates supplies had decreased by 2,891,000 barrels during the prior week. Our distillates supplies fell by more this week even as the amount of distillates supplied to US markets, an indicator of our domestic demand, decreased by 73,000 barrels per day to 4,105,000 barrels per day, because our exports of distillates rose by 369,000 barrels per day to 1,656,000 barrels per day, while our imports of distillates fell by 13,000 barrels per day to 81,000 barrels per day.. After fifty inventory withdrawals over the past seventy-six weeks, our distillate supplies at the end of the week were 14.2% below the 129,331,000 barrels of distillates that we had in storage on October 1st of 2021, and about 21% below the five year average of distillates inventories for this time of the year...

Meanwhile, after the increase in refining and the decrease in our oil imports, our commercial supplies of crude oil in storage fell for the 12th time in 24 weeks and for the 31st time in the past year, decreasing by 1,356,000 barrels over the week, from 430,559,000 barrels on September 23rd to 429,203,000 barrels on September 30th, after our commercial crude supplies had decreased by 215,000 barrels over the prior week. After this week's decrease, our commercial crude oil inventories slipped to about 3% below the most recent five-year average of crude oil supplies for this time of year, but were still about 29% above the average of our crude oil stocks as of the end of September over the 5 years at the beginning of the past decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels. And even though our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, and then jumped again after last year's winter storm Uri froze off US Gulf Coast refining, our commercial crude supplies as of this September 30th were 2.0% more than the 420,887,000 barrels of oil we had in commercial storage on October 1st of 2021, while 12.9% less than the 492,927,000 barrels of oil that we had in storage on October 2nd of 2020, and 0.9% more than the 425,569,000 barrels of oil we had in commercial storage on October 1st 27th of 2019…

Lastly, with our inventories of crude oil and our supplies of all products made from oil near multi-year lows over the most recent months, we are continuing to watch the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR. With the across the board inventory decreases 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 16,198,000 barrels this week, from 1,653,552,000 barrels on September 23rd to 1,637,354,000 barrels on September 30th, after our total inventories had fallen by 13,468,000 barrels during the prior week. That left our total liquids inventories down by 151,079,000 barrels over the first 39 weeks of this year, and at the lowest level since April 15, 2005, or at more than a 17 year low... 

This Week's Rig Count

The number of drilling rigs running in the US fell for the sixth time in ten weeks, but for only the 13th time over the past 106 weeks during the week ending October 7th, but even so, they're now 3.9% below the prepandemic rig count....Baker Hughes reported that the total count of rotary rigs drilling in the US decreased by 3 rigs to 762 rigs this past week, which was still 229 more rigs than the 533 rigs that were in use as of the October 8th report of 2021, but was 1,167 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global market with oil in an attempt to put US shale out of business….

The number of rigs drilling for oil decreased by 2 to 602 oil rigs during the past week, after the number of rigs targeting oil had increased by 2 during the prior week, and there are 168 more oil rigs active now than were running a year ago, even as they amount to just 37.4% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are still down 11.9% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 1 to 158 natural gas rigs, which was still up by 59 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....in the past, we've identified various "miscellaneous" as being exploratory, for carbon dioxide storage, and for utility scale geothermal projects...a year ago, there were was only one such "miscellaneous" rig running...

The offshore rig count in the Gulf of Mexico was down by 3 at 12 rigs this week, with all of this week's Gulf rigs drilling for oil in Louisiana's offshore waters....that's still higher than the 10 Gulf rigs running a year ago in the wake of Hurricane Ida...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, there was also a rig drilling offshore from Alaska...

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 2 to 698 horizontal rigs this week, which was also 215 more rigs than the 483 horizontal rigs that were in use in the US on October 8th of last year, but just over half of the record 1,374 horizontal rigs that were drilling on November 21st of 2014....on the other hand, the directional rig count was down by 5 to 41 directional rigs this week, but those were still up by 19 from the 22 directional rigs that were operating during the same week a year ago…meanwhile, the vertical rig count was unchanged at 23 vertical rigs this week, which was down by 5 from the 28 vertical rigs that were in use on October 8th 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 7th, the second column shows the change in the number of working rigs between last week’s count (September 30th) and this week’s ( October 7th) count, the third column shows last week’s September 30th 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 8th of October, 2021...

Louisiana's 4 rig drop includes the three Gulf of Mexico oil rigs that were shut down in the state's offshore waters, and a Haynesville shale natural gas rig that was shut down in the northwest corner of the state...in Texas, there was a rig added in Texas Oil District 8, or in the core Permian Delaware, which accounts for this week's Permian basin increase, while there was an inland waters rig pulled out of Galveston Bay, leaving the state's ​rig ​count unchanged...the rig added in Oklahoma was in a basin not tracked by Baker Hughes, as was the rig pulled out of Wyoming also from a basin Baker Hughes doesn't cover....while there was a natural gas rig added in West Virginia's Marcellus, the Haynesville shale loss and a natural gas rig rig pulled from a basin Baker Hughes doesn't cover left the national natural gas rig count down by one...

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Group finds PFAS 'forever' chemicals used in Ohio oil and gas wells - A non-profit research group has found the oil and gas industry in Ohio has used PFAS, known as “forever” chemicals, in at least 101 oil and gas wells since 2013. Physicians for Social Responsibility (PSR) released a report on Thursday and said that the state’s disclosure rules prevent the public from knowing how widely PFAS have been used.PFAS are a class of thousands of man-made chemicals used in everything from food packaging to firefighting foam. “And there’s evidence that it has been used widely in the oil and gas industry for decades,” said Dusty Horwitt, who co-authored a report for Physicians for Social Responsibility. PFAS are known as forever chemicals because they don’t break down easily in the environment. They have been linked to some cancers, reduced fertility, and developmental effects in children. The group analyzed a database where the oil and gas industry self-reports chemical usage, and found PFAS was used in wells in eight Ohio counties: Belmont, Carroll, Columbiana, Guernsey, Harrison, Jefferson, Monroe, and Washington.“However, the number of definitively identified cases of PFAS use may significantly underrepresent the use and presence of PFAS in the state associated with oil and gas operations,” according to the report.According to Horwitt, PFAS are difficult to track because Ohio rules allow companies to claim ‘trade secrets’ to avoid disclosure of chemicals they use. “Between 2013 and 2022, oil and gas companies withheld the identity of at least one trade secret chemical in more than 2,100 oil and gas wells,” he said.A report in the Philadelphia Inquirer last year found PFAS chemicals were used in eight wells in Pennsylvania, although Pa. has similar “trade secrets” rules. PFAS chemicals are known to move quickly in water. For Horwitt, that adds a concern because PFAS contamination of drinking water from fracking hasn’t been adequately researched. “We’re aware only of one study so far that has looked for these chemicals in drinking water near oil and gas operations,” Horwitt said. That sampling found PFAS in a drinking well fed by groundwater near oil and gas operations in Pennsylvania. Horwitt wants more research but also thinks Ohio and other states should follow Colorado’s lead and ban the use of PFAS in oil and gas operations. “That’s a very wise thing to do because of the extreme toxicity and persistence of these chemicals and the multiple routes of exposure that could exist from oil and gas operations,” Horwitt said. In Ohio, much of the wastewater is pumped into underground injection disposal wells. The state has 245 frack waste injection wells, according to an analysis by FrackTracker Alliance, referenced in the PSR report, which accepted a total of 12.7 billion gallons of waste in 2020 from Ohio, Pennsylvania and West Virginia. “There could be PFAS in the wastewater that comes up from these wells, whether in Ohio or from neighboring states like Pennsylvania and West Virginia and then is sent to Ohio for disposal,” Horwitt said.

Pipefitter says BP used unskilled contractors on unit before fatal explosion at Toledo, Ohio refinery - It is two weeks since the September 20 explosion and fire that claimed the lives of two young workers at the BP Husky refinery in Oregon, Ohio. Two brothers, Max and Ben Morrissey, aged 34 and 32, respectively, suffered horrific burns in the fire and succumbed to their injuries the following day. The Morrissey brothers, who were also fathers of small children, were buried after a memorial attended by hundreds of family members, friends and co-workers at the refinery last week. There is widespread suspicion among workers that cost-cutting measures by management contributed to the disaster. Workers have long complained about manpower shortages, management cutting corners on maintenance and repair, and the contracting out of jobs to non-union workers who lack knowledge and training. Operators have also warned that exhausting work schedules and the practice of shifting them from unit to unit, instead of keeping them on units where they have experience and specific knowledge, undermines safety. BP, which is in the process of selling off its share of the refinery just east of Toledo to Calgary-based Cenovus, has not released any details about the September 20 fire. Nor have inspectors from the federal and state Occupational Safety and Health Administration (OSHA). The United Steelworkers (USW), which has 315 members at the refinery, including the two deceased brothers, has not released any information either. Last week, Eric Sweeney, the District 1 staff representative for USW Local 1-346, told the Toledo Blade that “no one wants to rush to judgment.” The WSWS was recently contacted by a union pipefitter who worked at the BP Husky refinery before the September 20 explosion. In an email and subsequent interview, the worker detailed unsafe practices by refinery management in the days leading up to the disaster. The information he provided is based on personal experience, the experiences of co-workers who worked the shutdown at the refinery, and from union representatives. In an initial email, the worker, whose identity we will keep anonymous to protect him from retaliation, said, “This past summer BP/Husky hired 55 percent non-union pipefitters to complete the spring 2022 shutdown! It is documented that the non-union outfit— ‘UNITED,’ we’ll call them—worked the unit that blew up. They were seen doing shabby work, not following proper procedures on taking valves, etc. to the wash pads, and had many other safety infractions! I blame the plant manager who decided to hire ‘UNITED.’ Most employees were from Texas, and they hired anyone.

Years into fracking boom, air regulators can't keep up - — The extraordinary phone call came at an ordinary moment: Darlene and Bob Williamson were watching television when they received an urgent warning to leave their Salem Twsp Ohio home immediately. An indoor air monitor had detected spiking contaminant levels, a scientist on the other end of the call told the two retirees. “There was a bad odor; both of us had a headache,” Darlene Williamson recalled. They opened their windows, fled the house and waited to return when the levels of the contaminants — known as volatile organic compounds and suspected to be stemming from nearby energy development infrastructure — had dropped to normal. The episode early last year revealed the power and benefits of low-cost sensors to furnish almost instant insight into air quality. The Williamsons are among some 35 southeastern Ohio and West Virginia households participating in a project to make more use of them in a mostly rural region where EPA air pollution monitoring is limited and shale gas production has boomed in the last decade. But the episode also suggests how government overseers have failed to keep pace with the air quality challenges posed by that boom. Hundreds of gas wells and related operations dot this verdant swath of the Ohio River Valley, but neither state nor federal regulators have the tools to consistently keep tabs on what nearby residents — as in the case of the Williamsons — are breathing. The regulators are working under a roughly 50-year-old Clean Air Act framework written to devote considerable focus to pollutants now of dwindling significance, such as sulfur dioxide. Instead, the law’s apparatus pays far less attention to volatile organic compounds, a class of chemicals linked to oil and gas development that includes air toxics like benzene, a carcinogen. Those regulatory shortcomings are compounded by poor air monitoring infrastructure and a surge in the drilling technique known as hydraulic fracturing — and are fueling a host of environmental and public health concerns.“We want to find out as much as we can, but we also know that there’s nothing that we can do,” Bob Williamson said in a recent interview on the deck of the home where he and his wife have lived for almost 40 years. Two of their grandchildren frolicked in a backyard pool. Less than a half-mile away, however, sat a natural gas compressor station. Run by the Oklahoma-based Williams Cos. Inc., its purpose is to keep gas moving through a pipeline. The station’s blasts of noise during periodic depressurization operations known as blowdowns are one sign of the impact of hydraulic fracturing, or fracking, which has allowed operators to tap the natural gas packed into the vast shale formations underlying the region. The couple blames emissions from the station for nausea, lethargy and other health problems, not to mention an oily film on their kitchen door. Within eyeshot of their home is more evidence: a metering station that tracks the flow of pipeline gas, occupying space in what used to be a corn and soybean field.

Equinor's Ohio Natural Gas Output Certified; Ascent Monitoring Methane - Equinor ASA’s natural gas production in the Appalachian Basin of Ohio has been certified as responsibly developed by Equitable Origin (EO). About 135 MMcf/d is actively produced by Equinor US in Monroe County. The third-party review covered Equinor’s “entire U.S. onshore natural gas production, encompassing 51 producing wells on 13 well pads at the time of the assessment,” EO noted. “However, this is a small fraction of the company’s total production in the U.S. as Equinor has significant offshore production operations” in the deepwater Gulf of Mexico. Through its US. subsidiary, Equinor’s current Appalachia operations in Ohio extend across 242,000 net acres under lease, with 27,000 net acres operational, EO noted. Monroe County is in the southeastern corner of the state, and it shares a border with West Virginia. The portion of the Appalachian from which Equinor operates primarily is in a dry gas field with minimal natural gas liquids production. The third-party assessment, which used the EO100 Standard for Responsible Development, was completed by Houston-based Responsible Energy Solutions LLC (RES). Meanwhile, privately held Ascent Resources – Utica LLC said nearly all of its natural gas production in Ohio has achieved the top certification under the MiQ methane emissions standard. As part of its certification, Ascent has partnered with Bridger Photonics, based in Bozeman, MT. Bridger uses aerial methane detecting technology, aka Gas Mapping LiDAR, to detect, locate and quantify methane emissions. “Ascent is committed to providing clean, reliable and affordable energy that is responsibly sourced,” COO Keith Yankowsky said. “That foundational principle enabled us to achieve multiple top-tier third party certifications, and we expect that our work with Bridger will further enhance our existing emissions detection and elimination efforts in a cost-effective way.”

100% of Equinor's Ohio Utica Gas Production Certified Responsible - Marcellus Drilling News - Equinor, Norway’s largest oil company (state-owned, used to be called Statoil before they became ashamed to have the word “oil” in their name), announced it had achieved 100% certification for its natural gas produced in the Ohio Utica using Equitable Origin’s EO100™ standard. Equinor now produces “responsible” natural gas for its 27,000 operational net acres, and 242,000 non-operational net acres. Congrats!

Commentary: Muskingum Watershed foresight provides Ohioans with recreational opportunities – by Rob Brundrett, president of the Ohio Oil and Gas Association. Over the past decade, the Muskingum Watershed Conservancy District has been executing a significant renovation plan to its campgrounds and marinas, which had no major redevelopments or upgrades since their construction over 50 years ago.What has made this massive transformation possible? The district understood the value of its land and the potential of the natural resources right under its feet. The Muskingum Watershed Conservancy District has been able to creatively work with oil and natural gas producers to monetize these resources so that all Ohioans can benefit from the oil and gas leases the district negotiated.District leadership was able to look ahead and view the possibilities during Ohio’s shale revolution, while at the same time ensuring these natural resources are and will remain protected for future generations to enjoy. In 2019, the district Board of Directors and executive staff followed recommendations to commit $40 million in reserve funding along with 50% of Utica shale royalties for the next four years to implement Phase 2 of the plan.

An ethane cracker in western Pa. will soon start up. We answered your questions about it - StateImpact – NPR - Shell’s ethane cracker is scheduled to come online soon, producing up to 1.6 million metric tons of plastic pellets a year. The plant will produce this plastic by processing ethane, a component of the natural gas found in the Marcellus and Utica shale formations nearby.Construction of the plant was Pennsylvania’s largest industrial project since World War II, according to Gov. Tom Wolf, and benefitted from the largest state subsidy ever – a $1.65 billion tax credit, plus various state and local tax breaks.More than 8,500 construction workers, many from out of state, crowded Beaver County over the last few years to construct the plant. When it is finished, it will employ 600 permanent workers. The cracker will also be permitted to be a large polluter – the second biggest emitter of volatile organic chemicals in the state. Stricter air quality rules and an energy system that relies less on polluting coal have made the air in and around Pittsburgh healthier in recent years. Many now ask: will this plant reverse gains to air quality? To help address what the project will mean for the region, we asked for readers’ questions about the plant, and solicited help from experts to answer them. Like all good questions, many of our readers’ queries were hard, if not impossible, to answer completely. Many wanted to know what the future holds for the plant and the region – things we can make educated guesses on right now but can’t know for certain. But these questions helped focus our attention on the new reality of western Pennsylvania as a petrochemicals hub.

• Q: How much is Pennsylvania paying per job per year in tax credits? How many jobs are being created, and how much will they pay? Would Pennsylvania have been better off just giving the money to that number of citizens in a “job lottery?” – Ira Beckerman, New Cumberland, Pa.
• A: Since the legislature passed the $1.65 billion tax break for Shell in Pennsylvania in 2012, this question has loomed over the project: Could the state have put that money to better use?Again, we put this question to Passmore.He said that the question hits on what economists call “opportunity costs”, which “represent the forgone benefit that would have been derived from an option not chosen.”The total number of permanent workers at the plant will be around 600, according to Shell. “A broader impact is likely because Shell will purchase from local suppliers, and local Shell workers will spend some of their earnings with local merchants,” Passmore said.By his “rough” estimate, not counting for inflation, Passmore figures the state will spend $122,000 to $165,000 per job per year. (That’s not including the workers hired to build the plant).Passmore said whether that’s worth it is complicated by the question of whether the plant would have been built regardless of the credit. Shell has said the answer to that question is no.“I can tell you, with hand to my heart, that without these incentives, we would not have made this investment decision,” a Shell executive said in 2016. Gov. Tom Corbett, who championed the tax credit for Shell, said at the time, “When you’re looking at the investment, you have to look at what it would have cost us had we done nothing, had we let these businesses go.”
• Q: I’ve read about cancer alley in (Louisiana) and other areas where cracker plants are located. We have significant numbers of pediatric asthma in western Pa. Are all lung conditions going to get worse when this plant is running at full capacity? – Michael Mannion, Pittsburgh
• Q: Shell states in the Shell Risk Assessment submitted to the DEP on Jan. 28, 2015 that 55 “Compounds of Potential Concern” will be emitted by the plant once it goes into operation. Many of these are carcinogens. What can be said from a scientific and air quality perspective about air quality? – Debra Smit, Pittsburgh, The Breathe Project
• Q: Who will be monitoring pollution from this site? And how will it be regulated? Some claim it will generate $3.7B per year in total economic value, but what are the total indirect costs in terms of health and environmental impacts? – Ryan Walsh, Pittsburgh
• A: Air quality was the most common topic readers wanted to know about. Southwestern Pennsylvania has long failed to meet federal air quality guidelines. But because of declining use of coal and tighter air pollution rules, the area around Pittsburgh is getting cleaner.That still doesn’t mean the air in Pittsburgh is safe, says Deborah Gentile, allergy and asthma specialist with East Suburban Pediatrics near Pittsburgh and Medical Director at Community Partners in Asthma Care.“The World Health Organization states that there is no level of air pollution that is safe,” Gentile said.Gentile said the EPA’s current air pollution standards rely on older data, and newer studies show that air pollution is harmful at lower levels than EPA standards allow. For that reason, the EPA’s scientific advisory panel hasasked the agency to set tougher standards for particle pollution, which the agency could do as soon as next year.“Nearby residents are already experiencing high levels of air pollution and the levels can only go higher once the facility becomes operational,” Gentile said. “Nearby residents will bear the burden of air pollution and its adverse health effects for the benefit of others who are not in the impact region.” Air pollution causes a broad array of health problems; breathing in fine particles has been shown to cause increased mortality, as well as higher rates of heart attacks, high blood pressure, and stroke, Gentile said. It also causes lung problems, like asthma and COPD, cancer and dementia.

Pitt, Pa. health department back out of public forum on fracking studies - The University of Pittsburgh and the state Department of Health are no longer participating in a public forum this Wednesday to discuss a series of state-funded studies about fracking and public health.The forum will still take place on Wednesday, Oct. 5, in Canonsburg. The Center for Coalfield Justice, one of the environmental groups involved in the forum, said in a statement this week that Pitt and the Department of Health had pulled out of the public event.Both the university and the Department of Health were slated to take part in the event“to explain the study process to the public and take questions from community members,” according to the center. In a statement, Maureen Lichtveld, Dean of the University of Pittsburgh School of Public Health and Professor of Environmental and Occupational Health, said that the studies are still “ongoing” and that “no data are available to share publicly.” Licthveld said the school was “willing to answer questions from the community as the studies progress. When we are prepared to release the results of these studies, we will do so publicly in a timely manner.”Pitt has set up a website with more information on the studies’ methodologies.Barry Ciccocioppo, a spokesperson for the Department of Health, said the agency pulled out of the event only after Pitt did. “(A)fter Pitt withdrew its participation in the meeting, it became clear that the department would be unable to provide anything more than background information and an overview of what led to contracting for these two studies,” Ciccocioppo said, in an email. “We will be providing that information to the organizers before the meeting.” Ciccocioppo said the department will try to answer questions and solicit feedback through an online questionnaire it has set up. The survey will be open for two weeks after the Oct. 5 meeting.

Canonsburg residents seek answers on health impacts of fracking, shale gas - Janice Blanock was asking once again if it was possible that the fracking and natural gas industry in her area played a part in her son’s death.Ms. Blanock, 62, of Cecil Township, was one of over 100 people attending a community meeting in Canonsburg on Wednesday evening about a state-funded study looking into the potential health impacts of shale gas drilling and fracking. She wanted to know why more than half a dozen young people in their region have been diagnosed with Ewing sarcoma, a rare childhood bone cancer, and other health issues since 2008.Her 19-year-old son, Luke Blanock, died from Ewing sarcoma in 2016.The prevalence of the disease in southwestern Pennsylvania appears unusual: only 200 to 250 cases of Ewing sarcoma occur in the U.S. each year. The National Cancer Institute says the incidence rate has remained unchanged for 30 years: for people of all ages, the incidence is one case per million. It is somewhat more common among patients aged between 10 and 19, with between nine and 10 cases per million.Absent from Wednesday’s meeting were researchers from the University of Pittsburgh School of Public Health and the state Department of Health, the groups studying the potential relationship between the disease and the fracking and natural gas industries since Gov. Tom Wolf allocated $3 million to look into the phenomenon in 2019. They were expected to join the discussion until last week. Pitt officials said researchers decided not to join the meeting due to a lack of data. Dr. Maureen Lichtveld, the dean of the School of Public Health, said in a statement that the study’s community advisory board remains a “crucial component” of the study, and she said they would “welcome open and collaborative conversations with the board when we have data to share.”“As the meeting date approached and plans were solidified, it became apparent that it would be premature to participate in a public forum regarding this research, which has recently closed to recruitment and entered the data analysis phase,” Dr. Lichtveld wrote when asked why researchers didn’t come to the meeting.After Pitt decided not to join the public forum, so did the DOH, according to a report from WESA, Pittsburgh’s NPR news station.But Lisa DePaoli, the spokeswoman for the Center for Coalfield Justice, one of the environmental groups involved with the meeting, said organizers, Pitt and the DOH all knew that the results wouldn’t be ready in time for the forum. The reason for the meeting was to give residents transparency on how the study has progressed in the past two years, she said.People in the area “have a lot of questions that aren’t being answered,” Ms. DePaoli said Wednesday. She hoped researchers would have been able to clarify their process and break down what conclusions they will and will not be able to glean from their data once their research is finished. Instead, residents at the meeting heard from public health experts and environmental advocates, who explained what they have learned from studies conducted in other regions and answered questions related to what Pitt and the DOH is studying. On a website, Pitt researchers release quarterly updates on the study’s progress and explain its methodologies. The most recent report, which covers April through June of 2022, says they had recently completed sending recruitment letters to eligible families of children with pediatric cancer, as well as sending correspondences to 2,000 control families. The Post-Gazette in 2019 identified six cases of Ewing sarcoma that had occurred since 2008 in the Canon-McMillan School District alone, but astudy by the state Department of Health released that year said rates of the illness were not significant enough to represent a cancer cluster. The newspaper later reported that there were at least 27 cases of the disease that occurred between 2008 and 2018 in Washington, Greene, Fayette and Westmoreland counties, which then had a combined population of about 750,000. Most cases of Ewing sarcoma occur in teens when they experience growth spurts, and there is limited information as to what causes it. Families of those who have had the disease, as well as environmental activists, have raised concerns that the cancer may be linked to the prevalence of shale gas drilling and fracking in the counties.

Pa. faces sanctions if new air rules for oil/gas sites aren't finalized by December --Pennsylvania is up against a clock to finish emissions regulations for oil and gas sites. At risk are hundreds of millions of dollars in federal highway funds. Earlier this year, the Environmental Protection Agency sent a letter to the state Department of Environmental Protection, warning it of impending sanctions if Pennsylvania did not submit plans to reduce emissions of volatile organic compounds at oil and gas sites by Dec. 16. In June, the Environmental Quality Board approved a final rule governing VOCs at existing unconventional, fracked wells. The Department of Environmental Protection says the rule will have a co-benefit of reducing methane, a greenhouse gas up to 86 times more powerful than carbon dioxide over a 20-year period.An earlier version of the rule included existing shallower, conventional wells. The Department of Environmental Protection separated the two industries in an attempt to avoid controversy and a delay of the rule.Democratic Gov. Tom Wolf and the Republican-controlled legislature made an agreement in 2016 to regulate the two industries separately. Conventional drilling companies had filed a preliminary lawsuit to stop the rule.Pennsylvania adopted a methane rule for oil and gas sites in 2018, but it only applied to future wells.Democratic state Representative Greg Vitali, who sits on the EQB, said he has yet to see a rule for conventional sites.“I don’t have confidence they’ll be done in time at all,” he said. “To the contrary, it looks like we’re running out of time.” DEP did not respond to a request for comment on the status of the conventional rule.In June, DEP said it hoped to have a conventional rule for the EQB to consider before the end of the year. After EQB votes, the rule would still need approval from the Independent Regulatory Review Commission and the Attorney General’s office.

Natural-gas pipeline fire prompts brief evacuations near Waverly, remains under investigation - A natural-gas pipeline incident near Waverly early Monday is being investigated after several residents were briefly evacuated. According to the Jacksonville/Morgan County Office of Emergency Management, firefighters were called to Panhandle Road south of Waverly about 12:30 a.m. An Energy Transfer gas pipeline was shut off and a fire was allowed to burn itself out. Firefighters from Morgan, Sangamon and Macoupin counties were called to the scene, as well as law enforcement officials from Jacksonville, Morgan County and Illinois State Police. Some residents were evacuated for a brief period, according to the emergency management office, but have been allowed to return.

-U.S. natgas drops 4%, near 12-week low on record output, demand decline (Reuters) - U.S. natural gas futures dropped about 4% on Monday to the lowest in nearly 12 weeks on record output and forecasts for milder weather and slower demand over the next two weeks due to ongoing storm-related outages and a reduction in liquefied natural gas (LNG) exports. Reducing gas demand from electric utilities, about 560,000 homes and businesses in Florida remained without power after Hurricane Ian hit the state on Sept. 28-29. Over the weekend in Maryland, Berkshire Hathaway Energy's 0.8-billion cubic feet per day (bcfd) Cove Point LNG export plant shut for about three weeks of planned annual maintenance. Gas demand already had taken a hit from the outage at the Freeport LNG export plant in Texas, the second-biggest U.S. LNG export plant which was consuming about 2 bcfd of gas before it shut on June 8. Freeport LNG expects the facility to return to at least partial service in early to mid-November. Front-month gas futures for November delivery fell 29.6 cents, or 4.4%, to settle at $6.470 per million British thermal units (mmBtu), their lowest close since July 12. The premium of futures for December 2022 over November 2022 doubled over the past week to 33 cents per mmBtu, its highest since October 2010. U.S. futures were still up about 75% so far 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 around $49 per mmBtu in Europe and $39 in Asia. That was an 8% decline for prices in Europe. Russian gas exports via the three main lines into Germany - Nord Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route - have averaged just 1.3 bcfd so far in October, the same as September but well below 9.2 bcfd in October 2021. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 100.5 bcfd so far in October from a monthly record of 99.4 bcfd in September. With cooler autumn-like weather coming, Refinitiv projected average U.S. gas demand, including exports, would slip from 88.4 bcfd this week to 90.2 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Friday. The average amount of gas flowing to U.S. LNG export plants fell to 11.2 bcfd so far in October from 11.5 bcfd in September. That compares with a monthly record of 12.9 bcfd in March.

Natural Gas Futures Stage Sharp Rebound as Pipeline Work Curbs Production - Natural gas futures rallied on Tuesday, with overall thin liquidity resulting in a likely overdone response to a temporary decline in production. Despite an unsupportive near-term outlook, the November Nymex gas futures contract jumped 36.7 cents to $6.837/MMBtu. December futures climbed 37.1 cents to $7.174. Spot gas prices rose almost across the board, outside of some continued weakness in Louisiana. NGI’s Spot Gas National Avg. jumped 44.5 cents to $5.195. With weather not yet moving the price needle decisively in one direction or the other, traders on Tuesday fixated on top day production data that showed a steep 2.4 Bcf/d drop in output. Wood Mackenzie said the declines were concentrated in the Northeast, Texas, North Louisiana, and the New Mexico portion of the Permian Basin, where there are maintenance or operational issues underway. Most issues, however, are expected to wrap up by Friday. Northeast production declined by around 1.2 Bcf/d, with the bulk of the decrease occurring in Southwest and Northeast Pennsylvania. West Virginia and Ohio output also fell. In Southwest Pennsylvania, EQT Corp. and Equitrans Midstream Corp. are each conducting planned pipeline maintenance, while Millennium Pipeline started work on its system in Northeast Pennsylvania. Tennessee Gas Pipeline had a one-day event Tuesday for a pig run. This is in addition to other restrictions on the 300 Line from Station 307 to Station 313 from previous weeks. In Ohio, Rockies Express Pipeline has maintenance underway at the Columbus compressor station impacting east to west flows through segment 380. Overall Texas production was down around 410 MMcf/d, concentrated in the Permian, with a few maintenance events beginning Tuesday on El Paso Natural Gas. Permian New Mexico was down roughly 250 MMcf/d, mainly on the Transwestern Pipeline, while North Louisiana production could remain curbed until the middle of the month because of various pipeline work in the region.

Natural Gas Futures Rally Again Despite Possibility of Record-Breaking Storage Injection - Natural gas futures continued to climb on Wednesday despite starkly bearish near-term fundamentals, including the potential for a record fall storage injection. After hitting a $7.022/MMBtu intraday high, though, the Nymex November gas futures contract settled Wednesday at $6.930, up only 9.3 cents day/day. December futures climbed 6.2 cents to $7.236. Spot gas prices continued to strengthen as well, with the East Coast gearing up for an early season cold blast. NGI’s Spot Gas National Avg. picked up 81.0 cents to $6.005. After two days in the green for Nymex futures in spite of unsupportive fundamentals, Vortex Commodities CEO Brian Lovern told NGI the rally could be tied to macro buying in the energy complex. He noted gains in oil prices, as well as the Energy Select Sector SPDR Fund (XLE). The XLE index is seen as a representation of the energy sector of the S&P 500 Index. “That buying probably fed into natty too and contributed to the move,” Lovern said. The trader also noted that there has been market chatter related to Freeport LNG’s return. While this would be supportive for gas prices, “nothing they have said could be trusted up to this point.” The liquefied natural gas terminal has been offline since early June following a fire. Management initially said the facility would return to partial service in October, but then pushed back the timeline by a month. Full operations would not occur until March. Cove Point LNG also is down for planned maintenance, with the supplies not being delivered to the two export facilities available for storage. After a sluggish pace of rebuilding throughout the summer, the gas market has been able to accelerate restocking now that temperatures have dropped from the record levels. Though pockets of heat continue in Texas, and at times the West, recent government inventory data has pointed to a much improved trajectory in the final weeks of the traditional injection season. Lovern said after back-to-back triple-digit storage builds, inventories appear “almost a lock to be higher than 3.5 Tcf” at the end October. “Odds are we are okay this winter, as we will need a lot of cold for major issues,” he said. “But of course, it’s not a done deal just yet.” The gas market is rapidly approaching the time of year when weather starts to “drive the bus,” according to the trader. “So far, October is not looking nearly as warm/bearish as everyone expected. Obviously it’s just October, but it becomes very interesting if that trend continues.”

U.S. natgas up 1% on higher demand forecast despite big storage build | ロイター (Reuters) - U.S. natural gas futures rose about 1% to a fresh two-week high on Thursday on forecasts for higher demand next week, despite a much bigger-than-expected weekly storage build. The U.S. Energy Information Administration (EIA) said utilities added a seasonal record of 129 billion cubic feet (bcf) of gas to storage during the week ended Sept. 30. That was the biggest weekly build during the autumn and the third biggest on record after increases of 147 bcf in July 2003 and 132 bcf in May 2015, according to EIA data going back to 1993. It was also much higher than the 113-bcf build analysts forecast in a Reuters poll and compared with an increase of 114 bcf during the same week last year and a five-year (2017-2021) average increase of 87 bcf. Analysts said last week's build was bigger than usual due to mild weather and an increase in wind power that reduced the amount of gas power generators needed to burn to produce electricity. Wind power produced about 9% of the nation's electricity last week, up from as little as 6% a few weeks earlier, according to federal energy data. "Even though the weekly natural gas storage inventories report showed a much larger-than-projected storage build, gas futures prices remained in positive territory ... as bullish traders shrugged off what should have been construed as bearish storage data," But looking forward, "there’s very little for gas market bulls to be excited about" with output near record highs and recent cuts in gas demand from reduced liquefied natural gas (LNG) exports and storm-related power outages. Almost 200,000 homes and businesses were still without power in Florida after Hurricane Ian hit the state on Sept. 28-29, reducing the amount of gas that power generators need to burn. Ian knocked out power to over 4 million in Florida and 1.1 million in North Carolina and South Carolina. Gas demand was also reduced by outages at LNG export plants, including Berkshire Hathaway Energy's 0.8-billion cubic feet per day (bcfd) Cove Point in Maryland for about three weeks of planned work starting Oct. 1 and Freeport LNG's 2.0-bcfd plant in Texas for unplanned work after an explosion on June 8. Freeport LNG expects the facility to return to at least partial service in early to mid-November. Front-month gas futures rose 4.2 cents, or 0.6%, to settle at $6.972 per million British thermal units (mmBtu), their highest close since Sept. 22 for a second day in a row. U.S. futures were up about 86% so far 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 around $49 per mmBtu in Europe and $36 in Asia. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 100.1 bcfd so far in October from a monthly record of 99.4 bcfd in September. Refinitiv projected average U.S. gas demand, including exports, would rise from 90.2 bcfd this week to 91.5 bcfd next week. The forecast for next week was higher than Refinitiv's outlook on Wednesday.

Ample Supply, Modest Demand Pressure Natural Gas Futures, Cash Prices - After three days in the green, natural gas futures’ rally finally came to a halt on Friday as the pressure from lackluster weather-driven demand and notably improved supplies proved too much to overcome. The Nymex November contract closed out the week at $6.748/MMBtu, off 22.4 cents on the day. December futures slid 19.5 cents to $7.047. Spot gas prices plunged on Friday with the typical lull in weekend demand pulling prices sharply lower across the Lower 48. NGI’s Spot Gas National Avg. dropped 71.5 cents to $5.475. The downside for futures was not surprising given the slew of unsupportive fundamentals in play. On Friday, traders were still digesting the latest inventory data – and adjusting upward their estimates for the next government report and beyond. [Get More: NGI’s Forward Look forward curve product provides improved price transparency and insight to help you make better business decisions. Request a trial now.] The Energy Information Administration (EIA) said stocks for the week ending Sept. 30 rose by 129 Bcf, the largest fall injection on record and well above expectations ahead of the EIA report. The triple-digit build lifted stocks to 3,106 Tcf, which is 165 Bcf below year-earlier levels and 264 Bcf below the five-year average. Tudor, Pickering, Holt & Co. (TPH) analysts said the 129 Bcf injection indicated the market was more than 5 Bcf/d oversupplied for the reference period, compared with 3 Bcf/d oversupplied the prior week. Given the rise in production north of 100 Bcf/d in recent weeks, the investment firm is now modeling stocks to reach more than 3.5 Tcf at the end of the injection season (Oct. 31).

Where Will Henry Hub Gas Price Be at End-2022? - Between $8.00 and $8.99 per MMBtu. That was the most popular response by executives from 155 oil and gas firms in the third quarter Dallas Fed Energy Survey when asked what they expected the Henry Hub natural gas price to be at the end of 2022. The second most popular response in the survey was between $7.00 and $7.99 per MMBtu and the third most popular response was between $9.00 and $9.99 per MMBtu. The survey average response was $7.97 per MMBtu, while the low forecast was $3.80 per MMBtu and the high forecast was $12.50 per MMBtu. In the second quarter Dallas Fed Energy Survey, executives from 132 oil and gas firms answered the question and the most popular response remained the same at between $8.00 and $8.99 per MMBtu. The second most popular response in the 2Q survey was also between $7.00 and $7.99 per MMBtu, although the third most popular response was between $6.00 and $6.99 per MMBtu. The survey average was $7.55 per MMBtu, while the low forecast was $2.90 per MMBtu and the high forecast was $12.00 per MMBtu. Executives from 134 oil and gas firms answered the question in the first quarter Dallas Fed Energy Survey, with the most popular response being between $4.00 and $4.49 per MMBtu. The second most popular response was between $4.50 and $4.99 per MMBtu and the third most popular response was between $5.00 and $5.49 per MMBtu. The survey average was $4.57 per MMBtu, while the low forecast was $3.00 per MMBtu and the high forecast was $8.00 per MMBtu. The price of Henry Hub natural gas during the 3Q, 2Q and 1Q surveys was $8.16 per MMBtu, $8.38 per MMBtu and $4.65 per MMBtu, respectively. Henry Hub natural gas hit a 2022 low, so far, on January 4 at $3.717 per MMBtu and a 2022 high, so far, on August 22 at $9.68 per MMBtu. At the time of writing, the commodity is trading at $6.50 per MMBtu.

API urges Interior to support U.S. energy security, economic strength with 5-year offshore program – The American Petroleum Institute (API) today submitted comments urging the U.S. Department of the Interior (DOI) to open offshore acreage to safe and environmentally responsible American energy development. In its comments in response to the 2023-2028 National Outer Continental Shelf Oil and Gas Leasing Proposed Program and Draft Programmatic Environmental Impact Statement, API highlighted the importance of offshore leasing to U.S. economic strength and energy security and called on DOI to uphold their statutory responsibility to take current and future energy needs into account by promptly issuing a final program that includes 11 lease sales.Oil production from federal waters provides approximately 628 MMbbl – or more than 15% – of total U.S. oil production. On June 30, 2022, as the current 5-year program expired, Interior put the U.S. in the unprecedented position of having a substantial gap between programs for the first time since this process began in the early 1980s. Without a 5-year program in place, no new offshore lease sales can be held outside of the three sales mandated by the Inflation Reduction Act, limiting domestic producers’ ability to meet future energy demand. According to an API poll from earlier this year, 9 in 10 Americans support the U.S. developing its own domestic sources of energy, rather than relying on other regions of the world and 84% agree that producing natural gas and oil in the U.S. helps make our the country and its allies more secure against actions by other countries, such as Russia. “The U.S. is now a global leader in both energy production and emissions reductions, thanks to the innovation and vitality of the U.S. oil and natural gas industry,” “The ability of U.S. producers to provide more oil and natural gas supplies to the world market has also changed geopolitical dynamics for the better, resulting in greater energy security for the U.S. and its allies, in addition to global environmental benefits. Given the current global circumstances, rarely has a strong offshore leasing program been more essential to our energy security.” In its comments, API expressed concern over the Proposed Program’s option to issue a final program with zero lease sales, which would jeopardize domestic production and weaken American energy security. According to a recent study conducted by API and the National Ocean Industries Association, a two-year lapse in federal offshore leasing could mean nearly 500,000 bpd less of production, cost nearly 60,000 American jobs, and sacrifice billions in lost state and local revenues by 2040. “The decisions made regarding future leasing will have short- and long-term implications for our nation’s energy and national security, prospects for job creation, and government revenue generation,” said Ramsey. “It is beyond time for a comprehensive energy policy that includes a robust offshore leasing program that ensures essential energy resources are made available; encourages investment opportunities and accelerates infrastructure development; and strengthens energy security, affordability, and reliability.” API’s comments are available here.

USCG Ends Search for Man Who Fell Off Platform Near Corpus Christi -The U.S. Coast Guard (USCG) has announced that it has ended its search for a missing man who fell off a platform near Corpus Christi. Commercial divers reported finding a body matching the man’s description near the platform, the USCG revealed. The organization announced that it was searching for a missing man who fell off a platform near Corpus Christi on October 1. In the announcement, the missing male was described as Latino and last seen wearing a manually inflatable blue life jacket, safety harness and tool belt. “Coast Guard Sector Corpus Christi command center watchstanders received a call at 1:45 p.m. from Corpus Christi Police Department personnel stating a scaffolder fell off a platform at Kiewit Offshore Services and entered the water in La Quinta Channel,” the USCG stated in a note posted on its website on October 1. “The on-site safety officer reported the man did not resurface and had been missing for 15 minutes … Watchstanders issued an urgent marine information broadcast and diverted an airborne MH-65 Dolphin helicopter from Coast Guard Air Station Corpus Christi and an underway 29-foot Response Boat–Small crew from Coast Guard Station Port Aransas to begin searching,” the USCG added in the note. Several organizations were involved in the search, including Coast Guard Air Station Corpus Christi, Coast Guard Station Port Aransas, Texas Parks & Wildlife Department, Corpus Christi Police Department, Ingleside Police Department, and Aransas Pass Dive Team.

Devon Energy Completes Acquisition of Eagle Ford Bolt-On - Energy News for the United States Oil & Gas Industry - — Devon Energy Corp. (NYSE: DVN) today announced that it has completed its previously announced acquisition of Validus Energy, an Eagle Ford operator, for a total cash consideration of $1.8 billion, less purchase price adjustments. This acquisition secures a premier acreage position of 42,000 net acres (90% working interest) adjacent to Devon’s existing leasehold in the basin. Current production from the acquired assets is approximately 35,000 Boe per day and is expected to increase to an average of 40,000 Boe per day over the next year. The transaction also adds 350 repeatable drilling locations in the core of the Karnes Trough oil window along with 150 high-quality refrac candidates. This highly economic inventory positions the company’s Eagle Ford assets to sustain its high-margin production and free cash flow generation for several years.

Permian pipelines leak more methane than EPA estimates — study - New research finds that gathering pipelines in the Permian Basin lose enough methane each year to power more than 2 million homes. -- Natural gas gathering pipelines in the Permian Basin are releasing 14 times more methane than EPA inventory estimates, according to new research based on aerial surveys.The lines — which move gas from production areas to processing facilities — emit at least 213,000 metric tons of methane annually, according to a group of researchers from Stanford University, the University of Arizona, and the Environmental Defense Fund. That’s enough “wasted gas” to meet the needs of 2.1 million homes, they say.The study, published Tuesday in the journal Environmental Science and Technology Letters, drew on four "aerial campaigns” conducted over three years, where aircraft surveyed more than 10,000 miles of gathering pipelines during each campaign.“Methane is a potent greenhouse gas with over 84 times the warming potential of carbon dioxide over its first 20 years in the atmosphere, and this new research indicates the importance of finding and fixing pipeline methane leaks to mitigate the climate crisis,” wrote study authors Erin Murphy and Jevan Yu in a blog post that lays out the study's findings....

Research shows gathering pipelines in the Permian Basin leaking 14 times more methane than officials estimate -- Methane emissions from natural gas gathering pipelines in the U.S. Permian Basin are at least 14 times greater than Environmental Protection Agency national inventory estimates, according to newpeer-reviewed research. Gathering lines transport unprocessed gas from well sites to processing facilities and vary widely in size and pressure, with diameters ranging from two inches to as large as 30 inches. Methane is a potent greenhouse gas with over 84 times the warming potential of carbon dioxide over its first 20 years in the atmosphere, and this new research indicates the importance of finding and fixing pipeline methane leaks to mitigate the climate crisis. After extensive surveys and subsequent analysis, the research found numerous large gathering line leaks that persisted over months and even years. As part of EDF’s PermianMAP project, oil and gas infrastructure was surveyed in four aerial campaigns during 2019-2021 using aircraft equipped with a sensor capable of imaging and quantifying large plumes of methane. The flights surveyed more than 10,000 miles of gathering pipelines in each campaign, identifying hundreds of high-emitting pipeline sources. The scale of methane being released from gathering lines is much higher than previously thought. The new study finds that Permian Basin gathering line emissions are at least 213,000 metric tons per year. This corresponds to an emission factor of 2.7 metric tons per year per kilometer of pipeline, which is 14 times greater than the U.S. EPA national inventory estimates. Applying this estimate to all gas gathering pipelines nationwide for illustrative purposes would increase the EPA inventory estimate for the entire natural gas system by 27%. Those 213,000 metric tons of methane have the same annual climate impact as 3.7 million passenger vehicles and represent enough wasted gas to meet the needs of 2.1 million homes. A small number of leaks on gathering lines are responsible for most of the methane emissions, like other segments of the oil and gas supply chain, with about 15% of the largest leaks accounting for 50% of total emissions detected. Thus, finding and fixing a relatively small number of leaks could have significant climate benefits.

As gas prices rise, Biden administration puts oil companies on notice - As prices at the pump trend up nationwide, the Biden administration is scrambling to shelter Democrats from consumer frustration, laying blame on oil company opportunism and threatening new restrictions on the industry.In public comments and private meetings with oil executives, administration officials are warning that the White House could take extraordinary — and potentially economically risky — steps to bring costs down if the companies do not move more aggressively to shield Americans from price spikes.The renewed attention on the cost of fuel comes as gas prices have jumped in recent days by as much as 60 cents per gallon in some regions, posing a political challenge for Democrats. A decline in prices that stretched for 99 days helped to improve their prospects in next month’s midterm elections, during which control of Congress and several key governorships is at stake.But now prices are rebounding, and the tools the administration has for curbing them are limited. The most potent policy option the White House has is emergency authority to limit exports to other nations, a strategy that would be targeted at boosting inventories at home but which could destabilize global markets and exacerbate the energy crunch. It would also be tricky to balance with the president’s commitment to keep as much oil flowing to Europe as possible. “After this president has taken an unusually active role in telling American drivers his administration is going to try to keep prices low, the fact that they are rising creates political jeopardy.”The price hikes are substantial in several pivotal states. In California, where there are at least eight hotly contested House seats, the average price of gas is $6.38 per gallon, an increase of 62 cents in the past week. During the same period, it jumped nearly 40 cents in the swing state of Arizona, where polling averages reflect an extremely tight race for governor.Nevada, Washington, Oregon and Alaska have all seen prices jump by at least 40 cents per gallon in the past week. Throughout the swing states of the Midwest, the increase has been less severe, but large enough for drivers to feel the pain.

OPEC+ supply cut should encourage oil exploration, shale chief says — OPEC+’s decision to lower its oil-production cap may set the stage for higher prices that would enable U.S. explorers to expand drilling, according to shale entrepreneur Matt Gallagher. Gallagher, who has led closely held shale driller Greenlake Energy Ventures LLC since engineering last year’s $6.4 billion sale of Parsley Energy Inc. to Pioneer Natural Resources Co., said the OPEC+ move on Wednesday gives oil CEOs more clarity on what oil-price levels the alliance is determined to defend. “We now know where the price floor is for OPEC and that should give traders comfort in the back end of the curve,” Gallagher said in a telephone interview. “That can sanction more projects for sure.” Shale executives have dramatically dialed back their oil-price expectations over the past three months as recession risks weighed on the market. US oil prices, which averaged about $85 a barrel during the third quarter are expected to end the year below $100, according to the Federal Reserve Bank of Dallas survey that pre-dated Wednesday’s OPEC+ measure.

Shale drillers struggle to find workers as unemployment dropped last month — The job market in the U.S. shale patch is showing further tightness as drillers struggle to find enough workers to meet output targets this year, according to a Labor Department report released Friday. The unemployment rate fell to 2.5% in September from 2.6% in the prior month on an unadjusted basis, government figures show. That compares with an unemployment rate of 7.3% a year ago. Oil companies are hesitant to boost wages dramatically as they seek to keep a lid on skyrocketing costs. As a result, oilfield workers have been looking elsewhere for a higher pay, with renewables being the most popular landing spot. Workers will have to wait until 2024 to see double-digit annual wage hikes, according to industry consultant Rystad Energy. Pay this year is expected to climb 2.9%, Rystad said in May. Labor shortages in the oilfield have been one of the biggest hurdles holding back production growth. The inability to find enough workers to drill new wells and frack them could pose an additional challenge to the Biden administration as it pushes for more output after OPEC+’s decision to cut supply. The number of workers employed in US oil and gas jobs totaled 133,800 last month, down 4.8% from this year’s peak in July. The broader mining and logging industry, of which oil and gas is a part, is the farthest behind of any sector in recovering its pandemic job losses, down 7.7% from February 2020.

Orange County oil spill: Company gets OK to repair pipeline - The Houston-based company operating the oil pipeline that ruptured off Huntington Beach last fall announced Saturday that the government has green-lighted its plans to repair the pipeline, raising the possibility it will be operational again early next year. In a press release, Amplify Energy Corp. said the U.S. Army Corps of Engineers has granted it a permit to remove and replace damaged segments of the pipeline, a job that is estimated to take about a month. The pipeline runs from a plant in Long Beach to the Elly platform in federal waters off Huntington Beach. At least 25,000 gallons of crude oil gushed from the broken pipe last October, forcing a weeklong closure of beaches along the Orange County coast in October and a months-long shutdown of fisheries. In August, Amplify Energy and two of its subsidiaries pleaded guilty to negligently discharging oil and agreed to pay nearly $13 million in criminal fines and cleanup fees. Amplify also said it had reached a settlement with businesses and property owners claiming spill-related losses. Amplify contends that the pipeline had been damaged by the anchors of container ships nine months before the spill, and that it had not been properly notified.Last week, the Center for Biological Diversity sued the Bureau of Ocean Energy Management in federal court, claiming the Biden administration was improperly allowing rigs in the oilfield off Huntington Beach to continue operating under outdated safety plans devised in the 1970s and 1980s.“It’s time to get these rusty relics out of our ocean,” Kristen Monsell, legal director of the Center’s Oceans program, said in a press release, comparing the aging oil platforms to “ticking time bombs.”

Unstable Ground: How thawing permafrost threatens a Biden-supported plan to drill in Alaska's Arctic. Along an open stretch of tundra far above the Arctic Circle, a gas flare burns bright against the early morning sky. The oil production facility, about eight miles north of the Alaska Native Village of Nuiqsut, sits like a ship on the horizon. Known as CD1, it is ground zero for ConocoPhillips’ Alpine Field, a sprawling network of gravel roads, pipelines, and well pads that covers about 165 acres of land. The CD1 pad houses hundreds of employees and has its own airstrip to receive direct flights from Anchorage. ConocoPhillips refers to it as “our town.” On March 4, the fossil fuel company reported an uncontrolled gas leak at the facility. According to ConocoPhillips’ own analysis, an estimated 7.2 million cubic feet of natural gas was released into the atmosphere during the first five days of the leak, equivalent to the annual carbon emissions of over 3,000 cars. Residents in Nuiqsut complained of headaches and nausea. ConocoPhillips brought in industry specialists from Texas with experience fighting oil well fires in Iraq and Kuwait. Then, around noon on March 7, the company decided to evacuate 300 employees from the pad out of “an abundance of caution.” It would take nearly a month before the leak was fully plugged. Nuiqsut’s mayor, Rosemary Ahtuangaruak, had been getting little sleep during those first few weeks and was anxious about the village’s air quality — an ongoing concern for residents of Nuiqsut, which is surrounded by oil and gas development. .“I’m having difficulty getting the information PPR needs regarding the situation at CD 1,” the northern region manager wrote in an email to ConocoPhillips nearly a week into the event. While some questions remain unanswered more than six months later, it’s clear now that the gas leak at Alpine illuminated the ways that climate change is amplifying the risks associated with oil and gas drilling in the Arctic — and even creating new ones. Permafrost thaw, which is accelerated by drilling and new construction, played an important role in the leak: In its incident report submitted to the state, ConocoPhillips explained that the heat generated by the injection of drilling fluids deep underground had thawed the permafrost layer — ground that had been frozen for thousands of years — to a depth of about 1,000 feet, which ultimately allowed the gas to reach the surface. But the problem didn’t end there. This same thawing process had affected some of the neighboring wells — there are about 50 wells on the CD1 pad, each about 10 feet apart — forming what Steve Lewis, a retired petroleum engineer who worked in the region for 20 years, described as a “gas highway,” creating multiple pathways for the gas to migrate. In its report, ConocoPhillips called this phenomenon a “thaw bulb.”A similar phenomenon is being replicated across Alaska’s North Slope region at a time when the Arctic is warming two to four times faster than the rest of the planet. According to an analysis by researchers at the University of Alaska Fairbanks, more than half of the near-surface permafrost on the North Slope could disappear by 2100 if emissions aren’t curbed. Soil temperatures at Prudhoe Bay, which is about 60 miles east of Nuiqsut, have already warmed by about 6 degrees Fahrenheit since the late 1970s. Permafrost thaw can cause the ground to buckle and in some cases collapse. Roads, pipelines, and well pads could all potentially be compromised and even in some cases rendered unusable, according to Vladimir Romanovsky, a permafrost expert and emeritus professor at the University of Alaska Fairbanks. Portions of the Trans-Alaska Pipeline, the 800-mile conduit that runs from Prudhoe Bay to Valdez, have already been damaged due to thawing permafrost.

Venezuela's oil output at 653000 b/d in September: PdV - Venezuelan oil production in September was an estimated 653,000 b/d, according to a weekly internal report from state-run oil company PdV. The average production for 2022 through September was 759,100 b/d, according to the report — a figure that many analysts say is far too optimistic. According to the report 17 out of 43 oil producing subsidiaries and/or joint ventures reported no production in September. Even large projects, like Chevron's Petroboscan field in western Venezuela, were reported to have stopped production in September because oil storage capacity has run out. Comprehensive US sanctions imposed after 2017 limit crude purchases from PdV. The country's oil operations are also plagued by interruptions in production because of regular power outages and a lack of key equipment and supplies. The report documents a slew of serious exploration, production, infrastructure and storage problems that may challenge PdV's stated goal of increasing production by at least 100,000 b/d from current levels year.

USA Denies Report of Plans to Change Venezuela Sanctions Policy -The Biden administration has no plans to change its sanctions policy toward Venezuela without positive actions from President Nicolas Maduro’s government, the National Security Council said after a report that the US would scale down restrictions affecting Chevron Corp. “Our sanctions policy on Venezuela remains unchanged,” NSC spokeswoman Adrienne Watson said in a statement. “We will continue to implement and enforce our Venezuela sanctions. As we have previously made clear, we will review our sanctions policies in response to constructive steps by the Maduro regime to restore democracy in Venezuela and alleviate the suffering of the Venezuelan people.” Chevron said in a statement that “we continue to conduct our businesses in compliance with the current sanctions framework provided by the US Office of Foreign Assets Control.” The comment came after the Wall Street Journal reported that the US was preparing to allow Chevron to resume pumping oil, smoothing the road for a possible reopening of US and European markets to oil exports from Venezuela. The newspaper cited people familiar with the proposal who it didn’t identify. Venezuela has been under economic and oil sanctions since 2019, after the US and dozens of other countries recognized opposition leader Juan Guaido as the country’s legitimate president. Over the weekend, the Biden administration said Venezuela had freed seven Americans, including oil executives and a former Marine, in a swap involving two members of Maduro’s family imprisoned in the US.

Greenpeace Campaigners Disrupt Liz Truss Speech to Denounce U-Turn on Fracking - Demanding to know “who voted for” new U.K. Prime Minister Liz Truss’ reversal on fracking, Greenpeace campaigners on Wednesday prominently displayed a banner as the Conservative leader spoke at her party’s annual conference in Birmingham before being forcibly removed from the meeting.“Who voted for this?” read the sign displayed by Rebecca Newsom, Greenpeace U.K.’s head of public affairs, and Ami McCarthy, the group’s policy officer.After Truss called for the protesters to be “removed” from the conference hall, the banner was ripped from their hands by security guards, but Newsom and McCarthy quickly produced another sign.The protest came two weeks after Truss announced the Conservative government will reverse the fracking ban imposed by the party in 2019, following tremors near the country’s only fracking site in Lancashire.Last week, Truss told BBC Radio that the government “will only press ahead with fracking in areas where there is local community support for that” but did not provide details on how local consent would be secured, and did not respond when an interviewer noted that members of Parliament who represent the area don’t support fracking.The Greenpeace campaigners on Wednesday said Truss’ plan to return to fracking represents just part of her party’s “U-turn” on policy since she took office.“Nobody voted for fracking, nobody voted to cut benefits, nobody voted to trash nature, nobody voted to scrap workers’ rights,” Newsom told reporters after the pair were forced to leave the conference hall. “There’s a whole host of things that the Conservative government were elected to do in 2019 that they’re simply not doing.”The protest followed nationwide outcry over the “mini-budget” the Conservative government released last month, including a tax cut for the wealthy which Chancellor Kwasi Kwarteng announced this week would no longer be included in the plan.“The chancellor said the government is now listening,” said Newsom. “If so, they may want to pay attention to the widening chorus of leading businesses, energy experts, former Conservative ministers, and even the U.S. president telling them to go in the opposite direction.”

East Yorkshire Conservative council votes for fracking ban - BBC News - A Conservative-led council has voted to oppose fracking in its area.East Riding of Yorkshire members supported a motion tabled by the Liberal Democrat opposition.The vote comes after Business Secretary Jacob Rees-Mogg recently announced the lifting of the 2019 ban in order to boost domestic gas production in the wake of the war in Ukraine.Tory leader of the council Jonathan Owen said he thought it was not "the right route".Mr Owen told the Local Democracy Reporting Service that fracking was "still unproven as a means of production"."Original arguments against fracking still hold in my mind and I have heard nothing to change my views," he said."Of particular concern is the effect on the aquifer under the Wolds and the counter-effect on our ambitions to have an Area of Outstanding Natural Beauty."Conservative leader of the council Jonathan Owen said he thought fracking was not "the right route"Conservative East Yorkshire MP Greg Knight has also voiced his concerns in Parliament.Sir Greg said doubts remained over the effects of the fracking process, including releasing methane gas and polluting underground water supplies.A survey by the British Geological Survey (BGS) showed that parts of the county sits on the Bowland Shale deposit which spans Yorkshire and Lancashire.The BGS estimate it could contain up to 37.6tr cubic metres of gas.The government's lifting of the moratorium on fracking would allow companies which already hold licences to begin getting permission to explore the reserves.The Department for Business, Energy and Industrial Strategy (BEIS) also announced a further round of offering licences to companies to drill for oil and gas.

Rees-Mogg tells Tories he’d welcome fracking in his back garden - Jacob Rees-Mogg has said he would be “delighted” for his back garden to be fracked, as he risked deepening divisions within the Conservative party by deriding those who oppose the controversial practice as “socialists”.The business secretary was bullish about restarting fracking in England after a nearly three-year moratorium, saying the current limit of magnitude 0.5 to avoid mini-earthquakes being caused was “ridiculously low”.Companies that want to drill a new fracking well could “go around, door to door, as politicians do at elections and ask people if they would consent”, Rees-Mogg suggested.“Then they have to go around to an identifiable community and if they get 50% plus one in favour then they should be able to go ahead,” he told the Chopper’s Politics fringe event hosted by the Telegraph at the Conservative conference in Birmingham.So far, the government has only said shale gas extraction firms will need “community consent” to start drilling, but refused to provide any further details. Rees-Mogg said the current seismic limit for fracking was too low and he would soon announce “a more realistic figure”. Asked if he would allow digging for shale gas in his back garden, the MP for North East Somerset, whose constituency home is the Grade II listed Gournay Court, said enthusiastically: “Yes, of course I would, I would be delighted to. If we do what I am suggesting on shale gas, you will be doing a public service by having it in your back garden. But you will also get paid for it. So both the country wins, and you win.

Rees-Mogg’s neighbours fail to share ‘delight’ at back garden fracking The sun was shining and the wind blowing steadily across Jacob Rees-Mogg’s manicured garden and the Somerset hills beyond. “It’s obvious on a day like this, isn’t it?” said Gary Marsh, a stonemason and a neighbour of the business secretary and Conservative MP for North East Somerset. “We should be putting more money into solar and wind energy. Plus tidal power on the coast at places like Burnham-on-Sea and Weston-super-Mare. Not fracking, messing with the earth and water.”Marsh and other residents who live near Rees-Mogg’s constituency home, the Grade II listed red sandstone mansion Gournay Court in the village of West Harptree, were digesting their MP’s claim at the Tory party conference that he would be “delighted” if his garden was fracked. “I don’t think many people around here would like that,” said Marsh.One of Rees-Mogg’s closest neighbours, who asked not to be named, said when she thought about fracking the image that came to mind was flames spurting from taps in the US. “And then I start getting worried about the earthquakes they had in Lancashire. It doesn’t feel wise to me. I don’t think his views represent what most people here feel.”Another close neighbour, who also asked to remain anonymous (this is a small village and Rees-Mogg wields power), laughed when asked about fracking. “He’s just doing it to provoke discussion isn’t he? I think he is, anyway.”David Wood, the Liberal Democrat councillor for the Mendip ward, which includes Rees-Mogg’s garden, does not believe it is a laughing matter. “By saying he would be delighted by fracking in his back garden, Mr Rees-Mogg is showing how very out of touch he is,” said Wood. “People are crying out for help with the cost-of-living crisis, which fracking will do nothing to address, and for action on insulation and other efficiency measures to cut fuel poverty and wasted energy.

Liz Truss refuses to rule out new schools and GP surgeries for fracking areas - The Prime Minister told ITV’s Calendar said she would not specify what price residents would have to pay, but insisted that fracking will only go ahead where there is “local support”.It comes after suggestions reported by the Sun on Sunday which said that ministers were drawing up plans to encourage communities to get fracking with promises of new schools and GP surgeries.Asked about the plans by ITV, Ms Truss said: “I'm not going into exactly how we will assess local support. But the local support principle is important.”A Government source confirmed that new schools and GP surgeries were one of the benefits that could be offered to communities which ministers are currently considering.Mr Rees-Mogg yesterday told an audience at the Conservative Party conference in Birmingham that he would “delighted” to have fracking in his back garden, “particularly if I get these royalties”.“If we do what I’m suggesting on shale gas, you will be doing a public service by having it in your back garden, but you also get paid for it,” he added, suggesting that only “socialists” opposed it.

Greenpeace Campaigners Disrupt Liz Truss Speech to Denounce U-Turn on Fracking - Demanding to know “who voted for” new U.K. Prime Minister Liz Truss’ reversal on fracking, Greenpeace campaigners on Wednesday prominently displayed a banner as the Conservative leader spoke at her party’s annual conference in Birmingham before being forcibly removed from the meeting.“Who voted for this?” read the sign displayed by Rebecca Newsom, Greenpeace U.K.’s head of public affairs, and Ami McCarthy, the group’s policy officer.After Truss called for the protesters to be “removed” from the conference hall, the banner was ripped from their hands by security guards, but Newsom and McCarthy quickly produced another sign.The protest came two weeks after Truss announced the Conservative government will reverse the fracking ban imposed by the party in 2019, following tremors near the country’s only fracking site in Lancashire.Last week, Truss told BBC Radio that the government “will only press ahead with fracking in areas where there is local community support for that” but did not provide details on how local consent would be secured, and did not respond when an interviewer noted that members of Parliament who represent the area don’t support fracking.The Greenpeace campaigners on Wednesday said Truss’ plan to return to fracking represents just part of her party’s “U-turn” on policy since she took office.“Nobody voted for fracking, nobody voted to cut benefits, nobody voted to trash nature, nobody voted to scrap workers’ rights,” Newsom told reporters after the pair were forced to leave the conference hall. “There’s a whole host of things that the Conservative government were elected to do in 2019 that they’re simply not doing.”The protest followed nationwide outcry over the “mini-budget” the Conservative government released last month, including a tax cut for the wealthy which Chancellor Kwasi Kwarteng announced this week would no longer be included in the plan.“The chancellor said the government is now listening,” said Newsom. “If so, they may want to pay attention to the widening chorus of leading businesses, energy experts, former Conservative ministers, and even the U.S. president telling them to go in the opposite direction.”

East Yorkshire Conservative council votes for fracking ban - BBC News - A Conservative-led council has voted to oppose fracking in its area.East Riding of Yorkshire members supported a motion tabled by the Liberal Democrat opposition.The vote comes after Business Secretary Jacob Rees-Mogg recently announced the lifting of the 2019 ban in order to boost domestic gas production in the wake of the war in Ukraine.Tory leader of the council Jonathan Owen said he thought it was not "the right route".Mr Owen told the Local Democracy Reporting Service that fracking was "still unproven as a means of production"."Original arguments against fracking still hold in my mind and I have heard nothing to change my views," he said."Of particular concern is the effect on the aquifer under the Wolds and the counter-effect on our ambitions to have an Area of Outstanding Natural Beauty."Conservative leader of the council Jonathan Owen said he thought fracking was not "the right route"Conservative East Yorkshire MP Greg Knight has also voiced his concerns in Parliament.Sir Greg said doubts remained over the effects of the fracking process, including releasing methane gas and polluting underground water supplies.A survey by the British Geological Survey (BGS) showed that parts of the county sits on the Bowland Shale deposit which spans Yorkshire and Lancashire.The BGS estimate it could contain up to 37.6tr cubic metres of gas.The government's lifting of the moratorium on fracking would allow companies which already hold licences to begin getting permission to explore the reserves.The Department for Business, Energy and Industrial Strategy (BEIS) also announced a further round of offering licences to companies to drill for oil and gas.

Fracking: the simple test for whether it should happen in the UK -The UK’s new prime minister, Liz Truss, recently announced the reversal of the2019 ban on fracking. Facing an acute energy crisis, the government want to increase domestic energy production.According to conventional economic theory, whether or not fracking should occur is simple. If the private benefits exceed the social costs, then fracking companies should be able to obtain local consent by compensating households with cash. If the costs are so large that households cannot be compensated, then fracking should not happen.Yet in recent history fracking has occurred irrespective of whether there is a public appetite. In 2016, the government permitted fracking at Fylde’s Preston New Road site, overturning Lancashire county council’s initial rejection. The current approach echoes this. Despite announcing that fracking will only take place where there is local consent, guidance on how this will be gauged is unclear. A framework for transparent cost-benefit analysis on prospective extraction sites has so far not been introduced.The first step is to estimate how much companies are willing to pay for the right to explore for and extract shale gas in a given area. This represents fracking’s private benefit. Auctions have become regular practice in UK utility markets. Renewable energy companies compete for contracts to produce electricity. The bidder offering electricity at the lowest price is paid a flat rate for their production over the next fifteen years, insulating them from volatile market prices. The winning bid would be legally bound to an upfront payment to the local authority in the case that consent is given.The second part of the process should then determine whether firms’ valuation of shale gas extraction is higher than the social cost.The costs associated with fracking are high. Shale gas is mostly methane, a fossil fuel with high carbon emissions.Its extraction also involves drilling using a high pressure mixture of water, sand and chemicals. Fracking in the UK has been linked to several local earthquakes as a result. The process also produces highly saline wastewater that must be disposed of.A recent survey shows just 27% of Britons support fracking.

UK urged to ration gas this winter over fears Putin may cut supplies -Households have been urged to limit energy consumption this winter to slash the risks of gas shortages over concerns of a Russian supply crunch and cold conditions. While the UK only got around four percent of its gas from Russia last year, the International Energy Agency (IEA) has said that cutting household demand would help Britons to cope with late winter cold snaps such as the Beast of the East storm which struck back in 2018. It comes after industry regulator Ofgem warned that Britain is at "significant risk" of gas shortages" due to Vladimir Putin's brutal war in Ukraine and his cutting of crucial supplies to mainland Europe. Meanwhile, the weather is expected to be unusually dry and cold, forecasters have warned, which could pile further pressure on already tight supplies. The IEA said: “Europe’s security of gas supply is facing unprecedented risk as Russia intensifies its use of natural gas supplies as a political weapon. Solidarity, unity and responsible household behaviour will be crucial to ensure supply security.” Although the UK's reliance on Russian gas is slim, Putin's supply squeeze has still had a huge knock-on impact on the UK due to the integrated nature of the market, which has hiked up bills and sparked staggering competition for supplies. While Europe managed to ramp up its storage levels to 90 percent amid fears that Moscow could cut off all remaining gas exports to the continent, the IEA warned that the UK could be vulnerable to cold snaps if the stored-up supplies are consumed too quickly. The intergovernmental organisation said: “A 13 percent demand reduction would also necessitate gas savings from households and require responsible electricity and gas consumption behaviour. “Our analysis indicates that behaviour change could reduce gas demand by 15 billion cubic metres during the 2022/23 heating season, equating to over 40percent of the 13 percent demand reduction.” And over the weekend, reports emerged that National Grid is racing to shore up more supplies amid fears that not enough energy imports will pour in from Europe. Craig James, head of national control at National Grid, urged the industry to “secure the network across a series of fault potentials or supply conditions, there's a requirement to take out extra operating margins of gas". Mr James added: “We also think there is a lower likelihood of interconnector flows from continental Europe to the UK across the winter period.”

Shocking Letter Reveals UK Blackout Fear As NatGas Supplies Could Be Cut In "Emergency" - A letter from Ofgem, the UK's power regulator, warned about the "significant risk" of a natural gas shortage this winter because of disruptions to energy markets following the war in Ukraine and undersupply of Europe. Bloomberg Opinion's Javier Blas tweeted a photograph of the letter focusing on technical changes in the UK electricity market. Blas highlighted the critical parts of the letter in the "background" section that detailed a dark and cold winter for the UK could be just ahead. Here's what Blas outlined: "Due to the war in Ukraine and gas shortages in Europe, there is a significant risk that gas shortages could occur during the winter 2022/23 in Great Britain ('GB'). As a result, there is a possibility that GB could enter into a Gas Supply Emergency."... "In the event that GB reaches Stage 2 in this procedure, Firm Load Shedding of gas would be applied to the largest gas users connected to the gas system. This will likely be large gas-fired power stations which produce electricity to the National Electricity Transmission System ('NETS')."Blas warned: "Winter is coming awfully quickly, and we are betting the house on a warmer-than-average season." Blas is correct. The average UK temperatures are around 12 Celsius (53.6 Fahrenheit). The peak in mean temps occurred in early August. Heating degree days, a measurement designed to quantify the demand for energy needed to heat a building structure, is already rising across the country, indicating the heating season has begun. Blas concluded: "Maybe, maybe, maybe... it's time for the UK government to seriously get a grip with the energy crisis, and start a public campaign for energy savings, before it is too late."

Natural gas can't be replaced by green sources, industry argues - U.S. natural gas industry leaders are amping up calls for the Biden administration and other governments to embrace the energy source ahead of a tough winter for much of the West. Europe's acute energy crisis, the pricey winter facing New England, and California's grid woes illustrate a need to increase production and transport of natural gas, gas executives argued Tuesday during an industry conference, where several also cast doubt on the viability of the fossil fuel -free future hoped for by leaders in each of those regions. The Biden administration and European governments have set ambitious targets to become net-zero economies by 2050. President Joe Biden also intends for the U.S. electric sector to be 100% carbon-free by 2035. Those who are green-minded in Europe (and, to a lesser degree, the United States) maintain those goals but are simultaneously grappling with major energy supply problems and ballooning prices that, in some places, have led utilities to restart coal-fired power plants. Pro-fossil fuel interests have criticized Europe's aggressive climate change policies that generally favor investment in renewable energy sources over fossil fuels sources, including oil and gas, for driving prices higher. "People have been misled to think they can live in a world without fossil fuel fuels," Toby Rice, the president and CEO of Pittsburgh-based gas giant EQT Corporation, said during remarks at the Shale Insight 2022 conference hosted by Appalachian gas industry group Marcellus Shale Coalition. "What they're missing, I think, is that people don't understand how much energy demand there is in the world," he said. Rice, who has been in Washington all year long lobbying for policies that will enable an "unleashing" of U.S. liquefied natural gas exports, has been marketing the industry as an ideal solution for Europe, where consumers and industries are buckling under the weight of astronomical energy prices stemming from the major disruptions to energy markets caused by the war in Ukraine.

Norway deploys Navy to protect oil and gas platforms -- Norway will receive help from Britain, Germany and France to patrol the seas around its oil and gas platforms due to suspicion that sabotage caused leaks in Nord Stream pipelines. Russia’s Nord Stream 1 and Nord Stream 2 pipelines burst, leaking gas into the Baltic Sea off the coast of Denmark and Sweden. The EU suspects sabotage caused the damage while Russian President Vladimir Putin accused the US and its allies of blowing up the pipelines.Now, as Reuters reports, Norway, Europe’s largest gas supplier and a major oil exporter, is deploying its navy, coast guard and air force to protect oil and gas security.While the country had no indications of direct threats, it considered it prudent to strengthen security.In the meantime, measurements from ICOS show that an enormous amount of methane gas has been released into the atmosphere. The leak is estimated to equal the size of a whole year’s methane emissions for a city the size of Paris or a country like Denmark.After the gas leak on the Nord Stream, Sweden and Denmark reported three leaks near Danish island of Bornholm. As a result, Denmark established an exclusion zone taking into consideration the great danger that this situation put shipping.

Denmark: The leak from the North Stream gas pipeline has been stopped --- The Nord Stream pipeline in the Baltic Sea has stopped leaking gas after it was damaged in an explosion, Danish authorities announced. Nord Stream AG, the operator of the Nord Stream 1 underwater gas pipeline, has confirmed that the pressure in the pipeline has stabilized, the Danish Energy Agency said on Twitter on Sunday, adding that this means the gas is no longer leaking. “The Nord Stream AG company has informed the Danish Energy Agency that a stable pressure now appears to have been achieved on the two Nord Stream 1 pipelines. This indicates that the blowout of gas from the last two leaks has now also been completed,” the Danish agency tweeted Sunday. The agency already announced on Saturday that gas has stopped leaking from the underwater gas pipeline North Stream 2. Since the early hours of Monday morning, a total of four leaks, two in Danish and two in Swedish waters, have been discovered in the Nord Stream 1 and 2 pipelines that used to transport Russian gas to Europe. The transport of Russian gas has been stopped for the past few months as part of the sanctions against Russia due to its aggression against Ukraine. Earlier this week Denmark and Sweden told the United Nations Security Council that the leaks were caused by "at least two detonations" with "several hundred kilos" of explosives. President Vladimir Putin on Friday accused the West of sabotaging the Russia-built pipelines, a charge vehemently denied by the United States and its allies. At least two explosions took place underwater, Copenhagen and Stockholm jointly announced on Thursday. Seismological institutes measured tremors of magnitude 2.3 and 2.1 on the Richter scale, which "probably corresponds to an explosive charge of several hundred kilograms" Swedish authorities already reported on Saturday that the amount of gas flowing out of the pipeline is decreasing.

Swedes close area of Baltic Sea around pipeline gas leaks (AP) — The Swedish prosecutor in charge of the investigation into leaks from pipelines in the Baltic Sea said Tuesday that he has ordered the area to be closed as he carries out a preliminary investigation into “suspected gross sabotage.” “I understand the great public interest, but we are at the beginning of a preliminary investigation and I therefore cannot go into details about which investigative measures we are taking,” Prosecutor Mats Ljungqvist said late Monday. The Swedish coast guard said ships, divers, fishing vessels and underwater vehicles, among others, are banned from approaching within 9.3 kilometers (5.8 miles) of the two leaks off Sweden. Last week, undersea blasts involving several hundred pounds of explosives damaged the Nord Stream 1 and 2 pipelines in four locations off southern Sweden and Denmark and led to huge methane leaks in international waters in the Baltic Sea. Over the weekend, authorities in Denmark said the Nord Stream 1 and 2 natural gas pipelines had stopped leaking. However, the Swedish coast guard said Monday that one of its planes had reported that the smaller leak in Nord Stream 2 had increased and was about 30 meters (100 feet) in diameter. The coast guard offered no explanation as to why the leak had increased. The other one, in Nord Stream 1, has stopped, it said. A Swedish submarine rescue ship capable of advanced diving missions and a Swedish coast guard vessels have been sent to the two leaks off Sweden. Danish authorities are monitoring the two gas leaks east of the Danish Baltic Sea island of Bornholm with ships and a a military helicopter. In Sweden, the Security Services are also taking part in the investigation, while Copenhagen police are in charge of an inquiry in Denmark. Danish Prime Minister Mette Frederiksen told Denmark's parliament that the investigation “is now underway. Preparedness in the energy sector has been increased. And together with our partners and allies, we are raising awareness of critical infrastructure.” The U.N. Security Council held an emergency meeting Friday on the pipeline attacks, and Norwegian researchers published a map projecting that a huge plume of methane from the damaged pipelines will travel over large swaths of the Nordic region.

Sweden sends diving vessel to probe leaking Nord Stream pipelines – Sweden sent a diving vessel on Monday (3 October) to the site of Russian gas pipelines in the Baltic Sea that ruptured last week following blasts in the area, to probe an incident that has added new tension to Europe’s energy crisis. Europe is investigating what caused three pipelines in the Nord Stream network to burst in an act of suspected sabotage near Swedish and Danish waters that Moscow quickly sought to pin on the West, suggesting the United States stood to gain. Nord Stream, which runs from Russia to Germany, has been at the centre of a growing gas supply crisis in Europe, which until recently relied heavily on Russian fuel, sending prices soaring. Several European Union states have triggered emergency plans that may lead to rationing as they race to find alternative supplies, while Britain now faces a “significant risk” of gas shortages this winter, the regulator said. “The coast guard is responsible for the mission, but we are supporting them with units,” a spokesperson for the Swedish navy, Jimmie Adamsson, told Reuters. “The only one we are naming is HMS Belos, which is a submarine rescue and diving vessel.” Sweden’s prosecution authority said in a press release that it had designated the area as a crime scene. A spokesman for the Swedish coast guard confirmed in an email that there was now an exclusion zone of five nautical miles around the leaks. Earlier, the Swedish coast guard said Nord Stream 1 had stopped leaking, but an overflight suggested gas was still draining out of Nord Stream 2 and bubbling to the surface over a 30 metre radius. The Kremlin doubled down on allegations that the West was to blame for the ruptures on Monday, saying that the United States was able to increase sales and prices of its liquefied natural gas (LNG) as a result. Washington has strongly denied any involvement. European countries suspect sabotage, but have declined to say who could be behind it. Kremlin-controlled Gazprom also said flows could resume at the last remaining intact pipeline in the Nord Stream 2 network, a suggestion likely to be rebuffed given Europe blocked Nord Stream 2 on the eve of Russia’s invasion of Ukraine in February.

Nord Stream Leaks Caused by Detonations - Detonations caused the recent ruptures of Russia’s Nord Stream gas pipelines, with the evidence pointing to a deliberate act, according to Swedish investigators. The completed preliminary investigation has “strengthened the suspicions of serious sabotage,” the Swedish Security Service said in a statement on Thursday. Swedish investigators didn’t give any indication of how the detonations occurred or who might be responsible. Officials are analyzing evidence collected at the site, which is located just outside the country’s territorial waters, to see “whether someone can be served with suspicion and later prosecuted,” Swedish Public Prosecutor Mats Ljungqvist said. Two leaks in the pipelines, which cross the Baltic Sea to Germany, were disclosed in Sweden’s exclusive economic area last week. Two other leaks are located in Denmark’s zone, prompting investigations and increased security across the region’s key energy infrastructure. Denmark’s police is conducting an investigation in its own exclusive economic zone. It declined to comment on the Swedish findings or provide an update on the status of its own probe. President Joe Biden on Sept. 30 said that the massive leak was a “deliberate act of sabotage” and that Russian statements about the incident shouldn’t be trusted. Germany also has implied that the country is to blame. The events have sparked fears Russia could stage surreptitious attacks on vital energy links to trigger price increases as winter approaches.

Russian Natural Gas Halt Threatens LNG Market Tightness, European Storage Shortfalls, Says IEA --European natural gas prices have continued to decline since the Nord Stream (NS) pipeline systems connected to previously vital Russian gas were damaged, but the International Energy Agency (IEA) warned LNG markets could be drastically impacted into next year. In the IEA’s latest natural gas market report, researchers said the blows to Russian gas imports to Western Europe would lead to a drop in natural gas demand in Europe and a prolonged tightness in global liquefied natural gas markets. IEA researchers forecast Europe’s LNG imports would increase in December by 60 Bcm compared with last year’s volumes. That demand is more than double worldwide LNG export capacity expansions, which could lead to higher prices as Europe battles with Asia over spot cargoes.“The outlook for gas markets remains clouded, not least because of Russia’s reckless and unpredictable conduct, which has shattered its reputation as a reliable supplier,” IEA’s Keisuke Sadamori, director of energy markets and security, said. “But all the signs point to markets remaining very tight well into 2023.”Before Russia’s invasion of Ukraine in February, Europe had been increasing its intake of LNG cargoes to make up for declining pipeline volumes. By August, European imports had increased 65% year/year while Asian demand had dropped by around 7%, according to the IEA. In a recent note from BofA Global Research, analysts wrote that increased LNG demand and limited supply could keep European natural gas prices at or above $60/MMBtu “over the next four to six months under normal weather.” A harsher winter could spike prices further and threatened a storage shortfall on the continent, analysts added. Meanwhile, on Monday EnergiDanmark analysts wrote that a milder short-term weather outlook and continued high storage levels were fueling an extended price drop. The market “remained nervous” that the Dutch Title Transfer Facility (TTF) benchmark was “relatively stable over the last few weeks compared to the enormous fluctuations during summer, while day-ahead prices have also fallen to the lowest level in a couple of months.” The TTF closed at around $49 Monday, down from $54.427 on Friday. It had been on a downward slide since last Wednesday (Sept. 28), after a brief spike in the wake of the NS news.

Blinken Calls Sabotage Attacks On Nord Stream Pipelines A "Tremendous Opportunity" - - Ever since the recent unprecedented sabotage attacks on the Russia to Europe Nord Stream pipelines, the central question has continued to remain who did it and correspondingly cui bono? Just when speculation and an avalanche of theories have inundated the web on an array of international outlets, the Biden administration has bluntly (and apparently lacking self-awareness) boasted that the pipeline bombings present an "opportunity".Secretary of State Antony Blinken said in a Friday joint press briefing with Canada's top diplomat that the damage and disruption to the pipelines are being seen in Washington as a "tremendous opportunity" to greatly reduce European energy imports on Russia.In addressing the 'mystery' sabotage incidents, Blinken began, "I think first it’s important to make clear that these pipelines – that is, Nord Stream 1 and Nord Stream 2 – were not pumping gas into Europe at this time. Nord Stream 2 never became operational, as is well known. Nord Stream 1 has been shut down for weeks because of Russia’s weaponization of energy."A mere few sentences later, he followed by saying "ultimately this is also a tremendous opportunity. It’s a tremendous opportunity to once and for all remove the dependence on Russian energy and thus to take away from Vladimir Putin the weaponization of energy as a means of advancing his imperial designs."He at the same time touted that the Untied States has now become "the leading supplier of LNG [liquefied natural gas] to Europe," stressing too that the Biden administration is helping to enable European leaders to "decrease demand" and "speed up the transition to renewables."Tellingly, in that single section of comments while speaking alongside his Canadian counterpart, Foreign Minister Mélanie Joly, Blinken had repeated the word "opportunity" while highlighting the European energy crisis no less than three times. According to @SecBlinken, the Nord Stream pipeline bombing "offers tremendous strategic opportunity for the years to come." Too bad that this tremendous opportunity for DC bureaucrats will come at the expense of everyone else, especially this coming winter. pic.twitter.com/T2eacQUuBF Canada's Joly for her part pointed the finger at Russia for sabotaging its own pipeline during a panel discussion the same day, telling an Atlantic Council conference that the world is "not naïve" about who is responsible for the acts of "sabotage". She's the latest top official of a NATO government to do so.But the Canadian foreign affairs minister stopped short of naming Russia directly in the exchange:"At this point we're still investigating, but obviously we want to make sure that we do things the right way, but we're not naïve," she said."You're not naïve as to who's behind it?" Sciutto responded."As I said, we won't speculate but at the same time, we want to make sure that — the world needs to understand that this is very important European infrastructure that was sabotaged," the minister added.

Escobar: Who Profits From Pipeline Terror? - Secret talks between Russia and Germany to resolve their Nord Stream 1 and 2 issues had to be averted at any cost... A sophisticated military operation – that required exhaustive planning, possibly involving several actors – blew up four separate sections of the Nord Stream (NS) and Nord Stream 2 (NS2) gas pipelines this week in the shallow waters of the Danish straits, in the Baltic Sea, near the island of Bornholm. Swedish seismologists estimated that the power of the explosions may have reached the equivalent of up to 700 kg of TNT. Both NS and NS2, near the strong currents around Borholm, are placed at the bottom of the sea at a depth of 60 meters.The pipes are built with steel reinforced concrete, able to withstand impact from aircraft carrier anchors, and are basically indestructible without serious explosive charges. The operation – causing two leaks near Sweden and two near Denmark – would have to be carried out by modified underwater drones.Every crime implies motive. The Russian government wanted – at least up to the sabotage – to sell oil and natural gas to the EU. The notion that Russian intel would destroy Gazprom pipelines is beyond ludicrous. All they had to do was to turn off the valves. NS2 was not even operational, based on a political decision from Berlin. The gas flow in NS was hampered by western sanctions. Moreover, such an act would imply Moscow losing key strategic leverage over the EU. Diplomatic sources confirm that Berlin and Moscow were involved in a secret negotiation to solve both the NS and NS2 issues. So they had to be stopped – no holds barred. Geopolitically, the entity that had the motive to halt a deal holds anathema a possible alliance in the horizon between Germany, Russia, and China.The possibility of an “impartial” investigation of such a monumental act of sabotage – coordinated by NATO, no less – is negligible. Fragments of the explosives/underwater drones used for the operation will certainly be found, but the evidence may be tampered with. Atlanticist fingers are already blaming Russia. That leaves us with plausible working hypotheses. This hypothesis is eminently sound and looks to be based on information from Russian intelligence sources. Of course, Moscow already has a pretty good idea of what happened (satellites and electronic monitoring working 24/7), but they won’t make it public.The hypothesis focuses on the Polish Navy and Special Forces as the physical perpetrators (quite plausible; the report offers very good internal details), American planning and technical support (extra plausible), and aid by the Danish and Swedish militaries (inevitable, considering this was very close to their territorial waters, even if it took place in international waters).The hypothesis perfectly ties in with a conversation with a top German intelligence source, who told The Cradle that the Bundesnachrichtendienst (BND or German intelligence) was “furious” because “they were not in the loop.” Of course not. If the hypothesis is correct, this was a glaringly anti-German operation, carrying the potential of metastasizing into an intra-NATO war.The whole operation had to be approved by Americans, and deployed under their Divide and Rule trademark. “Americans” in this case means the Neo-conservatives and Neo-liberals running the government machinery in Washington, behind the senile teleprompter reader.This is a declaration of war against Germany and against businesses and citizens of the EU – not against the Kafkaesque Eurocrat machine in Brussels. Don’t be mistaken: NATO runs Brussels, not European Commission (EC) head and rabid Russophobe Ursula von der Leyen, who’s just a lowly handmaiden for finance capitalism.It’s no wonder the Germans are absolutely mum; no one from the German government, so far, has said anything substantial.The Poles, moreover, are terrified that with Russia’s partial mobilization, and the new phase of the Special Military Operation (SMO) – soon to be transformed into a Counter-Terrorism Operation (CTO) – the Ukrainian battlefield will move westward. Ukrainian electric light and heating will most certainly be smashed. Millions of new refugees in western Ukraine will attempt to cross to Poland.At the same time there’s a sense of “victory” represented by the partial opening of the Baltic Pipe in northwest Poland – almost simultaneously with the sabotage. Talk about timing. Baltic Pipe will carry gas from Norway to Poland via Denmark. The maximum capacity is only 10 billion cubic meters, which happens to be ten times less than the volume supplied by NS and NS2. So Baltic Pipe may be enough for Poland, but carries no value for other EU customers.The Russian Foreign Ministry was sharp as a razor: “The incident took place in an area controlled by American intelligence.”

Putin spokeswoman US sabotaged Nord Stream sell gas to Europe - Maria Zakharova, Vladimir Putin’s spokeswoman in the Kremlin, has accused the US of being responsible for sabotaging the Nord Stream pipelines. She claimed that Washington carried out the attack to leave Europe cornered into purchasing supplies from America instead.Posting on her Telegram channel, Zaknarova wrote: “On September 30, U.S. Secretary of State Blinken and Canadian Foreign Minister M. Joly held a joint press conference in Washington. Blinken spoke openly and unashamedly about the motives of the US and its NATO partners for destroying the Nord Stream 1 and Nord Stream 2 gas pipelines”.“Quote 1: ‘Nord Stream 1 and Nord Stream 2 were not pumping gas to Europe at the time. Nord Stream 2, as you know, was never put into operation. Nord Stream 1 was stopped for several weeks because Russia was using energy as a weapon….'”.“Russia has never used energy as a weapon. Russia, and before it the USSR, simply supplied Europe with gas. Uninterruptedly, for 50 years. Washington’s lies only confirm his criminal manipulation of the subject”.“Quote 2: ‘We have greatly increased our production and also made LNG (liquefied natural gas) available to Europe. We are now the leading supplier of LNG to Europe, helping to make up for any loss of oil and gas to Europe as a result of Russian aggression against Ukraine'”.“And there’s the motive. Only Ukraine has nothing to do with it. If it is to be remembered in the context of U.S. energy interests, we should talk about the fact that under the pressure of U.S. officials, Kyiv politicians constantly put conditions on the Russian side on the verge of blackmail on gas transit”.“Quote 3: ‘…and in the end, it’s also a huge opportunity. This is a tremendous opportunity to get rid of dependence on Russian energy once and for all and thus deprive Vladimir Putin of using energy as a means of advancing his imperial designs. This is very important and opens up enormous strategic opportunities for the coming years…'”. She concluded her post with “Curtain”.

Biden Backs Ongoing LNG Exports to Europe as Russia’s War in Ukraine Rages, Report Says -- The Biden Administration remains committed to supporting robust levels of LNG exports in support of Europe’s efforts to bolster supplies for winter, according to a report Tuesday. The continent is moving with haste to reduce its dependence on Russia amid the Kremlin’s war in Ukraine and is consistently calling for U.S. shipments of the super-chilled fuel. During a scorching summer that fueled robust cooling demand in the Lower 48 and in Europe – combined with precarious storage supplies globally – U.S.prices soared to 14-year highs around $9.00/MMBtu. This elicited calls from consumer and manufacturing advocates to curb exports of liquefied natural gas to preserve supplies for domestic use. This, they argued, could help contain U.S. costs this winter, when both demand and prices are widely anticipated to rise anew after a fall weather reprieve. In a report Tuesday, however, Reuters cited senior White House officials who said Biden, after a new analysis of Europe’s energy needs, had ruled out any limits on natural gas exports during the coming winter. They cited the need to support Europe during the depths of the heating season. The president, shortly after Russia invaded Ukraine in late February, vowed to back the European Union (EU) and North Atlantic Treaty Organization (NATO) as they pushed against the Kremlin and took steps to guard the continent from Kremlin aggression. This included assurances to deliver 15 Bcm of LNG ahead of winter, and the United States already has eclipsed that goal. “President Biden made a commitment in March and we have been moving out on it. We surpassed the LNG export goal President Biden set,” an administration official told Reuters, noting a 30 Bcm in U.S. LNG exports to the EU since early March, double the same period of 2021. “And because of the steps we and our partners have been taking, gas storage in Europe is at a significantly higher level than last year. More work remains,” the official said. EU officials have called on countries across the continent to stock up on LNG to offset supplies from Russia cut off by the Kremlin. Prior to the war, Europe had depended on Russia for roughly a third of its natural gas; it recently has received only about 10% from Russia. Because of LNG from the United States and elsewhere, along with energy conservation, the continent is on track to fill storage to a level adequate for an average winter. But the EU continues to push for more to defend against the potential of a protracted or particularly cold winter. As it stands, according to Rystad Energy, Europe needs at least modest flows of Russian gas or continued strong levels of LNG imports to weather a harsh winter. The latter source appears more reliable. U.S. exporters, already approaching record activity levels ahead of the war, have since operated at or near capacity – aside from repair projects – through the lion’s share of the conflict in Ukraine.

Hungary Is Now The Only EU State Still Receiving Russian Gas - With three of the four pipelines delivering Russian natural gas to Europe out of commission, Hungary is now the only EU member state still receiving Russian gas, Forbes Hungary writes. There are four pipelines that could supply Russian natural gas to Europe:

1. Nord Stream 1, with a capacity of 55 billion cubic meters (bcm) per year (deliveries on this one were halted by Russia);
2. Nord Stream 2, with an identical capacity of 55 bcm (this one never became operational after the German government refused to approve it in the wake of Russia’s invasion of Ukraine).
3. Yamal Europe, the longest pipeline (4,107 kilometers) supplies gas from the Yamal Peninsula in Western Siberia, terminating in Germany, and has a capacity of 33 bcm. Deliveries were halted by Russia in May.
4. Turk Stream, delivering gas from Russia under the Black Sea and through the Balkans, has a capacity of 31.5 bcm and is the only pipeline still in operation. It terminates in Hungary, meaning that as of now, Hungary is the only EU member state still receiving Russian natural gas.

Due to the huge income Russia has made from soaring gas prices, coupled with a massive reduction in other trade with Europe, Russia has no interest in completely shutting down these pipelines.Although Hungary still receives gas, its price is linked to market prices, thus the country is strongly opposed to any further sanctions against Russia.Earlier this week, Prime Minister Viktor Orbán announced a national consultation over the EU’s Russia sanctions, with the consultation asking citizens whether they support the sanctions or not.The Hungarian government has vocally opposed many of the sanctions imposed on Russia arguing they harm Europeans more than they hurt Russians.Hungarian Prime Viktor Orbán just last week called for an end to Russian sanctions by the end of the year in order to halt inflation, halve food prices, and bring soaring energy costs under control.

Eni, Gazprom working to resolve gas flow halt -- Italy’s Eni said it would not receive any of the gas it had requested from Russia’s Gazprom for delivery on Saturday, but the firms said they were working to fix this.Russian gas supplies through the Tarvisio entry point will be at zero for October 1, Eni, the biggest importer of Russian gas in Italy, said in a statement on its website.Moscow and several European countries, including Germany, have been at loggerheads over the supply of natural gas from Russia since the country’s invasion of Ukraine in February.Tensions soared this week after leaks in the Nord Stream 1 and 2 pipelines, linking Russia and Germany, spewed tonnes of methane into the Baltic Sea, in what the UN believes could be the largest leak of the climate-damaging gas ever recorded.On Saturday, the operator of Nord Stream 2 said gas had finally stopped leaking out, five days after the initial rupture, which both Russia and the West blamed on sabotage. The European Union says Moscow is using the flow of gas needed for energy in the region as an economic weapon.

Washington, Brussels Set Sights on TurkStream Pipeline Amid Crackdown on Ankara-Moscow Cooperation At the beginning of this year there were four pipelines carrying natural gas from Russia to Europe, and a fifth (Nord Stream 2) was about to come online. Now Nord Stream 1 and 2 are dead, the Yamal Pipeline is closed, and the amount of gas flowing through Ukraine is greatly diminished. That leaves theTurkStream pipeline, which transports natural gas from Russia to Turkey and then onto southeastern Europe, and it’s in the crosshairs.South Stream Transport B.V., a Netherlands-based subsidiary of Gazprom that operates the Black Sea portion of TurkStream, said the Netherlands withdrew its export license on September 18 amid wider sanctions from the European Union. South Stream Transport applied for a new license but it doesn’t know if it will receive it. Now South Stream plans to “suspend the execution of all contracts related to the technical support of the gas pipeline, including design, manufacture, assembly, testing, repair, maintenance and training” due to the sanctions.That means that “no one will be able to carry out repairs if a pipe is damaged, gas leaks, or if a part of the pipeline comes apart due to an earthquake.”The news comes on the heels of Moscow’s claim that it foiled an attack on TurkStream. And Washington luminaries are now homing in on the pipeline.MIchael Rubin of the American Enterprise Institute writes that “Biden should kill TurkStream to promote transatlantic energy security.”Former CIA director and known perjurer John Brennan is very concerned about all pipelines bringing natural gas to Europe:TurkStream was launched in 2020 as part of Russia’s efforts to diversify its export routes away from Ukraine. It has the capacity to deliver 31.5 billion cubic meters of natural gas a year with half of it destined for Turkey and the other half for the Balkans and Central Europe. The main European customers of TurkStream natural gas are Serbia and Hungary – the former is an ally of Moscow, and the latter is the most outspoken member of the EU against Russian sanctions. Other countries, like Austria and Slovakia, also receive gas from TurkStream via Hungary.

Germany criticizes U.S. for charging 'astronomical' gas prices - Germany's Minister for Economic Affairs and Climate Action Robert Habeck on Wednesday criticized the "astronomical" gas prices charged by "friendly" supplier countries, such as the United States, suggesting they were profiting from the fallout of the Russia-Ukraine conflict. "Some countries, even the friendly ones, are charging astronomical prices in some cases. Of course, this brings problems that we must talk about," Habeck told the German Neue Osnabruecker Zeitung (NOZ) newspaper. The Russia-Ukraine conflict has caused a dramatic energy crisis in Germany, which previously relied on Moscow for 55 percent of gas deliveries. To address gas shortages, Berlin is investing in more expensive liquefied natural gas (LNG). Germany and other European countries have thus turned to the United States, which now provides 45 percent of European LNG imports – up from 28 percent in 2021. "The United States turned to us when oil prices soared, and the national oil reserves were tapped in Europe as well," Habeck said. "I think such solidarity would also be good for curbing gas prices." Habeck said the European Union (EU) should do more to solve the region's energy crisis and called on the bloc to "bundle its market power and orchestrate smart and synchronized purchasing behavior." The U.S. did not immediately respond to the comment. European Commission President Ursula von der Leyen said she preferred to discuss a price cap on gas. "High gas prices are driving electricity prices. We have to limit this inflationary impact of gas on electricity – everywhere in Europe," she said on Wednesday in a speech in Strasbourg, France. No gas has been flowing from Russia to Germany via the important Nord Stream 1 pipeline since September. Last week, major leaks were discovered after explosions were detected by Norway's earthquake service. Russia and the U.S. have accused each other of sabotage..

Germany builds new gas terminals to succeed Russian pipelines - Germany’s most strategically important building site is at the end of a windswept pier on the North Sea coast, where workers are assembling the country’s first terminal for the import of liquefied natural gas (LNG). Starting this winter, the rig, close to the port of Wilhelmshaven, will be able to supply the equivalent of 20 percent of the gas that was until recently imported from Russia. Since its invasion of Ukraine, Moscow has throttled gas supplies to Germany. In the search for alternative sources, the German government has splashed billions on five projects like the one in Wilhelmshaven. Altogether the new fleet should be able to handle around 25 billion cubic meters of gas per year, roughly equivalent to half the capacity of the Nord Stream 1 pipeline. LNG terminals allow for the import by sea of natural gas which has been chilled and turned into a liquid to make it easier to transport. A specialist vessel, known as an FSRU, which can stock the fuel and turn LNG back into a ready-to-use gas, is also hooked up to the platform to complete the installation. Unlike other countries in Europe, Germany until now did not have an LNG terminal, instead relying on relatively cheap pipeline supplies from Russia. But since the invasion of Ukraine, Germany has set about weaning itself off Moscow’s gas exports, which previously represented 55 percent of its supplies. To diversify its sources, secure enough supplies of the fuel and keep its factories working, Berlin has bet massively on LNG to fill the gap left by Russian imports. Chancellor Olaf Scholz last week signed an agreement with the United Arab Emirates for the supply of LNG, while touring Gulf states in search of new sources. Renting five FSRU ships to plug into the new terminals has also set Berlin back three billion euros ($2.9 billion). Following the outbreak of the war in Ukraine, Germany passed a law to drastically speed up the approval process for LNG terminals. In Wilhelmshaven, the work is coming along rapidly. The terminal should be finished “this winter”, says Holger Kreetz, who heads the project for German energy company Uniper. The strategic importance of the terminal has seen building work advance surprisingly quickly. “Normally, a project like this takes us five to six years,” Kreetz tells AFP.

Gas-Hungry Germany Approves Arms Deal With Saudi Arabia - German media reported on 29 September that Berlin has approved a number of new weapons export deals with Saudi Arabia, in defiance of a 2018 ban over Riyadh’s brutal war in Yemen. In a letter to the Bundestag, the country’s Economy Minister, Robert Habeck, said that the deals were approved by German Chancellor Olaf Scholz just before his recent visit to Saudi Arabia. The German export licenses fall under a joint export program with Spain, Italy, and the UK, Habeck’s letter specifies, and will allow Riyadh to buy equipment and ammunition for Eurofighter and Tornado warplanes amounting to around $35 million. Germany, whose arms exports to Saudi Arabia stood at around $1.22 billion in 2012, banned exporting weapons to the kingdom in 2018 as part of a broader ban against countries involved in the war on Yemen, despite some exceptions. However, a complete ban was enforced the following year after the murder of columnist Jamal Khashoggi inside the Saudi embassy in Istanbul. This ban initially fell under Germany’s policy of not exporting arms to active war zones, a policy that shifted as a result of NATO pressure on Berlin to send weapons to Ukraine. The weapons export deals come at a time when Germany is scrambling to boost relations with energy exporting countries, as the country faces a major economic catastrophe after losing access to Russian fuel Scholz set off on a tour of the Gulf states last month, which began in Saudi Arabia on 24 September, in a bid to diversify Germany’s energy supply. This mission became ever more urgent since the sabotage attack that targeted the Kremlin’s Nord Stream pipelines this week. The loss of Russian fuel has pushed several German industries to the brink of collapse, and it has also forced Berlin to nationalize one of the nation’s main energy providers to save it from bankruptcy.

European Gas Demand Set For Record-Breaking Decline In 2022 - Soaring natural gas prices, demand destruction in the industrial sector, and energy-saving measures are set to reduce gas consumption in Europe’s developed economies by 10% this year, the biggest drop in European demand in history, the International Energy Agency (IEA) said in its quarterly Gas Market Report on Monday.The forecast of a 10% decline in natural gas demand in OECD Europe reflects the expectation of higher gas prices and the EU’s ambition to reduce gas consumption by 15% between August 2022 and March 2023 compared to its five-year average.“Assuming average weather conditions, gas demand in the residential and commercial sectors is expected to remain below 2021 levels,” the IEA said in its report.Due to sky-high high prices and a very tight gas market, natural gas usage in the power generating sector in Europe is forecast to drop by nearly 3% this year. Industrial gas demand is expected to plunge by as much as 20%, the IEA said.Energy-intensive industries in Europe, including aluminum, copper, and zinc smelters and steel makers, have already warned EU officials that they face an existential threat from surging power and gas prices. After a record slump in gas demand this year, Europe faces another year of gas consumption contraction in 2023, when OECD Europe’s demand is forecast to decline by 4% amid high prices, according to estimates from the IEA.The agency also noted that “Further potential disruption to the supply of Russian gas provides additional downside risk to this outlook.”Keisuke Sadamori, the IEA’s Director of Energy Markets and Security, commented on the report:“The outlook for gas markets remains clouded, not least because of Russia’s reckless and unpredictable conduct, which has shattered its reputation as a reliable supplier. But all the signs point to markets remaining very tight well into 2023.” The IEA’s Executive Director Fatih Birol said last week that the gas market could be even tighter next year compared to already tight LNG markets in 2022.

European Gas Moves from Bad to Ugly -European gas has moved decisively into BofA Global Research’s “ugly” scenario following the NS1 and NS2 pipeline explosions, a new report from the company has outlined. “After the war broke out in March, we set out three scenarios for European TTF natural gas prices that we labelled ‘good’ (€75/MWh), ‘bad’ (€100/MWh) and ‘ugly’ (€200/MWh),” the report noted. “During the first half of 2022, the European TTF natural gas market traded mostly along the ‘bad’ scenario as pipeline flows from the east continued, despite some friction loss,” the report added. “But as Russian pipeline natural gas flows into North West Europe collapsed this summer after Nord Stream 1 maintenance, day ahead TTF prices quickly moved into the ugly scenario, averaging exactly €200/MWh in the past three months, a level that we now expect to hold over the next 4 to 6 months under normal weather,” the report continued. The BofA Global Research report noted that, in the short term, government mandated inventory fills have partly shielded Europe from the worst outcomes heading into the 2022/23 winter season but added that the situation “remains very precarious”. “A one standard deviation colder-than-normal winter would leave stocks near empty, on our estimates,” the report stated. “A synchronous cold winter in Europe and Asia would trigger a race for gas molecules. Given the drop in nuclear and hydro power generation and the collapse in European natgas demand elasticity, Europe will keep relying on fuel switching abroad and demand rationing at home to balance TTF,” the report added. “Yet as the Ukraine conflict becomes more entrenched, refilling gas stocks in 2023 will prove hard,” the report continued. In a separate report sent to Rigzone on September 30, BofA Global Research noted that damage to both Nord Stream pipelines might imply a permanent, not just temporary, loss of gas supply, “thereby locking in our 'ugly' price scenario of c.EUR200/MWh for multiple winters”. “This is a picture that we see persisting for several years until tangible new LNG supply comes to the market from 2025/26,” that BofA Global Research report stated. In a statement posted on its website on September 29, Nord Stream AG said it intends to start assessing the damage to the Nord Stream pipeline as soon as it receives necessary official permits. “Access to the area of incidents may be allowed only after the pressure in the gas pipeline has stabilized and the gas leakage has stopped,” the company stated.

Natural Gas Market To Remain Tight Into 2023 Russia’s continued curtailment of natural gas flows to Europe has pushed international prices to painful new highs, disrupted trade flows, and led to acute fuel shortages in some emerging and developing economies, with the market tightness expected to continue well into 2023, according to the IEA’s latest quarterly Gas Market Report. Natural gas markets worldwide have been tightening since 2021, and global gas consumption is expected to decline by 0.8% in 2022 as a result of a record 10% contraction in Europe and unchanged demand in the Asia Pacific region. Global gas consumption is forecast to grow by only 0.4% next year, but the outlook is subject to a high level of uncertainty, particularly in terms of Russia’s future actions and the economic impacts of sustained high energy prices. Russia has largely cut off gas supplies to Europe in retaliation against sanctions imposed on it following its invasion of Ukraine. This has deepened market tensions and uncertainty ahead of the coming winter, not just for Europe but also for all markets that rely on the same supply pool of LNG. “Russia’s invasion of Ukraine and sharp reductions in natural gas supplies to Europe are causing significant harm to consumers, businesses, and entire economies – not just in Europe but also in emerging and developing economies,” "all the signs point to markets remaining very tight well into 2023.” The current gas crisis also casts longer-term uncertainty on the prospects for natural gas, especially in developing markets where its use was expected to rise at least in the medium term as it replaced other higher-emission fossil fuels. European natural gas prices and Asian spot LNG prices spiked to record highs in the third quarter of 2022. This reduced gas demand and incentivized switching to other fuels such as coal and oil for power generation. In some emerging and developing economies, the price spikes triggered shortages and power cuts. Europe’s gas consumption declined by more than 10% in the first eight months of this year compared with the same period in 2021, driven by a 15% drop in the industrial sector as factories curtailed production. Natural gas demand in China and Japan was almost unchanged in that same period, while it contracted in India and Korea. Chinese gas demand is forecast to increase by less than 2% this year, its lowest annual growth rate since the early 1990s. Meanwhile, natural gas prices in the United States hit their highest summer levels since 2008, yet North America was one of the few regions of the world where demand increased, supported by demand from power generation. Europe has offset the sharp falls in Russian gas supplies through LNG imports, as well as alternative pipeline supplies from Norway and elsewhere. Europe’s surging demand for LNG – up 65% in the first eight months of 2022 from a year earlier – has drawn supply away from traditional buyers in the Asia-Pacific region, where demand dropped by 7% in the same period because of high prices, mild weather, and continued Covid lockdowns in China. The IEA forecasts that Europe’s LNG imports will increase by over 60 bcm this year, or more than double the amount of global LNG export capacity additions, keeping international LNG trade under strong pressure for the short- to medium-term. This implies that Asia’s LNG imports will remain lower than last year for the rest of 2022. However, China’s LNG imports could rise next year under a series of new contracts concluded since the beginning of 2021, while a colder-than-average winter would also result in additional demand from northeast Asia, further adding to market tightness. For the new report, the IEA conducted a resilience analysis of the EU’s gas market in the case of a complete Russian supply shutdown starting from November 1, 2022. The analysis shows that without demand reductions in place and if the Russian pipeline supply is completely cut, EU gas storage would be less than 20% full in February, assuming a high level of LNG supply – and close to 5% full, assuming low LNG supply. Storage falling to these levels would increase the risk of supply disruptions in the event of a late cold spell. A reduction in EU gas demand through the winter period of 9% from the average level of the past five years would be necessary to maintain gas storage levels above 25% in the case of lower LNG inflows. A reduction in demand of 13% from the 5-year average would be necessary through the winter period to sustain storage levels above 33% in the case of low LNG inflows. Therefore, gas saving measures will be crucial to minimize storage withdrawals and keep inventories at adequate levels until the end of the heating season.

China Is Reselling U.S. LNG To Europe For Big Profits -Chinese companies that have signed long-term contracts to buy U.S. liquefied natural gas have been selling their excess inventories to Europe and reaping big profits from the sales thanks to weak demand in China, the Wall Street Journal reports. WSJ reports that just 19 LNG vessels from the U.S. docked in China in the first eight months of the year, a far cry from 133 recorded for last year’s comparable period. China’s key buyers are located in Europe, Japan and South Korea. China has imported nearly 30% more gas from Russia so far this year, typically at a steep discount, shipping data shows. Still, Chinese sales to Europe are not nearly enough to help the continent avoid potential shortages this winter with Europe depending more heavily on the U.S. Europe has managed to fill its gas stores ahead of schedule. Europe’s natural gas prices have plunged sharply on news that Germany’s gas stockpiles are running ahead of schedule. Benchmark Dutch front-month futures crashed 21% in a single day, reversing the previous week’s 40% jump after Germany’s Economy Minister Robert Habeck revealed that the country’s gas stores are filling up fast and are on target to meet the October objective of 85% full. According to a Reuters gas counter, 88.4% of EU gas storage is already filled.The plunge has brought some relief after a furious rally, though futures are still trading almost six times higher than a year ago. Europe is on the brink of a recession, with inflation running at the highest in decades in several countries. European Governments have collectively set aside some 280 billion euros ($278 billion) in relief packages. Goldman Sachs has told Barrons that Europe has managed to solve its gas crisis ahead of winter and that prices could drop by half in the next six months.

More Bad News For Europe: Forecasters Predict Colder Winter, Less Renewable Power - Just days after we learned that Europe's cell phone tower energy reserves will last 30 minutes during the upcoming mass blackouts, putting the entire European cellular system in jeopardy, the continent which will soon replace Russia with the US as its vassal master and energy sponsor, got even more bad news: according to Florence Rabier, director-general of the European Centre for Medium-Range Weather Forecasts (ECMWF), i.e., the European weather forecasting agency, early indications for November and December were for a period of high pressure over western Europe, which was likely to bring with it colder spells and less wind and rainfall, reducing the generation of renewable power.This, as the FT translates, means that Europe could suffer a colder winter with less wind and rain than usual, adding to the challenges for governments trying to solve the continent’s energy crisis. “If we have this pattern then for the energy it is quite demanding because not only is it a bit colder but also you have less wind for wind power and less precipitation for hydro power,” Florence Rabier told the Financial Times. Rabier said recent hurricanes across the Atlantic could cause milder, wetter and windier weather in the short term. But cooler weather later in the year would be consistent with the atmospheric conditions known as La Niña, a weather pattern derived from the cooling of the Pacific Ocean’s surface, which drives changes in wind and rainfall patterns in different regions.In any case, there is a faint silver lining to Europe's coming deep freeze: as Reuters' reporter John Kemp reports, Europe is entering winter with a near-record volume of gas in storage after buying large volumes at almost any price over the summer to prepare for an interruption of supplies from Russia.Gas inventories in the European Union and the United Kingdom (EU28) had climbed to 996 terawatt-hours (TWh) by Sept. 30, according to data from Gas Infrastructure Europe (GIE). For the time of year, inventories were at the third highest on record, with higher volumes only in 2020 (1,074 TWh) and 2021 (1,067 TWh).Storage had risen by around 700 TWh from its post-winter low, the second-fastest increase on record, as suppliers purchased as much gas as possible despite exceptionally high prices. As a result, stocks ended the summer refill season +98 TWh (+11% or +0.83 standard deviations) above the prior ten-year average. This is a huge turnaround from the end of January, when they were -134 TWh (-23% or -1.34 standard deviations) below. As Kemp forecasts, Inventories are likely to continue increasing for at least another three weeks until late October, but the build could persist into early November, depending on temperatures and how far high prices restrain consumption. Since 2011, the median date on which storage peaked was Oct. 26, but in two cases inventories continued rising into the first half of November. Based on previous seasonal movements, storage is expected to peak around 1,025 TWh, with a likely range from 1,009 TWh to 1,053 TWh. But the volume of gas in store is still increasing at an average rate of more than 2.3 TWh per day, implying it is likely to climb towards the top of the range. Is it enough? EU storage is more than 89% full and UK storage is more than 94% full, with extra stocks likely to be added over the next 3-6 weeks. Storage is well ahead of the formal target of 80% this year (preferably 85%) by Nov. 1 agreed by the EU in June (“Council adopts regulation on gas storage”, European Council, June 27).According to Kemp, European governments have fulfilled their stated objective of maximizing the volume of gas in storage ahead of winter 2022/23 to reduce the impact of a disruption of pipeline supplies from Russia. But storage is intended to deal with seasonal variations in consumption, not provide a strategic reserve in case of an embargo or blockade.Maximizing the volume of stored gas will alleviate the impact of any supply disruptions but it is not enough to guarantee supply security. In the event of a complete cessation of imports from Russia, a colder than normal winter such as the one forecast, or both, gas would become scarce before the end of March 2023. Even if Europe scrapes through this winter, inventories are likely to end at very low levels, requiring another, perhaps even bigger, restocking next year ahead of winter 2023/24.

Gazprom Resumes Flows to Italy -Russian gas supplies to Italy via Austria resumed, bringing some temporary relief to gas prices in Europe. Gazprom PJSC said it has found a solution with Italian buyers to overcome the regulatory changes in Austria at the end of September that were preventing transit flows, according to a company statement on Telegram. Benchmark gas futures fell as much as 4.7% after the news. The spat with the Austrian authorities is the latest in a series of disputes over regulation and contractual clauses that have been used by Gazprom as a way to limit Russian gas supplies to Europe. Earlier this year, the Kremlin demanded so-called “unfriendly states” must pay for pipeline gas in rubles and halted gas deliveries to nations that refused. Another step was to gradually shut down the Nord Stream pipeline for maintenance to its turbines, saying that sanctions and paperwork were holding the process up. Gas supplies to Italy through a pipeline that passes through Austria were halted on Saturday, just days after an attack was carried out on the Nord Stream gas pipelines causing huge gas leaks into the Baltic Sea near Denmark and Sweden. There has been some wariness over Russia’s next move after the act was declared to be sabotage by several nations including Germany. Italy’s energy giant Eni SpA confirmed the resumption of gas flows on Wednesday, saying the issue had been resolved, in a company statement. Austrian regulator E-Control said a solution appeared to have been found. The halt to transit flows was caused by Gazprom not paying a guarantee to the Austrian operator for gas passing to Italy, Claudio Descalzi, chief executive officer, of Eni SpA said at an event on October 3. European gas prices fell as low as 154.28 euros ($153.33) a megawatt-hour on Wednesday and were down 3% at 158.35 euros as of 10:33 a.m. Vienna time.

French Strikes Tighten European Diesel Supplies Further - The European diesel market is tightening faster than usual as workers’ strikes at French refineries choke off supplies. The continent’s diesel sector -- which tightens during the heating season -- has been on edge since the invasion of Ukraine, with traders already shunning Russian barrels. That’s now being exacerbated by French industrial action curbing fuel output just as routine maintenance starts at oil-processing facilities across Europe. Europe’s diesel market has surged this week as worries about near-term availability mount. The contract closest to expiry is now more than $90 a ton above November futures, with the gap shooting up to the biggest since July. Futures have rallied to the equivalent of about $150 a barrel. The strikes add pressure to Europe’s diesel and heating oil market, which has been left short by the loss of Russian supply. The action has seen filling stations in parts of France start to run out of fuel -- another headache for consumers and industries hit by a cost-of-living crisis and the worst energy crunch in decades. Oil trader Gunvor Group’s Chief Executive Officer Torbjorn Tornqvist said Tuesday that the diesel market is moving toward levels of tightness that were seen in the weeks after the invasion of Ukraine. The French outages “come at exactly the wrong time for Europe’s energy security, as they risk accelerating product stockdraws ahead of the looming embargo on imports of Russian products,” Facts Global Energy said in a note Tuesday. France is an important fuel supplier, able to process more than 1 million barrels of crude a day. The strikes have affected about two-thirds of the nation’s capacity. The two biggest refineries -- the Normandy plant operated by TotalEnergies SE and Exxon Mobil Corp.’s Gravenchon -- are operating below capacity.

Minister: Azerbaijan aims to double gas supplies to Europe by 2027 - Azerbaijan aims to double gas supplies to Europe by 2027, Economy Minister Mikayil Jabbarov said in an interview with Euronews Bulgaria, Azernews reports. “We are already in talks with our partners, both foreign and local. Our idea is to increase our production. President Ilham Aliyev mentioned today what quantities we are talking about, and our aim is to double these quantities by 2027. This is a key priority for us. Now the question is how these quantities will be distributed among the various European countries, and it should be determined by the EU’s member states themselves,” he said. Touching upon the bilateral relations between Azerbaijan and Bulgaria, the minister emphasized that Baku is considering all options to cover Bulgaria's gas consumption as much as possible. Moreover, Mikayil Jabbarov stated that Azerbaijan’s state energy company will open a branch in Bulgaria. “We believe that this will make a significant contribution to the development of bilateral ties, and in this way, we will be able to communicate directly with business partners on the ground. This is the most practical and fastest way to satisfy the needs of our customers in the local market,” he said. Azerbaijan and Bulgaria agreed to supply 1 billion cubic meters of gas per year through the Interconnector Greece-Bulgaria. However, because the IGB was still under construction, Azerbaijani gas was delivered to Bulgaria via the Kulata-Sidirokastro interconnection point. The IGB gas pipeline is designed to connect the Greek national gas transmission system (DESFA S.A.) and the Trans-Adriatic gas pipeline (TAP AG) in the area of Komotini (Greece), and with the Bulgarian gas transmission system (Bulgartransgaz EAD) in the area of Stara Zagora. The total length of the gas pipeline is 182 km, the diameter of the pipe is 32'', and a design capacity of up to 3 billion m3/year in the direction of Greece-Bulgaria. The pipeline is designed to increase its capacity up to 5 bcm/y depending on market interest and the capacities of neighboring gas transmission systems.

Qatar: not able to fully compensate for Russian gas to Europe - Qatar is unable to meet the gas demands of several European countries, including Germany, given the volume of supply that Russia has been providing to the Old Continent in recent years, which has been compromised by Russia's invasion of Ukraine and the resulting European sanctions imposed on Vladimir Putin's regime, and by the disruption of the Nord Stream pipelines caused by leaks in the installation, which have yet to be investigated to determine their cause and authorship. Qatar has other commitments to major customers such as China, South Korea and Japan, and is not able to cover as much as expected to receive gas from the European continent. The breakdowns and leaks suffered by the two Nord Stream pipelines, the infrastructure that transports gas from Russia to Germany through the Baltic Sea and which is controlled by a consortium under the Russian giant Gazprom, have put the whole of Europe on alert, as it fears for the supply and price of natural gas for the winter season, with the consequent effects on the heating systems of homes in several countries on the Old Continent. The Russian gas channels in the Baltic Sea of the Nord Stream complex suffered explosions and leaks that will affect the flow of supplies for an undetermined period of time. This is of great concern to Europe, which was preparing to stop Russian supplies through sanctions decreed because of the war in Ukraine, but did not expect this to become a reality after the explosions that hit the Russian gas channels in the Baltic Sea. With winter approaching and sanctions imposed by the European Union on Russian oil and gas after the invasion of Ukraine, Germany, the EU's figurehead, tried to find solutions, such as the Qatari route, the world's largest exporter of liquefied gas. Qatar's deputy prime minister and foreign minister, Sheikh Mohamed bin Abdulrahman al-Thani, said Doha is in talks with several German companies about new supplies of liquefied natural gas. But sources confirmed to the energy specialist Oil Price that quantities and delivery times have yet to be discussed and that Qatar will only provide a partial solution to the gas crisis facing Europe, and this will not happen in the short term, as also reported by Al-Arab. "Qatar's ability to compensate the EU for all the lost Russian gas supplies is very limited and will only provide a partial solution to the Europeans' gas crisis," said Simon Watkins, Oil Price's reporter. . According to media reports, due to past political differences, the German chancellor did not achieve much in the way of an energy partnership with the Saudi kingdom, but he did reach an energy security agreement with Emirati President Mohamed bin Zayed, according to the official Emirati news agency WAM. The deal involved the Emirati national oil company ADNOC and Germany's RWE for the supply of liquefied natural gas. According to Scholz's visit, deliveries from the Emirati side would start before the end of 2022. Ammonia exchanges were also agreed for the transport of green hydrogen, one of the energy sectors in which the Gulf state is investing the most. In the case of Qatar, what makes the situation difficult for Germany is that the Gulf country seeks to secure high prices for liquefied natural gas over a long period, up to 20 years.

Future gas exploration in Lake Eyre could upset the 'greatest desert river system in the world' forever, research shows - The Lake Eyre Basin is the last big free-flowing desert river system in the world.But will it be lost in the gas industry's last dash for cash?About once a decade the hot dry deserts of central Australia are nourished by water.Flooding rains in Queensland, the Northern Territory and South Australia flow into channels, creeks and rivers, spread across vast flood plains and eventually make their way into the vast ephemeral inland lake Kati Thanda, or Lake Eyre.The area, once desolate, bursts into a discombobulating cocktail of life.A plethora of invertebrates and plants that have sat dormant for years spring from the sand, becoming food for fish and birds, which flock to the lakes, swamps and rivers, and breed in their millions.For the vast region that drains into Lake Eyre — the Lake Eyre basin — and the communities and ecosystems that rely on it, it's either boom or bust. And right now, it's definitely boom.Mithaka man and traditional owner Josh Gorringe, who lives in Windorah in Western Queensland in the north-east of the Basin, said the life after the floods "is what amazes me the most". "It can go from this dry, almost bare dirt to vibrant green grass," he said."The birdlife booms again and even people's spirits lift again."But Mr Gorringe said the delicate balance that sustained the country as it swung from boom to bust was being put at risk by a push from the oil and gas industry."The mines are the biggest threat that we've got at the moment," Mr Gorringe said. "The coal seam gas that's been approved across the flood plains, you're talking roads going in places where they've never had roads before."Australia has committed to reduce its net greenhouse gas emissions to zero in less than three decades, but despite this, a possible expansion to the industry's footprint could mean centuries of impact on the system, Mr Gorringe said, in return for just a few decades of profits.The gas industry argues that it's existed in the Lake Eyre basin since the 1980s without interrupting the pristine waterways there, as well as bringing billions of dollars into Australia.But new research shared with the ABC has uncovered its impact, and suggests the future of the basin could be threatened.

The US says a cap on Russian oil prices would save billions of dollars for importers like Turkey and Thailand, report says: FT - A proposed price cap on Russian oil could mean importers in the largest emerging markets pay billions of dollars a year less for oil than otherwise, according to US Treasury estimates reported by the Financial Times. The findings came from a Treasury study, which looked at the impact of two alternatives on the global oil market: a system allowing shipments priced below a set level, and embargoes without those exemptions. The planned G7 price cap could save the 50 largest emerging market and low-income countries — ranging from Turkey to El Salvador and Thailand — about $160 billion annually in spending on oil imports, the study found. But the Treasury didn't specify what the capped price level would need to be to yield the billions in savings, according to the FT. An official from the department also said there is "significant uncertainty" around the estimates, the Tuesday report said. The G7 countries — which includes Canada, France, Germany, Italy, Japan, the UK, and the US — agreed to set a price cap on Russian oil in early September. The measure is aimed at squeezing Russian revenues and so curb Moscow's ability to fund its war against Ukraine, and to stabilize global crude prices. Under the proposals, refiners, traders, and financers would not be allowed to handle Russian crude oil unless it was sold below the price limit. That would benefit the US as a net exporter of energy, the Treasury official said. But it would pay off even more for less-developed countries in Central Asia and Europe that are dependent on oil imports. "The impact is far greater under any reasonable assumptions for emerging markets, which are just getting hammered right now," the official said, per the FT. "This means that countries have a significant incentive to benefit from the price cap, including purchasers like China and India, and that all net oil importing EMs would benefit from lower oil prices," the official added. The US has been trying to rally countries like China and India to support the G7 price cap plan, saying the two Asian countries could benefit by buying more cheap barrels. China and India have been heavy purchasers of Russian oil since the invasion of Ukraine, as sanctions forced Moscow to offer big discounts. The proposal could face headwinds as the price of oil has risen recently thanks to concerns that OPEC and its allies will soon agree to cut oil production quotas by 1 million barrels per day. That supply squeeze could lift oil prices as high as $100 a barrel, analysts told Insider. Brent crude futures, the international benchmark, soared to a high of $127.98 a barrel in early March. They were up 2% to trade at $90.61 at last check Tuesday, while US benchmark WTI crude futures were about 1.7% higher at $85.10.

Refurbished Oil Spill Response Ship Enters Service - A refurbished high-spec oil spill response vessel for the Aegean Sea has entered service under a four-year contract with the European Maritime Safety Agency (EMSA), a contract with an option for four additional years. Dubbed AKTEA II, the OSRV will be able to reach anywhere in the Aegean within 24 hours and can collect and carry up to 4,500 tonnes of oil. Based in Piraeus, Greece AKTEA II OSRV (IMO 9327516) has onboard capacity of 4,486 cu. m. for recovered oil and is equipped with two systems for the mechanical recovery of oil: two rigid sweeping arms and offshore booms (2x250m) with a high-capacity skimmer. The onboard radar-based oil slick detection system increases the efficiency of oil recovery operations at sea. AKTEA II OSRV was built in 2007, purchased by Environmental Protection Engineering (EPE) in 2021 and fully refurbished. The AKTEA II OSRV is 91m long and has 14 crew members constantly on board.

Shell to invest in second Malaysia oil, gas project in a month -- SHELL announced a second investment in Malaysia’s oil and gas sector in a month as the major and its partners, including Petronas, aim to revive output in an environment of tight global supply. Shell’s decisions come after the war in Ukraine disrupted Russian oil and gas supplies and boosted prices. Oil and gas producers in Asia are struggling to sustain output after years of under-investment in the sector as international companies scaled back to focus on exploration and production in Africa and the Americas. Sabah Shell Petroleum, a Malaysian unit of Shell, said on Monday (Oct 3) it will invest in phase 4 of the Gumusut-Kakap-Geronggong-Jagus East (GKGJE) deepwater offshore development project along with its partners. No amounts were given. The GKGJE phase 4 development is a subsea tie-back project that is expected to achieve first oil in late 2024, Shell Malaysia said in a statement. Shell’s partners in the GKGJE project include ConocoPhillips Sabah, Petronas Carigali, PTTEP Sabah Oil Limited, PT Pertamina Malaysia Eksplorasi Produksi and others. The GKGJE project will reviving declining output of Kimanis crude, Malaysia’s flagship export grade. Kimanis production has been falling because of a lack of investment and because of technical issues at the Gumusut-Kakap and Malikai fields.

China may extend refined fuel export quota into next year – sources - China may tweak a proposed sharp increase in refined fuel export quotas for this year by extending the plan into next year, as it weighs the benefits to the economy of higher exports against low domestic stocks and operational challenges, four sources told Reuters. However, the four sources with direct knowledge of the matter - and three others - said the government was still reviewing the matter. The market has been widely expecting China to release a fifth batch of fuel export quota of up to 15 million tonnes for the rest of the year, which would be its largest so far in 2022 and lift China's sagging exports. The proposal from refiners' planning departments, following a government call to boost trade, has led some refiners to ready an increase in output to take advantage of the quota. However, the four sources said Beijing might extend the duration of the proposed volume of 15 million tonnes into next year to cushion its impact on global markets and avoid a price crash. The National Development and Reform Commission, China's powerful economic planner, was hosting a meeting with the nation's major oil refiners earlier on Wednesday, the sources said. It was not immediately clear if the meeting reached a decision. The meeting reviewed companies' oil trading activities and their production capacities this year and also discussed the global oil market outlook for 2023, the four sources said. "The government believes that domestic refiners were operating at low levels this year due to weak domestic demand and negative impact of COVID controls," said one of the sources. "Raising the quotas could help boost overall exports and also help refiners to raise runs," this person added. Global oil markets have been supported by a sharp reduction in Chinese fuel exports for most of this year. However, the proposed large volume of export quotas caused Asian refiners' margins for diesel, jet fuel and gasoline to slump two weeks ago, although middle distillates products have recovered somewhat. The proposed volume would mean a 63% jump from the 24 million tonnes released so far for 2022, too large to be practical and risk crashing refiners' margins, said officials at state refiners.

Refiners Expect Saudi Arabia To Raise Oil Prices For Asia In November - Saudi Arabia may raise the prices for its crude export grades to Asia next month in response to signs of recovering crude demand in one of its biggest markets and the new batch of fuel export quotas issued by Beijing.Energy consultancy FGE said last week that Chinese refiners had been issued fuel quotas to the tune of 13.25 million tons for transport fuels and almost 2 million tons of very low-sulfur fuel oil, valid through the end of the year. They also have some 7 million tons left from previous quota batches, FGE noted.As a result of this higher demand, Saudi Arabia’s official selling prices could rise by $0.25 per barrel for the flagship Arab Light crude, refiners participating in a Reuters survey said.On the one hand, the new quotas suggest higher near-term demand for crude but, on the other, refining margins have sunk after the announcement of the new quotas in anticipation of a flood of new fuel supply. As a result, survey respondents forecast a relatively moderate expected hike in Saudi Arabia’s prices.Last month, Saudi Arabia cut its prices for Asian and European buyers, after four consecutive monthly price hikes. Aramco cut prices of its Arab Light crude benchmark to Asia by $3.95 per barrel, and to European buyers by $2 a barrel, while prices for U.S. buyers saw no change, with the exception of heavier and lighter variants that will see a $0.50 per barrel increase.The October price cuts came after record high prices in September for Arab Light, which reached $9.80 over the Oman/Dubai average per barrel, while Arab Extra Light sold for $10.95 over per barrel that same month. With the price cuts, Asian buyers for this month will pay $5.85 per barrel above the Oman/Dubai benchmark. Aramco normally announces its official selling prices for the following month around the fifth of the current month. This week, the fifth is also the date of the October meeting of OPEC+, where members are expected to discuss a sharp production cut of 1 million bpd or more.

Nigeria probes fire incidents at oil wells-(Xinhua) -- Nigerian authorities on Tuesday said an investigation has been launched into fire incidents affecting two oil wells in the country's oil-rich state of Rivers. Idris Musa, head of the National Oil Spills Detection and Response Agency (NOSDRA), said in a statement that the agency on Monday received a report of the fire incidents at the Akaso Wells 14 and 4T Wellheads, two major oil wells operated by Eroton Exploration and Production Limited in the southern state. Musa said the raging fire had not been put out by the spill control agency, although a situation room was created for effective communication between the affected oil firm and all relevant stakeholders to give a two-hourly update on the incident. A well-concerted effort is in place to extinguish the blazes, the NOSDRA official said. According to him, an illegal boat that was suspected to be engaged in oil theft was observed at the location. The boat has been completely burned and the fire on it was extinguished, he added. ■

Oil Investors Are Ready For Recession - By John Kemp at Reuters (with graphs) Portfolio investors continued to flee from the oil market last week amid multiplying signs of an imminent recession that would cut petroleum consumption. Hedge funds and other money managers sold the equivalent of 34 million barrels in the six most important petroleum futures and options contracts in the week to Sept. 27. Funds have sold in 10 of the last 16 weeks with positions reduced by a total of 237 million barrels since early June, according to position records published by ICE Futures and the U.S. Commodity Futures Trading Commission. The combined position has been cut to just 410 million barrels (18th percentile for all weeks since 2013) from 647 million barrels on June 7 (57th percentile). Bullish long positions outnumber bearish short ones by only 3.63:1 (40th percentile) down from 6.68:1 (85th percentile). The most recent week saw heavy sales of NYMEX and ICE WTI (-23 million barrels) and more modest sales of Brent (-4 million), U.S. diesel (-4 million) and European gas oil (-3 million), with no change in U.S. gasoline. The combined position across all three crude contracts has dwindled to just 314 million barrels (10th percentile) from 513 million on June 7 (55th percentile), as confidence in a price rebound has evaporated. In middle distillates, the most cyclically sensitive contracts, the combined position in diesel and gas oil has fallen to just 45 million barrels, the lowest level since November 2020, before the first successful coronavirus vaccines were announced. Fund managers are preparing for a moderate-to-severe downturn in the business cycle cutting consumption - with the most significant impacts felt in crude and the distillates used primarily in freight transport and manufacturing. Inventories of both crude and refined fuels remain at multi-decade lows in the major consumption centres, but a cyclical downturn is expected to stabilize and rebuild them, ending upward pressure on prices.

Oil prices could soon return to $100 as OPEC+ considers ‘historic’ cut, analysts say -- An influential alliance of some of the world's most powerful oil producers is reportedly considering their largest output cut since the start of the coronavirus pandemic this week, a historic move that energy analysts say could push oil prices back toward triple digits.OPEC and non-OPEC producers, a group often referred to as OPEC+, will meet in Vienna, Austria, on Wednesday to decide on the next phase of production policy.The oil cartel and its allies are considering an output cut of more than a million barrels per day, according to OPEC+ sources who spoke to Reuters. "The OPEC ministers are not going to come to Austria for the first time in two years to do nothing. So there's going to be a cut of some historic kind," Oil prices rose around 4% on Monday morning. International benchmark Brent crude futures popped 4% to $88.54 per barrel, while U.S. West Texas Intermediate futures climbed 4.2% to trade at $82.83 per barrel."A further uptick in trading activity coupled with tightening near-term oil fundamentals could well push oil prices back to $100/bbl," Stephen Brennock said in a research note."Those of a bullish disposition have endured a summer of pain, but a winter of hope and expectation is on the horizon," he added.Echoing this call of a return to $100 a barrel, analysts at Goldman Sachs see Brent reaching triple digits over the next three months, before climbing to $105 over a six-month horizon.The U.S. investment bank expects WTI to jump to $95 by around year-end, before hitting $100 over the next six months.

Novak Set to Attend OPEC+ Meeting - Russian Deputy Prime Minister Alexander Novak is set to attend the OPEC+ meeting in Vienna, according to people familiar with the situation, as the alliance prepares for a show of unity and the biggest production cut since 2020. The meeting on Wednesday -- the first physical gathering since the pandemic forced the group online -- was officially called at the weekend as falling oil prices prompted the cartel to consider a substantial production cut. The alliance headed by Saudi Arabia and Russia is expected to make a point of the enduring partnership, even as the war in Ukraine leaves Moscow increasingly isolated. The group is considering cutting oil output by more than 1 million barrels a day, according to delegates, with the global economic slowdown threatening to undermine demand, prices, and producer nations’ budgets. Such a massive cut risks adding another shock to the global economy, which is already battling energy-driven inflation. It will also irk the US, after President Joe Biden visited Saudi Arabia earlier this year in search of a new oil deal -- and lower pump prices. At the same time, Biden is trying to restrict the revenues that Moscow receives for oil by implementing a price cap as part of efforts to weaken Vladimir Putin’s war effort. An OPEC+ reduction would probably have the opposite effect. Novak’s physical presence in Vienna also presents challenging optics for the European Union: the US has sanctioned him, though the EU has not followed suit. Austria’s government has declined to comment on his attendance, noting only that he has not been sanctioned by the bloc.

OPEC+ to consider oil output cut of more than 1 mln bpd - OPEC+ will consider an oil output cut of more than a million barrels per day (bpd) when it meets on Oct. 5, OPEC sources told Reuters on Sunday. The figure is slightly above estimates for a cut given last week, which ranged between 500,000 bpd and 1 million bpd. OPEC+, which combines OPEC countries and allies such as Russia, is meeting in person in Vienna for the first time since March 2020. “It is a meeting that is taking place at a very interesting global time,” one of the sources said. The output cuts are being considered on the back of a slide in oil prices from multi-year highs reached in March and market volatility. Saudi Arabia, OPEC’s de facto leader, first flagged the possibility of cuts to correct the market in August.

OPEC+ To Cut Oil Output By As Much As 1.5 Million B/D On Wednesday To Reverse Price Drop -- First it was 500Kb/d, then 1 million. Now, according to both Bloomberg and the WSJ, OPEC+ will likely announce that it is slashing output by more than a million barrels per day when it meets this Wednesday in Vienna. With the amicable days of fistbumps long gone... ... the larger-than-expected reduction will reflect the scale of concern that central banks are rushing to spark a global recession, which in turn is crippling oil demand and demanding a supply response. The dollar, which has hit record highs pretty much every day in Q3, has also weighed on prices.That said, a final decision on the size of the cuts won’t be made until ministers meet, Bloomberg's sources said while the WSJ noted that because the ultimate decision will be hotly debated, the group decided to meet in person in Vienna on Wednesday for the first time since the start of the pandemic. Other options being considered include a smaller reduction of 500,000 barrels a day or as much as 1.5 million barrels a day.The Journal's Summer Said noted that the option to cut more than 1 million barrels a day is backed by Russia, the group’s biggest non-OPEC partner. But the cartel’s biggest exporter, Saudi Arabia, has some reservations on the size of the cut, the delegates said. This week's cut will come after OPEC+ agreed last month to reduce oil production for the first time in more than a year, saying it would cut about 100,000 barrels a day amid fears of a global recession. The move ended an 18-month era of production increases for OPEC+. The group slowly brought crude back onto the market after a sharp cut during the pandemic, when demand plunged.Brent crude soared above $125 a barrel following Russia’s invasion of Ukraine in February. It’s since dropped to $85 sparked by Biden's desperate drain of the US strategic petroleum reserve meant to avoid a crash for Democrats at the midterms, and tempering the spectacular windfall enjoyed by the Saudi Arabia, Russia, the United Arab Emirates and other members of the coalition.The 23-nation alliance is scheduled to meet on Wednesday at its headquarters in Vienna, OPEC’s secretariat said a statement on Saturday. The group has been meeting on-line on a monthly basis and wasn’t expected to arrange an in-person gathering until at least the end of this year.In recent weeks, banks such as JPMorgan said OPEC+ may need to lower output by least 500,000 barrels a day to stabilize prices. RBC's Helima Croft said the group may opt for a cut twice that large. It now appears that the final cut will be even bigger.

Oil rebounds 3% as OPEC+ weighs biggest output cut since 2020 -- Oil prices jumped more than 3% in early Asian trade on Monday, as OPEC+ considers cutting output by more than 1 million barrels a day for its biggest reduction since the pandemic, in a bid to support the market, Trend reports with reference to Reuters.Brent crude futures rebounded $2.51, or 3%, to $87.65 a barrel by 0206 GMT, after settling down 0.6% on Friday. U.S. West Texas Intermediate crude was also up 3%, or $2.39, at $81.88 a barrel, after the previous session's loss of 2.1%.Oil prices have tumbled for four straight months since June, as COVID-19 lockdowns in top energy consumer China hurt demand, while rising interest rates and a surging U.S. dollar weighed on global financial markets.To support prices, the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, is considering an output cut of more than 1 million bpd ahead of Wednesday's meeting, OPEC+ sources told Reuters. If agreed, this will be the group's second consecutive monthly cut after reducing output by 100,000 bpd last month.However, OPEC+ missed its production targets by nearly 3 million bpd in July, two sources from the producer group said, as sanctions on some members and low investment by others stymied its ability to raise output."Anything less than 500,000 barrels a day would be shrugged off by the market. Therefore, we see a significant chance of a cut as large as 1 million barrels a day," ANZ analysts said in a note.While prompt Brent prices could strengthen further in the immediate short term, concerns over a global recession are likely to limit the upside, consultancy FGE said."If OPEC+ does decide to cut output in the near term, the resultant increase in OPEC+ spare capacity will likely put more downward pressure on long-dated prices," it said in a note on Friday.Also on Friday, China issued its biggest quota for exports of oil products this year and topped up crude import quotas for independent refiners.State and private refiners can export as much as 15 million tonnes of gasoline, diesel, jet fuel and low-sulphur fuel oil, adding much needed supplies into global markets to replace Russian exports the European Union embargoed in February. However, analysts and traders said some of China's exports were likely to spill over into early 2023 as refiners will need time to ramp up.

Oil Kicks off Q4 with Rally as Ukraine War Escalates, OPEC+ -- Oil futures settled the first session of October and the fourth quarter with sharp gains fueled by reports of a sudden escalation on the battlefields of Southern and Eastern Ukraine following a series of defeats for Russian forces, including the loss of a key city in the Donetsk region and recent setbacks in Kherson that Russian President Vladimir Putin illegally annexed less than 48 hours ago. Unverified media reports published Monday afternoon showed a freight train belonging to the 12th Directorate of the Russian Ministry of Defense, responsible for transportation of nuclear arsenal, was moving armored personnel carriers and other military equipment across Siberia towards the frontlines of Eastern Ukraine. Although reports have yet to be confirmed by either Moscow or Washington, the headlines of such maneuvers have lifted the geopolitical risk premium embedded in oil prices as the standoff between Russia and the West enters a new phase. On Friday, Putin illegally annexed four Ukrainian regions in the South and Eastern parts of the country, including Kherson, Zaporizhian, Donbass, and Luhansk. Ukrainian President Volodymyr Zelensky has vowed to retake the territories, while Western leaders have said they would never recognize Russia's annexation, calling the late September referendums a sham. These developments follow another flare-up in a proxy conflict between Russia and the European Union after Gazprom suspended natural gas deliveries to Italy over the weekend, claiming it failed to receive authorization for pipeline flows through Austria. For their part, Austrian authorities said Gazprom had not signed up to changes in supply contracts required by regulatory adjustments that are made every year, and which Gazprom had known about for months. Gazprom, Austria's government, and Italian energy company Eni SpA said they were working to find a solution. EU countries have imposed sweeping financial and trade restrictions on Russia that will get tougher later this year with the introduction of an embargo on Russian seaborne oil exports scheduled to take effect on Dec. 5. Separately, Organization of the Petroleum Exporting Countries and allied producers are reportedly considering a sizable production cut of more than 1 million bpd when the group meets Wednesday. If agreed upon, this would be the largest reduction to OPEC+ output since April 2020 when the group slashed collective production by 9.7 million bpd to offset demand destruction brought by the global pandemic. Russia, the group's second-largest producer, has reportedly lobbied for the larger cut as it struggles to expand its export markets under the weight of international sanctions and needs higher prices to capitalize on existing sales. Saudi Arabia, OPEC's de-facto leader, voiced similar concerns following the recent selloff in oil futures, with the international crude benchmark Brent contract losing more than 20% of value during the third quarter. Analysts, however, caution that OPEC+ is currently missing its output target by 3.5 million bpd due to tight spare capacity and poor infrastructure, meaning a 1 million bpd reduction would likely translate into only a 400,000-bpd decline in actual oil output. At settlement, November West Texas Intermediate futures spiked more than $4 to $83.63 bbl, and ICE December Brent futures rallied to $88.86 bbl, up $3.72. NYMEX November RBOB futures advanced 14.31 cents to $2.5129 gallon, with the front-month ULSD futures surging 14.75 cents to $3.3691 gallon.

Oil prices rise in international market - Pakistan Observer --Oil prices witnessed an increase in the international market just a day after news that quoted OPEC sources saying that OPEC+ would consider an oil output cut of more than a million barrels per day (bpd) next week. At around 05:40 GMT, Brent crude futures rose 41 cents, or 0.46%, to $89.27 per barrel after gaining more than 4% in the previous session. Similarly, the US WTI crude futures rose by 21 cents, or 0.25%, to $83.84 per barrel. The benchmark gained more than 5% in the previous session, which was its largest daily gain since May. Oil prices rallied on Monday on renewed concerns about supply tightness. Investors expect the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, will cut output by more than 1 million barrels per day (bpd) at their first in-person meeting since 2020 on Wednesday.The meeting will take place on October 5 against the backdrop of falling oil prices and months of severe market volatility, which prompted top OPEC+ producer Saudi Arabia to say the group could cut production.Voluntary cuts by individual members could come on top of this, making it their largest cut since the start of the COVID-19 pandemic, OPEC sources said.OPEC+, which combines OPEC countries and allies such as Russia, has refused to raise output to lower oil prices despite pressure from major consumers, including the United States, to help the global economy.Prices have nevertheless fallen sharply in the last month due to fears about the global economy and a rally in the US dollar after the Federal Reserves raised rates.A significant production cut is poised to anger the United States, which has been putting pressure on Saudi Arabia to continue pumping more to help oil prices soften further and reduce revenues for Russia as the West seeks to punish Moscow for sending troops to Ukraine.The West accuses Russia of invading Ukraine, but the Kremlin calls it a special military operation.Saudi Arabia has not condemned Moscow’s actions amid difficult relations with the administration of US President Joe Biden.

Oil Holds Surge as OPEC+ Mulls Biggest Supply Cut Since 2020 - - Oil held a two-day surge before an OPEC+ meeting at which the alliance is considering the biggest supply cut since 2020 to revive prices. West Texas Intermediate futures traded near $86 a barrel after jumping almost 9% over the previous two sessions. The producer group is set to discuss reducing output by as much as 2 million barrels a day, delegates said before the group meets in Vienna later Wednesday. That’s double the volume previously flagged. A cut of that magnitude would reflect the scale of concern from the alliance about the outlook for energy demand in the face of rapidly tightening monetary policy. The US benchmark recently capped its first quarterly loss in two years after giving up all the gains made following Russia’s invasion of Ukraine. There are some conflicting signals however — as the group meets, markets for refined products are surging. Diesel in Europe is in its biggest backwardation since July, indicating tight supply, while gasoline and heating oil in the US have also jumped. “These are unusual times and this is going to be an unusual cut, this is a signaling cut,” “The message is: look market we will hold the downside of this price, we will fix this disconnect between paper prices and fundamentals.” Saudi Arabia may also announce an extra voluntary cut in its own oil output, potentially augmenting a group-wide agreement to curb supply, RBC Capital Markets said in a note. Riyadh has made additional production moves on several occasions since December 2016. WTI for November delivery dipped 0.5% to $86.11 a barrel at 10:01 a.m. in London. Brent for December settlement lost 0.4% to $91.45 a barrel. The Organization of Petroleum Exporting Countries and its allies may also discuss a slightly smaller cut of 1.5 million barrels a day, said delegates. Even a reduction of that size is likely to draw criticism from the US and other major oil-consuming nations, which have been battling energy-driven inflation. “I think we’re setting up for a buy-the-rumor, sell-the-fact situation,” Carley Garner, the founder of DeCarley Trading LLC, said in a Bloomberg TV interview. OPEC+ are “not meeting their quotas as it is already,” she said. Complicating the supply outlook is a proposed price cap on Russian oil, which a US official said could be announced within weeks. The European Union backed a new package of sanctions that includes support for a price cap on oil sales, people familiar with the matter said.

Brent Tops $91 After OPEC+ Signals Larger Output Cut -- Oil futures advanced more than 3% Tuesday in reaction to reports indicating the Organization of the Petroleum Exporting Countries and allied partners will announce a production cut of 2 million barrels per day (bpd) for the month of November to backstop a slide in oil prices.Moreover, Saudi Arabia and Gulf partners are likely to shoulder a large chunk of the cut from current production as opposed to nominal targets by OPEC+ members that have underproduced quotas. An actual reduction in production of 2 million bpd could only be realized by the Saudis, United Arab Emirates, Kuwait, and possibly Iraq that still have wiggle room to shut-in a sizable volume of output without losing export markets or affecting oil infrastructure.Russia, OPEC+'s second largest producer, has voiced support for a large output cut as it struggles to expand its export market under international sanctions and attempts to increase the revenues from existing sales. If agreed upon, this would be the bullish surprise to the market and the largest reduction to OPEC+ output since April 2020 when the group slashed collective production by 9.7 million bpd to offset demand destruction brought by the global pandemic. Earlier in the session, oil futures advanced on comments by Saudi Aramco Chief Executive Amin Nasser who stressed limited spare capacity held by OPEC+ producers. Nasser estimated global spare capacity stands at just 1.5% of current oil production, which in his view would be tapped the moment Beijing moves past its zero-COVID policy that has constrained China's economy. Saudi officials have said on multiple occasions the industry needs higher oil prices to incentivize new production amid the current transition towards green energy. Saudi's current oil output stands at 10.904 million bpd, according to OPEC's Oil Monthly Market Report, far below a record 12.3 million bpd the kingdom briefly reached in April 2020. Nasser furthered that Saudi Arabia won't reach its goal of 13 million bpd production capacity until at least 2027.At settlement, WTI October futures traded on the New York Mercantile Exchange advanced $2.89 barrel (bbl) to $86.52 bbl, and International Brent futures for December delivery on the Intercontinental Exchange settled at $91.80 bbl, up by $2.94 bbl on a session. NYMEX November RBOB futures spiked 17.01 cents to $2.6830 gallon, with the front-month ULSD futures adding 16.67 cents for $3.5358 a gallon settlement.

Oil Prices Rise As API Reports Surprise Crude, Gasoline Draws - The American Petroleum Institute (API) reported a surprise draw this week for crude oil of 1.770 million barrels, while analysts predicted a build of 333,000 barrels. U.S. crude inventories have grown by roughly 21 million barrels so far this year, according to API data, while the U.S. Strategic Petroleum Reserves fell by nearly eight times that figure. The draw comes even as the Department of Energy released 6.2 million barrels from the Strategic Petroleum Reserves in the week ending September 30 that left the SPR with 416.4 million barrels.In the week prior, the API reported a build in crude oil inventories of 4.150 million barrels after analysts had predicted a small build of 333,000 barrels.WTI rose on Tuesday prior to the data release. At 2:28 p.m. ET, WTI was trading up $3.15 (+3.77%) on the day at $86.78 per barrel—up nearly $9 per barrel on the week (after a $7 per barrel slide in the week prior). Brent crude was trading up $3.13 (+3.52%) on the day at $91.99—a more than $6 increase on the week that more than erased the previous week’s $5 decrease. Crude oil prices continued to rise throughout the afternoon, with a flurry of OPEC+ chatter detailing just how much crude oil production the group could decide to cut for December. The most recent report figure suggests the group could be contemplating a cut up to 2 million bpd.U.S. crude oil production data continues to be a concern, if not for U.S. drivers who would be unlikely to see much immediate relief from increased oil production, then certainly from the Biden Administration, who has spearheaded the SPR releases to bring down gasoline prices ahead of midterm elections. For the week ending September 23, U.S. crude oil production slipped to 12.0 million bpd, according to the latest weekly EIA data. This is just a 300,000 bpd rise from the levels seen at the start of the year, and still a 1.1 million bpd shortfall seen at the start of the pandemic.The API also reported a draw in gasoline inventories this week, of 3.474 million barrels for the week ending September 30, adding onto the previous week's 1.048 million-barrel draw. Distillate stocks rounded out the week’s draws with a loss of 4.046 million barrels compared to last week's 438,000-barrel increase. Cushing inventories were up by 925,000 barrels in the week to September 30. In the week prior, the API saw a Cushing increase of 357,000 barrels. Official EIA Cushing inventory for the week ending September 23 was 25.683 million barrels, up from 24.991 million barrels in the prior week.

OPEC+ Agrees on 2 Million-Barrel-a-Day Cut to Output Limit - OPEC+ agreed to cut its collective output limit by 2 million barrels day as it seeks to halt a slide in oil prices caused by the weakening global economy.It’s the biggest reduction by the Organization of Petroleum Exporting Countries and its allies since 2020, but will have a smaller impact on global supply than the headline number suggests. Several member countries are already pumping well below their quotas, meaning they would already be in compliance with their new limits without having to reduce production. Even so, the cartel’s decision risks adding another shock to a global economy that is already battling inflation driven by high energy costs. The move would also irk the US — and potentially trigger a response from Washington. President Joe Biden visited Saudi Arabia earlier this year in search of higher production and lower pump prices for Americans ahead of midterm elections in November. The cut of 2 million barrels a day will be measured against the same baseline as the previous OPEC+ agreements, Amir Hossein Zamaninia, OPEC governor for Iran, told reporters in Vienna after the meeting. Shared pro rata between members, that would require just eight countries to curb actual production and deliver a real reduction of about 880,000 barrels a day, according to Bloomberg calculations based on September output figures. Oil prices were little changed near $92 a barrel in London. Earlier on Wednesday, US officials were making calls to counterparts in the Gulf trying to push back against the move to cut production, according to people familiar with the situation. Already, the White House had asked the US Energy Department to analyze whether a ban on exports of gasoline, diesel and other refined petroleum products would lower prices, Bloomberg reported on Tuesday. It’s a controversial idea but one that’s gaining traction in some corners of the Biden administration. In Vienna, there was little sign before the meeting that the US pressure was working. United Arab Emirates Energy Minister Suhail Al Mazrouei insisted the decision was “technical.” “It’s very important that it remains as a technical decision and it’s not political,” he told reporters. “That’s why it’s important to look at technical side of the equation and look at any concerns regarding the economy and the status of the economy.”

OPEC+ Tries to Keep Oil Above $90 With Large Cut -- OPEC+ agreed to cut its collective output limit by 2 million barrels day, stoking tensions with the US as the cartel seeks to halt a slide in oil prices caused by the weakening global economy. It’s the biggest reduction by the Organization of Petroleum Exporting Countries and its allies since 2020, but will have a smaller impact on global supply than the headline number suggests. Several member countries are already pumping well below their quotas, meaning they would already be in compliance with their new limits without having to reduce production. Even so, the decision risks adding another shock to a global economy that is already battling inflation driven by high energy costs. The cartel extended its cooperation agreement until the end of 2023, and the new production limits agreed on Wednesday will remain in place until then unless the market changes, said a delegate. “OPEC wants prices around $90,” Nigerian Minister of State for Petroleum Resources Timipre Sylva said after the meeting. Many member countries have based their 2023 budgets on that price and “it would destabilize some economies” if that weren’t to happen, he said. The move irked the US, with President Joe Biden saying he was concerned by the “unnecessary” cut, according to CNN. He visited Saudi Arabia earlier this year in search of higher production and lower pump prices for Americans ahead of midterm elections in November. The cut of 2 million barrels a day will be measured against the same baseline as the previous OPEC+ agreements, Amir Hossein Zamaninia, OPEC governor for Iran, told reporters in Vienna after the meeting. Shared pro rata between members, that would require just eight countries to curb actual production and deliver a real reduction of about 900,000 barrels a day, according to Bloomberg calculations based on September output figures. Oil rose as much as 2.2% to $93.80 a barrel in London, the highest in three weeks. Earlier on Wednesday, US officials were making calls to counterparts in the Gulf trying to push back against the move to cut production, according to people familiar with the situation. Already, the White House had asked the US Energy Department to analyze whether a ban on exports of gasoline, diesel and other refined petroleum products would lower prices, Bloomberg reported on Tuesday. It’s a controversial idea but one that’s gaining traction in some corners of the Biden administration. In Vienna, there was little sign before the meeting that the US pressure was working. United Arab Emirates Energy Minister Suhail Al Mazrouei insisted the decision was “technical.” “It’s very important that it remains as a technical decision and it’s not political,” he told reporters. “That’s why it’s important to look at technical side of the equation and look at any concerns regarding the economy and the status of the economy.” OPEC+ will no longer hold monthly meetings, Zamaninia said. The group’s Joint Ministerial Monitoring Committee, which oversees implementation of production cuts, will meet every two months, he said.

U.S.-Saudi relations take a hit as OPEC cuts oil production - Relations between the United States and Saudi Arabia reached a new low Wednesday, as Saudi-led OPEC voted to slash oil production amid a global run-up in energy prices. The decision represented a win for Russia, which coordinates oil policy with OPEC and is seeking to bolster the value of its exports. It also comes a month before the midterm elections in the United States, where high energy prices are likely to be a central issue. Biden administration officials expressed disappointment in the move and signaled they were open to working with Congress on legislation that would enable the government to bring an antitrust suit against the oil cartel. Two members of Congress said they would introduce legislation to remove U.S. troops and military equipment from the country. “This is going to lead a lot of people in the U.S. to reevaluate the U.S.-Saudi relationship,” said Ben Cahill, a senior fellow at the Center for Strategic and International Studies. “The assumptions have changed.” Analysts said the moves underscored the depths of the gulf between Washington and Riyadh. The two capitals’ interests were once linked: Saudi Arabia exported barrels of oil around the world in exchange for U.S. security guarantees. But recent years have flipped the relationship on its head, and relations have been strained by differences over the Arab Spring, the killing of Jamal Khashoggi and conflicting approaches to a spiraling energy crisis. “The market has moved on, things have changed a lot,” Cahill said. “Saudi Arabia has a much broader array of trade partnerships and interests. Its relationships in Asia have become a lot more important, and I think the U.S. feels a lot more liberated to go its own way and not depend on Gulf oil production.” Analysts said OPEC’s move to slash production appeared to be a response to a looming European embargo on Russian oil exports, which is set to go into effect in December, as well as efforts by the Biden administration and its European allies to place a price cap on Russian crude. Attempts by oil-consuming countries to try and set the price of oil represents a direct threat to OPEC’s ability to direct oil markets, they said. The move will slash OPEC oil production by 2 million barrels a day, or about 2 percent of global oil production. Most analysts expected the actual cuts to be more muted, as most OPEC nations are already failing to meet their stated production targets. “Historically, OPEC has often cut production in the face of weakening demand, yet it has never implemented a cut in such a tight market, with inventories at historically low levels,” Goldman analysts wrote.

White House 'disappointed' with OPEC+ decision to cut oil production, will release more from US reserves - The White House on Wednesday expressed disappointment following the announcement from OPEC+ that it would cut two million barrels per day from its production quotas beginning in November. The decision by the OPEC+ alliance, which includes Russia, is likely a response to oil prices dropping amid less demand stemming from a global economic slowdown. Oil prices currently hover around approximately $80 per barrel, down from the $100-plus cost it hit during late spring and early summer. Reducing supply will likely boost the cost of oil, which could raise the price Americans pay at the gas pump around the November midterm election -- and it comes just a few months after Biden traveled to Saudi Arabia in July to lobby Middle Eastern allies to increase production."The president is disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin's invasion of Ukraine," the White House said in a statement from national security adviser Jake Sullivan and National Economic Council Director Brian Deese.The White House also said President Biden has directed the Department of Energy to release another 10 million oil barrels from the country's Strategic Petroleum Reserve next month, signaling the administration's effort to keep gas prices low with a month until the crucial midterms. The release was previously planned, according to an Energy Department press release.Biden offered little response when asked about the OPEC+ alliance's decision as he left the White House to head to Florida Wednesday morning."I need to see what the detail is," Biden said in response to a reporter's shouted question about the decision. "I am concerned, it is unnecessary."Secretary of State Antony Blinken said that the administration would continue to ensure energy prices are "kept low" in light of the OPEC+ announcement. The national average cost of a gallon of gas is currently $3.83, up about 62 cents from last year, according to AAA.

Biden's 'unthinkable' options for punishing OPEC - President Joe Biden and other Democrats are considering a range of actions to blunt the impacts of OPEC’s decision to cut oil shipments — though none of their options looks appealing.The oil cartel’s move this week to cut output by 2 million barrels a day is threatening to push up U.S. gasoline prices, undercutting Biden’s risky diplomatic outreach to Saudi Arabia in July as well as his boast that he helped drive prices at the pump down for three straight months this summer.Now, White House and congressional leaders are eyeing several responses to protect U.S. consumers, ranging from an effort to wrest market control away from OPEC, limiting U.S. companies’ energy exports, and easing sanctions on unfriendly oil-producing nations — each of which carries serious potential downsides for American interests.“There are a lot of alternatives and we haven’t made up our minds yet,” Biden told reporters Thursday.For now, the White House is pledging to work with Congress on a bill to allow the U.S. to sue oil cartels for antitrust violations, a step that lawmakers from both sides of the aisle have threatened before but which the Biden administration has been wary of taking.“This is really the first time we have a president who’s supporting it with a Congress that looks likely to support it as well,” said Kevin Book, managing director of ClearView Energy Partners, a research firm. “What was previously unthinkable is no longer unthinkable.”Senate Democrats are weighing action, too. “We are looking at all the legislative tools to best deal with this appalling and deeply cynical action,” Majority Leader Chuck Schumer said in a statement.The rest of the menu of options under discussion range from the imperfect to the disastrous, market analysts tell POLITICO.Their consensus opinion is that policy measures that would actually bring down gasoline prices will require long-term planning, so the best thing lawmakers could do for the energy markets now is to shut up.

Oil Rallies As OPEC+ Agrees Historic 2 Million B/D Production Cut, Shuns Biden - As was well-telegraphed - and despite The White House's sabre-rattling - OPEC+ JMMC has recommended the cartel to go ahead with a historic 2 million b/d production cut.One delegate has confirmed this cut is from baseline levels. This means the production cut is less than 2 million b/d directly since current actual production levels are already below quota. However, it is still a sizable cut.As ArgusMedia reports, the extent to which any cut to November quotas will reduce actual supply will depend on how OPEC+ members fare in meeting their targets this month and how the cut is distributed.The group as a whole fell 3.58mn b/d below its collective ceiling in August, according to an average of secondary source estimates.If agreed by ministers at their meeting in Vienna today, it will mark the biggest cut since the group reduced its collective quota by 9.7mn b/d during the early stages of the Covid crisis in 2020. WTI is extending gains on the news, rallying back above $87 at 7-week highs...This is not good news for the American consumer as gas prices are about to start accelerating again... And that is not good news for President Biden's approval rating... We await The White House statement 'mulling' a reaction to this clear dissent of the unipolar order. As we have detailed recently, this is a direct message to The Fed and The White House... Food for thought...OPEC can cut more/longer than Biden administration can release from SPR. This OPEC meeting a wakeup call for US politicians that energy inflation is going to be STICKY.

Oil Surges on Unexpected Crude Draw, Gasoline Demand Jumps - -- Oil futures advanced more than 2% in late-morning trade Wednesday after inventory data from the Energy Information Administration showed total crude oil and fuel inventories in the United States declined for a second straight week through Sept. 30, while demand for gasoline surged, topping 9 million barrels per day (bpd) for the first time since early August. Commercial crude oil stockpiles fell 1.4 million barrels (bbl) to 429.2 million bbl last week, counter to expectations for a 1.3 million bbl build, and despite a 6.2 million bbl drawdown from the Strategic Petroleum Reserve. The draw pressed inventory to a four-week low while 13.1 million bbl or 3% below the five-year average. The crude draw was realized as the U.S. refinery run rate rose 0.7% to 91.3% of capacity against expectations for a 0.4% decline in utilization, with refiners processing 210,000 bpd or 1.3% more crude oil during the final week of September compared with the previous week. Crude exports remained strong too at 4.551 million bpd, the third highest weekly export rate in 2022. During the second week of August, U.S. crude exports reached 5 million bpd, with crude exports at 4.646 million bpd during the week-ended Sept. 23. The U.S. crude net import rate, which subtracts crude exports from crude imports, fell to the second lowest weekly rate in 2022 at 1.4 million bpd. Data for gasoline was also bullish, with EIA reporting a 640,000-bpd jump in implied demand for the final week of September to 9.465 million bpd -- the highest weekly consumption rate for the transportation fuel in 2022. While gasoline demand typically trends lower in September, inventory movement from Gulf Coast refiners to southeastern states ahead of Hurricane Ian might have boosted the implied demand reading, which measures the barrels delivered to the U.S. market. PADD 3 Gulf Coast gasoline stocks were drawn down 3.8 million bbl during the week reviewed to 78.6 million bbl, an 18-month low. Gasoline stockpiles fell 4.7 million bbl to 207.5 million bbl last week, pressing gasoline inventory to the lowest point since November 2014. A 3.4 million bbl draw in distillate stocks was also bullish, with the decline more than expectations for a 1.4 million bbl draw, pressing inventory to a 110.916 nine-week low and 28.3 million bbl or 20.3% below the five-year average. Bullish EIA data joined by OPEC+ agreeing to a 2 million bpd production cut beginning in November pushed crude futures prices to three-week highs and refined products futures to five-week highs late morning. Shortly after the noon hour in Washington, a statement from the White House expressing disappointment with the OPEC+ decision pressed oil futures off their highs and sent the front month gasoline contract lower. NYMEX November West Texas Intermediate were trading near $87.50 bbl, easing from an $88.42 high, and ICE December Brent was over $93 bbl after trading just shy of $94 bbl. NYMEX November ULSD futures were nearly 15 cents higher near $3.6820 gallon after trading as high as $3.7174 gallon, and November RBOB futures were slightly lower near $2.68 gallon after rallying to a $2.70 high.

Oil rises to 3-week highs as OPEC+ agrees to deep cuts, U.S. stockpiles fall | Euronews - Oil prices rose on Wednesday to three-week highs, as OPEC+ agreed to its deepest cuts to production since the 2020 COVID pandemic, despite a tight market and opposition to cuts from the United States and others. Prices also rose on U.S. government data that showed crude and fuel inventories fell last week. [EIA/S] Brent crude rose $1.57, or 1.7%, to settle at $93.37 a barrel. Brent reached a session high of $93.96 per barrel, its highest since Sept. 15. U.S. West Texas Intermediate (WTI) crude rose $1.24, or 1.4%, to settle at $87.76 a barrel. It reached $88.42 per barrel during the session, the highest since Sept. 15. Both Brent and WTI rose sharply in the last two days. The 2 million-barrel-per-day (bpd) cut from OPEC+ could spur a recovery in oil prices that have dropped to about $90 from $120 three months ago on fears of a global economic recession, rising U.S. interest rates and a stronger dollar. Oil had been rising this week in anticipation of the cuts. “The real impact of a large cut would be smaller, given that some of the members are failing to reach their output quotas,” Cincotta added. In August, OPEC+ missed its production target by 3.58 million bpd as several countries were already pumping well below their existing quotas. “We believe new output targets will mostly be shouldered by core Middle East countries, led by Saudi Arabia, the UAE and Kuwait,” said Rystad Energy’s analyst Jorge Leon. Meanwhile, Russian Deputy Prime Minister Alexander Novak said on Wednesday that Russia may cut oil production in order to offset negative effects from price caps imposed by the West over Moscow’s actions in Ukraine. The United States was pressing OPEC+ producers to avoid making deep cuts, a source familiar with the matter told Reuters, as President Joe Biden looks to prevent a rise in U.S. gasoline prices ahead of midterm congressional elections on Nov. 8. Biden has been grappling with higher gasoline prices all year, which have eased after a spike, something his administration has touted as a major accomplishment. In U.S. supply, crude stocks, gasoline and distillate inventories fell last week, the Energy Information Administration said. Crude inventories posted a surprise draw of 1.4 million barrels to 429.2 million barrels. [EIA/S] U.S. gasoline stocks fell more-than-expected by 4.7 million barrels, while distillate stockpiles, which include diesel and heating oil, also posted a larger-than-expected draw, falling by 3.4 million barrels. “We’re definitely seeing supplies of gasoline and diesel fall pretty dramatically,”“The mantra we’ve been seeing in recent weeks is the economy is slowing and oil prices were down because of peak demand, but these numbers seem to be holding up a lot better than people would think.”

Oil prices mixed over supply uncertainties -- Oil prices mixed on Thursday over supply uncertainties after OPEC+ producers decision to cut daily oil production by 2 million barrels. International benchmark Brent crude traded at $93.22 per barrel at 10.01 a.m. local time (0701 GMT) for a 0.16% drop from the closing price of $93.37 a barrel in the previous trading session. American benchmark West Texas Intermediate (WTI), trading at $87.52 per barrel at the same time, decreased 0.27% after the previous session closed at $87.76 a barrel. The group of Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed Wednesday to cut production by 2 million barrels per day (bpd) starting November. The group pointed to the uncertainty that surrounds the global economic and oil market outlook, and noted 'the need to enhance the long-term guidance for the oil market.' Following the group's decision the US officials said on Wednesday that US President Joe Biden 'is disappointed' by OPEC+'s decision to cut oil production. The decision will have the most negative effect on lower- and middle-income countries that are reeling from elevated energy prices, according to a statement by National Security adviser Jake Sullivan and top economic adviser Brian Deese. 'At the President’s direction, the Department of Energy will deliver another 10 million barrels from the Strategic Petroleum Reserve to the market next month, continuing the historic releases the President ordered in March,' said the statement. Moreover, EU countries on Wednesday reached an agreement on the eighth sanctions package against Russia. The measures include a prohibition of transporting oil to non-EU countries above a certain price, mostly affecting the shipping industry of Greece, the Greek Cypriot administration, and Malta. The Energy Information Administration (EIA) on Wednesday showed that US commercial crude oil inventories decreased by 1.4 million barrels during the week ending Sept. 30 against the market expectation of a drop of around 1.77 million barrels. Strategic petroleum reserves, excluded in commercial crude stocks, also fell by 6.2 million barrels, while gasoline inventories decreased by 4.7 million barrels over the same period.

Oil prices settle up 1% on cuts to OPEC+ production targets - Oil prices rose about 1% Thursday, holding at three-week highs after OPEC+ agreed to tighten global supply with a deal to cut production targets by 2 million barrels per day (bpd), the largest reduction since 2020. Brent crude futures settled at $94.42 barrels, up $1.05, or 1.1%. U.S. West Texas Intermediate (WTI) crude futures settled at $88.45 barrels, gaining 69 cents, or 0.8% after closing 1.4% up on Wednesday. The agreement between the Organization of Petroleum Exporting Countries (OPEC) and allies including Russia, a group known collectively as OPEC+, comes ahead of a European Union embargo on Russian oil and would squeeze supplies in an already tight market, adding to inflation. "We believe that the price impact of the announced measures will be significant," said Jorge Leon, senior vice president at Rystad Energy. "By December this year Brent would reach over $100/bbl, up from our earlier call for $89." Saudi Energy Minister Abdulaziz bin Salman said the real supply cut would be about 1 million to 1.1 million bpd. Saudi Arabia's share of the cut is about 0.5 million bpd. Several OPEC+ members have been struggling to produce at quota levels because of underinvestement and sanctions. "The countries that were underproducing are not going to cut production," "Maybe Saudi Arabia, the UAE, Kuwait, and Kazakhstan may cut production to new quota, but I doubt anybody else will." The output cut comes as the U.S. Federal Reserve and other central banks are raising interest rates to fight inflation. Higher oil prices will likely cut demand, which could cap price gains, s "That's what's cutting back the other way and why prices have stabilized for WTI just under $90," U.S. President Joe Biden expressed disappointment over OPEC+ plans and said the United States was looking at ways to keep prices from rising. "There's a lot of alternatives. We haven't made up our minds yet," Biden told reporters at the White House. Earlier, the White House said Biden would continue to assess whether to release more supplies from the Strategic Petroleum Reserve and would consult Congress on other ways to reduce market control of OPEC and its allies. Also supporting prices, U.S. crude inventories dropped by 1.4 million barrels to 429.2 million barrels in the week ended Sept. 30, the Energy Information Administration said.

Oil Prices Rose on Thursday, Holding at Three-Week Highs - Oil prices rose on Thursday, holding at three-week highs after OPEC+ agreed to tighten global crude supply with a deal to cut production targets by 2 million barrels per day, the largest reduction since 2020. The agreement between the Organization of Petroleum Exporting Countries and allies including Russia, a group known collectively as OPEC+, comes ahead of a European Union embargo on Russian oil and would squeeze supplies in an already tight market, adding to inflation. The output cut comes at the same time the U.S. Federal Reserve and other central banks are raising interest rates in an attempt to curb inflation. Higher oil prices will likely cause further demand destruction, which was keeping prices from moving higher, November WTI delivery gained 69 cents per barrel, or 0.79% to $88.45, Brent for December delivery gained $1.05 per barrel, or 1.12% to $94.42. Gasoline for November delivery gained 1.29 cents per gallon, or 0.48% to $2.681, ULSD for November delivery gained 17.80 cents per gallon, or 4.83% to $3.8649 Global oil supply is set to tighten, intensifying concerns over increasing inflation after the OPEC+ group of nations announced a 2 million bpd output cut, its largest supply cut since 2020. Saudi Energy Minister Abdulaziz bin Salman said the real supply cut would be about 1 million to 1.1 million bpd, a response to rising global interest rates and a weakening world economy. The OPEC+ cuts compound supply concerns as European Union sanctions on Russian crude and oil products take effect in December and February, respectively, prompting Morgan Stanley to raise oil price forecasts. Morgan Stanley raised its oil price forecast for the first quarter of 2023, and predicted tight supply going forward. The bank said "We now see the oil market in a 900,000 bpd deficit in 2023, up from 200,000 bpd before. Those forecasts assume that Russia's oil production will fall by 1-1.5 million bpd after the EU oil import embargo comes into force." Morgan Stanley raised its first-quarter 2023 Brent price forecast to $100/barrel from $95/barrel, noting: "Brent will find its way to $100/barrel quicker than we estimated before." Meanwhile, Citi Research said the final market impact of OPEC+ decision to cut oil production would depend on the agreement duration, and expects major consumers to "react with displeasure" to the deal. Meanwhile, Goldman Sachs has raised its oil price forecast for this year and 2023, as the U.S. bank expects the 2 million bpd output cut agreed by OPEC+ producers to be "very bullish" for prices going forward. Goldman Sachs raised its 2022 Brent price forecast to $104/barrel from $99/barrel and 2023 forecast to $110/barrel from $108/barrel. The U.S. bank also raised its fourth quarter 2022 and first-quarter 2023 Brent price forecast by $10/barrel to $110 and $115/barrel, respectively. U.S. President, Joe Biden, said he was surveying his options after OPEC+ nations announced plans to cut oil output, a decision he said was disappointing. He said the U.S. was looking at all possible alternatives to keep prices from rising.

Oil prices have surged 13% in 5 days for their biggest weekly gain since March - and OPEC's production cuts set them up to stay higher for longer, Barclays says - Oil prices on Friday were on course to log their biggest weekly gain in seven months, and the agreement reached this week by OPEC+ members to slash output should cultivate further energy price advances, Barclays said.During Friday's session, West Texas Intermediate crude futures rose 1.1% to $89.39 per barrel. Brent oil, the international benchmark, bulked up 1% at $95.36.WTI was on track to notch a five-day winning streak and record its largest weekly increase since March with prices up nearly 13%. Brent futures were also stretching gains into a fifth session and were looking at a weekly rise of more than 8%.Oil began stepping higher in anticipation that the 23 members of OPEC+ would decide to cut oil production at its meeting in Vienna on Wednesday in an effort to halt a pullback in prices. The group decided to reduce its output quota by 2 million barrels a day starting in November, the largest cut since the COVID-19 outbreak began spreading worldwide in 2020."Western disappointment at the 2m bbl/d cuts announced this week is understandable given it directly complicates the inflation issue. Lower supply will likely broadly offset lower demand as the economy cools, thus keeping prices high and pushing out a fall in inflation," Barclays' European equities strategy team led by Emmanuel Cau said in a note Friday."It does help our Energy [overweight] recommendation however, given higher for longer energy prices will continue to fuel earnings and cash flows at the energy names."In the US market, the S&P 500 Energy Sector has risen about 50% on a year-to-date basis, the only sector on the S&P 500 that's higher for the year."We reiterate Energy's unique ability to hedge portfolios against inflation and geopolitics, even as its fundamentals remain healthy. A clear risk to this view would be a significant reduction in Russia-Ukraine hostilities and reopening of energy links," Barclays said. Oil prices earlier this year shot up to the $130-a-barrel range in the wake of Russia's invasion of Ukraine in February. But prices have since been weighed down by demand concerns as central banks fighting inflation have raised borrowing rates to slow economic activity.

Brent Tops $98 as OPEC Cuts Fuel Concern Over Tight Supply-- Oil futures extended their rally into a fifth consecutive session Friday, with both benchmarks finishing the first week of October 5% higher. The gains were underpinned by a two-fold supply risk in Russia after Moscow threatened to cut all oil exports to any country that participates in a G-7 initiative to cap the price of Russian energy sales, and steep production cuts from the OPEC+ that defied calls from the Biden administration to ease pressure on the tight global oil market. Oil futures only briefly pared gains earlier in the session on the back of a strengthening U.S. dollar following the September employment report that solidified the case for a 75-basis-point rate hike at the Federal Reserve meeting next month. The U.S. economy added 263,000 new jobs last month -- broadly in line with market's expectations, but the overall unemployment rate surprisingly fell back to pre-pandemic February 2020 low of 3.5%. The decline in the jobless rate last month came as labor force participation fell slightly to 62.3% -- a sign of ample demand for workers even amid growing fears of recession. Even as the labor market shows some signs of cooling, it is yet to reflect the broader slowdown in other sectors of the economy. Underpinning gains in the oil complex are ongoing uncertainty surrounding the G-7 plan to cap the price of Russian oil exports that is expected to be finalized sometime before the E.U. embargo goes into full effect on Dec. 5. The potential complexity of the U.S.-led measure and lack of clarity over how it will be implemented risks pushing more Russian oil off the market than most experts currently expect, according to the world's biggest independent oil trader, Vitol. The idea behind the price cap is that it should be applied as globally as possible to restrict the Kremlin's revenues. Theoretically, the measure will also affect all exports of Russian oil to large Asian buyers, including China and India. According to the European Commission, the exact price floor has yet to be determined. However, preliminary estimates suggest that the price should be above the breakeven level for the Russian producers but considerably below the current market rate and closer to what Russia was getting paid before invading Ukraine. Following the announcement, Russian Deputy Prime Minister Alexander Novak said moves to cap the price of his country's oil will backfire and could lead to a temporary reduction in its oil output. Additionally, OPEC+ this week agreed to cut its collective oil production by 2 million barrels per day (bpd) for the month of November -- the largest output reduction since April 2020 when producers were forced to slam the breaks on output in light of collapsing demand. Most of the announced 2 million bpd production cut would fall on the shoulders of five OPEC+ producers, led by Saudi Arabia and Russia, that would equally reduce crude output by 526,000 bpd. Iraq agreed to cut output by 220,000 bpd, the United Arab Emirates by 160,000 bpd, and Kuwait by 135,000 bpd. It is notable that OPEC+ members have been producing far below their official target levels for months now. In August, OPEC+ underproduced against their quota by 3.4 million bpd, meaning the volume that would be removed from the market in November would be smaller than 2 million bpd. Still, even a cut in the ballpark of 700,000 to 1 million bpd could considerably tighten the physical oil market. At settlement, November WTI futures advanced $4.19 to $92.64 per barrel (bbl), and ICE Brent futures for December delivery rallied to $97.92 per bbl, up by $3.50 in afternoon trading. NYMEX November RBOB futures added 5.32 cents to $2.7346 per gallon, and front-month ULSD futures surged 15.38 cents to $4.0187 per gallon.

Oil up a 5th session, with U.S. prices gaining nearly 17% for the week after OPEC+ production cuts - Natural-gas futures end lower, down for a 7th straight week. Oil futures climbed Friday for a fifth session in a row, with U.S. prices up nearly 17% for the week after the recent decision by major oil producers to cut output. Brent and WTI both saw strong weekly gains after the OPEC+ -- made up of the Organization of the Petroleum Exporting Countries and their Russia-led allies -- agreed on Wednesday to cut its output target by 2 million barrels a day starting in November. "For several weeks, fears about a weakening global economy had been weighing on oil prices," Colin Cieszynski, chief market strategist at SIA Wealth Management, told MarketWatch. "This week, however, sentiment changed after OPEC+ showed the world that it is prepared to cut supply to defend the price in the face of political and central bank opposition from the U.S. and other countries." Daily output is, in reality, likely to "decline by only 1 million barrels because many countries are already producing well below quota," said analysts at Commerzbank, in a Friday note. However, "this would still be enough to prevent the surplus that has been predicted for the final quarter of this year." The European Union's embargo on Russian oil purchases and the possible implementation of a price cap on Russian oil are coming ever closer, which could prompt Russia to further cut its production, while no significant expansion of non-OPEC supply is in sight, either, the analysts wrote. "Against this backdrop, a whole series of bad economic news would probably be needed to put any substantial pressure on prices again," they said. Crude fell sharply last month, with WTI and Brent testing eight-month lows as investors reacted to fears aggressive tightening by global central banks would send the economy into a sharp downturn. Looking back at the price range before COVID and the Russia-Ukraine conflict, the "current levels seem pretty sustainable given the macro picture," said Daniela Hathorn, market analyst at Capital.com, in emailed commentary. "In fact, we have seen the Biden administration hint at possible further releases of its Strategic Petroleum Reserve stockpiles to further stabilise prices." This further tightening of supply has "helped oil prices break away from the recent downtrend, but the longer-term trend is likely going to continue to be determined by demand concerns," she said.

Saudi budget forecasts for 2023 lowballs oil price -- Saudi Arabia's preliminary budget statement for 2023 released last week shows its projected oil revenues are based on a conservative price for Brent oil, analysts said. According to Al Rajhi Capital, oil revenues for the kingdom in 2023 could reach SAR 754 billion “Based on our assessment, the government’s 2023 budgeted revenues are likely based on an assumption of Brent at around $76 a barrel,” said Mazen Al Sudairi, head of research at the brokerage. According to Emirates NBD, the Saudi finance ministry "has likely based projected revenues on a conservative oil price assumption of around $80/barrel, which is much lower than our forecast of an average of $105/barrel in 2023." On Monday, Brent crude futures rebounded $2.51, or 3%, to $87.65 a barrel from Friday, as OPEC+ is reported to be considering an output cut by more than 1 million barrels a day in a bid to support the market. The median price forecast for Brent in 2023 is $94, according to a Reuters poll. Meanwhile, the Saudi government preliminary budget estimates expects total revenues to reach SAR 1.12 trillion, 17% higher than the previously announced of SAR 968 billion. Expenditure in 2023 is estimated at SAR 1.11 trillion, 18% higher than the earlier announcement. The Saudi government now expects a budget surplus of SAR 9 billion for 2023, lower than the SAR 27 billion estimated earlier. Emirates NBD had forecast SAR 330 billion surplus. The government has forecast GDP growth of 3.1% in 2023; which is "slightly lower than our 3.5% forecast," the lender said.

Work on decaying FSO Safer expected to begin in next few weeks - — The salvage of the aging supertanker FSO Safer, off the Yemen coast, can now begin, the UN said in late September, after it announced that more than $75 million has been pledged to carry out the operation. "Moored off Yemen’s Red Sea coast, the FSO Safer is an aging supertanker in advanced state of decay that will soon break apart or explode if the world does not act," the UN website states on its "Stop Red Sea Spill" campaign page. The vessel's structure has been left exposed to humidity and corrosion with little or no maintenance since Yemen's civil war started in 2015. And in the last few years various companies, countries, media agencies and environmental groups have called the tanker a "ticking time bomb," "massive floating bomb" and a "deadly ghost ship." The UN's plan to prevent this potential oil spill (by transferring the oil to a safe vessel) was previously delayed because of insufficient funding. The UN began asking for contributions from members of the public in June, and the UN crowdfunding campaign raised the $75 million required for the emergency operation. In late September, UN and Dutch officials reported that, "Dutch company Smit Salvage is expected to start work within weeks to lift 1.14 MMbbl of oil from the decaying ship. The Boskalis-owned salvage company has been lined up to stabilize the 407,000-dwt FSO Safer in a four-month operation to prepare for the oil to be removed." More recently, according to the Oct. 3 Maritime Security Threat Advisory report, work on the decaying FSO Safer is expected to begin in the next few weeks. Once the pledges are fully converted into cash for the initial salvage operation, with more than $77 million promised from 17 countries, another $30 million to $38 million is still needed for Phase 2, which will cover the installation of safe replacement capacity to secure the 1 MMbbl of oil on board. The UN plan is for this to be done through transferring the oil to a secure double-hulled vessel, as a permanent storage solution, until the political situation allows it to be sold or transported elsewhere. The UN campaign website says," The FSO Safer vessel is holding four times the amount of oil spilled by the Exxon Valdez—enough to make it the fifth largest oil spill from a tanker in history. If we do not act now, the result will be an environmental and humanitarian catastrophe centered on the coast of a country already devasted by seven years of war. A massive spill from the Safer would destroy pristine reefs, coastal mangroves and other sea life across the Red Sea, expose millions of people to highly polluted air, and cut off food, fuel and other life-saving supplies to Yemen, where 17 million people already need food aid.

Houthis Warn Oil Firms To Leave Saudi Arabia And The UAE -Yemen's Houthis have warned oil companies operating in Saudi Arabia and the United Arab Emirates (UAE) to pack up and leave as the warring sides in the Yemeni conflict failed to reach an agreement to extend the six-month truce.Fighting in Yemen has been ongoing for over seven years now after the Iran-affiliated Houthis overturned the elected president, which prompted Saudi Arabia to wage war on the rebel group. In response, the Houthis have made Saudi Arabia's oil facilities their preferred target of attacks.Yemen's Armed Forces' spokesman Yahya Saree wrote on Twitter this weekend, warning oil firms to organize and leave Saudi Arabia and the UAE."As long as the American-Saudi aggression countries are not committed to a truce that gives the Yemeni people the right to exploit their oil wealth in favor of the salary of the Yemeni state employees, the armed forces give oil companies operating in the UAE and Saudi Arabia an opportunity to organize their situation and leave," Saree wrote, adding "forewarned is forearmed.""If the Saudi and Emirati coalition continue to deprive our Yemeni people access to their resources, our military forces can, with God's help, deprive them of their resources," the Yemeni military spokesman added.Meanwhile, UN Special Envoy to Yemen Hans Grundberg said on Sunday that he regrets "that an agreement has not been reached today, as an extended and expanded truce would provide additional critical benefits to the population.""As negotiations continue, the UN Special Envoy calls on the parties to maintain calm and refrain from provocations or any actions that could lead to an escalation of violence," the UN statement reads.Two months ago, Yemen's Houthi-led government accused the country's Saudi-backed coalition forces of siphoning off $13 billion in Yemeni oil revenues over the past five years, with reports claiming that another $180 million in looted oil left the country on a Greek oil tanker in August.In a tweet published by local media sources, Houthi National Negotiation Delegation official Abdul Malik Al-Ajri claimed that the $13 billion "looted" from Yemen's oil revenues is based on figures from OAPEC (Organization of Arab Petroleum Exporting Countries) and maritime traffic data.

Iran's Ayatollah Breaks Silence On Anti-Government "Riots", Calls Uprising A US-Israeli Plot -- Iran's "anti-hijab" protests are now in their third week, with a Norway-based monitor, Iran Human Rights (IHR), saying that at this point at least 92 Iranians have died as a result of the ongoing security services crackdown. Demonstrations and unrest have gripped dozens of cities, including parts of the Iranian capital, following last month's death of 22-year-old Mahsa Amini in police custody, which sparked a wave of anger, especially among women who are demanding equal rights. But on Sunday, Iran’s supreme leader, Ayatollah Ali Khamenei, has weighed in on the protests for the first time, after having remained silent since their beginning. He laid blame on the United States and Israel for fueling the unrest as part of efforts to fragment the Islamic Republic and its government, implying an ongoing regime change plot."I say explicitly that these riots and this insecurity were a design by the US and the occupying, fake Zionist regime [Israel] and those who are paid by them, and some traitorous Iranians abroad helped them," Khamenei said.Interestingly enough, the scathing words were issued at a graduation ceremony for police cadets in Tehran. Top officials of the Islamic Revolutionary Guard Corps (IRGC) were also said to be present for the speech. "In the accident that happened, a young woman passed away, which also pained us, but reactions to her death before investigations [take place] … when some come to make the streets insecure, burn Qurans, take hijabs off covered women, and burn mosques and people’s cars – they’re not a normal, natural reaction," Khamenei said. His fiery denunciation of the protests as an externally driven plot, which have in some cases led to clashes with police and reported instances of live ammunition used by state forces to quell the unrest, strongly suggests that the crackdown is about to get a lot worse.