US gasoline supplies at an 8 year low; oil supplies at a 21 year low; oil+products supplies at a 17½ year low

US gasoline supplies at an 95 month low after gasoline imports fell to a 47 month low; US oil supplies at a 21 year low, Strategic Petroleum Reserve at a 38 year low, oil + oil products supplies at a 17½ year low…

Oil prices rose for a second week and US oil production fell after Biden threatened oil companies with a windfall profits tax if they didn't raise production and lower prices...after rising 3.4% to $87.90 a barrel last week as US oil & fuel inventories shrank and our oil exports rose to a record high, the contract price for the benchmark US light sweet crude for December delivery fell in overseas trading early on Monday after weaker-than-expected Chinese business activity data brewed fresh fears over slowing demand for crude, and extended their retreat on the Chinese data during the US session to settle down $1.37 or 1.56% at $86.53 a barrel on expectations that U.S. production would continue rising, after monthly government data showed output at a post pandemic high, even as weak Chinese data and the country’s widening COVID-19 curbs weighed on demand...oil prices moved lower in Asia again on Tuesday, on the back of the US output gains and on doubts about Chinese demand, but rallied after media reports suggested that China would probably ease its disruptive zero-COVID policy by the end of this year, and after OPEC raised its medium to long term demand forecasts, and then spiked after reports that Iran was planning an attack on targets that included Saudi Arabia and Northern Iraq, and settled $1.84 or 2% higher at $88.37 a barrel as a weaker dollar offset the impact of China demand concerns...oil prices held their gains overnight after the American Petroleum Institute reported domestic crude and gasoline inventories had unexpectedly tumbled, but softened in early trading on Wednesday on the back of mixed economic data ahead of the Fed's decision on interest rates. and then rallied again after the EIA reported US crude production fell and gasoline supplies had hit an 8 year low, and settled $1.63 or 1.8% higher at $90.00 a barrel...however, oil prices fell in early Asian trade Thursday, as the Fed's interest rate increase pushed up the dollar and heightened fears of a global recession that would crimp fuel demand, and then tumbled 2% during the New York session to settle $1.83 lower at $88.17 a barrel, as China stood by its strict zero-COVID policy and as the dollar surged 1.4% following hawkish remarks from Fed Chairman Powell...but oil prices advanced more than 3% in early trading Friday morning in reaction to media reports that Chinese officials were planning substantial changes to Beijing's zero-COVID policy, in a move that could boost global oil demand at a time when supplies remained tight, and settled up by $4.44, or by more than 5% at $92.61 a barrel, amid uncertainty around future interest rate hikes by the Fed, while a looming EU ban on Russian oil and the possibility of China easing some COVID restrictions supported expectations...oil prices thus finished the week 5.4% higher as a dollar slump following a strong US jobs report and the G-7 attempt to price-fix Russian oil all added to the mix...

Natural gas prices also finished higher for a second week, following 9 straight weekly declines, as prices see-sawed throughout the week on shifting weather forecasts and ended on a high note... after rising 3.9% to $5.684 per mmBTU last week on bargain hunting following the prior week's 23% price drop, the contract price of US natural gas for December delivery opened 62 cents or 11% higher on Monday as new forecasts showed colder temperatures moving in by mid-month, and ended 67.1 cents or 12% higher on the day at $6.355 per mmBTU, with the rally supported by forced short covering...however, natural gas prices opened 35 cents lower on Tuesday, and pulled further back throughout the day before settling 64.1 cents lower at $5.714 per mmBTU, on profit taking after the latest forecasts called for the weather to remain mild for the next two weeks...but natural gas prices rebounded on Wednesday after weather forecasts once again hinted at colder temperatures, and after a major LNG export facility affirmed its intention to relaunch this month, offsetting expectations for a stout inventory report, and settled 55.4 cents or 9.7% higher on the day at $6.268 per mmBTU...natgas prices reversed again on Thursday, sliding 29.3 cents to $5.975 per mmBTU, on a bigger-than-expected storage build and forecasts for lower demand over the next two weeks than had been expected...prices reversed yet again on Friday, jumping 42.5 cents or more than 7% to a three-week high of $6.400 per mmBTU, following a return to colder forecasts from both the American and European weather models, and thus finished 12.6% higher on the week..

The EIA's natural gas storage report for the week ending October 28th indicated that the amount of working natural gas held in underground storage in the US rose by 107 billion cubic feet to 3,501 billion cubic feet by the end of the week, which still left our gas supplies 101 billion cubic feet, or 2.8% below the 3,602 billion cubic feet that were in storage on October 28th of last year, and 135 billion cubic feet, or 3.7% below the five-year average of 3,636 billion cubic feet of natural gas that were in storage as of the 28th of October over the most recent five years....the 107 billion cubic foot injection into US natural gas working storage for the cited week was 10% higher than the average forecast for an injection of 97 billion cubic feet from a Reuters poll of analysts, and was much more than the 66 billion cubic feet that were added to natural gas storage during the corresponding week of 2021, and also way more than the average injection of 45 billion cubic feet of natural gas that had typically been added to our natural gas storage during the same week over the past 5 years...

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending October 28th indicated that after a big decrease in US oil supplies that could not be accounted for and a big jump in our oil refining, we needed to pull oil out of our stored commercial crude supplies for the 7th time time in 12 weeks, and for the 28th time in the past 49 weeks. despite a big drop in our crude oil exports....Our imports of crude oil rose by an average of 25,000 barrels per day to average 6,205,000 barrels per day, after rising by an average of 273,000 barrels per day during the prior week, while our exports of crude oil fell by 1,204,000 barrels per day to 3,925,000 barrels per day, which together meant that the net of our trade in oil worked out to an import average of 2,280,000 barrels of oil per day during the week ending October 28th, 1,229,000 more barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly 100,000 barrels per day lower at 11,900,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have averaged a total of 14,180,000 barrels per day during the October 28th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,842,000 barrels of crude per day during the week ending October 28th, an average of 406,000 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 720,000 barrels of oil per day were being pulled out of the various supplies of oil stored in the US.   So, based on that reported & estimated data, the crude oil figures from the EIA for the week ending October 28th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 941,000 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 (+941,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been an omission or error of that magnitude in this week’s oil supply & demand figures that we have just transcribed....moreover, since last week’s EIA fudge factor was at a record (+2,266,000) barrels per day, that means there was a 1,325,000 barrel per day difference between this week's balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, rendering those comparisons completely useless....however, since most everyone treats these weekly EIA reports as gospel, and since these figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably accurate by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

This week's 720,000 barrel per day decrease in our overall crude oil inventories left our oil supplies at 836,622,000 barrels at the end of the week, which was our lowest total oil inventory level since October 26th, 2001, and therefore at a 21 year low...Our oil inventories decreased this week as an average of 445,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while 225,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve. That draw on the SPR was the smallest withdrawal to date from the program outlined under Biden's "Plan to Respond to Putin’s Price Hike at the Pump" (sic), that was intended to supply 1,000,000 barrels of oil per day to commercial interests over a six month period from its inception to the midterm elections next week, in the hope of keeping gasoline and diesel fuel prices from rising until that time, and those withdrawals have been fluctuating in recent weeks because the administration has been attempting to use the Strategic Petroleum Reserve to manipulate prices on a weekly basis; moreover, last week Biden announced a final 15,000,000 barrel release from the Strategic Petroleum Reserve to run thru December, while simultaneously announcing he'd buy crude to replenish the SPR if prices fall to or below the $67-72 a barrel range, effectively putting a floor under oil at that price.....Including the administration's initial 50,000,000 million barrel SPR release earlier this year, their subsequent 30,000,000 barrel release, and other withdrawals from the Strategic Petroleum Reserve under recent release programs, a total of 256,355,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 27 months, and as a result the 399,792,000 barrels of oil that still remain in our Strategic Petroleum Reserve is now the lowest since May 18, 1984, or at a new 38 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs had already drained those supplies considerably over the past dozen years, even before the Biden administration's SPR releases. The total 180,000,000 barrel drawdown of the current release program, now scheduled to run through December, will remove almost a third of what remained in the SPR when the program started, and leave us with what would be less than a 20 day supply of oil at today's consumption rate...

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 6,089,000 barrels per day last week, which was 0.5% more than the 6,061,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be 100,000 barrels per day lower at 11,900,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day lower at 11,500,000 barrels per day, while Alaska’s oil production was 15,000 barrels per day higher at 446,000 barrels per day, but had no impact on the final rounded national total. US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 9.2% below that of our pre-pandemic production peak, but was 22.7% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021...

US oil refineries were operating at 90.6% of their capacity while using those 15,842,000 barrels of crude per day during the week ending October 28th, up from their 88.9% utilization rate during the prior week, and above the historical utilization rate range for the end of October. The 15,842,000 barrels per day of oil that were refined this week were 5.5% more than the 15,023,000 barrels of crude that were being processed daily during week ending October 29th of 2021, but 1.0% less than the 15,998,000 barrels that were being refined during the prepandemic week ending October 25th, 2019, when our refinery utilization was at 87.7%, within the normal range for the end of October...

With the increase in the amount of oil being refined this week, the gasoline output from our refineries was also a bit higher, increasing by 43,000 barrels per day to 9,480,000 barrels per day during the week ending October 28th, after our gasoline output had increased by 58,000 barrels per day during the prior week. This week’s gasoline production was still 6.8% less than the 10,176,000 barrels of gasoline that were being produced daily over the same week of last year, and 6.9% below the gasoline production of 10,184,000 barrels per day during the week ending October 25th, 2019. At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 139,000 barrels per day to 5,117,000 barrels per day, after our distillates output had decreased by 45,000 barrels per day during the prior week. With this week's increase, our distillates output was 5.9% more than the 4,833,000 barrels of distillates that were being produced daily during the week ending October 29th of 2021, and 3.0% more than the 4,970,000 barrels of distillates that were being produced daily during the week ending October 25th 2019... 

Even with the increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 5th time in 6 weeks; and for the 30th time out of the past thirty-nine weeks, decreasing by 1,257,000 barrels to a 95 month low of 207,890,000 barrels during the week ending October 28th, after our gasoline inventories had decreased by 1,478,000 barrels during the prior week. Our gasoline supplies fell again this week even though the amount of gasoline supplied to US users fell by 270,000 barrels per day to 8,660,000 barrels per day, because our imports of gasoline fell by 369,000 barrels per day to a four year low of 286,000 barrels per day, while our exports of gasoline fell by 39,000 barrels per day to 837,000 barrels per day. And after 30 gasoline inventory drawdowns over the past 39 weeks, our gasoline supplies were 3.6% lower than last October 29th's gasoline inventories of 214,258,000 barrels, and about 6% below the five year average of our gasoline supplies for this time of the year…

Meanwhile, with the increase in our distillates production, our supplies of distillate fuels increased for the 15th time in 24 weeks and for the 23rd time in the past year, rising by 427,000 barrels to 106,784,000 barrels during the week ending October 28th, after our distillates supplies had increased by 170,000 barrels during the prior week. Our distillates supplies rose again this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, increased by 379,000 barrels per day to 4,257,000 barrels per day, because our exports of distillates fell by 294,000 barrels per day to 921,000 barrels per day, while our imports of distillates fell by 18,000 barrels per day to 121,000 barrels per day.. But after fifty-one larger inventory withdrawals over the past eighty weeks, our distillate supplies at the end of the week were were 16.0% below the 127,122,000 barrels of distillates that we had in storage on October 29th of 2021, and about 19% below the five year average of distillates inventories for this time of the year...

Meanwhile, despite the increase in our oil exports, our commercial supplies of crude oil in storage fell for the 14th time in 28 weeks and for the 32nd time in the past year, decreasing by 3,115,000 barrels over the week, from 439,945,000 barrels on October 21st to 436,830,000 barrels on October 28th, after our commercial crude supplies had increased by 2,588,000 barrels over the prior week. After this week's decrease, our commercial crude oil inventories slipped to 3% below the most recent five-year average of crude oil supplies for this time of year, but were still about 29% more than the average of our crude oil stocks as of the end of October over the 5 years at the beginning of the past decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels. And even though our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, and then jumped again after February 2021's winter storm Uri froze off US Gulf Coast refining, our commercial crude supplies as of this October 28th were still 0.6% more than the 434,102,000 barrels of oil we had in commercial storage on October 29th of 2021, while 9.8% less than the 484,429,000 barrels of oil that we had in storage on October 30th of 2020, and 0.5% more than the 438,853,000 barrels of oil we had in commercial storage on October 25th of 2019…

Finally, with our inventories of crude oil and our supplies of all products made from oil near multi-year lows over the most recent months, we are also continuing to watch the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR. With the modest 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 2,639,000 barrels this week, from 1,626,530,000 barrels on October 21st to 1,623,891,000 barrels on October 28th, after our total inventories had decreased by 5,070,000 barrels during the prior week. This week's decrease left our total liquids inventories down by 164,542,000 barrels over the first 43 weeks of this year, and at the lowest level since March 25th, 2005, or again at a 17 1/2 year low... 

This Week's Rig Count

The number of drilling rigs running in the US rose for the seventh time in fourteen weeks, and for the 88th time over the past 110 weeks during the week ending during the week ending November 4th, but they're still 2.9% below the prepandemic rig count....Baker Hughes reported that the total count of rotary rigs drilling in the US increased by 2 rigs to 770 rigs this past week, which was also 220 more rigs than the 550 rigs that were in use as of the November 5th report of 2021, but was 1,159 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global market with oil in an attempt to put US shale out of business….

The number of rigs drilling for oil increased by 3 to 613 oil rigs during the past week, after the number of rigs targeting oil had decreased by 2 during the prior week, and there are now 163 more oil rigs active now than were running a year ago, even as they amount to just 38.1% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are still down 10.4% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations was down by one to 155 natural gas rigs, which was still up by 55 natural gas rigs from the 100 natural gas rigs that were drilling during the same week a year ago, even as they were only 9.7% 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: one of those was a directional rig drilling to between 5,000 and 10,000 feet on the big island of Hawaii, while the other was a vertical rig drilling more than 15,000 feet into a formation in Humboldt county Nevada that Baker Hughes doesn't track....While we have seen no details on either of those, in the past we've identified various "miscellaneous" rigs as being exploratory, for carbon dioxide storage, and for utility scale geothermal projects...a year ago, there were were also two such "miscellaneous" rigs running...

The offshore rig count in the Gulf of Mexico was unchanged at 13 rigs this week, with 11 of this week's Gulf rigs drilling for oil in Louisiana's offshore waters, and two rigs drilling for oil offshore from Texas....the Gulf rig count is also unchanged from the 13 Gulf rigs running a year ago, when 12 of rigs were drilling for oil offshore from Louisiana and one was deployed for oil offshore from Texas...but in addition to rigs drilling in the Gulf, we still have an offshore directional rig drilling to between 5,000 and 10,000 feet for natural gas in the Cook Inlet of Alaska, while a year ago, drilling offshore from Alaska had already shut down for the winter...

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

The count of active horizontal drilling rigs was up by 2 to 705 horizontal rigs this week, which was also 213 more rigs than the 492 horizontal rigs that were in use in the US on November 5th of last year, but just 51.3% of the record 1,374 horizontal rigs that were drilling on November 21st of 2014....on the other hand, the directional rig count was unchanged at 43 directional rigs this week, while those were up by 10 from the 33 directional rigs that were operating during the same week a year ago…at the same time, the vertical rig count was also unchanged at 22 vertical rigs this week, which was down by 3 from the 25 vertical rigs that were in use on November 5th 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 November 4th, the second column shows the change in the number of working rigs between last week’s count (October 28th) and this week’s (November 4th) count, the third column shows last week’s October 28th 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 5th of November, 2021...

we'll again start by checking the Rigs by State file at Baker Hughes for changes in Texas, where the count was up by one rig this week; first, there was a rig pulled out of Texas Oil District 7B, which includes at least one county in the far eastern Permian Midland, and there was another rig pulled out of Texas Oil District 7C, which encompasses the southern Permian Midland, while there were two rig added in Texas Oil District 8, which is the core Permian Delaware, thus leaving the Texas Permian rig count unchanged....there was also a rig added in Texas Oil District 9, which is apparently targeting a basin that Baker Hughes doesn't track...the two rigs pulled out of California had similarly been drilling in a basin that Baker Hughes doesn't track...elsewhere, the two rigs added in North Dakota account for the two oil rig increase in the Williston basin, and the rig added in Oklahoma account for the oil rig increase in the Ardmore Woodford, where all 6 rigs are targeting oil...at the same time, the rig pulled out of the Haynesville shale in northwestern Louisiana accounts for the only natural gas rig change this week...

+++++++++++++++++++++++++++++++++++++

Natural gas-linked super PAC drops $1 million backing Republicans - cleveland.com - An opaque political entity has backed Republicans including J.D. Vance for U.S. Senate and a range of state legislative candidates.

Gas group is behind 'Affordable Energy Fund' PAC ads in Ohio - The Empowerment Alliance, a dark-money group aligned with the gas industry, is behind the mysterious Affordable Energy Fund PAC that spent over $1 million dollars on election mailers and digital ads supporting Republican candidates in Ohio over the last two months. The Empowerment Alliance (TEA) took credit for “establishing the Affordable Energy Fund as a political action committee” in a “Year in Review 2021” report. The Energy and Policy Institute obtained a copy of the report, which has not previously been made public, via a public records request filed with the Auglaize County Commissioners, who met in September with TEA’s then-executive director Matthew Hammond. The Affordable Energy Fund PAC (AEF PAC) has paid more than $1 million to the political consulting firm Majority Strategies for direct mail and digital ad campaigns since the start of September, according to Federal Election Commission (FEC) reports the Super PAC filed in October. Hammond joined TEA as its new executive director in January, after previously working as president of the Ohio Oil and Gas Association and a lobbyist for Chesapeake Energy. Hammond also began a new job as an associate vice president at Majority Strategies in January, according to his LinkedIn profile. He left TEA and Majority Strategies sometime in October and now works for the lobbying firm Orion Strategies. “We can run a digital, mail, or door-to-door campaign to any universe of Affordable Energy Voters,” TEA said in a guide on “How to Run on Energy” included in recent installments of its weekly e-newsletter. “Republicans have a once in a generation chance to reshape the electoral landscape,” TEA said in the election guide. “Dissatisfaction with Biden and democrats’ anti-energy energy policies have led to increased prices across the board, which has created a new universe of voters – Affordable Energy Voters.” On October 28, the AEF PAC reported to the FEC that it paid Majority Strategies nearly $225,000 for direct mailers supporting J.D. Vance, the Republican who is running against Democrat Tim Ryan for Ohio’s open seat in the U.S. Senate. The Super PAC previously reported that it paid Majority Strategies approximately $650,000 in September and $150,000 in October for “State IE” [state independent expenditures] digital advertising and direct mail campaigns. A sparse website for the AEF PAC says the Super PAC supports “pro-Ohio energy” candidates. The website links to YouTube videos about gasoline prices and home heating costs supporting Republican state senate candidates in Ohio, including Nathan Manning, Michael Rulli, Kristina Roegner, and Michele Reynolds. The videos supporting Manning and Reynolds appeared inGoogle ads paid for by the Affordable Energy Fund LLC, and the Reynolds video is also featured in a Facebook ad paid for by the AEF PAC.

EOG Resources plans 20-well program in newly accumulated Utica acreage - EOG Resources Inc. is targeting a 20-well program in the Utica in 2023 after establishing a new position in Ohio, accumulating 395,000 net acres and about 135,000 mineral acres in the southern portion of its acreage footprint—all for less than $500 million, the company said as part of its third-quarter earnings release Nov. 3.The product mix averages about 60-70% liquids across the acreage where the company already has completed four wells and operates 18 additional legacy wells across a 140-mile trend.The company “is now operating seven significant resource basins with the addition of the Utica Combo in Ohio,” said Ezra Yacob, chairman and chief executive officer. The multi-basin position provides flexibility “to allocate capital to the highest return projects across a diverse and improving inventory of future well locations,” he said. For fourth-quarter 2022, EOG expects total crude oil equivalent volumes of 900,000-936,700 boe/d with US crude oil and condensate volumes of 460,400-468,400 b/d and 1,360-1,440 MMcfd for US natural gas. Capital expenditure of 1.25-1.45 billion is expected.

Groups: End Ohio’s authority to regulate fracking waste - Mahoning Matters -- More than two dozen citizen, environmental and faith groups want the U.S. Environmental Protection Agency to revoke Ohio’s authority to regulate fracking waste.In a new petition, the groups say the Ohio Department of Natural Resources hasn’t complied with federal Safe Drinking Water Act requirements or its environmental-justice obligations.Billions of gallons of oil and gas waste have been injected into Ohio’s Class II injection wells, including waste from other states.Ankit Jain, associate attorney with the Sierra Club’s Environmental Law Program, says Ohio’s regulatory program doesn’t hold oil and gas companies accountable for violations.“If you compare Ohio, really, across the rest of the country, it’s one of the worst programs,” Jain said. “Their regulation itself, the rules that the operators have to follow, are extremely lax. And then the enforcement for violating the lax rules is almost nonexistent. It’s not just that they could do better — it’s really one of the worst of the worst.”Ohio has more than 220 injection wells. Jain said the brine, which is toxic and radioactive, is spread on roads as a deicer and dust suppressant.ODNR said Ohio “operates an effective regulatory program that meets federal standards and protects public health.”Ashtabula County resident Julie Boetger is a member of the Ohio Brine Task Force and Ashtabula County Water Watch, both among the petitioners. She said tests run by ONDR, as well as independent researchers, have revealed the brine in Ohio exceeds federal and state limits for radioactivity.“This is contaminating our air, our water,” Boetger said. “This is contaminating things that we can’t see. So it’s very important that we pay attention to what’s going on in our own backyard, and what exactly they’re doing with fracking and brine.” The petition notes that injection wells are disproportionately located in low-income communities in Appalachia.Jill Hunkler, director of Ohio Valley Allies, is from Belmont County, one of the most heavily fracked in the state. She said people have voiced their concerns to federal and state officials.“Based on our mutual respect, I believe that we can work together to solve these issues, hopefully immediately,” Hunkler said. “I feel like it’s life or death for us here in Appalachia, Ohio, because we’ve been failed by regulating agencies — and certainly the industry.”

EOG Resources Reports Third Quarter 2022 Results, Announces New Position in Utica Combo ...EOG Resources, Inc. (EOG) today reported third quarter 2022 results. The attached supplemental financial tables and schedules for the reconciliation of non-GAAP measures to GAAP measures and related definitions, along with a related presentation, are also available on EOG's website athttp://investors.eogresources.com/investors. "EOG is now operating seven significant resource basins with the addition of the Utica Combo in Ohio. Our growing multi-basin portfolio of high-return plays positions EOG for long-term sustainable value creation. "Our multi-basin footprint reinforces several competitive advantages. It provides flexibility to allocate capital to the highest return projects across a diverse and improving inventory of future well locations. Operating in multiple basins also fosters innovation through diverse, high-performing teams creating new ideas at the field level that are then shared across our operations. "Strong performance by our operating teams propelled third quarter production volumes and capital expenditures ahead of their targets, despite a challenging operating environment. We remain focused on applying new innovations and efficiencies to mitigate future inflationary cost pressures. We expect our multi-basin footprint, now with the addition of the Utica Combo play, will continue to lower EOG's overall cost of supply.

Pennsylvania Lawmakers Add $30M in Tax Incentives for Natural Gas Use, Offer Carrot for Hydrogen Hub - Lawmakers in Pennsylvania, the second-largest U.S. natural gas-producing state, last week signed a bill increasing tax credits by $30 million for in-state fertilizer and petrochemical manufacturers that use locally-produced natural gas. House Bill 1059, dubbed the Pennsylvania Economic Development for a Growing Economy (PA EDGE), amends the Keystone State’s tax code, boosting the natural gas use tax credits from more than $26.6 million to around $56.6 million. Companies that have invested a minimum of $400 million into an in-state fertilizer, natural gas liquids or petrochemical project could be eligible to receive the credit at a rate of 47 cents/Mcf of purchased dry gas by filing an application to the state’s Department of Revenue by March 1, once the tax credits come into play. Eligible projects also should demonstrate the use of carbon capture, utilization and sequestration (CCUS), or a similar technology, at the facility “to the extent it is cost effective and feasible” at the discretion of the company applying for the credit, according to the legislation. Each fiscal year, up to two eligible companies can each receive up to about $6.6 million in tax credits. The remaining available tax credits would be made available to a company that has made an investment of more than $1 billion in order to construct and operate a qualifying project in the state. Pennsylvania legislators noted the benefits of the bill’s predecessor, the Local Resource Manufacturing Tax Credit (LRMTC), which offered more than $26.6 million to incentivize Pennsylvania companies to use Pennsylvania-sourced dry natural gas in production. According to Pennsylvania Senate Republicans, the LRMTC brought in Houston-based Nacero Inc. to construct a $6 billion manufacturing facility at the site of a former Pennsylvania coal mine to produce gasoline from natural gas and renewable natural gas (RNG), rather than crude oil.

2K gallons of oil spilled in Somerset County, crews to spend weeks cleaning up (WTAJ) — A company in Stoystown announced Monday that they are actively working to clean up heating oil that was spilled into the surrounding environment. On Thursday, Oct. 27, approximately 2,000 gallons of No. 2 heating oil was spilled from one of the buildings at Highland Tank & Manufacturing Company in Quemahoning Township as a result of incorrectly installed piping for the heating system. Within two hours of discovery, remediation resources arrived at the scene to help clean up the oil. The company said it is believed the largest impact of the spill is to the soil on the Highland Tank property. However, an unknown amount of material did migrate through the soil to the Oven Run Creek behind the property. In the weeks to come, the company will continue to utilize contractors in its clean-up and remediation efforts on its property and any other impacted areas. The company also announced it will continue to work closely with federal, state and local agencies through every step of the process. “The goal of all parties is to focus efforts in a manner that will lessen the impact the spill may have on the environment and the surrounding community,” the company wrote in its release.

'All for naught.' Biden orphan well plan faces trouble in Pa. - A plugged orphan well is pictured in western Pennsylvania. Pennsylvania Department of Environmental ProtectionEven as Pennsylvania prepares to tap millions in federal money to plug roughly 300 of the state’s many abandoned oil and gas wells, drillers this year have already tried to walk away from another 354.The abandonments are not a fluke of oil prices or market shifts.From 2017 to 2021, state regulators sent more than 3,000 notices to companies for attempting to abandon oil and gas wells in Pennsylvania without plugging them.This potential new wave of abandoned wells highlights the hydra-like nature of well abandonment in the state, and worries environmentalists about what they might eventually see throughout the Appalachian region. While Congress and the Biden administration committed $4.7 billion last year to clean up abandoned wells across the country, that significant influx of money could fall short in the mountainous region if states don’t stop drillers from walking away when wells reach the end of their lucrative lives (Energywire, Nov. 23, 2021).“The federal money that is coming through the federal bipartisan infrastructure law is a godsend,” said explained David Hess, who worked in leadership at the Pennsylvania Department of Environmental Protection for a decade, including as secretary in 2001 and 2002. “But if we don’t stem this continuing flood of new well abandonment somehow, it’s going to be all for naught.”Appalachia is home to roughly half of the country’s orphans, and a high number of aging wells are located in those states as well, signaling what could be the next chapter of well abandonment.“Wells enter the orphan rolls all the time,” said Adam Peltz, a senior attorney for the Environmental Defense Fund who tracks orphan well issues. Peltz said that the most concrete evidence of the problem is in Pennsylvania, but he remains concerned about it happening in other states in the region.But changing the way states manage oil and gas in Appalachia can be an uphill battle, with many lawmakers loyal to the long-standing industry and deeply opposed to federal intervention in how states manage oil companies.In Pennsylvania, conservative lawmakers from the natural gas-rich western region pushed through a law earlier this year blocking the state bureaucracy for 10 years from increasing bonding on some wells. That bonding is the financial insurance drillers lay down to ensure cleanup doesn’t fall to the taxpayers when companies go bankrupt or refuse to plug wells.Pennsylvania, where there are more than 8,000 known orphans, doesn’t require bonding on wells drilled before 1985, and critics of the new law say it sets bonding requirements that aren’t enough to cover cleanup costs. The administration of Democratic Gov. Tom Wolf — which allowed the new restriction to become law — said that it is looking for other ways to ensure oil companies don’t abandon wells.

Third-Party Issues Seen Challenging EQT Operations Into 2023 - Natural Gas Intelligence - Supply chain issues, midstream constraints and adverse weather combined to curb EQT Corp.’s third quarter natural gas output and are likely to impact the company’s operations through the middle of next year, management said last week. “These third-party constraints, along with water restrictions due to drought conditions in parts of the [Appalachian] basin, negatively impacted our 2022 production by more than 150 Bcfe, or 7% compared with our original volume expectations,” said CEO Toby Rice during a call to discuss the company’s third quarter results. Strong well productivity and work to optimize field operations have helped to “buffer the impact and clawed back” almost 50 Bcfe, he added. But production is likely to come in at the low end of the company’s previous forecast, or roughly 1.925-1.975 Bcfe. The company now expects to turn-in-line 64-79 wells this year, or 30% fewer wells compared to its February guidance. That’s expected to cut the company’s capital expenditures by $25 million at the high end of its previous forecast. Rice said water line problems have been resolved, but added that supply chain issues such as trouble getting equipment will continue “nagging at us.” He added that “we’re doing all we can to build more visibility into our program,” but said the nation’s largest gas producer isn’t likely to be back on track until mid-2023. The company, which operates only in Appalachia, also reported an average realized price for the quarter of $3.41/Mcfe, up from $2.33 during the year-ago period. However, that was partly offset by unfavorable cash-settled derivatives and lower Appalachian prices. EQT reported a wider-than-expected basis differential due to an unplanned outage on the Nexus Gas Transmission System and other midstream constraints in the region. Appalachian stalwarts Range Resources Corp. and Antero Resources Corp. also kicked off this earnings season by reporting midstream issues and inflationary pressures.

Fuel oil companies warn of a long, cold winter -— Local heating fuel companies are warning that it could be a cold winter for more than 1 million Pennsylvanians who depend on them to supply fuel to their homes. Owners of local heating oil companies say the biggest challenge they are facing now is not supply but cost. Their credit limits are not high enough to handle the ups and downs in the oil market, making them unable to store what they need to supply customers. Customers, in turn, can't afford to pay for it. It's not every day that you see competitors working together, but inside the Hazle Township Commons meeting room, the owners of several heating oil companies in Luzerne County and surrounding areas came together as they believe their businesses are in jeopardy. "As all the fuel dealers know that are here today, you know, the price has such swings in a day. Prices can change 30, 35, 40 cents a gallon when we're buying it, and we're having a lot of problems, not only getting the product but when it comes to paying for it," said Bill Gallagher of Hazleton Standard Fuel. "We can't afford to buy what they can't afford to pay for. That's what's happening every day right now. This isn't what if. It's now. And if it goes up another buck or two, freeze everything; everything stops. Nobody could afford to buy another gallon of diesel fuel," said Steve Passio of Button Oil and Propane. "It bothers us to know that there's a storm coming where we're going to be out, that we're going to be literally sitting with our trucks idle, waiting to collect money to be able to collect that money to then go push it back to the suppliers to be able to go get it. What if it's cold?"

The diesel market is in a perfect storm as prices surge, supply dwindles ahead of winter - A perfect storm is taking place in the diesel market, with dwindling diesel reserves, a drought on the Mississippi River pushing more product to rail and truck, and a possible rail strike leading to a surge in prices that is expected to continue.Diesel prices have increased by 33% for November deliveries."The national average price for diesel today is $5.30 per gallon and is expected to go up 15 to 20 cents in the next few weeks," said Andy Lipow, president of Lipow Oil Associates, LLC.Reserves for diesel this time of year have not been this low since 1951, with the greatest shortfall in the Northeast region including New York and New England. "This is not only constricting the ability of farmers to export the soybeans and grain they grow but also to receive the fuel and fertilizer they need to operate," said Mike Steenhoek executive director of the Soy Transportation Coalition of the low water conditions that have turned the Mississippi River from a multi-lane interstate to a two-lane highway."Now adding insult to injury is the increased uncertainty that railroads will be able to provide an effective lifeline during this critical time. It's a vivid reminder that it is not enough to produce a crop or have demand for that crop. Having a reliable supply chain that connects supply with demand is also essential for farmers to be successful," Steenhoek said.Two rail unions recently voted down a labor deal needed to avert a national strike in the coming months. Diesel inventories in the New York/New England markets are facing an acute crisis, down over 50% since last year and at the lowest level since 1990, according to Lipow.Lipow said East Coast refineries are making as much diesel as they can and dependent on tankers and barges for supply, any weather delay causes a terminal to run out of product..According to the EIA, East Coast refineries operated at 100% capacity in June and July. "Last week, they operated at 102% of capacity," Lipow said. "No more supply is forthcoming from the four East Coast refineries." Diesel fuel and heating oil are the problem children of the petroleum complex, says Again Capital's KilduffNew England's diesel supply issues were made worse when a Canadian refinery in Newfoundland shut down in 2020 as the pandemic impacted on demand.The Midwest is also seeing supply constraints, pushing up costs for farmers."In visiting with a number of farmers, the consensus, of course, is that diesel costs are one more incursion into profitability," Steenhoek said. "As far as getting supplies, it looks like those areas most dependent upon the river are experiencing the biggest challenge. A couple of farmers told me diesel supply via their local vendor is day to day." In order for the Northeast to receive more diesel, the fuel needs to be imported from another country or a tanker from the Gulf Coast, but that is not allowed because of the Jones Act, also known as the Merchant Marine Act of 1920, which prohibits a foreign vessel from transporting all goods between two U.S. ports. "The Jones Act requires all cargo transported between U.S. ports be carried on ships that are U.S. flagged and built, and mostly owned and crewed by Americans,"

The U.S. Diesel Shortage Is Worsening - Multi-year low inventories and constraints in supply are exacerbating a diesel shortage in the United States, especially on the East Coast.Diesel demand continues to be strong after recovering faster from the pandemic slump than other fuels such as gasoline, refiners say.But several factors have combined this year to deplete U.S. distillate inventories, which include diesel and heating oil. And ahead of the winter, the distillate fuel crunch is worsening. U.S. refining capacity is now lower than it was before Covid, as operable refinery capacity shrank in 2021 for a second consecutive year to stand at 17.9 million barrels per calendar day as of January 1, 2022, according to EIA estimates. U.S. refiners permanently shut down some refinery capacity at the start of the pandemic when fuel demand plunged, while others closed facilities to convert them into biofuel refineries. Some refineries were under maintenance this autumn, reducing the availability of products. In addition, the U.S. banned imports of all Russian energy products after the Russian invasion of Ukraine and hasn’t imported any petroleum products from Russia since AprilLower refinery capacity in the U.S. since the pandemic, seasonal maintenance at refineries globally, and a major strike in France have all combined in recent weeks to create a shortage of middle distillates, not only in the United States, but also worldwide. The world is also scrambling for diesel supply also in view of the looming EU embargo on Russian fuel imports by sea, expected to kick in in early February.A diesel shortage and high diesel prices don’t bode well for the global economy, which is slowing down and could tip into recession at some point next year. Distillate fuels are used in transportation, agriculture, manufacturing, and heatingIn the U.S., distillate fuel inventories are about 20% below the five-year average for this time of year, according to the EIA’s latest weekly inventory report. The U.S. has just 25 days of diesel supply in reserve, with some regional markets very tight.According to CNBC, U.S. diesel reserves at the end of October have never been so low since 1951, with the Northeast most exposed to low levels of diesel stocks.Not that refiners aren’t trying—refinery utilization on the East Coast was at 102.5% in the week to October 21, per EIA data.Yet, distillate inventories are much lower than normal, and diesel and heating oil prices remain high and stoke inflation as they make consumer goods and heating bills more expensive.Households in the Northeast who rely on heating oil for space heating will see 27% higher bills this winter compared to last winter, the EIA said in its Winter Fuels Outlook in October.“Our forecast for heating oil margins this winter reflects price pressures that have currently been affecting the U.S. distillate market, including low inventories, low imports, and limited refining capacity,” the EIA said.For diesel, one fuel supplier has already issued an alert for the East Coast.“East Coast fuel markets are facing diesel supply constraints due to market economics and tight inventories,” Mansfield said last week.“Because conditions are rapidly devolving and market economics are changing significantly each day, Mansfield is moving to Alert Level 4 to address market volatility. Mansfield is also moving the Southeast to Code Red, requesting 72 hour notice for deliveries when possible to ensure fuel and freight can be secured at economical levels,” the supplier said.The Biden Administration hasn’t ruled out the idea of limiting U.S. fuel exports in order to restore inventories and lower prices. Refiners are opposed to that idea,saying that “Banning or limiting the export of refined products would likely decrease inventory levels, reduce domestic refining capacity, put upward pressure on consumer fuel prices, and alienate U.S. allies during a time of war.”Tom Kloza, Global Head of Energy Analysis at OPIS, told USA Today last week, “Between now and the end of November, if we don’t build inventories, the wolf will be at the door.”“And it will look like a big ugly wolf if it’s a cold winter.”

Eversource CEO Warns of Winter Natural Gas Shortage in New England – Eversource CEO Joe Nolan wrote a letter to President Joe Biden last week warning of the possibility of power outages this winter if steps aren't taken to expand the country's natural gas supply. In his letter, dated Oct. 27, Nolan said New England might not have enough natural gas to meet the region's electricity supply if this winter is colder than anticipated. "ISO-New England, the region’s electricity grid operator, and the Federal Energy Regulatory Commission have acknowledged for many months that New England will not have sufficient natural gas to meet power supply needs for the region in the event of a severe cold spell this winter," he said. "This represents a serious public health and safety threat." Nolan spoke to NBC10 Boston about his concerns Monday. "I am worried about a peak day, when we hit a polar vortex," he said. "I do not want be in a situation that they were in Texas or they were in California." Those states have had rolling blackouts in recent years due to insufficient energy. "Consumers in New England are already experiencing skyrocketing electricity and gas costs given supply constraints and global price pressures following the Russian invasion of Ukraine," Nolan added. "As the governors of the New England states mentioned in their letter to the Administration on July 27, New England’s energy situation will have significant implications for customers of all types." He urged Biden to use the federal government's emergency powers to take steps to ensure that adequate fuel resources will be available in the event of a colder than expected New England winter.

Equitrans call for legislation to finish Mountain Valley pipeline - Equitrans Midstream Corp. cited “the continued hostility of the Fourth Circuit Court panel” in calling for expeditious passage of federal energy infrastructure reform legislation that “specifically requires the completion of” its 2-bcfd Mountain Valley (MVP) natural gas pipeline project. The US Fourth Circuit Court of Appeals heard oral arguments Oct. 25, 2022, relating to Section 401 water quality certification in West Virginia.The company said that it remains engaged in the federal permitting process but that a combination of the court’s perceived hostility and uncertainty regarding the timelines on which other permitting is proceeding were threatening its ability to meet Mountain Valley’s targeted second-half 2023 in-service date and $6.6-billion total cost. MVP received its Section 401 stream-crossing permit from West Virginia in January 2022, but the permitting has faced nearly continuous legal challenges since.“There continues to be significant, bipartisan support for federal energy infrastructure permitting reform legislation,” Equitrans chief executive officer Thomas Karam said in a release. “However ... the same panel of judges in the US Fourth Circuit Court of Appeals has again been assigned and appears hostile in a (Mountain Valley) permitting case," Karam said. The Fourth Circuit has already vacated multiple project permits.Equitrans has an approximate 48.1% ownership interest in Mountain Valley and will operate the pipeline. Its partners in MVP LLC are NextEra Energy Inc., Consolidated Edison Inc., AltaGas Ltd., and RGC Resources Inc.Equitrans also said the Mountain Valley JV continues to evaluate its 300-MMcfd MVP Southgate project, including engaging in discussions with anchor shipper Dominion Energy North Carolina regarding likely changes to the project design, scope, and timing. MVP LLC last month filed a voluntary dismissal of eminent domain proceedings regarding the 73-mile pipeline (OGJ Online, Oct. 24, 2022).On Sept. 30, 2022, the US Federal Energy Regulatory Commission issued a draft environmental impact statement for Equitrans’s 350-MMcfd Ohio Valley Connector Expansion Project (OVCX). OVCX is designed to meet growing gas demand through existing interconnects in Clarington, Ohio, with long-haul pipelines. Equitrans is targeting first-half 2024 in-service.

US NatGas Spikes As Temperatures Are About To Dive Nationwide - US natural gas prices catapulted into the stratosphere Monday morning after new two-week weather forecasts showed average temperatures across the country would begin to dive next week, driving up heating demand. NatGas for December delivery soared as much as 13% to $6.40 per million British thermal units in New York. Prices have come off the highs at the start of the US cash session, still up 10%, around $6.27. Bloomberg cited data from private forecaster Maxar Technologies that shows cold weather in the West will traverse the country into the Midwest next week. The two-week outlook for the US Lower 48 shows average temperatures will begin to sink Sunday and fall well below a 30-year mean through the second half of the month. By Nov. 15, average temperatures across the US could average in the mid-30s US Lower 48 heating degree days will rise well above a 30-year trend line, indicating heating demand via households and businesses will soar as colder temps swoop across the nation. "The gas rally underscores how sensitive traders are to potential cold blasts as below-normal stockpiles and booming exports stoke concern about whether supplies will be enough to meet demand in a deep freeze," Bloomberg said. Eli Rubin, an analyst at EBW AnalyticsGroup, said the prospect of colder weather means traders are buying back into NatGas markets. Prices have slumped by more than 35% since August, with hedge funds trimming bullish bets to the lowest in two years -- all because of warmer weather. NatGas appears to have found a near-term bottom as 'Old Man Winter' is set to make an entrance. As a reminder, soaring energy prices mean US households are about to pay 47% more for electricity than a year ago -- making it very costly to heat homes.

December Natural Gas Futures Above $6 Handle as Heating Demand Looms - Colder shifts in weather forecasts for mid-November outweighed the potential for increased storage injections, propelling natural gas futures on Monday. After losing ground to close out last week, the December Nymex gas futures contract climbed 67.1 cents day/day and settled at $6.355/MMBtu. January gained 65.4 cents to $6.607.NGI’s Spot Gas National Avg. rose 4.0 cents to $4.385.The latest forecast from Maxar’s Weather Desk Monday showed colder trends day/day for the eastern half of the Lower 48 in the 11- to 15-day period (Nov. 10-14). Both the American and European modeling added several heating degree days to their respective projections, Maxar said.The forecaster said a pattern shift during the 11- to 15-day period would “allow for a colder air flow from the Northwest to the North-Central, while keeping the Southeast on the warmer side.”An outlook for more heating demand toward mid-November was the key catalyst driving Monday’s price spikes, though not the only one, according to EBW Analytics Group senior analyst Eli Rubin. “Speculator net short positioning is likely forcing some traders to buy back positions…amplifying the move higher,” Rubin said. “It would not be surprising to see the Nymex front month extend higher to test the 20-day moving average at $6.47.”It would likely require another “significantly colder weather shift and the timely return of Freeport LNG” to “sustain higher valuations for Nymex gas,” the analyst added. “Still, a continued near-term turn colder could lead to further gains first.”The Freeport liquefied natural gas operation in Texas was forced offline in June after a fire. It is slated to ramp back up in November, helping U.S. exporters meet robust European and Asian LNG demand and providing a bullish undercurrent for Nymex prices.LNG demand in October reached a four-month high at 12.5 Bcf/d, Rubin noted. Freeport’s return could pull up to 2.0 Bcf/d of natural gas from domestic circulation to meet export demand.

Natural Gas Futures Pull Back Despite Production Drop; Cash Prices Fall as Demand Fades - Natural gas futures failed to sustain momentum Tuesday as fresh signs of benign weather and weak demand overshadowed a drop in production. Following a 67.1-cent gain to start the week, the December Nymex gas futures contract on Tuesday settled at $5.714/MMBtu, down 64.1 cents day/day. January fell 52.7 cents to $6.080.NGI’s Spot Gas National Avg. dropped 41.5 cents to $3.970 as forecasts pointed to warm weather delaying the heating season.As trading got underway Tuesday, both the American and European weather models dropped forecast demand over the prior 12-24 hours, according to NatGasWeather.The outlooks signaled warmer trends next Monday through Nov. 11, with the data “showing cold air over Canada failing to advance as aggressively into the Midwest” as earlier forecasts had hinted, the firm said. “There will be frosty air over Canada Nov. 8-15, but the weather data is struggling to determine just how much of it will arrive into the northern U.S.”This has contributed to uncertainty in the modeling, NatGasWeather said. “It just happened to be colder trends Sunday into Monday before reversing back strongly warmer over the past 12-24 hours,” the firm added.Overall, the updated pattern was “solidly bearish” through the first 11 days of the month, before shifting toward “closer to seasonal” conditions Nov. 12-15, according to NatGasWeather. “Very light demand will continue the next 10 days as warmer-than-normal temperatures rule most of the southern and eastern halves of the U.S.,” the firm said. “There will be chilly weather systems over the Northwest and into the Plains, but not enough to counter comfortable conditions elsewhere.”The latest forecasts outshined a substantial, albeit likely temporary, drop in production.Wood Mackenzie analyst Laura Munder said estimates showed output down 4.4 Bcf/d at 95.9 Bcf/d. “The declines are largely due to the first of the month scheduling and with significant revisions expected,” she said. “However, there is maintenance…impacting the production estimate.”Repair work in Texas and the Rocky Mountains could impact flows this week and curb output modestly, Munder said.That noted, production reached a record level in early October above 101 Bcf/d and has held near that mark since, with the exception of short-term maintenance interruptions. This, in combination with mild autumn weather over the past several weeks, cleared a path for plump storage injections, and analysts anticipate another with this week’s government inventory report.

U.S. natgas falls 5% on big storage build, lower demand forecast (Reuters) - U.S. natural gas futures fell about 5% on Thursday on a bigger-than-expected storage build and forecasts for lower demand over the next two weeks than previously expected. Those lower demand forecasts should allow utilities to keep adding gas into storage for a few weeks beyond the usual Oct. 31 end of the injection season. The U.S. Energy Information Administration (EIA) said utilities added 107 billion cubic feet (bcf) of gas to storage during the week ended Oct. 28. Analysts said the build was bigger-than-normal primarily because the weather last week was mild, keeping heating demand low. That was higher than the 97-bcf build analysts forecast in a Reuters poll and compares with an increase of 66 bcf in the same week last year and a five-year (2017-2021) average increase of 45 bcf. Gas futures declined despite forecasts for colder weather that should boost heating demand in mid- to late November, a drop in output so far this month and expectations gas demand will rise once the Freeport liquefied natural gas (LNG) export plant in Texas exits an outage. In what has been an extremely volatile week, front-month gas futures fell 29.3 cents, or 4.7%, to settle at $5.975 per million British thermal units (mmBtu). That follows a rise of 12% on Monday, a drop of 10% on Tuesday and a rise of 10% on Wednesday. Overall, U.S. gas futures are still up about 60% so far this year as much higher global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading at $36 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $28 at the Japan Korea Marker (JKM) in Asia. Data provider Refinitiv said that average gas output in the U.S. Lower 48 states fell to 97.8 bcfd so far in November, down from a record 99.4 bcfd in October. Traders, however, noted that early-month output figures were usually revised higher later in the month. With the coming of seasonally cooler weather, Refinitiv projected that average U.S. gas demand, including exports, would rise from 97.6 bcfd this week to 99.5 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Wednesday. The average amount of gas flowing to U.S. LNG export plants rose to 11.5 bcfd so far in November with the return of Berkshire Hathaway Energy's Cove Point export plant in Maryland from a maintenance outage, from 11.3 bcfd in October. That is still well below the monthly record of 12.9 bcfd in March due mostly to the ongoing outage at Freeport. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG. During the first 10 months of 2022, roughly 66%, or 7.0 bcfd, of U.S. LNG exports went to Europe, as shippers diverted cargoes from Asia to get higher prices. Last year, just 29%, or about 2.8 bcfd, of U.S. LNG exports went to Europe.

U.S. natgas futures jump 7% in volatile week on cold forecasts (Reuters) - U.S. natural gas futures jumped about 7% to a three-week high on Friday at the end of an extremely volatile week of trade on forecasts for much colder weather and higher heating demand in mid-November than previously expected. The market was focused "on the potential arrival of widespread below-average temperatures across the U.S. around mid-November that will increase demand for gas as heating fuel," analysts at energy consulting firm Gelber & Associates said in a note. Futures also gained support from a drop in output so far this month and expectations the Freeport liquefied natural gas (LNG) export plant in Texas would return to service soon, according to traders. Freeport LNG submitted a draft Root Cause Failure Analysis to the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) on Nov. 1, according to sources familiar with the filing. Freeport LNG, however, has not yet submitted a request to resume service. Freeport LNG said it still expects the 2.1-billion-cubic-feet-per-day (bcfd) export plant to return to at least partial service in early to mid-November following an unexpected shutdown on June 8 caused by a pipeline explosion. At least four vessels were lined up to pick up LNG at Freeport, according to Refinitiv data. Prism Brilliance, Prism Diversity and Prism Courage were waiting off the coast from the plant, and Prism Agility was expected to arrive around Nov. 29. In what has already been an extremely volatile week, front-month gas futures rose 42.5 cents, or 7.1%, to settle at $6.400 per million British thermal units (mmBtu), the highest close since Oct. 14. That follows a rise of 12% on Monday, a drop of 10% on Tuesday, a rise of 10% on Wednesday, and a drop of 5% on Thursday. For the week, the contract was up 13% after gaining 15% last week. In the spot market, mild weather and low heating demand pressured gas prices for Friday in the U.S. Northeast, with the Eastern Gas South hub in Pennsylvania at its lowest since November 2020, New York City at its lowest since April 2021, and the Algonquin hub in New England at its lowest since June 2021. Overall, gas futures were up about 72% so far this year as much higher global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's invasion of Ukraine. Gas was trading at $35 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $29 at the Japan Korea Marker (JKM) in Asia.

Chesapeake Aiming to Be Major Natural Gas Supplier in U.S. LNG Capacity Expansion - A revamped Chesapeake Energy Corp. continues streamlining its strategy around supplying natural gas to the Gulf Coast LNG corridor, executives said in an earnings call on Wednesday. The company sees a somewhat softer natural gas market in 2023, with no real structural demand growth until new export capacity comes online starting in 2024. “As export capacity doesn’t begin to increase until at least 2024, we’re setting up our near-term volumes to be relatively flat and begin to ramp slowly as we approach 2024,” CEO Domenic J. Dell’Osso said. Management said the company remained bullish on its Haynesville and Marcellus shale assets. The company would only pull back on its production plans if prices fell to the mid-to-low $3.00/MMBtu range. As part of its liquefied natural gas plan, Chesapeake entered into an agreement with Momentum Midstream LLC to deliver 700 MMcf/d to Gulf Coast liquefied natural gas markets in 2024. Momentum is developing the 1.7 Bcf/d New Generation Gas Gathering system. Along with a supply agreement with Golden Pass LNG Terminal LLC, the company has 1 Bcf/d of capacity to deliver certified gas from the Haynesville to the LNG corridor starting in two years. The company sees already under-construction liquefaction capacity pulling an additional 5.7 Bcf/d of U.S. natural gas by 2025. Chesapeake, once the nation’s largest natural gas producer, emerged from bankruptcy last year when Dell’Osso was tapped to lead the company. The focus has since returned to natural gas production over oil.

New Fortress LNG plant review resumes, start-up slips to 2023 (Reuters) - U.S. firm New Fortress Energy Inc's proposed Louisiana offshore LNG facility likely will not begin operation until the second half of 2023, people familiar with the matter said on Monday. The 2.8 MMtpy export project initially was proposed to start next March but has faced delays during its permit review. U.S. regulators on Friday lifted a stop-clock order. The soonest the facility could begin producing LNG, assuming no further delays, is the second half of next year, one of the people said. The U.S. Department of Transportation's Maritime Administration (MARAD) in August had stopped the clock on a 356 day review process, citing information gaps in the application. "They were not going to make the first half of 2023 deadline as soon as they got the stop-clock letter," Christine Tezak, managing director at energy consulting firm ClearView Energy Partners LLC, told Reuters on Monday. "If New Fortress gets its resume-clock letter today, the earliest they would have approval is early June...so long as the clock is not stopped again and they get all their other approvals," Tezak said. It would take a further two months after approval is received to begin commercial processing. The company has said it will take about 14 to 16 months to fabricate each Fast LNG unit and another 4 to 6 months to install, hook up and commission the units at their offshore sites. Last week, NFE said it finalized a deal with Mexico state power and gas utility Comision Federal de Electricidad (CFE) to deploy multiple offshore LNG units.

'Hubris': LNG plant officials saw trouble days before blast - For at least two days before a pipe exploded at its Texas gas export terminal, Freeport LNG had been trying to figure out what was wrong, records show. The June 8 blast forced the plant to close and took almost a fifth of U.S. liquefied natural gas exports offline. But there is no indication in an investigatory report obtained by E&E Newsthat the company stopped operating to fix the problem before the explosion. An industrial safety expert called that an expensive mistake. “Why wouldn’t they have taken a shutdown action?” said Faisal Khan, director of the process safety center at Texas A&M University. The managers didn’t halt operations because they didn’t want to acknowledge there was a problem in the plant, according to a consultant hired by the company to do an in-house investigation. “It was hubris,” the consultant said in a recorded conversation with investigators from the fire marshal’s office in Brazoria County, where the plant is located. E&E News obtained the recordings and the report under the Texas Public Information Act. The plant’s managers seemed to assume “‘I know everything, and I couldn’t possibly be running a facility that had a line blocked in,’” the consultant added. The managers brought in an outside engineer to troubleshoot the problem with the pipe the day before the explosion. But the fire marshal’s report says that “someone did not listen to him and react to the pipe moving.” The pipe was filled with liquefied natural gas and was likely blocked for four days by an improperly closed relief valve, causing pipes to move on their support structure as pressure built up, according to the investigator’s report. The explosion caused the price of natural gas in the United States to fall, and it cut off about 17 percent of domestic gas exports at a time when Russia’s war in Ukraine has made American energy a crucial worldwide commodity. The plant is on the tiny barrier island of Quintana near the town of Freeport, about 70 miles southwest of Houston. It has equipment that can process up to 2.1 billion cubic feet of gas a day, refrigerating it to negative 260 degree Fahrenheit, which turns the gas into a liquid that can be easily exported on ships. No one was killed or injured in the explosion. Freeport LNG officials declined to comment for this story, and the county investigators didn’t return phone calls seeking comment.

Fire reported at Valero East Plant on Corpus Christi's Refinery Row -- A fire reported at one of Valero's Corpus Christi facilities Thursday morning has been contained and did not result in any injuries, according to an afternoon update from a company spokesperson. Questions regarding the possible cause of the fire and the subsequent damage to the Valero East Plant, 1710 Cantwell Lane, were not immediately answered. Air monitoring conducted in response to the fire has found "no issues of concern," said Darcy Schroeder, a Valero spokesperson, in a written statement. "The safety of our workers and community is our priority," Schroeder said in the noon statement to the Caller-Times. "(W)e appreciate the coordination of efforts with local partners and agencies including the (Refinery Terminal Fire Company), Port of Corpus Christi, City of Corpus Christi, (Texas Commission on Environmental Quality) and the U.S. Coast Guard." TCEQ was notified of the fire at 6:29 a.m. and deployed personnel to the facility to provide assistance and oversight. They are conducting air monitoring in the area, TCEQ spokesperson Gary Rasp said in a written statement. "Valero personnel and their contractors are also conducting air monitoring and have reported no detections of concern at this time. In addition, there were no elevated readings at continuous ambient air monitoring stations in the area," Rasp said. Questions about whether and to what degree operations at the facility could be impacted were not immediately answered. A Reverse Alert issued just before 7:30 a.m. described a fire on Refinery Row that was being contained at a plant. "Response units are currently responding to a localized fire at the Valero East Plant. At this time, there are no off-site impacts and no community action is necessary. More information will be released as available," the alert stated.

Feds: Let Enbridge skip certain Line 5 inspections for 15 years — Detroit News - The U.S. Department of Justice has proposed allowing Enbridge Energy not to perform some in-line inspections on Line 5 for at least 15 years, stating pressure tests conducted in 2017 are sufficient to show the twin pipelines under the Straits of Mackinac are not in danger of rupturing on their own before then.

The nonprofits cleaning up the oil and gas industry’s ‘dirty little secret’ — Curtis Shuck stumbled upon what he calls one of the oil and gas industry’s “dirty little secrets” while visiting Montana for a work-related trip in 2019. It was a rusted, uncapped oil well in the middle of a wheat field — literally a hole in the ground. And there wasn’t just one; there were several. “These were images that I could not get out of my mind that day,” Shuck said. At the time, he had worked for 30 years in the oil and gas industry. “I was alarmed, disappointed, embarrassed and shocked that the industry would leave something like this behind without at least cleaning up after itself. I could not ‘unsee’ this stuff.”The wells aren’t just eyesores. They can leak hydrogen sulfide, benzene and arsenic into the groundwater and are a significant source of methane — a highly flammable, powerful gas that traps heat in the Earth’s atmosphere.Shuck’s discovery in Montana led him to establish the Well Done Foundation, a nonprofit organization that in the past year has plugged more than 22 orphaned and abandoned oil wells in nine states.But there are at least one million more abandoned wells to plug. President Joe Biden’s Bipartisan Infrastructure Package provides up to $4.7 billion to plug some of them, including $560 million awarded this year to 24 states to address some of the worst polluting wells. Some estimates saythe cost to close all of the abandoned wells could be several times more than the amount provided in the infrastructure law.The wells, in backyards, fields and even community parks, were abandoned by oil and gas companies that went bankrupt over the decades. Regulations requiring the wells to be closed, or plugged, didn’t even exist till the middle of the 20th century. But the problem isn’t just historical. One investigation showed the number of such wells has increased 12% since 2008, as companies that were active in the hydraulic fracturing boom defaulted. “Bankruptcy is the business plan for many oil companies,” said Scott Eustis, community science director for the Louisiana-based environmental advocacy group Healthy Gulf.“If the USA wants to tackle the methane issue, we need a larger policy shift, a just transition, because we are likely to see many more wells abandoned at a faster rate in the near future,” he said. “I think we must focus on hiring more workers and getting more of them plugged, in whatever form that takes.” Companies that drill on federal land are required to provide a bond to plug wells when they are done with them, but a 2019 Government Accountability Office report found that in more than 80% of cases, the bonds didn’t provide nearly enough money to properly close the wells. According to the report, the average bond was $2,122 per well. The cost to cap wells starts at about $65,000, said Adam Peltz, a senior attorney at the Environmental Defense Fund who studies the abandoned and orphaned well problem.He points out, however, that federal wells represent just 10% of the onshore wells in the country — the majority are on state land, where oil and gas producers are often allowed to post a single bond for all of their wells in an area or a state. That amount is generally enough to close and cap just a fraction of the wells. “It’s woefully underfunded,” he said.

Drillers ask U.S. to exempt smallest wells from looming methane rule (Reuters) - Oil and gas companies have asked the Biden administration to exempt hundreds of thousands of the nation's smallest wells from upcoming rules requiring drillers to find and plug leaks of methane, according to industry groups, despite studies showing they emit huge amounts of the powerful greenhouse gas. The Independent Petroleum Association of America and a coalition of some 20 state drillers' associations have asked the Environmental Protection Agency (EPA) to exclude wells producing less than 6 barrels per day from the rule, arguing that including them would be costly and inefficient, according to the IPAA and the Kansas Independent Oil & Gas Association. An EPA official declined to confirm the request or discuss details of the upcoming proposal. Oil and gas production is the source of around a third of the nation's methane emissions and is a key target for the Biden administration as it seeks to combat climate change. The United States is among over 100 countries that have pledged to cut their methane emissions 30% by 2030 from 2020 levels. Biden's EPA last year unveiled a proposal that would require oil and gas companies to monitor 300,000 of their biggest well sites every three months to find and fix leaks, ban the venting of methane produced as a byproduct of crude oil into the atmosphere, and require upgrades to equipment such as storage tanks, compressors, and pneumatic pumps. Those rules will most likely take effect in 2023 and are aimed at slashing methane from oil and gas operations by 74% from 2005 levels by 2035, an amount equivalent to the emissions created by all U.S. passenger cars and planes in 2019, according to an EPA summary. But the rules left aside how the industry should manage methane emissions from its smaller "marginal" wells - those producing less than 15 barrels per day - an issue that will be dealt with in the EPA's supplemental ruling expected in the coming weeks. A source familiar with the administration's plans said the supplemental proposal could be announced at the United Nations climate conference in Egypt in November. Groups representing the owners of low producing wells have told EPA officials they lack the resources to monitor all their sites with the latest technology. They also say smaller wells often produce only insignificant methane emissions that don't warrant the cost and effort of a monitoring program. The problem, environmentalists say, is that collectively, the smaller wells produce a massive amount of climate-damaging methane.

Will Colorado's strict oil and gas rules spread to other states? - — Bill Coffee’s neighbors in this outer suburb of Denver figured they were doomed to lose their fight against the oil company’s plan to drill 26 wells next to their subdivision. But Coffee grew cautiously optimistic as he learned about a 2019 state law that prioritized health, safety and the environment ahead of oil and gas production. “That leveled the playing field, so to say,” Coffee said. It leveled it enough that they won their fight against Occidental Petroleum Corp. Thanks to the law and the concerted efforts of Coffee, his neighbors and activists, state regulators blocked the company’s plan to drill. Colorado’s law and the slew of regulations it engendered were one of the biggest regulatory responses to the fracking-powered drilling resurgence that revived the country’s withered oil industry more than a decade ago. The package, commonly referred to by its legislative moniker, SB-181, led to numerous limits on the oil and gas industry, such as banning routine flaring of gas and requiring wells to be 2,000 feet from homes. The industry warned that the new restrictions would “shut down” Colorado’s energy production. But today, rigs and other heavy drilling equipment are a common sight along the highways north of Denver. Well pads are part of the suburban landscape, along with fast-food joints and stately new signs at subdivision entrances. And Colorado was still the fifth-largest crude oil producer in the country last year. Oil production in Colorado is not back to where it was when the law passed or before the pandemic. There aren’t as many oil and gas jobs, either. But production is down in many states as oil companies cut costs, and oil field employment is down across the board. Some industry executives have now come to accept the rules, even embrace them. There’s a sense that Colorado’s approach is where the industry is headed nationally. That acceptance is part of the reason the industry also fears Colorado’s restrictions might spread to other states. “We certainly worry about things like that making their way outside of Colorado,” said Lynn Granger, executive director of the American Petroleum Institute Colorado. Particularly vexed by the 2,000-foot buffer zone, she worries about opponents arguing that “they’re doing it there, and they were able to make it work.” Granger calls Colorado’s rules “the strictest in the world.” But the new law doesn’t do enough for many environmentalists and local activists. People are still harmed by oil and gas operations, they say, and attempts to help them often come up short.

California's Natural-Gas Bans Push Utility to Find a New Strategy - Southern California Gas will need to spend billions to repurpose its system for a future with fewer gas customers. As California expands its efforts to phase out natural-gas use in homes, the nation’s largest gas utility is trying to reinvent itself for a future in which far fewer customers use its core service. Southern California Gas Co., a unit of Sempra, is studying how to repurpose its system—and handle the costs of doing so—as the state works to ban the sale of gas furnaces and water heatersstarting in 2030. The state’s initiatives are the latest in a series of measures aimed at reducing future gas use to address climate-change concerns. Already, about 50 California cities and towns have regulations in place to ban or limit gas hookups in new buildings.

U.S. oil production nears 12 mln barrels/day, at pre-pandemic high |- U.S. oil output climbed to nearly 12 million barrels per day (bpd) in August, the highest since the onset of the COVID-19 pandemic, even as shale companies have said they do not see production accelerating in coming months.Overall U.S. output peaked at 13 million bpd in late 2019, and has not returned to that level since the pandemic started as rigs have been shut in and as costs for equipment and labor increased rapidly. Several U.S. shale producers recently said well results are disappointing, and production is falling short of forecasts. A little over two years after the pandemic wrecked havoc on demand and slashed profits, four of the five largest global oil companies brought in roughly $50 billion in net income in the most recent quarter. U.S. upstream oil companies are expected to bank a 68% increase in free cash flow per barrel in 2022, while output growth lingers at 4.5% year to date, Deloitte said last week. Crude production rose 0.9% to 11.98 million bpd in August, the highest since March 2020, the U.S. Energy Information Administration (EIA) said in its monthly 914 production report. In top oil producing states, monthly output rose 1.6% to 5.10 million bpd in Texas and 0.6% to a record 1.58 million bpd in New Mexico, but fell 0.5% to 1.06 million bpd in North Dakota.

Here's how fracking and renewables are changing US energy production - Using annual report info from the Energy Information Administration, OhmConnect looked into how the U.S. generates its power, and how the rise of renewable energy fits into the future landscape. (detailed report w/ graphics) The use of renewable energy sources is on the rise in the U.S., which may be a welcome relief to both Earth and its inhabitants. Sourcing energy from renewables such as solar power, hydropower, and wind offers a plethora of health and sustainability benefits, especially compared to energy sources that release greenhouse gases into the atmosphere. Considering the volume of U.S. energy use, national over-reliance on GHG-emitting energy sources has been a cause for concern in most scientific circles for decades. Currently, the residential and commercial sectors of the U.S. each consume between 4-7 quadrillion Btu, or British thermal units, of energy annually, while the industrial and transportation sectors use between 22-27 quadrillion Btu. By far the largest energy consumer in the U.S. is the electric power sector, which gobbled up more than 36 quadrillion Btu in 2021.Unfortunately, renewable energy source use pales against sources like natural gas. The Energy Information Administration found that since 2000, natural gas use in the residential sector alone has been more than three times that of renewables, despite an uptick in renewable sourcing since 2010. In the commercial sector, the difference is even more extreme, at nearly four times that of renewables. So, it is of little surprise that hydraulic fracturing (or fracking), which is the method by which natural gas is extracted, dominated U.S. energy production in 2021—a year that also marked the third in a row that annual energy production exceeded energy consumption in the U.S.Fracking is a process fraught with controversy. While it has been a major industry in states like Pennsylvania, Ohio, Texas, Colorado, and the Dakotas for several years, it came to widespread public attention during the 2020 presidential campaign, when both then-President Trump and President Biden used it as a hot-button issue to make their respective energy stances known. The process is currently having a moment in the U.K. as a plinth from which the political right is attempting to address the nation's energy crisis.Both renewables and natural gas energy production reached record highs in 2021; however, even though incentives such as tax credits encourage increasing the use of renewables, fracking remains popular, as it offers what its supporters describe as a much-needed clean energy alternative to petroleum. Using annual report information from the Energy Information Administration, OhmConnect looked into how the U.S. generates its power, and how the rise of renewable energy fits into the future landscape.

Biden eyes new oil taxes, attacks 'windfall of war' - President Joe Biden floated the possibility of new taxes on oil companies yesterday, accusing them of war profiteering as consumers struggle nationwide with high gasoline prices. Speaking at the White House while standing next to Energy Secretary Jennifer Granholm and Treasury Secretary Janet Yellen, Biden called on energy companies to boost domestic production and refining capacity, adding, “If they don’t, they’re going to pay a higher tax on their excess profits and face other restrictions.” The president said he will work with Congress to “look at these options that are available to us and others.” “It is time for these companies to stop war profiteering, meet their responsibilities to this country, give the American people a break and still do very well,” Biden said. “The American people are going to judge who is standing with them, and who is only looking out for their own bottom line.” The president directly called out Exxon Mobil Corp. and Shell PLC for the surging profits they reported in the third quarter. Biden said that instead of increasing production or “giving American consumers a break,” oil and gas firms are returning excess profits to shareholders or stock buybacks. “Give me a break. … Enough is enough,” Biden said, who described himself as a capitalist and said he has no issue with corporations turning a fair profit. “Record profits today are not because they’re doing something new or innovative,” Biden said. “Their profits are a windfall of war, the windfall from the brutal conflict that’s ravaging Ukraine and hurting tens of millions of people around the globe.” For most of the 1980s, the United States had an excise tax on oil that functioned as a windfall tax. It was applied to domestic oil producers when the price of oil rose above a pre-set price, according to a 2006 report from the Congressional Research Service.. But the tax may have reduced domestic production by as much as 8 percent, and it made the United States more dependent on foreign imports, the report said. “We must not doom ourselves by embracing the policy mistakes of the 1980s — where a similar tax ultimately resulted in lower domestic energy production, a higher reliance on foreign sources of energy, and runaway inflation,” Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, said in a statement. The American Petroleum Institute Monday also slammed Biden’s proposed windfall tax on oil and gas companies. “Oil companies do not set prices — global commodities markets do. Increasing taxes on American energy discourages investment in new production, which is the exact opposite of what is needed,” Mike Sommers, API’s president and CEO, said in a statement. “American families and businesses are looking to lawmakers for solutions, not campaign rhetoric,”

$30B of profits renews Big Oil's clash with White House - The two biggest U.S. oil and gas companies reported over $30 billion in combined earnings Friday, touching off another round of debate about the actions of domestic energy producers.President Joe Biden and the head of Exxon Mobil Corp. engaged in a long-distance verbal spat over the third-quarter results while a Democrat in Congress announced a new plan to block exports of U.S. gasoline during periods with high domestic prices.Exxon and Chevron Corp. said they’re benefiting from long-term investments they continued during the depths of the Covid-19 pandemic. The industry has argued the best way for Biden’s administration to help American consumers is by encouraging more oil and gas production in the United States. At the same time, companies are spending billions of dollars on dividends and share buybacks to reward their investors. “There has been discussion in the U.S. about our industry returning some of our profits directly to the American people,” Darren Woods, Exxon Mobil’s CEO, said Friday in prepared remarks. “In fact, that’s exactly what we’re doing in the form of our quarterly dividend.”Woods also argued against windfall profit taxes, which the European Union has imposed on certain energy companies.The White House, through Biden’s official Twitter account, responded, “Can’t believe I have to say this but giving profits to shareholders is not the same as bringing prices down for American families.”Exxon Mobil brought in $19.7 billion, its highest quarterly profit ever, and Chevron made $11.2 billion, the companies said. Overseas, the French oil producer TotalEnergies SE reported a quarterly profit Thursday of $6.6 billion and Shell PLC reported $8.3 billion for the quarter.The companies have benefited as Russia’s war in Ukraine and political maneuvering by Saudi Arabia and other energy-producing countries drove up oil prices and gas prices. Crude began to fall during the most recent quarter, and gasoline prices dropped from record highs, but the companies continued to profit as the price of natural gas has remained high.The industry broadly has also improved its bottom line by cutting costs, and many companies didn’t replace thousands of employees who were laid off when oil prices crashed after the Covid-19 pandemic hit in 2020. Exxon Mobil, for instance, said Friday it has cut costs by $6.4 billion compared to 2019.The price of gasoline and diesel also rose because some U.S. refineries closed during the pandemic. Companies began pulling in record margins for each barrel they processed into gasoline and diesel (Energywire, May 5).At the same time, analysts and the oil companies themselves have been saying the world needs to invest more in conventional oil and gas production as the world’s economy recovers from the pandemic.“We’re in a commodity business that goes through cycles,” Chevron CEO Mike Wirth said in an interview with Bloomberg TV. “There are hard times as we saw just two years ago where we had enormous losses.”While a cycle can also result in “strong earnings,” Wirth said, the company has to invest through good and bad times. He said putting a new tax on the industry would not be productive.The Biden administration has tried to tamp down oil prices by releasing oil from the Strategic Petroleum Reserve, but experts have said any relief was limited (Energywire, Oct. 24).Rep. Ro Khanna (D-Calif.) introduced a bill Friday that would prohibit the export of American-made gasoline while allowing diesel to be exported to Europe and other regions (Greenwire, Oct. 28). The bill doesn’t address oil exports.The Biden administration hasn’t endorsed the idea of a U.S. energy export ban, and oil companies have opposed the idea. In his interview with Bloomberg, Wirth suggested that a ban would have “unintended consequences.” But he said the administration could help consumers by waiving refining specifications for gasoline and diesel — and the Jones Act, which prohibits foreign-owned ships from transporting cargo between U.S. ports.

Biden threatens oil companies with ‘higher tax’ if they don’t increase production - President Biden on Monday warned that oil companies would face a “higher tax” on their excess profits if they don’t reinvest in increasing production to bring down prices at the pump. “They have a responsibility to act in the interest of their consumers, their community and their country, to invest in America by increasing production and refining capacity,” Biden said of the companies during a speech on Monday afternoon. “If they don’t, they’re going to pay a higher tax on their excess profits and face other restrictions,” he added in the remarks from the White House just more than a week before the midterm elections. Biden can’t unilaterally impose a tax on companies; he would need a new law to pass Congress. He pledged to work with the legislature to look at his options. His comments come after ExxonMobil, Chevron and Shell reported high third-quarter earnings. The president name-checked both Exxon and Shell in his speech. Legislation would face a tough path even in a Congress held by Democrats, since at least 10 GOP votes would now be needed to break a filibuster in the Senate. Republicans are hoping the midterms will deliver GOP majorities in both chambers. Gas prices soared earlier this year after Russia’s invasion of Ukraine and Western and U.S. sanctions on Moscow, a major oil producer. Biden and his allies have blamed Russian President Vladimir Putin for the high prices, and have also tried to pin the blame on the industry. Analysts have attributed this year’s high gas prices not only to the war, but to a rebound in demand after the pandemic as well as refinery closures and outages.

Biden issues a warning as he accuses oil and gas companies of 'war profiteering' off Russia's invasion of Ukraine — President Joe Biden escalated weeks of sharp warnings to energy producers on Monday by floating a so-called “windfall” tax on their corporate profits, calling out major gas companies for racking up gains from a spike in prices he attributes to Russia’s war in Ukraine. “Record profits today are not because they’re doing something new or innovative. The profits are a windfall of war,” Biden said in brief remarks from the Roosevelt Room alongside Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm. The speech came as Americans face continued high prices at the gas pump in the final stretch of the midterm campaign season. Biden raised the possibility of pursuing the tax proposal, among other ideas, during hastily scheduled remarks at the White House Monday afternoon. It marked the latest in a series of policy and rhetorical efforts to battle high gas prices as Democrats brace for bruising midterm elections. Biden spoke just days after several global energy giants posted a round of massive corporate profits and after several months of Biden targeting oil executives in a push to drive private sector actions to increase production and capacity, and, in turn, drive down high prices at the pump. The president called on oil companies to “act beyond their narrow self-interest,” arguing they had a responsibility to “act in the interest of their consumers, their community and their country to invest in America by increasing production and refining capacity.” Biden, who has sought to display a grasp on inflation eight days before the midterm elections, also floated other restrictions for those companies that do not do so, which would require congressional approval. “If they don’t,” he warned, “they’re going to pay a higher tax on their excess profits and face higher restrictions.” Biden did not get into details or specifics of the restrictions, but said the administration would “work with Congress to look at these options that are available to us and others.” “It’s time for these companies to stop war profiteering, meet their responsibilities in this country and give the American people a break and still do very well,” Biden added.

Biden threatens higher taxes on oil companies if they do not work to lower gas prices - President Joe Biden threatened Monday to pursue higher taxes on oil company profits if industry giants do not work to cut gas prices. Biden has criticized oil companies that have made record-high profits as consumers struggle to keep up with high gas prices. The price of a gallon of gas was $3.76 on Monday, according to AAA, down from a record of over $5 in June but still higher than a year ago. "Their profits are a windfall of war," Biden said, referring to Russia's war in Ukraine, which prompted Western sanctions that reduced oil supply. "It's time for these companies to stop their war profiteering." "If they don't they're going to pay a higher tax on their excess profits," he said. With eight days to go before Election Day, White House messaging has focused on how Democrats are working to improve the economy and how Republicans would make it worse. Inflation and the economy consistently rank as the top issue for voters — and higher gas prices stretched consumer budgets for much of this year. Ahead of the election, he has highlighted efforts to reduce consumer costs in a range of other industries. Last week, Biden announced initiatives to address "junk fees" from banks, airlines, cable companies and other industries, aiming to "provide families with more breathing room." Any new taxes on oil profits would need congressional approval, which may prove difficult as Democrats control both chambers of Congress by slim margins. Progressives like Senators Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts previously floated the idea. Republicans, who generally support lower taxes, also hope to win back one or both chambers of Congress in the Nov. 8 midterms. Biden stressed that he is "a capitalist" but added that companies are making "profits so high it's hard to believe." Shell made $9.5 billion in profits in the third quarter, almost double what it made in the same period last year, Biden said. Exxon's profits in the third quarter were $18.7 billion, nearly triple what Exxon made last year and the most in its 152-year history. Biden has made pleas to oil companies to increase production rather than to enrich shareholders in recent weeks as the price of gas remains high. Earlier this month, Biden announced the release of 15 million barrels of crude oil from the Strategic Petroleum Reserve. The White House has released about 165 million barrels of crude from the reserve since the beginning of the year, out of a total that it said would be around 180 million.

Windfall Tax on Big Oil Is More US Politics Than Real Threat - President Joe Biden’s threat to slap a tax on oil-company profits is more bluster than threat as the clock runs out on the administration’s efforts to tame fuel prices ahead of midterm elections. Democrats have tried, and failed, for more than a decade to impose a so-called “windfall” tax on oil companies without success. With an evenly divided Senate and an eight-seat majority in the House looking increasingly vulnerable, Biden’s threat to tax what he described as the industry’s “windfall of war” will be nearly impossible to achieve.

We Told Big Oil Not to Invest. Don't Complain Now --The cure for high oil prices is high prices, or so says the commodity industry’s adage. Let the invisible hand of the free market work its magic. High prices will simultaneously reduce demand and increase supply, eventually making the good less expensive. But the axiom no longer seems to be governing the oil market. To be sure, the elevated cost of crude is suppressing appetite. But the other side of the equation — supply — isn’t working out. The industry simply hasn’t been reacting to high prices with more investment as it has before. This means demand will have to do all the work to rebalance the oil market. The result is likely to be a slower economy and more sustained energy costs than in the past. Why isn’t the supply lever working? Money certainly isn’t the problem. Big Oil has reported its best-ever six-month period, earning more than $100 billion in profits from April to September. Neither Exxon nor its competitors Chevron Corp., Shell Plc, TotalEnergies SE and BP Plc have announced any major increases in spending beyond what they have already planned. Institutional investors, led by BlackRock Inc., have convinced virtually every oil executive to keep spending under control. In the past, some executives would have tried to kickstart a boom-to-bust cycle: Boost spending early, increase production and then cash in before prices crashed. Today, the pressure from shareholders to remain frugal is so strong and uniform across the industry that from the outside it almost looks like a cartel. And the result is cartel-like: Big Oil is collectively underinvesting by a lot. Last year, the industry spent $305 billion on oil exploration and production, significantly below what’s required to meet oil demand until the end of the decade based on the most likely scenarios. Let’s not kid ourselves. Oil companies are doing what we told them to do: Spend less on fossil fuel production. From green philanthropists to big Wall Street investors, the message has been nearly unanimous. One can hardly blame the executives for doing as they were told. The industry, of course, soon realized that spending less was rather good business, particularly when very few deviated. Only a handful of state-owned oil companies in the Middle East are today boosting their fossil fuel spending meaningfully. The industry has been calibrating for a world of peak oil and rapidly declining petroleum demand. But that world simply does not exist today, nor will it tomorrow or in the near future. Russia’s invasion of Ukraine has made that all too clear.

The oil and gas paradox threatening Biden’s party at the polls - President Joe Biden’s regulators have approved new oil and gas wells at a far faster pace than the Trump administration did during its first 21 months in office — a fact that undermines Republican election-year arguments about the causes of this year’s high gasoline prices.The U.S. has also produced more crude oil since Biden’s inauguration than it had done during the equivalent period of former President Donald Trump’s presidency, a POLITICO review of federal energy data shows.The Biden-era petroleum surge came despite his promises to shift the nation away from fossil fuels to combat climate change, as well as his unsuccessful efforts to end new oil and gas drilling on federal lands and waters. But it hasn’t shielded Biden from taking a political strafing over gasoline prices, which reached a record high in June and remain a potent campaign issue for next week’s midterm elections.The dynamic offers yet another reminder of how little power any president has to shape the gyrations of the energy markets.Democrats have blamed the gasoline price spike on Russia’s invasion of Ukraine, production cuts by OPEC, lingering economic supply chain effects of the pandemic and price-gouging by oil companies — some of which reported record quarterly profits last week. On Monday, Biden accused the oil industry of “war profiteering” and threatened to push for stiffer taxes on the companies’ earnings.But Republicans have hammered one consistent message this year: Biden caused motorists’ pain at the pump by shutting down U.S. oil and gas production.“Joe Biden’s anti-energy agenda has destroyed American energy independence,” House Republicans tweeted last week as part of a cascade of similar GOP messages aired on social media and television appearances in the run-up to the election.An analysis of federal energy data shows a different story, however.From January 2021 to the end of September, Biden’s Interior Department approved 74 percent more well permits for oil and natural gas production than the agency had done during the comparable period of Trump’s term, according to figures from the U.S. Bureau of Land Management.Meanwhile, U.S. natural gas production has hit record highs, and oil output is expected to reach an all-time high next year. Even with the oil industry’s pandemic slump, the U.S. produced more than 15 percent more oil during Biden’s first 20 months than during the same period under Trump, according to POLITICO’s analysis of numbers from the Energy Information Administration.All told, the U.S. is still the world’s top oil and natural gas producer, as it had been under Trump, as well as the largest exporter of natural gas, gasoline and other transportation fuels.

The Lukoil Loophole- How Russian Oil Sidesteps Sanctions To End Up In The US - I describe the roundtrip process in which Russian oil refined in Italy makes its way to to the US. It's a real hoot... The Wall Street Journal has an interesting video that describes How Russian Crude Avoids Sanctions and Ends Up in the US.With an upfront ad, that is a free WSJ video link. Sanction Avoidance Process:

• US sanctions are on crude oil, not refined products.
• Lukoil, Russia's second largest oil and gas company was not sanctioned by the US.
• Lukoil's refinery in Sicily is the second largest in Italy and fifth largest in Europe.
• A Lukoil refinery in Italy once processed crude from multiple countries. Now it inputs are 93 percent from Russia.
• After refining, the country of origin is Italy, not Russia. This is due to longstanding practice of changing the country of origin to where oil is refined.
• The refined product then makes its way Exxon and Lukoil plants in New Jersey and Texas.
• Lukoil still has a gas station presence in the US and it distributes products to eleven states.

Republicans plan an energy agenda designed to keep Democrats on their heels --Republicans are preparing to advance an ambitious energy agenda if they win control of the House in next week’s elections — including faster approvals of fossil fuel projects and probes of how the Biden administration is spending its hundreds of billions in climate dollars.The plan, described by a dozen current and former House lawmakers, aides and outside allies, seeks to build on the political momentum that the GOP claimed on energy policy this year, as jumps in fuel and electricity prices battered President Joe Biden’s popularity and complicated his climate agenda.The GOP effort would include components of a strategy that top House Republican Kevin McCarthy released in June that called for measures to stimulate oil and gas production, ease permitting regulations and seek to reduce reliance on China and Russia for critical materials. It also would propose actions that lawmakers of both parties may be able to agree on, such as faster approvals for low-carbon energy sources like renewable power, small nuclear reactors and hydrogen.In interviews, the people familiar with the Republican priorities say it will keep a focus on voters’ frustrations with gasoline prices, which surged in the past year amid the Russian invasion of Ukraine and the global economy’s rebound from the pandemic.“Whatever big initiatives they have, it’s going to be focused on addressing inflation and energy costs,” said George David Banks, an outside energy adviser to Republicans who was former President Donald Trump’s top international energy adviser. “That’s the smart political move if you are trying to build momentum, and more of a majority the next election and trying to get the White House back.”

North America Leads $370 Billion Global Push For Oil & Gas Pipelines - This year, the United States became the world's biggest liquefied natural gas (LNG) exporter as deliveries to energy-starved buyers in Europe and Asia surged. In the current year, five developers have signed over 20 long-term deals to supply more than 30 million metric tons/year of LNG or roughly 4 Bcf/d, to energy-starved buyers in Europe and Asia. Unfortunately, whereas the United States has the world’s largest backlog of near-shovel-ready liquefied natural gas projects, takeaway constraints including limited pipeline capacity are seen as the biggest hurdle to growth of the sector. In the Appalachian Basin, the country’s largest gas-producing region churning out more than 35 Bcf/d, environmental groups have repeatedly stopped or slowed down pipeline projects and limited further growth in the Northeast. Indeed, EQT Corp. CEO Toby Rice recently acknowledged that Appalachian pipeline capacity has “hit a wall.” Luckily, the Permian Basin and Haynesville Shale are still able to shoulder much of the growth forecast for LNG exports including pipeline development. Analysts at East Daley Capital Inc. have projected that U.S. LNG exports will grow to 26.3 Bcf/d by 2030 from their current level of nearly 13 Bcf/d. For this to happen, the analysts say another 2-4 Bcf/d of takeaway capacity would need to come online between 2026 and 2030 in the Haynesville. According to RigZone, initial findings from Westwood’s upcoming onshore pipeline market forecast has revealed that between 2022 and 2028, the world will spend ~$369B on 310,000km of new oil and gas pipelines, with North America responsible for the lion’s share. The forecast says that 205,000km, or two-thirds of total installations, will be gas pipelines, with several projects already lined up in the United States. According to the Federal Energy Regulatory Commission (FERC), four U.S. LNG projects are currently under construction, and another 12 have won regulatory approval by federal regulators while four more have been proposed totaling 40 Bcf/d of potential LNG exports. The pivotal Permian Basin is preparing to unleash a torrent of gas and gas projects to meet exploding LNG and nat. gas demand. Energy Transfer LP (NYSE: ET) is looking tobuild the next large pipeline to transport natural gas production from the Permian Basin. The company is also working on the Louisiana-based Gulf Run pipeline, which will transport gas from the Haynesville Shale in Texas, Arkansas, and Louisiana to the Gulf Coast. Heavy investment in O&G pipelines is also anticipated in China as the country looks to boost imports, including the West-East Gas Pipelines 4 & 5 (a combined 6,323km) and the Xinjiang Coal-to-Gas pipeline (8,372km). Strong activity is also expected in Eastern Europe & FSU, driven by the construction of additional pipeline capacity in Russia to serve Asian markets. In Africa, the proposed 6,500km-Central African Pipeline System designed to link 11 countries and improve energy security in the region could potentially mark one of the biggest pipeline projects on the continent.

Pemex’s crude oil exports rise 30% in September, production stable - Mexican state oil firm Pemex recorded a 30% monthly jump in crude exports in September from the prior month, boosted by soaring demand from Europe and Asia following Russia’s invasion of Ukraine. Pemex said in a weekend report it had exported 1.21 million barrels per day (bpd) of crude oil compared with 914,665 bpd in August. Exports were up 23% year-on-year, from the 983,000 bpd recorded last September. The Mexican government, which had said that this year it would move toward refining more oil at home, took advantage of the higher prices that followed Russia’s war in Ukraine. Pemex said shipments of crude destined for Europe – which is looking to wean itself off Russian oil – surged 85% in September from August to reach 149,734 bpd, while shipments to Asia were up 80% at 292,008 bpd. While the company continued to ship largely to the Americas, sales to the region fell 14% to 579,840 bpd compared to August. The average price of the Mexican export mix in September fell slightly from previous months to $82.36 per barrel, Pemex said. Crude production remained stable at 1.77 million bpd. While fuel oil production in September reached its highest level this year at 278,888 bpd, gasoline output dropped slightly to 242,000 bpd. Pemex said last week that crude processing in its six local refineries had grown to an average of about 800,000 bpd. The figure for September stood at 779,664 bpd and 820,000 the previous month.

Venezuela’s Oil Exports Plunge In October --Venezuela’s crude and product exports slumped in October from September and from October last year due to lower oil production, Reuters reported on Wednesday, citing ship-tracking data and export figures of state oil firm PDVSA. Venezuela’s exports of crude oil and products averaged 533,968 barrels per day (bpd) last month, PDVSA and Refinitiv Eikon vessel-tracking data showed. The exports in October were 25% lower than in September and 23% lower than the volumes exported in October last year. Lower production was the main reason for the lower exports. Most of the oil cargoes that departed from Venezuela in October were headed to Asia, mostly Malaysia and China, via intermediaries, according to the data cited by Reuters. Petrochemical and oil by-product exports, however, rose, partly offsetting the low crude and product exports. October saw the fourth-lowest monthly exports of oil from Venezuela, which has been grappling with U.S. sanctions on its exports, a lack of investment in aging infrastructure, and foreign oil firms backing out of the sector in the country holding the world’s largest oil reserves. Venezuela’s crude oil production dropped in September compared to August, according to the latest Monthly Oil Market Report (MOMR) by OPEC. According to OPEC’s secondary sources, Venezuela’s crude output fell by 19,000 bpd from August to 659,000 bpd in September. Venezuela’s self-reported figures to OPEC showed a decline of 57,000 bpd to 666,000 bpd.

Petrobras reports $8.8bn in net profit in Q3 2022 -- Brazil’s state-run oil firm Petrobras has reported a 47.6% increase in net profit for the the third quarter (Q3) of 2022, due to higher prices of Brent crude.The firm’s net profit stood at $8.8bn for the third quarter that ended on 30 September 2022, compared with $5.9bn in the same period a year ago.Net revenue for the quarter was $32.41bn, an increase from $23.25bn reported in Q3 2021. Petrobras CFO Rodrigo Araujo Alves said: “From the financial point of view, we brought our cash position to a level more compatible with the financial needs of the company, considering that besides cash balances of $6.8bn, we have access to revolving credit facilities, resulting in additional liquidity to the company should stress scenarios eventually materialise.”

Energy giant Repsol fined again after Peru oil spill - Peru’s environmental authorities announced new fines Monday against Spanish energy giant Repsol totaling more than $10 million — the latest sanction for an oil spill that polluted beaches and cost thousands their livelihoods. Almost 12,000 barrels of crude spilled into the sea off Peru on January 15 as a tanker unloaded oil at a Repsol-owned refinery. Peru said more than 700,000 people were affected by the spill which forced the closure of 20 beaches and dozens of tourism businesses. At least 5,000 fishers and shopkeepers lost their livelihoods. Repsol had blamed the spill on freak waves caused by a volcanic eruption more than 10,000 kilometers (6,200 miles) away near Tonga. The environment ministry said Monday that its Environmental Assessment and Monitoring Agency (OEFA) fined Repsol $3.5 million for reporting “false information” about the extent of the spill, and another $7.3 million for not doing enough to contain and clean up the mess. In July, the OEFA had fined Repsol another $1.3 million for “failing to identify” the areas affected by the spill. Repsol and five other companies also face civil lawsuits in Peru for $4.5 billion in damages to the environment and individuals. On its website, Repsol Peru says that its La Pampilla Refinery, where the spill took place, had signed compensation agreements with more than 3,200 families and others affected, including ice cream and umbrella vendors, and motorcycle taxi drivers.

UK Mulls Extending Windfall Tax On Oil & Gas Companies - Chancellor of the Exchequer Jeremy Hunt is considering extending the UK’s windfall tax on oil and gas companies as he looks for ways to plug a £35 billion ($40 billion) budget hole. Hunt is looking at a significant expansion of the tax, raising the rate to 30 per cent from 25 per cent and imposing it until 2028 rather than 2026, according to a person familiar with the matter, who spoke anonymously about plans that aren’t finalized. The chancellor is also considering extending it to electricity generators, the person said. Hunt has warned he faces “decisions of eye-watering difficulty” as he prepares to announce an Autumn Statement on Nov. 17 that amounts to a budget in all but name. He’s seeking to make £50 billion of tax rises and spending cuts to provide extra headroom above the UK’s fiscal gap so that his plans have credibility with the markets. The plans to extend the windfall tax were reported first by Thursday’s Times and also the Sunday Times. The Times said the move would increase revenues from the existing tax by 50 per cent to £40 billion over five years, although that’s dependent on volatile energy prices. The government has come under increasing pressure to target energy firms for extra revenue amid surging profits. Shell Plc didn’t pay the UK windfall tax in the third quarter, a period in which its profit doubled to $9.45 billion, because it was making big investments in North Sea fields. Internal Treasury estimates suggest UK gas producers and electricity generators could make excess profits of up to £170 billion over the next two years.

Shell Paid No Windfall Tax in UK Despite Record Global Profits - Oil giant Shell has paid no windfall tax in the UK and said it did not expect to this year, despite making a record $30 billion in global profits so far in 2022, The Guardian reported. Companies are allowed to reduce their tax payments if they make investments in production, and Shell wasn’t liable because it shifted its third-quarter profits into investments in oil drilling in the North Sea, reported Bloomberg Tax. But this comes at a time when many people in the UK are struggling to pay their energy bills, and there have been calls for the government to make changes to the tax levy, which was meant to raise billions of dollars to help with the cost of living crisis. General Secretary of the Trade Union Congress Frances O’Grady said Shell’s profits were “obscene — especially at a time when millions are struggling with soaring bills. The government has run out of excuses. It must impose a higher windfall tax on oil and gas companies. The likes of Shell are treating families like cash machines,” BBC News reported. The energy profits tax was originally introduced in May by former Chancellor Rishi Sunak, who became the UK’s new prime minister earlier this week. Following political pressure, Sunak had admitted energy companies were “making extraordinary profits, not as the result of recent changes to risk-taking or innovation or efficiency, but as the result of surging global commodity prices driven in part by Russia’s war” in Ukraine, reported The Guardian. But extreme reductions to the tax were offered for investment in oil drilling in the North Sea, to the tune of about $1.05 for each $1.16 invested. The levies also didn’t apply to trading gas and oil shipments and other highly-profitable activities like refining. Shell’s Chief Financial Officer Sinead Gorman said the company didn’t anticipate paying any energy profits taxes for 2022.

Strong Quarter For BP Enables $2.5B Share Buyback - BP Plc posted its second-highest quarterly profit on record and announced a further $2.5 billion of share buybacks, capping a stellar period for Big Oil after Russia’s invasion of Ukraine pushed up energy prices. The strong earnings, which included an “exceptional” performance from gas trading, is delivering a windfall for investors, but also stoking the ire of politicians who are grappling with the economic damage from soaring inflation and rising interest rates. BP shares rose 1.1% to 484.9 pence as of 8:02 a.m. in London. BP’s home country of the UK has already imposed additional taxes on the oil industry, and companies could face more levies as US President Joe Biden and some other European governments seek to mitigate the impact of high energy prices. BP’s adjusted net income was $8.15 billion, just below the record set in the second quarter, but still well ahead of the average analyst estimate of $6.18 billion, the company said in a statement on Tuesday. It’s more than double the level from a year ago. BP actually reported a net loss of $2.2 billion for the period, mainly due to an accounting adjustment required by changes in forward gas prices. It’s another sign of how volatile global gas markets are having a big impact on the industry’s accounts, working capital and cash flows. That volatility, however, swelled the earnings contribution from BP’s large and opaque trading unit. Adjusted third-quarter profit for the gas and low carbon energy unit was $6.24 billion, exceeding the profit the business made in the first nine months of 2021. “The exceptional gas trading result is particularly impressive given the Freeport LNG outage,” RBC analyst Biraj Borkhataria said in a note, referring to the Texas liquefied natural gas plant that was shut by a fire in June. Bumper profits have been used to pay down debt and reward shareholders. The company’s latest share buyback brings total repurchases announced in 2022 to $8.5 billion. Net debt fell to $22 billion, dropping at a slower pace than prior quarters but still down by almost $10 billion from a year earlier.

World needs to accept the urgent need for fossil fuel investment now, BP CEO says - BP's strategy is centered around investing in hydrocarbons whilst simultaneously putting money into the planned energy transition, the oil and gas supermajor's CEO said Monday. "What the world needs, more than ever right now, is a conversation and a series of actions that are involved in the practicalities and realities of today and tomorrow," Bernard Looney, who was appearing on a panel discussion moderated by CNBC's Hadley Gamble, said. "And by that I mean, our strategy as BP — which we're executing in the U.K., we're working on here in the Middle East and we're doing it in the United States and across the world — is to invest in hydrocarbons today, because today's energy system is a hydrocarbon system," he added. Speaking at the Adipec conference in Abu Dhabi, Looney said his company was "obviously trying to produce those hydrocarbons with the lowest possible emissions" whilst at the same time investing in "accelerating the energy transition." "And we're doing that in Britain, we're doing that in the United States, we're doing it here," he said, namechecking carbon capture, electric vehicle charging, hydrogen and offshore wind. A major producer of oil and gas, BP says it's aiming to become a net-zero company by the year 2050 or before. It's one of many major firms to have made a net-zero pledge in recent years. While such commitments draw attention, actually achieving them is a huge task with significant financial and logistical hurdles. The devil is in the detail and goals can often be light on the latter.

Russia accuses Britain of blowing up Nord Stream pipelines - The Russian government has accused Britain of playing a major role in the September 26 blowing up of the Nord Stream 1 and Nord Stream 2 gas pipelines. Powerful underwater explosions blew gaping holes in the Nord Stream 1 and 2 pipelines, which carry Russian natural gas 760-miles under the Baltic Sea to Germany. The pipelines have a joint annual capacity to provide 110 billion cubic metres of gas, more than 50 percent of Russia’s normal gas export volumes. On Saturday, a spokesperson for Russia’s defence ministry said, “According to available information, representatives of this unit of the British Navy took part in the planning, provision and implementation of a terrorist attack in the Baltic Sea on September 26 this year blowing up the Nord Stream 1 and Nord Stream 2 gas pipelines.” The “unit of the British Navy” referred to, as the spokesperson later detailed, were British operatives “in the city of Ochakiv, Mykolaiv region, Ukraine.” The explosions destroyed tens of billions of dollars in infrastructure vital to financing Russia’s economy, and powering and heating European industry and households. Russia’s state-owned energy company Gazprom is the main owner of the pipelines. The leaks took place on international waters, but of the four explosions two of them were in the Danish exclusive economic zone and two in the Swedish zone, close to the Baltic Sea island of Bornholm. Nord Stream 1 had been operating for nearly 11 years, while Nord Stream 2 contained gas but had not yet been brought into commercial operation, owing to pressure by Washington on Germany and other EU powers. The spokesperson also alleged UK involvement in Saturday’s attacks on Russian ships in the Black Sea. He stated, “At 4.20am today, the Kyiv regime carried out a terrorist attack on Black Sea Fleet ships and civilian vessels. “Preparation for the terrorist act and training of military personnel of the Ukrainian 73rd Special Operations Centre Marine Unit was carried out under the guidance of British specialists who were in the city of Ochakiv, Mykolaiv region, Ukraine. “It should be stressed that the Black Sea Fleet vessels that suffered the terrorist attack are involved in ensuring the security of the grain corridor as part of the international initiative to export agricultural products from Ukrainian ports.” Britain’s Ministry of Defence denied the accusations, saying they were made to distract from Russia’s “disastrous handling of the illegal invasion of Ukraine”. Russia’s statement comes after weeks of insinuations by Britain and other NATO allies that the blowing up of its own pipeline was an act of sabotage by Russia. The incident has been used to further ramp up hostilities between NATO and Russia, with the activation of NATO's Article 5 collective defence clause being mooted.

Norway Deploys Armed Forces To Guard Its Vast Gas Pipeline Network - Norway took immediate action after the 26 September discovery of the severely damaged Nord Stream 1 & 2 gas pipelines in the Baltic Sea of the Danish and Swedish coasts to increase pipeline inspections on its 8,800-km pipeline network connecting Norway with continental Europe and Britain. “Together with Equinor, we have intensified the inspection programme based on this situation,” Gassco Chief Executive Frode Leversund said in an interview. Bolstering its response, Norway has deployed its armed forces to guard the pipelines and offshore platforms. The Nordic country has become Europe’s top pipeline gas supplier since Russia cut deliveries to the region following its invasion of Ukraine, with Moscow blaming the cuts on technical issues caused by Western sanctions. “We are doing more inspections now than we would have done in a normal situation,” Mr Leversund added. “Under its regular maintenance programme, inspections are risk-based,” he explained. According to Refinitiv vessel-tracking data, the Havila Subsea offshore supply vessel - equipped with remotely operated subsea vehicles - has spent the last weeks seemingly inspecting Norwegian pipelines to Germany and Belgium. Another vessel, the Volantis, has visited the key Sleipner gas transport hub, as well as another section of the Statpipe and Norpipe links ending at Germany’s Emden terminal.

U.S. LNG Cannot Replace The Russian Natural Gas That Europe Has Lost - Europe cannot rely solely on imports of U.S. LNG to offset the pipeline gas supply it will have lost from Russia when it starts rebuilding inventories after the end of this winter, according to BloombergNEF.So far this year, American LNG has been crucial in meeting demand in Europe, which is scrambling for gas supply and willing to pay up for spot deliveries, outbidding most of Asia.The United States is shipping record volumes of LNG to Europe to help EU allies and nearly 70% of all American LNG exports were headed to Europe in September, according to Refinitiv Eikon data cited by Reuters. However, the significant drop in Russian gas supply this year occurred only in June, meaning that Europe could still stock up on some Russian gas earlier this year.Ahead of the 2023/2024 winter, however, the gap in gas supply in Europe will be much wider without Russian gas. Europe will not be importing much Russian gas—or none at all if Russia cuts off deliveries via the one link left operational via Ukraine and via TurkStream—compared to relatively stable imports from Russia in the first half of this year, before Moscow started gradually cutting volumes via Nord Stream in June until shutting down the pipeline in early September.“The year-on-year increase is not sufficient to offset a total cut in Russian piped supply with under half of these volumes met by LNG increases,” BNEF analyst Arun Toora said.“The good news is that Russia looks close to having played its last card in terms of gas leverage over Europe. However Europe’s challenges will not disappear with the daffodils next spring,” London-based consultancy Timera Energy said in a winter gas market outlook at the beginning of October.Without most of the Russian gas supply, Europe will likely need to offset around 40 bcm of additional lost Russian flows next year. LNG alone cannot meet this volume, considering a lack of new global liquefaction capacity in the short-term, including in the U.S., limited further demand elasticity in Asia, and European regasification capacity constraints. Therefore, European demand will need to fall, Timera Energy said.

No Easy Fix For European Energy Crisis -A Russian gas-reliant Europe has no quick and easy fixes for the sky-high energy prices and the crisis it is currently facing. Piped gas imports from Russia are 80% down on last year, sending prices through the roof, and it will take time to resolve energy prices. Like the market for commodities such as oil, copper, and wheat, the current market model in the European power sector is based on marginal pricing. Essentially, that means that market prices are decided based on the variable cost of the most expensive source required to serve demand. With gas-fired generators providing Europe’s marginal power supply, gas costs are the major factor behind current high-power prices. It is worth noting that high gas prices are a significant issue, but they aren’t the only problem the European power sector faces. Major losses of electricity production from nuclear and hydro have defined Europe’s power supply mix in 2022 so far. In France, safety inspections and repairs have caused a loss of over 60 TWh in nuclear output over the first three-quarters of the year – with annual production likely to fall beyond a 30-year low – while in Germany the retirement of three reactors at the end of 2021 has meant the loss of over 25 TWh of generation so far this year. Germany will now retain its three remaining reactors in case of emergency. In France, the ongoing inspection program means 2023 production estimates are a little better than for this year. Meanwhile, Europe’s drought has led to a 60 TWh reduction in hydro generation, while low river levels have also put some coal deliveries at risk. With this year’s summer heatwave increasing air conditioning use, overall demand losses have remained small. As a result, the sector has very few options to boost supply, and the contribution of gas and coal generators have both increased. In the short term, wind – up 34 TWh – and solar – 27 TWh – have partly filled the gap in supply. However, solar will contribute far less over the winter, while low reserves mean hydro can be of little help to redress the short-term supply imbalance. Switching away from gas will therefore mean using more coal, plus nuclear and, to a far lesser extent, oil. Unfortunately, the ability of all three is limited, although Germany is allowing mothballed coal plants to restart and postponing closures. Coal generation is up 30 TWh year-to-date, but this is almost entirely in Germany and Italy. So far power demand has remained relatively resilient, but the EU has acted to bring forward arrangements to procure load reduction during peak periods and encourage steps to lower overall demand. However, interruptions or selective rationing cannot be ruled out as a last resort to maintain supplies to critical and vulnerable consumers.

TTF’s Premium Over Asian Spot LNG Price Narrows Sharply – The TTF front-month contract has fallen by 31% since the start of October. The TTF’s premium over the East Asia Index (EAX) was nearly $13.00/MMBtu at the beginning of October and has since narrowed to less than $5.50/MMBtu as the outright price has fallen as well. Price spreads to other European hubs have also narrowed in recent sessions. The week saw some demand for LNG cargoes for December delivery, with South Korea coming to the market with long-term demand. Europe saw its third highest ever imports in October, and the week saw Greek companies securing unloading slots at the Revithoussa terminal. Producer KUFPEC is selling an FOB cargo from its Australian Wheatstone LNG plant for a 19-24 December loading window. Japanese trading firm Diamond Gas International (DGI) has issued a 9 December FOB sell tender from the Cameron facility in the US. The tender closes on 4 November. Middle Eastern producer Oman LNG awarded at least 1 cargo close to $20.00/MMBtu on an FOB basis from the Qalhat facility. The tender closed on 1 November. Oman had offered an FOB two-cargo tender for 16-20 November loading and the other for late December. A third FOB cargo may be offered in January. In longer term demand, South Korean company KOSPO was seeking 15-year supply for up to 0.3mtpa to 0.4mtpa, starting from 2026. The tender closes on 7 November. In October, European LNG imports totalled 9.7m tonnes, which was the third highest on record, according to ICIS LNG Edge data. This includes the UK, but not Turkey. By far, the US was the largest single supply source by country at 4.1m tonnes, the highest since April The second-largest supply source was Qatar, bringing 1.9m tonnes in Europe, in line with the previous two months. As many as 55 cargoes have confirmed destinations into Europe for November, with most expected in the first half of the month.

Oil CEOs say this winter is not the season to worry about when it comes to the energy crisis — Politicians and governments around the world are bracing for potential civil unrest as many countries grapple with mounting energy costs and rising inflation. The global economy is facing an onslaught from multiple sides — a war in Europe, and shortages of oil, gas and food, and high inflation, each of which has worsened the next. Concerns are centered on the coming winter, especially for Europe. Cold weather, combined with an oil and gas shortage stemming from Western sanctions on Russia for its invasion of Ukraine, threatens to upend lives and businesses. But as much worry as there is ahead of this winter, it's really the winter of 2023 that people should be worried about, major oil and gas executives have warned. "We've got a difficult winter ahead, and subsequent to that we've got a more difficult winter in the year ahead of that, because the production that is available to Europe in the first half of 2023 is considerably less than the production we had available to us in the first half of 2022," Russell Hardy, CEO of major oil trader Vitol, told CNBC's Hadley Gamble during a panel at the Adipec conference in Abu Dhabi. "So the consequences of energy shortage and therefore price escalation, all of the things that have been discussed here about the cost of living, the expectation of problems ahead, clearly need to be thought about in that context," he said. We are in good shape for this winter. But as we said, the issue is not this winter. It will be the next one, because we are not going to have Russian gas. CEO Bernard Looney, speaking at the same panel, agreed. Energy prices "are approaching unaffordability," with some people already "spending 50% of their disposable income on energy or higher," he said. But through a combination of high gas storage levels and government spending packages to subsidize people's bills, Europe may be able to manage the crisis this year. "I think it has been addressed for this winter," Looney said. "It's the next winter I think many of us worry, in Europe, could be even more challenging." The CEO of Italian oil and gas giant Eni expressed the same worry. For this winter, Europe's gas storage is around 90% full, according to the International Energy Agency, providing some assurance against a major shortage. But a large proportion of that is made up of Russian gas imported in previous months, as well as gas from other sources that was easier than usual to buy since major importer China was buying less due to its slower economic activity. "We are in good shape for this winter," Eni chief Claudio Descalzi said. "But as we said, the issue is not this winter. It will be the next one, because we are not going to have Russian gas – 98% [less] next year, maybe nothing."

Europe Faces 1 Tcf Natural Gas Shortfall Next Winter, IEA Warns - Europe could face a 30 billion cubic meter (Bcm) natural gas shortfall for the 2023-2024 winter if the European Union (EU) doesn’t start planning ahead now, the International Energy Agency (IEA) said in a report released Thursday. That’s the equivalent of about 1 Tcf of natural gas. And even though European gas storage facilities are currently 95% full, or about 5 Bcm (176 Bcf) above their 5-year average, it is wrong to expect the same conditions in 2023, the IEA warned. “With the recent mild weather and lower gas prices, there is a danger of complacency creeping into the conversation around Europe’s gas supplies, but we are by no means out of the woods yet,” said IEA Executive Director Fatih Birol. A gas supply shortfall next year could mean Europe would lack half the volume it needs to fill storage facilities up to 95%, which means inventories would only reach 65% of capacity for the 2023-2024 winter season. Russian gas deliveries were close to normal for the first half of this year, but they’ve been cut dramatically since. Total pipeline supply from Russia to the EU in 2022 is likely to amount to around 60 Bcm (2.1 Tcf), according to the report, “but it is highly unlikely that Russia will deliver another 60 Bcm of pipeline gas in 2023 – and Russian deliveries to Europe could halt completely.” “The IEA has rightly pointed out a more challenging time in 2023 than in 2022,” senior researcher Marco Giuli, of the Brussels School of Governance in Belgium, told NGI. “This winter might leave us with very low inventories,” he added. “Under an optimistic assumption, the current Russian flows through Ukraine and TurkStream might continue, but we’ll be nowhere near the amount of Russian gas imported in 2022. The shortfall will especially hit the region that used to be served by Nord Stream.”

The Israel-Lebanon Agreement Could Be A Game Changer For Natural Gas Markets - Israel and Lebanon announced earlier this month that they had come to an agreement over their maritime border, a historic step in diplomacy that should help boost the natural gas output of both countries. As the world battles gas shortages going into the winter months, this deal provides a ray of hope for global energy markets in the future. The most recent negotiations, led by the U.S., had been taking place over several months, with the impetus for a deal beginning in 2020. The final agreement is expected to “strengthen Israel’s security, inject billions into Israel’s economy, and ensure the stability of our northern border”, according to Israeli Prime Minister Yair Lapid. Meanwhile, Lebanon’s president, Michel Aoun, stated that the deal “satisfies Lebanon, meets its demands, and preserves its rights to its natural resources.”It appeared last minute as if the deal might not pass as Israel was prepared to reject Lebanon’s final draft of the agreement. However, due to mounting pressure to pass a deal before Aoun steps down at the end of October, and elections take place in Israel on 1st November, the two rival states came to an agreement. Lebanon’s powerful Shia group, Hezbollah, is also backing the agreement due to the country’s dire economic situation. However, the maritime border agreement should not be conflated with a peace agreement, which still appears a long way off. Israel will now be able to produce natural gas from the Karish maritime reservoir, which, along with the Tanin field, is believed to hold 2 to 3 trillion cubic feet of natural gas and 44 million barrels of liquids. This is a shift, as Lebanon previously held claim to part of the Karish field. European and North American powers are eager for Israeli production to begin in the field, to alleviate the pressures of global gas shortages. Meanwhile, Lebanon will exploit Qana, the neighboring field. Several TotalEnergies representatives have traveled to Beirut to discuss the immediate exploration and development of the gas field. While the deal marks significant progress in the relations between the two countries, experts have been quick to criticize the deal due to certain undefined terms leaving space for ambiguity. While Lebanon will be given production rights in the Qana field, Israel will be entitled to a share of the royalties through an agreement with TotalEnergies, as the field crosses the maritime border into Israeli waters. The agreement does not stipulate the share of profit distribution that Israel will receive from Qana, which could lead to further disagreements in the future. The deal states: “Israel shall work with the Bloc 9 Operator in good faith to ensure that this agreement is resolved in a timely fashion.” Essentially, Lebanon’s development of Qana requires Israel to come to an agreement with Total before it can proceed. This comes at a time when Lebanon is facing severe energy shortages that have led to long blackout periods as it tackles a major financial crisis.

QatarEnergy in talks for 30% in Lebanon offshore gas project - State-owned QatarEnergy is in talks with the Lebanese government to take a 30 percent stake in an offshore exploration block and is also negotiating with TotalEnergies and Eni on this matter, CEO Saad al-Kaabi confirmed on Sunday. Two sources said last week that TotalEnergies and the Lebanese government reached a deal handing the French oil major temporary majority control of the block and paving the way for negotiations with Qatar over a stake in the gas project. “We are in the process of discussing that with the government of Lebanon and the partners, Total and Eni for a participation of around 30 percent ownership of that exploration block,” al-Kaabi said. “In due course when we get that basically finalised as an agreement and we sign that agreement, we will announce it.” The initial exploration licence was held by a three-part consortium of TotalEnergies, Italy’s Eni, and Russia’s Novatek. Beirut announced in September that Novatek, which held a 20 percent stake, would exit. Offshore areas in the eastern Mediterranean and Levant have yielded major gas discoveries in the past decade. Interest in these has grown since Russia’s invasion of Ukraine disrupted gas supplies.

EU Threatens Secondary Sanctions Against Turkey Amid Row Over NATO Bids, Russian Ties --Türkiye continues to exasperate Washington and Brussels with its willingness to chart its own course in its relationship with Russia. While ties between Ankara and Moscow grow stronger, the Turkish relationship with NATO is on the rocks. Washington is using Greece and Cyprus to increase pressure on Türkiye in the Eastern Mediterranean, and Türkiye continues to block the NATO bids of Sweden and Finland.Meanwhile the EU is reportedly discussing applying extraterritorial sanctions on Türkiye (pushed by members Greece and Cyprus) in what would be a major escalation. From Radio Free Europe / Radio Liberty: The EU diplomats I spoke to on the condition of anonymity indicated that the move to broaden the scope of EU sanctions should primarily be read as scare tactics to force third countries into aligning with the EU position on the issue. Some countries, notably EU candidate countries Serbia and Türkiye, have not followed Brussels’ lead on sanctions to date…It was Cyprus and Greece who were allegedly instrumental in pushing for the bloc going toward extraterritoriality. Does that mean Türkiye might be in the crosshairs? In a leaked European Commission document assessing the impact of the EU’s Russia sanctions so far — a document seen by RFE/RL — Türkiye, alongside China, is mentioned in a subchapter on circumvention with the text stating that “the value of Türkiye’s exports to Russia nearly doubled since the second quarter [of 2022].” The document also states that “exports of some member states to Türkiye have also risen sharply over 2022.”The threats of secondary sanctions come on the heels of the Netherlands-based operator of TurkStream, South Stream Transport, temporarily losing its export license after it was judged to be in breach of EU sanctions against Russia. Countries receiving gas via TurkStream include Türkiye, Greece, Serbia, Hungary, Romania, North Macedonia, and Bosnia and Herzegovina.Ankara and Moscow are also pressing ahead with plans to make Türkiye a natural gas hub for Europe – an irritating thought for Washington and many in Europe who want to completely end the relationship with Russian energy no matter the economic costs to the EU.Russian President Vladimir Putin, speaking to the media about the Nord Stream pipelines and plans with Türkiye on Oct. 31, said:It is difficult for us to control the situation because the [Nord Stream] site is in the exclusive economic zone of Denmark, Sweden and, farther, Germany.In this sense, it is easier for us to work with Turkiye, first of all, because President Erdogan keeps his word. If we come to an agreement on something – this may be difficult to do, but if we come to an agreement, we try to implement it. It was the first point. And secondly, it is easier for us to control the Black Sea area.Therefore, it is a perfectly realistic project, and we can accomplish it relatively quickly. And there will be enough of those wishing to sign contracts. I have no doubt about that.

Turkey and Iran Reach New Gas Exports Deal - Turkey’s state-owned energy company, BOTAS Petroleum Pipeline Corporation, has signed a new deal with the National Iranian Gas Company (NIGC) to export more natural gas to Turkey, a senior NIGC official privy to the deal announced last week. According to the report published by the Moderndiplomacy on October 24, Dispatching Director Mohammadreza Jolaei disclosed that high-level meetings had been held by the parties involved and an agreement reached. Jolei added that all the operational, technical, and executive frameworks for exporting Iranian gas to Turkey would be finalized in the next six months, given the agreement between the Iranian and Turkish gas officials. The agreed measures include but are not limited to the operational plans, cathodic protection, maintenance and repair services, coverage of gas pipelines between Turkey and Iran, renovation and upgrade of the Bazargan Station, and other cases related to gas export from Iran to Turkey. The expert-level meeting’s discussions also covered the gas transmission capacity, engineering, and technical services, as well as other fields of cooperation. “The significant position of the country in the world’s energy market must be taken into serious consideration, and consequently, effective steps must be taken to remove barriers and challenges,” the official stressed. The Islamic Republic of Iran is Turkey’s second-largest natural gas supplier after Russia, delivering 10 billion cubic meters of gas annually under a 25-year deal agreed upon by both countries. The Iranian gas is delivered to Turkey through a 2,577 km (1,601 miles) pipeline stretching from Tabriz to Turkey’s capital, Ankara. Turkish President Recep Tayyip Erdogan made it clear that Turkey would continue buying energy supplies from Iran despite the US re-introducing the crippling sanctions on Tehran in November 2018.

Japan seeks to stay in Russia's Sakhalin-1 energy project after Exxon exit -- The Japanese government has decided to remain involved in the formerly Exxon-led Sakhalin-1 oil and gas project in Russia, Nikkei has learned, as it seeks a stable supply of energy despite international sanctions on Moscow over its invasion of Ukraine. ExxonMobil, which held a 30% stake in Sakhalin-1, announced in March that it would withdraw from the project. Remaining investors forced to decide whether to accept Moscow's new terms.

Former Exxon Oil Project In Russia Ramping Up Exports -Oil exports from Sakhalin-1 are ramping up after Russia took control of the project in the nation’s Far East from Exxon Mobil Corp., which had pledged to exit the country following the invasion of Ukraine. Two tankers recently loaded Sokol crude from the De-Kastri terminal and both vessels have signaled Yeosu in South Korea as their destination, marking the first exports from the project in five months, according to data compiled by Bloomberg. Russia’s Rosneft PJSC had issued a tender that closed last week to sell six prompt cargoes, mostly for November loading, said traders. Exxon had been winding down output at Sakhalin-1 since May after flagging its intention to exit the country, with Moscow terminating the company’s interests in the project and transferring it to a Russian operator. Sokol can be shipped to major refining hubs in China and South Korea in around three to five days. Some Sokol cargoes offered by Rosneft were at a discounted price to the Dubai benchmark on a delivered basis to China, according to traders involved in the Asian market who asked not to be identified as the information is private. It’s unclear whether the deals were settled, they said. Some smaller trading houses were also involved in marketing the cargoes, with buyers potentially fearing damage to their reputation or facing financing issues should they deal directly with the Russian oil company, said traders. Sokol shipments are most likely to flow to China and India, they added. The European Union is set to implement new sanctions on Moscow from early December, which will prohibit European companies from providing insurance and other important services for Russian oil shipments. That’s led to Indian refiners pausing spot purchases as they assess the potential fallout. Victor Konetsky and Vladimir Arsenyev signaled Yeosu after loading Sokol, according to ship-tracking data compiled by Bloomberg. Yuri Senkevich has been anchored off De-Kastri since April and is likely to be the next to load Sokol, while Pavel Chernysh is en route to the port, according to Vortexa Ltd. All four vessels are shuttle tankers that are commonly used to transport cargoes of Sokol from De-Kastri to Yeosu for ship-to-ship transfers.

Sanctions are about to slam Russia’s still-booming oil export trade - The Putin regime has been enriching itself through oil exports ever since Russia invaded Ukraine. It still is. Russian oil sales continue to boom as of late October. Russian seaborne crude exports are averaging 3.4 million barrels a day this month, up 2.5% year on year, according to data from Kpler. In the eight months since the invasion, Russia’s average crude exports jumped 12% compared to the eight months prior to the invasion. The good news for those seeking to punish Russian President Vladimir Putin is that Russia’s oil gains face a serious threat in the very near future from a lack of available tankers. The bad news is that time is running out — it may have already run out — for the G7 price cap designed to keep Russia’s export volumes steady while simultaneously squeezing Russia’s profits. “It seems that a meaningful reduction in Russian exports is in the cards, at least temporarily,” warned Erik Broekhuizen, head of research at brokerage and consultancy Poten & Partners, in his latest outlook. Bruce Paulsen, a sanctions expert and partner at law firm Seward & Kissel, told American Shipper: “For the most part, shipments of oil and petroleum products are not arranged at the last minute. If guidance on [price cap] compliance doesn’t come soon, some industry players may sit on the sidelines until they can determine that shipments under the price cap are safe.” Sanctions effect imminent The EU has reduced its reliance on seaborne crude imports from Russia since the war began. According to Kpler data, EU imports of Russian seaborne crude averaged 1.1 million barrels a day in the eight months since the war began, down 31% from the eight months before the war. However, the EU was still importing an average of just over 1 million barrels per day of Russian seaborne crude this month, according to Kpler data. To comply with sanctions, volumes must fall to zero in just six weeks. In June, the EU agreed to ban seaborne imports of Russian crude starting Dec. 5 and imports of seaborne products on Feb. 5. Crucially for tanker markets, these sanctions also stipulated that no EU shipping service provider could be involved in the transport of Russian oil cargoes to non-EU nations as of those dates. The EU shipping services ban covers EU marine insurance and reinsurance providers. All-important U.K. marine insurance providers are heavily reliant on EU reinsurance. Whether directly or indirectly, insurers covering over 90% of the world’s tankers will be affected.

Oil is all that Putin has left, U.S. presidential advisor Amos Hochstein says - Oil is all Russia's economy has left following its invasion of Ukraine earlier this year, according to Amos Hochstein, special presidential coordinator for President Joe Biden."Oil is the only thing they have left in that economy … Putin has destroyed the rest of the economy," Hochstein told CNBC's Hadley Gamble Monday. "All he's got left is the stuff that comes out of the ground. He won't sell his gas to Europe anymore, so all he has is oil, so that's what funds this war." The Russian Embassy to the U.K. was not immediately available to respond to the comments when contacted by CNBC.The Russian economy shrunk by 4% year-on-year over the second quarter, and the Central Bank of Russia expects the downturn to deepen in the quarters ahead. The International Monetary Fund expects Russia's GDP to contract by 3.4% in 2022.Hochstein's comments, from the ADIPEC conference in Abu Dhabi, come at a volatile time for energy markets following Russia's invasion of Ukraine in Feb. 2022.Russia was the biggest supplier of both natural gas and petroleum oils to the EU in 2021, according to Eurostat, however gas exports from Russia to the European Union have slid this year. "Despite available production and transport capacity, Russia has reduced its gas supplies to the European Union by close to 50% y-o-y since the start of 2022," according to the International Energy Agency.

"Let's Get Out Of NATO": Discontent Soars Across Europe As Russian Sanctions Backfire - Western sanctions against Russia have been considered a powerful foreign policy tool by the US and the EU to paralyze Moscow back to the 'stone age.' Though sanctions against Moscow have entirely backfired, sparking the worst cost-of-living crisis for Europeans in a generation. In early September, we first noticed a wave of discontent sweeping across Europe as tens of thousands of people took to the city streets to protest soaring electricity bills and the worst inflation in decades. Some countries delivered relief packages to citizens to tame the anger, while other countries did not have the financial capacity to hand out checks. Tens of thousands of people have marched across metro areas in France, Belgium, the Czech Republic, Hungary, and Germany -- many of them are fed up with sanctions on Russia that have sparked economic ruins for many households and businesses -- but also very surprising, support for NATO's involvement in Ukraine is waning. There has been increasing awareness and dissent among Europeans about their countries' leaders prioritizing NATO's ambitions in Ukraine over their own citizens. The prioritization has been in the form of sanctions against Moscow, sparking energy hyperinflation and supplying weapons to Ukraine, which has made Moscow displeased with any country that does so. Some Europeans are now demanding NATO negotiate with Moscow to end the war so that economic turmoil can abate. Here are the latest protests across Europe of tens of thousands of people (if not more) frustrated with high inflation and crying out anti-NATO slogans.

“Nikkei-Owned Financial Times Begins to Crack on Sanctions” by Yves Smith - A journalist contact who knows the ins and outs of the Financial Times exceedingly well pinged about a new article, Japan cannot survive without Russian oil, warns trading house chief, bleating about the oil and gas sanctions, and without saying so, the going-live-soon G7 oil price cap. Yes, Japan is a member of the G7.The piece is noteworthy, as our alert colleague correctly noted, because the Financial Times has been a hardliner on Russia generally and the sanctions/economic war in particular.His remarks:Roula Khalaf was summoned to Tokyo to have this dictated to her…Khalaf is a careerist and there is no way she would have run this without being ordered to.Consider additionally:It is very unusual for the Japanese to make a stink like this. Using a venue like the Financial Times means they wanted the noisemaking to be noticed. The Japanese complain in public only after they’ve tried hard in private and gotten nowhere. This article looks to be the result of official Japan, which has sought and gotten some waivers from the oil and gas sanctions, believing it’s going to be in a very bad way without more relief.Recall that the EU version of the oil sanctions, was set to add extreme provisions, like permanently barring any vessel that violated the price cap regime from ever getting any services from EU companies, like insurance or even one assumes, resupply at an EU port.Remember further that Russia has said it simply won’t sell oil subject to a price cap regime. Experts anticipate that response would produce a big jump in oil prices. Japan is already in bad economic shape due to the yen being very weak at a time when commodity prices are high. The article points out that Japan gets 9% of its gas and 4% of its oil from Russia. Those levels may not seem like much, but as the cliche goes, you will be just as dead whether you drown in 6 inches or 6 feet of water.Or Japan’s real concern may be that the imposition of non-leaky sanctions will lead to those aforementioned big oil price increases. Simon Watkins in a new OilPrice story contends:¹Oilprice.com sources: In the short term, Russia could secure at least three-quarters of the shipping needed to move its oil as usual to established buyers.However, the imposition of the price cap regime is sure to produce near-term dislocations as the work arounds (and likely longer transit processes) are implemented, so the immediate shortfalls would be greater than the “three-quarters of the shipping” suggests. Would it be mere weeks, or more on the order of months for these new mechanisms to be working smoothly?

Russian Oil Price Cap Will Not Apply To Resold Cargoes - The United States and its Western allies have agreed that a cargo of Russian oil will only be subject to the price cap mechanism at the first sale of the oil to a buyer on land, sources familiar with the ongoing discussions told The Wall Street Journal on Friday.This means that the upcoming price cap will not apply to the resale of the same Russian cargo. The price cap will not apply to a cargo of Russian crude processed into gasoline when the gasoline is sold, either.However, intermediary sales and trades of Russian oil happening at sea should be subject to the price cap, according to the Journal’s sources.The U.S. and the G7 allies and Australia are working on setting the details of the price cap before the December 5 deadline, after which the EU embargo on imports of Russian crude oil by sea enters into force. The G7 group of the most industrialized nations and the EU are looking to introduce a price cap on Russian oil, aiming to reduce Vladimir Putin’s oil revenues for his war chest. The allies will ban maritime transportation services for Russian oil unless the products are purchased at or below a certain price cap.Reports emerged this week that the G7 members had agreed to set a fixed price for Russian oil exports as a cap rather than a price set as a discount to a benchmark, Reuters reported, citing an unnamed source familiar with the discussions. The price itself has yet to be determined, the source said, adding that, according to the G7, “This will increase market stability and simplify compliance to minimize the burden on market participants.”Earlier, a price range in the mid-$60s was mentioned as a possible target for the cap as it represented the range in which Russian oil has traded before the last rally.While considering all the parameters of a price cap, the U.S. Treasury issued this week guidancethat says Russian crude oil loaded onto a vessel at the port of loading for maritime transport prior to December 5 will not be subject to the price cap if the oil is unloaded at the port of destination before January 19, 2023.

Russia Becomes India’s Top Crude Oil Supplier - Russia overtook OPEC heavyweights Iraq and Saudi Arabia to become the largest crude oil supplier to India in October, with record shipments of 946,000 barrels per day (bpd), the Economic Times reported on Wednesday, quoting estimates from energy analytics firm Vortexa. Before the Russian invasion of Ukraine, India was a small marginal buyer of Russian crude oil. After Western buyers started shunning crude from Russia, India became a top destination for Russian oil exports alongside China. Indian refiners haven’t expressed hesitation to deal with Russia—their primary incentive to buy has been the much cheaper Russian oil than international benchmarks and similar grades from the Middle East and Africa. According to Vortexa’s estimates, India—the world’s third-largest crude oil importer—shipped in a record 946,000 bpd of crude from Russia last month, up by 8% compared to September. Total Indian imports increased by 5% month on month in October, Vortexa data cited by the Economic Times showed. Of note was that Russia surpassed both Iraq and Saudi Arabia to become the number-one crude oil supplier to India. Russian crude accounted for 22% of all Indian imports last month, while Iraq’s share was at 20.5% and Saudi Arabia’s—at 16%. Going forward, there will be a lot of uncertainties among buyers over Russia’s oil exports when the EU embargo enters into force on December 5.

India’s Sept crude oil imports fall 6.7% to 16 mn tonnes; 5.8% YoY decline - India’s crude oil imports in September fell to 16.46 million tonnes, down 6.7% from a month ago, government data showed on Friday. On a yearly basis, imports dipped by 5.8%, data from the website of the Petroleum Planning and Analysis Cell showed. The drop in intakes come against a backdrop of maintenance at refiners such as Reliance Industries and Indian Oil Corp. Russia’s share of India’s April-September crude imports rose to 17% from 0.7% a year earlier, data from sources has shown. India has emerged as Russia’s second biggest oil buyer after China, taking advantage of discounted prices as Western buyers stay away due to Moscow’s invasion of Ukraine. Oil product imports came in lower for a second straight month, falling about 4% from a month earlier to 3.48 million tonnes in September, while exports dropped 4.8%. Of the 4.98 million tonnes of exports in September, diesel accounted for 2.69 million tonnes. India, Asia’s third-biggest economy, holds surplus refining capacity and exports refined fuels as well.

Nigeria's oil production dips as Addax workers resume strike - INDICATIONS are that the nation’s oil output may have further shrank by 22, 000 barrel per day following the resumption of strike action embarked upon by over 324 employees of Addax Petroleum Development Nigeria. It may be recalled that the Federal Government and management of the company has been unable to address the anti-labour practices and payment of their exit packages as Addax is ready to exit Nigeria. Addax is owned by China’s Sinopec Group with four Oil Mining Licences, OML 123, 124, 126 and 137. The company is operating the assets in Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) Limited.

Uganda to begin commercial oil exploration in 2025, seeks funding - Uganda aims to start commercially pumping its oil reserves in April 2025, with China being considered as a potential source of funds to develop an export pipeline, authorities said on Tuesday. Although Ugandan officials have previously mentioned 2025 as the year for the commencement of production, it is the first time they are being specific on the month. “I hope that by April 2025 we shall see the first oil,” energy minister Ruth Nankabirwa Ssentamu said at a conference in Abu Dhabi. Uganda and neighbouring Tanzania are also confident they will secure funding for a planned crude export pipeline, she said. Tanzania President Samia Suluhu Hassan was expected to travel to China soon, Ssentamu said, for “the completion of the mobilisation of resources. And I know that we will get money.” “China is always ready,” she said when asked if the money would come from China. “China is always ready and I want to encourage Europe, I want to encourage America to [also] … invest in Uganda.” In February, TotalEnergies and its partner China National Offshore Oil Corporation reached a final investment decision to develop Uganda’s oilfields in the country’s west. Uganda’s President Yoweri Museveni has criticised the European Union parliament after it passed a resolution urging TotalEnergies to delay the development of the pipeline by a year to explore an alternative route or alternative renewable energy projects. There has also been criticism from environmentalists about the proposed project because it runs through one of the country’s national parks. But Museveni has endorsed it, warning that he will not “allow anybody to play around” with “my oil”.

Iraq oil pipeline fire contained in Al-Abdeh - The maintenance teams of the Tripoli Oil Facilities, in cooperation with the firefighting units of the Benin-Al-Abdeh Civil Defense Center, managed to control the fire that broke out in the morning due to oil leaks from Iraq’s oil pipelines in the locality of Al-Abdeh. The holes in the pipes were closed temporarily, until work is done to replace the worn-out connections in the pipelines which is the only way to radically eliminate the risk of these leakages. Civil defense teams are currently working to cool the burning reed fields in the vicinity of these pipes, as a precaution for fear of renewed fire

OPEC Boosts Global Oil Demand Forecast - OPEC has increased its outlook for global oil demand in the medium and longer term, the group said in its 2022 World Oil Outlook released on Monday. OPEC said in the report that global oil demand will increase to 103 million barrels per day next year—an increase of 2.7 million bpd from 2022 and an increase of 1.4 million bpd from what the group predicted for 2023 last year. OPEC raised its oil demand outlook for the medium term as well, through 2027, increasing the outlook by 2 million bpd by the end of that period, compared to what the group forecasted last year. The reason for the bump in how the group sees world oil demand is the more robust recovery seen this year and next, and the shift in focus from energy transition to energy security. OPEC now sees oil demand hitting 108.3 million bpd in 2030, also up from what it forecasted for 2030 last year. In the even longer term, OPEC sees 2045 global oil demand hitting 109.8 million bpd, up from the 108.2 million bpd that it forecasted last year. OPEC sees its own market share rising, but sees OPEC’s output lower in 2027 than in 2022. In its closely-watched Monthly Oil Market Report (MOMR) that was released on October 12, OPEC revised down its estimate of global oil demand growth for 2022 by 460,000 barrels per day (bpd), citing China’s Covid lockdowns, economic headwinds in developed economies, and inflationary pressures everywhere. In that report, OPEC saw world oil demand growing by 2.6 million bpd this year to average 99.7 million bpd. The cartel also slashed its oil demand growth forecast for 2023 in that report, by 360,000 bpd, expecting growth at 2.3 million bpd next year.

America and Saudi Arabia are locked in a bitter battle over oil. The stakes are massive — The relationship between the United States and Saudi Arabia is one of the most important on the planet. And lately, it’s also been one of the most awkward.Angry officials in Washington vowed “consequences” after Saudi-led OPEC sharply cut oil production earlier this month, driving up pump prices just weeks before the midterm elections.US lawmakers are threatening steps that were unthinkable not long ago, including banning weapons sales to Saudi Arabia and unleashing the Justice Department to file a lawsuit against the country and other OPEC members for collusion.Riyadh has been caught off guard by the thirst for revenge from US politicians. And Saudi officials are hinting at payback – including dumping US debt – that could have huge ripple effects in financial markets and the real economy.Neither side is even trying to hide the tension. After a top Saudi official suggested the kingdom has decided to be the more mature party, a top White House official responded by saying, “It’s not like some high school romance here.”What happens next is critical.If this decades-old relationship devolves into a full-blown break-up, there could be enormous consequences for the world economy, not to mention international security. “This is a new low. We have seen a degradation in the US-Saudi relationship for years but this is the worst it’s been,” said Clayton Allen, director at the Eurasia Group.After trying and failing to persuade OPEC to ramp up oil production, President Joe Biden reversed his 2020 campaign promise to make Saudi Arabia a “pariah” over its human rights record. Biden visited Saudi Arabia over the summer and even fist-bumped Crown Prince Mohammed bin Salman.US officials thought they reached a secret deal with Saudi Arabia to finally boost supply of oil through the end of the year, The New York Times reported this week.They were wrong.OPEC and its allies, known as OPEC+, responded by increasing oil production by a measly 100,000 barrels per day – the smallest increase in its history. The move was widely viewed as a “slap in the face” of the Biden administration.What came next was worse.In early October, OPEC+ announced plans to slash oil production by 2 million barrels per day – a move that briefly drove up oil and gasoline prices at a time of high inflation and infuriated US politicians.“Neither side seems to understand each other,” Allen said. “Riyadh underestimated the severity of the US backlash. And the US assumed we had an unspoken agreement.”

US backs Opec calls for more oil, gas investment - The US' top energy envoy Amos Hochstein today supported calls for investment in oil and gas to increase globally alongside spending on the transition to a lower-carbon energy system. "We hope this happens around the world," Hochstein told the Adipec conference in Abu Dhabi. "Increased investment in production, investment in refining capacity and… at the same time additional investment in the [energy] transition." After weeks of tense exchanges between the US and Opec linchpin Saudi Arabia over the wider Opec+ group's decision to lower crude output quotas, Hochstein's comments put Washington on the same page as Opec, which has long called for increased oil and gas investment. UAE energy minister Suhail al-Mazrouei told the Adipec conference today higher oil and gas spending will help the world navigate the energy transition and reduce the risk of today's supply crunch being experienced in the future. Al-Mazrouei was at pains to stress that increased oil and gas spending is not just an issue for Opec+ producers. "We in the UAE, as well as our fellow producers in Opec+, are keen on supplying the world with the [oil] requirements it needs. But, at the same time, we are not the only producers," he said. "Others also need to do their part in investing and encouraging investments." Opec+ — which groups Opec countries with 10 non-Opec producers led by Russia — is doing its part when it comes to investing in hydrocarbons, al-Mazrouei said. Saudi Arabia and the UAE, in particular, are pursuing aggressive upstream expansions that should deliver close to 2mn b/d of additional crude capacity before the end of the decade. Prior to Russia's invasion of Ukraine, many governments in Europe and the US were pushing for a more urgent commitment to move away from fossil fuels. But Hochstein today insisted that energy investment is needed across the board. Spending on fossil fuels and cleaner energies is "not contradictory", he said. "They are just two different timelines," he said. "It may be that our climate goals are met by 2035 or 2050. But to get to those goals, we had to invest yesterday."

Oil giant Saudi Aramco's quarterly profit surges 39% on higher prices— State oil giant Saudi Aramco reported a 39% rise in net income for the third quarter year-on-year, on the back of higher crude prices and tightening global supply. Net income rose to $42.4 billion for the quarter, up from $30.4 billion the previous year and just above expectations. The Saudi company also reported an increase in free cash flow to a record $45 billion from $28.7 billion one year prior and paid out its second-quarter dividend of $18.8 billion. Its third-quarter dividend of the same amount is due to be paid out in the fourth quarter. In a statement, Aramco CEO and President Amin Nasser said the earnings and cash flow figures "reinforce our proven ability to generate significant value through our low cost, low-carbon intensity upstream production and strategically integrated upstream and downstream business." "While global crude oil prices during this period were affected by continued economic uncertainty, our long-term view is that oil demand will continue to grow for the rest of the decade given the world's need for more affordable and reliable energy," Nasser added. Aramco is not alone in predicting a continued rise in oil demand. The Organization of Petroleum Exporting Countries, or OPEC, on Monday raised its medium and long-term forecasts for crude demand, and said that $12.1 trillion of investment was required to meet it. Its outlook differs from that of some other bodies, like the International Energy Agency, which sees oil demand peaking sometime in the middle of the next decade, as nations attempt to transition away from fossil fuels.

Saudi Arabia may cut crude prices for Asia for Dec cargoes - Top oil exporter Saudi Arabia may cut the prices of most crude grades to Asia in December as weaker-than-expected fuel consumption in China amid its strict COVID-19 rules put a lid on regional demand, trade sources said. State oil giant Saudi Aramco may lower the official selling price (OSP) for its flagship Arab Light crude by about 30 to 40 cents per barrel in December, according to five respondents surveyed by Reuters. The price cut comes as China, the world’s largest crude oil buyer, extended stringent mobility controls to contain the highly transmissible Omicron variant after a surge in daily reported cases. Changes in the market structure for the Dubai Middle East oil benchmark typically guides how the Arab Light OSP is set. The premium of the first-month Dubai price over the third-month Dubai price narrowed by 59 cents during oil cargo trading in October versus the difference in September. That softening in the backwardation, or the structure when prompt prices are higher than for later delivery, suggests lower demand for oil. “Chinese demand is much weaker than expected,” said one respondent, adding that the market has already priced in the expectation that Chinese refineries will fully use their oil product export quotas. China in late September issued an additional 15 million barrels of new export quotas to boost its faltering economy, but some refineries have said the incentives to hike operational rates are low because of poor margins. The refining margin for a typical Asian refiner who processes the Middle Eastern crude fell to an average of $2.59 a barrel so far in October from $3.30 in September. DUB-SIN-REF But the respondents said that the OSP cut could be moderate given a tighter market supply. OPEC+ has planned to trim 2 million barrels per day of output from November to support oil futures 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. For other grades, three respondents expect the OSPs for Arab Medium and Arab Heavy to see a bigger reduction following a weaker refining cracks for fuel oil compared to middle distillate products such as diesel fuel and kerosene. FO380-SIN-DIF, GO10-SIN-DIF Saudi crude OSPs are released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 9 million barrels per day (bpd) of crude bound for Asia.

Oil Falls as Weak Chinese PMI Feeds Demand Fears - - Oil prices fell on Monday after weaker-than-expected Chinese business activity data brewed fresh fears over slowing crude demand, although expectations of tightening supply in the coming months helped limit losses. London-traded Brent oil futures fell 0.8% to $92.98 a barrel, while crude oil WTI Futures fell 0.5% to $87.42 a barrel by 22:31 ET (02:31 GMT). Data showed that China’s manufacturing PMI unexpectedly shrank in October, as did overall business activity. The reading, coupled with a recent resurgence in local COVID-19 cases, drove widespread concerns that crude demand in the world's largest oil importer will remain subdued in the coming months. Markets remained wary of any more economic disruption in the country, after Beijing recently reiterated its commitment to maintaining its strict zero-COVID policy. The policy is at the heart of China’s economic woes this year, and has weighed heavily on Chinese crude demand, denting oil prices. This trend is expected to continue in the near-term, with Chinese industrial hubs such as Wuhan and Chengdu recently reintroducing more COVID-linked curbs. Still, losses in oil prices on Monday were limited by expectations that slowing U.S. production and supply cuts by the Organization of Petroleum Exporting Countries will tighten crude markets in the remainder of the year. The prospect of tightening supply has helped crude markets weather headwinds from slowing economic growth. Crude prices fell sharply from two-year highs hit earlier in 2022, as markets feared that rising inflation and interest rates will weigh on global oil demand.

Oil Futures Fell on Monday on Expectations that U.S. Production Could Rise | Sprague -- Oil futures fell on Monday on expectations that U.S. production could rise even as weaker economic data out of China and the country’s widening COVID-19 curbs weighed on demand. Oil output in the United States climbed to nearly 12 million barrels per day in August, the highest since the onset of the COVID-19 pandemic, monthly government data showed. U.S. President Joe Biden is also set to speak later in the day and call on oil and gas companies to invest some of their record profits in lowering costs for American families, a White House official said. Meanwhile, factory activity in China, the world's largest crude importer, fell unexpectedly in October, an official survey showed on Monday, weighed down by softening global demand and strict COVID-19 restrictions that hit production. December WTI settled down $1.37 or 1.56% at $86.53 a barrel however, this front month contract gained $7.04, or 8.86% on the month. Brent Crude for December delivery ended Monday’s session down 94.00 cents or 0.98% but gained $6.87 per barrel, or 7.81% to $94.83 this month. RBOB Gasoline for November delivery ended the session down 9.59 cents or 3.30% but gained 33.81 cents per gallon, or 13.67% to $2.8107 this month. ULSD for November delivery settled down 35.89 cents or 7.89% but gained 82.19 cents per gallon, or 24.40% to $4.1909 this month. OPEC raised its forecasts for world oil demand in the medium- and longer-term in its annual outlook and said $12.1 trillion of investment is needed to meet this demand despite the energy transition. OPEC said world oil demand will reach 103 million bpd in 2023, up 2.7 million bpd from 2022. The 2023 total demand is up 1.4 million bpd from last year's prediction. OPEC also raised its demand forecasts for the medium term to 2027, saying the figure is up by almost 2 million bpd by the end of the period from last year. It said the upward revision reflects a more robust recovery now seen in 2022 and 2023 and a "strong focus on energy security issues" leading to a slower substitution of oil by other fuels such as natural gas, whose price has increased due to Russia's invasion of Ukraine. By 2030, OPEC sees world demand averaging 108.3 million bpd, up from 2021, and lifted its 2045 figure to 109.8 million bpd from 108.2 million bpd in 2021. The United Arab Emirates' Energy Minister, Suhail al-Mazrouei, said that OPEC+ is keen on providing the world with the oil supply it needs, driving home the message that the alliance of top producers will always be in a position to balance markets. He said OPEC+ will always remain a trusted technical organization to balance oil supply and demand. A Reuters survey showed that oil prices will find support from OPEC+ output cuts and sanctions on Russia for the rest of the year and into the early part of 2023, however a recession could limit further gains. A survey of 42 economists and analysts forecast benchmark Brent crude would average $101.10/barrel this year, and $95.74/barrel in 2023, up from estimates of $100.45/barrel and $93.70/barrel, respectively in September. U.S. crude forecasts were raised slightly to $96.23/barrel in 2022 and $90.39/barrel next year, from a previous forecast of $95.73/barrel and $88.70/barrel, respectively.

Crude oil prices edge lower amid China COVID-19 woes, Brent hits $92.77/bbl - Oil prices inched lower on Tuesday, extending losses of 1% from the previous session as more extensive COVID-19 curbs in China increased fears of slowing fuel demand in the world's second-largest oil consumer. Brent crude for January delivery was down 4 cents at $92.77 a barrel at 0112 GMT. The December contract expired on Monday at $94.83 a barrel, down 1%. US West Texas Intermediate (WTI) crude fell 18 cents, or 0.2%, to $86.35 a barrel. COVID-19 curbs in top crude oil importer China forced the temporary closure of Disney's Shanghai resort on Monday, while production of Apple Inc iPhones at a major contract manufacturing facility could drop by 30% in November. "With China sticking to the zero-COVID policy, the oil demand outlook overshadowed a record of US oil export data from last week," CMC Markets analyst Tina Teng said. Strict pandemic restrictions have caused China's factory activity to fall in October and cut into its imports from Japan and South Korea. Also weighing on sentiment was the world's largest independent oil trader Vitol saying that its sees signs of oil demand destruction, ANZ Research analysts said in a note. Pressuring oil prices, US oil output climbed to nearly 12 million barrels per day (bpd) in August, highest since the start of the COVID-19 pandemic, even as shale companies said they do not expect production to accelerate in coming months. That is likely to lead to a rise in US crude oil stocks in the week to Oct. 28 of about 300,000 barrels, while distillate and gasoline inventories were expected to fall, a preliminary Reuters poll showed. The poll was conducted ahead of reports from the American Petroleum Institute due at 4:30 p.m. EDT (2030 GMT) on Tuesday, and the Energy Information Administration due at 10:30 a.m. (1430 GMT) on Wednesday. Brent and WTI benchmarks ended October higher, marking their first monthly gains since May after the Organization of the Petroleum Exporting Countries and its allies including Russia announced plans to cut output by 2 million bpd. OPEC raised its forecasts for world oil demand in the medium-and longer-term on Monday, saying that $12.1 trillion of investment is needed to meet this demand despite the transition to renewable energy sources.

Oil Spikes After Pentagon Predicts Iran Attack On Saudi Arabia Likely In "48 Hours", Iran Denies --Following Tuesday's WSJ report revealing that Saudi Arabia and its ally the United States are on high alert over a potential impending attack from Iran, the Pentagon has narrowed its assessment, saying there's credible threat of an attack "soon or within 48 hours." Oil prices spiked more than $2 on this new "48 hours" intelligence, which the Pentagon reportedly received from the Saudis, hammering tech stocks further. A subsequent and quite expected denial from Iran... ... because what will Iran say: "yup, you got us, we are about to launch an attack", reversed some of today's sharp gains.The Biden administration reaffirmed that it will not hesitate to respond... "We are concerned about the threat picture, and we remain in constant contact through military and intelligence channels with the Saudis," the National Security Council said in a statement. "We will not hesitate to act in the defense of our interests and partners in the region."

Oil up Nearly 2% as Weaker Dollar Offsets China Concerns (Reuters) -Oil prices rose on Tuesday, recouping losses from the previous session, on optimism that China, the world's second-largest oil consumer, could reopen from strict COVID curbs. Brent crude for January delivery rose $1.84, or 2%%, to settle at $94.65 a barrel. The December contract expired on Monday at $94.83 a barrel, down 1%. U.S. West Texas Intermediate (WTI) crude rose $1.84, or 2.1%, to $88.37 after falling 1.6% in the previous session. An unverified note trending in social media, and tweeted by influential economist Hao Hong, said a "Reopening Committee" has been formed by Politburo Standing Member Wang Huning, and was reviewing overseas COVID data to assess various reopening scenarios, aiming to relax COVID rules in March, 2023. Hong Kong and China stocks jumped on the rumors. A Chinese foreign ministry spokesman later said he was unaware of the situation. "We're getting a lot of signals in that direction and the market is responding very positively to that," said Phil Flynn, an analyst at Price Futures Group. The Brent and WTI benchmarks both registered monthly gains in October, their first since May, after the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, cut their targeted output by 2 million barrels per day (bpd). The OPEC+ cuts and record U.S. oil export data also support oil price fundamentals, said CMC Markets analyst Tina Teng. Tamas Varga of oil broker PVM, meanwhile, said that dwindling oil supply, a possible halt to release of oil from the Strategic Petroleum Reserve (SPR) and reinvigorated oil demand growth could also send crude back above $100 a barrel. An oil investment lag is sowing seeds for a future energy crisis, OPEC secretary General Haitham Al Ghais said on Tuesday. OPEC raised its forecasts for world oil demand in the medium and longer term on Monday, saying that $12.1 trillion of investment is needed to meet this demand. These bullish factors have offset demand concerns raised by COVID-19 curbs that lowered China's factory activity in October and cut into its imports from Japan and South Korea. U.S. crude oil stockpiles fell in the latest week, according to market sources citing American Petroleum Institute figures on Tuesday. The API reported that crude stocks fell by about 6.5 million barrels for the week ended Oct. 28, they said. Gasoline inventories fell by about 2.6 million barrels, while distillate stocks rose by about 870,000 barrels, according to the sources, who spoke on condition of anonymity..

WTI Holds Gains After Big Unexpected Crude Draw -Oil prices rallied today for the first time in 3 days after strong JOLTS data and rising geopolitical risks outweighed anxiety overFed-induced demand drags. Additionally renewed Zero-COVID lockdown easing rumors in China helped sentiment."Risks to energy supplies remain elevated after reports that Iran was planning an attack on targets that include Saudi Arabia and Northern Iraq," said Edward Moya, senior market analyst at OANDA. Meanwhile, "global economic outlook remains very fragile to a swathe of risks, and that should keep crude demand forecasts vulnerable to getting slashed, but for now energy traders remain fixated on how tight the market remains." For now, all eyes are on the API for any signs of distillates stocks rebuilding.... API

• Crude -6.53mm (+267k exp) - biggest draw since June
• Cushing +883k
• Gasoline -2.64mm
• Distillates +865k (-733k exp)

A much bigger than expected crude draw and unexpected distillates build were the highlights of the API report...WTI hovered between $88 and $88.50 and extended gains after the print... “We’re in a tale of two markets,” “The physical markets are very tight. The paper markets are pricing in bad economic news and a bad recession.” Meanwhile, President Joe Biden’s suggestion that US oil companies are profiting from Russia’s war in Ukraine was “absolutely outrageous,” according to the trade group representing American oil and natural gas companies. “The statement itself was outrageous, and I would certainly hope that the President would reconsider such statements in the future,” Mike Sommers, chief executive officer for the American Petroleum Institute, told reporters Tuesday on a conference call. “A number of API member companies who have joint ventures in Russia withdrew from those before the federal government mandated those withdrawals.”

WTI Futures Slip Despite API Showing Crude Stocks Tumbled -Oil futures softened in early trade Wednesday despite the American Petroleum Institute reporting domestic crude and gasoline stockpiles tumbled well above consensus during the final week of October and the U.S. dollar extended losses against global peers on the back of mixed economic data ahead of the Federal Open Market Committee's decision on interest rates. API reported commercial crude oil stocks plummeted 6.53 million barrels (bbl) last week, far exceeding calls for a 200,000-bbl decrease. Stocks at the Cushing, Oklahoma, tank farm, the New York Mercantile Exchange delivery point for West Texas Intermediate futures, meanwhile, gained 883,000 bbl through the week ended Oct. 28, while inventory from the Strategic Petroleum Reserve fell 1.9 million bbl. Further details of the report showed gasoline stocks tumbled 2.64 million bbl in the reviewed week, nearly three times the expected decline of 900,000 bbl. If confirmed by government data later Wednesday morning, this would mark the third consecutive weekly drawdown from the domestic gasoline stockpiles that currently stand 6% below the five-year average. Distillate inventories added 865,000 bbl compared to an expected 800,000-bbl decline, easing some concerns over tight distillate supplies. The Energy Information Administration last reported nationwide inventories of middle distillates stand about 6 million bbl above 100 million bbl, which is assumed to be the minimum operational level for efficient midstream and downstream industry activity. Near 7:15 a.m. EDTD, NYMEX December WTI slipped $0.22 to $88.14 bbl, with Brent crude for January delivery easing $0.21 to $94.44 bbl. NYMEX December RBOB futures added $0.0028 to $2.5973 gallon, with the gasoline market remaining in backwardation through February 2023 delivery. December ULSD futures declined $0.0209 to $3.6002 gallon. Tuesday's economic data showed pockets of the economy are still surprisingly robust, strengthening the case for the Fed to move more aggressively on raising interest rates in December and February. The Labor Department's monthly survey of Job Openings and Labor Turnover showed new vacancies unexpectedly jumped by nearly 500,000 in September to 10.717 million after an August drop that some analysts thought would mark the beginning of a broader slowdown in the labor market. There were roughly 1.9 open positions for every person looking for work in September, up from 1.7 in August. The ratio has become more important for the central bank's efforts to cool the tight labor market and bring down stubbornly high inflation. When jobs are plentiful and workers scarce, employees have leverage to ask for a higher wage which puts upward pressure on inflation. the same time, a closely watched gauge of manufacturing activity in the United States posted the slowest growth in 2-1/2 years in September, with prices paid by businesses for inputs sliding for the seventh consecutive month, according to the Institute for Supply Management. ISM's manufacturing purchasing managers index fell to 50.2 from 50.9, slightly higher than the consensus estimate for a reading of 50, a level that divides expansion from contraction.

WTI Rises After US Crude Production Slides, Gasoline Stocks Hit 8 Year Lows Oil prices pumped and dumped overnight as a big crude draw reported by API prompted gains into Asia and a statement crushing hopes of an end to China's Zero-COVID policy sent prices back down to unchanged. Today's FOMC decision and press conference are also weighing on traders desires to extend positions. “Crude trades near the top of its range, but the lack of visibility regarding the short-term direction continues to keep the market mostly rangebound,” “The demand side is torn between the prospect of a pickup in Chinese demand once Covid restrictions are lifted and worries global economic activity will continue to weaken in the coming months.” The next leg from here will likely be driven in the short-term by the official inventory/demand data until The Fed hit at 1400ET.. DOE

• Crude -3.115mm (+267k exp)
• Cushing +1.267mm
• Gasoline -1.257mm
• Distillates +427k (-733k exp)

While not as extreme as the API report, official data showed an unexpected crude draw last week (and the 3rd weekly build in a row in distillates stocks)...Graphs Source: Bloomberg Cushing inventories are steadily rising, but remain at the lowest seasonal level since 2009. Refiners are set to wind up their fall maintenance, presenting a tug once again on domestic inventories. In addition, the final tranche of SPR sales are about to conclude. Refinery utilization rebounded and is back to over the 90% mark nationwide. Rates rose after three consecutive weeks of declines as maintenance wraps up in all PADD regions.

The Energy Information Administration Reported Weekly Declines in U.S. Crude Oil and Gasoline Inventories - Oil futures jumped on Wednesday, with WTI topping $90 a barrel. Prices gained support after the Energy Information Administration reported weekly declines in U.S. crude oil and gasoline inventories, and as recent reports said Iran may be preparing an attack on Saudi Arabia. Interestingly, domestic oil production decreased from 12 million bpd to 11.9 million bpd. The decline in the domestic oil production may serve as a bullish catalyst for oil markets. Oil prices continued higher after the U.S. Federal Reserve approved an increase of 0.75 percentage points in its benchmark interest rate. December WTI tacked on $1.63, or 1.8%, to settle at $90 a barrel, the highest settlement for a front month contract. ICE Brent Crude for January delivery gained $1.51 per barrel, or 1.60% to $96.16 since October 10. RBOB Gasoline for December delivery gained 10.27 cents per gallon, or 3.96% to $2.6972, while ULSD for December delivery gained 5.63 cents per gallon, or 1.55% to $3.6774.The EIA reported that U.S. East Coast refinery utilization rates increased in the week ending October 28th to 103%, a record high. The EIA also reported that U.S. gasoline stocks fell by 0.6% on the week to 206.6 million barrels, the lowest level since November 2014. U.S. East Coast gasoline stocks fell by 900,000 barrels on the week to 50.2 million barrels, the lowest level since November 2014. Meanwhile, crude oil stocks in the SPR fell by 1.9 million barrels to 399.8 million barrels, the lowest level since May 1984.IIR Energy reported that U.S. oil refiners are expected to shut in about 625,000 bpd of capacity in the week ending November 4th, increasing available refining capacity by 642,000 bpd.According to a Reuters survey, OPEC oil output fell in October for the first time since June on lower exports from African members and lower output from some Gulf producers after the wider OPEC+ alliance pledged a small output cut. The survey showed that OPEC produced 29.71 million bpd in October, down 20,000 bpd from September which was the highest output since April 2020. Output from the 10 OPEC members covered by the agreement fell 1.36 million bpd below their October target after a 1.32 million bpd shortfall reported for September.The Federal Reserve raised interest rates by 75 basis points on Wednesday, but signaled future increases in borrowing costs could be made in smaller steps to account for the "cumulative tightening of monetary policy" it has enacted so far. The policy decision set the target federal funds rate in a range between 3.75% and 4.00%, the highest since early 2008. Fed Chair, Jerome Powell, said the “ultimate level” of the Federal Reserve’s benchmark policy rate is likely higher than previously estimated. He said there is “significant uncertainty” around the level of rates needed to bring down inflation, but “we still have some ways to go.” He said the Federal Reserve could cut the size of its rate increase at its year-end policy meeting.

Oil prices fall as US Fed interest rate hike raises fuel demand concerns (Reuters) -Oil slipped on Thursday as an increase to U.S. interest rates pushed up the dollar and heightened fears of a global recession that would crimp fuel demand, though losses were capped by concern over tight supply. Brent crude dropped by $1.19, or 1.2%, to $94.97 a barrel by 1135 GMT while U.S. West Texas Intermediate (WTI) crude futures fell $1.31, or 1.5%, to $88.69. Both benchmarks had gained more than $1 on Wednesday, aided by another drop in U.S. oil inventories, even as the U.S. Federal Reserve boosted interest rates by 75 basis points and Chair Jerome Powell said it was premature to consider pausing rate increases. That sent the dollar higher on Thursday, with Powell indicating that U.S. rates are likely to peak above current investor expectations. A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies. "Rising anxiety about stalling growth will inevitably impact global oil demand and another downward revision in the next set of forecasts is not a far-fetched idea," said PVM Oil analyst Tamas Varga. However, losses were capped by expectations that the oil market is set to tighten in the coming months. Stephen Innes, managing partner of SPI Asset Management, said it was that surprising oil had proved so resilient after the move by the Fed, but he said that fundamentals have put a floor under prices. The European Union's embargo on Russian oil over its invasion of Ukraine is set to start on Dec. 5 and will be followed by a halt on oil product imports in February. Lower output from the Organization of the Petroleum Exporting Countries (OPEC) also lent price support, with a Reuters survey finding that the producer group's output fell in October for the first time since June. OPEC pumped 29.71 million barrels per day (bpd) last month, the survey found, down 20,000 bpd from September, which was the highest output since April 2020. The group produced 1.36 million bpd below targets for October. OPEC and its allies including Russia, known collectively as OPEC+, also decided to cut targeted output by 2 million bpd from this month. Another bullish factor is a potential pick-up in demand from China if Beijing eases its zero-COVID policies. Chinese policymakers pledged on Wednesday that growth was still a priority and they would press on with reforms.

Oil Futures Mixed, WTI Slides 2% as Rate Hike Lifts USD -- Oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled mixed Thursday, as the U.S. dollar rallied for a second session following Wednesday afternoon's hawkish remarks from Federal Reserve Chairman Jerome Powell over inflation and interest rates that heightened concern the United States could tilt into recession. The U.S. dollar rallied 1.4% to a 112.804 two-week high settlement Thursday, continuing to find support a day after the Federal Open Market Committee lifted the federal funds rate by 0.75% for the fourth consecutive meeting to a target range of 3.75% to 4% -- the highest overnight bank borrowing rate since 2008. Economic projections by FOMC released in September noted a commitment by central bank officials to front-load rate hikes with a terminal rate of 4.75% to 5% by the end of 2023. While little changed in the Fed's trajectory on rates, Powell punctuated the central bank's hawkishness, stating, "There are still some significant rate increases coming before we get to the level that is sufficiently restrictive." The Fed chief added, "incoming data suggests no pattern of inflation coming down," implying a protracted period of higher interest rates. Data released Thursday supported Powell's comments, with unemployment claims barely budging despite rising interest rates and the service economy remaining in expansion territory for the 29th month in a row in October, according to the Institute of Supply Management. Adding to the market's worry, business operators reported ongoing price pressures for inputs and labor costs, confirming that inflation is becoming more entrenched in the broader economy. Service operators also reported that hiring remained a challenge and qualified workers were scarce, reinforcing Tuesday's Labor Department's Job Openings and Labor Turnover survey that showed new vacancies unexpectedly jumped by nearly 500,000 in September. The outlier in the oil complex was once again the December ULSD contract that advanced more than 5% on the back of tight distillate inventories on both sides of the Atlantic Basin, with demand for middle distillates expected to pick up in the winter months. Wednesday's inventory report from the U.S. Information Administration showed domestic diesel stocks rose only marginally ahead of the winter heating season and still remain some 22% below the five-year average at 106.8 million bbl. U.S. inventories remain low across the board for most petroleum products, heightening fears that the impending end of the releases from U.S. strategic reserves will remove a source of the cushion supply. Against this backdrop, the Department of Energy this afternoon announced final bids for 15.05 million bbl of crude oil from the Strategic Petroleum Reserve that will be released in December, which completes the 180 million bbl of SPR crude sales U.S. President Joe Biden pledged on March 31. At settlement, NYMEX December West Texas Intermediate slid $1.83 to settle at $88.17 bbl, with January Brent, the international crude benchmark, falling $1.49 bbl to $94.67 bbl. NYMEX December RBOB futures slipped $0.0033 to $2.6939 gallon, and December ULSD futures surged $0.1879 to $3.8653 gallon.

Crudes Spike as G7 OKs Price Cap, China Reopening Chatter - Oil settled Friday's session sharply higher on growing speculation China could soon scrap quarantine controls on international air travel in a first major step to ease zero-COVID policies, while the potential risk of supply disruption out of Russia tied to the G7 plan to cap the price of seaborne oil exports in response to Vladimir Putin's unprovoked war in Ukraine further boosted risk-on sentiment. After months of intense negotiations, G7 countries reached an agreement on Friday to enforce a fixed price on Russian oil exports but only at the point of first sale on land, meaning the resale of the same oil at sea won't be subject to the regulation. Additionally, sales of Russian petroleum products, such as gasoline and diesel fuel, won't fall under the price-cap plan, dropping an earlier proposal for a three-tier price cap. Many details of the agreement are still murky, including the exact price level at which Russian oil would be sold under Western shipping insurance or enforcement mechanism that governs those transactions. The original idea behind the price cap was to bar firms located in G7 countries from providing critical maritime services for the waterborne shipment of Russian oil unless the oil is sold at or below a set price cap. Because much of the world's maritime services are based in G7 countries, the Western partners were aiming to effectively dictate the price at which Russia can sell its oil on global markets. The fact that the language of the price cap agreement has been softened to the point of first transaction means G7 nations seek to avoid disruption of Russian oil flows on the global market. Russian officials repeatedly threatened to cut oil supplies to any country that participates in the G7 price cap proposal. Regardless of the final text, traders are likely to shun away from Russian oil in coming days before all rules and regulations governing sales of Russian oil are determined. The next question is what happens to an EU ban on maritime services for Russian oil shipments. So far, signs indicate EU will move forward with an embargo set for Dec. 5, but it remains unclear whether they will sign on to the G7 price cap that allows Russian oil exports to flow using European maritime services. Underpinning gains for the oil complex Friday are reports Chinese officials are moving expediently to remove some restrictions contained in Beijing's zero-COVID policy, starting with easing controls on international travelers and penalty system for airlines boarding infected individuals. The latest trigger came in the form of a transcript attributed to former state official Zeng Guang, who said at an investment conference organized by Citigroup in Hong Kong that Beijing will substantially change its zero-COVID policy next year. U.S. dollar plummeted more than 2% against a basket of foreign currencies to 110.774, with the offshore yuan strengthening more than 1% in Asian trading to a one-week high of 7.2441 per U.S. dollar. Stocks in Shanghai and Hong Kong posted their best week since at least July 2020. The reaction underlines how sensitive markets are to the so-called "reopening trade" as investors blamed Beijing's COVID controls for the cratering consumer spending and faltering economy since the pandemic broke out in early 2020. At settlement, NYMEX December West Texas Intermediate spiked $4.44 to $92.61 bbl, with January Brent, the international crude benchmark, surging to $98.57 bbl, up $3.90 bbl. NYMEX December RBOB futures advanced $0.0409 to $2.7348 gallon, and December ULSD futures rallied $0.0495 to $3.9148 gallon.

Oil up as Robust U.S. Jobs Surprisingly Gut Dollar; Russia Price-Fix Adds to Mix -- US jobs numbers overshot expectations again in October but the hedge funds that typically send the dollar rallying on that chose this time to hammer down the greenback — handing a win to oil and the rest of the commodities complex. News that G7, or the Group of Seven rich nations, along with Australia have agreed to set a fixed price — rather than adopting a floating rate — on Russian oil later this month made it a complete storm for oil bears. Futures of New York-traded WTI, or West Texas Texas Intermediate, and London-traded Brent surged as much as 5% at Friday’s close as oil bulls found their rhythm after being stymied for days over news of COVID lockdowns in top oil importing nation China. Both crude benchmarks had also slumped on Thursday in a belated reaction to the Federal Reserve’s renewed pledge from a day earlier to keep raising interest rates to curb inflation at four-decade highs. The Fed’s stance then had driven the Dollar Index, which pits the greenback against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, to a three-week high of 113.035 on Thursday. But on Friday, the Dollar Index dropped to below 111 at one point despite the United States adding 261,000 jobs last month in its October nonfarm payrolls report, almost 35% more than the 195,000 anticipated by economists. “If the dollar continues to slide here, oil’s strength could be relentless,” Moya added. WTI settled up $4.44, or 5%, at $92.61 a barrel. The session high was $92.81, marking a nine-week high after the U.S. crude benchmark breached $90 this week for the first time since Oct. 11. WTI was headed for a similar percentage gain on the week. WTI rose 5.4% on the week. Brent settled up $3, or 3%, at $97.67 per barrel. The global crude benchmark hit a session high of $98.74 earlier. Brent's weekly gain about 2%. Friday's oil rally was further fueled by fears of the Kremlin’s reprisal to the G7 plan to cap the selling price of Russian oil in order to limit Moscow's ability to fund its invasion of Ukraine without throttling global supplies. Russian President Vladimir Putin has threatened in the past not to deal with countries that participate in the G7 plan or to suspend crude exports altogether, in retaliation against the scheme.

Gas Tanker Blast Leaves At Least 9 Dead, Many Wounded At Baghdad Soccer Field - At least nine people were killed and twenty more wounded when a gas tanker exploded in the Iraqi capital of Baghdad on Saturday, national security services said in a statement. "The explosion is an accident and not an act of terrorism," commander of security forces in Baghdad, Ahmad Salim, said. Most of the victims were soccer players participating in an amateur game on a field nearest the blast in a bustling eastern part of the city. However, conflicting reports pointed to the possibility of a car bomb having been denoted, or other IED which triggered the petrol tanker explosion.An AFP correspondent cited that many area windows were blown out, with extensive damage to nearby parked vehicles. "We were at home and felt a very strong blast and a smell of gas" an eyewitness told AFP."It felt like we were suffocating," the local resident added. "Our doors and windows were blown out."Iraq’s recently-elected president, Abdul Latif Rashid, vowed to launch an investigation to determine what happened and who was responsible. In an initial report, Reuters gave an account that appeared to conflict with Iraqi authorities saying it was 'accidental'. "The explosion took place in a garage near a football stadium and a café, when an explosive device attached to a vehicle detonated, leading to another explosion of a gas tanker that was close by, the security sources said," Reuters wrote. Shrapnel damaged surrounding residential buildings. Other reports too have questioned whether it was an attack or the result of accidental detonation: "Security officials, speaking to Associated Press on condition of anonymity in line with regulations, said it was unclear whether the explosion was a technical failure or targeted attack."

Iraq Monthly Roundup: 105 Killed in October - During October, at least 105 people were killed, and 239 were wounded. The number of dead fell significantly from last month. In September, 179 people were killed and 294 people were wounded.Militant-related violence left 58 dead and 82 wounded. At least 43 civilians were killed, and 58 more were wounded. Eight security personnel were killed, and 24 were wounded. Also, seven militants were killed.The conflict involving Turkey and the Kurdistan Workers’ Party (P.K.K.) continued in northern parts of Iraq. At least 45 P.K.K. members were killed, and six more were wounded. At least two Turkish soldiers died as well. Also, one civilian was wounded.Anti-government protests commemorating the October 2019 protests took place at the beginning of the month. About 150 people were wounded in them.

US Will No Longer "Waste Its Time" On Iran Nuclear Deal Talks --On Monday, President Biden’s special envoy for Iran, Robert Malley, said the US isn’t going to “waste its time” on talks with Tehran to revive the nuclear deal and would use a military option as a “last resort” against Iran.Negotiations between the US and Iran on the nuclear deal, known as the JCPOA, have been stalled since early September. The Biden administration hasn’t officially said it’s done with the talks, but Malley’s comments are the surest sign that diplomacy between Washington and Tehran is dead.Malley echoed other administration officials and said that the JCPOA is “not our focus right now” and that the US is going to focus on other issues, including supporting protesters inside Iran. “It is not on our agenda. We are not going to focus on something which is inert when other things are happening… and we are not going to waste our time on it… if Iran has taken the position it has taken,” Malley said at a Carnegie Endowment event, according to Axios.There’s no sign that Iran is working to develop a nuclear weapon, but Malley still threatened the US would use military action as a “last resort” to prevent Tehran from doing so.“We will use other tools, and in last resort, a military option if necessary, to stop Iran from acquiring a nuclear weapon,” he said.The US has accused Iran of making “extraneous demands” during the JCPOA negotiations. But the Biden administration had taken a hardline approach in the talks by refusing to lift all Trump-era sanctions.The stance forced Iran to negotiate what sanctions would be lifted in exchange for it bringing its nuclear program back into the strict limits set by the JCPOA.

Harris calls for Iran’s ouster from UN group charged with protecting women’s rights --Vice President Harris on Wednesday called for Iran to be removed from the United Nations Commission on the Status of Women, the body charged with promoting gender equality and addressing issues related to women’s rights. “Iran has demonstrated through its denial of women’s rights and brutal crackdown on its own people that it is unfit to serve on this Commission; Iran’s very presence discredits the integrity of its membership and the work to advance its mandate,” Harris said in a statement. “This is why today the United States is announcing our intention to work with our partners to remove Iran from the UN Commission on the Status of Women,” the vice president wrote. Iran, which began a four-year term on the U.N. commission earlier this year, has come under fire for its treatment of women after 22-year-old Mahsa Amini died in police custody after being arrested for allegedly violating Iran’s dress code.

US Has No Plans To Withdraw From Syria Or End Sanctions: White House - The Coordinator of Strategic Communications for Washington’s National Security Council, John Kirby, said on 28 October that the US has no plans to either ease the Caesar Act sanctions against Syria or to withdraw its illegally occupying forces from the country.The Caesar Act, passed by Congress in 2019, imposes harsh sanctions against Syria and targets any state, business, or individual involved with the Damascus government.In an attempt to justify the US presence in Syria, Kirby said that "only a thousand American soldiers" were stationed there, whose mission he claimed was solely to combat ISIS.The US official also claimed that Washington does not wish to shift "the balance of power" in Syria, suggesting that it has abandoned its regime change policy against Damascus.Despite this claim, the US continues to support and arm militant groups in the country, including the CIA-trained, anti-government Maghawir al-Thawra (MaT) faction, which holds positions within the Al-Tanf base. Last month, a Russian official claimed that MaT was planning an indiscriminate, false flag operation against civilians in order to pin the blame on the Syrian Arab Army (SAA).Despite also claiming that its presence in Syria aims to deter ISIS, US forces only carry out superficial strikes and operations against the extremist group, killing civilians in the process, while the SAA continues to pursue the organization thoroughly.Instead, US troops in Syria are preoccupied with their persistent and illegal oil-looting operations, the latest of which took place on 26 October. Lately, Washington has even stepped up its looting of Syrian oil in order to alleviate the man-made energy crisis it faces, as well as to ease the effect of the latest decision by OPEC+ to cut output production levels. According to the Syrian Oil Ministry, US forces have stolen more than 80 percent of the country’s daily oil output. Damascus and Moscow have both repeatedly and strongly condemned the US occupation, as well as its sanctions and policy of looting Syria’s natural resources.