US commercial crude supplies are at a new 21 month high despite record high oil exports after 2.266 million new barrels of oil of unknown origin appear daily; drilling for oil is at a 25 week low
US oil prices rose for the first time in three weeks after the EIA reported record US oil exports and the smallest inventory build in five weeks...after falling 0.3% to $76.32 a barrel last week on rising US oil inventories and on concern over the potential for a monetary policy induced recession, the contract price for the benchmark US light sweet crude for April delivery moved higher in early overseas trading on Monday amid supply disruptions in Europe and optimism over a demand recovery in China, but turned lower in volatile trading as a stronger dollar and fears of recession risks offset gains arising from Russia's plans to deepen oil supply cuts, and then tumbled during the New York session following much weaker-than-expected U.S. manufacturing data that showed protracted weakness in the industrial sector, undermining the outlook for fuel demand. to settle 64 cents lower at $75.68 a barrel on renewed worries about the impact of more US interest rate hikes....oil prices steadied in early Asian trading on Tuesday while the threat of more US rate increases following stronger-than-expected orders for core capital goods kept a lid on oil prices. then pushed higher on hopes that upcoming Chinese economic data would point to a recovery in the their economy, and then rallied to finish $1.37 higher at $77.05 a barrel as hopes for a strong economic rebound in China offset worries about US interest rate hikes dragging down consumption in the world’s biggest economy....oil prices continued to rise overnight even though American Petroleum Institute data showed that US crude oil inventories saw another significant increase, and then extended gains for a second session on Wednesday after a strong jump in manufacturing in China, the world’s top crude importer, boosted the outlook for global fuel demand, and settled 64 cents higher at $77.69 a barrel after the EIA report of record high U.S. crude exports helped offset the market’s consternation over another weekly build of crude stockpiles...oil prices inched up in early Asian trading on Thursday, extending gains from the previous two sessions, on the strong economic rebound in China, which offset concerns about a rise in U.S. crude inventories, then moved higher for a third straight day in New York trading amid evidence of China’s rebound and fresh signals that the Fed might pause interest-rate hikes this summer, and settled 47 cents higher at $78.16 a barrel even as traders fretted over stronger-than-expected labor market data in both the US and the Eurozone that defied hope for a near-term correction in inflation...oil prices slumped nearly 2% in early trading on Friday after the Wall Street Journal reported that the United Arab Emirates had an internal debate about leaving OPEC and pumping more oil. but trimmed the early losses as strong service sector surveys from Asia and Europe helped calm market fears that a recession might be imminent, and then rallied to settle Friday's session $1.52 higher at $79.68 a barrel following weekly data on U.S. drilling activity that showed rigs had declined for a third consecutive week to the lowest total in six months, suggesting that producers are slowing production in response to building inventories...the U.S. crude benchmark price thus gained 4.4%.this past week, supported by stronger than expected economic data from China, record US crude oil exports, and a falling US dollar...
meanwhile, natural gas prices finished higher for a second straight week, following a ten week drop to a 28 month low on February 17th, as a colder than normal forecast for earlly March persisted while gas flows to export plants hit record highs...after rising 8.3% to $2.548 per mmBTU last week as major winter storms impacted California and the northern tier and March forecasts turned colder, the contract price of US natural gas for April delivery opened 15 cents higher on Monday as weather models continued to show cold over much of the Lower 48 for early to mid-March and as Freeport LNG stayed on its path toward full operations, and settled 18.3 cents, or 7.2% higher at a one month high of $2.731 per mmBTU, supported by technical trading, a possible short squeeze, and frigid forecasts...but natural gas prices opened 7 cents lower on Tuesday as traders pulled back overnight to realign with market fundamentals following the March contract settlement, but rallied from a 16 cent deficit to settle 1.6 cents higher at $2.747 per mmBTU, on a monthly drop in gas output and an increase in the amount of gas flowing to LNG export plants...following an early dip, gas prices rose again on Wednesday and settled 6.4 cents higher at $2.811 per mmBTU on afternoon forecasts calling for colder weather and higher heating demand next week than had been previously expected....however, natural gas prices posted a decline for the first time in seven sessions on Thursday following an EIA report showing an anemic draw from storage and settled 4.6 cents lower on the day at $2.765 per mmBTU...but the natural gas rally resumed on Friday, as prices rose 24.4 cents or 9% to a five week high of $3.009 per mmBTU on new two-week forecasts for colder weather and higher heating demand, while the amount of gas flowing to U.S. LNG export plants soared to a record high, and thus finished 18.1% higher on the week...
The EIA's natural gas storage report for the week ending February 24th indicated that the amount of working natural gas held in underground storage in the US fell by 81 billion cubic feet to 2,114 billion cubic feet by the end of the week, which left our natural gas supplies 451 billion cubic feet, or 27.1% above the 1,663 billion cubic feet that were in storage on February 24th of last year, and 342 billion cubic feet, or 19.3% more than the five-year average of 1,772 billion cubic feet of natural gas that were in storage as of the 24th of February over the most recent five years….the 81 billion cubic foot withdrawal from US natural gas working storage for the cited week was a little more than was expected by a Reuters survey of analysts, whose average forecast called for a 75 billion cubic feet withdrawal, but it was much less than the 137 billion cubic feet that were pulled out of natural gas storage during the corresponding week of 2022, and also much less than the average 134 billion cubic feet of natural gas that have typically been withdrawn from our natural gas storage during the same winter 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 February 24th indicated that even after another big jump in our oil exports, we still had a bit of surplus oil left to add to our stored commercial crude supplies for the 10th consecutive week, and for the 29th time in the past 45 weeks, largely due to the appearance of another 16 million barrels of oil that could not be accounted for... Our imports of crude oil fell by an average of 118,000 barrels per day to average 6,208,000 barrels per day, after rising by an average of 94,000 barrels per day during the prior week, while our exports of crude oil rose by 1,032,000 barrels per day to a record average 5,629,000 barrels per day, which combined meant that the net of our trade in oil worked out to a record low net import average of 579,000 barrels of oil per day during the week ending February 24th, 1,116,000 fewer barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly unchanged at 12,300,000 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 12,879,000 barrels per day during the February 24th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 14,979,000 barrels of crude per day during the week ending February 24th, an average of 31,000 fewer barrels per day than the amount of oil that our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that an average of 166,000 barrels of oil per day were being added to the supplies of oil stored in the US. So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending February 24th appear to indicate that our total working supply of oil from net imports and from oilfield production was 2,266,000 barrels per day less than what was added to storage plus 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 [+2,266,000] 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 was an omission or error of that magnitude in this week’s oil supply & demand figures that we have just transcribed.... However, since most everyone treats these weekly EIA reports as precise, and since these weekly 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)….
With our oil exports at a record high, we'll include a historical graph of them below, where you can see that prior to the end of 2014, US oil exports, except for those allowed under NAFTA, had been negligible because they had been banned 40 years earlier, in the wake of the Arab oil embargo. The ban on US oil exports was lifted in a spending bill that Congress passed during the last week of 2015, part of a compromise that Obama agreed to in order to avoid a government shutdown...as you can see, the recent export spikes clearly beat the previous oil export highs by a large margin...
Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,456,000 barrels per day last week, which was still 4.2% more than the 6,193,000 barrel per day average that we were importing over the same four-week period last year. This week's 166,000 barrel per day increase in our overall crude oil inventories was all added to our commercially available stocks of crude oil, while the amount of oil in our Strategic Petroleum Reserve remained unchanged.. This week’s crude oil production was reported to be unchanged at 12,300,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at a 33 month high of 11,900,000 barrels per day, while Alaska’s oil production was 2,000 barrels per day lower at 445,000 barrels per day and added 400,000 barrels per day to the the rounded national total, same as last week....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 still 6.1% below that of our pre-pandemic production peak, but was 26.8% 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 85.8% of their capacity while using those 14,979,000 barrels of crude per day during the week ending February 24th, down from their 85.9% utilization rate during the prior week, but still close to normal utilization for late February, when seasonal maintenance is slowing throughput.. The 14,979,000 barrels per day of oil that were refined this week were 2.7% less than the 15,398,000 barrels of crude that were being processed daily during week ending February 25th of 2022, and 4.6% less than the 15,696,000 barrels that were being refined during the prepandemic week ending February 28th, 2020, when our refinery utilization was 86.9%, close to normal for late February ...
Even with another modest decrease in the amount of oil being refined this week, the gasoline output from our refineries was again higher, increasing by 302,000 barrels per day to 9,730,000 barrels per day during the week ending February 24th, after our gasoline output had increased by 339,000 barrels per day during the prior week. This week’s gasoline production was also 4.9% more than the 9,274,000 barrels of gasoline that were being produced daily over the same week of last year, while just 0.3% less than the gasoline production of 9,795,000 barrels per day during the prepandemic week ending February 28th, 2020. Meanwhile, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 91,000 barrels per day to 4,609,000 barrels per day, after our distillates output had increased by 191,000 barrels per day during the prior week. With this weeks decrease, our distillates output was 2.2% less than the 4,713,000 barrels of distillates that were being produced daily during the week ending February 25th of 2022, and 0.8% less than the 4,648,000 barrels of distillates that were being produced daily during the week ending February 28th 2020...
Even with the increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the fourth time in sixteen weeks and for the 14th time in 29 weeks, decreasing by 874,000 barrels to 240,066,000 barrels during the week ending February 24th, after our gasoline inventories had decreased by 1,856,000 barrels during the prior week. Our gasoline supplies fell by less this week even though the amount of gasoline supplied to US users rose by 202,000 barrels per day to 9,112,000 barrels per day, because our imports of gasoline rose by 196,000 barrels per day to 672,000 barrels per day, and because our exports of gasoline fell by 117,000 barrels per day to 561,000 barrels per day.. Even with 12 recent gasoline inventory increases, our gasoline supplies were still 2.8% below last February 25th's gasoline inventories of 246,011,000 barrels, and still about 5% below the five year average of our gasoline supplies for this time of the year…
Even with the decrease in our distillates production, our supplies of distillate fuels increased for the 4th time in 9 weeks, and for the 28th time over the past year, rising by 179,000 barrels to 122,114,000 barrels during the week ending February 24th, after our distillates supplies had increased by 2,698,000 barrels during the prior week. Our distillates supplies rose by less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, increased by 64,000 barrels per day to 3,835,000 barrels per day, and because our imports of distillates fell by 217,000 barrels per day to 197,000 barrels per day, while our exports of distillates fell by 13,000 barrels per day to 945,000 barrels per day... After fifty-seven inventory withdrawals over the past ninety-five weeks, our distillate supplies at the end of the week were were 1.9% below the 119,678,000 barrels of distillates that we had in storage on February 25th of 2022, and about 10% below the five year average of our distillates inventories for this time of the year...
Finally, with a record two and a quarter million barrels per day of new oil supplies that could not be accounted for, our commercial supplies of crude oil in storage rose for the 17th time in 29 weeks and for the 25th time in the past year, increasing by 1,166,000 barrels over the week, from 479,041,000 barrels on February 17th to 480,207,000 barrels on February 24th, after our commercial crude supplies had increased by 7,647,000 barrels over the prior week. With even larger oil supply increases in the weeks following the Christmas refinery freeze offs, our commercial crude oil inventories were at a 21 month high, up by 14.1% from December 30th, and now about 9% above the most recent five-year average of commercial oil supplies for this time of year, and also 45.8% above the average of our available crude oil stocks as of the last weekend of February over the 5 years at the beginning of the past decade, with the apparent disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels. And even after 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 February 24th were 16.2% more than the 413,425,000 barrels of oil we had in commercial storage on February 25th of 2022, but 0.9% less than the 484,605,000 barrels of oil that we had in storage after winter storm Uri on February 26th of 2021, while 8.1% more than the 444,119,000 barrels of oil we had in commercial storage on February 28th of 2020…
This Week's Rig Count
The number of drilling rigs active in the US decreased for the 16th time over the prior 30 weeks during the week ending March 3rd, and were 5.5% below the prepandemic level, even after increasing ninety-five times over the past 126 weeks... Baker Hughes reported that the total count of rotary rigs drilling in the US fell by four to 749 rigs over the past week, which was still 99 more rigs than the 650 rigs that were in use as of the March 4th report of 2022, but was 1,180 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global market with oil in an attempt to put US shale out of business. .
The number of rigs drilling for oil decreased by 8 to to a 25 week low of 592 oil rigs during the past week, after the number of rigs targeting oil had decreased by 7 during the prior week, while there are still 73 more oil rigs active now than were running a year ago, even as they amount to just 36.8% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and while they are now down 13.3% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations increased by 3 to 154 natural gas rigs, which was also up by 24 natural gas rigs from the 130 natural gas rigs that were drilling during the same week a year ago, even as they were only 9.6% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….
In addition to those rigs targeting oil and natural gas, Baker Hughes now shows three rigs they've labeled as "miscellaneous" are 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, and another was a directional rig drilling to between 5,000 and 10,000 feet into a formation in Lake county California that Baker Hughes doesn't track, while the new one is a directional rig drilling to between 5,000 and 10,000 feet into a formation in Pershing county Nevada….While we haven't seen any details on any of those wells, in the past we've identified various "miscellaneous" rig activity as being for exploration, for carbon dioxide storage, and for utility scale geothermal projects....a year ago, there were two such "miscellaneous" rigs running...
The offshore rig count in the Gulf of Mexico was down by one to 16 rigs this week, with 15 of those drilling for oil in Louisiana's offshore waters and one also drilling for oil in Texas waters….that Gulf rig count is still up by 4 from the 12 Gulf rigs running a year ago, when 11 Gulf rigs were drilling for oil offshore from Louisiana and one was deployed for oil offshore from Texas….since there aren't any rigs drilling off our other coasts at this time, the Gulf rig count is equal to the national offshore count..
In addition to rigs running offshore, there is now just one water based rigs drilling through an inland body of water this week; that's a directional rig drilling for oil at a depth greater than 15,000 feet in Terrebonne Parish, Louisiana...the inland waters directional rig that had been drilling for oil in Lafourche Parish, Louisiana last week was shut down this week ...a year ago, there were three rigs drilling on inland waters...
The count of active horizontal drilling rigs was down by 3 to 690 horizontal rigs this week, which was still 95 more rigs than the 595 horizontal rigs that were in use in the US on March 4th of last year, but was only just over half of the record 1,374 horizontal rigs that were drilling on November 21st of 2014.....at the same time, the vertical rig count was down by two to 14 vertical rigs this week, which was also down by 11 from the 25 vertical rigs that were operating during the same week a year ago…on the other hand, the directional rig count was up by one to 44 directional rigs this week, and those were also up by 135 from the 30 directional rigs that were in use on March 4th of 2022…
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 March 3rd, the second column shows the change in the number of working rigs between last week’s count (February 24th) and this week’s (March 3rd) count, the third column shows last week’s February 24th 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 4th of March, 2022...
with the greatest rig drops in Texas and in the Permian basin, we'll start by checking the Rigs by State file at Baker Hughes for the changes in the Texas Permian...there we find that there were four rigs pulled out of Texas Oil District 8, which overlies the core Permian Delaware, and that rig counts in the other Texas Permian districts were unchanged, thus accounting for the four rig decreases in both the state and the Permian basin...one of those Permian rigs removed had been targeting natural gas, so that leaves the Permian deployment at 345 oil rigs and 4 targeting natural gas...elsewhere in Texas, the rig count was up by one in Texas Oil District 1, and up by one in Texas Oil District 3, but down by two in Texas Oil District 4, which most likely were offsetting changes in the Eagle Ford shale, where the rig count remained unchanged, while there was a rig pulled out of Texas Oil District 6, which accounts for the natural gas rig pulled out of the Haynesville shale, since the core Haynesville area in Louisiana was unchanged...the two rigs removed from Louisiana included an oil rig that had been drilling offshore, and the aforementioned inland waters rig that had been drilling for oil in Lafourche Parish in the southeastern corner of the state..
Oklahoma accounts for the other two basin changes that Baker Hughes shows; there was an oil rig pulled out of the Mississippian shale near the Kansas border, while there was a rig added in the Cana Woodford that underlies several counties in the west central part of the state....since the Oklahoma rig count is down by one, there must have also been a rig removed from a Oklahoma basin that's not tracked by Baker Hughes...meanwhile, the two rigs added in Wyoming were targeting natural gas in Campbell county, which overlies the Powder River basin, also a basin that's not tracked by Baker Hughes...however, since we already know there were natural gas rigs pulled out of the Permian and Haynesville, that still means that three more natural gas rigs were added to other basins not tracked by Baker Hughes...since the other state counts, other than Nevada where a "miscellaneous" rig was added, are otherwise unchanged, that means that three oil rigs not listed by Baker Hughes were pulled out of the same state or states that saw natural gas rig additions at the same time...
++++++++++++++++++++++++++++++++++++++++++++++++++
Oil and gas commission looking to lawmakers for increased royalties, fees - The commission in charge of new rules for leasing Ohio’s state lands to oil and gas companies will seek legislative tweaks to award leases through bidding and to allow for more lucrative royalties. Meanwhile, the commission is pushing forward with a standard lease form over the objections of environmentalists.They worry that, despite repeated statements to the contrary, the proposal opens the door to surface uses like setting up drilling equipment within state parks.The Ohio Oil and Gas Land Management Commission introduced its standard lease form at a meeting in February. The public comment period for that draft has now closed.Environmentalists have zeroed in on a particular section which notes “without a separate written surface use agreement,” companies can’t build structures like well pads, pipelines or pump stations on public land. Cathy Cowan Becker argued that language creates a supposition that surface use is possible, but that directly contradicts what Gov. Mike DeWine has promised.“The administration has a policy of prohibiting any new surface use impacts,” she explained. “But if you go to their draft at least form, it says that they can have surface impacts with a separate written surface use agreement.”“And so that can be negotiated after a lease comes to this commission and is approved, then that’s all done out of sight, all behind closed doors,” she added.Public lands advocates voiced frustrations with the proposed nomination process whereby interested companies select and pursue a given parcel. Roxanne Groff wants to see more time for public comment.“We asked for a minimum 60 days,” she said, “and we cannot accept 45.”With the public comment period concluded, next steps include a determination from the state’s Common Sense Initiative which intervenes when rules could hamper business development. After that, the commission has to hold an additional public hearing and go before the Joint Committee on Agency Rule Review.
Gulfport Makes $495M in 2022, Drilled & Turned to Sales 28 Wells | Marcellus Drilling News - Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), emerged from bankruptcy in May 2021 with a new board and new top management. In January of this year, the company appointed a new CEO, John Reinhart, the former President and CEO of M-U driller Montage Resources Corporation before that company was gobbled up by Southwestern Energy (see Marcellus Veteran John Reinhart Joins Gulfport Energy as CEO). Yesterday Gulfport issued its 4Q and full 2022 update. The company made $749 million in net income during 4Q22, versus $558 million in 4Q21 (up 34%). Gulfport’s net income for the full year was $495 million in 2022, versus losing $113 million in 2021.
No — natural gas is not really green energy - – Randi Pokladnik - During the recent lame duck session, Ohio’s predominantly Republican Legislature and Gov. Mike DeWine rushed to pass HB 507. The amended bill prohibits communities from banning pesticides within city borders and allows state lands and parks to be leased for oil and gas development. The legislation also would “create a broad new legal definition of green energy that would include natural gas.”An anonymously funded, pro-natural gas, dark money group, the Empowerment Alliance, helped Ohio lawmakers spin the narrative that natural gas is green. Labeling gas as green energy does not change the scientific facts: The combustion of methane produces carbon dioxide, and methane itself is a potent greenhouse gas. The bio-geo-chemical processes that created the methane gas and coal deposits in the geographic area of Ohio took place millions of years ago, when carbon sources such as ancient plants and animals decayed in anaerobic conditions. Coal has a higher percentage of carbon than methane; therefore, it produces more carbon dioxide per BTU when burned. However, both substances are fossil fuels that contribute to climate change, and both have limited supplies. Methane produces lower carbon dioxide emissions when burned but that benefit is overshadowed by the fact that extracting methane using high-pressure hydraulic fracking releases enormous amounts of methane gas into the atmosphere. These emissions can be from leaks of storage tanks, compressor stations, blowdowns, pipelines and flaring. A report published in “Energy Science and Engineering” states “natural gas (both shale gas and conventional gas) is responsible for much of the recent increases in methane emissions, and because of this have a higher greenhouse gas footprint than coal or oil. Pound for pound, the comparative impact of methane is 25 times greater than carbon dioxide. Fracking requires extensive infrastructure and constant inputs of resources such as water, sand and chemicals used to extract the methane. When it comes to the energy costs of fossil fuels, consumers are at the mercy of an industry which consistently makes record profits while it receives $20 billion a year in subsidies. Ohio’s southeastern counties provide examples of how fracking has turned rural communities into sacrificial industrial sites. Pipelines mar wooded hillsides; well pads rise over the landscape; and thousands of trucks loaded with carcinogenic chemicals, frack sand and toxic water travel our roads every day. Local residents are exposed to air and water emissions from the process which releases hazardous air pollutants and contaminants water. In February 2018, a gas well in Belmont County experienced a blowout. The well released methane gas for 20 days before the leak could be contained. The total emissions from the 20-day event were estimated to be equivalent to the total annual emissions of several countries, or 120 metric tons per hour. Given the significant contribution of methane gas to climate change and the environmental destruction caused by fracking, it is hard to understand why any educated person would call this energy source green. The only time “green” can legitimately be used to describe methane gas is when pointing out it is a potent greenhouse gas.
29 New Shale Well Permits Issued for PA-OH-WV Feb 20-26 | Marcellus Drilling News - New shale permits issued for Feb. 20-26 in the Marcellus/Utica slide lower last week. There were 29 new permits issued in total last week (down from 35 the week before), including 24 new permits for Pennsylvania, no new permits for Ohio, and five new permits issued in West Virginia. Last week the top receiver of new permits by far was the largest natural gas driller in the country, EQT Corporation, with 20 new permits split between Greene and Washington counties in southwestern PA. Antero Resources, Armstrong County, Beaver County, CNX Resources, Doddridge County, Energy Companies, EQT Corp, Greene County (PA), Harrison County, HG Energy, Lewis County, Marshall County, PennEnergy Resources, Range Resources Corp, Snyder Brothers, Southwestern Energy, Washington County, Westmoreland County
ShaleTech: Marcellus-Utica Shales - Thawing prices from a fickle winter heating season and largely politically-induced takeaway restrictions have combined to rein in gas production from the premier Appalachian basin, situated on the doorstep of half of the nation's population cluster. Amid seesawing gas prices, operators across the basin's dry and wet gas Marcellus and Utica shales of Pennsylvania, West Virginia and Ohio are expected to produce 35,372 MMcfd in February (Fig. 1), guesstimates the U.S. Energy Information Administration (EIA), a number which would be some 4,625 MMcfd less, year-over-year. January to February Appalachian gas production is forecast to rise by 93 MMcfd, but remains below February 2022 production. Source: U.S. Energy Information Administration (EIA)Gas prices vacillated for much of last year and continued into 2023, where futures for February delivery dropped to $4.172/MMBtu on Jan. 4, as a deadly arctic blast in late December gave way to unseasonably warm weather to greet the new year. The EIA projects spot gas prices on the Henry Hub benchmark will average less than $5.00/MMBtu this year. Prices hit a 2022 high of $9.85/MMBtu on Aug. 22. "I remain bullish on the outlook for natural gas, but there's no doubt we see some volatility in the near-term," Chesapeake Energy Corp. EVP and COO Josh Viets told the Bank of America Securities Global Energy Conference last November. Chesapeake is returning to its gassy roots following the $1.425 billion sale of around 377,000 net acres and 27,000 boed of oil production in its Eagle Ford Brazos Valley asset on Jan. 18.Headwinds aside, Appalachian drilling activity remained relatively steady throughout 2022 and entered 2023 with a combined 52 rigs active in January (Fig.2), according to Baker Hughes. Of those, 38 active rigs targeted the Marcellus in January—two active rigs off from the 2022 high of 40 in October—mainly in the Pennsylvania fairway, where operators are increasing focus on the Upper Marcellus horizon. Fig. 2. Cumulative Appalachian drilling activity was relatively steady last summer, averaging around 48 active rigs. Image: Southwestern Energy Co.Leading gas producer EQT Corp. operated up to three of those rigs last year, along with one to two top hole rigs and two to three frac spreads. In September, EQT spent $5.2 billion to acquire privately held Tug Hill Operating and XCL Midstream, adding 800 MMcfed of production and around 90,000 net acres to their possession, which now comprises 1.1 million net acres across the tri-state operating area. Full-year 2022 net production was projected to reach roughly 6.1 Bcfed, with 64 to 79 net wells turned-in-line—some 30% fewer than previously guided. President and CEO Toby Rice said wells have pushed back to this year, largely in hopes that the 10% to 20% inflation rate the industry has faced will ease. "One of the benefits of moving wells back in 2023, I guess, is that we do hope service costs will abate a bit," he said. "But we'd like to have those volumes today with the current price backwardations." With operators reporting record cash flows, further production growth, they say, is being hampered by difficulties in moving more gas out of the basin. The lingering dearth of pipeline capacity, which shows no sign of easing anytime soon, is driven largely by backlash from non-producing states, particularly in the Upper Northeast.
EQT Sending Oil, Natural Gas Equipment to Support Ukraine's War Efforts - EQT Corp., the largest natural gas producer in the United States, has donated production equipment to Ukraine’s largest gas producer, JSC Ukrgasvydobuvannya, to restore facilities damaged in the war with Russia. Ukrgasvydobuvannya, a unit of Naftogaz, produces 70% of Ukraine’s gas, which totals around 12.5 Bcm.“Ensuring a reliable supply of energy is a challenge, not only for Ukraine, but for the entire world,” said EQT CEO Toby Z. Rice. “This equipment will play a major role in helping to stabilize Ukraine’s energy supply.”The year-long Russian invasion of Ukraine has upended global gas and oil supplies. LNG imports from the United States have been one way to help Europe in responding to the impacts of Russia’s waning pipeline gas. “The war has significantly complicated delivery of required gas production equipment and materials. Certain equipment is just not readily available on the Ukrainian market,” said Ukrgasvydobuvannya’s acting CEO Oleg Tolmachev.
Pioneer Natural Resources considers buying smaller shale rival in Marcellus basin – Pioneer Natural Resources Co. is considering an acquisition of Range Resources Corp., according to people familiar with the matter. oil derrick in Marcellus shale basin The Texas-based oil and gas explorer is weighing a deal for the smaller U.S. rival as it seeks further consolidation in the shale industry, the people said, asking not to be identified discussing confidential information. Deliberations are ongoing and there’s no certainty the companies will reach an agreement, the people said. A representative for Pioneer declined to comment while Range couldn’t immediately be reached for comment. Pioneer shares fell as much as 7% on the news while Range rose as much as 18%, giving the company a market value of $6.8 billion. Up until Friday, shares in Pioneer have fallen 11% in New York over the last 12 months, valuing it at about $47 billion. Range’s stock is up 12% over the period. Buying Range would bring Pioneer into the Marcellus Basin in southwest Appalachia, where the key resource is gas, not oil. Pioneer already produces gas in the Permian, but only as a byproduct from its oil wells. Pioneer’s CEO Scott Sheffield has a reputation for dealmaking, with acquisitions of Parsley Energy and DoublePoint Energy since 2020. Both deals expanded Pioneer’s acreage in its core Midland Basin asset. The U.S. shale sector is poised for a big return to dealmaking this year as some of the largest oil companies look for ways to deploy cash, according to a McKinsey & Co. report Friday. Shares of other Appalachian-focused gas producers also climbed. EQT Corp. rose as much as 5.6% while Coterra Energy Inc. gained 2.8% and Antero Resources Corp. advanced 8.5%.
Range Resources Shrugs Off Report of Potential Pioneer Natural Resources Acquisition --Range Resources Corp.’s management team on Tuesday brushed aside questions about whether they’ve discussed the possibility of Pioneer Natural Resources Co. acquiring the company after reports surfaced last week. CEO Jeff Ventura told analysts during a call to discuss year-end financial results Tuesday that a statement Pioneer issued downplaying the reports was “good news” for Range. He added that Range is “in a great position where we don’t need to pursue any sort of” merger or acquisition. Management said little more about whether conversations with Pioneer, one of the nation’s largest independent oil producers, had actually taken place. Bloomberg, citing anonymous sources, first reported that Pioneer was considering acquiring the Appalachian pure-play and heavyweight. Pioneer released a statement shortly after the report saying it “is not contemplating a significant business combination or other acquisition transaction.” Ventura said Tuesday that 2022 was one of the best in Range’s history as it was able to capitalize on a sharp spike in commodity prices. As natural gas prices have fallen off steeply since then, he noted the company is well positioned to weather the current environment. He said the company is well hedged with breakevens of well below $2/Mcf across a wide-ranging position that spans Pennsylvania. Efficiencies gained through the second half of 2022 are also expected to build the company’s in-process well inventory and give it more optionality in 2024 and 2025 if prices firm. COO Dennis Degner said this year’s activity would be weighted more toward the company’s liquids-rich acreage in Southwest Pennsylvania compared to last year. He said two-thirds of the lateral footage turned to sales in 2023 would be in wet and super-rich areas as dry gas prices have plummeted by double digits since the beginning of the year. Range once again plans to pursue a maintenance program and keep production levels flat this year. The company produced 2.1 Bcfe in 2022 and guided for the same level of production this year. Fourth quarter production was 2.2 Bcfe and flat from the year-ago period. Capital expenditures are forecast to increase, however, as the industry continues to grapple with inflation. Range said it expects to spend $570-615 million this year, up from $492 million in 2022, to achieve the same levels of production. While Degner said the natural gas outlook appears grim now with maintenance levels continuing, rigs falling off and prices dropping, “we think that bodes well for the go-forward outlook for natural gas.” He added that Freeport LNG’s return to commercial service and additional U.S. liquefied natural gas export projects slated to come online beginning in 2024 is also constructive. Propane is also still being exported at record levels, “which is really encouraging,” Degner said. “And of course, we’re all watching the reopening of China take place, and we know that that will turn into the further support of reducing stock levels and continuing to support a back-half-of-the-year constructive outlook for further” natural gas liquids price improvements.
EOG Resources Strikes Upbeat Tune on Natural Gas, Oil Volumes - EOG Resources Inc., a multi-basin exploration and production firm, said its strong fourth quarter and full-year 2022 results were powered by robust natural gas and oil demand, price spikes and steady production activity. For the year, EOG said, the natural gas prices it fetched jumped 49% from a year earlier, while crude prices increased 42%. Houston-based EOG said natural gas production increased 4% in 2022 to 1.5 Bcf/d. Total equivalent production, including oil and natural gas liquids, increased 10% to 331.5 million boe. Gas prices have since retreated because of a mild second half of winter across much of the Lower 48 and elevated production. Oil prices, too, have come down amid recession concerns. Even as rumblings mount about production activity scaling back — Chesapeake Energy Corp. and Comstock Resources Inc., for example, said on recent earnings calls they would drop rigs this year – EOG said it would forge ahead and expects output growth in 2023. EOG’s Lower 48 footprint includes operations in the Permian, Williston, Powder River, Denver-Julesburg (DJ) and Anadarko basins, along with the Eagle Ford and Barnett shale formations, among other areas. The company estimated at the midpoint of its guidance that oil and condensate production would be 473,800 boe/d, above the 2022 actual of 461,300 boe/d. The company expects to maintain steady drilling operations in the Permian’s Delaware sub-basin and the Eagle Ford. It sees steady activity or growth in the Powder River Basin, Utica Shale, and DJ, among others. President Lloyd Helms estimated the average EOG rig count for this year would increase by two, with one additional fracturing fleet.
Despite Gas Price Slump, EOG Full Steam Ahead in Emerging Plays - EOG Resources Inc.’s drilling plans — particularly in emerging plays in South Texas and the Utica Shale — are not being significantly impacted by the recent slump in natural gas prices, the company recently told investors.Houston-based EOG has kept an eye on volatility in the natural gas space since late last year, Chairman and CEO Ezra Yacob said in the company’s fourth-quarter 2022 earnings call on Feb. 24. But the company plans to continue development and infrastructure build-out in emerging plays and expand its drilling program in 2023.Henry Hub gas prices averaged $3.27/million Btu MM(MMBtu) in January, down more than $2/MMBtu from December 2022, according to the U.S. Energy Information Administration’s most recent Short-Term Energy Outlook.After previously forecasting Henry Hub prices to average nearly $5/MMBtu this year, the EIA now anticipates gas prices to average around $3.40/MMBtu in 2023 and to stay below $4 until December.But recent volatility in gas prices won’t deter EOG from its long-term strategy, Yacob said. The E&P company anticipates “a pretty dramatic increase in the offtake and the demand coming on along the Gulf Coast” as more liquefied natural gas export projects start up in the next few years.“The U.S., just this year, will have about 2 Bcf/d of LNG export back online after the disruption's clear,” Yacob said. “We've got an additional 5 Bcf/d a day coming online in kind of the [2024, 2025] time frame and then potentially another 8 Bcf/d still working through financing.”EOG plans to produce between 1.67 Bcf/d and 1.81 Bcf/d of natural gas this year, up approximately 245 MMcf/d at the midpoint compared to 2022 volumes.Around half of EOG’s gas volume growth will come from associated gas from EOG’s sizable footprint in the Delaware Basin, where returns are being predominately driven by oil and NGL production.EOG completed 358 net wells in the Delaware Basin in 2022, up from 288 net wells completed during 2021. The company plans to complete around 365 net wells in the Delaware this year, the company said in its latest annual report.The other half of EOG’s gas production growth will come from the company’s emerging Dorado gas play in South Texas. EOG completed 22 net wells in the Dorado play last year and anticipates completing 30 net wells in there in 2023.“Our strategy at Dorado hasn’t significantly changed yet – and at this point, we don’t really see that it would, barring anything dramatic,” Yacob said. “The reason for that is that Dorado always has been kind of a longer-term strategy for us.”Late last year, EOG began construction on a new 36-inch pipeline that will transport gas from the Dorado field to the Agua Dulce sales hub outside of Corpus Christi, Texas.Overall, EOG’s average rig count for 2023 is expected to grow by about two rigs and one additional frac fleet.
US Natural Gas Production Surges to Record in 2022, up 33% from 2017. LNG Exports Hit Record despite Freeport Terminal Shutdown - By Wolf Richter -US natural gas production rose to a record 39 trillion cubic feet in 2022, according to EIA data, having soared by 33% since 2017 and having doubled since 2006, amid the massive US fracking boom that reshaped the energy landscape in the US globally. By 2008, with limited demand in the US and not enough export possibilities, the price of natural gas in the US collapsed ( for a neck-breaker rollercoaster, see the long-term price chart at the bottom). In 2011, the US became the largest natural gas producer in the world.The US has exported natural gas via pipelines to Mexico since the late 1990s, and to a lesser extent to Canada (from which is also imports natural gas). And the US has long had a small Liquefied Natural Gas (LNG) export terminal in Alaska.But large-scale exports of LNG to the rest of the world was impossible until the first large-scale LNG export terminal on the Gulf Coast began operating in 2016. And as the LNG export boom took off, providing more demand for US production, US production skyrocketed:Total exports of natural gas via LNG to the rest of the world, and via pipelines to Mexico and Canada rose to a new record of 6.89 trillion cubic feet, or roughly 18% of US production.Exports via LNG rose by 3.6% in 2022 to 3.87 trillion cubic feet, up from near-0 in 2015. Exports were handicapped by the shutdown of the Freeport natural gas liquefaction plant in Texas last June, after a major fire, which cut LNG export capacity by 17% for the second half of the year. Exports did not resume until this year. Exports via pipeline to Mexico took off over 20 years ago and in 2021 reached a record of 2.15 trillion cubic feet, but dipped to 2.07 trillion cubic feet in 2022 (the US imports no natural gas from Mexico).Exports to Canada via pipeline have remained relatively stable over the years, and in 2022 rose to 952 billion cubic feet, but that was below the 2019 volume (the US imports more natural gas from Canada than it exports to Canada).In the chart, you can see the slower growth in LNG exports (purple line) in 2022 due the shutdown of the Freeport LNG export terminal. The green line represents exports via pipeline to Mexico and Canada. The red line is total natural gas exports:Asia had been the dominant buyers of US LNG, at first Japan and South Korea. China and India also became big buyers starting in 2020. In 2021, exports of LNG to Asia reached a record 1.68 trillion cubic feet, nearly half of total LNG exports, according to EIA data. But in 2022, sales to Asia plunged by 46% (green line), as US LNG was diverted to Europe.European countries with LNG import terminals became large buyers of US LNG. Combined, they bought 2.47 trillion cubic feet in 2022, about 64% of total US LNG exports (red).Even though Germany ended up with some of the gas through the European gas distribution network, it didn’t have LNG import terminals until the very end of the year, and so it doesn’t show up as a major buyer. The buyers in Europe were coastal countries with LNG import terminals and with chartered Floating Storage and Regasification Units (FSRU). The largest buyers in Europe were, in billion cubic feet (Bcf)Exports to Latin America plunged by 60% in 2022, to 245 billion cubic feet (gray). Exports to the Middle East and Africa rose to 249 billion cubic feet (blue).
New Jersey utility wants to overhaul gas pipelines - New Jersey’s largest utility is seeking state approval to continue a major overhaul of its gas infrastructure, replacing aging cast-iron and steel pipelines prone to leaking methane, a potent greenhouse gas. The three-year $2.54 billion proposed project, filed with the state Board of Public Utilities Wednesday, also would allow PSE&G for the first time to use renewable natural gas and hydrogen in its gas distribution system, which serves nearly 2 million customers.If approved by the regulatory agency, the project would offer insight into how gas utilities are adapting to a state intent on transitioning from fossil fuels, a goal the Murphy administration now aims to achieve with a 100% clean-energy economy by 2035, 15 years sooner than its previous target.This third phase of PSE&G’s gas modernization program aligns with recent executive orders by Gov. Phil Murphy and the state’s Energy Master Plan, as well as a state law mandating reductions in greenhouse gas emissions, according to Wade Miller, senior director of gas transmission, distribution and engineering for PSE&G.PSE&G has more than 3,000 miles of cast-iron gas mains, with an average age of 91 years — more than any other utility in the nation. In its proposal, the company would replace about 860 miles of cast-iron pipes and approximately 200 miles of unprotected steel pipes, with much of the replacement targeted for overburdened communities.By PSE&G’s estimate, the utility’s ongoing replacement program has reduced methane emissions by 250,000 metric tons of carbon dioxide equivalent emissions. The new program is expected to reduce emissions by another 145,000 metric tons, the utility said.If implemented as proposed, the latest program is forecast to increase the typical residential customer bill by about 3%, or $3 per month for each year of the three-year program. Lower natural gas prices have led to rate decreases in the past two months.
Is LNG by rail safe? - The train derailment in East Palestine, Ohio, is renewing concerns about the safety of moving natural gas by rail and whether existing federal rules governing the industry should be changed. Seven Democratic House lawmakers from Pennsylvania, for example, sent a letter to Transportation Secretary Pete Buttigieg on Friday, asking that he work to suspend a Trump administration rule that would allow the transportation of liquefied natural gas by rail. During the Biden administration, the Pipeline and Hazardous Materials Safety Administration proposed to halt that authorization until it could finalize a rule or until June 20, 2024, whichever comes first (Energywire, Nov. 9, 2021). Advertisement But calls to change the rule more quickly have swelled since the Norfolk Southern derailment in Ohio, which forced the evacuation of thousands in the town near the Pennsylvania border, caused the deaths of tens of thousands of aquatic animals and left residents questioning whether the air and water in their town is safe. “We believe this derailment further demonstrates that any regulation governing hazardous transport must be developed in a manner that carefully analyzes safety risks and creates protections for communities through which trains travel and the workers who operate the railroad and respond to accidents on it,” said the letter, which was led by Rep. Chrissy Houlahan (D-Pa.). There are currently no large-scale shipments of LNG by rail in the United States, but that could change pending what happens with the Trump rule, according to industry groups, researchers and environmental advocates. Under a separate pilot program, a route in southern Florida in 2017 and one in Alaska in 2015 were given blessings by the Federal Railroad Administration to ship LNG by rail using the United Nations’ approved train cars for gas. The southern Florida project is shipping LNG by rail now. The Trump rule would allow the bulk transport of LNG in specialized rail tank cars and was created in response to a 2019 executive order (Energywire, June 23, 2020). Environmental groups, followed by 12 Democratic-leaning states, filed petitions to review the plan in the Court of Appeals for the District of Columbia Circuit months later (Energywire, Aug. 19, 2020). Bradley Marshall, a senior attorney for Earthjustice and the lead of the environmental groups’ petition, said parts of the rule mostly followed recommendations by the Association of American Railroads and other rail-industry groups pushing for the approval — including a speed limit of 50 miles per hour on cars transporting LNG and the use of the specialized tank car that can hold more liquid than the United Nations’ approved train cars for the fuel. “Even a small amount of LNG in the right circumstances can prove pretty catastrophic should it reach a confined system and ignition source,” he said. “It could get into a storm water sewer and still have enough concentration to ignite and destroy good chunk of area with it.” The Association of American Railroads, which first petitioned for the allowance of LNG by rail in 2017, did not respond to a request for comment. On their website, the group says railroads have transported cryogenic liquids similar to LNG for 80 years, and more than 99.9 percent of rail hazmat shipments reach their destinations without releases caused by train accidents. The association also says that crude by rail has a strong safety record, pointing to numerous regulations and actions by Congress on safety. However, some incidents of train derailments containing fossil fuels have been devastating. An unattended parked train in Lac-Mégantic, Quebec, rolled to the town’s core and derailed, and its payload of 2 million gallons of crude oil caught fire and exploded, leveling much of the town and killing 47 people. After PHMSA proposed rolling back the Trump LNG rule, 20 Republican members of the House’s Transportation and Infrastructure Committee in December 2021 urged against the decision. They said tank cars required under the Trump plan would require a thicker layer of outer steel to prevent damage in the event of a derailment and that those same types of train cars have transported other forms of flammable cryogenic material for years.
The Race to Debottleneck U.S. LNG Feedgas Routes | RBN Energy - LNG exports will be the biggest driver of demand growth for the Lower 48 natural gas market over the next five years. After a year of oversupply in 2023, export capacity additions will help to balance the market and support gas prices in 2024 as the glut spills over into next year. Beyond 2024, higher export volumes will lead to tighter balances and price spikes. As supply struggles to keep up with new export capacity, the timing of pipeline expansions will be critical for balancing the market. The bulk of new LNG export projects are sited along a small stretch of the Texas-Louisiana coastline and more pipeline capacity will be needed to move incremental feedgas into this area and across the “last mile” to the facilities. In today’s RBN blog, we begin a series delving into the planned pipeline expansions lining up to serve LNG demand along the Gulf Coast. Before we dive into our discussion about recently completed and planned pipeline projects along the Gulf Coast, let’s quickly review the LNG export projects that are driving their development. Figure 1 summarizes the LNG export facilities already operating (green diamonds) in the region, including ones with planned expansions, along with greenfield projects that fall into one of three categories: projects that are already greenlighted and under construction, or in the case of Calcasieu Pass, commissioning (blue diamonds); projects that are likely to reach final investment decisions (FID) within a year (dark orange diamonds); and projects that are probable for reaching FID in the next 1-3 years (lighter orange diamonds). Note that these are just a subset of the nearly 30 LNG export projects we track in our LNG Voyager report that are jockeying for a piece of the global gas market. For the purposes of this blog series, however, we’ll focus on the projects that are well on their way or have significant momentum toward moving ahead. As Figure 1 illustrates, there are two facilities that are under construction: QatarEnergy and ExxonMobil’s Golden Pass LNG on the west bank of the Sabine River near the Texas-Louisiana border that will add three liquefaction trains totaling 18 MMtpa (~2.4 Bcf/d) of export capacity, with the first train targeting in-service in early 2024; and the first phase of Venture Global’s Plaquemines LNG terminal, a greenfield project in southeastern Louisiana’s Plaquemines Parish that is aiming to add 13.33 MMtpa (1.75 Bcf/d) by late 2024. Another two are likely to reach FID within a year: the second phase of Plaquemines LNG and the first phase of Port Arthur LNG. (Port Arthur announced last month that its Phase 1 is fully subscribed, meeting the requirement to take FID.) Still others have gained momentum and are in the running to take FID in the next 1-3 years, including one in southwestern Louisiana: the Train 4 expansion at Sempra Energy’s existing Cameron LNG just outside Hackberry along the Calcasieu Ship Channel. In addition, there are the export projects on the Texas side that will compete for feedgas supply. Cheniere Energy sanctioned its Corpus Christi Stage III expansion last summer with plans to add seven trains totaling 10 MMtpa (~1.3 Bcf/d). The developer is also considering adding two mid-scale trains (the 8th and 9th), with FID on the 2.9-MMtpa (0.4 Bcf/d) expansion likely in the next year. FIDs for NextDecade’s Rio Grande LNG in Brownsville, TX, and Freeport’s Train 4 expansion are also possible in the near- to mid-term. As we said in Final Countdown, these projects would amount to ~3 Bcf/d of incremental feedgas demand each year in the 2024-26 timeframe and make up the lion’s share of demand growth for the Lower 48 gas market in the next five years. As such, the industry will be closely watching the progress and timing of these export capacity additions, from regulatory approvals to construction schedules and potential weather-related disruptions, such as hurricanes and damaging rains, that could derail project timelines.
Natural Gas Futures, Cash Prices Rise Amid Series of Winter Blasts - Natural gas futures extended their gains on Monday as weather models continued to show cold over much of the Lower 48 for early to mid-March and Freeport LNG stayed on its path toward full operations. With some nascent technical momentum also in play, the newly prompt April Nymex natural gas contract settled at $2.731/MMBtu, up 18.3 cents from Friday. May futures climbed 15.2 cents to $2.853. Spot natural gas prices strengthened across most of the country, but the West Coast and Northeast plunged dramatically after the latest winter storm exited those regions. NGI’s Spot Gas National Avg. ultimately fell 91.5 cents to $3.445. Despite the steep sell-off in some cash markets on Monday, additional storms ushering in bitter cold and snow on the West and East coasts should keep demand elevated this week – and possibly longer. Weather models continue to fluctuate with the March pattern, but the first half of the month is expected to see a “fair amount of cold,” particularly in the northern two-thirds of the country, according to NatGasWeather. Where the weather data is not yet clear is in the 11- to 15-day time frame. NatGasWeather said there are indications that colder momentum might be more difficult to sustain as some models show blocking waning late in the period. If that happens, a warmer pattern would likely evolve later in March over most of the country. “To be sure, the longer-range weekly models do not agree with such a scenario, keeping cold in play for longer,” the forecaster said. “But given what we see at the end of recent ensemble runs, it will be interesting to see how this week’s longer-range outlooks evolve.” After a record warm January, and overall mild winter thus far, any significant – and sustained – cold late in the season would bode well for prices. Last week, March futures briefly dipped below $2.00 as the market faced an ever-expanded storage surplus amid near-record production. There are indications that producers may tap the brakes on output this year, given the precipitous decline in gas prices along with inflation. However, the winter season is quickly drawing to a close, demand is waning and gas inventories are unseasonably high.
Natural gas rebound snaps on 6th day as stock draw unimpressive - Natural gas prices fell Thursday for the first time in six sessions after the U.S. government’s report of a larger-than-expected weekly draw of the fuel from storage failed to impress a market more concerned about an overall supply glut. The EIA, or Energy Information Administration, reported a draw of 81 bcf, or billion cubic feet, from gas storage during the week ended Feb. 24, higher than the 75 bcf forecast by industry analysts as well as the 71 bcf reported by the agency during the previous week to Feb. 17. Natural gas futures initially responded well to the draw, with the front-month April contract on the New York Mercantile Exchange’s Henry Hub rising to a five-week high of $2.861 per mmBtu, or metric million British thermal units. But the gains faded as trading progressed, resulting in a settlement at $2.765. That was down 4.6 cents, or 1.6%, on the day, marking its first decline since Feb. 23. From a fundamental perspective, the rebound in gas prices from the 2-½ year low of $1.967 on Feb. 23 was supported by a production dip to 97.5 bcf per day from earlier highs of above over 100 bcf daily. An anticipated rise in U.S. heating demand over the next two weeks due to colder-than-normal weather conditions in early March has been a supportive factor as well. Another upside for gas bulls has been the improving feed demand for liquefied natural gas with a steady pickup in volumes going into the Freeport LNG terminal in Texas, which has been slowly getting back to normal operations after a fire in June. Freeport had been a rock-solid base of 2 bcf of gas demand a day until it was knocked out. But intraday price swings will continue occurring due to the distinctly weaker demand for heating during much of the 2022/23 winter, analysts said. “Forecasts have been trending colder for March but it's too late to save the heating season.” “It's looking to me like there's too much natural gas in North America and a mess in the pipeline system. In the second half of the decade, it could balance out with more LNG online but given how rapidly gas names upped production, I don't think we're going to be back above $5 sustainably for a while.” Storage of natural gas stood at a total 2.114 tcf, or trillion cubic feet, as of Feb. 24 — up 27% from the year-ago level of 1.66 tcf and 19% higher than the five-year average of 1.77 tcf.
US natgas jumps 9% to 5-week high on record LNG feedgas, colder weather forecasts (Reuters) - U.S. natural gas futures jumped about 9% on Friday to a five-week high, as the amount of gas flowing to U.S. liquefied natural gas (LNG) export plants soared to a record high and on new two-week forecasts for colder weather and higher heating demand. Cold weather could crimp supply too. Gas producers "may face growing freeze-off risks in the Bakken (North Dakota) and Rockies," analysts at energy consulting firm EBW Analytics said in a note. The amount of gas flowing to LNG export plants was on track to hit a daily record high on Friday as Freeport LNG's facility in Texas keeps using more fuel after exiting an eight-month outage in February. The plant shut after a fire in June 2022. Front-month gas futures for April delivery rose 24.4 cents, or 8.8%, to settle at $3.009 per million British thermal units, their highest close since Jan. 27. For the week, the front-month was up about 23%, its biggest weekly gain since August 2020. Last week, the contract rose about 8%. Freeport LNG's export plant was on track to pull in about 1.4 billion cubic feet per day (bcfd) of gas on Friday, up from 1.2 bcfd on Thursday, according to data provider Refinitiv, a sign the company likely had started the second of three liquefaction trains to turn gas into LNG. When operating at full power, Freeport LNG, the second-biggest U.S. LNG export plant, can turn about 2.1 bcfd of gas into LNG for export. Freeport LNG said on Feb. 21 that it could consume about 2.0 bcfd of feedgas "over the next several weeks." Some analysts have said Freeport LNG will likely not return to full capacity until the end of April. Federal regulators have approved the restart of two of Freeport LNG's liquefaction trains (Trains 2 and 3). On Monday, Freeport LNG sought permission to restart the third (Train 1). Total gas flowing to U.S. LNG export plants has risen to 13.4 bcfd so far in March from 12.8 bcfd in February. That compares with a monthly record of 12.9 bcfd in March 2022 before the Freeport LNG facility shut. Refinitiv said average gas output in the U.S. Lower 48 states has risen to 98.4 bcfd so far in March from 98.2 bcfd in February. The monthly record was 99.9 bcfd in November 2022. Analysts said production declined earlier this year due in part to drops in gas prices of 40% in January and 35% in December that caused several energy firms to reduce the number of rigs drilling for gas. In addition, extreme cold in early February and late December cut gas output by freezing oil and gas wells in several producing basins. Meteorologists forecast the weather in the Lower 48 states would remain mostly colder than normal through March 18 after some warmer-than-normal days from March 3-6. Refinitiv forecast U.S. gas demand, including exports, would ease from 120.9 bcfd this week to 119.1 bcfd next week, then jump to 127.4 bcfd in two weeks. Gas stockpiles were about 19% above their five-year average (2018-2022) in the week ended Feb. 24, expected to end up about 22% above normal during the week ended March 3, according to federal data and analysts' estimates.
BP Gets Disappointing Results For Gulf Of Mexico Deepwater Appraisal Well - BP, Chevron, and Talos Energy received disappointing results this week from its Puma West-2 appraisal well, Talos said. The Puma West-2 appraisal well was drilled to a depth of 25,995 feet followed by a sidetrack, which was drilled geologically down-dip to a total depth of 27,650 feet. While the appraisal wells did encounter hydrocarbons in multiple sands, additional hydrocarbons from a subsequent well or sidetrack are necessary before they consider moving forward with the project. The Puma West 2 wellbore was suspended temporarily with utility to allow for future potential sidetrack opportunities. Drilling data will now be reviewed and analyzed to determine the best path forward. BP owns a 50% stake in the project and is operator, with Chevron and Talos each holding a 25% stake. Spudded in October of last year, the well was highly anticipated and followed in the footsteps of the 2021 exploration discovery well on Green Canyon Block 821 just west of BP’s Mad Dog field. BP has plans to increase its GoM production to 400,000 bpd by the middle of this decade. The U.S. Gulf of Mexico is possibly one of the world’s most mature deepwater basins with significant room left to expand. It boasts some of the lowest emissions per barrel estimates in the world and contributes roughly 15% of all U.S. crude oil, a report from McKinsey & Company said late last year, with the potential to add up to another 2 million bpd by 2040. For oil companies that have pledged net zero emissions targets, the U.S. Gulf is an attractive play. The Bureau of Ocean Management issued last week a notice for an oil and gas lease sale in the Gulf of Mexico that will take place this month. The BOEM is offering up 13,600 blocks across 73.3 million acres..
American E&Ps Maintain Pandemic-Era Peak Oil Production; Inventories Mount U.S. crude output last week held at robust levels as American exploration and production (E&P) companies remained active to bolster domestic supplies and help meet global demand. E&Ps generated 12.3 million b/d for the week ended Feb. 24. That was on par with the highest level since March 2020, when the pandemic was declared. U.S. production also had held at this level through January and the first half of February, according to the U.S. Energy Information Administration’s (EIA) Weekly Petroleum Status Report on Wednesday. The EIA print eclipsed the year-earlier level of 11.6 million b/d. It kept inventories around the highest level since the onset of coronavirus outbreaks. U.S. commercial crude stocks for the Feb. 24 period, excluding those in the Strategic Petroleum Reserve, increased by 1.2 million bbl from the previous week. At 480.2 million bbl, inventories were 9% above the five-year average. The continued strength in output among U.S. E&Ps comes as OPEC and its allies scale back in the near term and Russian production is vulnerable now and over the long term. The Saudi Arabia-led OPEC-plus launched an effort in late 2022 to cut production by up to 2.0 million b/d from the highs of last year. Russia in February threatened to trim its 10 million b/d oil production by 5% to retaliate against European Union sanctions imposed to protest the Kremlin’s war. At the same time, the International Energy Agency’s (IEA) February Oil Market Report highlighted a forecast for global oil demand to rise about 2 million b/d this year to nearly 102 million b/d, reaching a record level on the back of an anticipated surge in Chinese demand. China’s government early this year lifted a litany of pandemic-related economic restrictions, a move expected to unleash pent up demand for travel and, by extension, crude consumption. IEA estimates show supply and demand roughly balanced through this year but vulnerable to geopolitical tumult, including Russia’s war in Ukraine, as well as aging infrastructure in smaller oil producing countries. Analysts at ClearView Energy Partners LLC said that, while American E&Ps are holding output at solid levels, shortfalls elsewhere could leave the global market with “a material oil supply shortfall” in the second half of 2023. Additionally, as RBN Energy LLC analyst Jason Lindquist noted in a report this week, sanctions against Russia extend well beyond its energy complex, infiltrating other sectors vital to its economy such as agriculture and banking.
EPA's risky methane gambit: Let outsiders look for leaks - EPA has proposed something new, and oil and gas advocates are sounding the alarm. The agency’s draft methane rules released last fall would, for the first time, give citizens and communities a formal role in policing petroleum operations for spikes in pollution from equipment malfunctions or other mishaps. There’s nothing new about cities or citizen organizations keeping a watchful eye on emissions from local energy developers to safeguard their air quality. But when a sudden leak is found, the state regulators and the company have largely had the discretion to respond as they see fit. That would no longer be the case under EPA’s proposed program, called the Super‐Emitter Response Program, or SERP. If it survives in the final rule later this year, the program would compel operators to inspect their operations within five days of being notified of a potential leak by third-party monitors, and to make any fixes within 10 days. Data on the event would be made public. The proposal has earned kudos from environmentalists, who say it will safeguard public health in oil and gas fields — including the tribes and environmental justice communities that the Biden administration has promised to prioritize. But it has also catapulted to the top of the industry’s list of concerns about the standards, which otherwise enjoy qualified support from a sector that has largely dropped its former opposition to federal methane regulation. Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute, told reporters on a call last month that the fenceline monitoring program is “the single most discussed problem within the rule across the industry.” “It definitely raised the most concerns when it was released in the fall,” he said. Macchiarola said the program as proposed by EPA would give local activists and environmental groups an opening to participate directly in oversight of industry — something he and other industry advocates have argued strenuously is not supported by the Clean Air Act. “Congress doesn’t set those [statutes] up for third parties to regulate our industry,” he said on the Feb. 14 call, which was timed for the end of the draft rule’s public comment period. “They set them up for experts and officials within the government to regulate our industry.” Macchiarola suggested that API might back a voluntary program that takes advantage of third-party data to detect leaks. But he decried EPA’s proposal to load that data on a publicly searchable online portal — especially if EPA hasn’t vetted it first. EPA’s proposal is an attempt to solve a problem. Traditionally the agency has relied on industry estimates for its data on oil and gas methane. But in the last decade, studies based on empirical data collected and analyzed by third parties — academic scientists and organizations like the Environmental Defense Fund — have shown that the industry’s climate footprint exceeds the levels shown in EPA inventories. EPA has moved to incorporate some of those findings in its inventory and in the oil and gas rules due to be final this summer.
Xcel Energy played a leading role in a stealthy plan to defend natural gas in Colorado | Colorado Public Radio - Anyone who's seen ads for Xcel Energy knows the company is in the green energy business. Its frequent television spots show workers erecting new wind turbines and touting its promise to deliver 100 percent carbon-free electricity by 2050. What's less featured is its massive role in Colorado's natural gas industry. While Xcel Energy has put solar and wind at the center of its electricity plans, newly released documents prove the company is a prominent force behind Coloradans for Energy Access — a non-profit dedicated to fighting a growing movement to shift buildings from natural gas heat to renewable electricity. The group’s 2021 tax documents show Joni Zich, the senior director of gas strategy for Xcel Energy, served as a board member when the group formed in late 2021. In addition, a political contributions report the company published last Thursday notes it donated $80,000 to the organization in 2022. The company maintains its participation doesn't undermine its larger climate commitments. Michelle Aguayo, an Xcel Energy spokesperson, said the company has pledged to meet a short-term goal to cut emissions from its natural gas system by 25 percent by 2030. That work defies the consensus among climate scientists, who have concluded further investments in fossil fuel infrastructure aren't compatible with international climate goals. A state analysis also shows Colorado’s widespread reliance on natural gas helped drive a spike in household energy costs this winter. The gas network nevertheless remains one of Xcel Energy’s most lucrative assets. The company’s latest annual financial report shows it now serves 1.5 million gas customers in Colorado and owns around 2,600 miles of gas transmission and distribution lines, making it by far the state's largest company delivering the methane-based fuel to buildings. Continued expansion projects are one reason the regulated monopoly earned a record $1.74 billion in profits last year. It's now clear the company helped launch a stealthy political project to defend the investment. The tax forms for Coloradans for Energy Access showed it received $205,000 in donations from five different individuals. As a social welfare nonprofit, it faces no legal requirement to publicly disclose the identity of those donors.
Fossil fuel companies donated $700m to US universities over 10 years -Six fossil fuel companies funneled more than $700m in research funding to 27 universities in the US from 2010 to 2020, according to a new study.Such funding at universities that conduct climate research can shift not just research agendas, but also policy in the direction of climate solutions the industry prefers, the report’s authors argue.Those solutions typically include biofuels, carbon capture, and hydrogen, according to the research by the thinktank Data for Progress and the nonprofit group Fossil-Free Research. Oil majors also invest in public policy and economics research that favors deregulation.“$700m is probably an absolute bare minimum,” Grace Adcox, polling analyst for Data for Progress, said. “There’s so little transparency around these gifts.”The top five schools on the list, include some that champion their climate research, like University of California at Berkeley ($154m), Stanford University ($56.6m) and Massachusetts Institute of Technology ($40.5m), as well as those with long-standing fossil fuel ties, like George Mason University ($64m), the largest recipient of funding from the Koch Foundation.These schools have also long been the targets of campus divestment campaigns, with students and faculty urging administrators to pull university funds from fossil fuel companies; Berkeley fully divested in 2020, Stanford and MIT’s resistance to the idea has resulted in a student-led lawsuit.Asked about the new research, several universities described measures they had taken to mitigate concerns, or pointed to more recent reductions in accepting donations.The report includes a poll indicating that a majority (67%) of both college-educated and non-college-educated voters agree with the statement: “Colleges and universities studying the impacts of climate change and sustainability should refuse donations from fossil fuel companies so they can remain unbiased in their research.”The study was created from publicly available data, including tax-form 990s from fossil fuel company foundations, annual reports from both universities and oil companies, and press releases or media coverage about big new donations. It’s an imperfect approach, but it is enough to give the public some hint of how much money fossil fuel companies are investing in research that has a real impact on policy.“These research projects have real-life implications – for example a lot of the fossil fuel-funded research has re-centered natural gas in the conversation about renewables,” Bella Kumar, lead author of the Data for Progress report, said.In response to the research, Dan Mogulof, assistant vice-chancellor at Berkeley, sent the Guardian a full accounting of the university’s fossil fuel donations, which he said represent less than 1% of its total research funding. Stanford spokesperson Mara Vandlik said: “It’s unclear how these numbers were calculated as we do not share this information publicly,” adding that the university has formed a committee to review the question of fossil fuel funding of research.
DEQ gives update on 2018 oil spill at BNSF yard - The Montana Department of Environmental Quality has released an update regarding assessment of an oil spill in 2018 in the BNSF rail yard. That site, an active locomotive fueling and maintenance rail yard, has operated since the 1890s and spills and leaks in the yard have led to the designation of the location as a state superfund facility, where DEQ works to facilitate the investigation and cleanup of hazardous substances. The update said the 2018 spill, of more than 2,000 gallons from the rail yard’s wastewater treatment plant, was of a mixture of water and oil. The spill was quickly contained and no impacts to the Milk River or Bullhook were identified, the update said. However, soil contamination was found under the treatment plant, in soil that cannot be removed without impacting the structural integrity of the building, the update said. A risk assessment was conducted in 2018, and an addendum was added to address the exceeding levels at the plant, the update said. DEQ and BNSF continue to work on finalizing the addendum, which includes information on additional small releases that have occurred in the rail yard since 2018. The update also said DEQ recently approved BNSF’s background evaluation on manganese in groundwater. Manganese is naturally occurring in Montana and has been identified as having a higher level in the Havre area. BNSF also has performed investigative work to identify contamination and evaluate the risk to human health at the property located at 801, 811 and 829 First Street, known as the former Crowder Oil. The results of the investigation will be provided to DEQ, the update said. Once the risk assessment addenda is finalized, the update said, that information and clean-up levels specific to sites investigated will be used in the next phase of the superfund process which is, the feasibility study, the update said. That will serve as the road map in the evaluation of cleanup options. The update said BNSF continues to evaluate groundwater contamination twice a year, with sampling in June and December to represent low and high groundwater conditions. The sampling occurs at locations including in the rail yard and at residential wells in North Havre that are down gradient from the rail yard and have historically shown petroleum and chlorinated solvent impacts, the update said.
Pollution Control Team Removed Almost 500 Gallons of Fuel in Marine Sanctuary in Hawaii - Yacht Harbour -- The 31-meter charter yacht Nakoa has spilled fuel around a protected bay on Maui, Hawaii. The incident, which was named by the owner a freak accident, resulting in the boat drifting ashore, happened on Monday, February 20. Eight passengers have been returned to shore by the Maui Fire Department. On Tuesday, after the bilge pumps activated, the diesel released into the water. Honolua Bay is a popular diving destination and a part of a state-administered marine life conservation district. To minimize the risk of environmental harm Maui Mayor Richard Bissen Jr. has asked Hawaii Gov. Josh Green to expedite the response effort.
Tugboat partially sinks off Lopez ferry terminal -A 45’ tugboat partially sank off the Lopez ferry terminal Wednesday morning, Feb. 22, with an estimated 400 gallons of diesel fuel onboard. Initial reports indicated the semi-submerged tug sank in the vicinity of a larger barge operation that was onsite to repair the Lopez ferry dock. According to Elaina Thompson, the new Executive Director of Islands’ Oil Spill Association, the vessel sinking was reported by American Construction Company, owner of the tug and barge. “We got a call this morning at 8:45 a.m. that this was happening,” says Thompson. “We sent a responder out on Lopez Island who got eyes on the scene and took some photographs and assessed the weather.” “We reported that to the Department of Ecology and the US Coast Guard,” adds Thompson. “We confirmed that all the proper channels were notified and responders were en route, and now due to the weather and other factors are taking command from DOE and US Coast Guard and waiting as this unfolds.” Early Wednesday morning photos taken at the scene showed the vessel’s flybridge was visible above the surface, and a diesel sheen visible drifting towards shore. According to Ty Keltner, Public Information Officer for the Department of Ecology, responders were enroute with air quality monitors to assess any diesel vapors. In addition, the response contractor that had been hired was Global Diving and Salvage, the same group that recovered the Aleutian Isle back in 2022.
Activists resist Biden move to okay ConocoPhillips's Willow oil project - White House officials suggested to environmental groups in recent days that they may pair approval for a controversial Arctic oil project with new conservation measures in Alaska, but have failed to convince activists the idea is an acceptable compromise, according to three people involved in or briefed on the calls.The high-stakes talks involve what some officials see as one of the most consequential climate decisions of President Biden’s term, a multibillion-dollar drilling project called Willow. The administration can announce a decision within days, and rejecting the project could lock the administration into a costly legal challenge and alienate key Alaska lawmakers in Congress.The compromise measures under discussion would include a new ban on drilling in the Arctic Ocean off Alaska’s North Slope and more habitat protections for other parts of the state, said two of the people familiar with the talks, all of whom spoke on the condition of anonymity to discuss confidential communications. They added that administration officials are seriously considering shrinking the Arctic project to just two approved drilling pads, a size so small that officials for ConocoPhillips — the company that has spent nearly five years pursuing federal approval — have suggested it would cause them to back out.ConocoPhillips has controlled leases in the National Petroleum Reserve-Alaska awarded by the Interior Department since 1999, giving it a strong case if the federal government blocks its ability to develop, legal experts said. That has pushed the administration to search for a compromise, hoping to curb backlash on a project that conservationists see as an irreversible catastrophe.So far, environmental groups aren’t buying it. While President Warren G. Harding set aside the nearly 23 million-acre reserve a century ago to ensure that the U.S. Navy would have an adequate supply of oil, only a portion of it has been developed, and the expanse provides critical habitat for migrating caribou, waterfowl and other wildlife.Many critics have focused on the proposal’s climate impact. The Biden administration’s own environmental review — released last month — estimated that Willow would generate roughly 9.2 million metric tons of carbon dioxide a year, which is equal to driving nearly 2 million gas-powered cars or burning nearly 51,000 rail cars’ worth of coal. “Rejecting a project like Willow should be a no-brainer for a climate leader like Biden. And if he doesn’t, it’ll be a stain on his legacy,” said Lena Moffitt, chief of staff at the climate advocacy group Evergreen Action. “No form of this project is okay.”Based on its cost, Willow would be the largest pending oil development in the country, analysts say. The Bureau of Land Management’s final environmental impact statement said the project could best go forward with three of the five well pads ConocoPhillips initially proposed. Now that the report is finished, the law allows the Interior Department to issue a final decision on permits as soon as this coming Monday. But according to individuals familiar with the process, White House officials have taken control of final deliberations, struggling to figure out whether a scaled-back version of the project can appease both environmentalists and Alaskan allies. The individuals said the decision is primarily between approving the three well pads, or only two pads with a postponed decision on a third. State officials and Alaska Native groups have been lobbying the administration to approve all three to avoid the risk of ConocoPhillips backing out.
Biden faces 'no good options' to keep gasoline prices in check -- US President Joe Biden promised he would lower prices at the pump, which have eased since topping $5/gal last summer, but the president will face new challenges and limited options if domestic fuel prices surge again as Russia has shown no signs of ending its war with Ukraine.US gasoline prices averaged $3.38/gal the week ended Feb. 20, down $1.63/gal from their mid-June 2022 peak, according to the Energy Information Administration. But as the Russia-Ukraine war enters its second year, more price spikes and supply dislocations are possible.Price caps on Russian seaborne exports of crude and petroleum products that went into effect Dec. 5 and Feb. 5, respectively, could begin to present limitations on oil supplies, especially as analysts have suggested good odds for G7 countries agreeing to lower the $60/b price threshold on Russian crude during a March review. Preliminary signs already point to a slowdown in Russian crude and refined product exports, and Russia's announced 500,000 b/d cut in oil production could be the start of counter sanctions imposed by Russia.The White House last year leaned heavily on the Strategic Petroleum Reserve to curtail global oil supply shortages and bring down domestic fuel prices, to the chagrin of Republicans and the oil industry. But the SPR currently stands at 371.6 million barrels and will soon be drained of another 26 million barrels as part of a congressionally mandated sale, leaving about 93 million barrels before the emergency reserve hits minimum stock levels of 252.4 million barrels that limit Biden's authority for further drawdowns."The Biden administration needs to realize that it cannot control global oil prices through the US SPR," Ellen Wald, chief industry officer at Washington Ivy Advisors, said.She and industry advocates have instead called on the administration to encourage the expansion of US refining capacity, relax some regulations on oil producers while they contend with labor and supply chain issues, and hold federal oil and gas lease sales to help bring gasoline prices down as sanctions on Russia will continue to make oil more expensive.Efforts to replenish the emergency crude stockpile got off to a rocky start with the Department of Energy turning down all of the offers it received as part of its first solicitation to repurchase up to 3 million barrels of sour crude to begin refilling the SPR. The DOE indicated that bids it received did not meet the crude specifications and price it was looking for.David Goldwyn, president of Goldwyn Global Strategies and chairman of the Atlantic Council Global Energy Center's Energy Advisory Group, said Asia is now the key market for OPEC and thus global oil production from that bloc will be significantly driven by market impacts in Asia rather than those in the US and Europe."The response of the US oil patch is driven far more by how private equity investors and companies see the future of the market and how much they are focused on maximizing returns rather than reinvesting," Goldwyn said. "Despite the rhetoric, oil companies never pay much attention to the desires of any US administration, Republican or Democrat, when deciding whether they want to ramp up production or pay higher dividends."With oil prices in the midst of a multiyear boom cycle, "the president has no good options to reduce short-term oil prices," Bob McNally, founder and president of Rapidan Energy Group, said. "However, his administration has been considering resorting to bad options, such as restricting oil exports and windfall profits taxes."Punitive taxes on the oil sector would require congressional support, an unlikely feat with Republicans controlling the House, but Biden could move to restrict exports on his own."While some in the Biden administration understand that export restrictions would be counterproductive, help [Russian President Vladimir] Putin, and hurt our allies, others will likely insist on imposing restrictions if SPR releases fail to restrain any future oil price spike," McNally said.Increased demand from Europe has helped to push US crude exports to record highs. Exports in the week ended Feb. 17 were at 4.6 million b/d, according to the US Energy Information Administration.Other policy tools that could rein in prices at the pump include tax holidays that some states experimented with last year and could be expanded on a national basis by Congress, as well as air quality waivers for certain fuel specifications like the one that allowed retailers nationwide to continue selling a higher ethanol blend mix through the summer.
Alberta Eyes Massive Budget Surplus Thanks To High Oil Prices -Alberta could see a budget surplus of some C$2.4 billion, equal to around $1.8 billion, in its new fiscal year, assuming a price for the local crude oil benchmark of C$78 per barrel.This is what the Finance Ministry of Canada’s biggest oil province said in thepresentation of budget 2023. The ministry also forecast a surplus for the next two fiscal years, although slightly lower than the 2023/24 expected surplus. It is, for its part, substantially lower than the surplus Alberta expects to book for fiscal 2022/23 when oil prices surged over $100.According to the Finance Ministry, Alberta’s total revenues this fiscal year will top C$70 billion, or over $51 billion. However, this will be a decline of close to $4 billion on revenues projected for the previous fiscal year because of lower oil prices and the looming global recession. However, revenue will rise over the next two fiscal years.The ministry expects oil sands production at 3.345 million barrels daily in the current fiscal year, with conventional oil production at 497,000 bpd.“At $76 oil, it would land us at about $18 billion in resource revenues, if that were to hold for the full fiscal year,” a University of Calgary economist told the Calgary Herald days before the release of the budget. “Despite oil prices coming down from their highs last year, we’re still in a really strong position,” Trevor Tombe noted.The budget assumes a slightly higher oil price, which could boost revenues even further as the oil industry remains essential for the province’s income, despite increasing pressure from environmental activist groups and the federal Canadian government.In fact, the Canadian oil industry has become notorious for that pressure, although companies continue to produce oil and gas and support provincial and federal budgets. The latest blow to Canada’s oil came from the Trudeau government’s Just Transition bill that eyes, among other things, the re-employment of oil industry workers elsewhere as the country moves away from fossil fuels.
Mexico's Oil Giant Reports Staggering Losses - The past several days have been devastating ones for Mexico’s state-run Pemex, which reported three refinery fires last week that have left two dead and more injured, followed by quarterly reporting that downs a tripling of losses against an impossible level of debt and a stark failure to revive output. Pemex released Q4 2022 results on Monday, reporting $9.4 billion in losses in a single quarter, more than triple the losses of the previous quarter. According to Bloomberg, Pemex output fell to 1.62 million barrels per day in 2022, the third year that Pemex has reported a decline. Simultaneously, debt ballooned to $107.7 billion by year’s end, with $8 billion of that set to mature this year. Mexico’s president Andres manuel Lopez Obrador (AMLO) campaigned on promises of reviving Pemex for the national interest; however, while oil companies the world over raked in windfall profits on the back of Russia’s war on Ukraine and sanctions last year, Pemex has moved sharply in the opposite direction. Government intervention, in the form of $45 billion in capital injections, tax breaks and other machinations has failed to move the needle, according to Bloomberg, and the plan to boost production by moving offshore production to shallower waters and focusing more attention on onshore plays has likewise met with no success. Pemex is now knocking on the door of Goldman Sachs and JP Morgan for $1-billion in financing to cover outstanding debt this year. Talks between Pemex and the banks are said by Bloomberg to be linked to Pemex’s gasoline sales in Mexico in the form of securitized payments.
Mexico’s Oil Major Has A Flaring Problem Mexico’s state-controlled oil and gas giant Pemex has continued gas flaring at a massive field despite a pledge to stop doing so by mid-January, according to satellite data researchers have analyzed exclusively for Reuters. In November, Pemex’s chief executive Octavio Romero said that the company would stop gas flaring at the Ixachi field by January 15, 2023, after it was fined for breaching its emission-control plan. Pemex has a poor environmental record and has regularly failed to reduce flaring as promised due to a lack of infrastructure to process all the natural gas it is extracting. Natural gas flaring has been an issue for Pemex and Mexico for years. Despite the pledge from November to stop gas flaring at Ixachi by the middle of January, Pemex has increased the rate of flaring, according to satellite imagery of the field analyzed for Reuters by scientists. The plants Papan and Perdiz, which were set to process the gas from the Ixachi field, burned an estimated 1.3 billion cubic feet of gas in January, according to satellite data. The flaring increased from November, when the pledge was made, and when the plants burned 1 billion cubic feet of natural gas. “We have a spike in flaring in January for two of the largest flares,” Mikhail Zhizhin, a researcher from the Earth Observation Group at the Payne Institute for Public Policy, Colorado School of Mines, told Reuters. As of last week, the flares were still active, the researcher told Reuters. While Pemex appears to have made no progress with controlling gas flaring, it also posted staggering losses for last year—unlike all other oil companies who reported record profits amid soaring oil and gas prices and extreme volatility in 2022.
Report: World's Fossil Fuel Subsidies Surged to $1 Trillion After Ukraine Invasion - Global fossil-fuel subsidies doubled last year to $1.1 trillion, by far the highest number ever recorded, according to a new report from the International Energy Agency, or IEA. The surge in financial support for oil and gas was largely a response to the energy crisis caused by the war in Ukraine, which caused many countries to abruptly reconsider their dependence on Russian fossil fuel reserves. Experts say the subsidies could be difficult to unwind, if consumers become accustomed to having a cushion against high prices.“In an energy crisis, governments prioritize shielding consumers from damaging price impacts over commitments to phasing out subsidies,” wrote the report authors. “This reduced hardship but diminished the incentive for consumers to save or to switch to alternative sources of energy, thereby delaying a lasting resolution of the crisis.”The world’s fossil-fuel consumption subsidies have risen and fallen over the last decade in tandem with the price of oil, but they have tended to hover somewhere between $400 and $600 billion. The biggest supporters of oil and gas over the past decade were large developing economies like Russia, China, Iran, India, and Saudi Arabia, with Iran spending almost one-fifth of its gross domestic product to pad fuel prices.That dynamic changed last year with the Russian invasion of Ukraine. The sudden loss of Russian oil and gas supplies forced European countries to seek out alternative fuel sources, causing oil and natural gas prices to soar. This in turn drove a huge increase in heat and electricity costs. Meanwhile, the Organization of Petroleum Exporting Countries, or OPEC, cut production later in the year, keeping crude prices high. The price increase wasn’t limited to Europe, either: As European countries outbid their poorer neighbors for shipments of liquefied natural gas, countries like Pakistan saw record prices and intermittent power outages.Countries around the world responded with a slew of tax breaks and subsidies for homeowners and businesses who had come to rely on lower prices. Thailand and Peru capped the price of gasoline and diesel; South Africa and Belgium froze or waived fuel taxes; and Italy and South Korea sent direct payments to consumers who were struggling with energy bills.However, more than half of the new fossil fuel subsidies that appeared last year were implemented within the European Union, or EU, according to the IEA. The EU spent $349 billion last year to cushion consumers from volatile prices. The rest of the world’s advanced economies added only $163 billion in new subsidies to deal with the energy crisis.The authors of the IEA report argue that these subsidies could make political and social sense in some cases, since high fuel costs often hit poor populations hardest, and expensive gas doesn’t by itself speed a transition to clean energy. This is because energy demand is what economists call “inelastic” over the short term: Most consumers are unlikely to dramatically change their energy usage based on a change in price, and instead are more likely to cut back their spending on other needs. That’s why most energy subsidies go to consumers, rather than producers like oil and gas companies. While subsidies for consumers have skyrocketed recently, subsidy growth on the production side has been much smaller.“High and volatile fossil fuel prices drive home the unsustainability of today’s energy system and underscore the benefits of energy transitions, but these episodes come with significant economic and social cost,” the authors write. “High fossil fuel prices are no substitute for consistent climate policies.”
European LNG Imports Soar 63% In 2022: IEA -- European imports of liquefied natural gas soared last year as nations sought to cover for drops in Russian pipeline supplies, a report from the International Energy Agency said Tuesday. The jump in demand from European nations sent prices spiking higher, with global sales doubling in value to $450 billion even though volume rose only 5.5 percent, the IEA said in a quarterly report on the gas market. It said it expects LNG volumes to rise by 4.3 percent in 2023. "LNG import growth in 2022 was led by Europe with a sharp 63 percent increase, compensating for a significant drop in pipeline gas imports from Russia," the IEA said. European imports of LNG rose by 66 billion cubic metres, with the United States supplying two-thirds of that increased consumption. "LNG played a critical role in mitigating the impact of Russia's deep cuts in piped gas supply to the European Union and was instrumental in avoiding gas supply shortages in 2022," said the IEA. For 2023, the IEA expects European gas demand to dip by three percent after having fallen by 13 percent in 2022. It sees further reductions in the use of gas by the power sector as renewables expand and French nuclear production increases after repair works are completed. While industrial use of gas is expected to recover by 10 percent, the evolution of gas for residential heating will depend on weather. The mild 2022-2023 European winter helped the region avoid shortages. The IEA said a complete cut-off of Russian gas delivered by pipeline would require a steeper reduction in demand of eight percent. Global gas consumption, pipeline plus LNG, dipped 1.6 percent last year to 4.042 trillion cubic metres. The IEA sees it stagnating in 2023.
Germany’s Natural Gas Bill Doubled In 2022 Despite Import Volumes Falling - Germany paid more than double for natural gas last year compared to 2021 amid soaring prices in the energy crisis despite a 30% decline in import volumes, according to data from the Federal Office for Economic Affairs and Export Control, BAFA. Germany paid as much as $79 billion (74 billion euros) for natural gas imports, more than double compared to the $37.8 billion (35.4 billion euros) it spent on importing gas in 2021, showed the official data reported by Reuters. In 2022, the average price Germany paid at the border surged by 197.3% to $22,440 (21,007 euros) per terajoule (TJ). Germany no longer receives Russian gas via Nord Stream, which was sabotaged in the autumn of 2022. Even before that, Russia had slashed pipeline flows via Nord Stream, citing Western sanctions that prevented gas turbine maintenance.Faced with the prospect of no Russian gas this winter, Germany rushed to install floating storage and regasification units (FSRUs). Two of those FSRUs are already operational, while a third is in the commissioning stage.Europe’s biggest economy plans to have as much as 70.7 million tons per year of LNG import capacity by 2030, which will make it the fourth-largest LNG import capacity holder in the world by the end of this decade, Argus reported last week, citing plans by the German economy ministry and energy group RWE.Germany plans to have a total of 10 FSRUs, some of which will be removed and replaced by onshore regasification facilities once they are built. The rush to have LNG import terminals as soon as possible will make Germany the fourth largest import capacity holder behind the major Asian LNG buyers South Korea, China, and Japan.Governments in Europe, including Germany, are now more comfortable with the gas supply situation for the rest of the winter, especially after the warm start to the heating season and a warm start to January. The unseasonably warm weather has prevented massive drawdowns from gas inventories and has sent the benchmark EU gas prices lower in recent weeks.
Exclusive: Russia set to mothball damaged Nord Stream gas pipelines – sources (Reuters) – Russia’s ruptured undersea Nord Stream gas pipelines are set to be sealed up and mothballed as there are no immediate plans to repair or reactivate them, sources familiar with the plans have told Reuters. Nord Stream 1 and Nord Stream 2, each consisting of two pipes, were built by Russia’s state-controlled Gazprom to pump 110 billion cubic metres (bcm) of natural gas a year to Germany under the Baltic Sea. Three of the pipes were ruptured by unexplained blasts in September, and one of the Nord Stream 2 pipes remains intact. But soaring tensions between Moscow and the West over Russia’s invasion of Ukraine had by then already brought Nord Stream 1 to a standstill and prevented its twin, criticised by Washington and Kyiv for increasing Germany’s dependence on Russia, ever coming online. Gazprom has said it is technically possible to repair the ruptured lines, but two sources familiar with plans said Moscow saw little prospect of relations with the West improving enough in the foreseeable future for the pipelines to be needed. Europe has drastically cut its energy imports from Russia over the past year, while the state-controlled Gazprom’s exports outside the former Soviet Union almost halved in 2022 to reach a post-Soviet low of 101 bcm. One Russian source said Russia saw the project as “buried”. Two others said that, while there was no plan to repair the ruptured pipelines, they would at least be conserved for possible reactivation in the future. Another source familiar with the plans confirmed that the stakeholders are considering conservation. This would most likely mean sealing the ruptured ends and putting a coating into the pipes to prevent further corrosion from seawater.
European Natural Gas Prices Post Longest Monthly Losing Streak Since 2020 - Europe’s benchmark natural gas prices fell in February for the third consecutive month, extending the monthly losing streak to the longest since 2020, as milder weather, comfortable inventories, and a plunge in demand dragged down prices. The front-month futures at the TTF hub, the benchmark for Europe’s gas trading, lost 19% in February, and have slumped by around 40% since the beginning of the year, according to Bloomberg’s estimates. On the last day of February, the TTF futures settled at $49.50 (46.67 euros) per megawatt-hour (MWh) in Amsterdam, down by 1.3% on the day. Last month, the benchmark European price fell below the threshold of 50 euros($53) per MWh for the first time since August 2021. Prices are now more than 85% down from the record high of 300 euros ($318) per MWh from August 2022. With only March left to go in the winter, concerns about a gas crisis in Europe continue to recede amid mild weather and above-average inventories across the continent. One year after the Russian invasion of Ukraine, the Dutch TTF benchmark gas contract is trading more than 40% below pre-invasion levels, The European Union managed to beat its target for cutting gas demand this winter, Eurostat data showed last week. According to the data, the EU’s winter demand had so far dropped by 19.3% compared to the five-year average, beating the 15% goal it set for itself to help it survive the winter.
Saudi Aramco Looks To Invest In LNG Export Facility Abroad --Saudi Aramco is interested in investing in an LNG export facility outside Saudi Arabia and is in early talks with developers aiming to secure a stake in a project in the United States or Asia, Bloomberg reported on Wednesday, quoting sources familiar with the matter. The Saudi oil giant, the world’s largest oil company by both production and market capitalization, prefers an LNG plant that could easily export the fuel to Asia, according to Bloomberg’s sources.Apart from investing in a stake, Aramco is also reportedly looking to secure a long-term off-take agreement with the project developer, the sources added.Going into LNG trading could be another lucrative business for the Saudi oil giant, considering that LNG demand is only set to grow in the coming years as Europe ditches Russian gas and Asia looks to use more natural gas instead of coal.Amid soaring spot prices, the value of global LNG trade surged to an all-time high in 2022 to $450 billion, the International Energy Agency (IEA) said on Tuesday in its quarterly Gas Market Report Q1-2023.“Despite rising by a mere 5.5% in volumetric terms, the value of global LNG trade doubled in 2022 to an all-time high,” the agency noted.Natural gas supply security is now taking centre stage amid a new wave of market reforms in Europe and developed Asian economies, the IEA said.The significantly higher LNG demand in Europe is set to intensify competition with Asia in the short term and to dominate LNG trade in the longer term, Shell said in its annual LNG outlook last month.European countries, including the UK, saw their LNG imports jump by 60% last year to 121 million tons, Shell, the world’s largest LNG trader, said as it issued a bullish outlook on the fuel through 2040.
Kazakh Officials Urge Citizens To Conserve Gas As Imports Become Necessary - Kazakhstan’s state-owned natural gas company has vowed that there will be no repeat shortages of the fuel next fall and winter like the ones that the country began to experience in late 2022. But Arman Kasenov, the deputy chairman of QazaqGaz, has said that consumers must in future also do their share in helping avoid crunches at times of peak demand by being more economic in their use of gas. Anybody failing to do so could face stiff bills, he hinted. In the short-term, Kazakhstan plans to prevent shock deficits by refraining from exporting gas. “Taking the growth in gas consumption within Kazakhstan into account, QazaqGaz cannot count on exports in the next fall-winter period,” Kasenov said on February 24. Indeed, far from thinking about exports – and China is the only game in town in this area – Kazakhstan is now resorting to buying imported gas. Earlier this week, Energy Minister Bolat Akchulakov said at a government meeting that plans are being drawn up to import gas from Russia to provide for areas in the east of Kazakhstan. Akchulakov said no prices have yet been discussed. The infrastructure for those specific imports does not yet exist, however. Extending gas supplies to those regions of Kazakhstan will be contingent on completion of a transnational pipeline running from Russia to China. “We have earlier proposed to Gazprom the idea of a transit route through the territory of the East Kazakhstan Region,” Kasenov said at a meeting held under the auspices of the Samruk-Kazyna state holding company. “It is under development. We have already carried out technical and economic feasibility studies.” In October, Kazakh President Kassym-Jomart Tokayev said QazaqGaz had reached a sales agreement with Turkmenistan’s Turkmengaz and that he hoped up to 1.5 billion cubic meters of gas could be imported annually under a long-term deal. According to QazaqGaz data, gas consumption in Kazakhstan in 2022 reached 21 billion cubic meters, while 5 billion cubic meters were earmarked for export. The expectation is that consumption will soar to 40 billion cubic meters by 2030. The irony of Kazakhstan’s reliance on imports is that it has more than enough gas of its own. As the country’s energy officials enjoy boasting, Kazakhstan sits atop 3.8 trillion cubic meters of gas, enough to last them 100 years. A good 70 percent of that total is concentrated in four huge fields: Karachaganak, Tengiz, Kashagan and Zhanazhol.
Russian Oil And Gas Project Misses Output Targets After Exxon Exit - Russian oil and gas output at the Sakhalin-1 project in the Far East is only half of what it was projected to be for 2022 after Russia’s invasion of Ukraine set off a series of Western sanctions that led to the departure of ExxonMobil. In a televised meeting with Russian President Vladimir Putin, Sakhalin governor Valery Limarenko said production was less than 50% of that planned, Reuters reported."First, in May, oil production was practically stopped, and in September, it was gas production. We lost a large amount, more than half, of the annual plan," Limarenko was quoted as saying. September last year saw oil production of around 84,000 barrels per day, which is less than half the figure projected. The governor further clarified that the regional budget would lose an estimated $664 million due to the lower production levels, noting that two-thirds of the regional budget comes from oil and gas taxes. “We will somehow get out, but this problem really exists," Limarenko told Putin, as reported by Reuters. The televised lamentation was likely intended to draw further attention to Moscow’s attempts to leverage political capital related to Exxon’s withdrawal from the project. Russia’s General Prosecutor’s Office is attempting to wrangle some $220 million in unpaid taxes from Exxon. In April 2022, Exxon declared force majeure on the Sakhalin-1 project due to Western sanctions against Moscow. Before the war in Ukraine, the project exported some 273,000 barrels daily of Sokol crude, with the main destination for the shipments being South Korea. Sakhalin-1 crude was also shipped to Japan, Australia, Thailand, and the United States. In early January this year, Russia claimed that it had ramped up production at Sakhalin-1, expecting the field to start pumping 220,000 bpd soon, up from 150,000 bpd at the time.
Polish refiner says Russia halted pipeline oil supplies to Poland - Russia has halted oil supplies to Poland via the Druzhba pipeline, the chief executive of Polish refiner PKN Orlen says, adding that the company would tap alternative sources to plug the gap.The supply halt via the pipeline – exempted from EU sanctions imposed on Russia following its full-scale invasion of Ukraine – came a day after Poland delivered its first Leopard tanks to Ukraine.“We’re effectively securing supplies. Russia has halted supplies to Poland, for which we are prepared. Only 10 percent of crude oil has been coming from Russia and we will replace it with oil from other sources,” PKN Orlen Chief Executive Daniel Obajtek wrote on Twitter.The company said it could fully supply its refineries via sea and that the halt in pipeline supplies would not affect deliveries of petrol and diesel to its clients.As of February, after a contract with Russia’s Rosneft expired, Orlen has been getting oil under a deal with Russia’s oil and natural gas company Tatneft.Tatneft and Russian oil pipeline monopoly Transneft did not immediately make statements over the issue.The supply halt came after US President Joe Biden visited Warsaw and Kyiv this week in a show of support for Ukraine a year after the invasion.On Friday, the European Union agreed on a 10th package of sanctions on Russia.Poland delivered four Leopard tanks to Ukraine already and is prepared to deliver more quickly, Polish Prime Minister Mateusz Morawiecki said on Friday.“Poland and Europe stand by your side. We will definitely not leave you, we will support Ukraine until complete victory over Russia,” Morawiecki said during a visit to Kyiv, standing next to Ukrainian President Volodymyr Zelenskyy. Following the invasion of Ukraine and before the EU embargoed seaborne supplies from Russia, Orlen stopped buying Russian oil and fuels via the sea.It said the company’s supply portfolio now includes oil from Western Africa, the Mediterranean, the Gulf and the Gulf of Mexico. It also has a supply contract with Saudi Aramco as of 2022.
Russia halts pipeline oil deliveries to Poland – Russia has halted supplies of oil to Poland via the Druzhba pipeline, the CEO of refiner PKN Orlen said on Saturday (25 February), adding that the Polish company would tap other sources to plug the gap.The halt in supplies via the pipeline – which has been exempted from European Union sanctions imposed on Russia following its full-scale invasion of Ukraine – came a day after Poland delivered its first Leopard tanks to Ukraine.“Russia has halted supplies to Poland, for which we are prepared. Only 10% of crude oil has been coming from Russia and we will replace it with oil from other sources,” PKN Orlen Chief Executive Daniel Obajtek wrote on Twitter.Orlen said it could fully supply its refineries via sea and that the halt in pipeline supplies would not impact deliveries of gasoline and diesel to its customers.As of February, after a contract with Russia’s Rosneft expired, Orlen has been getting oil under a deal with Russian oil and natural gas company Tatneft. Tatneft and Russian oil pipeline monopoly Transneft did not immediately respond to a request for comment.Oil transport to the Czech Republic, where Orlen operates two refineries, via the southern branch of the Druzhba pipeline was running to plan, pipeline operator Mero said on Saturday.The supply halt came after US President Joe Biden visited Warsaw and Kyiv in a show of support for Ukraine a year after the invasion. And on Friday, the European Union agreed on a 10th package of sanctions on Russia.Following the invasion of Ukraine and before the EU embargoed seaborne supplies from Russia, Orlen stopped buying Russian oil and fuels transported by sea.It said its supply portfolio now includes oil from Western Africa, the Mediterranean, the Gulf and the Gulf of Mexico. It also has a supply contract with Saudi Aramco as of 2022.Seaborne supplies reach Poland via Naftoport, an oil terminal in Gdansk on the Baltic Sea. It can receive 36 million tonnes of oil annually topping volumes that can be processed by Polish refineries and is in part used to supply oil to refineries in eastern Germany that are linked to Druzhba.“Given the capacity of Naftoport and the fact that we also have other routes to import motor fuels, clients will not feel any impact, while Orlen has been prepared for this for months,” Mateusz Berger, Poland’s Secretary of State in charge of strategic energy infrastructure told Reuters by telephone.
Russia’s Oil Exports Still Strong Despite Sanctions | Russia’s crude oil producers managed to export 7.32 million barrels per day of crude oil and crude oil products in February, Kpler data showed, indicating to some that the ban on Russian seaborne crude shipments into Europe and the price cap mechanism have done little to curb the flow of Russia’s crude. The 7.32 million barrels per day of crude oil exported from Russia in February is largely on par with that exported in December, shortly after the crude sanctions went into effect. But that comparison is based on a December that saw Russia’s exports lower due to weather-related disruptions, pushing some shipments into January. Russia’s January petroleum exports increased as a result, and now February’s exports have fallen back to December levels. And once again, inclement weather has restricted the amount of crude Russia has been able to export this month, with the port of Novorossiysk “repeatedly shut down this month.” Kpler crude analyst Viktor Katona told Bloomberg. For March, Russia has stated its intention to cut its crude oil production by 500,000 barrels per day, and India is facing increased scrutiny from financiers to prove that its crude oil purchased from Russia was purchased below the $60 price cap, Bloomberg noted. Earlier this week, new calculations from the Institute of International Finance, Columbia University, and the University of California determined that Russia took in more money in the weeks that followed the oil price cap than the cap allowed. On average, the calculations show that Russia sold its crude oil for about $74 in the four weeks following the December 5 price cap. The authors of the published analysis called for “further investigation of these transactions and reinforces the need for stepped-up enforcement.”
Russian Fuel Exports Dropped By 20% In February - Russian oil product exports dropped by 20 percent last month, hitting the lowest level since May last year, BNE IntelliNews reported, citing data from S&P Global. The February average was also 24% lower than the average pre-war level of oil product exports.The data follows an earlier report that crude oil exports from Russia had remained relatively stable despite the pileup of sanctions, including an embargo on both oil and oil products in the European Union.According to cargo tracking data from Kpler, Russian oil and fuel exports last month averaged 7.32 million barrels daily, almost unchanged from December before the fuel embargo kicked in.What’s more, according to fresh research from the Institute of International Finance, Columbia University, and the University of California, Russia has been selling its crude oil at higher prices than the cap of $60 per barrel that the G7 in partnership with the EU imposed on those exports last year.The average selling price for Russian crude, according to the researchers, has been $74 per barrel for the four weeks following the imposition of the crude oil export embargo by the EU on December 5.Meanwhile, Russia has said it would reduce oil production by half a million barrels daily this month in response to sanctions, a move that may affect the level of its oil and fuel exports.According to JP Morgan, Russian fuel exports could slip by 300,000 bpd as a result of the EU embargo but the bank added Russia could maintain production of crude oil at pre-war levels. It would be harder, however, to return to pre-pandemic levels of production, JP Morgan also said. Pre-war production stood at 10.8 million bpd, while production rates before the pandemic averaged 11.3 million bpd, according to the bank.
Spain detains oil tanker over Mediterranean fuel spill - Spain has detained and fined a Maltese-flagged oil tanker it says discharged oil in open waters near the northeastern port city of Tarragona, a transport ministry department said. Spain’s Mediterranean and Atlantic coastlines have become hubs for shipping activity including the transfer of oil known as ship-to-ship (STS) operations, which industry sources say are becoming an increasing safety concern. Spanish authorities said they had intercepted the Lagertha after a discharge of hydrocarbons was detected by aircraft sensors and satellite radar on Feb. 11. “The slick, in the stern area of the vessel, extended over an area of 12.7 square kilometres,” Spain’s Merchant fleet, a transport ministry department, said on Tuesday in a statement. It said the vessel was being detained until the owners paid bail of 100,000 euros ($106,680), adding that on the basis of the evidence, authorities will begin disciplinary proceedings. The Merchant Fleet told Reuters that the Lagertha was in open sea and it was unable to measure if there was any environmental damage. The vessel’s Turkey-based manager Besiktas Shipping Group – according to shipping databases and its website – did not immediately respond to a request for comment. In 2021, another tanker was intercepted by Spain for illegally discharging oil at sea over some 55 square kilometres off the coast of La Palma in the Canary Islands. ELEPHANT HELD Separately, the Merchant Fleet told Reuters that it had detained another tanker, the Elephant, on Feb. 14 after authorities detected “deficiencies of a technical and documentary nature” during an inspection in the northwest port of Ferrol and also for failure to notify Spain’s maritime administration with documents related to STS operations. The Elephant’s owner, according to shipping databases, is Vietnam-based Hung Phat Maritime Trading, which could not immediately be located by Reuters for comment. Spanish officials said the Elephant had transferred a cargo to the Singapore-flagged tanker Maersk Magellan, which was banned from Spanish ports earlier this month. Authorities in Spain said the Elephant had previously loaded a cargo from the Cameroon-flagged Nobel. This vessel, they said had been working under a Russian flag until July 1, 2022, which was in breach of European Union sanctions. Denmark’s Maersk Tankers declined to comment last week about the Elephant, but said that official documents showed the cargo it moved to the Maersk Magellan was of Turkish origin. The company operates the Maersk Magellan.
Tanker with 800,000 liters of oil capsizes off Romblon– A tanker carrying 800,000 liters of industrial oil capsized near Tablas Island, Romblon, early Tuesday, February 28, a local port official said. The MT Princess Empress, an oil tanker, was on its way from Limay, Bataan, to Iloilo when it was slammed by strong waves near Tablas Island at around 2 am, port manager Joselito Sinocruz of Port Management Office (PMO) Batangas said in a radio interview on dzBB. “Batay sa report, lubog talaga ‘yung barko sa lugar. May laman ho ‘yun na 800,000 liters,” Sinocruz said. (According to the report, the boat already sank in the area. It contained around 800,000 liters.) All 20 crew onboard the MT Princess Empress were rescued by the foreign general cargo vessel MV EFES at around 6 am, he said. Sinocruz said the rescued crew will be brought to the Port of Subic Bay. Authorities have yet to confirm whether an oil spill occurred, but Sinocruz said the Philippine Coast Guard has been alerted of the incident. The Coast Guard has dispatched a marine environment protection unit to contain a possible spill. It said in a Facebook post that it deployed BRP Melchora Aquino and one airbus helicopter to respond to the incident.
Coast Guard reports oil spill from capsized tanker in Oriental Mindoro – The Philippine Coast Guard reported late Tuesday afternoon, February 28 an oil spill from the oil tanker MT Princess Empress that capsized earlier in the day off the coast of Naujan, Oriental Mindoro. Reports of the five-kilometer long and 500-meter wide oil spill from the diesel fuel that powered the oil tanker prompted environmental groups to urge the Philippine government to end the country’s dependence on fossil fuels. The Philippine Coast Guard, which had deployed air and water assets to monitor the effects of the maritime mishap off Balingawan Point, said the oil spill did not involve the 800,000 liters of crude oil that the tanker was ferrying from the port of Limay in Bataan to the port of Iloilo. “We monitored spillage of diesel fuel, not industrial fuel oil (cargo),” the PCG said in a statement. The PCG also said the vessel owners’ representative promised to send two tugboats with an oil spill boom to contain the damage. The initial report, from a GMA interview with port manager Joselito Sinocruz of the Port Management Office (PMO) Batangas, placed the vessel in the Tablas Strait off Romblon island when it capsized around 2 am. The PCG later clarified that the accident took place off Balingawan Point. Tablas Strait is a body of water separating Mindoro Island from Panay and Romblon islands. Later in the day, Bantay Dagat personnel of Pola in Oriental Mindoro recovered life vests, safety tubes, rafts, and belongings from oil tanker MT Empress in Barangay Tagumpay, Naujan. Authorities said they are also monitoring the site of another maritime accident off the coast of Occidental Mindoro. Commodore Innocencio Rosario Jr., the commander of the Philippine Coast Guard Southern Tagalog told Rappler that cargo vessel MV Manife V ran aground in the evening of February 26 north of Lubang, Occidental Mindoro, 110 meters from the shoreline of Barangay Maligaya. All the 20 crew members of the MT Princess Empress and the 14 from the MV Manife V were safely rescued and brought to shore. A foreign vessel rescued the oil tanker’s crew and brought them to Subic Bay port.
Philippines dispatches resources to contain oil spillage from sunken tanker 'Princess Empress' - World News - Philippine coast guard authorities are rushing to find out and secure a tanker which sank in rough seas and is now spilling the industrial fuel oil cargo it was carrying. The tanker MT Princess Empress was carrying 800,000 litres (210,000 gallons) of industrial fuel oil and sank off the northeast coast of Mindoro island, Philippines on 28 February. The oil product tanker was on its journey from Bataan province, near the capital, Manila, to the central province of Iloilo. The vessel faced an issue with its engine and sank into the sea. After the tanker sank, a spillage was spotted by the coast guard and was initially thought to be just the malfunctioned engine's diesel fuel. However, after conducting a test of the water samples, the authorities confirmed on Thursday that it was in fact some spillage of the industrial oil cargo the tanker was carrying. The industrial oil leakage was spotted off Oriental Mindoro province. By Wednesday, the coast guard said that a spill had spread in an area of over 24sq km (9 square miles). However, anything certain could not be said about the extent of the spillage. Philippines Coast Guard spokesperson Rear Admiral Armand Balilo, as quoted by media portals, said, “A ship’s structural integrity may be compromised during the sinking, and it may develop a hole through which oil will leak under pressure." It is becoming difficult for the divers to reach the tanker as the vessel sank into over 400 metres deep (1,300 feet) seas, he said. Balilo added that the cargo was not sealed and was loaded directly into the tanker. Oriental Mindoro provincial Governor Humerlito Dolor said that a search is underway. The coast guards are using oil spill booms to contain the oil spillage. The areas where the oil spillage is spotted include Verde Island Passage, a marine ecosystem that provides food and livelihood to millions of people. Environmental groups are expressing concerns that the oil spill could potentially endanger protected 21 marine protected areas.
Oriental Mindoro oil spill threatens Philippine, global diversity - The Philippines is the center of marine biodiversity in the world, and the February 28 Oriental Mindoro oil spill occurred smack in the heart of the country’s richest fishing and aquatic area. The Oriental Mindoro oil spill threatens the marine ecology not only of the Philippines but the world, Department of Environment and Natural Resources (DENR) Secretary Ma. Antonia Yulo-Loyzaga warned on Friday, March 3. The DENR secretary flew to the province south of Metro Manila to assess the damage caused by the oil spill from the sunken MT Princess Empress, which capsized on February 28 in Balingawan Point off the coast of Naujan town. The DENR secretary said the government was “looking at the big picture” in determining the impact of the oil spill. The most urgent task, she stressed, was finding the exact location of the sunken vessel, to allow scientists to pinpoint how broad and deep the damage to the marine environment could get. Loyzaga said the oil spill would have “vast implications” not only for the country, but for the world. The Philippine Coast Guard (PCG) said black, foul-smelling sludge has reached the shores of eight of Oriental Mindoro’s 13 municipalities: Naujan, Pola, Pinamalayan, Gloria, Bansud, Bongabong, Roxas, and Mansalay. An aerial reconnaissance flight by the Coast Guard Aviation Force (CGAF) observed a shortening of the oil spillage, from six kilometers on March 1 to under three kilometers on March 3. Coast Guard Romblon reported signs of oil on Sibale Island on Friday. Romblon is east of Oriental Mindoro. Around 5 pm on the same day, the Coast Guard district in Western Visayas said officials had called an emergency meeting after a report from their station in Semirara Caluya indicated sighting of an “undertermined quantity of oil probably coming from MT Empress.” The PCG on Thursday, March 2, said the MT Princess Empress cargo of industrial oil had started to leak after a spill of the vessel’s diesel fuel. The PCG deployed a water depressant at the site of the oil spill, around 13.7 kilometers off Naujan. But in Pola town, Mayor Jennifer Cruz said local government personnel and residents were reduced to manually scooping and mopping up the shoreline sludge with pails, dippers, sponges, and rugs. The Pola town council approved on March 3 the state of calamity declared by Cruz. The general area of the maritime accident, the Tablas Strait, is a strategic waterway connecting Luzon and the Visayas.The oil spill threatens some of the country’s richest areas of biodiversity like the Verde Island Passage linking the island of Mindoro to Batangas on the Luzon mainland. The Verde Island Passage covers the village of Anilao in Mabini, Batangas, as well as Puerto Galera town in Oriental Mindoro, and Verde Island.Mindoro Oriental has a coastline of around 342.45 kilometers and almost 311,000 hectares of municipal waters. This is according to the Oriental Mindoro Integrated Coastal Area Management Plan 2019-2023, which was drafted by the Provincial Agriculture Office-Provincial Fisheries and Coastal Resource Management Division with the Malampaya Foundation Inc. and the Partnerships in Environmental Management for the Seas of East Asia.The province has around 2,392 hectares of mangroves, 4,537 hectares of coral reefs, and 1,196 hectares of seagrass habitats.Almost 18,000 persons – 12,570 males and 5,402 females – rely on municipal fishing for livelihood.A separate report by the provincial agriculture office said that the province’s fisheries production from January to October 2019 was recorded at 7,301.12 metric tons. The bulk of production, almost 5 MTs, was contributed mainly by municipal fisheries, which the government agency credited to the continuous establishment of marine protected areas.Three badly-hit towns – Pinamalayan, Pola, and Gloria – and Puerto Galera exhibited “highly diverse fish species,” the report said.After decades of struggle to establish marine protected areas (MPA) where human activities are strictly managed to protect the environment, commercial maritime traffic caused one of the most serious threats to the country’s marine economy.Here are the natural resources in the many protected areas and sanctuaries threatened by the MT Princess Empress oil spill.
Fishing banned as Philippine oil spill spreads | Philstar.com — Thousands of fishermen in the Philippines have been ordered to stay ashore as authorities struggled Friday to contain an oil spill from a sunken tanker that is threatening the region's rich marine life and economy. The slick off Mindoro island, south of the capital Manila, stretched for 120 kilometres (75 miles) and was about nine kilometres offshore, said Ram Temena, disaster operations chief in the affected province of Mindoro Oriental. The Philippine Coast Guard is still looking for the Princess Empress, which had engine trouble and sank in rough seas off Naujan municipality on Tuesday. It was carrying 800,000 litres (210,000 gallons) of industrial fuel oil from Bataan province, near Manila, to the central province of Iloilo. Another vessel rescued the 20 crew members on board. Diesel fuel, which had been powering the Philippine tanker, and some of the cargo have leaked into the sea, the coast guard said previously, sparking concern for the environment and industries dependent on the ocean. Coast guard spokesman Armando Balilo said experts and major oil firms were being consulted over how to recover the industrial fuel oil from the tanker, which is more than 400 metres (more than 1,300 feet) below sea level. "It is beyond the capability of technical divers," Balilo told reporters. "Second, we do not have the mechanical equipment, submersible, that can dive to syphon it off without endangering (crew) lives." Rough seas have prevented the deployment of oil spill booms to stop the toxic material from spreading, Balilo said. Instead, they were spraying chemical dispersants on the water surface to break down the oil. It is not known how much diesel fuel and industrial fuel oil are in the water. The situation was "getting worse", said Provincial Governor Humerlito Dolor. He had ordered the province's 18,000 registered fishermen to stay on shore until it was safe to fish. In the meantime, they would receive food packs. "It will have a big impact on us," Dolor said. "Based on experience, the adverse effects on the community will be long term." An estimated 591 hectares (1,460 acres) of coral reefs, 1,626 hectares of mangroves and 362 hectares of seaweed could be "potentially affected" by the oil spill, Environment Secretary Maria Antonia Loyzaga said. The tanker sank near the Verde Island Passage -- a busy sea lane between the main island of Luzon and Mindoro -- which Loyzaga said was "globally recognised" for its marine biodiversity. Pola Mayor Jennifer Cruz said some dead fish coated with oil had washed up on the shores of the municipality, which is one down from Naujan. "Our entire coastline was hit by the oil spill," said Cruz. "Earlier, we could smell the foul odour. It's like we're inside an auto shop." Coast guard personnel and volunteers were cleaning up oil from beaches, some using their bare hands, and had already filled several drums with the toxic material, she said.
Farmers, elders, Teals meet to thwart Santos fracking the Pilliga and the Liverpool Plains Kamilaroi elders, farmers and politicians gathered under a temporary pavilion on the Gunn property east of Gunnedah this week, right in the middle of the Liverpool Plains. They want to stop the fossil fuel developments that threaten our food supply, reports Callum Foote.Farmers and landholders organised a conference this week with the sole intent of stopping Santos’s expansion into the Liverpool plains through the proposed development of the Hunter Gas Pipeline; and if possible, stop the development of the Narrabri and Pilliga gas fields. Cattle farmer Rosemary Nankivell told the meeting:Nankivell has lived in the area, on the same property, for her whole life. Her husband Paul quips that “she has only changed bedrooms”. Along with many other farmers, they have been fighting fossil fuel developments in their backyard for over a decade. Many were a part of the Caroona Coal Action Group which managed to successfully block both BHP’s Caroona and Shenhua’s Watermark coalmines which were to be developed in the region.This success remains a touchstone for how powerful rural communities can be when they put their minds to it. And many are hopeful they will see Santos off.“We will do this, however the reality is that we have a hard fight ahead. We’ve stared down BHP, we stared down Shenhua, and we won’t be backing down now,” says Nankivell.Meanwhile, water extracted from the Great Artesian Basin is already at record levels thanks to extraction by CSG operators to supply Gladstone LNG plants. Fracking NSW will propel extraction levels far higher.
Guaya oil spill cleanup ongoing - Heritage Petroleum’s Oil Spill Response Team’s clean-up operation at the site of last Saturday’s oil spill in Guayaguayare is still underway. The source of the leak was in a heavily forested area, but it was quickly repaired on Sunday and additional checks have revealed no further seepage. However, air quality monitoring is ongoing after residents from a nearby community complained about an odour. So far, no harmful emissions have been detected. Along with its contractors, Heritage assured that it’s working to remove the residual oil from the forested area. The contractor has also employed members of the community to expedite the cleanup and restoration work. Heritage added that the Ministry of Energy and Energy Industries (MEEI) and the Environmental Management Authority (EMA) continue to be updated on the cleanup an ongoing basis.
OPEC’s February Oil Production Jumped By 150,000 Bpd - OPEC’s crude oil production for February was, on average, 150,000 bpd more than it was in January, a Reuters survey found on Tuesday. OPEC’s February crude oil production rose to 28.97 million bpd, the survey said, but is still 700,000 bpd less than it was in September. OPEC+--responsible for producing around 40% of the world’s crude oil-- cut its oil production targets as demand took a tumble during the pandemic. The group slowly raised its production targets last year as demand increased but consistently failed to meet its monthly production targets. In September last year, OPEC+ decided to begin cutting the group’s production targets, effective in October. The first cut was mild, at just 100,000 bpd. The cut was considered mostly symbolic, with the group at the time still underproducing by nearly 3 million bpd. But with oil prices falling from $120 Brent to less than $90 Brent by their October meeting, OPEC+ moved to tighten oil markets even further by making a drastic cut to its production targets by 2 million bpd, effective in November. The group’s production targets have not changed since then. For the ten OPEC members that are part of the wider OPEC+ agreement, February production was 880,000 bpd below its targets. This is closer to their target than they were in January when they produced 920,000 bpd less than their target. For February, Nigeria was behind OPEC’s largest increase in production, with the African nation boosting production by 100,000 bpd, according to the Reuters survey. Iraq saw the second-largest increase in production. Angola saw a drop in crude oil production in February of 80,000 bpd. The Reuters survey is based on shipping data, Petrologistics, and Kpler, along with information provided by OPEC and consultants, Reuters said.
Goldman Sees Oil Price Spike In 2024 As Spare Capacity Runs Thin -Events in China, not Russia, drove oil prices this past year, and now that Chinese manufacturing activity is on the upswing, the next 12-18 months are likely to see another spike in oil prices, says Goldman Sachs. That could mean crude oil targeting prices above $100 per barrel in the fourth quarter of this year. The situation is “tighter” today, Jeff Currie, global head of commodities research at Goldman Sachs, told Bloomberg Surveillance Early Edition on Wednesday. The big event last year was not Russia. It was China. “Global oil demand contracted 2% in the fourth quarter of last year, and that’s a recession in my book,” Currie said. That contraction, said Currie, created the spare capacity in oil and other commodities, but manufacturing data coming out of China this morning shows that is now reversing. The Chinese manufacturing purchasing managers’ index (PMI) jumped to 52.6 in February from 50.1 in January, data from China’s National Bureau of Statistics showed on Wednesday. The surge in factory activity was the fastest in over a decade.. Additionally, the index for non-manufacturing sectors also jumped, signaling an overall expansion of the Chinese economy in February. Altogether, it signals the potential for a faster-than-expected rebound after the reopening from the ‘zero-Covid’ policies abandoned by Beijing just at the end of 2022. “We created new supply, not through investment, but through China contracting, through lockdowns. Now, as China comes back, we’re gonna lose that spare capacity and we’re gonna be back to the same problems we had before,” Currie warns. The real focus, according to Goldman, is supply scarcity. “At this point, the ability to get from one year to the next given how scarce supply is, is really the focus. And the markets have been trading that way,” Currie said, noting that a commodities supercycle is not an “upward trend”; rather, it is a “sequence of spikes”.
Oil prices fall on renewed inflation fears and stronger dollar -Oil prices fell in volatile trade on Monday, as a stronger dollar and fears of recession risks offset gains arising from Russia's plans to deepen oil supply cuts. West Texas Intermediate U.S. crude futures (WTI) traded at $75.98 a barrel, 34 cents, or 0.5% lower, while Brent crude futures were down 48 cents, or 0.6%, at $82.68 a barrel at 0733 GMT. Both benchmarks closed more than 90 cents higher on Friday. The dollar hovered near a seven-week peak on Monday after a slew of strong U.S. economic data reinforced the view that the Federal Reserve will have to raise interest rates further and for longer. A firm dollar makes commodities priced in the U.S. currency more expensive for holders of other currencies. "Crude continues to take direction from the sentiment in the broader financial markets," said Vandana Hari, founder of oil market analysis provider Vanda Insights. Fears of a hawkish Fed returned to the fore on Friday after the personal consumption expenditures (PCE) price index, shot up 0.6% last month after gaining 0.2% in December. "If risk-aversion continues to grow, crude will likely come under renewed pressure," said Hari. Adding to the downside pressure, U.S. crude oil inventories surged to the highest level since May 2021 last week, data from the Energy Information Administration (EIA) showed. "The EIA data continue to raise more questions instead of providing clarity on markets," analysts at the consultancy Energy Aspects said in a note, referring to the steep supply adjustment in the data that contributed to the build. On the supply side, Russia plans to cut oil exports from its western ports by up to 25% in March versus February, exceeding its previously announced production cuts of 5%. Oil prices have fallen by about a sixth in the year since Feb. 24, 2022, when Russian troops first marched into Ukraine. Two weeks after the invasion, prices surged to a record high of nearly $128 a barrel over supply concerns but have since cooled over fears of a global economic slowdown. Russia halted supplies of oil to Poland via the Druzhba pipeline, the chief executive of Polish refiner PKN Orlen (PKN.WA) said on Saturday, a day after Poland delivered its first Leopard tanks to Ukraine. Separately, investors are bracing for China's manufacturing surveys this week for a clear direction on oil demand. China is holding its annual parliamentary meeting from this weekend and will see new economic policy targets and policies.
NYMEX WTI Futures Fall on Weak US Manufacturing Activity -- West Texas Intermediate futures on the New York Mercantile Exchange settled Monday's session with losses under pressure from weaker-than-expected U.S. manufacturing data that showed protracted weakness in the industrial sector, undermining the outlook for refined fuels demand. The Commerce Department reported on Monday durable goods orders dropped 4.5% in January -- the steepest decline since April 2020 when the country was in COVID lockdown -- reflecting a sharp pullback in bookings for commercial aircraft. January's decline followed a 5.6% jump in durable goods orders in December that was tied to aircraft orders. The Commerce Department's report showed bookings for commercial aircraft, which are volatile from month to month, slumped 54.6% at the start of the year. Other indicators also pointed to a weak manufacturing sector. The Institute for Supply Management's gauge of factory activity has shown contraction for three straight months, and several regional Federal Reserve banks showed shrinking activity in January. For context, Texas factory activity in February declined for the first time since May 2020, according to the Dallas Federal Reserve Bank's Texas Manufacturing Outlook Survey released Monday morning. Following the bearish data, the U.S. dollar index declined 0.5% against a basket of foreign currencies to settle at 104.624, but the weakness failed to lend support for the front-month West Texas Intermediate futures. WTI April futures on NYMEX fell $0.64 to $75.68 bbl. Internationally, the global crude benchmark Brent contract for April delivery eased $0.71 to settle at $82.45 bbl ahead of expiration Tuesday afternoon, with the May contract falling $0.78 to $82.45 bbl. NYMEX RBOB March added $0.0096 to settle at $2.3683 gallon, with the next-month RBOB futures widening its premium to the expiring contract to $0.2157. NYMEX ULSD March futures advanced $0.0236 to $2.8198 gallon and ULSD April futures settled at $2.8003 gallon. Early in the session, the oil complex got a leg up from reports Russia cut oil supplies on the Druzhba pipeline to Poland a day after Warsaw sent the first Leopard tanks to Ukraine. "We're effectively securing supplies. Russia has halted oil deliveries to Poland, for which we are prepared. Only 10% of crude oil has been coming from Russia, and we will replace it with oil from other sources," said Chief Executive Officer of Poland's largest refiner PKN Orlen Daniel Obajtek. It must be noted that the Druzhba pipeline, which supplies oil to Poland and Germany, as well as to Hungary, Czech Republic, and Slovakia, was exempted from EU sanctions to help the landlocked countries of Eastern and Central Europe secure oil supplies. It doesn't appear that disruption in Poland affected deliveries to Hungary, Slovakia, and Czech Republic. Before the Russian invasion of Ukraine, Druzhba pipeline, whose name means "friendship" in Russian, delivered around 2 million bpd to the European Union, making it one of the world's largest pipelines.
Oil Set for 4th Monthly Loss Thanks to Worries About Fed Hit to Demand --Oil prices are on track to post a monthly loss for the fourth time in a row, as traders stay firmly focused on the prospect the Federal Reserve will keep hiking interest rates. That potential hit to demand appears to be overshadowing the chances of a jump in appetite for crude as China's economy reopens or as Russia slashes supply. A buildup in US stockpiles is also likely weighing on prices. Brent crude futures, the global benchmark, have fallen 2.2% to $83 a barrel in February so far, while West Texas Intermediate crude futures have dropped 3.2% to $77 a barrel. The declines put the benchmarks on track to fall for a fourth consecutive month. "Crude oil prices have remained volatile this year, with markets torn between fears of an extended Federal Reserve rate-hiking cycle due to a tight US labor market and optimism over a recovery in oil demand as China's economy reopens," UBS CIO Mark Haefele said in a research note. In February, investors returned to bracing for US interest rates to be higher for longer, after a string of positive economic data including a surge in job numbers. That offers the Fed the scope to raise borrowing costs above 5% and then hold them there, as it tries to rein in sticky high inflation. Higher interest rates in the US weigh on oil prices because they curb consumer demand and drag on economic activity. They also strengthen the dollar, which can pull down prices for Brent and WTI that are denominated in the US currency. "While better US economic data should mean better oil demand, the concern is that this forces the Fed to overtighten monetary policy to bring inflation under control," UBS analyst Giovanni Staunovo said earlier this month. Another factor is the growth in US crude inventories, which have logged nine weekly rises in a row. Supplies are now over 15% higher than they were last year, according to FXPro. Crude's losing streak comes even though China has started to rapidly reopen its economy after nearly three years of strict zero-COVID lockdowns. Some strategists expect it could boost global demand and fuel a price rally, and Vitol CEO Russell Hardy has said it could push oil demand to record highs later this year. But many analysts expect oil prices to rally again once Russia starts cutting its production levels. Moscow said earlier in February that it plans to cut its oil output by 500,000 barrels a day in March, as Ukraine sanctions hit its ability to find willing buyers. Those Russian output cuts would squeeze global supply tighter, and that would drive prices higher as long as demand continues to hold up. "We believe that the tightening of the oil market this year will eventually put prices on an upward trajectory," UBS CIO Haefele said. "Russia's announcement last Friday of an output cut in March is a reminder of these dynamics."
Crude oil higher; still on course for another monthly loss - Oil prices rose Tuesday but are still heading for a fourth straight monthly drop on further U.S. interest rates hikes will hit economic activity in the world's largest consumer. By 09:15 ET (14:15 GMT), U.S. crude futures traded 2.7% higher at $77.67 a barrel, while the Brent contract rose 2.2% to $83.86 a barrel. Crude oil futures have pushed higher on hopes that upcoming economic data will point to a recovery in the Chinese economy, the largest import of crude in the world. China's per capita spending fell 0.2% in 2022, data showed on Tuesday, as COVID restrictions ground economic activity to a halt. However, the country's Purchasing Managers' Indices, due overnight, are expected to show some improvement in February from the prior month, with the country's manufacturing sector - which acts as a bellwether for economic growth - likely to push further into expansion territory. That said, the two benchmark crude indices are still on course to post losses of around 3% this month as hotter than expected inflation numbers in the U.S. have largely cemented expectations the Federal Reserve will continue raising rates. This has raised concerns of a hard landing for the U.S. economy, as well as aiding the dollar, hurting commodities like oil that are priced in the greenback, making them more expensive for foreign buyers. Attention is likely to now focus on U.S. inventory data from the American Petroleum Institute later in the session, which is likely to show another hefty build. Commercial crude stocks have risen steeply in the last eight weeks – by a combined total of more than 50 million barrels – adding to concerns that demand is waning in the U.S., the world's largest economy. The latest market positioning data showed that money managers trimmed their net long positions in both the ICE Brent and Nymex WTI contracts over the last week, after hitting a one-year high. "Speculative net longs in ICE Brent are still comfortably higher when compared to the range over the past year and reflect the possibility of further liquidation if economic expectations deteriorate," said analysts at ING, in a note.
The market traded higher as it awaits key economic data over the next two days | Sprague -- The oil market on Tuesday traded higher, erasing Monday’s losses as expectations of demand recovery in China underpinned its gains. The market traded higher as it awaits key economic data over the next two days, with expectations that China’s factory activity increased in February. Meanwhile, Refinitiv Eikon reported that Urals crude exports to China from Russia’s western ports increased in February from the previous month due to lower freight rates and increased demand. The oil market posted a low of $75.55 in overnight trading before it retraced its previous losses and breached its downward trendline at $76.66. The market extended its gains to over 2 cents as rallied to a high of $77.83 early in the session. The market retraced more than 50% of its move from a low of $73.80 to a high of $80.62. The market later erased some of its gains and settled in a sideways trading range from $76.85 to $77.70 during the remainder of the session. The April WTI contract settled up $1.37 at $77.05 and the April Brent contract settled up $1.44 at $83.89. The product markets settled higher, with the heating oil market settling up 11 points at $2.8209 and the RB market settling up 6.6 cents at $2.4343. The EIA reported that U.S. crude oil production in December fell by 276,000 bpd to 12.101 million bpd from a revised level of 12.377 million bpd in November. It revised the November production level by 2,000 bpd. It reported that U.S. crude oil exports in December fell to 3.853 million bpd from 4.042 million bpd in November. Total refined oil product exports increased to 3.366 million bpd in December, up from 3.088 million bpd in November. U.S. distillate fuel exports increased to 1.421 million bpd in December, up from 1.172 million bpd in November and gasoline exports in December fell to 962,000 bpd from 984,000 bpd in November. The EIA also reported that U.S. total oil demand in December fell by 5.6% or 1.166 million bpd on the year to 19.491 million bpd. U.S. distillate demand in December fell by 5.9% or 233,000 bpd on the year to 3.717 million bpd and U.S. gasoline demand fell by 3.5% or 307,000 bpd on the year to 8.572 million bpd. According to a Reuters survey, OPEC’s oil output increased in February led by a further recovery in Nigerian supply, despite strong adherence by top producers to an agreement by the wider OPEC+ alliance to cut production. OPEC produced 28.97 million bpd in February, up 150,000 bpd on the month. Output is still down more than 700,000 bpd from September. With the rebound in Nigerian output in February, compliance with the agreement increased to 169% of pledged cuts, against 172% in January. The 10 OPEC members required to cut production pumped about 880,000 bpd below the group's target. The shortfall in January was about 920,000 bpd. According to a Reuters survey, the oil market will tip into a deficit, lifting prices above $90/barrel towards the second half of 2023, as Russia cuts its supply and China increases its consumption. Economists and analysts forecast Brent crude would average $89.23/barrel this year, falling from a previous estimate of $90.49, but still above current levels of around $83. West Texas Intermediate is projected to average $83.94/barrel in 2023, below the previous month's $85.40/barrel forecast.
U.S. Crude Oil Inventories Continue To Build - Crude oil inventories in the United States saw another significant increase, with a 6.203 million barrel increase last week, the American Petroleum Institute (API) data showed on Tuesday, bringing the total number of barrels gained so far this year to nearly 59 million barrels. This week, SPR inventory held steady for the seventh week in a row at 371.6 million barrels—the lowest amount of crude oil in the SPR since December 1983. But the Biden Administration previously announced that there would be further releases from the SPR in the amount of 26 million barrels after the stockpiles dropped by 221 million barrels last year. Oil prices traded up on Tuesday in the run-up to the data release. At 12:29 p.m. EST, WTI was trading up $1.80 (2.38%) on the day to $77.48 per barrel, and up nearly $1.50 per barrel from this time last week. Brent crude was trading up $1.54 (+1.87%) on the day at $83.99—a weekly increase just shy of $1 per barrel. U.S. crude oil production stayed at 12.3 million bpd for week ending February 17—the highest production rate since last April 2020. U.S. production is still 800,000 bpd lower than the peak production seen in March 2020. WTI was trading at $76.86 shortly after the data release. Gasoline inventories fell by 1.774 million barrels after last week’s API data showed the fuel inventories rising by 894,000 barrels. Distillates fell 341,000 barrels after rising by 1.374 million bpd in the week prior. Inventories at Cushing, Oklahoma, increased by 483,000 barrels on top of the 781,000 barrel hike reported last week.
Oil Prices Climb As China’s Manufacturing Data Stuns Markets Crude oil prices rose today driven by new data from China, which suggested its manufacturing activity was picking up after the slump amid last year’s lockdowns. Brent crude was trading at just above $84 per barrel at the time of writing and West Texas Intermediate was changing hands at over $77.60 per barrel, both up by about 0.7 percent from yesterday’s close. Reuters reported that China’s factory activity rose last month, for the first time in seven months. PMI data also showed manufacturing activity expanding at the fastest rate in over a decade, reinforcing expectations of a strong economic rebound in the world’s largest oil importer. China’s oil demand is seen as the chief factor behind expectations for higher oil prices later in the year. A recent Reuters poll among economists showed most expect Brent crude to top $90 per barrel in the second half of the year. The respondents cited Chinese demand and Russian supply as factors. The China demand expectations were so pronounced this week that they offset the American Petroleum Institute’s estimate that crude oil inventories in the United States had expanded for yet another week. According to the API, the build came in at 6.2 million barrels. Government data on U.S. inventories from the Energy Information Administration is out later today but the EIA, too, has been reporting sizeable inventory builds over the past several weeks. The U.S. inventory reports have capped oil price gains to an extent lately, and OPEC production data may add to that cap. According to a Reuters survey, the group’s combined output rose by 150,000 bpd in February from the previous month to a total 28.97 million barrels daily. This is still 700,000 bpd lower than what OPEC produced in September last year but if the increase is confirmed, it would suggest OPEC is not as rigid about its output limit enforcement as demonstrated.
WTI Rebounds After Smaller-Than-Expected Crude Build, Cushing Stocks Highest Since June 2021Oil prices are considerably lower again this morning after a major rollercoaster ride higher last night and back down again this morning. This price action follows another big crude build reported by API, and hawkish policy fears sparked by German inflation and US PMIs (prices jumped) all offsetting buying pressure after China reported big jumps in its manufacturing data. "Oil prices have fallen for the month due to an extremely warm winter in the U.S. and Europe . "In addition, recent mixed data on inflation and associated hawkish [Federal Reserve] commentary have been a headwind for oil as the dollar strengthened and stock prices came off of highs." Overhanging the market is uncertainty around the global economic outlook as the Federal Reserve and other major central banks continue to push interest rates higher in a bid to rein in inflation, and the signs from week-after-week of inventory increases remains an ominous one. API
- Crude +6.203mm (+350k exp)
- Cushing +483k
- Gasoline -1.774mm (-300k exp)
- Distillates -341k (-700k exp)
DOE
- Crude +1.166mm (+350k exp)
- Cushing +307k
- Gasoline -874k (-300k exp)
- Distillates +179k (-700k exp)
Crude stocks rose for the 10th straight week and inventories at the Cushing Hub rose for the 9th straight week. Gasoline inventories drewdown for the 2nd week in a row... US Crude inventories are at their highest since May 2021... Stocks at the Cushing Hub surged to their highest since June 2021... Graphics Source: Bloomberg Before we move on, it's worth reflecting once again on the so-called "adjustment factor" that is used to fudge the numbers in the crude inventory process... it just hit a new high... US Crude production was flat at cycle highs despite the drop in rig counts... WTI was hovering around $76.75 ahead of the official data and bounced on the smaller crude build (smaller than API reported and BBG's whisper number of +3mm)
WTI Gains as US Oil Exports Surge to Record-High 5.6M Bpd -- Reversing earlier losses, oil futures settled Wednesday's session with gains between 1% and 2%. The advances come after the weekly inventory report from the Energy Information Administration showed U.S. crude oil exports surged to a record-high 5.6 million barrels per day at the end of February, while domestic demand for gasoline improved to a two-month high 9.1 million barrels per day (bpd) amid easing prices at the pump and unseasonably warm winter weather. More evidence of surging demand for U.S. oil barrels on the global market could be found in EIA's inventory report for the final week of February, showing the total U.S. oil and petroleum products exports jumped to 11.1 million bpd. The volume of U.S crude and petroleum products being exported to Europe has risen sharply in recent months and looks set to remain high as the region deals with a shortage of Russian crude oil following an EU ban on Russian crude imports. Total U.S crude exports to Europe reached 1.75 million bpd at the start of 2023, a rise of around 75% over 2021 levels. The jump in oil exports comes as demand for refined fuels remained remarkably weak at the start of the year but showed nascent signs of recovery. For instance, U.S. gasoline consumption topped 9 million bpd for the first time this year last week, while 202,000 bpd above the same week a year ago. A combination of easing prices at the pump and mild weather could have contributed to an unseasonal jump in gasoline demand. On the bearish side, U.S. commercial crude inventories still increased for the tenth consecutive week through the end of February, building by almost 60 million barrels (bbl) since the start of the year. The rate of the builds, however, slowed to 1.2 million bbl, down from 7.64 million bbl and 16.284 million bbl in the second and third weeks of February. At 480.2 million bbl, nationwide crude inventories now stand about 9% above the five-year average. Internationally, China released the first set of post-lockdown economic data overnight showing its manufacturing sector expanded at the fastest pace since 2011. China's manufacturing Purchasing Managers Index, a gauge of industrial activity, grew for the first time in six months, jumping to 56.7 reading from the prior month's 49.8. Goldman Sachs estimated that China's oil demand is still roughly 1.6 million bpd below the trend. The revision of this trend could boost oil prices by $15 bbl in the second half of the year, with several forecasting agencies expecting global supply and demand balances to tighten this Spring. At settlement, NYMEX West Texas Intermediate April contract advanced $0.64 to $77.69 per bbl, while international crude benchmark Brent crude gained to $84.31 per bbl, up $0.86 per bbl on a session. NYMEX RBOB April futures rallied $0.0328 to $2.6748 per gallon, and ULSD April futures gained $0.0682 for a $2.8738-per-gallon settlement.
Crude oil holds gains on China rebound, even as US crude stocks rise - Oil prices inched up in early Asian trade on Thursday, extending gains from the previous two sessions on signs of a strong economic rebound in China, the world’s top oil importer, which offset worries about a rise in U.S. crude inventories. Brent crude futures rose 12 cents, or 0.1%, to $84.43 a barrel at 0231 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 7 cents, or 0.1%, at $77.76 a barrel. Both contracts rose about 1% in the previous session after data showed manufacturing activity in China in February grew at the fastest pace in more than a decade, adding to evidence of an economic rebound after the removal of strict COVID-19 curbs. However a tenth consecutive week of crude stock builds in the United States capped the market’s gains. U.S. crude inventories rose by 1.2 million barrels in the week ending Feb. 24 to 480.2 million barrels, their highest level since May 2021, the Energy Information Administration reported. Analysts polled by Reuters had expected a 500,000-barrel rise. Fear of breaching Western sanctions might slow Russian oil imports to India Record exports of U.S. crude oil, however, kept the build smaller than in recent weeks, with shipments rising to 5.6 million barrels per day (bpd) last week, according to the EIA. “U.S. crude inventories slowed their increases but sit at above the five-year range, with the slowdown of builds due to surging gross exports to new records,” Citi analysts said in a client note. Meanwhile, crude oil processed by Indian refiners reached record levels in January, provisional government data on Wednesday showed, as the country boosted imports of Russian barrels that Western countries shunned. Refinery throughput in the world’s third-largest oil importer and consumer reached 5.39 million barrels per day for January, the highest since Reuters records going back to 2009.
The Oil Market Continued to Trend Higher on Thursday Amid Signs of an Economic Recovery in China -The oil market continued to trend higher on Thursday amid signs of an economic recovery in China. Data released on Wednesday showed that manufacturing activity in China grew last month at the fastest pace in more than a decade and China’s seaborne imports of Russian oil are expected to reach a record high this month. The oil market breached its previous highs and retraced more than 62% of its move from a high of $80.62 to a low of $73.80 and also breached a trendline at $78.18 as it rallied to $78.35. The market erased some of its gains on fears over the impact of potential increases to European interest rates following the news that inflation in the euro zone increased in February to a higher than expected annual rate of 8.5%, with faster than expected acceleration in consumer prices in France, Spain and Germany. The oil market, however, retraced its losses and continued to rally higher. It extended its gains to 90 cents as it posted a high of $78.59 by mid-day. The April WTI contract erased some of its gains and settled up 47 cents at $78.16, while the April Brent contract settled up 44 cents at $84.75. The product markets were mixed, with the heating oil market settling down 76 points at $2.8662 and the RB market settling up 2.55 cents at $2.7003. J.P. Morgan forecast Russia would be able to maintain its oil output at pre-Ukraine conflict levels of 10.8 million bpd due to steady demand from China and India but said it might struggle to reroute some of its oil product exports away from Europe. J.P. Morgan expects Indian and Chinese demand collectively to increase by 1 million bpd this year. J.P. Morgan said Russia's oil product exports were expected to drop by about 300,000 bpd to "lows last seen in May 2022" as it struggles to reroute refined products exports. The bank also said Moscow could face more competition from refiners in the Middle East coming online in the second half of the year. Bloomberg reported that the amount of crude held in floating storage has declined significantly, contributing to a surplus that has impacted the market during the past six months. According to the IEA, tankers used as temporary storage facilities held 79.5 million barrels by the end of 2022, down nearly 40% from the year before. The flow equates, when averaged over the year, to about 100,000 bpd. One reason for the distributions from floating storage is the end of a trade that started in mid-2020. The flow appears to have continued in January as Iran is selling down its stockpile of crude and condensates. At its peak, Iran had more than 100 million barrels in tankers around the world. The IEA estimates that Iranian oil accounts for about 50% of all the crude and condensate that is left in floating storage. Bloomberg stated that as with the SPR releases that largely ended this year, the distribution from floating storage are declining, removing another supply source that will cause the market to tighten. China's seaborne imports of Russian oil are set to reach a record in March after refiners took advantage of lower prices as domestic fuel demand rebounded. However, Russia's plan to cut exports will likely cap buying in coming months. Tanker tracking consultancies Vortexa and Kpler estimated nearly 43 million barrels of Russian crude oil, comprising about at least 20 million barrels of ESPO Blend and 11 million barrels of Urals, are set to reach China in March.
Oil Prices Drop after Report on UAE Debating OPEC Exit - Oil prices slumped on Friday after the Wall Street Journal reported that the United Arab Emirates had an internal debate about leaving the Organization of the Petroleum Exporting Countries and pumping more oil. Brent crude futures fell $1.57, or 1.8%, to $83.18 a barrel by 1412 GMT. U.S. West Texas Intermediate (WTI) crude futures were down $1.52, or 1.9%, at $76.64. Oil prices this week had been boosted by strong Chinese economic data, underpinning hopes for oil demand growth, but those gains were all but erased on Friday. "The driver was the WSJ story, with concerns that this might impact the OPEC+ production (cut) deal. The UAE and Saudi Arabia are the two countries with significant spare capacity," said UBS analyst Giovanni Staunovo. In China, activity in the services sector expanded at the fastest pace in six months in February as the removal of tough COVID-19 restrictions revived demand, a private sector survey showed on Friday. Manufacturing activity in China also grew last month, at the fastest pace in more than a decade, reinforcing expectations of a fuel demand recovery. China's seaborne imports of Russian oil are set to hit a record high this month. The world's top oil importer is becoming increasingly ambitious with its 2023 growth target, aiming as high as 6%, sources involved in policy discussions told Reuters this week. "Those betting on higher oil prices are basking in the afterglow of the positive macro data out of China," said PVM analyst Stephen Brennock. The market broadly shrugged off a 10th consecutive week of crude stock builds in the United States, as record exports of U.S. crude made for a smaller increase than in recent weeks. Russia's plan to deepen oil export cuts in March also helped to buoy prices. Meanwhile, analysts polled by Reuters expect the dollar to weaken in the next 12 months, which would make dollar-denominated oil cheaper for holders of other currencies. On the central bank front, hawkish signals continue to emanate from the European Central Bank, with Governing Council member Pierre Wunsch saying its key interest rate could climb as high as 4% if underlying inflation remains high.
Oil pares drop after UAE officials say no plans to leave OPEC - Brent oil pared a sharp drop as UAE officials said there was no plan to leave the Organization of Petroleum Exporting Countries. The global benchmark had retreated as much as 2.8 per cent, though later pared some of those losses to trade near US$84 a barrel. The officials were responding to a Wall Street Journal report that a growing rift with Saudi Arabia meant it is having internal discussions about quitting the alliance. The UAE has said publicly and privately it is sticking to the current OPEC output deal for at least this year. If the UAE were to quit the grouping, it would risk a political fallout not just with Saudi Arabia, one of its biggest trading partners, but with other Gulf allies such as Kuwait and Iraq. UAE officials have for some years been contemplating what alliances best suit its long-term interests, as the country seeks to monetize recent expansion in its production capacity. In a previous OPEC+ dispute with Saudi Arabia, the group’s policy decision was held up for weeks, though in the end a compromise was found. The flurry of headlines sparked a rare bout of oil-price volatility on Friday, with crude sharply shedding about US$2, before eventually recovering to trade where futures were before the first report. Last month in an interview with Bloomberg TV, the UAE’s Energy Minister Suhail Al Mazrouei said he wasn’t concerned about his country’s current production quota agreed with the OPEC+ alliance, though it will consider whether to seek a higher level when the group comes to discuss output for 2024. Days earlier, delegates said Russia’s partners in the OPEC+ coalition won’t boost production to fill in for cutbacks announced by Moscow. For much of this year, oil prices have struggled to break out of a US$10 range, with traders weighing a bout of interest rate hikes by the Federal Reserve against expectations of higher crude consumption led by a reopening of China’s economy. Traders largely expected OPEC production to remain stable for the rest of this year. Prices and other news: Brent fell 0.9 per cent to US$84 a barrel by 10:14 a.m. New York time. WTI lost 0.7 per cent to US$77.59 a barrel.
Oil Futures Reverse Higher After US Rig Count Falls -- Reversing earlier losses triggered by a report suggesting the United Arab Emirates is considering leaving the Organization of the Petroleum Exporting Countries, oil futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange settled Friday's session higher following weekly data on U.S. drilling activity that showed another decline in active oil rigs, suggesting producers are slowing output in response to building inventories. Oilfield service provider Baker Hughes on Friday said the number of active rigs drilling for oil in the United States declined for a third consecutive week this week, down eight to 592 -- the lowest total in six months. The data reinforces the view that domestic producers are beginning to pull back on drilling activity amid a slowdown in the manufacturing sector of the U.S. economy, which is responsible for a large chunk of domestic oil consumption. Separate data released earlier this week showed business activity in the manufacturing sector contracted for the fourth consecutive month in February, with the headline index remaining at the lowest level since May 2020 when the economy was under nationwide lockdown. What's more troubling, input prices paid by the producers jumped 6% from the previous month despite extremely weak demand, meaning parts of the economy are gradually entering into stagflation. Friday's economic calendar was dominated by the Institute of Supply Management surveys on U.S. services activity that showed more resiliency compared to manufacturing, with the headline index little changed from the prior month at 55.1. The headline reading remains highly important, as the central bank wants to cool down the economy, but the markets and the Federal Reserve are paying even closer attention to the Prices Paid component, which reflects inflation. Input prices for service providers unexpectedly declined by 2.2% from the prior month. Earlier in the session, oil futures came under selling pressure from a Wall Street Journal report suggesting U.A.E. is considering leaving OPEC over its rift with Saudi Arabia. "Saudi Arabia and the U.A.E. have diverged on several fronts, competing for foreign investment and influence in global oil markets and clashing on the direction of the Yemen war," states the article. WSJ claims the most intense disagreement between the two Gulf producers is over OPEC+ quotas that obligate the U.A.E. to pump much less oil than it is capable of, hurting its oil revenue. U.A.E. has invested heavily in its oil industry, and has long pushed to pump more oil, but the Saudis have said no, according to OPEC sources cited in the article. The potential for the U.A.E. to leave the OPEC+ coalition and increase oil production unilaterally initially pressed oil prices lower Friday morning, but the oil complex quickly recovered losses in afternoon trading. On the session, NYMEX West Texas Intermediate April contract advanced $1.52 to $79.68 per barrel (bbl), while the international crude benchmark Brent contract for May delivery gained to $85.83 per bbl, up $1.08 per bbl. NYMEX RBOB April futures pulled higher $0.0504 to $2.7504 per gallon, and ULSD April futures advanced $0.0469 to $2.9131 per gallon.
Oil up 4% on week after dollar slide, belated response to U.S. exports -- It was a belated response by oil longs though not entirely surprising, given the outsized exports for last week. Crude prices jumped almost 2% Friday and over 4% on the week in a catch-up to record crude exports reported by the EIA for last week. New York-traded West Texas Intermediate settled at $79.68 a barrel, up $1.52, or 1.9%. For the week, the U.S. crude benchmark gained 4.4%. London-traded Brent crude settled at $85.83, up $1.08, or 1.3%. The global crude benchmark was up 3.7% on the week. Crude prices started the week with a stumble, then gained momentum on positive factory data from top oil importer China. Hawkish rate hike talks and inflation concerns kept the market from breaking out after the EIA, or Energy Information Administration, reported on Wednesday that U.S. crude exports hit a record high of 5.629 million barrels last week. Friday’s session was again volatile as prices initially tumbled on a Wall Street Journal report that the United Arab Emirates had an internal debate about leaving OPEC and pumping more oil. By midmorning though, the market retraced the losses and headed higher on the back of a weaker dollar after a Reuters report quoted a UAE official as saying that the WSJ story was "far from the truth." “Prices have fluctuated in a range for months now and the current price sits more-or-less in the middle of that range. The range does appear to be gradually tightening but remains quite large and there appears little appetite for a breakout at this moment in time.” Downside risks could escalate again in the coming week when the Labor Department releases the U.S. nonfarm payrolls report for February. The so-called NFP report is expected to show a slower jobs growth of 200,000 for last month after the blowout 517,000 in January. Runaway jobs growth — and spending by Americans — has made the Federal Reserve’s task of curbing inflation much harder than the central bank had expected. “Core foreign inflation remains high and inflationary pressures are broad,” the Fed said in its semi-annual report to Congress. Referring to its policy-making Federal Open Market Committee, the central bank said: “The committee is strongly committed to returning inflation to its 2% objective. Ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive.” To clamp down on runaway price growth, the Fed added 450 basis points to interest rates since March last year via eight hikes. Prior to that, rates stood at nearly zero after the global outbreak of the coronavirus in 2020. Rate expectations for the Fed’s March 22 policy meeting, monitored by foreign exchange traders, remained largely at 25 basis points on Friday, though that could change with the increasing calls for tighter policing from the central bank’s hawks.
Israeli Squatter Terrorists Fire Guns, Set dozens of Fires in Palestinian Town, Killing One and Wounding 100 – Israeli squatters on land owned by Palestinian families went berserk on Sunday, after two squatters were shot by a Palestinian guerrilla in Huwwara, a small town of several thousand residents in the Nablus district. The shooter appears to have been from Nablus and was a member of the “Lion’s Den” resistance movement. The squatters set fire to at least 20 homes in the Palestinian hamlet, sometimes with the family still inside, and burned 30 automobiles and many trees. They threw rocks at people and shot at them and at houses. One Palestinian, Samah Hamdallah Aktash, 37, died from a gunshot wound to the belly, another is in critical condition from being hit in the head by a large rock, and nearly 100 other people were wounded. So reports Josh Breiner at Haaretz and WAFA.The terrorist mob was from the “illegal” squatter-settlement of Evyatar. All squatting by Israelis on Palestinian land is illegal by the 4th Geneva Convention and the Rome Statute. But even the Israeli government frowns on Israelis just going off and building homes on Palestinian farms owned by local families. The Israeli government prefers to take away the Palestinians’ land itself, exercising a sort of eminent domain, and then sending in squatters. Under international law, it is a war crime for Israel to usurp the land of the Palestinians it occupies.Breiner quotes opposition politician Yair Lapid as saying that the current, extremist government of Binyamin Netanyahu is a danger to Israel’s security, after “Smotrich’s militias set out to burn Hawara.”Bezalel Smotrich, the leader of the fascist Religious Zionism Party, has been put in charge of the occupied Palestinian West Bank by Netanyahu, the first time such authority has been invested in a civilian Israeli politician rather than in the Israeli military.Haaretz published an editorial Sunday by Zehava Galon pointing out that Israel is already in breach of international law by sending squatters in to steal Palestinian land. At least the fiction of a military occupation had been maintained, however, by keeping the administration of the Palestinian West Bank in the hands of the Israeli military, as required by the 4th Geneva Convention and the Rome Statute. Making Smotrich the civil administrator was an open declaration of an intent to annex this occupied territory permanently.US State Department spokesman deplored the terrorist attack that killed two Israelis and the “violence of the settlers.” Commenters on social media pointed to the difference in language. Surely what the squatters did is terrorism, which the 1990s US federal code defined as violence undertaken by non-state actors against civilians in order to effect a change in political policy
Arab Leaders Bring Syria's Assad Back 'In From The Cold', Angering US -- Egyptian Foreign Minister Sameh Shoukry arrived in Damascus on Monday to meet with President Bashar al-Assad and express his country’s solidarity with Syria following the devastating earthquake, signifying continued warming of relations between the Syrian government and regional states.The visit to Syria represents the first by a high-level Egyptian official since the start of the US-backed war in 2011. Upon his arrival at Damascus International Airport, Shoukry was received by Syria’s Foreign Minister, Faisal Mekdad.A day earlier, the Egyptian Foreign Ministry had announced in a statement “that the visit aims to convey a message of solidarity from Egypt to Syria and its brotherly people after the disaster,” according to the state-affiliated Syrian news outlet, SANA. Shoukry is also scheduled to visit Turkey following his visit to Syria.A day after the quake, on February 7, Egyptian President Abdel Fattah al-Sisi held a phone conversation with Assad, expressing his solidarity and “his sincere condolences” in what was “the first official exchange” between the two presidents. Cairo was also among the countries that provided Syria with humanitarian relief aid through the Syrian Arab Red Crescent (SARC).Egypt severed diplomatic relations with Damascus and announced its support for the opposition in 2013, during the presidency of the Muslim Brotherhood-affiliated Muhammad Morsi, who was overthrown that year in a military coup led by Sisi.Ties were restored the same year following Sisi’s coup. However, relations were never fully mended, and Damascus remains excluded from the Cairo-based Arab League after it was suspended in 2011. In recent years, Jordan and the UAE, two backers of the extremist insurgency in Syria, have restored their relations with the Syrian government.Since the earthquake, Arab states have embraced Syria. Tunisia has expressed its intention to restore diplomatic ties, and even Saudi Arabia – who actively supported extremist groups with the aim of overthrowing the government – has expressed the need to ‘end the status quo’ regarding enmity with Damascus. The US and UK are trying to thwart normalization efforts with Arab capitals...
Race and Erasure: Why don't Syrian and Palestinian Refugees get treated like Ukrainians?– With the war in Ukraine now in its second year, nearly a third of the country’s population has been displaced, including 8 million people who have sought refuge beyond its borders. International support for the plight of these refugees has been heartening. Nearly 4.5 million Ukrainians having been granted temporary protection status across the European Union (EU).But we also need to ask: how does this response compare to the countless other humanitarian crises around the world right now?Last year, the Norwegian Refugee Council (NRC) reported there were ten “forgotten crises” in the world, all in Africa. The suffering of people in these countries or regions rarely makes international headlines. And there is seemingly little political interest or will from the international community to address the situation.Furthermore, the war in Ukraine has redirected humanitarian assistance and resources away from these other crises. While children in Ukraine have been supported, millions of young people in countries like Sudan and Yemen have lost access to vital food aid. They are now at heightened risk of malnutrition and starvation.NRC Secretary-General Jan Egeland put it like this:The war in Ukraine has demonstrated the immense gap between what is possible when the international community rallies behind a crisis, and the daily reality for millions of people suffering in silence [from crises] that the world has chosen to ignore. [This is] not only unjust […] but comes with a tremendous cost.A recent report from Save the Children compared the EU’s response to Ukrainians seeking temporary protection and asylum to those from elsewhere. Syrian refugees, for example, described being detained in inhumane or substandard conditions until their asylum claims were considered.They certainly weren’t granted the temporary protection status afforded Ukrainian refugees. The report called this “dysfunctional at best and cruel at worst”, part of a policy designed to “contain those who arrived and deter others from coming”.
A Russian oil depot caught fire hundreds of miles from Ukraine, the possible result of a daring Ukrainian drone attack A fire broke out at a coastal oil facility in southern Russia in the early hours of Tuesday, the aftermath of a possible drone strike by Ukraine deep into enemy territory. Details on the attack were difficult to come by: Fires broke out in the early morning, as videos and photos that lit up Russian social media appeared to show.Neither Ukrainian nor Russian authorities verified the incident as an attack, though Russian outlets said drones were seen near the oil facility, run by government-controlled oil giant Rosneft. But an expert told Insider that Ukraine has the equipment to carry out such a strike. Similiar strikes, such as two on Russian air fields in December, have been attributed to Ukraine. Local authorities said that the fire, at Tuapse oil depot on the Black Sea coast, spread to an area of around 200 meters square before being put out at around 3 a.m. local time. Tuapse is roughly 300 miles from the nearest Ukrainian-held territory as the crow flies.State news agency RIA Novosti said a drone had been seen overhead, while popular Telegram channels such as Baza and Face of War claimed that two drones struck the site.Officials played down the incident, saying no oil was spilled and there were no casualties.But local news outlet 93.ru cited nearby residents as hearing two loud blasts that shook their homes, while another Telegram channel posted a video purporting to show a massive explosion and a plume of flames.Insider was unable to independently verify the video.The apparent attack comes amid a barrage of both official and unofficial reports of drone attacks on multiple sites in Russia overnight
No comments:
Post a Comment