oil & gas prices both bounce off six month lows after January natural gas hit a new life of contract low; global oil supply was 1,580,000 barrels per day short of global demand in November, with OPEC's output 630,000 barrels per day below their reduced target..
After tumbling to a new 6 month low midweek, US oil prices rallied to increase for the first time in eight weeks, after trader sentiment turned bullish on signs that the Fed would pivot to lower interest rates….after falling 3.8% to $71.23 a barrel last week as traders believed the market was oversupplied, the contract price for the benchmark US light sweet crude for January delivery traded in a narrow range and settled 9 cents higher at $71.32 a barrel on Monday as traders awaited a slew of macroeconomic data releases in the US, Europe, and China later in the week that would update the global demand outlook into the end of the year….oil prices then rallied in overnight trading on news that a Norwegian tanker in the Red Sea had been struck by a missile fired by Houthi rebels off the coast of Yemen, raising concerns over shipping disruptions in the Middle East, but tanked during the New York session and ended $2.71 lower at $68.61 a barrel following the U.S. consumer price index report that showed inflation remained sticky in November despite lower gasoline and energy prices, diminishing the chance that the Fed would ease interest rates during the first quarter....however, oil prices edged off six-month lows early Wednesday after OPEC forecast a significant shortfall in global oil supplies next quarter, then powered higher during Wednesday's afternoon session as the U.S. dollar rapidly lost ground after the Fed signaled an easing of monetary policy next year, sharply diminishing the odds of a slowdown in 2024, as oil settled 86 cents higher at $69.47 a barrel…the oil price rally continued into Thursday as the dollar fell to a new four month low and the IEA increased its oil demand forecast for next year, then chased financial markets higher in the afternoon session to finish with a $2.11 or 3% gain on the session at $71.58 a barrel…oil prices slipped to settle 15 cents lower at $71.43 a barrel on Friday on a rebounding U.S. dollar index as traders tried to reconcile mixed signals for oil demand in the coming year, but still managed to eke out a 0.3% gain on the week, driven by risk-on sentiment in financial markets after the Fed signaled easier monetary policy in the year ahead..
Meanwhile, natural gas prices finished lower for a sixth straight week, but like oil, rallied from a six month low midweek on record export demand and a shift in the forecast before closing lower…after falling 8.3% to a life of contract low of $2.581 per mmBTU last week, the contract price for natural gas for January delivery opened 23 cents lower on Monday as bearish weather forecasts and steady production persisting through the weekend before recovering to settle with a loss of 15.0 cents at $2.431 per mmBTU, hammered by soaring natural gas production and a lack of weather-driven demand…after hitting a six month low of $2.235 early Tuesday, as natural gas surpluses were seen ballooning on December warmth, prices settled at $2.311 per mmBTU, down 12 cents on the day…natural gas prices then inched 2.4 cents higher to $2.335 per mmBTU on Wednesday as record amounts of gas flowed to LNG export plants, then added 5.7 cents to $2.392 per mmBTU on Thursday on a cooler shift in the short-term forecast even as the weekly withdrawal from storage was less than anticipated…natural gas prices climbed 9.9 cents or more than 4% to $2.491 per mmBTU on Friday on record flows to LNG plants and forecasts for higher demand next week than had been expected, but still ended 3.5% lower on the week..
The EIA's natural gas storage report for the week ending December 8th indicated that the amount of working natural gas held in underground storage in the US fell by 55 billion cubic feet to 3,664 billion cubic feet by the end of the week, which still left our natural gas supplies 245 billion cubic feet, or 7.2% above the 3,419 billion cubic feet that were in storage on December 8th of last year, and 260 billion cubic feet, or 7.6% more than the five-year average of 3,404 billion cubic feet of natural gas that were in working storage as of the 8th of December over the most recent five years…the 55 billion cubic foot withdrawal from US natural gas working storage for the cited week was less than the average 60 billion cubic feet withdrawal from supplies that was expected by the market, and much less than the average 81 billion cubic feet withdrawal from natural gas storage that has been typical for the same late Autumn week over the past 5 years, but more than the 46 billion cubic feet that were pulled from natural gas storage during the corresponding early December week of 2022…
The Latest US Oil Supply and Disposition Data from the EIA
The US oil data from the US Energy Information Administration for the week ending December 8th appeared to show that after a big decrease in our oil imports and significant ongoing demand for oil that the EIA could not account for, we needed to withdraw oil from our stored commercial crude supplies, for the second time in eight weeks, and for the 13th time in the past 22 weeks...Our imports of crude oil fell by an average of 991,000 barrels per day to average 6,517,000 barrels per day, after our oil imports had jumped by an average of 1,675,000 barrels per day the prior week, while our exports of crude oil fell by 568,000 barrels per day to average 3,771,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 2,746,000 barrels of oil per day during the week ending December 8th, 423,000 fewer barrels per day than the net of our imports minus our exports during the prior week. At the same time, transfers to our oil supply from Alaskan gas liquids, natural gasoline, condensate, and unfinished oils averaged 688,000 barrels per day, while during the same period, production of crude from US wells was unchanged at 13,100,000 barrels per day. . Hence our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a total of 16,534,000 barrels per day during the December 8th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,097,000 barrels of crude per day during the week ending December 8th, an average of 104,000 fewer barrels per day than the amount of oil that our refineries were processing during the prior week, while over the same period the EIA’s surveys indicated that a rounded average of 609,000 barrels of oil per day were being pulled out of 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 December 8th appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production was 1,046,000 barrels per day more than what our oil refineries reported they used during the week. To account for that big difference between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a [ -1,046,000] barrel per day figure onto what is now line 16 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the 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 error in the week’s oil supply & demand figures that we have just transcribed.... However, since most oil traders react to these weekly EIA reports as if they were accurate, and since these weekly figures therefore 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 reliable 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)….(note there is also an aging twitter thread from an EIA administrator addressing these errors, and what they had hoped to do about it…the errors have since gotten larger)
This week's 609,000 barrel per day decrease in our overall crude oil inventories came as 608,000 barrels per day were pulled out of our commercially available stocks of crude oil, while 1,000 barrels per day were removed from our Strategic Petroleum Reserve, following SPR additions the past two weeks. . Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports ticked up to 6,497,000 barrels per day last week, which was 2.7% more than the 6,325,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at 13,100,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 12,700,000 barrels per day, while Alaska’s oil production was 4,000 barrels per day higher at 435,000 barrels per day but still added the same 400,000 barrels per day to the EIA's rounded national total as it did 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 matches that of our pre-pandemic production peak, and is 35.1% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.
US oil refineries were operating at 90.2% of their capacity while processing those 16,097,000 barrels of crude per day during the week ending December 8th, down from their utilization rate of 90.5% last week, and on the low end of normal utilization for early December.. the 16,097,000 barrels per day of oil that were refined this week were 0.2% less than the 16,126,000 barrels of crude that were being processed daily during week ending December 9th of 2022, and 3.0% less than the 16,597,000 barrels that were being refined during the prepandemic week ending December 6th, 2019, when our refinery utilization rate was at 90.6%..
Even with the decrease in the amount of oil being refined this week, gasoline output from our refineries was a bit higher, increasing by 25,000 barrels per day to 9,542,000 barrels per day during the week ending December 8th, after our refineries' gasoline output had increased by 180,000 barrels per day during the prior week. This week’s gasoline production was 3.8% more than the 9,194,000 barrels of gasoline that were being produced daily over the same week of last year, but 2.2% less than the gasoline production of 9,753,000 barrels per day during the prepandemic week ending December 6th, 2019....on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 83,000 barrels per day to 4,987,000 barrels per day, after our distillates output had increased by 72,000 barrels per day during the prior week. With that decrease, our distillates output was 3.5% less than the 5,168,000 barrels of distillates that were being produced daily during the week ending December 9th of 2022, and 4.6% less than the 5,228,000 barrels of distillates that were being produced daily during the week ending December 6th, 2019..
With this week's increase in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the 6th time in eight weeks and for the 16th time in forty-two weeks, increasing by 409,000 barrels to 224,013,000 barrels during the week ending December 8th, after our gasoline inventories had increased by 5,420,000 barrels during the prior week. Our gasoline supplies rose by less this week because the amount of gasoline supplied to US users rose by 393,000 barrels per day to 8,859,000 barrels per day, and because our exports of gasoline rose by 179,000 barrels per day to 1,131,000 barrels per day while our imports of gasoline rose by 26,000 barrels per day to 715,000 barrels per day.…Even after twenty-six gasoline inventory withdrawals over the past forty-two weeks, our gasoline supplies were still 0.2% above than last December 9th's gasoline inventories of 223,583,000 barrels, and only 2% below the five year average of our gasoline supplies for this time of the year…
Even with this week's decrease in our distillates production, our supplies of distillate fuels rose for the third time in eleven weeks, increasing by 1,484,000 barrels to 113,539,000 barrels over the week ending December 8th, after our distillates supplies had increased by 1,267,000 barrels during the prior week. Our distillates supplies rose by more this week because our imports of distillates rose by 123,000 barrels per day to 205,000 barrels per day while our exports of distillates fell by 7,000 barrels per day to 1,208,000 barrels per day, and while the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 14,000 barrels per day to 3,770,000 barrels per day....With 23 inventory decreases over the past forty weeks, our distillates supplies at the end of the week were still 5.5% below the 120,171,000 barrels of distillates that we had in storage on December 9th of 2022, and about 12% below the five year average of our distillates inventories for this time of the year...
Finally, with our our oil imports lower and significant additional demand for oil that the EIA could not account for, our commercial supplies of crude oil in storage fell for the 16th time in twenty-six weeks and for the 24th time in the past year, decreasing by 4,258,000 barrels over the week, from 445,031,000 barrels on December 1st 440,773,000 barrels on December 8th, after our commercial crude supplies had decreased by 4,633,000 barrels over the prior week... With that decrease, our commercial crude oil inventories were about 2% below the most recent five-year average of commercial oil supplies for this time of year, but were still about 32% above the average of our available crude oil stocks as of the 2nd weekend of December over the 5 years at the beginning of the past decade, with the big difference between those comparisons arising because it wasn’t until early 2015 that our oil inventories had first topped 400 million barrels. After our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, then jumped again after February 2021's winter storm Uri froze off US Gulf Coast refining, but then fell in the wake of the Ukraine war, only to jump again following the Christmas 2022 refinery freeze offs, our commercial crude supplies as of this December 8th were 3.9% more than the 424,129,000 barrels of oil in commercial storage on December 9th of 2022, and 2.9% more than the 428,286,000 barrels of oil that we still had in storage on December 10th of 2021, but still 11.9% less than the 500,096,000 barrels of oil we had in commercial storage on December 11th of 2020, after early pandemic precautions had left a lot of oil unused…
OPEC's Report on Global Oil for November
Wednesday of this past week saw the release of OPEC's December Oil Market Report, which includes the details on OPEC's & global oil data for November, and hence it gives us a picture of the global oil supply & demand situation as the major OECD economies outside of the US had slowed, and as Chinese demand growth remained sluggish after their brisk first half recovery from the country's restrictive Covid policy, while oil supplies were impacted by an ongoing unilateral million barrel per day production cut by the Saudis and an additional 300,000 million barrel per day supply cut by Russia...November was also the eleventh month that OPEC and aligned oil producers were operating under a 2 million barrel per day production cut, meant to take roughly 2% of global oil supplies off the market, in response to a perceived global surplus and related lower prices of a year ago, and the sixth month of a Saudi led cut of an additional 1.16 million barrels per day, which, when combined with a unilateral 500,000 million barrel per day Russian cut, was intended to take an additional 1.66 million barrels per day off the market for the rest of this year...all told, then, the members of the cartel had committed to holding 4.66 million barrels per day, or roughly 4.6% of global supplies, off the market during this month....
The first table from this month's report that we'll review is from the page numbered 49 of the report (pdf page 61), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings below indicate...for all their official production measurements, OPEC has been using an average of production estimates by as many as eight "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA), the industry newsletter Petroleum Intelligence Weekly, the energy consultancy Wood Mackenzie and the research and intelligence firm Rystad Energy, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures…
As we can see in the bottom right hand corner of the above table, OPEC's oil output decreased by 57,000 barrels per day to 27,837,000 barrels per day during November, down from their revised October production total that averaged 27,895,000 barrels per day....however, that October OPEC output figure was originally reported as 27,900,000 barrels per day, which therefore means that OPEC's October production was revised 5,000 barrels per day lower with this report, and hence OPEC's November production was, in effect, 62,000 barrels per day less than the previously reported OPEC production figure (for your reference, here is a copy of the table of the official October OPEC output figures as reported a month ago, before this month's revision)...
with the production increases by Venezuela, Libya and Iran, countries exempt from OPEC quotas, production from the OPEC members actually restricted by the cartel’s “voluntary'” cuts fell by 108,000 barrels per day…that was largely due to the 77,000 barrel per day production decrease by Iraq and the 37,000 barrel per day production decrease by Angola…Iraq’s oil production had been running a bit higher than the accumulated cuts they had committed to, but Angola has been underproducing by hundreds of thousands of barrels per day, so this month’s modest decrease puts them farther below their quota...
the series of oil supply cuts imposed by the OPEC+ cartel over the past year began with a 2 million barrel per day production cut that the joint agreement imposed on all producers in October 2022...following that, six OPEC oil producers, led by the Saudis, and two other oil producers aligned with OPEC+, came to an agreement at the beginning of April to further reduce their combined production by an additional 1.16 million barrels per day beginning in May, over and above the formal OPEC cuts...in addition, Russia agreed to extend their ongoing 500,000 barrels per day voluntary outpot cut for the rest of the year for a total cut of 1.66 million barrels per day from those nine producers...then the Saudis committed to an additional million barrel per day output cut that was first implemented in July, and that cut was extended to the end of this year in September
production cuts that OPEC members commited to under the April agreement included 500,000 barrels per day (bpd) from the Saudis, 211,000 bpd from Iraq, 140,000 bpd from the Emirates, 128,000 bpd from Kuwait, 48,000 barrels per day from Algeria, and 8,000 barrels per day from Gabon...six months ago, our initial assessment was that only the Saudis managed to hit the additional production cut target in May, and only Algeria joined them in June, indeed, most of the others who announced cuts in April increased their production over the June through October period, rather than cutting it….Iraq’s 77,000 barrel per day production decrease in November brings them closer to their commitment, but doesn't match it ...hence, the net production reduction remains about half of what had been committed to by the parties to that April 2nd agreement..
OPEC and other aligned oil producers had previously agreed to reduce production by 2,000,000 barrels per day beginning last November, so the net 986,000 barrels per day OPEC ex-Saudi Arabia have cut since then is also well short of that...however, OPEC's production was already running 1,585,000 barrels per day below what they were expected to produce when that policy was initiated in October of last year, so the 27,837,000 barrels per day OPEC produced in November still leaves them short of what they were expected to produce during the month, as we'll see in the next table...
The above table was originally included as a downloadable attachment to the press release following the 33rd OPEC and non-OPEC Ministerial Meeting on October 5th, 2022, which set OPEC's and other aligned oil producers' production quotas for November 2022 and the following months through the end of 2023, and the quotas shown above were reaffirmed by the cartel for 2023 in during the 34th OPEC and non-OPEC Ministerial Meeting on December 4th, 2022....the first column above, labeled "August 2022 required production", actually matches the October 2018 baseline production level on which OPEC and aligned producers have based all of their quotas since the onset of the pandemic, and the "Voluntary adjustment" is the production cut each country is expected to make from that benchmark level to achieve a 2 million barrel per day cut for the cartel as a whole, leaving each country with a "Voluntary Production" level they're expected to hit each month during 2023, whether they've been able to produce that much recently or not....since war torn Libya and US sanctioned producers Iran and Venezuela have been exempt from the production cuts imposed by the joint agreement that has governed the output of the other OPEC producers since May 2020, they are not shown on the above list, and OPEC's quota excluding them is aggregated under the total listed for the 'OPEC 10', which you can see was expected to be at 25,416,000 barrels per day from November 2022 through December 2023...
with the April 2nd agreement, six members of OPEC agreed to further reduce their production by 1,035.000 starting in May and through the end of the year....thus the voluntary production level for the OPEC 10 would have been reduced from 25,416,000 to 24,381,000 through December....subtracting the one million barrel per day cut from the Saudi's production initiated in July from that would leave OPEC's 'voluntary production' level at 23,381,000 barrels for the month of November....therefore, the 22,751,000 barrels those 10 OPEC members actually produced in November were 630,000 barrels per day short of what they were expected to produce during the month, with Nigeria and Angola still accounting for the majority of this month's production shortfall...
The next graphic from this month's report that we'll look at shows us both OPEC's and worldwide oil production monthly on the same graph, over the period from December 2021 thru November 2023, and it comes from page 50 (pdf page 62) of OPEC's December Oil Market Report....on this graph, the sky blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple line graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale....
After this month's 57,000 barrel per day decrease in OPEC's production from their revised production of a month earlier, OPEC's preliminary estimate is that total global liquids production decreased by a rounded average of 400,000 to an average of 101.7 million barrels per day in November, after October's total global output figure was apparently revised up by 500,000 barrels per day from the 101.6 million barrels per day of global oil output that was reported for October a month ago, as non-OPEC oil production fell by a rounded 400,000 barrels per day in November after that revision, with most of November’s non-OPEC production decrease due to lower oil output from Russia and Kazakhstan, which more than offset greater oil production from other Asian, Canada and other Eurasian countries...
With the November decrease in global oil output, the amount of oil being produced globally during the month again fell short of the expected global demand, as this next table from the OPEC report will show us...
The above table came from page 27 of the December Oil Market Report (pdf page 39), and it shows regional and total oil demand estimates in millions of barrels per day for 2022 in the first column, and then OPEC's estimate of oil demand by region and globally, quarterly over 2023 over the rest of the table…on the "Total world" line in the fifth column, we've circled in blue the figure that's relevant for November, which is their estimate of global oil demand during the fourth quarter of 2023….OPEC estimated that during the 4th quarter of this year, all oil consuming regions of the globe have been using an average of 103.28 million barrels of oil per day, which was unrevised from their estimate for the fourth quarter a month ago....but as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were only producing 101.70 million barrels per day during November, which would imply that there was a shortage of around 1,580,000 barrels per day of global oil production during November, when compared to the demand estimated for the month...
in addition to figuring the November oil shortage implied by this report, the upward revision of 500,000 barrels per day to October's global oil output that's implied the data in this month's report means that the 1,680,000 barrels per day global oil output shortage we had previously figured for October would now be revised to a shortage of 1,180,000 barrels per day...
Note that in green we have circled an upward revision of 10,000 barrels per day to OPEC's previous estimate for third quarter demand, and a downward revision of 10,000 barrels per day to OPEC's previous estimate for first quarter demand…while those revisions offset each other and leave OPEC’s demand estimate for the year unchanged, we have been keeping a running monthly shortage or surplus total for future reference, so we’ll update those figures here..
Hence, with an upward revision of 10,000 barrels per day to third quarter demand, the 810,000 barrels per day global oil output shortage we had previously figured for September would be revised to a shortage of 820,000 barrels per day, the shortage of 1,300,000 barrels per day we had previously figured for August would now be revised to a shortage of 1,310,000 barrels per day, and the shortage of 1,420,000 barrels per day barrels per day we had previously figured for July would have to be revised to a shortage of 1,430,000 barrels per day...
For the first quarter, the downward revision of 10,000 barrels per day to OPEC's previous estimate of first quarter demand means that the 210,000 barrels per day global oil output surplus we had previously figured for March would be revised to a surplus of 220,000 barrels per day.. similarly, the downward revision to first quarter demand means that the global oil surplus of 510,000 barrels per day we had previously figured for February would now be revised to a surplus of 520,000 barrels per day, while the 240,000 barrels per day global oil output shortage we had previously figured for January would now be revised to a shortage of 230,000 barrels per day, in light of the 10,000 barrel per day downward revision to first quarter demand...
This Week's Rig Count
since we haven't been able to get back on track for a detailed report on the national rig count, we are again just including below a screenshot of the rig count summary pdf from Baker Hughes...in the table below, the first column shows the active rig count as of December 15th, the second column shows the change in the number of working rigs between last week’s count (December 8th) and this week’s (December 15th) count, the third column shows last week’s December 8th 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 period a year ago, which in this week’s case was the 16th of December, 2022...
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Legislature votes to let gas companies charge customers millions for new pipelines - cleveland.com– The state General Assembly passed legislation Wednesday, introduced just one day prior, allowing gas companies to charge customers up to an estimated $67 million per year to build pipelines to speculative megaproject sites.The extra costs to customers each month would be limited to a modest $1.50. However, companies could continue to charge customers for up to five years if they can’t recover the full cost of the project sooner. The money would build up gas infrastructure for proposed megaproject sites, even with no specific buyer lined up.The legislation now goes to Gov. Mike DeWine for signature or veto.The utilities say the money would give them the capital they need to develop sites that can entice buyers, like the recent Intel project, a massive semiconductor factory near Columbus that’s expected to employ thousands. Large-scale developers, the utilities say, don’t want to consider sites that can’t immediately deliver water, gas, sewer, and electricity. However, critics – including Democrats and the Ohio Manufacturers’ Association – say the bill saddles customers with the costs and risks of infrastructure investments for purported economic development. Kim Bojko of the OMA said the legislation gives utilities way too much leeway to do things like pass on to customers costs that predate a project; costs incurred if a project fails to secure a buyer; and others.“The language is overly broad and would allow the gas utilities to upgrade almost anything (distribution and transmission faculties) in the name of economic development without proper justification,” Bojko told lawmakers. The bill passed the Senate 23-8 mostly along party lines with Democrats in opposition. However, Democratic Sen. Catherine Ingraham, of Cincinnati, voted yes. Republican Sens. Niraj Antani and Mark Romanchuk voted no. It passed the House soon afterward on a 60-31 vote, mostly along party lines. Technically, monthly charges on gas bills known as “infrastructure development riders” already exist under state law for “prudently incurred” costs. With approval from regulators, Columbia Gas collects 63 cents per customer per month, and CenterPoint (Vectren) and Dominion both charge their customers three cents per month – all under the $1.50 cap, according to data from the Public Utilities Commission of Ohio. But under House Bill 201, utilities could spend the money to run pipelines to sites hoping to land a “megaproject” like Intel. Projects would be eligible if they win approval from JobsOhio, the state’s economic development arm, or the Ohio Department of Development.The rushed nature of the bill was apparent throughout the day on Wednesday. Republican Senators (plus Democratic Sen. Bill DeMora) agreed to add the idea Tuesday to unrelated House-passed legislation that originally limited the ability of local governments to mandate electric vehicles. Senate Minority Leader Nickie Antonio, a Lakewood Democrat, declined comment Wednesday morning given her caucus hadn’t had a moment to review the idea. The bill text didn’t appear on the Senate’s website until just before the voting session Wednesday.Senate President Matt Huffman, a Lima Republican, told reporters the Senate discussed the idea when it included the provision in its version of the state budget. Senators backed down at the time after House negotiators objected. He said the gas companies need a way to secure capital to pay for the pipelines.Intel picked Ohio without any extra subsidy for gas lines, said Democratic state Sen. Kent Smith of Euclid, underscoring the lack of a need for the bill. Rather, he said HB201 just continues a pattern of Republican lawmakers giving utilities what they want.“Utilities get paid based on the money they spend,” he said. “This would allow them to spend money on site development where there might not ever be a site developed. Ratepayers would still pay for that, and utilities would still make a profit on it.”One of the few Republicans to vote no, Antani made similar comments.
Ohio gas bills may go up with a pipeline provision added to this legislation -– A bill meant to prevent Ohio towns and counties from restricting the sale of gas cars has been sent to the governor’s desk with a provision allowing gas companies to charge customers to build pipelines for potential “megaprojects.” House Bill 201, passed by both chambers Wednesday evening, was intended to prevent the Ohio EPA from adopting California’s more stringent emissions standards for vehicle manufacturers. But a last-minute amendment to the bill allows gas companies to tack on up to $1.50 to customers’ monthly bills to fund the construction of natural gas pipelines to supply energy to massive economic development projects – like Intel’s 1,000-acre Licking County site for semiconductor chip facilities. The Legislative Service Commission has not produced an updated fiscal analysis to account for the bill’s amendments, but under a provision considered in June to allow a $3 rider, energy companies could recoup an additional $66.7 million from their customers. ADVERTISING Ohio Senate passes sweeping bill deregulating aspects of K-12 education The companies would be authorized to add that charge under an existing Infrastructure Development Rider program. Currently, utility companies can use the rider in limited circumstances; under HB201, eligibility is expanded to include the construction, extension, or upgrade of a natural gas company’s pipelines. For six years after the bill’s signing, the rider can also be used for investments to provide energy to the sites of economic development plans approved by JobsOhio, JobsOhio’s regional partners or the Department of Development. On the Senate floor, Sen. Bill Reineke (R-Tiffin) said the infrastructure rider for gas companies is necessary to keep Ohio competitive with other states for the consideration of large economic development projects, similar to Intel’s scale. Gas company executives, including from Columbia Gas and Duke Energy, testified Tuesday that without the rider, gas companies would be unable to extend pipelines to accommodate large projects in regions of the state ripe for development. That means “job makers” with bold development plans will choose elsewhere to invest, testified Vince Parisi, president and chief operating officer of Columbia Gas. “The current [rider] is not flexible enough for the high costs associated with the large economic development projects Ohio has seen recently,” Parisi said. “These large projects, like Intel, are installed in areas that are significantly distant from the nearest natural gas pipeline capable of providing service. Because of this, the cost to serve these customers is pretty high.” Transgender athlete, healthcare ban heads to DeWine’s desk But Democrats and some Republicans view the rider less as an opportunity to boost the economy and more as an additional burden on ratepayers. Under the amendment, the Public Utilities Commission of Ohio is required to annually report on infrastructure development rider applications received and approved, the amount approved for recovery through each company rider and a list of the status of all approved economic development plans. While PUCO authorizes the infrastructure development riders, companies are allowed to apply the rider to projects before approval. If companies aren’t able to recover project costs under current law’s one-year limit, they’re allowed to continue the rider for five additional years. Sen. Kent Smith (D-Euclid) called HB 201 an “anti-competitive, utility-driven” policy proposal that puts everyday Ohioans on the hook for gas companies’ potential projects – without any assurance that they’ll come to fruition. “When the legislature moves fast, Ohioans should hang onto their wallets, and this is one of those instances,” Smith said. Sen. Niraj Antani (Miamisburg), one of a handful of Republicans to vote against the bill, echoed Kent’s sentiments, calling it an effective tax increase on Ohioans. Abortion clinics ask judge to permanently strike down Ohio’s six-week abortion ban The Senate hoped to add a similar provision to the state’s two-year budget in June, instead approving up to a $3 monthly rider on ratepayers’ bills. As such, Senate President Matt Huffman (R-Lima) defended HB 201’s late amendment, telling reporters that it’s crucial to supporting the “extraordinary growth in folks wanting to locate here in Ohio.” “These projects are happening right now, and in the case of Intel, for example, there was a promise that we’re going to put a gas pipeline in for Intel, a $20 billion investment,” Huffman said. “Well the gas company has to figure out how to pay for that, otherwise the Intel project doesn’t get built.” Columbia Gas has an existing 63-cent rider for what Parisi described as the “first portion of its costs” to supply energy to Intel. He said to recover the full costs of the project, the company will likely need to approach the $1.50 limit. In addition to the infrastructure rider, HB 201 would also prohibit local governments from restricting the sale of vehicles based on power source – a provision aimed at preventing the proliferation of bans similar to California’s ban on the sale of new gas-powered vehicles by 2035. The bill also prohibits the state’s EPA from enacting California’s carbon emissions standards. California has received multiple EPA waivers to adopt stricter standards than the federal Clean Air Act requires in an attempt to achieve the state’s carbon neutrality goals, including the most recent waiver in 2023. Gov. Mike DeWine has 10 days from HB 201’s passage to sign or veto it. His office did not respond to a request for comment.
27 New Shale Well Permits Issued for PA-OH-WV Dec 4 – 10 | Marcellus Drilling News - New shale permits issued for Dec 4 – 10 in the Marcellus/Utica were up by 2 over the previous week. There were 27 new permits issued last week versus 25 issued two weeks ago. However, there was a major surprise! Last week’s permit tally included 8 new permits in Pennsylvania, 9 new permits in Ohio, and 10 new permits in West Virginia. The pattern is typically the opposite, with PA receiving the most permits and WV the least. The company receiving the most permits last week was EQT Corporation, with all 10 of WV’s permits all on the same well pad in Marion County. Apex Energy | Ascent Resources | Belmont County | Encino Energy | EQT Corp | Guernsey County | Jefferson County (OH) | Marion County | Southwestern Energy | Susquehanna County | Westmoreland County
“I Turned Blue” Fracking Workers Share Horrifying Experiences --“I felt like I was vibrating and everything turned blue,” Eric Steppe (48) tells Public Herald, recalling a recent injury he incurred while working as a shift leader for a small crew treating oil and gas fracking wastewater at Eureka Resources, an environmental solutions company based in Williamsport, Pennsylvania.Over the past six months, Public Herald has been contacted by four additional Eureka workers — Quinn Aughenbaugh, Brandon Barrett, Dalton Trahan and Alijah Kibler — who are for the first time sharing their stories about the dangers of treating fracking wastewater.Across Pennsylvania, there is a system of facilities that takes liquid waste from fracking sites and theoretically clean it, stripping out all harmful contaminants before discharged to waterways. However, the Pennsylvania Department of Environmental Protection’s (DEP) 2016 TENORM study data indicates that these treatment facilities are often not removing even half or, in some cases, any radioactivity before the fracking waste is discharged into rivers.The industrial companies primarily guilty of this practice are centralized waste treatment facilities, or CWTs. These facilities are owned by private companies such as Eureka Resources and are permitted by the state and federal government to treat and “clean” fracking waste in-house. In reality, most CWTs are not doing a proper job. So they’re failing on two counts: they’re not eliminating radioactivity from the waste and, in some cases, they’re making the waste hotter.In January, Public Herald reported that DEP’s own data reveals Eureka’s treatment process only removed about 9% of radium from the oil and gas wastewater it processed at its facility in Williamsport.At Eureka’s Williamsport facility where Eric was hired, wastewater has entered the treatment system “hot” at an average 9,600 pCi/L of combined radium based on the DEP study. After being treated, wastewater tested was only marginally less radioactive at an average of 8,800 pCi/L of radium. These results are a far cry from Eureka’s “pure water” claims, let alone the federal drinking water limit of 5 pCi/L.What the public has yet to hear is what’s happening to workers in the CWT facilities. When it comes to oil and gas radioactivity, which regulators call Technologically Enhanced Naturally Occurring Radioactive Material (TENORM), the EPA itself presents a daunting message: “Although EPA and others working on the problem have already learned a great deal about TENORM, we still do not completely understand all the potential radiation exposure risks it presents to humans and the environment.” This report, as evidenced through Eric Steppe’s experience, is one of the first published accounts of those risks inside a treatment facility.
Burgeoning hydrogen industry draws $41 million in federal lobbying from fossil fuel companies - The number of companies and organizations lobbying the federal government on issues related to hydrogen increased nearly tenfold since President Joe Biden took office — from about two dozen at the end of 2020 to more than 200 this year, according to an OpenSecrets analysis of lobbying disclosures. Fossil fuel companies, which have promoted hydrogen as a catch-all solution to climate change, rank among the top spenders and outnumber clients from every industry, including the renewable energy sector, the analysis shows. Thirty-two oil and gas producers reported lobbying on hydrogen, among other issues, and spent a combined $41.3 million on federal lobbying efforts this year, as of Sept. 30. The lobbying blitz comes as the Biden administration prepares to direct billions of dollars in federal subsidies to scale up hydrogen production to decarbonize the U.S. economy. Unlike coal, oil and gas, hydrogen does not release planet-warming greenhouse gases when burned.The fossil fuel industry has aggressively lobbied the White House, Congress, and Energy and Treasury departments to ensure gas-based hydrogen qualifies for federal subsidies. The industry claims it can produce climate-friendly “blue hydrogen” from natural gas using carbon capture, a nascent technology still in early development.In 2022, the American Petroleum Institute, which represents nearly 600 oil and gas companies, submitted comments on the Energy Department’s draft National Clean Hydrogen Strategy and Roadmap emphasizing the near-term cost advantages of blue hydrogen. The industry group’s climate action framework, published the previous year, also called for “full government funding” of low-carbon research and development programs and urged policy-makers to adopt a “technology-neutral” approach to the energy transition. Julie McNamara, the deputy policy director for climate and energy at the Union of Concerned Scientists, a think tank, told OpenSecrets that the government risks “aiding and abetting fossil fuel” interests.“There are so many ways that hydrogen can go that it just perpetuates the status quo,” she explained. “That is an extremely lucrative place for the fossil fuel industry to be,” she said. “If we have weak standards, it can mean more use of natural gas for longer with more profit along the way.”
Venture Global: roof lifted on fourth Plaquemines LNG tank - -- US LNG exporter Venture Global LNG has completed raising the roof on the fourth and final storage tank at its Plaquemines LNG export plant in Louisiana.Venture Global announced the completion of this milestone in a short social media post on Monday.The firm completed raising the roof onthe first tank in February, the second tank in April, andthe third tank in September.This means Venture Global completed raising the roofs on all four LNG tanks in less then 10 months.McDermott’s unit CB&I won a contract from a unit of Venture Global to build the first two LNG storage tanks as part of the first phase while the second phase includes two tanks as well.Venture Global previously said the roof of the first tank weighs 900 tons and is 294 feet (89.6 meters) in diameter. Air raising allows for better and safer access as well as a faster construction schedule, as the roof can be erected concurrently with the shell.Eventually, the tank will have an inner tank made from 9 percent nickel alloy and outer wall and outer roof made from concrete, it said.Venture Global took a final investment decision in May last year on the first phase of the Plaquemines project with a capacity of 13.3 mtpa and the related pipeline. It also secured $13.2 billion in project financing.In March this year, the company sanctioned the second phase of the Plaquemines LNG export plant in Louisiana and also secured $7.8 billion in project financing.The full project, including the second stage, will have a capacity of 20 mtpa coming from 36 modular units, configured in 18 blocks.
US natgas prices drop to near 6-month low on mild weather, ample output (Reuters) - U.S. natural gas futures slid more than 10% to a near six-month low on Monday, hurt by ample output while mild weather limited heating demand. Front-month gas futures for January delivery on the New York Mercantile Exchange fell 28.1 cents, or 10.9%, to $2.30 per million British thermal units (mmBtu) at 0941 a.m. EST (1441 GMT), its lowest levels since June. The fundamental reasons why the prices are dropping drastically are "record production, higher Canadian exports, lukewarm and late arriving domestic demand, and high foreign gas storage levels," said Zhen Zhu, managing consultant at C.H. Guernsey and Co in Oklahoma City. "I believe the market is betting against a colder than normal winter in January and February, but the market may be reasonable as most of longer term weather forecasts are calling for a warmer than normal if not normal remaining winter." With record production levels and ample storage, gas futures have been sending bearish signals for weeks that prices for this winter (November-March) likely already peaked in November. The contract was down about 8% last week. Financial firm LSEG said average gas output in the Lower 48 U.S. states was at 108.5 bcfd so far in December from a record 108.3 bcfd in November. Traders have noted that mild weather and near record output should cap the amount of gas utilities pull from storage in coming weeks. The continental United States entered the winter heating season with the most natural gas in storage since 2020, the U.S. Energy Information Administration (EIA) said last week. "Further price decline to the $2.20 area and ultimately toward the $2 mark would appear to be the most likely course given this unusually mild start to the heavy usage cycle," LSEG forecast U.S. gas demand in the Lower 48, including exports, would stay steady at 123.8 bcfd next week from 123.7 bcfd forecast this week. U.S. energy firms last week added oil and natural gas rigs for a fourth week in a row for the first time since November 2022, energy services firm Baker Hughes said in its closely followed report on Friday. The U.S. is on track to become the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar. Much higher global prices have fed demand for U.S. exports due in part to supply disruptions and sanctions linked to the war in Ukraine. Gas was trading around $11 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $15.98 at the Japan Korea Marker (JKM) in Asia.
EIA Slashes Henry Hub Forecast as Production Seen Near 105 Bcf/d Throughout Winter - The U.S. Energy Information Administration (EIA) is slashing its winter Henry Hub spot price forecast on a combination of elevated production and weak space heating demand for natural gas so far this season. EIA said in its latest Short-Term Energy Outlook (STEO) Tuesday it now expects the national benchmark to average $2.80/MMBtu this winter, down 60 cents from month-earlier projections. With mild weather-driven demand and rising domestic output padding inventories, the agency also revised its projected end-March storage carryout to more than 2 Tcf, or 22% above the five-year average. In last month’s STEO, EIA had called for inventories to exit March 2024 at a little under the 2 Tcf threshold.
US weekly LNG exports climb to 29 cargoes - US liquefied natural gas (LNG) exports rose in the week ending December 6 compared to the week before, according to the Energy Information Administration. The agency said in its weekly natural gas report that 29 LNG carriers departed the US plants between November 30 and December 6, five vessels more compared to the week before. Moreover, the total capacity of these LNG vessels is 105 Bcf, the EIA said, citing shipping data provided by Bloomberg Finance. Average natural gas deliveries to US LNG export terminals decreased by 1.6 percent (0.2 Bcf/d) week over week, averaging 14.1 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana decreased by 1.3 percent (0.1 Bcf/d) to 8.6 Bcf/d, while natural gas deliveries to terminals in South Texas decreased by 4.2 percent (0.2 Bcf/d). The agency said that natural gas deliveries to terminals outside the Gulf Coast increased by 6.8 percent (0.1 Bcf/d). Cheniere’s Sabine Pass plant shipped eight LNG cargoes and the company’s Corpus Christi facility sent five shipments during the week under review. The Freeport LNG terminal and Sempra Infrastructure’s Cameron LNG terminal each dispatched five LNG cargoes, while Venture Global’s Calcasieu Pass, the Cove Point plant, and the Elba facility each shipped two cargoes. This report week, the Henry Hub spot price increased 3 cents from $2.70 per million British thermal units (MMBtu) last Wednesday to $2.73/MMBtu this Wednesday, the agency said. The price of the January 2024 NYMEX contract decreased 23.5 cents, from $2.804/MMBtu last Wednesday to $2.569/MMBtu this Wednesday. Moreover, the price of the 12-month strip averaging January 2024 through December 2024 futures contracts declined 23.8 cents to $2.746/MMBtu, the EIA said.
Can't Get Enough - Gulf Coast LPG Export Dock Capacity Maxing Out; What Happens to U.S. Markets? | RBN Energy ---Gulf Coast LPG export capacity is tight again, and it’s going to get worse before it gets better — terminal capacity to load more barrels of propane and butane simply has not kept up with production gains. A number of new LPG dock expansions and greenfield projects are in the works, but they are 18 months or so away. In the meantime, production keeps rising, inventories are high, and it’s very unlikely we will see enough cold weather to balance the propane market. Bottom line: 2024 is shaping up to be a tough year for propane and butane prices. In today’s RBN blog, we examine what has been happening with exports, the looming dock capacity constraints, and the projects that will eventually relieve the imbalance. NGL export markets are a frequent topic in the RBN blogosphere, especially when LPG export capacity gets tight — such as the first round of export capacity constraints in 2012-16 when shale production was just kicking in, and then again in 2019-20. This year we’ve posted a number of blogs that considered the impact of increasing NGL production and the implications for exports. In Ready For It? we looked at what increases in Permian NGL production has meant for mixed NGL (aka Y-grade) takeaway capacity out of the basin — the market needs a lot more. Then, in in It's A Mystery, we questioned why, with all the new gas processing plants coming online, NGL production wasn’t growing even faster. (That mystery was solved as production statistics ramped up during the second half of the year.) We also examined the implications of surging ethane production and the implications for much higher ethane exports in You Ain't Seen Nothin’ Yet. It’s been a crazy market for NGLs this year. Total production from gas plants and refineries will hit an astronomical 7 MMb/d in 2023, up 1 MMb/d from the 6 MMb/d average in 2021. But while supply is increasing, domestic demand for NGLs has been essentially flat. The implication is obvious: more exports. Almost all incremental production volume is destined to move to exports, with the lion’s share — about 85% — moving off the Gulf Coast. Fortunately, global markets have been more than receptive to receive growing, attractively priced U.S. export volumes.LPG markets — propane and butane — have been at the epicenter of that surge in Gulf Coast NGL exports. If you are not familiar with LPG exports, here’s a quick tutorial. Propane and butane (together called LPGs or liquified petroleum gases) are exported across the same dock facilities and are frequently exported together on the same ship, although in separate tanks, not mixed in an LPG cocktail. Since they are exported at the same time, the dock capacity used is the sum of the propane and butane loaded on a ship. However, the capacity available is different for propane versus butane. That is because while both products must be chilled before being load onto the LPG workhorse ship, called a Very Large Gas Carrier or VLGC, propane must be chilled to a much lower temperature than butane. The colder the temperature needed, the more chilling capacity is required. Therefore, the capacity of the chiller is frequently a limiting factor for determining effective LPG export capacity for a terminal.As shown in Figure 1, LPG exports were strong in 2019, with volumes out of PADD 3 (Gulf Coast) export terminals averaging 1.16 MMb/d (dashed red line to far left), representing a year-on-year gain of 13% (130 Mb/d). Despite Covid-19, 2020 was a banner year for LPG exports, with volumes up 16% (188 Mb/d) to 1.35 MMb/d as new dock export capacity was added. Growth slowed from that point, however, with shipments up 10% (139 Mb/d) to 1.5 MMb/d in 2021 and only 5% (81 Mb/d) to 1.57 MMb/d in 2022 as the global LPG market waited on new petchem and other demand, mostly in China, to ramp up. But 2023 has been another big year, with RBN’s projected export volumes coming in at 1.74 MMb/d - up 172 Mb/d (or 11%) from last year.
Yet Another Oil Spill Hits the Gulf of Mexico - A new large oil spill hit the Gulf of Mexico on November 16. This disaster is a stark reminder of the constant risk that offshore drilling poses to wildlife, ecosystems, and coastal communities. The Coast Guard reported that the recent spill may have released over a million gallons of crude oil in the Gulf, which would make it the largest spill in the region since Deepwater Horizon. On November 16, an oil slick 3–4 miles wide was detected 19 miles offshore Plaquemines Parish in southeast Louisiana. Federal officials have not yet confirmed the source of the spill, but it may have originated from the 67-mile Main Pass Oil Gathering pipeline system, which transports crude oil to shore from seven different offshore drilling operators. However, the Coast Guard has inspected the full length of the Main Pass Oil Gathering pipeline system, along with sections of nearby pipelines, without finding evidence of damage or the cause of the leak. On December 5, more oil was detected on the water’s surface near the original spill, even though the main pipeline and several others have been shut down since the initial incident in November. The Bureau of Safety and Environment Enforcement (BSEE), the federal agency responsible for ensuring safety and environmental protection in offshore oil and gas operations, documented 992 oil spills in U.S. federal waters during 2021 and 2022. These spills released nearly 80,000 gallons of oil. For the offshore oil and gas industry, they are simply a cost of doing business.Spills can inflict long-lasting harm on local ecosystems and wildlife, as shown by the catastrophic Deepwater Horizon spill. Oil exposure can smother or weaken the plants that support important habitats like seagrass meadows and coastal wetlands, which play a critical role in carbon sequestration and flood protection, and provide habitat for numerous species. Deepwater Horizon contaminated over 92,000 square miles of surface water and 1,300 miles of coastline. Eight years after the disaster, coastal oil concentrations were still ten times higher than before the spill. Oil is toxic to animals and can cause mortality from exposure or ingestion. When marine mammals surface in or near an oil slick, they also risk inhaling oil, which can likewise be fatal. The Deepwater Horizon spill killed an estimated one million seabirds and up to 8.3 billion oysters and 5,000 marine mammals. Exposure to oil can kill fish larvae and impair the reproduction capacity of adult fish. After Deepwater Horizon, fishing communities were devastated as the Gulf of Mexico commercial fishing industry lost around $247 million and thousands of jobs. Alarmingly, oil from the November Gulf spill partially overlapped with the habitat for the critically endangered Rice’s whale — a species of baleen whale that lost nearly 20% of its population as a result of Deepwater Horizon. Rice’s whales live exclusively in the Gulf of Mexico, and there are only about 50 of them left. Although the population still has a chance to recover, oil spills are an ever-present threat to the species’ survival.The newest Gulf oil spill highlights, yet again, the risks that offshore drilling poses to the marine and coastal environment. Ultimately, the only way to protect Gulf wildlife, ecosystems, and coastal communities from oil pollution is to end offshore drilling once and for all.
Biden's new offshore ally: Oil majors - The Biden administration has gained an unlikely ally in its efforts to charge a hefty premium for offshore drilling: major oil companies. The current proposal — which the Bureau of Ocean Energy Management released earlier this year — aims to prevent the public from having to pay to clean up abandoned oil wells in the Gulf of Mexico. As written, an estimated $9 billion in new cleanup insurance that would be required by the regulations would fall disproportionately to smaller oil companies, which are now scrambling to push BOEM to rewrite the provision before a final version is published next year. Advertisement The Biden administration plans to finalize the regulations by April, according to a regulatory agenda released last week. The rules, part of the clean energy-focused White House’s attempt to overhaul the nation’s oil and gas program, would also protect some of the biggest drillers in the country from cleaning up abandoned wells when smaller firms go bust. The proposal comes after a spate of bankruptcies in the offshore oil and gas sector in which midsize firms attempted to abandon billions of dollars’ worth of infrastructure. But the plan has produced a wave of disapproval from critics who say it may not offer additional protections to everyday citizens. “It’s not really the taxpayers that are getting insulated,” said Rahul Vashi, co-chair of the oil and gas practice at the law firm Gibson Dunn. “It’s the prior owners that are getting insulated, because there’s already a regime here that says, ‘If I weren’t able to foot the bill, the government will go back to who owned it before me.’” In 2021, Fieldwood Energy tried to walk away from more than 1,000 wells, 280 pipelines and 270 offshore drilling platforms during its second bankruptcy in less than five years. A court ultimately transferred much of that cleanup liability to former owners of the assets — all major oil and gas companies. That ruling was consistent with longstanding federal policy for offshore oil and gas, in which legacy owners of assets are never fully off the hook for a share of cleanup liabilities even if they sell their assets. The financial instability of some offshore firms has put pressure on federal regulators to make it harder for those companies to drill without setting aside more upfront cleanup costs or insurance. The proposed regulations are also the latest example of the Biden administration’s efforts to stiffen regulation of the nation’s oil and gas program — often leading to fights with Republicans and the industry. While the White House has retreated from commitments made during President Joe Biden’s campaign for office in 2020 to shut down federal drilling due to climate change, it has continued to enact changes officials say will help align the oil program with modern, climate conscious policies. They include limiting new oil leasing, elevating the importance of climate impacts in oil decisions and shrinking the footprint of future drilling via environmental and financial rules. But the new draft rules have put the Biden administration in the unusual position of siding with major oil companies like Chevron, Shell and BP. The firms are on board with key aspects of the proposal because it could help shield them from covering cleanup of wells they formerly owned.
Occidental Petroleum to buy Permian producer CrownRock for $12 billion, raise dividend - Occidental Petroleum on Monday agreed to buy CrownRock, a major privately held energy producer that operates in the Permian Basin, for $12 billion. The deal is latest in a spate of consolidation in the U.S .energy sector, particularly in the Permian, the largest oil-producing region in the U.S. The transaction is expected to close in the first quarter of 2024. CrownRock is developing a 100,000-acre position in the Midland Basin, a portion of the Permian that spans 20 counties in western Texas. The Midland Basin produced 15% of U.S. crude in 2020, according to the U.S. Energy Information Agency. The transaction will add 170,000 barrels of oil equivalent per day to Occidental's production as well as 1,700 undeveloped locations to the company's operations in the Permian. Occidental will issue $9.1 billion in debt and about $1.7 billion in common stock to finance the transaction. Occidental CEO Vicki Hollub said the company is purchasing CrownRock to increase its scale in the Midland Basin. "It's the scale, it's the inventory, and all of that has helped now for us also to step up our dividend," Hollub told CNBC's "Squawk Box" on Monday. Occidental is raising its quarterly dividend to 22 cents a share from 18 cents a share beginning next year. CrownRock is one of the last major private producers in the Permian alongside Endeavor Resources. The company is led Texas billionaire Timothy Dunn and backed by the Houston-based private equity firm Lime Rock Partners. Occidental is the ninth-largest energy company in the U.S. with a market capitalization of $49.7 billion. Warren Buffett's Berkshire Hathaway owns about a 26% stake in the company. Occidental's stock has fallen 10% this year. Its shares were up 1% in morning trading Monday. Hollub said Berkshire Hathaway was not involved in the CrownRock deal, though Occidental did discuss with Buffett how the company fits into its corporate strategy. Occidental's last major acquisition was its purchase of Anadarko Petroleum for $55 billion in 2019. The buy of Anadarko loaded the company with debt and sparked a bitter dispute with activist investor Carl Icahn, who sold the remainder of his stake in the company in 2022.
Explainer: The US EIA's crude accounting issue hasn't gone away, despite changes (Reuters) - The primary data source on U.S. energy markets has struggled this year to depict weekly changes in the country's oil supply and demand, leaving some investors conflicted on how to parse information about the world's top oil producer and consumer.For decades the market had brushed over a so-called "adjustment" in the EIA's weekly inventory report due to its relatively negligible size. But that has changed in the past year as the agency consistently posted outsized adjustments, also known as unaccounted for barrels, sowing confusion among market participants despite changes to improve the quality of the data.The adjustment number is a figure the EIA reports each week that serves as a balancing item when the administration's supply and demand data do not align. Adjustments are normal within the data, which, given the report's quick weekly turnaround, have to account for some margin of error.However, market participants have consistently complained this year about larger adjustment figures. The EIA posted an adjustment number of minus 1.42 million barrels per day (bpd) in the week to Dec. 1, the largest negative adjustment on record. In the week to Dec. 8, the adjustment was minus 1.05 million bpd, the third largest negative adjustment on record.Earlier this year, the EIA studied larger adjustment numbers, as the average annual adjustment in 2022 was the biggest in records dating back to 1973. The assessment found two root factors: crude oil blending accounting that overestimated domestic consumption, and under-reported oil output, the EIA said in March.As a result, the EIA said it would change its surveys to get more accurate crude output data, and also change its accounting methods for crude oil blending.The EIA relies on surveys from market participants to capture weekly data. But no dataset is perfect, especially weekly datasets pulled from estimates and sample surveys. The EIA encourages data users to treat the weekly data as a snapshot of trends and compare it to more vetted monthly data."I know that our weekly data informs a lot of decisions in the market, and that the volatility is not useful. This is why we continue to work on improving our data collection and analysis," said Warren Wilczewski with the EIA.The frequency, transparency and expansiveness of EIA's data mean that market participants around the world depend on it to make investment decisions related to the crude market. Release of the data on Wednesdays typically moves the massive crude futures market.But as the adjustments have grown larger, some have grown warier about the data's depiction of the energy landscape."The market has been losing faith in the weekly data over the last year or two, leaving the report to be viewed as increasingly irrelevant, given the magnitude of the adjustment factor and its unpredictableness," said Matt Smith, lead oil analyst for the Americas at Kpler.EIA's accounting changes around crude oil blending have actually added confusion instead of clarity, Smith added.Reporting by Stephanie Kelly; Editing by Aurora Ellis
The EPA’s innovative new way of policing methane super emitters - Scientists with NASA’s Jet Propulsion Laboratory were flying a plane equipped with a visible-infrared imaging spectrometer over an oil field in California’s San Joaquin Valley when they made a worrisome discovery. Images produced by the device revealed a large plume of methane lingering in the air. The plane made flights over the field for several more weeks, and while the plume shifted and changed shape with the blowing wind, its presence persisted. Believing the source could be a leak at the oil well, the scientists notified the operator. Soon, the plume disappeared. The leak, coming from a small fuel line, had been repaired. “This is the essence of proactive measurement,” Riley Duren, one of the scientists involved in the flights and now CEO of Carbon Mapper, told Grist. “It’s a good example of how you would want it to work.” The leak, detected in July 2020, was what’s called a “super emitter.” The term refers to events in which a lot of methane is quickly expelled, or to infrastructure that releases a disproportionately high amount of the gas. In oil and gas production, events can occur on purpose, as part of routine processes like venting (when producers intentionally release unburned gas) or by accident, due to faulty equipment or human error. However they happen, super emitters release a particularly insidious greenhouse gas. Although it only stays in the atmosphere for about a decade, methane is 28 times more potent than carbon dioxide at trapping heat in the atmosphere. Because methane lacks color or odor, releases can go undetected for months. Nearly one-third of methane emissions in the U.S. come from the oil and natural gas sector, and super emitters account for almost half of them. But a new emissions rule from the Environmental Protection Agency, or EPA, targets super emitters by leveraging technology like remote-sensing aircraft and even high-resolution satellites to not only find leaks, but to hold those who cause them accountable. The EPA’s methane rule, announced December 2 at the COP28 climate summit in Dubai, includes a suite of regulations aimed at addressing the gas and other dangerous pollutants at oil and gas facilities. It establishes emissions standards for new equipment, phases out routine flaring of natural gas, guides states in regulating emissions from existing equipment, and requires the industry to conduct regular monitoring for leaks. “Its importance should not be understated,” Darin Schroeder, of the Clean Air Task Force’s methane pollution prevention program, said of the rule. “Reducing methane emissions is the best action we can take right now to bend the climate curve.” The EPA predicts the new regulations will avoid 58 million tons of methane emissions by 2038, reducing projected emissions from the gas by 80 percent. The rule also includes the “super-emitter program,” in which outside organizations certified by the EPA can use approved remote-sensing technologies, including airborne spectrometers and satellites, to monitor oil and gas facilities and detect large releases. Under the program, watchdogs will report super-emitter events — defined as a release of more than 100 kilograms per hour — to the EPA, which vets the data and informs the operator. The owner must investigate and report back to the EPA within 15 days, explaining how and when it will fix the problem. The EPA will also post verified super-emitter events on the program’s website, allowing those in frontline communities to monitor their possible exposure to dangerous gasses.
Richmond Chevron refinery receives nuisance violation for odor from bioreactor - Inspectors from the Bay Area Air Quality Management District issued a public nuisance notice of violation to the Chevron Refinery following a Friday inspection. They had responded to a number of air quality odor complaints from people detecting a heavy petroleum or burnt tires odor. Air district staff spoke with the Chevron Fire Department who directed them to the facility's bioreactor where they found the same burnt tire odor. Chevron staff told the inspectors that they had experienced an upset at their bioreactor, according to the air district incident report. That was about 3 p.m.By 3:30 p.m., the company reported a Level 1 notification through its Community Warning System saying, "We have investigated and have confirmed odors are from the Richmond refinery. The odor source is ongoing."The air district inspection staff are patrolling the Point Richmond area throughout the weekend. It is the second Level 1 warning in two weeks. The air district late last month issued violation notices to Chevron because of flaring from the refinery.That incident on Nov. 27 happened due to a loss of power at part of the facility and sent a large plume of black smoke over the region.A Facebook post by the Chevron Richmond account confirmed that the workers at the facility were attempting to "quickly to minimize and stop the flaring." The post said a "Community Warning System (CWS) Level 1" was issued due to smoke and the visible flaring. The Bay Area Air Quality Management District reports theyreceived more than 100 complaints about air quality in connection with the incident. ALSO READ: Black smoke clouds air over Chevron Richmond refinery as power loss triggers flaring incident
Indigenous peoples' dissenting views on Arctic drilling fuels debate -Members of Congress agree that the administration needs to consider the concerns of indigenous communities when taking actions on oil and gas leasing in the Arctic. There is just disagreement on whose concerns should be prioritized.The Biden administration’s slate of actions announced in September included canceling the remaining oil and gas leases in the Arctic National Wildlife Refuge issued under President Donald Trump and proposing new protections for over 13 million acres in the neighboring National Petroleum Reserve-Alaska.These proposals drew condemnation from many Republicans — already critical of the Biden administration’s leasing policies — that the moves will increase U.S. dependence of foreign sources of oil. Alaska’s congressional delegation, which includes Democratic Rep. Mary Peltola, said the administration ignored the wishes of those on the ground.These frustrations were on display last week when the House Natural Resources Committee approved a bill that would prohibit the Biden administration from enforcing these actions. The bill was introduced by Rep. Pete Stauber, R-Minn., and co-sponsored by Peltola, who was the only Democrat to vote in favor.The bill also had support from Kaktovik Iñupiat Corporation and Iñupiat Community of the Arctic Slope. At a Nov. 29 hearing, Doreen Leavitt, director of natural resources for the latter group, said their voices had been “continually dismissed” as the Biden administration considers the fate of drilling in the region.In their Dec. 7 comments on the National Petroleum Reserve-Alaska proposal, ICAS, the North Slope Borough and the Arctic Slope Regional Corporation expressed many of the same concerns.“[The Bureau of Land Management] is failing to fulfill its broader duties to Congress and the indigenous people of the North Slope by capitulating to a political agenda that calls for ending domestic oil and gas development with no regard to the economic and national security consequences of those actions,” the comments said.Other Democratic members of the committee, though, spoke of their concerns that oil and gas development in the region would both be a major source of emissions and threaten the way of life of the Gwich’in people who depend on the region’s caribou herds for subsistence.Gwich’in representatives from Alaska and Canada were in Washington last week to urge expanded protections for the region. In a statement the Gwich’in Steering Committee said that during the trip it shared “as we have many times in the past that protecting the Arctic Refuge is not just about protecting land: it is about respecting our rights as Indigenous Peoples.”“Future generations deserve assurance from the US government that our culture, traditions, and connections to our sacred land and its animals will not be infringed on,” the committee said.Ranking member Raúl M. Grijalva, D-Ariz., expressed his own concerns that opponents of the drilling did not have their concerns adequately addressed under the Trump administration when it moved to finalize the leases.In their comments on the NPR-A proposal, environmental groups including the Sierra Club, The Wilderness Society and the Northern Alaska Environmental Center encourage stricter protections for the region.“The lands and waters of the Reserve are globally unique ecosystems and culturally irreplaceable for the Alaska Native communities who live within the region and rely on its resources,” the groups wrote. “As the Biden Administration looks to fulfill its ambitious, yet necessary domestic and international commitments toward environmental justice, climate action, and the protection of biodiversity, the Reserve offers a tremendous opportunity for addressing their goals.”But for the groups that would see the most immediate economic benefits from drilling in the region, the development represents a way to support some of the most remote communities in the nation.“I think that there is a lack of understanding just because they talk about subsistence and they talk about protecting the land and the animals for the people that are there,” said Nagruk Harcharek, president of the Voice of the Arctic Iñupiat. “But if you’re threatening our economic base you’re in turn indirectly limiting our ability to subsist.”
No spill response can eliminate risk to marine life in the Strait of Juan de Fuca | Spare News -- Last week, Capital Daily reported that the new 74.5-metre (244-foot) Western Marine Response Corporation (WMRC) vessel named the K.J. Gardner will be docked in Beecher Bay early in the new year. The ship is purpose-built to patrol the BC coastline and respond in the event of an oil spill. This additional response resource is being deployed in anticipation of the 34+ tankers per month (450 per year) that will soon come out of Burnaby’s Westridge Marine Terminal laden with oil from the TMX pipeline before making their way through the San Juan Islands and the Strait of Juan de Fuca. That oil that originates in the Alberta oil sands and travels a 1,150-km pipeline to the Burnaby Terminal, is high in bitumen and is notoriously viscous and dirty. To facilitate its transport through the pipeline, oil sands bitumen is chemically diluted to make what is called ‘dilbit.’ Canada has limited capacity to refine heavy crude oil like this so it needs to transport it in tankers to refineries with larger capacity in the US like Ferndale in Washington State. The David Suzuki Foundation considers dilbit spills particularly toxic and hard to clean up. “Tar balls sink to the bottom of the water or hang in the water column, eluding conventional booms used to contain spills.” En route to Washington, tankers carrying this heavy oil will travel the migration routes of significant Sockeye salmon that head up the Fraser River and past the Gulf Islands. Clear Seas, an independent research centre that supports safe and sustainable marine shipping in Canada, says the TMX project could represent a 9% increase in commercial ship traffic traveling through the Strait of Juan de Fuca. Those tankers will also pass by the Race Rocks Ecological Reserve (RRER) off the coast of East Sooke where, according to Warden Derrick Sterling, “Humpbacks are visible every day.” According to the RRER site, Southern Resident orcas also pass south of Race Rocks reserve heading west, and Bigg’s (Transient) orcas pass, heading East. Race Rocks is the most southerly part of Canada on the Pacific Coast, roughly one nautical mile from Rocky Point off the southern shore of Beecher Bay on Vancouver Island. The reserve’s name refers to the tidal race that swirls around its rocky outcrops at rates of up to eight knots. RRER is home to a diverse range of large and small animal and vegetable marine life. It’s the site of haul-out and a pupping colony for Elephant Seals. California and Northern sea lions “haul out” there in by the thousands in the fall of each year, meaning they leave the water for periods of time to forage, rest and reproduce. The RRER is also host to thousands of migratory birds each year like Auklets, Petrels and is a winter roosting area for thousands of seabirds like Buffleheads and Ancient Murrelets. Despite TMX assurances that all of its tankers will be carefully escorted by tug vessels through the Georgia and Juan de Fuca Straits and will receive extended pilot guidance to the Race Rocks area, no precautions are 100% infallible.
Canada's Secure to Sell Oilfield Waste Facilities for $850MM - Waste management and energy infrastructure company Secure Energy Services Inc. has entered into a definitive agreement with Waste Connections Inc. to sell the facilities formerly owned by Tervita Corporation that were ordered to be divested by Canada’s Competition Tribunal. The transaction is for $790 million (CAD 1.075 billion) in cash plus approximately $55.3 million (CAD 75 million) for certain adjustments, for total estimated cash proceeds of $850 million (CAD 1.150 billion), Alberta-based Secure said in a news release Monday. Secure and Tervita Corporation, both oilfield waste service providers, announced their merger in March 2021. Canada’s Competition Bureau in June 2021 launched a challenge, where it alleged that the loss of rivalry between the two would result in oil and gas producers likely paying higher prices and experiencing a reduced quality of service due to the transaction. The Competition Tribunal ruled in favor of the Commissioner of Competition in his challenge of the acquisition. The Tribunal then ordered Secure to sell 29 facilities to resolve the substantial lessening of competition found in 136 relevant markets.
LNG Canada On Track to Start Testing Facility in 2024 – The first phase of the Shell plc-led 14 million metric tons/year (mmty) LNG Canada export project in Kitimat, British Columbia, is more than 85% complete, CEO Jason Klein said in a year-end update. The project is on track to start shipping LNG abroad in 2025. The project is now preparing for “safe start-up activities” to begin in 2024, Klein said. “That’s when our equipment is tested and fine-tuned, and we begin the process of producing LNG,” he added. “Our safe start-up program will take more than a year to complete.” Indonesia’s PT Pertamina has canceled a contract to buy 1 mmty from the Mozambique LNG project in Africa because of ongoing delays. Work on the TotalEnergies SE-led Mozambique project was...
Cedar LNG FID Slips to Early 2024 as Pembina Prepares for Western Canada’s ‘Transformational Period’ - Pembina Pipeline Corp. disclosed that a possible final investment decision (FID) for its Cedar LNG project on the British Columbia (BC) coast could slip to early next year as the project partners hammer out final details for its construction and tolling agreements. In its recently released 2024 guidance, the company said it expects to make a contribution of more than $154 million to the liquefied natural gas project next year on its way to making an FID. Last month, Pembina signed a tentative agreement with Samsung Heavy Industries and Black and Veatch to reserve manufacturing capacity for the floating LNG vessel that will serve as the center of its 3 million metric ton/year export facility. “Cedar LNG continues to progress the key project deliverables...
Pembina delays FID on Cedar LNG project - --Canada’s Pembina Pipeline and the Haisla Nation have postponed a final investment decision on their Cedar floating LNG export project. Pembina and the Haisla Nation each own 50 percent in the Cedar LNG project.Last month, Pembina said that the partners may move the final decision on the LNG export project from the fourth quarter of this year to early 2024.The duo also recently signed a heads of agreement with US-based engineer Black & Veatch and South Korean shipbuilder Samsung Heavy to secure access to shipyard capacity for their project.Last year, Black & Veatch and SHI won the front-end engineering and design (FEED) contract for the project’s proposed floating liquefaction, storage, and offloading unit (FLNG).The $2.4 billion FLNG project will have a capacity of about 3 mtpa and will source natural gas from the prolific Montney resource play in northeast British Columbia.Moreover, Cedar LNG plans to receive feed gas from the Coastal GasLink pipeline, which will supply the giant Shell-led LNG Canada export plant near Kitimat.The floating LNG facility will also be located near the LNG Canada plant and will be powered by renewable electricity from BC Hydro.Pembina said in a statement on Monday that the parties expect to finalize a lump sum engineering, procurement, and construction agreement prior to the end of the year, which will provide Cedar LNG with the necessary services to construct the project.
Altamira LNG Nabs Final Environmental Assessment as Launch of Mexico Exports Nears - The U.S. Department of Energy (DOE) has delivered a final environmental assessment for New Fortress Energy Inc.’s (NFE) offshore Altamira LNG project as the firm awaits delivery of a component that could allow it to begin exporting U.S. natural gas from Mexico’s eastern coast. NFE previously requested to re-export 145 Bcf/year, or 400 MMcf/d, from Texas through Altamira until 2050. It received partial authorization in March, but the firm has been awaiting an environmental review of the project before DOE makes a final export authorization decision. DOE staff wrote in the assessment that the proposed action is to grant authorization as long as the project is ultimately deemed to be in the public interest. If DOE did not authorize the Altamira LNG facility, staff noted that...
Oil Majors in Guyana Advance Plans despite Venezuela Threats: Prez Ali - Oil majors operating in Guyana’s waters are “moving ahead aggressively” with production plans despite Venezuela’s threats to take over the region in an escalating border conflict, according to President Irfaan Ali. Speaking from Georgetown, Ali said Guyana’s troops are prepared to defend the nation’s territory after Venezuela’s Nicolas Maduro revived a long-dormant dispute over the Essequibo, a swath roughly the size of Florida where major oil discoveries have been made in recent years. Companies operating there were not intimidated by orders from the Venezuelan leader to leave the region, he added. “There’s absolutely no slowing down” in production plans, Ali said in a video interview on Monday. “We are on the right side of international law, on the right side of ethics, and on the right side of history.” Maduro last week told Exxon Mobil Corp. and others to withdraw from the area within three months, leaving Brazil and other Latin American nations on high alert about the possibility of an armed conflict in the region. Exxon leads a joint venture that includes Hess Corp. on Guyana’s Stabroek Block, home to the world’s largest crude discovery of the past decade. Ali and Maduro are set to meet on Thursday on the island nation of St. Vincent and the Grenadines in a bid to deescalate tension. The dispute intensified in recent years as the massive oil discoveries off the coast of Guyana led the small English-speaking nation to become the world’s fastest-growing economy. Estimates that Guyana’s economy will grow 25 percent-30 percent a year in the medium-term are “very conservative,” said Ali, who is targeting more than 1.2 million barrels of daily production in the coming years. “We are continuing to ensure that we are in a position with our international partners to defend what is ours,” Ali said. “But make no mistake, our troops are going to ensure the territorial integrity and sovereignty of Guyana is respected.” The escalating dispute over the Essequibo is largely seen as an attempt by Maduro to rally the population with a nationalistic rhetoric ahead of next year’s presidential elections. The Venezuelan leader is widely expected to run for a third term, despite his low poll ratings and the rise of opponent MarÃa Corina Machado’s popularity. Machado is currently banned from holding office, though Venezuela has outlined a legal path to restore her eligibility, under pressure from the US. In exchange for reaching an agreement with some opposition leaders, the US Treasury eased oil sanctions on Caracas last month, allowing foreign companies including Chevron Corp. to expand operations in the country and increase exports, providing Venezuela with much-needed revenue.
Spot LNG shipping rates, European prices continue to decline - Spot liquefied natural gas freight rates and European LNG prices continued to decline this week, according to Spark Commodities. Last week, LNG freight rates decreased as well. The Spark30S Atlantic decreased to $155,250 per day, while the Spark25S Pacific decreased to $141,000 per day. “LNG freight rates fell once again week, with a 8 percent week-on-week decrease for Atlantic rates and a 17 percent week-on-week decrease for Pacific rates,” Qasim Afghan, Spark’s commercial analyst told LNG Prime on Friday. Afghan said that the Atlantic rate decreased by $12,750 to $142,500 per day, whilst the Pacific rate decreased by $24,000 to $117,000 per day. “Spark25S is at its lowest price since August 22 and both basins are currently at their lowest December spot price in three years,” he said. As per European LNG pricing, the SparkNWE DES LNG front month also declined from the last week. The NWE DES LNG for January delivery was assessed last week at $12.689/MMBtu and at a $0.770/MMBtu discount to the Dutch TTF. “The SparkNWE DES LNG price for January delivery is assessed at $11.887/MMBtu and at a $0.745/MMBtu discount to the TTF,” Afghan said on Friday. “This is a $0.802/MMBtu decrease in DES LNG price, and the discount to the TTF narrowed by $0.025/MMBtu, when compared to last week’s January prices,” he said.
Spanish LNG imports down, reloads up in November - Spanish liquefied natural gas (LNG) imports dropped in November while reloads rose compared to the same month last year, according to Enagas.LNG imports decreased by 14 percent to about 22.8 TWh in November and accounted for 69.4 percent of the total gas imports. In October, LNG imports reached some 21.8 TWh.Including pipeline imports from Algeria, France, and Portugal, gas imports to Spain reached about 34.5 TWh last month, a slight drop from some 34.7 TWh in November last year, Enagas said in its monthly report.Moreover, national gas demand in November dropped by 6.8 percent year-on-year to some 26.1 TWh.Demand for power generation declined by 35.5 percent year-on-year to about 6.1 TWh last month, while conventional demand rose by 7.9 percent to 19.9 TWh, the LNG terminal operator said.The firm previously said that August of this year marked the first time in its history that Spain has managed to fill 100 percent of its underground storage facilities.Storage facilities were also full in October and November, according to Enagas.
Fourth Round of EU Gas Buying Scheme Secures 260 Bcf for Negotiation - The fourth round of a European Union coordinated gas purchase program has matched 7.35 billion cubic meters (259.56 billion cubic feet) of demand with offers by suppliers. Thirteen international vendors responded to the latest call for the AggregateEU gas matchmaking scheme with a combined offer of 9.13 billion cubic meters (322.43 billion cubic feet). Participating companies in the EU region had registered a total demand of 10.06 billion cubic meters (355.27 billion cubic feet), according to the results announced recently by the bloc’s Directorate-General of Energy. The buyers and their vendors can now start contractual negotiations, which happen outside the AggregateEU service. The supply under this round is scheduled for delivery between January 2024 and March 2025. “A combined volume of 42.13 billion cubic meters [1.49 trillion cubic feet] of aggregated European gas demand was matched with offers by reliable suppliers”, the directorate said in a press release, referring to the four rounds. Under AggregateEU, companies in the 27-member bloc can pool demand, negotiate with international suppliers and coordinate collective purchases. The matchmaking service, created under Council Regulation 2022/2576 of December 19, 2022, is part of the broader EU Energy Platform for coordinated purchases of gas, liquefied natural gas and hydrogen. The Energy Platform was formed last year as part of the REPowerEU strategy for achieving energy independence from Russia. “Introduced in April 2023, the EU Energy Platform has demonstrated the EU’s ability to use its collective weight to secure reliable gas supplies from international partners and make our energy supply more diverse”, said the directorate about the latest round of AggregateEU. EU Executive Vice-President for the European Green Deal Maros Sefcovic had called on the group to consider establishing mechanisms for the joint purchase of other strategic commodities such as clean energy and raw materials. “We must build on the success of the Platform, recognizing the added-value of the joint purchase for the EU's open strategic autonomy, competitiveness of Europe's economy and its green and digital transition”, he said announcing the results of the third round, according to a transcript on the European Commission’s website October 6. “This is key to ensuring we can meet the growing demand for hydrogen, a key resource for facilitating the decarbonization of European industry and therefore crucial to our target of climate neutrality by 2050”. The third round of AggregateEU saw 6.49 billion cubic meters (582.33 billion cubic feet) in aggregated demand, from 39 companies. The volume offered by suppliers, 18.1 billion cubic meters (639.2 billion cubic feet), exceeded the pooled demand, according to results announced October 6. The first two rounds pooled 27.5 billion cubic meters (971.15 billion cubic feet) of demand, 22.9 billion cubic meters (808.71 billion cubic feet) of which saw offers, the Directorate-General of Energy said in a news release September 21 announcing the opening of the third round.
Ministry of Oil and Gas denounces Egypt's signing of agreement with South Korea to export Libyan oil - The Tripoli based Libyan Ministry of Oil and Gas said that it denounces the agreement concluded between Egypt and South Korea regarding the export of Libyan oil through the Egyptian port of Garjoub, according to the official statement contained on the website and official Facebook page of the Egyptian Ministry of Transport. On the Facebook page of the Egyptian on 28 November, the statement read: “The Egyptian government, represented by the Ministry of Transport, signs a memorandum of understanding with the South Korean government, represented by the South Korean company STX,” and in the part that concerns Libya, it stated: “Establishing an oil pipeline from Libyan territory to the port of Garjoub and re-exporting it to European countries.” In an exclusive interview with Libya Herald, the Director of the Media Office at the Ministry of Oil and Gas, Ahmed Al-Tarhouni, said that the Ministry denounced what was stated in the Egyptian statement regarding Libya and its rights to impose its sovereignty over its economic capabilities in all the country. Al-Tarhouni explained that the statement of condemnation confirmed that the Ministry of Oil and Gas was not aware, neither closely nor remotely, of the agreement concluded between the Egyptian side and South Korea regarding the export of Libyan oil through the port of Garjoub. He pointed out that the Ministry stressed that it would have been more appropriate, according to the prevailing regulations, systems and laws in force in the Libyan state, to notify the Ministry of Oil and Gas of such strategic matters in order to provide sound technical opinions issued by Libyan competencies and active and influential figures in the oil sector.
Nigeria's NNPC Inks Deals for Domestic, International LNG -- Nigerian National Petroleum Corporation Ltd. (NNPC) has signed two major agreements to deliver liquefied natural gas (LNG) to the domestic and international markets. At the sidelines of COP28 in the United Arab Emirates (UAE), NNPC signed a memorandum of understanding with China’s Wison Heavy Industry Co. Ltd for the development of a floating LNG project in Nigeria that would target the international LNG market. The two companies will work together on a roadmap that they envision will lead to an investment decision, NNPC said in a news release Wednesday. Further, NNPC Prime LNG Ltd., an arm of NNPC Trading Ltd., signed a supply, installation and commissioning agreement with independent oil and gas company SDP Services, for a project serving the domestic LNG market with a capacity of 421 metric tons per day. The Small Scale LNG (SSLNG) Project will be located at Ajaokuta in Kogi State, Central Nigeria, and will ensure the efficient supply of LNG to autogas/compressed natural gas (CNG) customers, as well as industrial and commercial customers nationwide. The project is expected to be operational by December 2024, the company said. “We see both projects as having enormous impact all over the country because they are central to the commercialization of Nigeria’s abundant gas resources and ensuring that our country earns the much-needed foreign revenue from its abundant gas assets”, NNPC Executive Vice President for Gas, Power and New Energy Olalekan Ogunleye said. “It is also consistent with NNPC management’s drive to deliver on Mr. President’s gas and power aspirations across the country”. NNPC Trading Managing Director Lawal Sade said the SSLNG Project will boost the domestication of LNG utilization by supporting the growth of auto-gas initiatives across the country. “We are looking at a timeframe of 12 months from execution to the commissioning of the project. The project will deliver about 420 [metric tons] per day of LNG per day into the domestic market, which will enhance efficient delivery of gas to the auto-gas/CNG and industrial customers in line with Presidential mandate”, he added.
BP to develop Indonesian regas terminal - A unit of UK-based energy giant BP is joining forces with Indonesian firm AKR Corporindo to develop a regasification terminal in Indonesia’s East Java. According to statement by AKR, the distributor of petroleum and basic chemicals has entered into a joint development agreement with BP Gas & Power Investments. AKR’s president Haryanto Adikoesoemo signed the deal with Gareth Jones, director of BP Gas & Power Investments, on December 4 during an online ceremony, AKR said. Under the deal, the two firms aim to build the regasification terminal in Java Integrated Industrial and Port Estate at Gresik, East Java, Indonesia (JIIPE). “This project is designed with the aim of providing reliable gas supply for tenants in JIIPE, and with a potential of excess capacity which can be used to supply the indigenous pipelined gas network in East Java,” the firm said.
TN top official inspects area affected by oil spill --Chennai: Tamil Nadu Chief Secretary Shiv Das Meenaon Sunday inspected north Chennai, where an oil spill over the Kosasthalaiyar river was noticed. The top official interacted with residents of Sadayankuppam over the oil spill and ascertained information related to the matter. The Southern Bench of the National Green Tribunal, constituted a high-level committee on December 9 and directed it to take necessary measures to prevent further spread of oil spill and 'recover the oil floating on the water surface.' The TN Pollution Control Board, in its report, cited traces of oil that originated from north Chennai areas of Kodungaiyur and Tondiarpet where the facilities of Chennai Petroleum Corporation Limited (CPCL) and Indian Oil Corporation Limited (IOCL) are functioning. The Water Resources Department report said: "The top of water surface was filled with a thick oily substance and it is visible all along the Buckingham canal for more than 5 kms and also spread to Ennore creek and Kosasthalaiyar River mouth and Bay of Bengal." Further it said: "It is seen visibly that the oil spill or intentional letting of waste soil in the Buckingham canal and Ennore creek affected the flora and fauna." The matter has been posted to December 12 by the NGT bench.
NOCs Face Mounting Pressure to Clean Up Operations - National Oil Companies (NOC) are facing mounting governmental and societal pressure to clean up their operations and contribute to the global energy transition, analysts at BMI, a Fitch Solutions company, stated in a report sent to Rigzone this week. “Historically, NOCs have tended to avoid the scrutiny faced by publicly listed companies, but as decarbonization moves up the global policy agenda, climate-change related legislation gains increasing traction, and Western governments move to tax carbon-intensive imports, there is growing recognition of the need to address emissions and diversify revenue streams,” the analysts noted in the report. “Record returns have created a fertile environment for investment, with bumper profits stimulating higher spending amongst NOCs globally,” they added. While several IOCs and large independents slowed or partially reversed their decarbonization efforts in response to the energy crisis of 2021-2022, NOCs as a whole have been stepping up both their spending and their ambitions, the analysts said in the report. “This speaks to some of the potential advantages held by NOCs over their publicly listed peers, in that they are less beholden to quarterly financial metrics and so are better positioned to take a long-term view on the sector,” the analysts added. “That said, NOCs in countries that are lagging in their climate commitments or those that play the role of cash-cow for their governments remain hamstrung, with differences in domestic green policy agendas being the key differentiating factor in the varying progress of NOCs globally,” they went on to state. “While encouraging progress is being made, low-carbon capex continues to represent only a small share of total NOC spending. Moreover, where net zero targets exist, they are exclusively limited to Scope 1 and 2 emissions and tend to be lacking in robust interim targeting,” the analysts continued. They also tend to relate to emissions intensity, rather than absolute emissions, the analysts said in the report. “It is often unclear how net-zero targets will be achieved and the potential overreliance on carbon credits is a cause for concern. In short, while the outlook on low-carbon capex among NOCs is improving year on year, more needs to be done to approach Paris Agreement alignment,” they added.
OPEC Urges Members to Block COP28 Pronouncements vs Fossil Fuels - OPEC’s top official urged member countries in a letter to reject any agreements that target fossil fuels at the latest climate negotiations. Producers should “proactively reject any text or formula that targets energy” in the form of “fossil fuels rather than emissions,” Secretary-General Haitham Al Ghais said in the letter to OPEC’s 13 members. The COP28 climate talks in Dubai, which are due to conclude early next week, are playing out with delegations positioning themselves on either side of a clearly drawn battle line: whether or not they can commit to phasing out fossil fuels. Al Ghais said he was concerned by the possibility that the meeting might endorse such an approach. “It seems that the undue and disproportionate pressure against fossil fuels may reach a tipping point with irreversible consequences, as the draft decision still contains options on fossil fuels phase out,” Al Ghais said in the letter. “It would be unacceptable that politically motivated campaigns put our people’s prosperity and future at risk,” he continued. The group has a pavilion at the flagship United Nations event for the first time. Al Ghais said in a subsequent statement to Bloomberg that the Vienna-based organization “continues to advise our member countries.” “What we will continue to advocate for is reducing emissions, not choosing energy sources,” he added. “The world requires major investments in all energies, including hydrocarbons, all technologies, and an understanding of the energy needs of all peoples. Energy transitions must be just, fair and inclusive.” Saudi Arabia, the de facto leader of the Organization of Petroleum Exporting Countries, told Bloomberg Television on Monday that the kingdom won’t agree to a text that calls for the phase down of fossil fuels. Energy Minister Prince Abdulaziz bin Salman insisted he would “absolutely not” accept such language. Other members include the United Arab Emirates — which is hosting the COP28 talks despite opposition from environmental activists — as well as Iraq and Nigeria.
OPEC members push against including fossil fuels phase-out in COP28 deal - OPEC members are pushing against attempts to include language on “phasing out” fossil fuels in a COP28 climate deal, underlining the struggle over whether the summit can for the first time in 30 years address the future of oil and gas. Negotiators and observers at the annual U.N. climate talks, pursuing a deal to tackle the worst impacts of climate change, said several OPEC members appeared to have heeded calls by the oil producer group to veto any deal to phase out fossil fuels. In a letter dated Wednesday, OPEC Secretary General Haitham Al Ghais called on members to reject language targeting fossil fuels, saying “the undue and disproportionate pressure against fossil fuels may reach a tipping point with irreversible consequences”. Al Ghais declined to comment on the letter but said OPEC wanted to keep the focus of the talks on reducing emissions, as opposed to picking energy sources. “The world requires major investments in all energies, including hydrocarbons,” he said. “Energy transitions must be just, fair and inclusive.” At least 80 countries are demanding a COP28 deal that calls for an eventual end to fossil fuel use, the top source of planet-warming emissions, to try to get on track to reach the goal of limiting global warming to 1.5 degrees Celsius. But they face a struggle to persuade countries that rely on oil and gas for revenue, many of which are instead promoting technologies like carbon capture, which is expensive and has yet to be proven at scale. Tina Stege, climate envoy of the Republic of the Marshall Islands – one of the places worst affected by climate change, said any pushback on including a phase-out of fossil fuels risked the world’s prosperity. “Nothing puts the prosperity and future of all people on earth, including all of the citizens of OPEC countries, at greater risk than fossil fuels,” said Stege, whose country chairs the High Ambition Coalition, a group of nations pushing for more ambitious emissions targets and policies. “This is why the High Ambition Coalition is pushing for a phase out of fossil fuels, which are at the root of this crisis. 1.5 is not negotiable, and that means an end to fossil fuels,” she said in a statement. After a week of technical talks, the negotiations now have ministerial input before the scheduled end of the summit on Tuesday – the last phase when countries wrestle to find consensus over the wording regarding fossil fuels. The latest version of the negotiating text includes a range of options – from agreeing to a “phase out of fossil fuels in line with best available science”, to phasing out “unabated fossil fuels”, to including no language on them at all.
COP28: US Opts Out of Dutch Plan to End Fuel Subsidies - The US opted out of a Dutch-led coalition that aims to phase out fossil fuel subsidies, starting by extricating countries from the international agreements in which they are embedded. Around 50% of government subsidies for oil, gas and coal are a result of global pacts, like those in aviation and shipping that exempt the fuels from tax, according to a statement by the coalition launched at COP28 in Dubai. Member countries will be required to report the amount of subsidies before next year’s summit.
New Poll Shows Strong Support for Making Oil and Gas Companies Pay for Climate Damages - As climate talks come to a close in Dubai, new polling reveals overwhelming American support for making the oil industry help cover the ballooning costs of climate change-fueled disasters. Conducted by Data for Progress and Fossil Free Media, the survey shows voters back laws requiring major oil and gas companies pay for a share of climate damages caused by fossil fuel pollution.The poll showed that likely voters widely support a bill that would require big oil and gas companies to pay a share of climate costs caused by pollution by a +40-point margin (66% in support compared to just 26% opposed). Support crosses party lines with 81% of Democrats, 61% of Independents, and a majority of Black and Latino voters in favor. The proposal also enjoys strong support from young voters aged 18-29 (68%). Additionally, 64% of voters said they would be more likely to support a candidate who prioritizes requiring oil and gas companies to pay climate costs linked to their pollution. Just 26% said they would be less likely to support officials backing such a measure.The findings coincide with “loss and damage” funding taking center stage at COP28, as vulnerable nations demand wealthy polluting countries pay compensation for their outsized role causing climate impacts now devastating low-income regions. Mirroring these calls for historic emitters to pay up, two-thirds of American voters support legislation compelling Big Oil to chip in on escalating climate costs linked to their products."In a resounding call for accountability, two-thirds of the American people support legislation demanding industry titans like Exxon and Shell shoulder their fair share of the climate damages inflicted by fossil fuels,” said Cassidy DiPaola, Communications Director at Fossil Free Media. “With COP spotlighting the towering price tag of climate change, voters resoundingly endorse fossil fuel companies contributing their fair share to address a crisis they helped manufacture and still refuse to help fix." \Climate summit draft decision drops fossil fuel phaseout language, instead calling for reduction -The latest iteration of negotiating text at this year’s global climate summit has dropped a previous version’s suggestion of a phaseout of fossil fuels.Instead, the latest draft text, introduced Monday, calls for “reducing” consumption and production of fossil fuels “in a just, orderly and equitable manner.”A group of 80 countries, including the U.S., small island nations and the European Union, havereportedly called for a “phase out” of fossil fuels. But official decisions have to be adopted unanimously by the nearly 200 countries at the COP28 climate summit. News outlets reported last week that the head of a group of oil-producing countries known as OPEC wrote to its members urging them to oppose language that targets fossil fuels. In addition to its call to reduce such fuels, the latest text calls for the rapid phasedown of unabated coal — that is, coal whose emissions are not prevented through carbon capture technology. It also calls for limiting permitting on new and unabated coal power. The text additionally calls for tripling global renewable energy capacity and doubling the average annual rate of energy efficiency improvements by 2030.A previous draft text included several suggestions on fossil fuels that included “a phase out of fossil fuels,” “phasing out unabated fossil fuels” or “no text” on the issue.
Climate summit makes ‘historic progress’ — but the world still can’t quit oil - Climate talks in Dubai ended with a deal to curb the use of fossil fuels that was both historic and 30 years too late.The two-week conference, held in the oil-rich desert kingdom of the United Arab Emirates and presided over by an oil CEO, brought two competing realities into a painful collision. The planet is overheating, yet humanity remains inextricably reliant on coal, oil and natural gas.The talks ended on Wednesday with a deal among almost 200 countries that committed to “transitioning away from fossil fuels,” notably by speeding up that shift before 2030. But the agreement also appeased oil-rich Gulf states by explicitly sanctioning those fuels’ use during the transition. And organizers gaveled it through so hastily that representatives for vulnerable island nations, who had a series of misgivings about the text, had yet to enter the room.Still, leaders of the U.N. summit and representatives of major governments were quick to endorse the nonbinding pact as a historic acknowledgment that the world needs to move quickly to cleaner energy sources.“This document sends very strong messages to the world,” said U.S. climate envoy John Kerry, who had placed his personal credibility on the line by backing the controversial choice of oil CEO Sultan al-Jaber to oversee the conference.“This is much stronger and clearer as a call” for halting global warming at 1.5 degrees Celsius — the ambitious, increasingly out-of-reach goal of global climate negotiators — “than we have ever heard before,” he said.Kerry also announced that China and the U.S. had agreed to update their long-term plans for tackling climate change in light of the progress made at the talks.“This is historic progress,” said Danish Climate Minister Dan Jørgensen. “I can totally understand if our populations think that it’s a disgrace that it had to take 28 years. But now we’re here. We’re in an oil country surrounded by oil countries that are now signing a piece of paper saying we need to move away from oil. It is historic.”
COP28 Ends With Deal on Transition Away From Fossil Fuels - The COP28 climate talks in Dubai ended in a deal that saw a commitment to transition away from all fossil fuels for the first time. The president of this year’s UN-sponsored summit, the UAE’s Sultan Al Jaber, brokered an agreement that was strong enough for the US and European Union on the need to dramatically curb fossil fuel use while keeping Saudi Arabia and other oil producers on board. The agreement calls for countries to quickly shift energy systems away from fossil fuels in a just and orderly fashion, qualifications that helped convince the skeptics. Under the deal, countries also are called to contribute to a global transition effort — rather than being outright compelled to make that shift on their own. “Together we have confronted the realities and sent the world in the right direction,” said Al Jaber, who’s also chief executive officer of Abu Dhabi National Oil Co. He brought the gavel down to confirm the deal on Wednesday, a day later than scheduled. It was met with applause and cheers by delegates. While the outcome falls short of the phase out most countries wanted, it does break new ground: No previous COP text has mentioned moving away from oil and gas, the fuels that have underpinned the global economy for decades. How quickly that becomes a reality won’t be decided by the diplomatic horsetrading that clinched today’s deal, but by investors, consumers and national governments. After a pledge to phase down coal in Glasgow two years ago, consumption has continued to rise and the world remains very unlikely to limit warming to the Paris Agreement’s target of 1.5C. Still, the Dubai decision is an important marker in the global direction of travel toward a low-carbon energy system. The text also includes agreements to triple the deployment of renewable power and double the rate of efficiency gains by the end of the decade. A separate COP28 agreement, reached earlier, makes operations a hard-fought fund for addressing the losses and damages of climate change. “An agreement is only as good as its implementation. We are what we do, not what we say,” Al Jaber said. “We must take the steps necessary to turn this agreement into tangible actions.” The COP28 language pushing a decline in fossil fuel use will send “a signal” that “the world is now thinking about it” and change the way investors assess the risk of those ventures, said Jonathan Pershing, environment program director at the William and Flora Hewlett Foundation and a veteran US climate negotiator. The last-minute deal is a diplomatic win for the UAE and Al Jaber, whose role at Adnoc made him a controversial choice to preside over this year’s talks. There have been hiccups – allegations he used his role to lobby for oil deals and an argument over the science of climate change – but in the end he will argue he delivered. Al Jaber also used his presidency to bring the oil and gas industry firmly into the COP process and there were more representatives of fossil fuel companies than at any previous summit, drawing criticism from climate activists. He forged a pact between more than 50 companies to reduce emissions from their own operations. It said nothing about levels of oil and gas production, but a pledge to reduce pollution from methane – 80 times more dangerous than carbon dioxide – to near zero by the end of decade could have a material impact on emissions. That didn’t prevent Saudi Arabia leading a rearguard action against any attempt to include a fossil fuel phase out in the text. As COP28 got into full swing, the kingdom’s Energy Minister was asked by Bloomberg News if he’d be happy to see a phase down in the text. “Absolutely not,” he replied. The Organization of the Petroleum Exporting Countries later sent a letter to members, asking them to lobby against any text that targets fossil fuels rather than emissions. While the final language was watered down to reflect their concerns, ultimately the coalition of oil producers was left too isolated to resist.
Final COP28 Deal Riddled With 'Cavernous Loopholes' for Fossil Fuel Industry -The COP28 climate summit in Dubai ended Wednesday with an agreement that, for the first time, explicitly endorsed a move away from fossil fuels—a weak but historic signal that the oil and gas era may be coming to an end.But the deal, dubbed the UAE Consensus, is also chock full of escape hatches that will allow the fossil fuel industry to persist and thrive in ways that are incompatible with efforts to keep warming below critical targets set out by the Paris climate agreement.The final text "calls on" nations to "contribute" to a number of global efforts, including tripling renewable energy capacity by 2030, accelerating the "phase-down" of "unabated coal power," and "transitioning away from fossil fuels in energy systems, in a just, orderly, and equitable manner... so as to achieve net zero by 2050 in keeping with the science."In the eyes of climate campaigners who pushed for an endorsement of an ambitious fossil fuel phaseout, the agreement falls well short of what's plainly necessary as global greenhouse gas concentrationscontinue to shatter records and climate-driven extreme weather wreaks devastating havoc across the globe."At long last the loud calls to end fossil fuels have landed on paper in black and white at this COP, but cavernous loopholes threaten to undermine this breakthrough moment," said Jean Su, energy justice director at the Center for Biological Diversity. "While this agreement offers faint guidelines toward a clean energy transition, it falls far short of the transformational action we need.""It is not enough for us to reference the science and then make agreements that ignore what the science is telling us we need to do."The Alliance of Small Island States, a coalition of nations particularly vulnerable to the climate emergency, vocally criticized the deal. The alliance said that its members—who have called for a fossil fuel phaseout and an end to fossil fuel subsidies—were "not in the room" when the final text was adopted."We were working hard to coordinate the 39 small island developing states that are disproportionally affected by climate change, and so were delayed in coming here," Anne Rasmussen, lead negotiator for the alliance, said, calling the agreement an "incremental advancement over business as usual when what we really needed is an exponential step-change in our actions and support.""It is not enough for us to reference the science and then make agreements that ignore what the science is telling us we need to do. This is not an approach that we should be asked to defend," Rasmussen added, criticizing the "litany of loopholes" in the deal's language on the transition away from fossil fuels and subsidies for the polluting industry."The paragraph on abatement can be perceived in a way that underwrites further [fossil fuel] expansion," she warned, citing the section of the text that urges countries to accelerate "zero- and low-emission technologies" such as carbon capture. Critics have called theunproven technology a "lifeline for the fossil fuel industry."The deal also "recognizes that transition fuels can play a role in facilitating the energy transition while ensuring energy security"—a thinly veiled endorsement of the liquefied natural gas expansion underway in the U.S. and elsewhere that is imperiling climate progress."This is not the historical deal that the world needed: It has many loopholes and shortcomings," said Kaisa Kosonen, senior political adviser at Greenpeace International. "But history will be made if all those nearly 130 countries, businesses, local leaders, and civil society voices, who came together to form an unprecedented force for change, now take this determination and make the fossil fuel phaseout happen. Most urgently that means stopping all those expansion plans that are pushing us over the 1.5°C limit right now."
‘Transitional Fuels’ – Like Natural Gas – Key to Achieving Net-Zero Emissions, Say Global Ministers - A landmark agreement clinched by nearly 200 government ministers is calling for the world to begin slowing down the use of fossil fuels, but they left the door open for “transitional fuels,” such as natural gas, to continue to play a big role in the decades ahead. The 28th Conference of Parties (COP28) to the United Nations (UN) Framework Convention on Climate Change concluded nearly two weeks of talks on Wednesday in Dubai, United Arab Emirates (UAE). “With an unprecedented reference to transitioning away from all fossil fuels, the UAE consensus is delivering a paradigm shift that has the potential to redefine our economies,” UAE’s Sultan Ahmed Al-Jaber, who was president-designate of COP28, said. He is UAE’s minister of industry and advanced technology and also head of the Abu Dhabi National Oil
The Crude Market Posted an Outside Trading Day on Tuesday as it Rallied Over Monday's High - The crude oil market posted an outside trading day on Tuesday as it rallied over Monday’s high and below its previous low in a volatile trading session. The market posted a high of $71.96 in overnight trading on news that a Norwegian tanker in the Red Sea off the coast of Yemen was struck by a missile fired by Houthi rebels on Monday, raising concerns over shipping disruptions in the Middle East. The market later erased its gains and traded back towards Monday’s low of $70.35 ahead of the release of the Consumer Price Index data. The market breached its previous low and extended its losses to over $3 or 4.3% to a low of 68.22 in afternoon trading as U.S. consumer prices increased in November, offering more evidence that the Federal Reserve was unlikely to cut interest rates early next year. The crude market later retraced some of its sharp losses ahead of the close, with the January WTI contract settling down $2.71 cents at $68.61 and the February Brent contract settling down $2.79 at $73.24. The product markets ended the session sharply lower, with the heating oil market settling down 10.13 cents at $2.5074 and the RB market settling down 6.34 cents at $1.9797. A fuel tanker was struck by a missile as it navigated the Red Sea. At least 10 merchant ships have now been attacked or approached around Yemen since Israel’s war with Hamas broke out in October. Iran-backed Houthi militants are supporting Hamas in conflict. The 470-foot Strinda was hired by Eni SpA and heading to Italy. The Houthis said they targeted the vessel because it was destined for Israel and port information shows it was due to go there early next year. The Houthis have said they would attack ships that have links to or are sailing toward Israel, describing them as “legitimate targets.” Last week, Bloomberg reported that the U.S. has been in talks with its Gulf allies about potential military action against the Yemeni group in response to their increasingly brazen attacks on ships. Deputy U.S. National Security Adviser, Jon Finer, said that the Biden administration has “not ruled out the possibility of taking military action” against Houthis but the focus for now is on assembling a maritime coalition to secure the Red Sea.In its Short Term Energy Outlook, the EIA cut its 2023 world oil demand growth estimate by 30,000 bpd to 1.85 million bpd and its 2024 world oil demand growth forecast by 60,000 bpd to 1.34 million bpd. The EIA reported that world oil demand is forecast to total 101 million bpd in 2023 and 102.34 million bpd in 2024. Total world oil production in 2023 is forecast to increase by 1.63 million bpd to 101.62 million bpd and increase by 570,000 bpd to 102.19 million bpd in 2024. U.S. crude oil output is forecast to increase by 1.02 million bpd to 12.93 million bpd in 2023 and by 180,000 bpd to 13.11 million bpd in 2024. OPEC oil output is expected to fall by 780,000 bpd to 33.39 million bpd in 2023 and by 280,000 bpd to 33.11 million bpd in 2024. The EIA also estimated that total U.S. oil consumption in 2023 is forecast to increase by 130,000 bpd to 20.14 million bpd in 2023 and by 250,000 bpd to 20.39 million bpd in 2024. In regards to prices, the EIA forecast the Brent crude price will increase from an average of $78/barrel in December to an average of $84/barrel in the first half of 2024, partly driven by recently announced OPEC+ production cuts. It expects the Brent spot price will average $83/barrel next year, down $10/barrel from its previous forecast of $93/barrel.
WTI Holds Gains After Big Crude Draw; Biden Admin Unexpectedly Drains SPR - Oil prices are rebounding modestly today after yesterday's puke (though WTI is still on pace for its longest weekly losing streak since 2018), as OPEC forecast a significant shortfall in global oil supplies next quarter. It even raised forecasts for the crude needed from OPEC this quarter by 190,000 barrels a day, amid a weaker outlook for production from its rivals. "Speculators played a major role in this trend, cutting their bullish positions sharply while increasing short positions. The market dynamic was fueled by exaggerated concerns about oil demand growth, which negatively impacted market sentiment," the report stated. In theory, that puts world markets on track for a record shortfall of about 3.3 million barrels a day in the last three months of 2023. Such estimates are increasingly hard to reconcile with real-world data. “The oil market will likely struggle until the numbers confirm that OPEC+ have reduced production in the first quarter next year,” said Arne Lohmann Rasmussen, head of research at A/S Global Risk Management. That doubt may explain why key market gauges over the past few weeks have signaled supply continues to outpace global demand. Nearby contracts are trading below those with a later date - a bearish structure known as contango - and some spreads are at the weakest since late 2020. The bearish view could be upset if API's crude draw is confirmed by the official DOE data. API
- Crude -2.35mm (-1.2mm exp)
- Cushing +1.4mm
- Gasoline +5.8mm (+1.9mm exp)
- Distillates +300k (+400k exp)
DOE:
- Crude -4.26mm (-1.2mm exp)
- Cushing +1.23mm
- Gasoline +409k (+1.9mm exp)
- Distillates +1.49mm (+400k exp)
Crude stocks fell for the second week in a row with a notably bigger-than-expected draw of 4.26mm barrels. Cushing stocks rose for the 8th straight week and products saw modest builds...
Reports of Russia's Weekly Average Seaborne Crude Exports Increasing to its Highest Level Since Early July -oil market moved lower in overnight trading as it remained pressured by concerns over global demand and oversupply. The market was weighed by reports of Russia’s weekly average seaborne crude exports increasing to its highest level since early July and the EIA raising its 2023 forecast for U.S. crude oil supply and lowering its oil price forecast in its Short Term Energy Outlook on Tuesday. The crude market posted a low of $67.71 in overnight trading before it bounced off that level and retraced its losses. The market bounced higher, with OPEC blaming the latest crude price decline on “exaggerated concerns” about oil demand growth in its latest monthly oil market report. OPEC kept its forecast for world oil demand growth unchanged for 2024. The crude market extended its gains to over $1 following the release of the EIA’s weekly petroleum stock reports, which showed larger than expected draws in crude stocks of over 4.2 million barrels on the week. It later settled in a sideways trading range ahead of the Fed rate decision announcement. The market posted a high of $69.74 ahead of the close, following the Fed decision to leave interest rates unchanged and were pivoting towards a cut next year. The January WTI contract settled up 86 cents at $69.47 and the Brent market settled up $1.02 at $74.26. The product markets ended the session higher, with the heating oil market settling up 4.07 cents at $2.5481 and the RB market settling up 4.52 cents at $2.0249. OPEC said it remained cautiously optimistic about 2024 oil market fundamentals and blamed "exaggerated concerns" about demand for a recent decline in prices, as it stuck to its relatively high 2024 oil demand forecast. OPEC, in its monthly report said speculators had played a major role in pushing prices lower. It said "The market dynamic was fueled by exaggerated concerns about oil demand growth, which negatively impacted market sentiment." OPEC kept its forecast for world oil demand growth in 2023 steady at 2.46 million bpd. In 2024, OPEC sees demand growth of 2.25 million bpd, also unchanged from last month. The report also stated that OPEC produced 27.84 million bpd, down 57,000 bpd on the month, citing figures from secondary sources, as production in Iraq, Angola and Nigeria decreased. Saudi Arabia told OPEC that it cut production by 122,000 bpd to 8.818 million bpd in November. OPEC's Secretary General, Haitham Al Ghais, said that the oil industry is in jeopardy without adequate levels of investment. A U.S. defense official said the U.S. Navy destroyer Mason shot down a Houthi drone launched from Yemen that was headed in its direction as it responded to reports of an attack on a commercial vessel. The U.S. official said the Adrmore Encounter reported no damage or injuries and continued on its way. Maritime sources said a tanker in the Red Sea off Yemen's coast was fired on by gunmen in a speedboat and targeted with missiles, the latest incident to threaten the shipping lane after Yemeni Houthi forces warned ships not to travel to Israel. British maritime security firm Ambrey and other sources said a second vessel was also approached by the speedboat in the same area but was not attacked. The Iran-aligned Houthi group has sought to support their Palestinian ally Hamas in the Gaza war by firing missiles at Israel and threatening shipping in the busy Bab al-Mandab Strait, next to Yemen at the southern entrance to the Red Sea.
NYMEX WTI Nears $70 After Fed Pivots Towards Cuts in 2024 (DTN) -- West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) powered higher during Wednesday's afternoon session, with U.S. dollar rapidly losing ground against foreign currencies after the Federal Open Market Committee (FOMC) concluded its final policy meeting of 2023 with a clear signal towards easing monetary policy next year, sharply diminishing the odds of a demand-sapping economic slowdown in 2024. The median estimate of FOMC members in the newly released Summary of Economic Projections implies the central bank will cut the federal funds rate at least three times next year. This would bring the key borrowing rate between banks closer to 4.6% towards the end of 2024 from the current target range of 5.25% to 5.5%. The pivot was more dovish than many on Wall Street expected, triggering a major rally in U.S. equity markets and sell-off in the U.S. dollar index. U.S. dollar, which has an inverse relationship with WTI futures, nosedived 0.95% against a basket of foreign currencies to a 102.848 two-week low. Money markets upped their bets for a more aggressive rate-cutting cycle next year from five 0.25% cuts in 2024 to six cuts. In his news conference following the FOMC's policy decision, Federal Reserve Chairman Jerome Powell did not push back against the narrative of cutting interest rates, adding that "the committee has begun discussing reducing policy rate next year." The message of cutting interest rates next year comes despite November's inflation report showing inflation in services is proving sticky as we near the end of 2023. So-called "super-core inflation," which includes shelter and services categories, rose to 0.5% from October's 0.3% reading, signaling the consumer-powered sectors of the economy continue to outperform. In November, Americans paid more for rent, food, airline tickets and medical care services. Wednesday's weekly inventory report from the Energy Information Administration lent support for the oil complex, revealing a larger-than-expected drawdown from U.S. commercial crude oil inventories along with a modest build in gasoline supplies as refiners unexpectedly pulled back on run rates. Gasoline stockpiles rose a modest 400,000 barrels (bbl) during the week ended Dec. 8 compared with expectations for a 1.2 million bbl increase as demand for motor fuel improved to a five-week high 8.859 million barrels per day (bpd). On a four-week average basis, gasoline demand averaged 8.5 million bpd, which is 2.5% above last year's consumption rate. Distillate fuel consumption, however, continues to disappoint, remaining below 4 million bpd for a third consecutive week through Dec. 8, which is just below year-ago levels. Distillate stockpiles were built by a larger-than-expected 1.5 million bbl in the reviewed week following a combined 6.5 million bbl build in the prior two weeks. Jet fuel stocks fell 1.1 million bbl. Commercial oil stockpiles, meanwhile, decreased by 4.3 million bbl during the week ended Dec. 8, marking the second consecutive weekly draw. At 440.8 million bbl, U.S. crude oil inventories are about 2% below the five-year seasonal average. At settlement, WTI January futures on NYMEX gained to $69.47 bbl, up $0.86, with the international crude benchmark Brent contract for February advancing $1.02 to $74.26 bbl. NYMEX RBOB January futures added $0.0452 to $2.0249 gallon and NYMEX ULSD futures for January delivery gained $0.0407 to $2.5481 gallon.
Oil Markets Rally as Dollar Weakens and IEA Ups Demand Forecast for 2024; WTI and Brent Settle Higher - The crude market on Thursday extended Wednesday’s gains and continued to retrace its previous losses. The market was well supported by a weaker dollar and as the IEA increased its oil demand forecast for next year. The dollar fell to a new four month low after the U.S. Federal Reserve’s projections indicated the interest rate hike cycle has ended and lower interest rates are coming in 2024. The January WTI contract posted a low of $69.54 in overnight trading before it bounced off that level and never looked back. The market retraced more than 38% of its move from a high of $79.60 to a low of $67.71 as it posted a high of $72.46 early in the afternoon. It was well supported after the IEA raised its world oil consumption forecast for 2024 by 130,000 bpd from its previous forecast to 1.1 million bpd. The market traded mostly sideways ahead of the close. The January WTI contract settled up $2.11 at $71.58 and the February Brent contract settled up $2.35 at $76.61. The product markets ended the session sharply higher, with the heating oil market settling up 4.32 cents at $2.5913 and the RB market settling up 9.39 cents at $2.1188. The IEA raised its global oil demand growth forecast for next year despite an expected economic slowdown, citing an improvement in the outlook for the United States and lower oil prices. Despite the upgrade, there is still a sizeable gap between the IEA, which represents industrialized countries, and producer group OPEC over 2024 demand prospects. The IEA estimates that world consumption will increase by 1.1 million bpd in 2024, up 130,000 bpd from its previous forecast. The IEA said the revision reflects "a somewhat improved GDP outlook compared with last month's report." It added "Falling oil prices act as an additional boost to oil consumption." The IEA cut its forecast for oil demand growth in 2023 by 90,000 bpd to 2.3 million bpd. China accounts for 80% of this year’s global increase. The IEA said the extension of the OPEC+ supply cuts had done little to support prices and that higher output in other nations would act as a headwind. In 2024, supply from producers outside OPEC+ is set to increase by 1.2 million bpd, a slowdown from this year’s 2.2 million bpd growth led by the U.S. It forecast global demand for OPEC crude plus withdrawals from stocks will average 28.2 million bpd in 2024 and fall to 27.7 million bpd in the first half of 2024. The IEA estimated OPEC pumped 28.1 million bpd in November or 400,000 bpd more than the demand it expects for OPEC crude in the first half of next year. The British maritime security company Ambrey said it is aware of reports that a group claiming to be the "Yemeni Navy" is demanding a vessel sailing in the Bab al-Mandab Strait change course to head for Yemen. Ambrey and the United Kingdom Maritime Trade Operations agency are investigating the incident and another one in the Indian Ocean off Yemen.
Oil Gains on Week as Sentiment Turns Bullish on Fed Pivot -- West Texas Intermediate futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange edged lower in the afternoon session Friday. Futures were under pressure from a rebounding U.S. dollar index, although all petroleum contracts posted their first weekly gains since late October, driven by risk-on sentiment in financial markets after Federal Reserve signaled easing monetary conditions next year. The U.S. dollar rebounded off Thursday's 101.765 four-month low on Friday, strengthening 0.6% to 102.548 following hawkish comments from the President of the New York Federal Reserve John Williams indicating near-term rate cuts are still not up for discussion among central bank officials. "The rate cut issue is not the main question before the Fed. It's premature to be thinking about a March rate cut," said Wiliams in an interview with CNBC. Investors slightly pared back odds for a March rate cut but have still priced in a 140-basis-point cut in the federal funds rate for 2024. The median estimate of Federal Open Market Committee members in the newly released Summary of Economic Projections implies a 75-basis-point rate cut next year -- a sharp pivot from the recent narrative of "higher-for-longer." On the macroeconomic data front, U.S. industrial production expanded more than expected in November, helped by the end of the United Auto Workers' strike against "Detroit's Big Three." Auto output jumped 7.1%, the Federal Reserve said, while industrial production rose 0.2%. Atlanta Fed's GDPNow tool upgraded its economic growth projections on Thursday, showing fourth-quarter growth now at 2.6% from 1.2% midweek following the most recent economic data releases. Retail sales posted surprise growth in November, expanding by 0.3% compared to a negative 0.1% in the prior month, underscoring the strength of the American consumer. In the Eurozone, macroeconomic data paints a less rosy picture, with manufacturing across the 20-country bloc falling into deeper recession and services broadly contracting. The downturn was led by France, where businesses reported the sharpest reduction in activity since March 2013, due to accelerating rates of contraction in both manufacturing and services. However, output also fell at a sharp and accelerating rate in Germany amid steepening losses for both goods and services. The manufacturing sector in Germany -- the bloc's largest economy -- remained in recession territory for a sixth successive month in December at 43.1, with 50 separating growth from contraction. "Once again, the figures paint a disheartening picture as the Eurozone economy fails to display any distinct signs of recovery. On the contrary, it has contracted for six straight months. The likelihood of the Eurozone being in a recession since the third quarter remains notably high," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. Despite a rather dismal economic backdrop, the European Central Bank concluded the final policy meeting of the year without any indication of potential rate cuts in 2024. In contrast, ECB President Christine Lagarde struck a hawkish tone when addressing the questions surrounding the easing of monetary conditions. "We should absolutely not lower our guards ... the reason is the domestic inflation driven by wage costs is not budging," said Lagarde on Thursday. At settlement, NYMEX WTI futures for January delivery slipped $0.15 per barrel (bbl) to $71.43 per bbl, and the international crude benchmark Brent February futures settled little changed at $76.55 per bbl. NYMEX RBOB January futures gained $0.0182 to $2.1370 per gallon, and NYMEX ULSD January contract advanced $0.00295 to $2.6208 per gallon.
The Armenia-Azerbaijan Conflict and the Pipelines That Run Through It -- Officials in Washington are doubling down on their efforts to create a new energy corridor that runs through the Caucasus, a major transit route for trade and energy that connects Europe and Asia.Focusing on Armenia and Azerbaijan, two countries at odds over land and history, officials in Washington hope to link the two countries with energy pipelines, despite Azerbaijan’s recent incursion into Nagorno-Karabakh, which resulted in more than 100,000 ethnic Armenians fleeing the territory in September.“A transit corridor built with the involvement and consent of Armenia can be a tremendous boon to states across the region and to global markets,” State Department official James O’Brien told Congress in November.For decades, U.S. officials have pursued geopolitical objectives in the Caucasus. Viewing the region as a strategically important area that connects Europe and Asia, they have sought to integrate the region with Europe while pulling it away from Iran and Russia, both of which maintain close ties to the region.“The Caucasus is tremendously important as a crossroads between Europe, Asia, and the Middle East,” Senator James Risch (R-ID) said in a statement last year. “Trade agreements, energy deals, infrastructure, and investment all have the potential to better integrate the region within the transatlantic community.”At the heart of U.S. planning is Azerbaijan. Given the country’s extensive energy resources, especially its oil and natural gas, U.S. officials have seen Azerbaijan as the key to creating a U.S.-led Caucasus that will help Europe transition away from its dependence on Russian energy.“We have been hard at work, along with our European colleagues, over the course of the last decade, trying to help Europe slowly wean itself off of dependence on Russian gas and oil,” Senator Christopher Murphy (D-CT) explained at a hearing in September. “Part of that strategy has been to deliver more Azerbaijani gas and oil to Europe.”Another reason for the U.S. focus on Azerbaijan is its location. With Russia to the north, the Caspian Sea to the east, and Iran to the south, U.S. officials have seen the country as “the epicenter of Eurasia energy policy,” as U.S. diplomats once described it. The United States has worked to position Azerbaijan as the starting point for an east-west energy corridor that benefits the West and deters a north-south corridor that would work to the advantage of Iran and Russia.For the United States and its European allies, the Baku-Tbilisi-Ceyhan (BTC) pipeline demonstrates the possibilities. Since 2006, the BTC pipeline has carried oil from Azerbaijan to the Mediterranean Sea, where it has been shipped to global energy markets. The pipeline is controlled by a consortium of energy companies headed by BP, the British oil giant.“We need that to keep functioning,” State Department official Yuri Kimtold Congress in September.From the U.S. perspective, another major geopolitical achievement has been the Southern Gas Corridor. The corridor, which combines three separate pipelines, runs from Azerbaijan all the way to Europe. Since its initial deliveries of natural gas to Europe in 2020, the corridor has been critically important to keeping Europe supplied with energy during the war in Ukraine.“That Southern Gas Corridor is extremely important for ensuring that there is energy diversity for Turkey, Greece, Bulgaria, potentially Albania, and definitely Italy, and possibly into the Western Balkans,” Kim said. “We cannot underestimate how important that is.”
Number Of Attacks On US Bases In Iraq & Syria Pushes Past 80 --US military bases in the Middle East reportedly came under Fresh attack again on Friday, pushing the total number of attacks since mid-October past 80 incidents."There were four additional attacks on U.S. forces in Iraq and Syria since yesterday, according to a DOD official. Now 82 overall since Oct. 17," Politico's Pentagon correspondent Lara Seligman wrote. Some media sources have put the figure as high as 85.While the fresh attack hasn't been widely reported in Western media, Iran's Mehr News Agency is among those regional sources claiming that some four American bases in Syria were hit.And one regional monitor OSINTdefender said, "The Attacks on U.S. Forces in the Middle East today has been Never-ending, with at least 10 Rocket and Drones Attacks reported against 6 different Bases in both Iraq and Syria in the last 12 Hours."In a Thursday briefing Pentagon spokesperson Sabrina Sing had said this trend of attacks had lessened since the end of the weeklong Israel-Hamas truce, and that the US is hoping things stay calm in the region."In terms of the attacks on our forces, I think it's important to remember that it's good that we have not seen attacks on our forces in the last 24 hours," Singh said. "We would like to see that continue."The Biden administration has long asserted that it "won't hesitate" to defend American forces in the region; however, recent reporting in Politico has suggested the US is intentionally refraining from a response to Iran-backed Houthi aggression in the Red Sea, on fears of sparking a broader war.This week for the first time since Oct.7, the US Embassy in Baghdad came under multiple missile salvos. Damage was reported but no injuries.Likely, attacks will continue to intensify especially in Syria - given that both Syrian national and Iranian forces want to squeeze American forces out of the illegal occupation of the country's oil and gas regions. There have been dozens of US troop injuries, with all of them reported as minor.
US Embassy in Baghdad Comes Under Mortar Fire - The US embassy in Baghdad came under mortar fire on Friday as US assets in Iraq and Syria continue to be targeted over US support for Israel’s onslaught in Gaza.According to Reuters, seven mortar rounds landed in the sprawling embassy. US officials said there was minor damage but no casualties. The incident was the first time the embassy, located in Baghdad’s Green Zone, came under attack since October 7.On the same day, there were at least five other attacks on US bases in Iraq and Syria. Three targeted US forces in Syria, and two hit the Ain al-Asad Airbase in western Iraq. An umbrella group of Iraqi Shia militias, the Islamic Resistance of Iraq, claimed a total of 11 attacks on US forces on Friday, but not all of them were confirmed. There have been more than 80 attacks on US forces in the two countries since they started on October 17, and the US has launched several rounds of airstrikes against Shia militias.Secretary of Defense Lloyd Austin spoke with Iraqi Prime Minister Mohammed Shia al-Sudani about the attack on the US embassy and the general tensions in the region. Austin singled out two Iran-aligned Shia militias that he said were responsible for most of the attacks, Kataib Hezbollah and Harakat al-Nujaba.Al-Sudani had previously criticized the US for launching airstrikes in Iraq without government approval. According to a statement from his office, in the call with Austin, al-Sudani “emphasized the security services’ capability to pursue and expose those involved in attacks, cautioning against a direct response without government approval.”Kataib Hezbollah said on Saturday that US troops in Iraq would continue to be targeted until they leave the country. “Our jihadist operations against the American occupation will continue until the last of its soldiers are removed from the land of Iraq,” a spokesman for the group said, according to Rudaw.
Houthis Claim Missile Attack on Norwegian-Flagged Ship in Red Sea - Yemen’s Houthis have taken credit for a missile attack on a Norwegian-flagged tanker in the Red Sea, the group’s latest operation aimed at disrupting shipping in response to Israel’s assault on Gaza.The Houthis, formally known as Ansar Allah, claimed the ship, the Strinda, was headed to Israel, while the vessel’s operator and ship tracking data said it was bound for Italy. The attack came after the Houthis warned all ships in the area that were sailing to Israel were potential targets.The Strinda was struck as it passed through the Bab al-Mandeb Strait, which separates Yemen and East Africa. Houthi spokesman Brig. Gen. Yahya Saree said Houthi forces fired on the ship after it “rejected all warning calls.” (Map of the region that shows the Bab al-Mandeb Strait) According to US Central Command, the Strinda reported damage but no casualties. CENTCOM said there were no US ships in the area at the time of the attack but that the US Navy destroyer USS Mason responded to the Strinda’s SOS call and was “rendering assistance.”The latest Houthi attack on shipping comes as Israel is warning it will take action against the group if the US and its allies do not. Reports have said the Biden administration was not planning direct strikes on the Houthis, but that could change as the attacks continue.
US Threatens to Kill Yemen Peace Deal Over Houthi Attacks on Red Sea Shipping -The US is threatening to kill a peace plan for Yemen that was negotiated between the Houthis and the Saudis if the Houthis continue attacking shipping in the Red Sea, which the group has been doing in response to Israel’s assault on Gaza.The Guardian reported that the Houthis and Saudis have reached a peace deal that could satisfy all the major parties involved, even the Southern Transition Council, a UAE-backed group that wants to see the restoration of North and South Yemen as two separate countries, as they were before Yemen was unified in 1990.The peace plan has been presented to the UN, but the details have not been disclosed to the public. According toThe Guardian, the agreement involves three phases, and a potential US plan to redesignate the Houthis as a “foreign terrorist organization” could prevent the first phase from being implemented.The first phase involves depositing money into accounts for the payment of civil salaries for workers in Houthi-controlled areas and fully opening airports and sea ports that have been under blockade since 2015. A US terrorist designation would mean any entity that does business with the Houthis would be subject to US sanctions, making both steps impossible to implement without the parties involved facing penalties.The White House said last month that it was considering redesignating the Houthis as terrorists in response to the attacks in the Red Sea and Houthi missile launches toward Israel. The Trump administration labeled the Houthis as terrorists in January 2021, but the move was quickly reversed by President Biden due to warnings from aid groups that it would doom food-deprived Yemenis living in Houthi-controlled areas.
Israel Orders Ports To Hide Online Shipping Schedules Due To Yemen Threat - Israel’s National Security Council issued an “urgent instruction” on Tuesday ordering Israeli ports to remove information on the arrival and departures of ships from their websites, Globes newspaper reported. The directive comes in light of the recent Yemeni attacks on Israeli shipping and vessels headed towards Israel. "As soon as it becomes clear in the future that there is no longer a problem that must be taken into account, it will be possible to return to the previous situation immediately," Israeli officials told Globes. The National Security Council’s instruction came the same day as a Yemeni naval attack, carried out by Yemen-based Houthis, on a Norweigan vessel north of the Bab al-Mandab strait. The ship was carrying oil and was en route to Italy. However, the Norwegian ship was scheduled to dock in Israel’s Ashdod port next month. "Before attacking the STRINDA, the Houthis would have been able to discover that the Norwegian ship was calling at Ashdod through a simple Internet search," Globes writes. Ansarallah and Yemen’s Armed Forces have launched numerous drone and missile attacks on Israeli targets since the Gaza-Israel war began in October, particularly on the southern-occupied port of Eilat. As part of its operations in solidarity with Palestine, Sanaa’s forces have declared war on Israeli shipping in the Red and Arabian seas and elsewhere. Since November 19, Yemen has seized one Israeli-linked ship and has launched drone attacks against at least two others. The missile attack on the Norweigan STRINDA ship comes days after Yemeni Armed Forces spokesman Yahya Saree announced that Yemen will prevent the passage of any vessel headed for Israel in the Red and Arabian Seas if food and medicine do not enter the Gaza Strip. The announcement was a response to the US veto of a UN resolution calling for a ceasefire in Gaza. As a result of Yemen’s naval operations, shipping companies, including Israeli firm Zim and others, have resorted to price hikes and costly reroutes around Africa.
US Warship Responds As Houthi Speedboat Terrorizes Several Commercial Vessels In Red Sea - There's been a fresh attack on commercial shipping in the Red Sea on Wednesday, which reportedly resulted in a US warship intervening and firing on an inbound drone believed launched by Yemen's Houthi rebels.The American warship had responded to reports that the oil and chemical tanker Marshall Islands-flagged Ardmore Encounter had come under attack. The Ardmore Encounter had been traveling north toward the Suez Canal in the Red Sea from India at the time.The vessel, which had a security crew aboard, reported an "exchange of fire" with a speedboat some 55 nautical miles (or just over 100km off Yemen's main port of Hodeidah, according to emerging Associated Press reporting.The approaching speedboat claimed to be the Yemeni Navy and ordered the commercial vessel to halt, but a nearby warship identified as a "coalition" naval vessel told the Ardmore Encounter to maintain its course. When the hostile boat approached within 300 meters, it unleashed small arms fire.During the incident, a responding US warship shot down a suspected Houthi drone which was inbound. According to regional sources and breaking reports, the hostile speedboat is harassing additional commercial vessels in the area: Shortly after the tanker incident, Ambrey said, the speedboat approached a Malta-flagged bulk carrier 52 nautical miles off Hodeidah’s shores, adding that it would provide updates as relevant.Britain’s Maritime Trade Operations (UKMTO) agency says it is closely monitoring the situation after another incident involving armed men on a speedboat making a hostile approach against two additional vessels transiting off Yemen.This marks at least half a dozen serious attacks against commercial shipping in the Red Sea. Yemen's Iran-backed Houthis have threatened to close the whole area to shipping due to the ongoing Israeli onslaught in Gaza. The group weeks ago 'declared war' on Israel and has sent several ballistic missiles toward Israel.
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