gasoline output at 35 month low w/ supplies at 35 month high & demand at a 54 week low, DUC well backlog at 4.7 months

US gasoline production at a 35 month low, gasoline supplies at 35 month high; gasoline demand at a 54 week low, distillates production at a 55 week low, after Gulf Coast refineries freeze; DUC well backlog unchanged at 4.7 months.

US oil prices rose for a fifth time in seven weeks ​f​ollowing ​Ukrainian drone attacks on Russian Baltic Sea ​fuel exports, Houthi missile attacks on shipping in the Red Sea, and a larger than expected draw from US crude supplies…after rising 1% to $73.41 per barrel last week on escalating Mideast violence and on cold weather damage to US production and refining, the contract price for the benchmark US light sweet crude for February delivery rose more than 2% at the start of trading on Monday in reaction to a drone attack on a Russian fuel port in the Gulf of Finland, impacting their crude and petroleum products flows to Asia, and held on to those early gains in spite of news that production at Libya's Sharara oilfield had resumed to settle $1.78, or 2.4% higher at $75.19 a barrel as trading in the February oil contract expired, while the more active March oil contract settled up $1.51 at $74.76 a barrel…with markets now quoting the contract price for the US benchmark crude for March delivery, oil prices pulled back in early trading Tuesday despite a fresh series of joint U.S. and U.K. strikes against Houthi targets in Yemen​, and finished 39 cents lower at $74.37 a barrel as traders focused on rebounding crude output ​f​rom frozen fields in North Dakota and ​on rising supplies from Libya and Norway, rather than risks to supply posed by conflicts in Europe and the Middle East…oil prices traded lower in on a softer US dollar early Wednesday, despite an American Petroleum Institute report that US commercial oil supplies had tumbled by more than four times ​what ​h​ad been expected, then rallied to a high of $75.83 after an EIA report confirmed a larger than expected draw from US crude stocks of over 9 million barrels, and held on to half its gains to settle 72 cents higher at at $75.09 a barrel, as the EIA report also showed that US oil production had dropped a million barrels barrels per day due to the arctic air outbreak…US oil prices continued higher early Thursday, supported by the larger than expected draw from crude stocks and by news of a Chinese cut in reserve requirements for banks in​tended to spur growth, then rallied to finish $2.27 or 3% higher at $77.36 a barrel after Houthi militants in Yemen claimed they had hit a U.S. warship in the Bab el-Mandeb Strait….after an early consolidation, oil prices rallied again Friday, propelled by stronger-than-expected macroeconomic data in the US and signs of deeper fiscal stimulus in China that boosted expectations for demand gains, and settled 65 cents higher at an eight week high of $78.01 a barrel as economic stimulus from China, stronger-than-expected 4Q GDP growth in the U.S., cooling U.S. inflation data, ongoing geopolitical risks, and the larger-than-expected drop in U.S. commercial crude supplies combined to wedge prices higher….oil prices thus finished the week 6.3% higher, while the March oil contract, which had closed the prior week at $73.25, settled with a 6.5% gain at a 13 week high...

Meanwhile, natural gas prices rose for the 5th ​time out of six​ week​s, ​o​n a near record withdrawal of gas from storage and ​on forecasts for slightly cooler weather heading into February…after falling 24% to $2.519 per mmBTU last week, the largest price drop in 3 years, ​​on forecasts for a national warming trend and a lower than expected withdrawal of gas from storage, the contract price for natural gas for February delivery opened 15 cents lower on Monday, knocked down over the weekend by a bearish adjustment to weather forecasts to close out the month, and struggled back to close 10.0 cents lower at $24​.19 per mmBTU, as forecasts had doubled down on warmer weather into February…natural gas prices were down another 8 cents at the open on Tuesday, as a mild temperature outlook stretching into early February continued to put pressure on prices, but mounted a steady ascent throughout the day to settle 3.1 cents higher at $2.450 per mmBTU, as traders awaited the expected report of massive pull ​of gas from storage on Thursday….prices opened at $2.595 on Wednesday, nearly fifteen cents above Tuesday’s closing price, following a modest bullish shift in forecasts overnight, and held those gains to settle 19.1 cents higher at $2.641 per mmBTU, as traders eyed a potentially record-challenging storage report following the widespread arctic weather outbreak last week…natural gas prices open eleven cents higher on Thursday, but the rally quickly gave way to selling as the storage withdrawal met expectations, and gas prices settled 7.0 cents lower $2.571 per mmBTU, as a near record draw of gas from storage failed to boost prices…February natural gas prices slid nearly 15 cents early Friday on an outage of a Freeport Texas LNG export train, but rallied in thin volumes​ ​​towards the contract expiration to settle 14.1 cents higher at $2.712 per mmBTU on forecasts for higher demand in two weeks when the weather turns slightly cooler…trading in February natural gas prices thus ​f​inished ​this week's trading 7.7% higher, while the March​ natrual gas contract, which will be the basis for trading next week, actually ended 3.4% lower at $2.17 per mmBtu...

The EIA's natural gas storage report for the week ending January 19th indicated that the amount of working natural gas held in underground storage in the US fell by 326 billion cubic feet to 2,856 billion cubic feet by the end of the week, which still left our natural gas supplies 110 billion cubic feet, or 4.0% above the 2,​7​46 billion cubic feet that were in storage on January 19th of last year, and 142 billion cubic feet, or 5.2% more than the five-year average of 2,714 billion cubic feet of natural gas that were typically in working storage as of the 19th of January over the most recent five years…the 326 billion cubic foot withdrawal from US natural gas working storage for the cited week was close to the average 321 billion cubic feet withdrawal from supplies that had been forecast by analysts polled by Reuters, but was more than triple the 86 billion cubic feet that were pulled from natural gas storage during the corresponding ​t​hird week of January 2023, and was more than double the average 148 billion cubic feet withdrawal from natural gas storage that has been typical for the same early winter week over the past 5 years…

The Latest US Oil Supply and Disposition Data from the EIA -

US oil data from the US Energy Information Administration for the week ending January 19th showed that after a big drop in production from US wells and an even larger drop in our oil imports, we needed to pull oil out of our stored commercial crude supplies for the sixth time in eight weeks, and for the 20th time in the past 32 weeks, even after a big drop in our oil refining….Our imports of crude oil fell by an average of 1,840,000 barrels per day to average 5,580,000 barrels per day, after rising by an average of 1,179,000 barrels per day the prior week, while our exports of crude oil fell by 595,000 barrels per day to average 4,434,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 1,146,000 barrels of oil per day during the week ending January 19th, 1.245,000 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 from unfinished oils averaged 693,000 barrels per day, while during the same ​w​eek, production of crude from US wells decreased by a rounded 1,000,000 barrels per day to 12,300,000 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 rounded total of 14,139,000 barrels per day during the January 19th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,276,000 barrels of crude per day during the week ending January 19th, an average of 1,376,000 fewer barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period the EIA’s surveys indicated that a rounded average of 1,188,000 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 January 19th appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production was 51,000 barrels per day more than what our oil refineries reported they used during the week…To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a rounded [-50,000] barrel per day figure onto 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 or omission of that size in the week’s oil supply & demand figures that we have just transcribed...

This week's rounded 1,188,000 barrel per day average decrease in our overall crude oil inventories came as 1,319,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while 131,000 barrels per day were being added to our Strategic Petroleum Reserve, the eighth SPR increase in fifteen weeks. following nearly continuous withdrawals over the prior 39 months... Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to 6,534,000 barrels per day last week, which was still 6.3% more than the 6,207,000 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 1,000,000 barrels per day lower at 12,300,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was a rounded 1.000,000 barrels per day lower at 11,900,000 barrels per day, while Alaska’s oil production was 8,000 barrels per day lower at 426,000 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 was 6.1% below that of our pre-pandemic production peak, but still 26.8% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.

US oil refineries were operating at 85.5% of their capacity while processing those 15,276,000 barrels of crude per day during the week ending January 19th, down from their utilization rate of 92.6% the prior week, and a below normal utilization rate for ​m​id January, ​apparently due to the arctic cold that penetrated to the Gulf Coast ... the 15,276,000 barrels per day of oil that were refined this week were still 2.0% more than the 14,981,000 barrels of crude that were being processed daily during week ending January 20th of 2023 (after the refinery-freeze-offs following the Christmas 2022 blizzard), but 9.4% less than the 16,857,000 barrels that were being refined during the prepandemic week ending January 17th, 2020, when our refinery utilization rate was at 90.5%..

With the big decrease in the amount of oil being refined this week, gasoline output from our refineries was also much lower, decreasing by 1,040,000 barrels per day to a 35 month low of 8,325,000 barrels per day during the week ending January 19th, after our refineries' gasoline output had decreased by 291,000 barrels per day during the prior week. This week’s gasoline production was 5.7% less than the 8,831,000 barrels of gasoline that were being produced daily over the storm impacted week of last year, and 12.7% less than the gasoline production of 9,535,000 barrels per day during the prepandemic week ending January 17th 2020....at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 402,000 barrels per day to a 55 week low of 4,500,000 barrels per day, after our distillates output had decreased by 265,000 barrels per day during the prior week. Even with this week’s decrease, our distillates output was 2.0% less than the 4,892,000 barrels of distillates that were being produced daily during the week ending January 20th of 2023, and was 9.2% less than the 4,954,000 barrels of distillates that were being produced daily during the week ending January 17th 2020..

Even with this week's decrease in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the 9th time in ten weeks, increasing by 4,912,000 barrels to a 35 month high of 252,977,000 barrels during the week ending January 19th, after our gasoline inventories had increased by 3,082,000 during the prior week. Our gasoline supplies rose this week despite the ​big drop in production because the amount of gasoline supplied to US users fell by 389,000 barrels per day to a 54 week low of 7,880,000 barrels per day, and because our exports of gasoline fell by 380,000 barrels per day to 717,000 barrels per day, and because our imports of gasoline rose by 79,000 barrels per day to 628,000 barrels per day…Even after twenty-seven gasoline inventory withdrawals over the past forty-eight weeks, our gasoline supplies were 9.0% above than last January 20th's gasoline inventories of 232,022,000 barrels, and about 1% above the five year average of our gasoline supplies for this time of the year…

With this week's decrease in our distillates production, our supplies of distillate fuels fell for the first time in nine weeks, decreasing by 1,417,000 barrels to 133,336,000 barrels over the week ending January 19th, after our distillates supplies had increased by 2,370,000 barrels to a 124 week high during the prior week. Our distillates supplies fell this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 139,000 barrels per day to 3,784,000 barrels per day, and because our exports of distillates rose by 87,000 barrels per day to 1,120,000 barrels per day, while our imports of distillates rose by 86,000 barrels per day to 201,000 barrels per day...With 24 inventory decreases over the past forty-five weeks, our distillates supplies at the end of the week were 15.7% above the 115,270,000 barrels of distillates that we had in storage on January 20th of 2023, but were still about 4% below the five year average of our distillates inventories for this time of the year...

Finally, after the big drops in our oil production and our imports, our commercial supplies of crude oil in storage fell for the 16th time in twenty-six weeks and for the 29th time in the past year, decreasing by 9.233,000 barrels over the week, from 429,911,000 barrels on January 12th to 420,678,000 barrels on January 19th, after our commercial crude supplies had decreased by 2,492,000 barrels over the prior week... With that ​big decrease, our commercial crude oil inventories slipped to about 4% below the most recent five-year average of commercial oil supplies for this time of year, but were still about 28% above the average of our available crude oil stocks as of the third weekend of January 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 January 19th were 6.2% less than the 448,548,000 barrels of oil left in commercial storage on January 20th of 2023, but 1.1 % more than the 416,190,000 barrels of oil that we still had in storage on January 21st of 2022, while still 11.7% less than the 476,653,000 barrels of oil we had in commercial storage on January 22nd of 2021, after 2020’s pandemic precautions had left a lot of oil unused…

This Week's Rig Count

In lieu of a detailed report on the rig count, we are again just including below a screenshot of the rig count summary from Baker Hughes...in the table below, the first column shows the active rig count as of January 26th, the second column shows the change in the number of working rigs between last week’s count (January 19th) and this week’s (January 26th) count, the third column shows last week’s January 19th 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 27th of January, 2023...

DUC well report for December

Tuesday of last week saw the release of the EIA's Drilling Productivity Report for January, which included the EIA's December data on drilled but uncompleted (DUC) oil and gas wells in the 7 most productive shale regions (click tab 3)....that data showed a decrease in uncompleted wells nationally for the 39th time out of the past 42 months, even though drilling of new wells increased in December while completions of drilled wells decreased and hence remained well below the average pre-pandemic levels....for the 7 sedimentary regions covered by this report, the total count of DUC wells decreased by 64 wells, falling from a revised 4,438 DUC wells in November to 4,374 DUC wells in December, which was also 18.0% fewer DUCs than the 5,337 wells that had been drilled but remained uncompleted as of the end of December of a year ago...this month's DUC decrease occurred as 862 wells were drilled in the seven regions that this report covers (representing 87% of all U.S. onshore drilling operations) during December, up by 9 from the 853 wells that were drilled in November, while 926 wells were completed and brought into production by fracking them, down from the 944 well completions seen in November, but up from the 904 completions seen during the storm impacted December of last year....at the December completion rate, the 4,374 drilled but uncompleted wells remaining at the end of the month represents a 4.7 month backlog of wells that have been drilled but are not yet fracked, same as the DUC well backlog of a month ago, while up from the eight year low of 4.6 months of last January, on a completion rate that is now more than 20% below 2019's pre-pandemic average...

the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, was unchanged from a month earlier at 768 DUC wells at the end of December, as 79 new wells were drilled into the Marcellus and Utica shales during the month, while 79 of the already drilled wells in the region were fracked...

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Commission claims court can’t review decisions on drilling under Ohio park and wildlife areas - Ohio Capital Journal -- An Ohio commission is arguing its decisions last fall to allow oil and gas drilling under a state park and two wildlife areas are final and cannot be appealed. Environmental groups challenging the Ohio Oil & Gas Land Management Commission say it failed to follow state law when it approved land parcels for leasing of drilling rights at Salt Fork State Park, Zepernick Wildlife Area and Valley Run Wildlife Area. Among other things, state law says the commission must consider nine factors in reaching its decisions, including environmental impacts, consequences for visitors or users of state lands, public comments or objections, economic issues, and others. State lawyers have filed a motion to dismiss, claiming the court can’t review the decisions because the statute doesn’t expressly provide for judicial review. The plaintiffs seeking to overturn the decisions, though, say the commission’s actions affect their rights and amounted to licensing, which can be appealed under the Ohio Revised Code. “Our courts play a critical role in overseeing agency decisions to make sure agencies do not abuse the discretion and power the law gives them. Our lawsuit asks that the court provide that critical oversight here,” said Megan Hunter, an attorney with Earthjustice, on behalf of the plaintiffs. Those environmental groups are Save Ohio Parks, the Ohio Environmental Council, the Buckeye Environmental Network and Backcountry Hunters and Anglers. “Ohio statute has set up a system where an oil and gas company can hand-select those public lands it wants to lease and ask the commission for permission to move forward with the process for it to do so,” Hunter added. “The law places the commission in a gatekeeping role, making them the ones to determine whether an oil and gas company should be able to lease a particular state park or wildlife area.” And while a winning bidder has to apply for permits to drill, Ohioans generally have no right to appeal permitting decisions, she said. “Therefore, the appeal from the nominations is when there is an opportunity for judicial review of the decision to drill under these state lands.” Commission chair Ryan Richardson admitted that the commission would need to consider the nine statutory criteria in a Nov. 2 affidavit filed in a related case. Yet the commissioners did not discuss all nine factors at the public meeting where they voted to grant the proposals. Nor did they provide any written opinion explaining how they weighed the nine criteria. “This is not the way justice is supposed to happen in Ohio or anywhere else in a democracy,” said Melinda Zemper, a member of Save Ohio Parks.The case is further complicated by the commission’s insistence on moving ahead before the Ohio Attorney General’s office resolves an investigation into claims about allegedly falsified comments that favored fracking under state parks and wildlife areas. “The [commission’s] decision to approve fracking in Ohio parks undermines core principles of good governance, for it occurred despite an ongoing investigation and enormous public pushback,” said Chris Tavenor, associate general counsel and managing director of democracy policy for the Ohio Environmental Council. The decisions also mean Ohio will be a less healthy place to live and have more greenhouse gas emissions, he said. As of 2021, the Energy Information Administration ranked Ohio fifth among states for total carbon dioxide emissions, he noted. The commission’s failure to let citizens testify at its meetings also undermined the trust of Ohio citizens and denied them their rights to participate in the process, said Loraine McCosker, a co-founder and member of Save Ohio Parks. A separate lawsuit challenges the constitutionality of House Bill 507, which jump-started the challenged decisions, but where citizen groups had no chance to testify against its natural gas provisions after they were added through last-minute amendments in late 2022. The appeal doesn’t automatically stay the public bidding period for the drilling rights, which began Jan. 3 and runs through Feb. 4. Spokesperson Andy Chow said the commission does not comment on pending litigation. However, he noted, the commission is currently working to schedule its next meeting to decide on the winning bids. Once companies have secured drilling rights, they would be free to apply for permits to drill wells. Ohio law generally provides up to 21 days for review of those applications, except for urban areas, where a 30-day review period applies. The average review time generally has been running 15 to 18 days, Chow said. So, barring any stay from a court, well construction could start as early as this spring.

Antis Have No Right to Appeal Decision to Drill Under State Parks - Marcellus Drilling News --Anti-fossil fuel fanatics in Ohio (and beyond) still can’t accept that they lost a battle to block drilling under (not on) Ohio state-owned land, including some Ohio state parks. In November, the Ohio Oil & Gas Land Management Commission (OGLMC) met in a public forum and voted to allow shale drilling under three state-owned tracts of land: (1) all 20,000 acres of Salt Fork State Park in Guernsey County, (2) more than 300 acres of Valley Run Wildlife Area in Carroll County, and (3) 66 acres of the Zepernick Wildlife Area in Columbiana County (see OGLMC Votes to Allow Fracking Under Ohio’s Salt Fork State Park). The vote precipitated a panic attack among the environment left. Earthjustice and the Ohio Environmental Council (disgusting leftwing green groups) filed a lawsuit in Franklin County Common Pleas Court appealing the OGLMC’s action (see Big Green Sues to Block Drilling Under (Not On) Ohio State Parks). One teeny, tiny problem for the wackos: The new law that empowers the OGLMC to do the leasing does not contain a provision to appeal their decisions to a court.

OH Supremes Revive Lawsuit Against ODNR for Closing Injection Well - Marcellus Drilling News - Here’s a story we haven’t written about in over three years. American Water Management Services (AWMS) owns a wastewater injection well in Trumbull County that supposedly caused a low-level earthquake (that nobody could feel) in 2014. Actually, there are two injection wells located at the site, both operated by AWMS. They were both “temporarily” shut down by the Ohio Dept. of Natural Resources following the quake nobody could feel (see ODNR Temporarily Shuts Down Injection Wells After Low-Level Quake). ODNR allowed AWMS to reopen one of the injection wells but denied it the right to reopen the second well. AWMS appealed the closure of the second well all the way to the Ohio Supreme Court in 2018.

Ohio Supreme Court finds appeals court in Warren was wrong to dismiss Weathersfield injection well case - An Ohio Supreme Court ruling issued on Wednesday could be a step toward resolving a long legal battle over how much, if any money is owed by the state to the owner of a Trumbull County brine injection well that was ordered closed following an earthquake. Justices on the state’s highest court unanimously ruled that the Eleventh District Court of Appeals, based in Warren, failed to follow earlier instructions from the Ohio Supreme Court in the case filed by AWMS Water Solutions against the Ohio Department of Natural Resources. AWMS has been arguing that ODNR in effect “took” its property when it suspended the operation of one of its injection wells along Route 169 in 2014 following seismic activity near the well site. The well owner argues that it invested $5.6 million into the wells and was unable to reap the profits from its operation. In a 2021 ruling, the appellate court dismissed the case, agreeing with the ODNR’s argument that AWMS had a lease to dispose of waste, and was not considered to be a property qualified for compensation. In Wednesday’s opinion, the Supreme Court states that it had already previously ruled that AWMS did have a property interest in its lease and that the duty of the appeals court was to weigh the evidence to consider how much money, if any, the state owes AWMS. “By deciding the case in this manner, the court ventured beyond the scope of our remand order,” the opinion stated. The opinion stated that it is hard to understand how the appeals court could rule that AWMS did not have an interest that entitled it to compensation without doing the takings analysis that the appeals court was ordered to do. The case is again being sent back to the appeals court where judges have been ordered to weigh the evidence to determine whether the well owner suffered a total taking of the property involved.

Appeals Court Failed to Follow Orders When Reconsidering Wastewater Well Closure - An appeals court failed to follow instructions from the Supreme Court of Ohio when considering the case of a wastewater well operator that was shut down for potentially causing earthquakes in Trumbull County.In a unanimous per curiam opinion, the Supreme Court today stated that the Eleventh District Court of Appeals ignored the high court’s directive to “weigh the parties'evidence ” to determine if the state should compensate AWMS Water Solutions for suspending its permits to operate in Weatherfield Township.In 2014, the Ohio Department of Natural Resources (ODNR) suspended the operation of one of two AWMS wells. The wells were used to inject waste fluid from the oil and natural gas drilling process of hydraulic fracturing, known as fracking. ODNR suspended the operations when seismic activity was recorded near AWMS well #2, which is close to the city of Niles.A protracted legal battle led to a 2020 Supreme Court decision regarding AWMS’claim that the state’s actions amounted to a “taking” of its property under the Fifth Amendment to the U.S. Constitution. AWMS argued that it was entitled to compensation from ODNR for improperly shutting down the wells and hindering the company’s ability to reopen. The Supreme Court did not definitively decide whether AWMS was owed money but remanded the case to the Eleventh District.After conducting a nine-day trial in 2021, and ordering the parties to file additional briefs, the Eleventh Districtdismissed the case, finding that AWMS was not entitled to compensation. AWMS appealed the decision to the Supreme Court, asserting the appellate court made its decision without following the Supreme Court’s directions. In December 2011, AWMS secured a lease from the owner of 5.2 acres of industrial property in Trumbull County. The lease gave the company the exclusive right to operate disposal wells and install, operate, and maintain infrastructure to facilitate waste disposal from oil and gas drillers. About a week after AWMS applied for permits, a 4.0-magnitude earthquake was recorded a few miles from the AWMS property. The event originated near another deep-well injection site and was felt by more than 4,000 people in parts of northeastern Ohio, western Pennsylvania, and Ontario, Canada. After the earthquake, former Ohio Gov. John Kasich imposed a moratorium on well-injection activities. The moratorium delayed the processing of AWMS’ permits, but the company was authorized to use the two wells in July 2013. AWMS then spent $5.6 million to construct the wells and other infrastructure, including tanks and pumps. ODNR authorized the company to begin wastewater injections in March 2014. Four months later, a 1.7-magnitude earthquake was recorded near well #2, and a month later, a 2.1-magnitude quake was recorded in the same area. ODNR ordered AWMS to suspend its operations of both wells, stating the earthquakes were related to the well operations. The agency later allowed well #1 operations to resume, but not well #2. AWMS sought ODNR permission to restart well #2 but was unsuccessful. In 2016, the company sought a writ of mandamus from the Eleventh District. AWMS wanted the appellate court to order ODNR to start a “property appropriation” proceeding, claiming that the state was, in effect, taking the property of the disposal company but not permitting it to operate. The Eleventh District dismissed the case, finding that ODNR regulation of the facility did not constitute a taking. AWMS appealed to the Supreme Court. In 2020, the Supreme Court ruled there was a “genuine issue of material fact” concerning whether the state’s suspension of AWMS’ operation constituted a taking by depriving the company of all economically beneficial uses of its lease. The Supreme Court remanded the case to the Eleventh District with instructions to weigh the evidence related to AWMS’ claim that the state “totally” took all the economic value of well #2 or “partially” took the value. The Supreme Court directed the Eleventh District to use a process set out by the U.S. Supreme Court to determine if AWMS suffered a partial taking.

‘Black Gold: EOG Resources Drills Gushers in Ohio Utica | Marcellus Drilling News - Perhaps our headline is slightly misleading. EOG is not the modern equivalent of Jed Clampett walking along and seeing crude bubbling up out of the ground (as in the fictionalThe Beverly Hillbillies show of the 1960s with the “Ballad of Jed Clampett” that says, “Oil that is, black gold, Texas tea.”). What EOG and other Ohio drillers (like Encino Energy and Ascent Resources) have done is more like rocket science than winning a lottery. The oil has been locked away in the Utica/Point Pleasant shale layer for millennia. Aubrey McClendon, co-founder and former CEO of Chesapeake Energy, was the first to see the vision of freeing oil from the Utica.

Black Gold: Ascent & Encino Drill Oil Gushers in Ohio Utica --Marcellus Drilling News - Yesterday we brought you the latest update on EOG Resources’ oil drilling program in the Utica Shale (see Black Gold: EOG Resources Drills Gushers in Ohio Utica). Today we have details about two more companies and their Utica oil drilling programs: Ascent Resources and Encino Energy. Last summer, we told you that Encino, which picked up Chesapeake Energy’s Ohio O&G assets, including 933,000 Ohio acres with 320,000 net Utica acres and 920 operated and non-operated Ohio Utica wells for $2 billion in 2018 (see Stop Press: Chesapeake Sells ALL of its Ohio Utica Assets for $2B), had finally cracked the code on coaxing oil from the Utica Shale (see Oil Prod. in Northern Utica Comes Alive – Encino Cracks Oil Code). Encino is now Ohio’s top oil producer.

20 New Shale Well Permits Issued for PA-OH-WV Jan 15 – 21 --Marcellus Drilling News - There were 20 new permits issued to drill in the Marcellus/Utica during the week of Jan. 15 – 21, versus 24 permits issued during the prior week. Pennsylvania issued 11 new permits last week. Ohio issued 9 new permits. West Virginia had a big, fat zero new permits last week. Ascent Resources scored the most new permits issued, with 5 permits across two counties, Jefferson and Harrison, in Ohio. Encino Energy (EAP in the list) had the second most new permits issued with 4 permits in Harrison County, OH. ARMSTRONG COUNTY | ASCENT RESOURCES | BRADFORD COUNTY | CHESAPEAKE ENERGY | CNX RESOURCES | ENCINO ENERGY | EQT CORP | EXCO RESOURCES | HARRISON COUNTY | JEFFERSON COUNTY (OH) | LYCOMING COUNTY | SOUTHWESTERN ENERGY | SUSQUEHANNA COUNTY |WASHINGTON COUNTY | WESTMORELAND COUNTY

Utilities plan onsite gas storage to improve reliability; critics warn of costs, safety concerns --As the U.S. electric power system has become more reliant on natural gas plants, it’s also become more vulnerable to gas system failures. During Winter Storm Elliott in 2022, about 18% of the anticipated power supply in the portion of the grid that serves the entire eastern half of the United States, called the Eastern Interconnection, was offline. Of the power plants that failed to perform, 47% were natural-gas fired, according to a joint inquiry by the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation. Natural gas fuel problems accounted for 20% of all generation outages, the report noted.However, in an era when building new gas pipelines, along with other infrastructure, has proven increasingly fraught, some utilities see a solution to gas shortages: adding liquified natural gas storage onsite.Virginia utility giant Dominion Energy is proposing to add liquefied natural gas storage to serve two large power plants it operates near Emporia in southern Virginia. And in South Dakota, Otter Tail Power Company is planning to add gas storage at its Astoria combustion turbine plant in Deuel County. A spokesman for Duke Energy, a large North Carolina-based utility company which was forced to cut power to customers during Elliott last year, said it is “exploring all on-site storage options, including LNG and other alternative fuel storage technologies for future use.” A 2021 study by researchers at Carnegie Mellon University found that storing gas onsite could also yield benefits for electric customers in New England, where gas supply is tight.Some pro-renewable energy analysts, though, are wary about the costs and impacts of adding new gas infrastructure at a time when cutting emissions to mitigate climate change is becoming ever more pressing. There are also safety and environmental concerns. Having backup fuel on site is common at many natural gas power plants, though the go-to option is typically a distillate fuel oil (like diesel), said Michael Caravaggio, director of research and development at the Electric Power Research Institute, an independent nonprofit research organization. The main advantage is ease of storage and management over a long period of time, whereas liquefied natural gas needs to be kept at extremely low temperatures, (about -260 degrees Fahrenheit). That means that adding LNG storage involves either liquefying pipeline gas onsite or transporting LNG in for storage in specialized tanks.“That’s a lot of infrastructure for backup fuel,” Caravaggio said. “The vast majority of the U.S. would likely pencil out with diesel and distillate oil as the onsite backup and that’s what we see currently.”But Bill Swanson, manager of supply operations and planning for Otter Tail Power Company, which has about 133,000 customers in Minnesota, North Dakota and South Dakota, said adding LNG at the company’s 245-megawatt Astoria plant made the most economic sense. Winter Storm Uri in 2021, which sent gas production plummeting, and Elliott last year prompted the company to pursue LNG backup fuel. During Winter Storm Elliott we had a situation where we couldn’t get gas out of the pipeline,” he said.The company explored fuel oil but found it would require modifications to the gas turbine. Burning the oil, he added, also reduces the output of the plant more than 10% and increases emissions.“On an evaluated cost basis, LNG was lower cost,” Swanson said, though when asked he said the total cost of the gas storage project is not public. If Otter Tail had to liquefy the gas onsite instead of trucking it in from a nearby facility, “economics might flow back to fuel oil,” he added.Jeremy Slayton, a spokesman for Richmond-headquartered Dominion Energy, said Elliott, Uri, and the Colonial Pipeline cyberattack in 2021 all underscored the need for backup fuel. The company is proposing to add a 25 million gallon LNG storage facility that will enable its two large combined cycle plants at Brunswick and Greensville to run at full bore for up to four days each. Those plants alone generate enough electricity to power 700,000 of its 2.6 million Virginia customers’ homes.

DTE Gas to recover $49 million in costs from year of skyrocketing prices - – State utility regulators recently approved most of DTE Gas Co.’s requests for its natural gas cost recovery for a past winter’s heating season. The Michigan Public Service Commission (MPSC) signed off on more than $49 million to be recovered with interest. The agency’s decision last week is related to the company’s contracted use of the NEXUS gas pipeline to bring the fossil fuel from Ohio into Michigan during the 2021-2022 fiscal year.

DEC: Heating oil leaked into Byron Lake from nearby Oakdale home - The state Department of Environmental Conservation and Town of Islip hazmat crews responded to an oil spill in Oakdale Friday that seeped into Byron Lake. The DEC says the spill started in the crawlspace of a home earlier in the week. Robert Abrahamson felt something was off when he smelled what he described as diesel coming from a stream behind his Oakdale home. He says he didn’t think anything of it until Thursday. “The smell just got increasingly worse,” he said. "Then we started seeing hazmat trucks, spill response clean ups down by the lake, Byron Lake. And then I said, oh well something's going on. And then late last night, we saw the trucks over here by the creek." The Department Of Environmental Conservation says a petroleum oil spill started at a home on Lincoln Drive Monday. DEC crews arrived at the home Wednesday and told the homeowner to stop a sump pump from pumping out the nearly 140 gallons of oil onto the street. The oil then found its way into a storm drain, into Byron Lake, and possibly the stream behind Abrahamson’s home. "It's actually gotten worse than it's been yesterday," he said. The DEC said the spill didn’t harm wildlife. Citizens Campaign for the Environment executive director Adrienne Esposito says potential impacts of a spill like this could greatly impact the watershed. "It can kill aquatic plants. It can kill hibernating reptiles, such as turtles, fish, and it’s very difficult to remediate at that point,” she said. “The longer you wait to clean it up, the more damage it does, and the more costly it is.” She says the DEC should’ve responded sooner to prevent potential problems further downstream. "The problem here with Byron Lake is that it is a tributary into the South Shore estuary,” said Esposito. “Once the oil flows into the lake, it's a very good chance it's flowing out into the bay."

US weekly LNG exports drop to 27 cargoes - US liquefied natural gas (LNG) exports decreased in the week ending January 17 compared to the week before, according to the Energy Information Administration. The agency said in its weekly natural gas report that 27 LNG carriers departed the US plants between January 11 and 17, one vessel less compared to the week before. Moreover, the total capacity of these LNG vessels is 99 Bcf, the EIA said, citing shipping data provided by Bloomberg Finance. Average natural gas deliveries to US LNG export terminals decreased by 15.4 percent (2.3 Bcf/d) week over week, averaging 12.5 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana decreased by 12.9 percent (1.2 Bcf/d) to 8 Bcf/d, while natural gas deliveries to terminals in South Texas decreased by 18.6 percent (0.8 Bcf/d) to 3.6 Bcf/d. The agency said that natural gas deliveries to terminals outside the Gulf Coast the decreased 28.8 percent (0.3 Bcf/d) to 0.9 Bcf/d. Cheniere’s Sabine Pass plant shipped eight cargoes and the company’s Corpus Christi facility sent four shipments during the period under review. Sempra Infrastructure’s Cameron LNG terminal shipped five LNG cargoes, and the Freeport LNG terminal shipped four cargoes, while Venture Global’s Calcasieu Pass sent three cargoes during the week under review. Also, the Cove Point LNG terminal shipped two cargoes, and the Elba terminal shipped one cargo during the week. This week, Texas and Louisiana experienced a cold snap, which affected operations at Cheniere’s Sabine Pass and Corpus Christi plants as well as the Freeport terminal, according to reports. This report week, the Henry Hub spot price fell 36 cents from $3.23 per million British thermal units (MMBtu) last Wednesday to $2.87/MMBtu this Wednesday, the agency said. The Henry Hub price reached a high of $13.08/MMBtu on Friday last week, the highest daily closing price since February 2021, reflecting a run-up in prices observed across the country that day, it said. Natural gas spot prices fell at most locations in the US this report week, after spiking on Friday ahead of the three-day holiday weekend. Prices were high on Friday in anticipation of increased natural gas consumption because of the weather forecast for well-below-normal temperatures for most of the US over the long weekend, it said. The price of the February 2024 NYMEX contract decreased 16.9 cents, from $3.039/MMBtu last Wednesday to $2.870/MMBtu this Wednesday. According to the agency, the price of the 12-month strip averaging February 2024 through January 2025 futures contracts declined 4.8 cents to $2.960/MMBtu. The agency said that international natural gas futures decreased this report week. Bloomberg Finance reported that weekly average front-month futures prices for LNG cargoes in East Asia fell 93 cents to a weekly average of $10.51/MMBtu. Natural gas futures for delivery at the Dutch TTF decreased 72 cents to a weekly average of $9.62/MMBtu, the first time averaging below $10/MMBtu since mid-summer, the agency said. In the same week last year (week ending January 18, 2023), the prices were $24.85/MMBtu in East Asia and $20.10/MMBtu at TTF, the EIA said. EIA

Port of Corpus Christi says LNG volumes hit record in 2023 - The US Port of Corpus Christi in Texas set a new record in annual tonnage during 2023, including for liquefied natural gas (LNG) volumes. According to a statement released on Thursday, more than 200 million tons of goods moved in 2023 through the Corpus Christi Ship Channel for the first time in its history. The 203 million tons moved in 2023 was an 8.1 percent increase from the prior year, and the new high mark primarily can be attributed to a jump in crude oil exports to 126.1 million tons in 2023, a 12.5 percent increase compared to 2022. Moreover, the port also saw a nearly 13.5 percent increase in agricultural commodities to a little over 2.2 million tons, as well as a slight increase in refined products to 42.5 million tons. A record volume of LNG – 16.3 million tons – moved through the Corpus Christi Ship Channel in 2023, the port said. LNG volumes rose 81.2 percent in 2021, reaching 15.7 million tons. The port previously said that LNG volumes increased 3.5 percent in 2022 compared to the year before. These volumes will grow in the future as Cheniere’s Corpus Christi liquefaction facility is currently undergoing a capacity expansion. The Corpus Christi terminal currently consists of three operational trains with each having a capacity of about 5 million tonnes per annum. Cheniere completed the first train in February 2019 followed by the second in August the same year, while Bechtel handed over operational control of the third train in March 2021. In June 2022, Cheniere took a final investment decision on the Corpus Christi Stage 3 expansion project worth about $8 billion, and Bechtel officially started construction on the project in October the same year. The project includes building seven midscale trains, each with an expected liquefaction capacity of about 1.49 mtpa.

Biden to pause natural gas export approvals as it updates how to assess projects - The Biden administration will pause approvals of some natural gas export facilities as it considers changing how to evaluate them, the administration announced Friday. The current analyses the Energy Department uses to decide whether to authorize exports of liquified natural gas (LNG) do not “adequately account” for factors like domestic energy costs or planet-warming emissions, the White House said in a fact sheet. As a result, the administration is temporarily pausing pending decisions on whether to approve exports to countries with which the U.S. does not have a free trade agreement. The pause will be in effect until the Energy Department can update how it conducts underlying analyses. An administration official told reporters that an update would take a few months, followed by a public comment period before it is final. President Biden, in a written statement, invoked climate change as he discussed the pause. “During this period, we will take a hard look at the impacts of LNG exports on energy costs, America’s energy security, and our environment,” he said. “This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time,” he added. The pause only applies to new export projects and is not expected to impact existing exports. There will also be exceptions for emergencies. An administration official told reporters that four projects — two large and two small — currently have applications before the department and would be affected by the pause. A controversial pending project, known as CP2, is not expected to immediately be impacted as its approval is not yet before the Biden administration, the official said. Energy Secretary Jennifer Granholm told reporters on Thursday that the update was coming due to a dramatic increase in U.S. natural gas exports. U.S. capacity to export liquefied natural gas (LNG) has more than tripled since 2018 and is on track to triple again based on projects that are already under construction, she said. “As our exports increase, we must review export applications using the most comprehensive, up-to-date analysis of the economic, environmental and national security considerations,” Granholm added. The announcement comes as progressives and environmental activists have shone a spotlight on the natural gas export projects — lamenting the climate implications of increased fossil fuel shipments. Politically, the move comes as at least some progressives have expressed disappointment in the administration over issues including the war in Gaza. And while Biden has signed significant climate legislation, progressives have also pushed back on his approval of the Willow Project — a major oil project in Alaska.

America faces a looming LNG debacle - Recent news of John Kerry’s departure from the Biden team is a reminder of the baneful influence he and his progressive friends have continued to exert on U.S. energy policy. This month that faction renewed their attacks on fossil fuel by urging the Biden administration to slow down or halt approvals of new liquified natural gas (LNG) export licenses. This initiative should be seen for what it is: an attempt to constrain the free market economy and accelerate the end of the fossil fuel economy. Even more puzzling is that constraining LNG exports would likely increase, not decrease, global carbon emissions.As the United States faces crises in the Middle East, Europe, and Asia, Washington should prioritize economic and energy stability to resist these challenges. Growing U.S. LNG exports has been key to keeping European economies stable, helping Ukraine resist Russian President Vladimir Putin’s aggression, and maintaining stable energy prices in the Pacific Rim.Indeed, last year the United States became the world’s largest LNG exporter, surpassing Qatar and Australia. U.S. exports rose 14.7 percent to a record 88.9 million metric tons (MT), or 8.6 billion cubic feet per day.After the shock of the 1972 Arab Oil Embargo, America spent decades eliminating its dependence on foreign energy suppliers to become the world’s leading energy producer. Energy independence, ample supplies, and lower prices have also been the secret to reenergizing U.S. industrial capacity. Meanwhile, the country’s vast energy resources have provided much-needed stability at home while helping allies, particularly in Europe after Russia’s full-scale invasion of Ukraine in 2022. Despite increasing production, the United States has seen one of the most significant decreases in carbon emissions of any industrialized country, now 17 percent below 2005 levels and falling while the economy continues to grow. A key reason why this occurred is because natural gas has been replacing coal in energy production. More energy and fewer emissions are a testament to American innovation and ingenuity. So America is not the renegade polluter demonized by progressives; it is the bar against which other countries should be judged, lest we forget that emissions from China and India far outpace the rest of the developed world combined. However, the Biden administration is now reviewing how it approves natural gas exports, with some reporting that the administration is planning to curtail or even limit additional applications for new or increased capacity.The theory is that exporting natural gas perpetuates the use of hydrocarbons. If America did not export such energy, other countries would emit less. This theory, however, is flawed. American LNG is not a choice of last resort; it is the world’s first choice, and its absence would undermine allies and increase the cost of goods and commodities. Furthermore, without American LNG, other countries’ emissions would actually increase because they would be forced to utilize fuels like coal or fuel oil that have higher carbon content. The history of the last few years demonstrates this inconvenient truth.

Deep Freeze Forces USA LNG Exporters to Cancel, Delay Cargoes - The recent freeze across Texas and Louisiana disrupted scheduled exports of US liquefied natural gas, temporarily tightening some supply of the heating and power-plant fuel. The Cameron LNG export plant in Louisiana canceled at least one scheduled shipment, according to people familiar with the matter. Several other planned deliveries from Cameron and Cheniere Energy Inc.’s Corpus Christi facility in Texas were also delayed, they said. The Freeport LNG terminal in Texas on Tuesday briefly brought down and restarted one of its three production units, according to a state regulatory filing. Freeport LNG’s loading schedule was also disrupted this week as a result of the weather, according to people familiar with the matter. Export disruptions will likely be short-lived, with warmer weather expected next week. Milder-than-normal temperatures are forecast across most of the US from Jan. 23 to 27, according to the National Oceanic and Atmospheric Administration. The global market impact should also be limited given that gas inventories across Europe and Asia remain high, with the end of winter on the horizon. European gas futures fell to a five-month low on Wednesday. Frigid weather in the US closed ports and reduced domestic gas production, forcing LNG exporters to rearrange schedules for customers. Pipeline gas flows to liquefaction facilities on Wednesday were 45% lower than a week earlier. Cameron LNG did not respond for comment. A spokesperson declined to comment on the plant operations earlier this week. Spokespeople for Cheniere and Freeport also declined to comment.

China’s demand for LNG imports may double over next decade: largest US exporter Cheniere Energy -- China’s demand for liquefied natural gas imports may double over the next decade, an official from America’s largest exporter of the commodity said on Tuesday, as the Asian country faces pressure to lower greenhouse gas emissions. “Everything is in place and heading towards a 130-to-140 million-tonnes market in China alone, as we get towards the mid-30s-to-2040 time frame. Then we actually think it plateaus,” said Anatol Feygin, Cheniere Energy’s executive vice-president and chief commercial officer. In 2023, China’s total LNG import volume reached 71.3 million tonnes, increasing by 12.6 per cent from a year earlier, according to Chinese customs data. However, that was still lower than the record level of 78.9 million tonnes in 2021, as the country has struggled economically after the coronavirus pandemic, seeing diminished energy consumption amid Beijing’s efforts to boost domestic gas production. The world’s second-largest economy views natural gas as a transitional energy source while it shifts from traditional fossil fuels to renewables. Beijing has pledged to peak carbon emissions before 2030 and achieve carbon neutrality by 2060. Natural gas emits almost 50 per cent less carbon dioxide than coal, the major primary energy fuel used in China. “We’re proud to be part of that solution,” Feygin said on Tuesday during an online event organised by the Centre for Strategic and International Studies, a Washington-based think tank. Feygin voiced confidence that China would meet its climate objectives and remain one of the major pillars of global LNG demand growth in the medium-to-longer term, along with South Asia and Southeast Asia. Currently, the country has more than 40 gigawatts of gas-fired power generation under construction, along with growing industry and residential commercial demand, suggesting rising opportunities for US exporters, he added. “So we think that in those economics everybody wins.” The United States has surpassed Russia to become the world’s largest exporter of LNG after the latter was mired in Western sanctions on its energy products following Moscow’s invasion of Ukraine. China, meanwhile, is the world’s top buyer of LNG. Chinese energy firms have signed a record number of long-term contracts over the past few years, mostly with American and Qatari suppliers. In November, China’s Foran Energy Group and Cheniere entered a long-term contract of purchasing around 0.9 million tonnes per annum of LNG for 20 years.

Biden freezes approvals to export U.S. gas, imperiling major projects - The Biden administration on Friday halted the approval of new licenses to export U.S. liquefied natural gas while it scrutinizes how the shipments affect climate change, the economy and national security — a moratorium likely to disrupt plans for billions of dollars in projects. The Energy Department study will build on an existing analysis that underpins the agency’s review of proposals to send more natural gas to European, Asian and other countries that are not U.S. free-trade partners. New exports are now vetted on a case-by-case basis to see whether they are in the public interest — a threshold established by federal law — but government assumptions used in those reviews haven’t been updated since 2018. “We will take a hard look at the impacts of LNG exports on energy costs, America’s energy security and our environment,” President Joe Biden said in a statement. “This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time.” Embedded Image The move strikes at the heart of the debate over LNG’s role in the future of energy. While advocates contend it’s crucial for getting developing nations to stop using coal and enabling Europe to power its economy without Russian gas, environmentalists warn that building the enormous infrastructure required to ship LNG ensures it will be burned for generations to come. The administration’s pause comes as environmentalists have seized on projects, including Venture Global LNG Inc.’s CP2 export terminal planned for the Gulf Coast, as a litmus test of the president’s climate change commitment. The review, which won’t affect previously granted authorizations or immediately shake the U.S. status as the world’s top LNG exporter, will be conducted by the Energy Department’s national labs. It could stretch for months before a report is made available for public comment. Senior administration officials who briefed reporters on the plan would not put a firm timeline on the process, saying only that it would be done expeditiously and take some months. “A lot has happened in the past decade since this program was created and we need to have an even greater understanding of the market need, the long-term supply and demand of energy resources, and the environmental factors,” Energy Secretary Jennifer Granholm said. The pause could have implications for more than a dozen proposals now awaiting review at the Energy Department, including ventures planned in Louisiana by Commonwealth LNG and Energy Transfer LP. The issue is politically fraught for Biden — forcing him to balance an array of competing priorities. A months-long review would effectively foreclose decisions on additional LNG exports until after the Nov. 5 presidential election. Environmentalists, such as Bill McKibben, who successfully led the campaign to block the Keystone XL oil pipeline roughly a decade ago, have pressed Biden to shift course on LNG and made clear they are scrutinizing every fossil-fuel project approval under his watch. The halt in permits represents “the first step in stopping these mega-climate bombs,” said Allie Rosenbluth, U.S. program manager for the environmental group Oil Change International. “Stopping LNG exports is a make-or-break issue for his climate record this election.” At the same time, Republicans — including former President Donald Trump — have accused Biden of making a priority of his climate agenda at the expense of domestic jobs and other economic concerns. On Wednesday, Senate Republican leader Mitch McConnell asserted that limiting LNG exports would hinder the U.S. goal of combating Russia’s influence as a global gas supplier. White House National Climate Advisor Ali Zaidi said the government’s existing analysis was outdated and didn’t reflect evolving information about how much methane — the prime ingredient in natural gas — could warm the atmosphere. Earlier studies were completed in 2012, 2015 and 2018. Natural gas burns more cleanly than coal — and oil industry allies argue that’s one reason to bolster exports, not halt them. But environmentalists say methane leaks from wells, pipelines and processing undermine those green credentials and that expanded LNG exports can crowd out investments in emission-free alternatives. LNG advocates excoriated the administration’s decision, saying it would chill development and undercuts US promises to help Europe displace Russian gas after the invasion of Ukraine. “The administration’s decision to freeze review of new LNG terminals is deeply disturbing and raises significant risks around the globe,” said Marty Durbin, president of the U.S. Chamber of Commerce’s Global Energy Institute. “It betrays our allies at a time of geopolitical instability and could slow the energy transition.” Already, 10 North American projects have won the Energy Department’s blessing to export U.S. LNG, but they remain in various stages of development. The U.S. has seven other LNG projects currently operating, and an additional 12 billion cubic feet a day of export capacity still could be constructed just under existing approvals. Four projects will be hardest hit because they have gone through initial permitting and undergone a separate required review by the Federal Energy Regulatory Commission yet are effectively blocked without a final export license from the Energy Department.

Manchin promises to investigate Biden natural gas export freeze -Senate Energy Committee Chair Joe Manchin (D-W.Va.), one of the Biden administration’s most vocal intraparty critics on energy issues, vowed an investigation into the newly announced pause on liquefied natural gas (LNG) export approvals. In a statement Friday morning, Manchin implied the decision to implement the pause was based on political considerations rather than “indisputable facts,” citing LNG production’s economic benefits and the role of American exports in isolating the Russian energy sector after Russia’s invasion of Ukraine. ”I have always said that our first concern must be protecting American consumers and growing American businesses, and we need a safety valve in place to ensure Americans aren’t unnecessarily stuck paying a premium for the abundant resources we’re blessed to have,” Manchin said. “But as the superpower of the world, we also have a responsibility to our allies and trading partners who, in our absence, may have no other choice but to turn to countries that don’t share our values. That’s been made abundantly clear in the last two years as we have been able to step in to replace Russian natural gas to cut off funds for Putin’s bombs and bullets.” Manchin, who is not seeking reelection this year, said he will hold hearings of the energy committee on the decision to “unveil the facts about the true state of play in the markets, this Administration’s motivations, and their implications.” The Biden administration confirmed Friday it will halt export permit approvals while it assesses impacts on emissions and domestic energy costs, saying the current export permitting process does not sufficiently assess these factors. The delay will specifically apply to countries that lack free-trade agreements with the U.S. Existing export projects will not be affected. “During this period, we will take a hard look at the impacts of LNG exports on energy costs, America’s energy security, and our environment,” President Biden said in a statement. “This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time.” Manchin has frequently blasted the Biden administration’s energy and environmental policies, sinking the White House’s ambitious Build Back Better climate and infrastructure package earlier in the president’s tenure by withholding his vote. Manchin later voted for the smaller Inflation Reduction Act, but he has been a harsh detractor of its implementation, particularly pertaining to electric vehicles.

Fossil Fuel Speculators—Not Consumers—Would Win Big From LNG Exports: Report -- Belying Big Oil’s claims that vastly expanded U.S. liquefied natural gas exports benefit consumers, a report published Wednesday revealed that fossil fuel speculators and commodity traders would be the main beneficiaries from eight proposed LNG projects, while American consumers and the climate would suffer higher prices and emissions.The report—entitled Methane Madness—was published by Friends of the Earth, Bailout Watch, and Public Citizen and examines how the controversial Calcasieu Pass 2 (CP2) LNG export terminal in Louisiana and seven other proposed projects would harm U.S. consumers while fueling the climate emergency.“Big Oil’s talking points about European energy security are cynical and inaccurate,” said Lukas Ross, climate and energy deputy director at Friends of the Earth.The report found that:

• If built, the eight pending projects will produce the annual equivalent of 113 coal plants in planet-warming emissions;
• More than half of the volume from these pending facilities has been secured by commodity trading firms and Big Oil’s speculative trading arms;
• Four of the five largest purchasers by volume from pending facilities are speculators;
• LNG from these facilities, if they are built, will be sold wherever these so-called “portfolio players” can turn the biggest profit—undercutting industry claims that the expansion is needed for European energy security; and
• The temporary surge in LNG exports to Europe since the outbreak of war in Ukraine is not translating into long-term demand.

“Record LNG exports drive up home heating prices for Americans, and line the pockets of fossil fuel CEOs, and these new planet-wrecking projects are not in the interest of the public,” asserted Public Citizen energy researcher Alan Zibel.“No amount of misleading energy industry lobbying can undo the simple reality that LNG exports force American consumers to pay more in the long run while U.S.-produced gas winds up in Beijing and Berlin,” he added. “The expansion of U.S. LNG export capacity simply empowers Big Oil giants and commodity traders’ ability to earn eye-popping profits.”The new report came as the Biden administration reportedly paused CP2’s approval pending a Department of Energy review of the project’s economic, national security, and climate impacts. While welcoming the news, climate campaigners argued that a pause is not enough.“Now that they have paused, there is only one thing to do: Vow to reject CP2 and all 17 proposed LNG projects, and to phase out ALL fossil fuels,” said 350.org U.S. campaign manager Candice Fortin. “Our frontline partners on the U.S. Gulf Coast have been fighting against oil and gas projects and for their homes and lives for decades. It is past time for the government to listen and stand up to the billionaires who are knowingly promoting toxic energy sources.”

US natural gas prices slide - Markets - US natural gas futures slid about 3% to a five-week low on Tuesday on forecasts for demand to keep dropping and output to keep rising as the weather turns warmer than normal through at least early February. That price drop occurred even though the amount of gas flowing to US liquefied natural gas (LNG) export plants climbed over the past week after it fell to a one-year low during last week’s Arctic freeze. That extreme cold also boosted daily gas demand to a record high and cut output to a one-year low by freezing wells. Front-month gas futures for February delivery on the New York Mercantile Exchange were down 8 cents, or 3.3%, to $2.339 per million British thermal units (mmBtu) at 9:07 a.m. EST (1407 GMT), putting the contract on track for its lowest close since Dec. 13.

U.S. natural gas prices slide 3% on warm forecasts, slow return of LNG feedgas (Reuters) - U.S. natural gas futures slid about 3% on Thursday on forecast for the weather to remain warmer than normal through at least early February and the slow return of U.S. LNG export plants to full service after last week's Arctic freeze. That freeze boosted gas demand to a daily record high and cut both U.S. gas output and LNG feedgas to a one-year low. Traders noted that prices fell despite forecasts for higher demand next week than previously expected, the slow return of output from last week's extreme cold, and a massive withdrawal from storage last week that was in line with estimates. The U.S. Energy Information Administration (EIA) said utilities pulled a much bigger than usual 326 Bcf of gas out of storage during the week ended Jan. 19 due to last week's extreme cold. That was the biggest weekly withdrawal since utilities pulled 338 bcf of gas out of storage during a brutal freeze in February 2021 and the all-time record withdrawal of 359 bcf in January 2018. Last week's withdrawal was close to the 321-bcf decline analysts forecast in a Reuters poll and compares with a decrease of 86 bcf in the same week last year and a five-year (2019-2023) average decline of 148 bcf for this time of year. Front-month gas futures for February delivery on the New York Mercantile Exchange fell 7.0 cents, or 2.7%, to settle at $2.571 per mmBtu. Financial company LSEG said average gas output in the Lower 48 states fell to 103.0 billion cubic feet per day (bcfd) so far in January, down from a monthly record of 108.0 bcfd in December. On a daily basis, U.S. gas output was on track to jump by 13.7 bcfd from Jan. 17-25 to a preliminary 104.2 bcfd on Thursday. That, however, was not enough to make up for the 17.2 bcfd output drop from Jan. 8-16 to a 12-month low of 90.5 bcfd on Jan. 16, due primarily to freeze-offs and other cold weather events. Meteorologists projected temperatures in the Lower 48 states would remain warmer than normal from now through at least Feb. 9. With less frigid temperatures coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would drop from 144.7 bcfd this week to 125.5 bcfd next week. The forecast for next week was higher than LSEG's outlook on Wednesday. That compares with a daily record demand of 168.4 bcfd on Jan. 16 during the arctic freeze. U.S. pipeline exports to Mexico rose to an average of 5.8 bcfd so far in January, up from 4.7 bcfd in December, but remained well below the monthly record of 7.0 bcfd in August. Analysts expect exports to Mexico to rise in the coming months once U.S.-based New Fortress Energy's LNG export plant in Altamira in Mexico starts pulling in U.S. gas to liquefy for export.

US natgas prices jump 6% ahead of contract expiry, slow output return (Reuters) - U.S. natural gas futures jumped about 6% to a one-week high in volatile trade on Friday ahead of contract expiration on forecasts for higher demand in two weeks when the weather turns slightly cooler and with the slow return of output from last week's Arctic freeze. Traders noted prices fell by over 5% earlier in the session on forecasts for the weather to remain warmer than normal through at least the middle of February and the slow return of U.S. liquefied natural gas (LNG) export plants to full service after last week's extreme cold. Last week's freeze boosted gas demand to a daily record high and cut both U.S. gas output and LNG feedgas to one-year lows. On its second to last day as the front-month, gas futures NGc1 for February delivery on the New York Mercantile Exchange rose 14.1 cents, or 5.5%, to settle at $2.712 per million British thermal units (mmBtu), their highest close since Jan. 17. Futures for March NGH24, which will soon be the front-month, were little changed at around $2.18 per mmBtu. For the week, the front-month gained about 8% after dropping about 24% last week. Financial company LSEG said gas output in the Lower 48 states fell to an average of 103.2 billion cubic feet per day (bcfd) so far in January, down from a monthly record high of 108.0 bcfd in December. On a daily basis, U.S. gas output was on track to jump by 14.6 bcfd from Jan. 17-26 to a preliminary two-week high of 105.1 bcfd on Friday. That, however, was not enough to make up for the 17.2 bcfd output drop from Jan. 8-16 to a 12-month low of 90.5 bcfd on Jan. 16, due primarily to freeze-offs and other cold weather events. Meteorologists projected temperatures in the Lower 48 states would remain warmer than normal from now through at least Feb. 10. The forecasts for the week of Feb. 4, however, were slightly cooler than the outlook for the week of Jan. 28. With the weather expected to turn warmer, LSEG forecast U.S. gas demand in the Lower 48, including exports, would drop from 144.6 bcfd this week to 124.9 5 bcfd next week before rising to 127.8 bcfd in two weeks as the weather turns cooler. The forecast for next week was lower than LSEG's outlook on Thursday. That compares with a daily record demand of 168.4 bcfd on Jan. 16 during the arctic freeze. Gas flows to the seven big U.S. LNG export plants fell to an average of 13.8 bcfd so far in January, down from a monthly record of 14.7 bcfd in December. But on a daily basis, LNG feedgas was on track to rise by about 4.8 bcfd from Jan. 17-26 to a preliminary 14.0 bcfd on Friday after dropping by 5.8 bcfd from Jan. 13-16 to a one-year low of 9.2 bcfd on Jan. 16 during last week's freeze.

Kinder Morgan remains bullish on natural gas demand growth - Kinder Morgan said on Wednesday it continues to have a bullish outlook for natural gas demand banking on higher demand from liquefied natural gas (LNG) export facilities and increased exports to Mexico. The United States was the largest exporter of LNG in 2023, with 8.6 million metric tons leaving the country's terminals in December. The U.S. Energy Information Administration expects North America's LNG export capacity to increase to 24.3 billion cubic feet per day (Bcf/d) by end-2027, partially driven by new plants in Mexico and Canada. "The future for U.S. natural gas is very bright. And that has positive implications both for our existing business and for our ability to expand," chief executive Kimberly Dang said during an investor call. The comments come days after the company reported fourth-quarter results which showed weakness in its natural gas pipeline operations. Kinder Morgan said a rise in natural gas demand has led to increased pipeline utilization, driving new projects for the company. Of its $3 billion project backlog, about $2.2 billion is associated with natural gas. The company has the largest natural gas transmission network in the U.S. and moves about 40% of all natural gas production. Kinder Morgan said the company is also working on a couple of projects to bring more natural gas supply into the short-supplied southeast market.

Remember that foul odor that swept through the Coastal Bend earlier this month? Contaminated soil from the Victoria spill is heading to our region. (news video) — San Patricio County Sheriff Oscar Rivera told 3News trucks carrying contaminated soil from the Victoria spill will be traveling through the Coastal Bend in the coming weeks. "The dirt is headed to a disposal site near Robstown," said the sheriff. "As you recall on January 3, we were flooded with calls about a bad odor on the east part of the county."Sheriff Rivera said TCEQ announced that the odor may be noticed on US 77 as about 50-60 truck loads travel through San Patricio County.

U.S. Department of Justice preparing legal brief as both sides appeal Line 5 decision - The U.S. government has been asked to explain to a federal appeals court precisely how it believes the country's 1977 pipeline treaty with Canada should impact efforts to shut down the controversial cross-border Line 5. A forthcoming Department of Justice brief will mark the Biden administration's first public foray into the long-running dispute between Calgary-based Enbridge Inc. and an Indigenous band in Wisconsin. The Seventh Circuit Court of Appeals wants the written amicus brief by Feb. 8, when it is scheduled to hear oral arguments from both Enbridge and the Bad River Band of Lake Superior Chippewa. "The court requests the United States to file a brief in this appeal as amicus curiae to address the effect of the agreement … and any other issues that the United States believes to be material," the court ordered last month. Canada invoked the treaty in the Wisconsin case in August 2022, less than a year after it did much the same in Michigan, where state Attorney General Dana Nessel has been waging a similar legal battle against Line 5. Both sides are appealing last year's decision by Wisconsin district court Judge William Conley, who concluded Enbridge had been trespassing on band territory since 2013 and ordered Line 5 rerouted by June 2026. Neither side was satisfied with the ruling: Bad River wants the contested 19-kilometre stretch shut down right away, while the company, which rejects the trespass finding, wants more time to prevent a wholesale shutdown. The U.S. has so far been largely silent on the little-known 47-year-old treaty, which has become a central issue in the case after both Enbridge and Ottawa cited it as a key reason why Line 5 must keep operating. A Justice Department spokesman refused to comment on the request or the status of the brief, citing an ongoing court proceeding. In an appeal brief filed with the Seventh Circuit last month, lawyers for Bad River bluntly accused Enbridge of flouting the band's rights over its own territory and refusing to take no for an answer. "Enbridge's position boils down to this: Enbridge can continue trespassing over tribal land for the foreseeable future so long as it pays 'fair rental value,'" the band argued. That's despite the fact that the band expressly refused to renew Enbridge's easements on the reservation in 2013 and that Conley concluded last summer that the company has been trespassing on tribal land ever since. "Although courts have long held that tribal land is absolutely 'beyond the reach of condemnation' … Enbridge insists that it can achieve the functional equivalent by consciously trespassing and then refusing to leave." Ever since Conley's ruling, the band has complained both about the three-year timeline, as well as an order to pay $5.1 million in restitution, which the Bad River brief denounces as a "paltry pay-as-you-trespass toll." "If a company knows it can make over $1 billion by trespassing on tribal land … by paying a mere $5.1-million toll calculated in a manner that ignores tribal sovereignty and the unavailability of eminent domain, then it will trespass every time," it argues. "The district court's award contravenes core restitution principles and undermines federal statutes protecting tribal sovereignty and tribal land." The band also dismisses the familiar argument from the pipeline's proponents that shutting down Line 5 would have a dramatic and painful impact on both the price and supply of energy in both the U.S. and Canada. Bad River lawyers say shutting down Line 5 would have a negligible impact on gas prices, and that existing infrastructure could offset most of the lost Line 5 crude oil capacity, minimizing the impact on jobs and refinery output. In its own appeal brief, Enbridge argued that shutting down Line 5 would be a violation of the 1977 treaty, which expressly prohibits a "public authority" — either the courts or the band itself — from "impeding … or interfering in any way with the transmission of hydrocarbons." Nor does the treaty expressly allow any "exception or qualification for expired easements or trespass claims," the brief says. The Biden administration's treaty talks with Canada are "specifically focused on whether the band's claims are a permissible basis for shutting down a key piece of binational energy infrastructure: Line 5," Enbridge says. "A trespass claim over a small tract of land that can readily be remedied through damages provides no basis for a court to usurp that process and prevent the U.S. government from speaking in one voice on the matter." The band also maintains that its own 1854 land-secession treaty with Congress should take precedence over the pipeline treaty. The supremacy clause of the U.S. Constitution says otherwise, Enbridge says. "The supremacy clause makes clear that treaties are supreme federal law alongside federal statutes," the company argued. "No authority suggests that a treaty with Canada on matters of international commerce has less power than a statute affecting Indian affairs." The band has been fighting Enbridge in court since 2019, saying the company lost permission to operate on the reservation in 2013. Conley agreed; Enbridge insists a 1992 agreement with the band allowed it to keep operating. But the judge was wary of an immediate shutdown, citing the risk of dire economic consequences, lingering fuel shortages in the Midwest, Ontario and Quebec and a lasting scar on Canada-U.S. relations. Line 5 carries 540,000 barrels of oil and natural gas liquids daily across Wisconsin and Michigan to refineries in Sarnia, Ont. Environmental groups call the 70-year-old pipeline a "ticking time bomb" with a dubious safety record, despite Enbridge's claims to the contrary. Defenders say a shutdown would cause major economic disruption across the Prairies and the U.S. Midwest, where it provides feedstock to refineries in Michigan, Ohio and Pennsylvania, as well as Ontario and Quebec.

Unconventional Production in the US Lower 48 Region - Major Oil Shale Players Include Permian Basin, DJ Basin, Eagle Ford & Bakken, while Haynesville, Marcellus & Scoop Stack Dominate Gas Shale -- The "Unconventional Production in the US Lower 48, H1 2023" report has been added to ResearchAndMarkets.com's offering.The US crude oil production has been on a positive trend in 2023 amid heightened geopolitical tensions in Eastern Europe and the Middle East. Additionally, a rise in international demand for petroleum products also played a pivotal role in bolstering oil production in the country.Nearly 75% of the US crude production in 2023 was obtained from the shale plays in the Lower 48 (L48) region. Permian Basin, DJ Basin, Eagle Ford, and Bakken are the major oil shale plays in the US, while Haynesville, Marcellus, Utica, and Scoop Stack are major gas shale plays. Report Scope:

• The report analyses the crude oil and natural gas appraisal and production activities in the US Lower 48 shale plays.
• Comprehensive analysis of crude oil and natural gas historical production in US L48 shale plays during 2020-27
• Detailed information of well development, permits and deals across US L48 shale plays
• In-depth information of economic viability, well productivity and well completion parameters across major shale plays in the US
• Analysis of top companies' net acreage, and planned capital expenditure in 2023
• Up-to-date information on major mergers and acquisitions across major shale plays during 2023

Oil spills in McKenzie County - Crude oil spilled at a well in western North Dakota's McKenzie County on Saturday, the state Department of Mineral Resources reported Monday.The well is operated by Chord Energy. The leak caused by an equipment failure resulted in the release of 500 barrels or 21,000 gallons of crude oil, according to thespill report on file with the state. The spill was contained on-site and cleanup has begun, according to Mineral Resources. An inspector has been to the site, and will continue to monitor cleanup, officials said.

Oil spills in Dunn County -Crude oil spilled at a well in western North Dakota's Dunn County on Monday, the state Department of Mineral Resources reported Wednesday.The well is operated by Marathon Oil. The leak was caused by a tank line split, and resulted in the release of 280 barrels or 11,760 gallons of crude oil, according to thespill report on file with the state. The spill was contained on-site and all the oil has been recovered, according to Mineral Resources. An inspector has been to the site and will monitor additional cleanup needed, officials said.

Burst pipe at Wilmington refinery spews petroleum mixture onto street – LA Times -A broken pipe at a refinery in Wilmington sent a mix of oil, gas and water spewing into the street on Saturday afternoon, according to the Los Angeles Fire Department.Firefighters responding to a call at the Warren Resources facility at 625 E. Anaheim Street around 1:45 p.m. found the oily mixture shooting roughly 30 feet into the air from the broken pipe and spilling into the street. An earlier version of this article incorrectly reported that the spill took place at a Valero refinery. Emergency personnel were able to shut down the flow and contain part of the spilled material with sandbags.“There is currently no widespread or escalating hazard to the public,” LAFD said in a statement.

Federal regulators offer final word on oil spill off coast of Huntington Beach – Orange County Register - Three safety-related improvements generated from the 2021 oil spill off the coast of Orange County soon could become operating procedures: First, the minimum distance between a commercial ship’s anchor and any oil pipeline operating in the San Pedro Bay, including off the coast of Orange County and Long Beach, should be expanded. The current minimum is 500 feet and the suggested new distance is expected to be 1,500 feet.Second, underwater alarm systems connected to oil pipelines could be beefed up so that they can better alert marine-traffic controllers when a ship anchor drops nearby, and similar improvements could be made nationally.Third, oil operators should be urged to always follow protocols for training and for employee drug testing after a spill or rupture is discovered.The National Transportation Safety Board first said it planned to seek those improvements in a preliminary report on the spill released in early December. And all three ideas made it into that report’s final draft, which was made public Thursday, Jan. 25.The NTSB’s findings offer something of a last word on the Oct. 1, 2021 spill that put a relatively small amount of oil (about 588 barrels, or 25,000 gallons) into the ocean, yet still managed to cause significant damage to one of the nation’s most popular and profitable stretches of coast. Oil that leaked out of an underwater oil pipeline, broken at a point roughly 4.75 miles off the coast of Huntington Beach, killed fish and other marine life, fouled local wetlands and closed commercial fishing and beaches from Orange County to as far south as San Diego.The spill sparked national news about oil off the Orange County coast, damaging the region’s reputation. It also canceled the last day of the 2021 edition of the Pacific Air Show in Huntington Beach, a huge money-maker for the city and local businesses.It also sparked lawmakers, in Sacramento and Washington D.C., to propose different ways to end or limit oil exploration off the Southern California coast – ideas that, so far, have not come to pass. Critics in the aftermath of the spill noted that drilling in San Pedro Bay produces a tiny sliver of the oil used nationally each year, while a clean ocean generates about $44 billion a year in private and public revenue for local governments and businesses, in addition to boosting real estate values throughout the region.The NTSB’s final report on the spill confirmed several facts that have previously been settled in court or confirmed in other investigations.For instance, the NTSB report describes the spill as the result of events that took place about nine months earlier, during a storm off the coast of Southern California on Jan. 25, 2021 – three years to the day before the release of the report.During that storm, two container ships, the Beiijing and the MSC Danit, dropped anchors near the pipeline. When the rough weather (which the NTSB report described as “high winds and seas generated by a strong cold front,”) prompted the anchors to shift, the 40-year-old pipeline was dragged along the ocean floor and bent like a huge straw, weakening the metal to the point that it ruptured on Oct. 1, 2021.Critically, the NTSB investigators said neither the pipeline’s owner, Amplify Energy, nor local marine-traffic control operators (an agency called Vessel Traffic Service Los Angeles-Long Beach) were told about the shifting anchors or the bent pipeline.Investigators described that lack of communication as an indirect cause of the spill.“Had the pipeline operator been made aware of the Beijing and MSC Danit anchor dragging, the company could have conducted an underwater survey of the pipeline, identified the damage, and made repairs, preventing the eventual release of crude oil.”

Predictive Maintenance Plays Crucial Role in Oil and Gas | Rigzone - Predictive maintenance plays a crucial role in the oil and gas industry. That’s what GlobalData outlined in a release sent to Rigzone recently, which highlighted that a recently released GlobalData report explored the use of predictive maintenance technologies in the oil and gas sector. “Maintenance strategies in the oil and gas industry have gradually transformed from their early days in the nineteenth century, GlobalData said in the release. “To achieve operational longevity, timely maintenance is necessary to prevent expensive repair works and unplanned production outages,” it added. “Technologies, such as AI, machine learning, and the internet of things (IoT) add enormous value to predictive maintenance strategies,” it continued. Apart from helping set up more agile operations in newer projects, predictive maintenance also helps extend the lifetime of aging assets, the company stated in the release. “It also aids to detect unwanted leakages that contribute to emissions. Thus, it can help oil and gas companies to efficiently fulfil their ESG obligations,” GlobalData added. The company said in the release that predictive maintenance capability is becoming increasingly useful in the oil and gas industry due to competitive energy market scenarios. “It helps maximize the operational life of the equipment and infrastructure by using an innovative data-driven approach to assess the state of the field equipment or infrastructure and provide a detailed picture of its expected operating life,” GlobalData noted. In the release, Ravindra Puranik, an oil and gas analyst at GlobalData, said, “predictive maintenance enables decision-makers to schedule maintenance activities without affecting the normal functioning”. “These insights can also be utilized to determine whether any machinery or infrastructure requires a substantial overhaul. Predictive maintenance strategies have evolved in the oil and gas industry to harness newer digital technologies for improved prediction models,” Puranik added. “The proficiency of digital technologies has grown tremendously in the last few decades. The advancements in sensors, connectivity networks, and computing power, offer a strong foundation for the adoption of predictive maintenance strategies,” Puranik continued. Puranik warned in the release that a day of unplanned downtime of an oilfield, pipeline, or refinery can incur over a million dollars in losses for the operator. “Predictive maintenance helps to identify potential problem areas and resolve them in a timely manner. It could be profitable to implement enterprise-wide predictive maintenance strategies in the long-run,” Puranik added. In the release, GlobalData highlighted that “several prominent integrated oil companies (IOCs) have actively sought to digitalize their operations by employing technologies, such as AI, IoT, cloud computing, big data, and others”. The company noted in the release that this has led to the generation of a vast amount of data from routine oil and gas operations. “Growing digitalization has facilitated the adoption of predictive maintenance technologies in the industry,” the company added. A chart showing upstream predictive maintenance related contractual activity across vendors and regions from January 2018 to November 2023, which was included in the release, showed SLB with the most contracts, at more than 20, followed by IKM Holding, with more than 10, and Baker Hughes, with 10.

Oil and Gas Undergoing Historic Consolidation Wave -- Oil and gas is undergoing a historic consolidation wave comparable to what occurred in the late 1990s and early 2000s, giving rise to the modern supermajors. That’s what Enverus Senior Vice President Andrew Dittmar said in an Enverus Intelligence Research (EIR) release sent to Rigzone recently, which summarized fourth quarter and full-year 2023 upstream merger and acquisition activity in the United States. In the release, EIR noted that the fourth quarter recorded a massive $144 billion in upstream M&A, which the company said is the largest quarter EIR has tracked. That pushed full-year 2023 value to more than $190 billion, also setting a record, EIR said in the release. The company highlighted in the release that two “historic” deals drove the “surge in value” - ExxonMobil’s $65 billion acquisition of Pioneer Natural Resources and Chevron’s purchase of Hess for $60 billion. “After a decade of lowered investment in exploration and with the major U.S. shale plays largely defined, M&A has become the preferred tool to replace declining reserves and secure longevity in these companies’ profitable upstream businesses,” Dittmar said in the release. “For the best quality resource, there are also now more buyers than sellers, driving prices upward,” he added. Among unconventional oil resource plays in the U.S., the Permian stands well atop the heap for remaining resource, offering both the most high-quality remaining drilling opportunities and the greatest potential for resource expansion from the prolific region’s stacked resource benches, EIR stated in the release. “It is unsurprising then that the Permian dominated M&A activity in 2023 with $103 billion transacted. That included a buy-in from Exxon as it made the Permian a cornerstone of its global portfolio with the $65 billion Pioneer purchase,” it added.

Norway’s Natural Gas Production Hits Record High --- Norway’s natural gas production beat forecasts and rose to a record high in December, preliminary figures from the Norwegian Offshore Directorate showed on Tuesday. Norwegian gas production increased to an all-time high of 379 million cubic meters per day (mcm/day), up from November levels and up by 7.7% compared to the directorate’s forecast. Oil production also beat forecasts, by 1.9%, and stood at 1.847 million barrels per day (bpd) last month, up from 1.805 million bpd in November.Last year, Norway’s oil and gas production was slightly lower than expected, largely due to unplanned and extended maintenance shutdowns at multiple fields and onshore facilities during the summer, the Norwegian Offshore Directorate said in its annual report earlier this month.Gas production resumed full force starting from early autumn, with November and December being particularly good months for gas exports, Norway said. According to the directorate’s preliminary figures, a new export record for a single month was set in December, with just under 12 billion standard cubic meters of gas exported.Oil and gas companies plan to boost exploration activity and spending offshore Norway this year as Western Europe’s top oil and gas producer looks to maintain production and raise exports to the rest of Europe.Currently, most exploration efforts are focused on areas around existing infrastructure so discoveries can be tied back quickly and create value while the fields are still in operation, the Norwegian Offshore Directorate said.While this is important for maintaining production levels in the near and medium term, the directorate said it “would like to see companies exploring actively in more frontier areas.”The robust exploration and production activity of the past year is set to continue into 2024, it noted in the report. This year, exploration activity will pick up, with 40 to 50 exploration wells planned by operators, up from 34 exploration wells spudded last year, according to the authority.

Norway Court Invalidates Approval of Three Oil and Gas Fields - Climate activists won a court case in Norway against the state over development plans at a handful of oil and gas fields under the sea off the Nordic country’s coast. Greenpeace Norway and Young Friends of the Earth argued that development plans at the Breidablikk, Tyrving and Yggdrasil fields, approved by the ministry of energy in 2021 and 2023, are invalid. On Thursday, the Oslo District Court concluded that the impact of combustion emissions must be considered by law, and that no impact assessment of such emissions had been carried out in connection with the decisions in question, it said. The ruling is a breakthrough for environmental groups. In an earlier case, the same two organizations, along with six young climate activists, had argued that allowing oil exploration in the Arctic during a climate crisis breaches fundamental human rights. After failing to persuade the Supreme Court in that case and after a series of appeals, the groups submitted their case to the European Court of Human Rights. In Thursday’s ruling, the state was prohibited from making other decisions that require a valid development plan approval for Breidablikk, Yggdrasil and Tyrving until the validity of the decisions has been legally determined. The state was also ordered to pay court costs. Production at the Breidablikk field in the North Sea started in October. “The judgment establishes that the Breidablikk, Yggdrasil and Tyrving oil and gas fields were approved on an illegal basis and that production must be stopped immediately,” Frode Pleym, head of Greenpeace Norway, said in a statement. “We expect a halt to all further developments.” The energy ministry said it will now thoroughly review the judgment together with the government attorney.

EPA investigating gas oil spill in Cork - The Environmental Protection Agency is investigating following a spill of gas oil into Cork Harbour on Monday. Members of the public are advised not to use the shoreline in the vicinity of Irving Oil in Whitegate until the clean-up of the spill has been completed. In a statement, the EPA confirmed it was notified of a spill of gas oil by Irving Oil Ltd. The site operator also notified the Port of Cork, Irish Coast Guard, Cork County Council, the Health and Safety Authority and local businesses. An inspection at 9am on the morning of January 22 discovered that gas oil had leaked from a small gauge pipe onto a marshy area below it and then into Cork Harbour. "A spill response team was mobilised by the operator and the leak was contained by 1pm. The damaged equipment was repaired at 7pm on Monday evening," the EPA statement said. The team also began attempts to recover oil from the marshy area and to minimise the extent of impact to the harbour, beaches and surrounding areas, including by means of containment booms. "On the morning of Tuesday 23rd January, the operator reported that the spill response team is continuing to carry out cleanup operations and are assessing impacts to the shoreline, waterbody and local ecology as a result of the spill," the statement continued.

Spot LNG shipping rates drop below $60,000 per day - Spot charter rates for the global liquefied natural gas (LNG) carrier fleet dropped below $60,000 per day, while European and Asian prices also continued to decline this week. Last week, Spark30S Atlantic decreased to $83,500 per day, and the Spark25S Pacific decreased to $66,000 per day. “LNG freight rates have fallen for the seventh consecutive week. The Spark30S Atlantic decreased by $26,500 (32 percent) to $57,000 per day, whilst the Spark25S Pacific decreased by $7,000 (11 percent) to $59,000 per day,” Qasim Afghan, Spark’s commercial analyst told LNG Prime on Friday. Afghan said that the Atlantic freight prices have halved since the beginning of the year. Spot LNG shipping rates drop below $60,000 per day Image: Spark Spot rates are continuing to decline despite increasing reports of vessels diverting away from the Red Sea. According to Spark, diverting a voyage via the Cape of Good Hope from the Arabian Gulf to North West Europe adds only $0.09 per MMBtu to the freight cost versus via Suez given Suez Canal savings, but increases laden voyage time by 9.5 days. LNG ships are now favoring the Cape of Good Hope for safer passage. On Thursday, no LNG vessels were transiting the Red Sea amid heightened tensions off the coast of Yemen, Kpler said. Kpler data shows that 2-3 LNG tankers would usually pass the passage on a typical day. Since January 15, over 11 vessels, including four Qatari cargoes headed for Europe, have taken the route via the Cape of Good Hope instead of the Red Sea, it said. In Europe, the SparkNWE DES LNG front month also continued to drop this week. The NWE DES LNG for February delivery was assessed last week at 9.081 per MMBtu and at a $0.805 per MMBtu discount to the TTF. “The SparkNWE DES LNG price for February delivery is assessed at $8.126/MMBtu and at a $0.745/MMBtu discount to the TTF,” Afghan said. He said this is a $0.956/MMBtu decrease since last week and a $7.88 (49 percent) decline since the front month winter peak on October 13, 2023. Levels of gas in storages in Europe remain high for this time of the year. Data by Gas Infrastructure Europe (GIE) shows that gas storages in the EU were 77.47 percent full on January 17. JKM, the price for LNG cargoes delivered to Northeast Asia dropped when compared to the last week, according to Platts data. JKM for March settled at $9.555/MMBtu on Thursday. Asian spot LNG prices continued to decline as inventories remain high across Northeast Asia, and demand remains weak and supply remains ample.

Fire Tied to Ukraine Drones Shuts Novatek Baltic Sea Fuel Plant - A fire that halted fuel production over the weekend at Novatek PJSC’s plant in the Baltic Sea port of Ust-Luga was linked by Ukrainian media to Kyiv’s special forces. The websites of Ukraine’s Suspilne TV and Ukrainska Pravda cited sources in the nation’s Security Service as saying the attack was a special operation of Ukrainian security forces. Separately, the BBC, citing an official source in Kyiv it didn’t identify, said special forces struck the plant with drones. The blaze was the result of “external influence,” Novatek said on Sunday, citing preliminary information and without elaborating. Fontanka, a local media outlet, said drones struck the facility, in the Leningrad region, early local time on Sunday morning, although Russia’s defense ministry reported no attacks in the area. Russian media report a drone attack on Novatek plant in Leningrad region last night. The Novatek plant in Ust-Luga processes stable gas condensate, the final products being oil, kerosene, diesel fraction and fuel oil. The plant is located in the coastal zone, next to a… pic.twitter.com/pUpCoM3ikg The incident comes days after Moscow said a Ukrainian drone was downed near St. Petersburg in the Leningrad region, about 1,000 kilometers (620 miles) from the border with Ukraine. That was the first known time that a UAV had been spotted in the territory since the start of Russia’s full-scale invasion of Ukraine almost 23 months ago. The Ust-Luga port is one of the country’s two main Baltic Sea energy-export outlets, located about 130 kilometers southwest of St. Petersburg, hometown of Russian President Vladimir Putin, and not far from the Estonian border. According to Novatek, the Ust-Luga gas condensate-processing plant has ceased all technological operations. There were no casualties. The complex processes gas condensate into naphtha, jet fuel and gasoil, and ships the petroleum products to overseas markets. In 2022, the facility processed almost 7 million tons of gas condensate, according to Novatek. Condensate is a by-product of natural gas and oil production. Ukrainian drones have regularly attacked areas in central Russia, including the Moscow region, and areas bordering Ukraine. On Saturday, Russia’s Defense Ministry reported that it had intercepted drones in the Smolensk, Tula and Orel regions.

Novatek halts exports of hydrocarbon liquids as facilities damaged by explosion and fire -- Russia's largest independent gas producer Novatek has temporarily lost its ability to export a large share of liquid hydrocarbons that it produces at gas fields in West Siberia, after a fire disrupted operations of its processing and export facilities near the Russian port of Ust-Luga on the Baltic Sea. "According to preliminary information, the fire was the result of external influence," the company said in a statement. Arctic LNG 2 readies first shipment to global markets Read more "The technological process at Novatek-Ust-Luga has been stopped, and an operational headquarters has been established to eliminate the consequences. Damage assessment will be carried out later," Novatek said. The company has not commented on local reports that the fire at the facility was caused by an attack of a drone reportedly coming from Ukraine. So far, there have been no reports of eyewitnesses seeing any drone in the sky just before an explosion that occurred in the deep of night on 21 January. However, there has been an unconfirmed statement from an eyewitness allegedly seeing a drone sometime after the explosion occurred at the Novatek’s facilities, St.Petersburg news outlet Fontanka said on Sunday. Novatek’s liquids processing facilities in Ust-Luga are located on the Gulf of Finland about 170 kilometres west of St. Petersburg, and provide a highly important contribution to the company’s revenues. The gas independent has had to secure additional investments into its second large liquefied natural gas development in West Siberia, Arctic LNG 2, after foreign shareholders had temporarily suspended their participation in this project in response to US sanctions. According to Novatek, the Ust-Luga facilities process gas condensate that is delivered by rail from another Novatek-run facility, the Purovsky plant in West Siberia , into refinery feedstocks such naphtha and kerosene, and also some fuels. These highly flammable feedstocks are usually exported and sold at a high margin to refineries outside Russia. According to Novatek, its production of hydrocarbon liquids, such as oil and condensate, grew by almost 4% last year to about 260,000 barrels per day against 2022, even though its output of gas remained almost unchanged at just over 82 billion cubic metres year-on-year. Although Novatek stopped disclosing operational results for the Ust-Luga facility after Russia invaded Ukraine in February 2022, it said that the facility processed condensate at the rate of 145,000 bpd in 2021. The Interfax-Ukraina news agency, citing unnamed sources in Kyiv, said the fire in Ust-Luga was the result of a special operation carried out by Ukraine's security services.

Arctic LNG 2 buyers said to receive force majeure notifications - Russia's Novatek has reportedly sent force majeure notices to some of its liquefied natural gas buyers concerning future supplies from the Arctic LNG 2 project due to start production in coming weeks, according to Reuters. The news agency, citing four "industry sources", said the notifications were issued last month after the US slapped sanctions on the project, which has three trains and capacity to supply 19.8 million tonnes of LNG per annum and 1.6 million tpa of gas condensate. A source told Reuters that companies receiving force majeure notices that had contracted to buy LNG included China's Shenergy Group and Zheijang Energy, as well as Spain's Repsol. Repsol denied that it had received any such notification, however, and told the news agency it did not have a firm contract with Novatek for supplies from LNG 2. Upstream sister publication TradeWinds reported Thursday that Novatek had started production at the Arctic LNG 2 plant from the first of the three 6.6 million tpa trains, likely using initial volumes to cool the project's 220,000 cubic metre storage tank. There are suggestions that the first train may be lacking key equipment that Novatek has been unable to procure because of the international sanctions, and that some specialised vessels needed for shipments have yet to be delivered, TradeWinds said.

US targets Baltic LNG suppliers with secondary sanctions - The US is targeting three Russian companies in a new round of sanctions, including one that counts among its shareholders Germany’s Linde, despite efforts by the leading international supplier of liquefied natural gas equipment to exit the joint venture. The package of sanctions is aimed mostly at military-related manufacturers and suppliers in Russia and form part of the US response to Russia’s invasion of Ukraine early last year. However, the new sanctions package also targets companies from China, United Arab Emirates and Turkey that help the Kremlin circumvent existing restrictions by handling the supply of military and so-called dual-use items to Russia — goods, software and technology that have both civilian and military applications. The US Treasury said it has put three Russian entities — Northern Technologies, Kazan Compressor Machinery Plant and Gazprom Linde Engineering — on the list in an effort to curtail future Russian energy export capacity. All three companies have been supplying equipment to the Baltic LNG project operated by Ruskhimalliance, a joint venture of state-controlled Gazprom and privately held Rusgazdobycha. Baltic LNG is Russia’s first major LNG export facility on the Baltic shore that could potentially produce up to 13 million tonnes per annum for the European market, despite calls to restrict Russian gas imports. This is about 10 times the combined capacity of the existing Gazprom-run Portovaya LNG facility and the Gazprom and Novatek-owned Vysotsk LNG plants on the Russian shores of the Baltic Sea. Northern Technologies, wholly owned by Ruskhimalliance, was known as Linde Severstal until June 2022, when Linde fully exited the venture. Northern Technologies has been reported as a manufacturer and supplier of spiral heat exchangers for Baltic LNG units. Ruskhimalliance has reportedly chosen Kazan Compressor Machinery Plant as a potential supplier of compressors for Baltic LNG following Linde’s exit. Located in the Russian republic of Tatarstan, the plant had been designated by authorities as an alternative supplier of turbines for future LNG developments in the country. Linde said that it entered the Gazprom Linde Engineering joint venture with Gazprom in March 2021 as a minority shareholder with 19.9%. Following Russia’s invasion of Ukraine in early 2022, Linde sought to withdraw from the joint venture. However, Linde was prevented from doing so before a transaction could be completed, as Russia introduced new regulations requiring Russian presidential approval for any sale of assets. Linde’s assets were subsequently frozen as part of ongoing litigation proceedings. The company has been unsuccessfully trying to overturn this Russian court ruling that ordered Linde’s assets frozen across Russia, including those owned in ventures with other partners and their affiliates, together with Linde’s shares in 12 Russian-registered companies. The German company said in a statement to Upstream: “Linde condemns Russia’s invasion of Ukraine. In response to the invasion and the impact of global sanctions, Linde deconsolidated its Russian industrial gases and engineering business entities as of 30 June 2022. “In accordance with international sanctions, Linde ceased all involvement with this joint venture as well as with any other activity in Russia.

Russian LNG exports set to hit record high despite sanctions - Russia's liquefied natural gas production and exports look certain to hit an all-time high this year following the completion of extensive maintenance works at the Yamal LNG and Sakhalin 2 developments and the expected start-up of the first train at Arctic LNG 2, according to industry analysts. The ramp-up is unlikely to be impacted by the efforts of European authorities to reach consensus on barring Russian LNG purchases, with incremental LNG production expected to flow east rather than westward. Despite being technically able to produce first LNG, the first train of Arctic LNG 2 is still not yet ready to start full commercial operations and launch first exports, Kpler lead analyst Viktor Katona said. However, once the first train is up and running, “Russia’s LNG exports will move into the next gear, and the country may finish this year with around 35 million to 36 million tonnes” of LNG shipped to international markets, Katona said. In total, Russia exported about 32.3 million tonnes of LNG in 2023 against 32.9 million tonnes in 2022, according to an independent assessment by Kpler based on the global movement of gas carriers. Extensive maintenance work at Novatek's Yamal LNG and Gazprom's Sakhalin 2 projects led to a total production loss of about 2.4 million tonnes of LNG last year compared with 2022. The decline was mostly offset by the Portovaya LNG facility on the Baltic Sea that until recently was fully owned by Gazprom. Portovaya LNG came into operation in September 2022 and almost reached its nameplate capacity of 1.5 million tonnes of LNG in 2023, with exports mostly headed to European ports. As a result, Russian LNG exports to EU countries reached a new high of 15.55 million tonnes last year, up from 15.34 million tonnes in 2022, Katona said. Spain became the largest importer of Russian LNG in Europe, at over 5 million tonnes, and the third-largest buyer of Russian LNG globally, according to the analyst. Belgium — typically not an end Russian gas consumer, but where Novatek has a long-term contract to use transshipment and regasification facilities in Zeebrugge — imported just over 4.9 million tonnes of Russian LNG that was either reloaded onto other carriers or entered the European gas network, according to Kpler’s calculations. France was Europe's third-largest importer, taking about 3.6 million tonnes of Russian LNG. With Novatek holding a 60% share in Arctic LNG 2 and thus the right to export a major share of the production from the first train, Katona expects the company to start filling its already allocated long-term agreements once the first train starts operations. Novatek said in December that it would continue with Arctic LNG 2 despite US sanctions on the project.

BGN Acquires 2 VLGCs for LPG, Ammonia Transport - Energy trading firm BGN has acquired two Very Large Gas Carriers (VLGCs) to its fleet in partnership with Indonesia’s Pertamina International Shipping (PIS). Pertamina Gas Tulip and Pertamina Gas Bergenia have dual-fuel tanks, enabling the optimization of low sulfur fuel and gas. The latest technology is said to improve the ship’s speed with even more efficient fuel usage, up to 16 percent, BGN said in a recent news release. The vessels have also incorporated Artificial Intelligence (AI) and Augmented Reality (AR) technologies into their operations. They can transport not only gas or LPG, but also petrochemical commodities such as ammonia, the company outlined. “We are delighted to see these two modern, efficient ships on the water, thanks to our collaborative partnership with PIS”, BGN Group CEO Ruya Bayegan said. “We are pleased to help strengthen the energy security of Indonesia at the same time as supporting BGN’s global energy and commodities trading platform with these maritime assets”. The vessels, each spanning twice the length of a football field, were constructed at Hyundai Samho shipyard in South Korea and were officially welcomed at a ceremony in South Korea on 9 January 2024. In October 2023, BGN signed an agreement with PIS to collaborate on gas vessel transportation, in a move that the company said reinforced its position as an emerging maritime asset owner and a significant LPG trader. In the agreement, the two companies outlined prospective collaborations that span joint ownership of VLGC vessels, LPG cargo transportation and vessel leasing. “BGN excels at strong business partnerships, and we are pleased to move forward with this new arrangement with Pertamina International Shipping”, Bayegan said in an earlier statement. “BGN’s collaboration with Pertamina International Shipping will further enhance our maritime fleet to facilitate our growing energy trading business, cementing our position as a significant LPG trader, as well as supporting the Indonesian energy system”. The company is present in 23 countries including offices in Dubai, Geneva, Houston, Rotterdam and Singapore, and is a supplier to Indonesia. BGN describes itself as a company that efficiently conducts the trading, storage, and transportation of petroleum products, petrochemicals, and commodities worldwide. Its integrated business model ranges from oil and gas trading and distribution to financing energy projects. With established relationships with refineries, producers, state oil companies, and international traders, BGN is present throughout the energy value chain. The company also invests in asset and infrastructure development to enhance its trading activities.

India’s oil export to Europe crosses previous records - India, a key player in the global energy market, has adeptly navigated the geopolitical turbulence of recent years to bolster its oil trade relationships. Amid the conflict between the West and Russia, India has significantly increased its imports of Russian crude oil, making it the second-largest buyer of Russian oil supplies globally. This article delves into India’s strategic oil trade decisions, examining the factors contributing to its success and the impact on the European market. India’s diplomatic pragmatism has led to a substantial surge in its imports of inexpensive Russian crude oil. In the past two years, Indian oil imports from Russia more than doubled, establishing the country as a major buyer of Russian oil supplies. As Western sanctions against Moscow prompted Europe and the United States to avoid Russian oil, India seized the opportunity to secure discounted crude oil from Russia. Presently, India accounts for almost 40 percent of Russian oil exports, while Europe’s share stands at a mere five percent. The favorable pricing resulting from anti-Russia sanctions has allowed Indian refineries to process the Russian crude into valuable oil products. India then exports these products, including diesel and kerosene, to the European and US markets at significantly higher prices than the cost of their imports. India’s strategic approach has not only elevated its status as a major importer but also positioned it as a significant exporter of oil products. In 2022, Indian exports of diesel, kerosene, and other oil products surged by around 20 percent year-on-year, with the European Union accounting for approximately 50 percent of all Indian kerosene exports. Building on the momentum of the previous year, India achieved record levels of oil product exports to Europe in 2023. According to Kpler, a global trade intelligence agency, EU imports of petroleum products from India soared by 115 percent, reaching 231,800 barrels per day— the highest recorded value in the last seven years, and potentially the highest ever. The Independent reported that despite sanctions, consumers in Europe likely received substantial quantities of gasoline, diesel, kerosene, and other petroleum products from Russia via India in 2023. A total of 20 out of 27 EU countries imported Russian oil through India, emphasizing Europe’s continued dependence on Russian raw materials. The Netherlands emerged as the largest buyer of Indian oil supplies in the EU, followed by France, Romania, Italy, and Spain. India’s strategic maneuvering in the global oil trade, particularly with Russia, has proven to be a lucrative endeavor. While Western politicians may scrutinize the Russian-Indian oil trade, India remains focused on advancing its economic interests. The West’s sanctions on Russia have inadvertently facilitated India’s ability to secure favorable import deals and capitalize on the resulting export boom. As India continues to strengthen its position in the global energy landscape, the European market remains a key beneficiary of its strategic oil trade decisions.

Russia Tops List Of China's Oil Suppliers In 2023 - Russia became China’s largest oil supplier last year, selling it a record 107.02 million tons of crude, according to Chinese customs data, as cited by Reuters.The total amount equaled a daily import rate of 2.14 million barrels, far ahead of Saudi Arabia, whose oil exports to China slipped to a daily average of some 1.7 million barrels last year, the data also showed. In June 2023, Russian exports to China hit an all-time high of 2.57 million barrels daily.The Western sanctions on Russian crude were instrumental in this development. The sanctions—in the form of a price cap on Russian oil shipments abroad—prompted previous buyers to shun Russian oil but China was only too happy to take more in, as was India. The price discount that the sanctions caused was a big reason for that, even though it narrowed with time, as Russian oil prices moved in sync with global prices.The same developments turned China into Russia’s largest oil customer last year. Deputy Prime Minister Alexander Novak said earlier this month that half of Russia’s crude oil exports went to China, which made it the biggest buyer of Russian oil."The main partners in the current situation are China, whose share has grown to approximately 45-50%, and, of course, India," Novak said, as quoted by VOA News. "Earlier, there basically were no supplies to India; in two years, the total share of supplies to India has come to 40%."India was the other country that saw Russia turn into its largest oil supplier last year, while the share of Europe in Russian oil imports dropped from around 45% to about 4-5% as the European Union imposed an embargo on Russian oil and petroleum product purchases in December 2022 and February 2023. Together, China and India took in some 90% of Russia’s oil exports in 2023.

Russia overtakes Saudi as China’s largest oil supplier in 2023 - ssia has overtaken Saudi Arabia as China’s biggest source of oil imports in 2023, despite the Western sanctions capping oil prices and reducing Russian imports, reports say. According to Chinese customs data released on Monday, China – the largest oil importer in the world – purchased a record 107.2 million tonnes of crude oil from Russia last year, around 25% more than in 2022. Plummeting by 1.8%, China imported about 86 million tonnes of oil from Saudi Arabia, meaning that Russia was China’s top supplier for the first time since 2018. The price of Russian ESPO crude increased through 2023 due to rising demand from Chinese and Indian refiners, who took advantage of the discounted oil. As a result, the price surpassed the $60 per barrel (/bbl) price cap imposed by the Group of Seven in December 2022. India is the greatest importer of Russia’s Ural Mountain seaborne oil, accounting for 50% of all Russian exports, with China coming in second. In May 2023, China and India both imported record-high levels of Russian crude oil facilitated by discounted supply prices, reducing the demand for oil from other areas such as the Middle East and Africa.

Nigeria's oil spills agency investigating Shell pipeline leak report -(Reuters) - A pipeline owned by Shell's subsidiary in Nigeria has spilled crude oil in the Niger Delta following a leak, the country's spills agency and an environmental group said on Saturday. The Obolo-Ogale pipeline in southern Rivers State feeds the 180,000 barrel-per-day Trans Niger line, one of two conduits to export Bonny Light crude. It had restarted operations this month after being shut for maintenance in December. The spill was detected on Friday by local communities who reported it to Shell Petroleum Development Company of Nigeria Ltd (SPDC) and the Nigerian Oil Spill Detection and Response Agency (NOSDRA). SPDC did not immediately respond to a request for comment. NOSDRA has received a report on the spill and will hold a joint investigation visit to the site on Sunday, Ime Ekanem, the agency's head in Rivers State, told Reuters. Shell has over the years faced several legal battles over oil spills in the Niger Delta, a region blighted by pollution, conflict and corruption related to the oil and gas industry. The company this week announced it was set to conclude nearly a century of operations in Nigerian onshore oil and gas after agreeing to sell SPDC to a consortium of five mostly local companies for up to $2.4 billion.

Shell is leaving Nigeria on a dirty note as new oil spill hits— A pipeline owned by Shell’s subsidiary in Nigeria has spilt crude oil in the Niger Delta after a leak, the country’s spills agency and an environmental group said on Saturday. The Obolo-Ogale pipeline in southern Rivers State feeds the 180,000 barrel-per-day Trans Niger line, one of two conduits to export Bonny Light crude. It had restarted operations in January after being shut for maintenance in December. The spill was detected on Friday by local communities, who reported it to Shell Petroleum Development Company of Nigeria (SPDC) and the Nigerian Oil Spill Detection and Response Agency. SPDC did not immediately respond to a request for comment. The agency received a report on the spill and will hold a joint investigation visit to the site on Sunday, said Ime Ekanem, the agency’s head in Rivers State. Shell has over the years faced several legal battles over oil spills in the Niger Delta, a region blighted by pollution, conflict and corruption related to the oil and gas industry. The company last week announced it is set to conclude nearly a century of operations in Nigerian onshore oil and gas after agreeing to sell SPDC to Renaissance, a consortium of five mostly local companies, for up to $2.4bn. The British energy giant pioneered Nigeria’s oil and gas business beginning in the 1930s. It has struggled for years with hundreds of onshore oil spills as a result of theft, sabotage and operational issues that led to costly repairs and high-profile lawsuits. Since 2021, Shell has sought to sell its Nigerian oil and gas business but will remain active in Nigeria’s more lucrative and less problematic offshore sector. Shell’s exit is part of a broader retreat by Western energy companies from Nigeria as they focus on newer, more profitable operations. ExxonMobil, Italy’s Eni and Norway’s Equinor have struck deals to sell assets in the country in recent years. The British major will sell SPDC for a consideration of $1.3bn, it said in a statement, while the buyers will make an additional payment of up to $1.1bn relating to prior receivables at completion. The Renaissance consortium is made up of Swiss-based trading and investment company Petrolin and local oil exploration and production companies ND Western, Aradel Energy, First E&P and Waltersmith. It will take over the responsibility for dealing with spills, theft and sabotage, Shell said.

Shell Pipeline Leak in Niger Delta Prompts Nigeria's Oil Spills Agency Investigations | Pipeline Technology Journal - A crude oil pipeline leak last Friday in Niger Delta has raised concerns, prompting a swift investigation by the country's oil spill agency following renewed concerns about environmental damage in the oil-rich area. As reported by Reuters on Friday, January 20, the Obolo-Ogale pipeline owned by Shell's Nigerian subsidiary, which feeds the crucial Trans Niger line, experienced a leak on Friday, according to the Nigerian Oil Spill Detection and Response Agency (NOSDRA) and an environmental group. According to the report, local communities first reported the spill, prompting NOSDRA to announce a joint investigation visit to the site scheduled for Sunday. "We have received a report on the spill and will hold a joint investigation visit to the site on Sunday," Ime Ekanem, NOSDRA's head in Rivers State, told Reuters. Shell Petroleum Development Company of Nigeria Ltd. (SPDC), the subsidiary responsible for the pipeline, did not immediately respond to a request for comment by Reuters. The leak comes just weeks after Shell announced it would sell SPDC to a consortium of local companies, marking the end of nearly a century of onshore oil and gas operations in Nigeria. Shell has faced numerous legal battles in the Niger Delta over past oil spills, which have devastated ecosystems and livelihoods in the region. The area already grapples with pollution, conflict, and corruption linked to the oil and gas industry. The extent of the latest spill and its potential environmental impact remains unclear, with the investigation by NOSDRA and the environmental group expected to shed light on the cause and consequences of the leak.

Beijing Set To Refill Strategic Oil Reserve After Draining It For Most Of 2023 -- It's not just the US that is in desperate need of refilling its strategic oil reserve after Biden drained it to score some quick political points ahead of the 2022 midterms. China also needs to refill its oil tanks after steadily drawing on those stockpiles for much of 2023... but like in the US, don’t expect a massive buying spree that will send global prices rallying.According to data from Vortexa, onshore inventories in the world’s biggest crude importer fell to an eight-month low at the start of the year. That’s likely to trigger more purchases on an international market which has been balanced between Middle East tensions and a transitory surge in US supply (which grinds to a halt the second the shale M&A wave is over).As readers are well aware, China’s oil consumption - and estimates of how much it’s holding in reserve - are crucial to the trajectory of world prices. All the extra fuel consumed after Beijing abandoned its Covid Zero travel restrictions helped lift global benchmark Brent crude above $95 a barrel in September. But that pent-up demand now looks spent and China’s economy is struggling, suggesting that restocking by refineries this year will be moderate unless of course Beijing follows through with its intentions of aggressively restarting growth and halting the plunge in the local market.Similar to the US, with oil prices now around $80 a barrel, that might not be low enough to tempt the government to add to its strategic reserves, although there is the risk that prices may rise much more if the Red Sea situation escalates, forcing both China and the US to miss their refilling window.Although China’s crude imports hit an annual record in 2023, the peak came in the summer. And even though stockpiles have been depleted, they’re still running above their five-year average, as the Bloomberg chart below shows.

Saudi Arabia’s Crude Oil Exports Hit 5-Month High in November - Saudi Arabia’s crude oil exports inched up in November from October to reach a five-month high, data from the Joint Organizations Data Initiative (JODI) showed on Monday. Crude oil exports from the world’s top crude exporter rose by 39,000 barrels per day (bpd) to around 6.34 million in November, up from October’s 6.3 million bpd level, according to the latest available data in JODI, which compiles self-reported data from many countries. Yet, Saudi crude oil production fell in November by 122,000 bpd to 8.82 million bpd—the lowest level so far for 2023, per the data in JODI, as the Kingdom continues to cut production as part of the OPEC+ agreement and reduces voluntarily output by an extra 1 million bpd. Saudi Arabia’s crude oil production in November was below the five-year average range for the period 2018 through 2022, the data showed. The volume of direct burn of crude fell slightly in November, and so did refinery runs, according to JODI. Saudi crude oil and oil products closing stocks fell by 4.05 million barrels to 230.4 million barrels in November. Of these, product inventories dropped by 4.19 million barrels, while crude inventories increased by 140,000 barrels. Saudi Arabia’s crude oil production and exports in early 2024 are expected to be around the levels reported in the most recent JODI datasets as the Kingdom has pledged to continue its voluntary production cut of 1 million bpd by the end of the first quarter of the year. Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said at the end of 2023 that the OPEC+ production cuts could extend beyond March 2024 if the market requires it. The Saudi energy minister also criticized in early December commentators for failing to understand the group’s output agreement and suggested that this would change once “people see the reality of the deal.”

Iran accounts for 12% of OPEC oil revenues in 9 months: IEA - Tehran Times - The International Energy Agency (IEA) has put Iran's oil income in the first nine months of 2023 at about $34 billion, which was equivalent to 12 percent of OPEC's total income in this period, Shana reported. Based on the IEA data, the total oil revenues of the 13 OPEC members in the mentioned nine months stood at $281.2 billion. The Islamic Republic’s in the mentioned period reached $33.9 billion, about two times the total oil revenue of the country in 2020. According to the U.S. Department of Energy, Iran sold only $17 billion of oil in 2020 and the country’s oil income rose to $37 billion in 2021, while Iran's total income from oil sales in 2022 was $54 billion. The report released by the U.S. Department of Energy earlier this month stated that Iran has been the top OPEC member in terms of production increase in 2023, with an increase of 330,000 barrels per day (bpd). The U.S. Energy Information Administration (EIA) affiliated with the Department of Energy mentioned in its latest report that the total oil production of Iran was estimated at 2.87 million bpd at the end of 2023. According to the mentioned entity, Iran’s oil production stood at 2.54 million bpd in 2022. The figures show that total OPEC oil production was 26.89 million bpd in 2023 which shows 630,000 barrels fall year on year. OPEC produced 27.52 million bpd in 2022. This report has put Iran's oil production in the last month of last year at 3.17 million bpd. Iran was the third-largest OPEC producer after Saudi Arabia and Iraq in December 2023. The 330,000-bpd increase in Iran’s 2023 oil production indicates that sanctions have been ineffective on Iran's oil industry. Back in June 2023, Bloomberg reported that the production and export of Iranian oil in 2023 reached record highs since the country came under U.S. sanctions more than five years ago. The report published in late June 2023 stated that Iran was shipping the highest amount of crude in almost five years despite U.S. sanctions. Bloomberg cited energy analysts as saying that Iran’s oil exports have surged to the highest level since the U.S. unilaterally re-imposed sanctions on the country in 2018. A Reuters report, also said in June last year, that Iranian crude shipments continued to rise in 2023 with higher shipments to China, Syria, and Venezuela. The report quoted consultants, shipping data, and a source familiar with the matter.

OPEC may need further supply curbs to balance market, says Mercuria chief - OPEC may need to cut production further to keep oil prices at current levels in the face of stuttering demand growth and high U.S. output, the CEO of commodities trader Mercuria Energy Group said on Wednesday. U.S. crude production will climb to record levels over the next two years, the U.S. Energy Information Administration (EIA) said last week, as efficiency gains offset a decline in rig activity. The EIA expects output to hit a record 13.21 million barrels per day (bpd) in 2024. “U.S. oil production growth was underestimated over the past year. But it will probably slow down because of huge industry consolidation and cost reduction,” Mercuria CEO Marco Dunand told Reuters on the sidelines of the World Economic Forum in Davos. That consolidation included $135 billion of acquisitions by only three companies: Exxon Mobil, Chevron Corp and Occidental Petroleum. “High U.S. (oil) production growth works well when Chinese demand is growing by 1 million bpd a year. But both Chinese and overall global demand are slowing and will probably grow by 1.5 million bpd this year,” Dunand said. Data on Wednesday showed China’s economy grew less than expected in the fourth quarter last year, weighing on oil prices. Brent futures Lwere down a $1.50 at $76.78 a barrel by 1135 GMT. Geneva-based Mercuria is one of the world’s top five oil traders, reaping a record $3 billion in profit in 2022, as well as a major trader in power, natural gas and emissions markets. The more bearish sentiment is supported by the lack of any material impact on oil output and flows from escalating Middle East tensions and Red Sea attacks so far. Dunand’s view was echoed by rival Gunvor. In the environment of slower demand growth, OPEC needs to show very good compliance with agreed supply curbs, said Dunand. “The Saudis might need to go further with production cuts if they want to control the price,” he added.

Delegates Say OPEC+ Doesn't Plan Any Changes to Oil Output Policy -- OPEC+ isn’t planning to make any changes to oil output policy at next week’s monitoring meeting, several delegates from the group said. Saudi Arabia and its allies have just this month started new production cutbacks and need more time to assess their impact, said the officials, who asked not to be identified. The group’s Joint Ministerial Monitoring Committee is due to convene online on Feb. 1. Oil prices have so far shown a muted response to the additional 900,000 barrel-a-day supply reduction being undertaken by the Organization of Petroleum Exporting Countries and its partners, which comes alongside geopolitical tensions including a conflict in the Middle East and attacks on shipping in the Red Sea. Brent crude has gained a few dollars this year to trade near $80 a barrel in London. Nonetheless, such levels are probably enough to forestall further action by the cartel for the time being, said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “Thanks to the high price level, the JMMC is unlikely to call for a strategy change,” Fritsch said. The OPEC+ monitoring committee will meet on Thursday via a videoconference that’s due to start at 12pm Vienna time, where the group’s headquarters is located. There are no plans to issues policy recommendations at the session, which will instead focus on reviewing OPEC+ production levels at the end of last year, one official said. Full data for January — the first month of the new curbs — won’t even be available in time for the meeting, the person said. The latest supply curbs — which deepen previous reductions made last year — are due to last for the first quarter, and Riyadh has said they could “absolutely” be prolonged. Delegates said a decision on any extension is more likely to happen in the months ahead.

Oil Prices Decline as Libya Resumes Production from Largest Field Sharara Oil prices fell as OPEC member Libya resumed production from its largest field, boosting global supplies and overcoming concerns about tensions in the Red Sea that appear set to continue disrupting shipping. Global benchmark Brent crude fell to $78 a barrel, after a week of trading within a narrow range, while West Texas Intermediate (WTI) was little changed and remained above $73. A The Libyan National Oil Corporation said that flows from the Sharara field, which previously pumped about 270,000 barrels per day, will resume after a three-week hiatus. Elsewhere in the Middle East, traders are anticipating a long-term disruption to shipping in the Red Sea and Suez Canal, as the United States tries to prevent Iran-backed Houthi rebels in Yemen from attacking ships. Military action to deter attacks will take some time, according to Biden administration official John Feiner, who hinted that Washington may take additional steps in the coming days. The seesaw oil prices pattern came as the impact of tensions across the Middle East, including the war between Israel and Hamas in the Gaza Strip, was balanced by expectations that oil markets would remain adequately supplied. Last week, the International Energy Agency highlighted increases in oil production outside the OPEC members, while demand growth is slowing. This comes as cold weather in the United States has halted millions of barrels of supplies, which could take weeks to restore. Oil Prices RBOB gasoline (Nymex) $216.66 per Gallon +0.38. Brent blend $78.49 per barrel -0.07. WTI (Nymex) $73.21 per barrel -0.20.

Oil rises about 2% after suspected Ukraine drone attack on Russia fuel terminal -- Oil prices rose Monday after Ukraine reportedly attacked a major Russia fuel terminal over the weekend, raising renewed concerns about supply disruptions. The West Texas Intermediate futures contract for February gained $1.78, or 2.42%, to settle at $75.19 a barrel. The Brent contract for March rose $1.50, or 1.91%, to settle at $80.06 a barrel. Ukrainian drones struck a major fuel terminal near St. Petersburg, a sources in Kyiv told the BBC and The Wall Street Journal. The Ust-Luga facility on the Baltic Sea exports 1.35 million barrels per day of crude oil, fuel and refined products, according to data from Kpler. "The Ukrainian drone attack on the Baltic port raises the question: Is this going to be a policy decision by Ukrainians to attack Russian oil infrastructure? If that's the case, that's a problem,". The attack highlights the vulnerability of these facilities to drone strikes, not just in Russia but also elsewhere in the world particularly in the Middle East, . "It's a pretty significant terminal they hit and if they continue to try to target Russian oil infrastructure that would be a game changer and that's what the market is pricing in here," . In the Middle East, meanwhile, several U.S. personnel are being evaluated for "traumatic brain injuries" after militants allied with Iran attacked an airbase in Iraq on Saturday with ballistic missiles and rockets, according to U.S. Central Command. U.S. forces stationed in Iraq and Syria have repeatedly come under attack by Iran-allied militants since Israel's military operation in Gaza began. Houthi militants, also allied with Iran, have continued their attacks on shipping through the Red Sea, a crucial trade artery, despite U.S. airstrikes. The attacks have stoked worries that the U.S. and Iran are getting drawn into a regional conflict that could disrupt oil supplies. Libya's National Oil Corporation, meanwhile, resumed full production at the Sharara oilfield on Sunday after protests shut down output for two weeks. Sharara is one of Libya's largest oilfields with capacity to pump 300,000 barrels per day. Traders have generally been more focused on the supply and demand outlook than geopolitical risk. The International Energy Agency has a bearish forecast for 2024, projecting that production outside OPEC, particularly in the U.S., will rise by about 1.5 million barrels per day, more than covering global demand growth of 1.2 million barrels per day. OPEC, on the other hand, has presented a stronger outlook with oil demand forecast to grow by 2.2 million barrels per day, while production outside OPEC will grow by 1.3 million barrels per day. "Investors want to be bullish but tepid data and cautious narrative from policymakers keep them on the backfoot," Tamas Varga, an analyst with PVM Oil Associates, wrote in a note.

Oil Slides Despite Flaring Tensions in Mideast, Europe -- Following a 2% advance at the start of the week, oil futures pulled back early Tuesday despite a fresh series of joint U.S. and U.K. strikes against Houthi targets in Yemen and a suspected drone attack against Russia's main Baltic Sea fuel terminal. Poor weather conditions and the attack on the Ust-Luga fuel terminal have depressed Russian oil exports to a 1-1/2 month low 3.02 million bpd during the week-ended January 21, according to tanker-tracking data analyzed by Bloomberg. Russian crude oil exports have since resumed, but the repairs from the drone strike still could take weeks to be fully completed. The commercial seaport Ust-Luga, located about 120 miles west of St. Petersburg, is a multifunctional port designed for the shipment of all types of cargo, oil, and petroleum products to international markets, and has both universal and specialized terminals. By annual turnover, Ust-Luga is one of the five largest cargo ports in Europe. Together with a vast shipping capacity, the facility is home to a large refining complex. In 2022, Ust-Luga processed almost 7 million metric tons of stable gas into end products, including 4.2 million metric tons of light and heavy naphtha, 1 million metric tons of jet fuel and 1.5 million metric tons of fuel oil and gasoil. Most of the petroleum products refined at the facility are shipped to Asia, namely China, Singapore, and Malaysia, while jet fuel is delivered to Istanbul for Turkish Airlines. Separately, U.S. and U.K. military forces carried out a successful round of airstrikes against Houthi targets in Yemen, hitting an underground storage facility and Houthi missile and surveillance capabilities. The strikes were "intended to disrupt and degrade the capabilities that the Houthis use to threaten global trade and the lives of innocent mariners." read the joint statement. Houthi rebels continue to assault commercial vessels passing through the Bab al-Mandab Strait, spiking up freight rates and forcing tankers to take a longer journey across the southern tip of Africa. Combined with intensifying attacks on Russian energy infrastructure and shipping restrictions through the Panama Canal, tensions in the Red Sea stand to further support commodity prices and underlying inflation across developed and developing economies alike. Near 7:30 a.m. EST, international crude benchmark Brent for March delivery retreated $0.69 to below $80 bbl at $79.36, with next-month April futures once again trading at a premium of $0.47 bbl. U.S. crude benchmark for March delivery declined $0.59 bbl to near $74.18 bbl. NYMEX February RBOB futures fell $0.0328 to $2.2050 gallon, and February ULSD futures dropped back $0.0167 to near $2.6768 gallon.

Oil prices settle down slightly on more supply in US and abroad (Reuters) - Oil prices settled lower on Tuesday as traders focused on rebounding crude output in parts of the U.S., along with rising supply in Libya and Norway, rather than risks to supply posed by conflict in Europe and the Middle East. Brent crude settled at $79.55 a barrel, losing 51 cents, or 0.6%. U.S. West Texas Intermediate crude settled at $74.37 a barrel, shedding 39 cents, or 0.5%. In North Dakota, the third-largest oil-producing U.S. state, some oil output came back online after shutting because of extreme cold, the state's pipeline authority said. However, output was still down as much as 300,000 bpd. Persistent weakness in U.S. gasoline demand has also hit oil prices, said John Kilduff, partner at Again Capital LLC. While U.S. crude stocks dropped by 6.67 million barrels last week, gasoline inventories jumped by 7.2 million barrels, according to market sources citing American Petroleum Institute figures. Official U.S. government data is due on Wednesday. Rising production elsewhere further pressured prices. Norway's crude production rose to 1.85 million barrels per day (bpd) in December, up from 1.81 million bpd the previous month and beating analysts' forecasts of 1.81 million bpd, according to the Norwegian Offshore Directorate (NOD). In Libya, production at the 300,000 bpd Sharara oilfield restarted on Jan. 21 after the end of protests that had halted output since early this month. Geopolitical uncertainty limited losses. "You've got the geopolitical pressures that aren't enough to really rally the oil market, but they're enough to keep the market from bottoming out of the range," s Crude prices rose by around 2% on Monday after a Ukrainian drone strike on Novatek's Ust-Luga Baltic fuel export terminal near Russia's second city St Petersburg raised supply concerns. In the Middle East, tensions rose after U.S. and British forces carried out a second joint round of strikes on Houthi positions in Yemen.

Oil Mixed Despite Large Crude Draw, Softer US Dollar - New York Mercantile Exchange oil futures and Brent crude traded on the Intercontinental Exchange were rangebound early Wednesday after industry data showed U.S. commercial crude oil inventories decreased by a larger-than-expected margin during the week-ended January 19, while a softer U.S. dollar pressured by risk-on sentiment in financial markets further limited the downside for the oil complex. The American Petroleum Institute reported late Tuesday commercial oil stockpiles in the United States tumbled by 6.674 million bbl last week, more than four times an expected 1.4 million bbl drawdown. At 429.9 million bbl, U.S. crude oil inventories currently stand about 3% below the seasonal five-year average. Supply at the Cushing, Oklahoma tank farm, the New York Mercantile Exchange delivery point for West Texas Intermediate futures, also fell by 2.031 million bbl. Bearish elements in the report could once again be found in the refined fuels complex, with gasoline stockpiles surging by 7.183 million bbl in the reviewed week, nearly five times calls for a build of 1.5 million bbl. If confirmed by government data later this morning, this would mark the fourth consecutive weekly build in commercial gasoline stocks that currently stand just above the five-year average. Data further show distillate stockpiles decreased by 245,000 bbl versus an expected decline of 700,000 bbl. Next, traders await the release of the weekly inventory report from the U.S. Energy Information Administration, scheduled for 10.30 AM ET. Near 7:30 a.m. EST, the U.S. crude benchmark for March delivery traded modestly lower at $74.19 bbl, with next-month April futures trading near parity at $74.10 bbl. International crude benchmark Brent March contract slipped $0.27 to $79.29 bbl, with the prompt spread widening backwardation to $0.40 bbl. NYMEX February RBOB futures eased $0.0155 to $2.1946 gallon, and February ULSD futures retreated $0.0241 to near $2.6672 gallon. In financial markets, the U.S. dollar index lost 0.43% against the basket of foreign currencies to trade near 102.955, lending tepid support for the front-month West Texas Intermediate contract. Weighing on the oil complex, Russia has resumed oil exports from the Baltic port of Ust-Luga mid-day Monday, less than 24 hours after a suspected drone attack on a gas processing facility adjacent to export terminals. Market sources, however, anticipate Russia's oil shipments could experience some delays in the coming days amid ongoing maintenance and increased security concerns. Sunday's attack on the Ust-Luga fuel terminal along with weather-related loading restrictions pressed Russian oil exports to a nearly two-month low 3.02 million bpd during the week-ended Jan. 21, according to tanker-tracking data analyzed by Bloomberg.

Oil Market Surges on Unexpected Drop in Crude Stocks and Decline in U.S. Production - The oil market traded higher on Wednesday following a larger than expected draw in crude stocks and fall in U.S. crude output. The geopolitical tensions in the Middle East also continued to support the oil market. The oil market traded higher in overnight trading as it traded back towards the $75.00 level on news that China’s central bank will cut the amount of cash banks must hold as reserves from February 5th, a move that is expected to support the economy. The market erased some of its gains and posted a low of $74.27 ahead of the release of the EIA’s weekly petroleum stocks report. However, the market later bounced off its low and breached its previous highs as it rallied to a high of $75.83 in light of a the larger than expected draw in crude stocks of over 9 million barrels on the week, compared with market expectations of a 2.2 million barrel draw. The EIA also reported that U.S. oil output fell from 13.3 million bpd two weeks ago to a five-month low of 12.3 million bpd last week after oil wells froze due to an Arctic freeze. The crude market later gave up some of its sharp gains ahead of the close. The March WTI contract settled up 72 cents at $75.09 and the March Brent contract settled up 49 cents at $80.04. The product markets ended the session in negative territory, with the heating oil market settling down 95 points at $2.6818 and the RB market settling down 6 points at $2.2095.The EIA reported that crude inventories fell by 9.2 million barrels to 420.7 million barrels in the week ending January 19th. The draw was driven by a decline in U.S. crude imports of 1.2 million bpd as the winter weather shut in refineries and kept motorists off the road. The winter storms also caused a 1 million bpd drop in crude production to 12.3 million bpd, the largest decline since September 2021. Refinery crude runs fell by 1.4 million bpd to 15.3 million bpd and refinery utilization rates fell by 7.1% to 85.5% of total capacity, the largest decline since December 2022 during Winter Storm Elliot. U.S. gasoline stocks increased by 4.912 million barrels to 253 million barrels, the highest level since February 2021. U.S. Midwest gasoline stocks increased by 1.3 million barrels to 59.8 million barrels, the highest level since March 2022. The EIA also reported that the four week average for distillate product supplied in the U.S. fell last week to the lowest level since June 2020. The four week average fell to 3.38 million bpd.Global Research sees Brent crude prices remaining rangebound at $75/barrel to $85/barrel in the medium term as analysts expect the spare capacity to offset any impact of geopolitical risks. HSBC analysts said the "above average" spare production capacity held by OPEC and allies will dampen the impact of Red Sea disruption and increasing geopolitical risks. The analysts said OPEC+'s spare production capacity of 4.5 million bpd at the end of 2024, which was up from 4.3 million bpd at the end of 2023, should help dampen price spikes. HSBC analysts forecast oil demand growth of 1.3% in 2024 over a year earlier, further slowing to 0.9% in 2025. According to industry sources and LSEG data, Russia’s Novatek resumed fuel loadings at its Baltic Sea Ust-Luga terminal, damaged in a suspected drone attack. It is drawing on stockpiles to resume fuel loadings. According to the data, Minerva Julie and Chrystal Arctic tankers are currently being loaded with fuel. Operations at the processing complex have not yet resumed. Analysts have said it would take weeks for the complex to restore full-scale operations.

Oil Rallies after Houthis Continue Red Sea Attacks -- Oil futures advanced more than 2% on Thursday after Iran-aligned Houthi militants in Yemen claimed they had hit a U.S. warship in the Bab el-Mandeb Strait. At settlement, March WTI futures advanced $2.27 to $77.36 bbl – the highest trade since Dec. 27, 2023. The international crude benchmark spiked by $2.86 bbl to $82.43 bbl, up by $2.39 in the afternoon session. February ULSD futures advanced $0.1136 to $2.7954 gallon, while front-month RBOB futures rallied $0.0549 to $2.2644 gallon. Houthi rebels in Yemen said they had made a direct hit on an American warship this morning, forcing two commercial vessels to re-route from the Bab el-Mandeb Strait in the Red Sea, according to the Houthi spokesman. The U.S. military refuted the claim. Instead, U.S. Central Command said Houthis fired anti-ship ballistic missiles toward the U.S.-flagged, owned, and operated containership M/V Maersk Detroit, which was transiting the Gulf of Aden. The Houthis continue to attack commercial shipping vessels in the Red Sea, forcing a growing number of cargo ships and oil tankers to divert away from the Red Sea/Suez Canal route to the longer and more expensive route via the Cape of Good Hope in Africa. Earlier this week, U.S. and U.K. military forces carried out a successful round of airstrikes against Houthi targets, hitting underground storage facilities and Houthi missile and surveillance capabilities. The strikes were, "Intended to disrupt and degrade the capabilities that the Houthis use to threaten global trade and the lives of innocent mariners," read the joint statement. Houthi rebels continue to assault commercial vessels passing through the Bab al-Mandab Strait, pushing up freight rates and forcing tankers to take a longer journey across the southern tip of Africa. Domestically, about 150,000 bpd of North Dakota oil production is still shut-in by last week's frigid weather and heavy snowfall which has disrupted operations in Bakken basin oil fields. Before the disruption, North Dakota oil production averaged about 1.25 million bpd. The U.S. Energy Information Administration reported on Wednesday nationwide oil production fell by 1 million bpd to the lowest level since late 2022 at 12.3 million bpd. The deep freeze also disrupted operations at Midwest and Gulf Coast refineries, with nationwide refinery throughput down by nearly 1.4 million bpd or 8.2% from the previous week to 15.2 million bpd. In the Gulf Coast, refinery crude throughout plummeted by 1.1 million bpd and Midwest runs fell 300,000 bpd. While market participants are yet to hear of any damage to refineries in these regions, some refiners in the Gulf Coast moved units into planned maintenance earlier than normal. Further lending support to WTI futures, commercial crude oil supplies declined by a larger-than-expected 9.2 million bbl in the reviewed week to 420.7 million bbl, about 5% below the five-year average. The supersized draw was much larger than a 1.4 million bbl decline expected by analysts and a 6.678 million bbl drop reported by the American Petroleum Institute on Tuesday. Oil stored at the Cushing, Oklahoma hub, the delivery point for the WTI contract, fell 2 million bbl to 30.1 million bbl.

Oil Prices Climb Following Significant Inventory Drawdown and Positive Economic Stimulus Signals The oil market continued to trend higher on Thursday as the market remained well supported following the EIA report on Wednesday showing a larger than expected draw in crude stocks last week of more than 9 million barrels. The market was also supported by news of China cutting reserve requirements for banks in order to spur growth, increasing sentiment around the country’s economic recovery. Meanwhile, a drone attack caused a fire that damaged a major refinery in Russia on Thursday following another strike that endangered Russian crude flow earlier in the week. The crude market posted a low of $75.16 in overnight trading and bounced higher on the bullish fundamentals. The market never looked back as it extended its gains over $2.40 to a high of $77.51 on the close. The March WTI contract settled up $2.27 at $77.36 and the March Brent contract settled up $2.39 at $82.43. The product markets also settled sharply higher, with the heating oil market settling up 11.36 cents at $2.7954 and the RB market settling up 5.49 cents at $2.2644. Kuwait Oil Tanker Company said it is monitoring and assessing the situation in the Red Sea on a daily basis. It said the company is taking precautionary measures to protect the safety of its fleet.Valero Energy Corp’s Chief Operating Officer, Gary Simmons, said the Red Sea attacks have led to an increase in freight rates for crude oil.The French army said a second French warship has arrived in the Red Sea region as part of efforts to ensure freedom of navigation. French officials have said their ships remain under national command and their priority is to escort French-linked vessels.Bloomberg is reporting a fire damaged Rosneft PJSC’s Tuapse refinery on Russia’s Black Sea coast early Thursday, the latest in a string of incidents at the nation’s downstream and energy-export facilities blamed on attacks by Ukraine. Local officials said a fire at a Rosneft-owned export-oriented oil refinery, with a capacity of 240,000 bpd, in the southern Russian town of Tuapse overnight has been extinguished.S&P Global Commodities at Sea data is showing the Russian Ust-Luga Baltic Sea facility has resumed docking tankers following a suspected Ukrainian drone attack that have resulted in a fire at the facility.The U.S. economy grew faster than expected in the fourth quarter amid strong consumer spending, with growth for the full year coming in at 2.5%. The Commerce Department's Bureau of Economic Analysis said GDP in the last quarter increased at a 3.3% annualized rate in its advance estimate of fourth-quarter GDP. The economy grew at a 4.9% pace in the third quarter. Consumer spending increased at a 2.8% rate in the October-December quarter after increasing at a 3.1% pace in the third quarter. The personal consumption expenditures price index increased 1.7% in the fourth quarter compared with an increase of 2.6%. Excluding food and energy prices, the PCE price index increased 2%, the same change as the third quarter.

Oil settles at highest in nearly 8 weeks on strong economic growth | (Reuters) - Oil prices rose for a second week in a row and settled at their highest in nearly two months on Friday as positive U.S. economic growth and signs of Chinese stimulus boosted demand expectations, while Middle East supply concerns added support. Brent crude futures rose $1.12, or 1.4%, to settle at $83.55 a barrel, their highest close since Nov 30. U.S. West Texas Intermediate crude climbed 65 cents or 0.8% to $78.01, also the highest close since November. Both benchmarks made weekly gains of more than 6%, marking their biggest weekly increase since the week ending Oct. 13 after the start of the Israel-Hamas conflict in Gaza. "Economic stimulus from China, stronger-than-expected 4Q GDP growth in the U.S., cooling U.S. inflation data, ongoing geopolitical risks, and the larger-than-expected 9.2 million-barrel drop in U.S. commercial crude stocks for last week have all combined to wedge prices higher," The Houthi military spokesperson said naval forces carried out an operation targeting an oil tanker in the Gulf of Aden, causing a fire to break out, adding to worries of supply disruptions. Oil was also boosted earlier this week by a larger-than-expected drawdown in U.S. crude stockpiles. The depletion in inventories, especially around the WTI delivery point at Cushing in Oklahoma and across the Midwest, could create a squeeze on nearby futures prices. Supply concerns are evident in the structure of Brent futures. The premium of the first-month contract to the sixth on both Brent and WTI rose to the highest since November, indicating a perception of tighter prompt supply. A potential fuel supply disruption after a Ukrainian drone attack on an export-oriented oil refinery in southern Russia also supported prices. On the demand side, the U.S., the world's biggest oil consumer, registered faster-than-expected economic growth in the fourth quarter, data showed on Thursday. Sentiment was also buoyed this week by China's latest measures to boost growth. Traders, however, bet the U.S. central bank is more likely to start its round of rate cuts in May, rather than March, weighing on crude futures. Also curbing gains, Baker Hughes said U.S. energy firms this week added two oil rigs, pushing the figure up to 499. Money managers raised their net long U.S. crude futures and options positions in the week to Jan. 23, the U.S. Commodity Futures Trading Commission (CFTC) said.

Oil Posts Weekly Gain After Another Tanker Attack --Oil rallied to the highest price in two months after a fuel tanker was struck near Yemen, underscoring the geopolitical risks to crude supplies. West Texas Intermediate rose to top $78 a barrel, the highest price since November. The ship operating on behalf of trading giant Trafigura Group was hit by a missile about 55 miles southeast of Aden, Yemen. Futures for refined products, including diesel and gasoline, also jumped to two-month highs. Crude climbed more than 6% this week — the biggest gain since the week after the start of the Israel-Hamas war — as positive fundamental news and a push from trading algorithms helped futures surpass key technical levels. Still, the US benchmark settled overbought on its nine-day relative strength index, suggesting the surge may have been overdone. Crude’s advance has been underpinned by elevated tensions in the Middle East, with the US striking Iran-backed Houthi rebels in Yemen to force them to halt attacks on commercial shipping in the Red Sea. Elsewhere, drone attacks on refineries in Russia endangered crude flows as the war in Ukraine drags on. Oil has gained more than 8% in January, with additional support from an unexpectedly large drawdown in US inventories and efforts by Chinese policymakers to shore up the economy. Still, many traders remain cautious given prospects for robust supplies from non-OPEC producers, as well as slower demand growth in major importers, including India. WTI for March delivery rose 65 cents to settle at $78.01 a barrel in New York. Brent for March settlement advanced $1.12 to settle at $83.55 a barrel.

Saudis Continue Sending Oil via Tense Red Sea -- Saudi Aramco, the world’s largest oil company, is continuing to send tanker loads of crude and fuels through the southern Red Sea, where Houthi militants have for months been menacing merchant ships in response to Israel’s war in Gaza. “We’re moving in the Red Sea with our oil and products cargoes,” Mohammed Al Qahtani, who heads Aramco’s refining and oil trading and marketing businesses, said in an interview at the company’s headquarters in Dhahran. The associated risks are “manageable,” he said. The decision contrasts with swaths of other tanker owners who abandoned Red Sea trips after the US and UK bombed parts of Yemen in an effort to quell the Houthi attacks. The militants responded by saying both nations’ shipping would be targeted, alongside that of Israel prompting naval warnings for merchant vessels to stay away. Even before the US and UK attacks, which have been ongoing since Jan. 12, hundreds of container ships and many other merchant vessels had already veered away from the area — an unavoidable route for any carrier wanting to use the Suez Canal to cut between Asia and Europe. That’s lengthened voyages and delayed cargoes of everything from fuels to car parts as many of the ships go the longer way around Africa. It’s also fanning concerns about a return of inflation. The Saudis have called for restraint in the US and UK strikes against the Houthis, trying to keep its own peace talks alive with the militants. The kingdom is seeking to end its militarily involvement in Yemen’s civil war, a conflict that has seen the rebels attack Saudi oil installations in the past. Saudi Arabia’s location — with the Red Sea on its west and the Persian Gulf on its east — makes it somewhat tricky for OPEC’s largest producer to avoid using the area. Aramco regularly brings crude and fuel from the Persian Gulf, where its largest oil fields and major refineries are located. There have been a steady stream of shuttle tankers going through the southern Red Sea — including to and from the Jizan refinery in the Red Sea — since the conflict started, tanker tracking compiled by Bloomberg shows. A fuel cargo for Jordan also went through. However, Aramco’s customers have shipped no crude cargoes through the Red Sea so far this month that might at other times have gone through the waterway via Egypt to buyers in the west. Such flows are intermittent anyway because most Saudi crude goes to Asia. At least two other tankers that loaded Saudi crude at Ras Tanura and fuel at Jubail, both in the Gulf, are making their way around Africa on the trip to Europe, rather than taking the shorter route through the Red Sea, according to ship tracking.

Saudi Tankers Given Passage Through Red Sea By Houthis, Alongside Russia & China --China and Russia aren't the only countries being given a "pass" from Yemen's Houthi rebels, but Saudi Arabia is also exporting crude oil through the Red Sea as if in perfectly normal times (well, almost). At a moment that especially Western and any and all Israeli-linked vessels are being targeted by rocket and drone attacks out of Yemen, the head of Aramco’s refining, oil trading and marketing division Mohammed Al Qahtani has confirmed to Bloomberg, "We’re moving in the Red Sea with our oil and products cargoes." He added that the risks remain "manageable". As we've been chronicling, a who's who of major tanker and container shipping companies have halted their Red Sea transit, instead opting for the much longer journey around the Cape of Good Hope in Africa. This typically adds some $1 million to the total transport bill for a tanker, LSEG Shipping Research data shows.Bloomberg's analysis shows that even at this very moment in which US warships are coming under fire, Saudi transit through the vital waterway is alive and well: In the first half of January, Aramco shipped as much crude from its Red Sea terminal at Yanbu northwards toward Europe as it did in the whole of the previous month, vessel tracking data compiled by Bloomberg show.“That is also giving us huge access and optionality,” Qahtani said. “We are assessing that almost on a daily basis.”Still, like the rest of the industry, Aramco is having to deal with fewer vessels willing to travel into the Red Sea and higher insurance costs for doing so.In what was no doubt meant as a message adding insult to injury to the Israel-friendly Western allies, the Iran-linked Houthis starting over a week ago declared that Chinese and Russian-flagged or owned vessels would not be attacked in the Red Sea.

US ships with Defense Department cargo attacked by Yemen Houthis (AP) — Two American-flagged ships carrying cargo for the U.S. Defense and State departments came under attack by Yemen’s Houthi rebels on Wednesday, officials said, with the U.S. Navy intercepting some of the incoming fire.The attacks on the container ships Maersk Detroit and Maersk Chesapeake further raise the stakes of the group’s ongoing attacks on shipping through the vital Bab el-Mandeb Strait. The U.S. and the United Kingdom have launched multiple rounds of airstrikes seeking to stop the attacks.Meanwhile, Qatar, one of the world’s top exporters of liquified natural gas, warned that its deliveries were affected by ongoing Houthi attacks over Israel’s war on Hamas in the Gaza Strip.Danish shipper Maersk, in a statement to The Associated Press, identified two of its vessels affected by the attacks as the U.S.-flagged container ships Maersk Detroit and Maersk Chesapeake. It said the U.S. Navy was accompanying its ships at the time.“While en route, both ships reported seeing explosions close by and the U.S. Navy accompaniment also intercepted multiple projectiles,” Maersk said. “The crew, ship, and cargo are safe and unharmed. The U.S. Navy has turned both ships around and is escorting them back to the Gulf of Aden.”Maersk said both vessels carried cargo belonging to the U.S. Defense and State Departments, as well as other government agencies, meaning they were “afforded the protection of the U.S. Navy for passage through the strait.”The ships were operated by Maersk Line, a U.S. subsidiary of Maersk that is “suspending transits in the region until further notice,” the company said.The U.S. military’s Central Command in an online statement blamed the Houthis for the attack, saying they fired “three anti-ship ballistic missiles. “One missile impacted in the sea,” the statement said. “The two other missiles were successfully engaged and shot down by the USS Gravely,” an Arleigh Burke-class guided missile destroyer.Central Command did not respond to further questions from the AP. The Houthis, who have been launching attacks on ships since November over Israel’s war on Hamas in the Gaza Strip, later claimed the attacks in a prerecorded statement by their military spokesman, Brig. Gen. Yahya Saree. He vowed the Houthis would continue their attacks. Since November, the rebels have repeatedly targeted ships in the Red Sea, saying they were avenging Israel’s offensive in Gaza against Hamas. But they have frequently targeted vessels with tenuous or no clear links to Israel, imperiling shipping in a key route for global trade. The U.S. and the U.K. have launched rounds of airstrikes targeting suspected missile storage and launch sites used by the Houthis in their attacks. The rebels now say they’ll target American and British ships as well.

British Oil Tanker Carrying Russian Naphta On Fire In The Red Sea After Houthi Missile Strike - The British fuel tanker operated on behalf of trading giant Trafigura, was on fire after it was struck by a missile as it transited the Red Sea, in the most significant attack yet by Yemen’s Houthi rebels on an oil-carrying vessel.Yemen's Houthis said on Friday their naval forces carried out an operation targeting "the British oil tanker Marlin Luanda" in the Gulf of Aden causing a fire to break out. They used "a number of appropriate naval missiles, the strike was direct," the Houthi military spokesperson Yahya Sarea said in a statement.“Firefighting equipment on board is being deployed to suppress and control the fire caused in one cargo tank on the starboard side,” a Trafigura spokesperson said in a statement. “We remain in contact with the vessel and are monitoring the situation carefully. Military ships in the region are underway to provide assistance.”The area in question and the southern Red Sea have been the center of multiple attacks on ships by Houthi militants in recent weeks. Since mid-November, the Houthis have launched near daily attacks on vessels transiting the waterway, in an act of solidarity with Palestinians amid the war between Israel and the militant group Hamas. The conflict has rerouted trade flows as some shippers avoid the key waterway.The tanker, headed toward Singapore, was carrying naphtha, which is used to produce gasoline and plastics. Ironically, the naphtha was of Russian origin, Trafigura said. “The vessel is carrying Russian-origin naphtha purchased below price cap in line with G7 sanctions,” a spokesperson said, however some have voiced questions about how a venerated Swiss merchant procured the Russian commodity.

The United States Navy Essentially Lost A Battle At Sea This Week -- On Wednesday the US Navy attempted to escort two US owned and flagged container carriers through the Bab el-Mandeb Strait into the Red Sea, but they turned around after coming under Houthi ballistic missile fire.A we detailed earlier, two contradictory narratives soon emerged: namely the Houthis said they scored a direct hit on one of the US ships, while the Pentagon flatly rejected the claim as nonsense. US CENTCOM said the missiles were intercepted, with one falling into the sea. But this has given rise to many more questions than answers, and some analysts are calling the hostile encounter a clear "loss" for the US Navy and the no less than three well-armed warships attempting to keep the commercial vessels safe. This engagement occurred while two American merchantmen - the Maersk Detroit and the Maersk Chesapeake - were attempting to run the Bab al-Mandeb from south to north while being covered by the USS Gravely. An AEGIS destroyer's defensive umbrella should have turned this transit into a milk run - except it didn't. CENTCOM admits that one of the Houthis' tactical ballistic missiles - undemanding targets as far as such things go - got through the Gravely's interceptors.What they neglected to mention was that it struck about a hundred meters from the Maersk Detroit, and that after the attack the convoy aborted the transit and retreated back into the Arabian Sea rather than press on into enemy fire. Was retreat the correct decision at the moment? Probably, the Gravely was shepherding two lumbering merchantmen and facing unsuppressed shore batteries of unknown strength and capability in broad daylight, quite possibly without adequate air cover given the ambiguities of the Eisenhower's exact station in the Red Sea and the limited combat radius of its air wing.Was this operational plan inadequate? Almost certainly - reading between the lines, it reeks of a complacent assumption that Houthi missile batteries had actually been suppressed by a few rounds of air raids and that a single AEGIS destroyer could handle anything the Houthis could throw at them with no need for additional contingency planning.In the event neither of these assumptions were correct - and because of it a convoy covered by one of the US Navy's premier warships retreated from a battle that was going badly. Perhaps the Task Force command should stop trying to shape narratives on this website and get to work on getting the Bab al-Mandeb back open to Western shipping, because right now that particular pool looks very closed.

Red Sea Security Deterioration Poses Risk for Energy Commodities in 2024 -A deterioration in the security situation in the Red Sea poses a key geopolitical risk for energy commodities this year, Rystad Vice President Kaushal Ramesh said in the company’s latest gas and LNG market update, which was sent to Rigzone on Thursday. “The deterioration in recent weeks of the security situation in the Red Sea, where Yemen-based Houthi militia in support of Palestine have disrupted global trade by launching drone and missile attacks on vessels, poses a geopolitical risk to LNG prices,” Kaushal noted in the update, adding that Qatar Energy suspended shipments through the Red Sea from mid-January “and has begun rescheduling shipments with European buyers”. Kaushal highlighted in the update that it has now been more than two months since the first attack on a commercial vessel, “with indications that the attacks could last at least until the Israel-Gaza conflict is resolved - an essentially uncertain duration”. “Since mid-January, the U.S. and UK have been drawn into military action in the region, striking Houthi targets inside Yemen,” Kaushal said. “However, the U.S. are in a difficult position, balancing relations with Israel while avoiding the conflict spillover over into the wider Middle East region,” Kaushal added. “Recently, the U.S. admitted that Houthi rebels are unlikely to stop their attacks regardless of U.S. action,” Kaushal continued. For the LNG market, an extended shut-in of the Red Sea route from the Middle East poses a supply risk to Europe, Kaushal stated in the update. The Rystad VP added, however, that the price impact will be delayed until Europe’s gas storage has been drawn down sufficiently. In a gas and LNG market update sent to Rigzone on January 11, Rystad Senior Analyst Masanori Odaka revealed that underground storage facilities in Europe were down 0.5 percent to approximately 96.97 billion cubic meters, “or 84.4 percent full”. “In 2023, around 15.5 million tons of LNG was sent through the Red Sea from the Middle East to Europe – a crucial 12.9 percent of the continent’s LNG supply last year,” Kaushal highlighted in the recent update, which showed that Italy’s share of LNG from the Middle East last year was over 40 percent. “Re-routing vessels through the Cape of Good Hope adds around 12.5 days to the voyage each way at 16 knots – which could require an additional 15-20 vessels to deliver the same volume over the year,” Kaushal added. “This could take the steam off the current bearish pressure on the shipping market, considering spot charter rates have dropped 23 percent across the month (two-stroke, East of Suez),” Kaushal continued. “However, it will take an increase in LNG prices before we see an increase in charter rates – more than 70 vessels could be delivered this year, representing fleet growth of more than 10 percent whereas LNG production will only grow three percent,” the Rystad representative continued.

Russian Foreign Ministry Ties Red Sea Blockade to Gaza Blockade, Backs Houthis in Moscow Meeting - --For the time being, there are no official photographs of the meeting in Moscow on Thursday evening at the Russian Foreign Ministry between Mikhail Bogdanov, the deputy foreign minister and chief Russian negotiator in the Middle East and Africa, and Mohammed (Mukhameddov) Abdelsalam leading a delegation of the Ansarallah government of Yemen, known as the Houthi movement. Bogdanov’s communiqué said “special attention was paid to the development of tragic events in the Palestinian-Israeli conflict zone, as well as the aggravation of the situation in the Red Sea in this regard. In this context, the missile and bomb attacks on Yemen undertaken by the United States and Great Britain, which are capable of destabilizing the situation on a regional scale, were strongly condemned.”This is the plainest signal to date of Russian backing for the southern front of the Arab war against Israel, and the link which the Houthis have made between the Israeli blockade of Gaza, the genocide of the Palestinians, and the Red Sea blockade which the Houthis have imposed on vessels owned or directed by Israeli shipowners, US naval fleet, and American-flagged and other vessels carrying military and civil cargoes to Israel or reload ammunition for future attacks on Yemen.At the same time across Moscow, unusually large delegations of officials of the Russian Security Council, led by Nikolai Patrushev, and Ali-Akbar Ahmadian, special presidential representative and Secretary of Iran’s National Security Council, have been meeting to discuss a detailed agenda which Patrushev’s communiqué calls a “wide range of Russian-Iranian security cooperation” and “the practical implementation of the agreements reached at the highest level.”In an open statement for reporters, Ahmadian told Patrushev: “”America’s grandeur has shattered, and today, it cannot even rally its traditional allies. A country that considers itself a superpower is engaged in war against resistance groups and the people of the region.”The display of Russian support for the Axis of Resistance against Israel and the US is unprecedented. The Foreign Ministry and Security Council meetings confirm there is now a new definition of “terrorism” in Russian warfighting strategy, in which there is both public and secret support for Hamas, the Houthis, and other groups in Lebanon and Iraq fighting for national liberation against Israel and the US.On the differentiation between national liberation which Russia supports, and terrorism which it condemns, click to read this.

Iranian-Pakistan Tensions Occur Amid Iran’s Rise as New Regional Power in West Asia - Iran and Pakistan have struck each other’s territory while targeting a terrorist group that operates on their shared border, thus confusing observers and analysts alike. Are both countries at an undeclared war? What do these developments have to do, if anything, with the overall escalation of violence in the Middle East that has been going on since Hamas operation on October 7 and Israel’s campaign in Gaza? Here is a summarized chronology of the latest events in Southwest Asia and some context. The Iranian-Pakistani border region known as Balochistan is home to a Baluchi Islamic-nationalist insurgency against both Iran and Pakistan. The Baluch Sunni movement Jaish ul-Adl is known to cooperate with Kurdish separatist groups in Iran; it also denounces the Iranian presence in the Syrian conflict. Iranian authorities in Tehran accuse (Sunni) Saudi Arabia and the US of being the main funders of Jaish ul-Adl. For years, Sunni extremist groups of a Wahabi Salafist persuasion have launched attacks against civilians in both Iran (a Shia Islamic nation) and Pakistan. The latter is a predominantly Sunni country and an Islamic Republic that has been troubled by ethnic and religious divisions and has been the target of jihadist militant groups – including ethnic Baluch separatists. In December 2023, the Baluchi group Jaish al-Adl group bombed a police station in Rask (Iran), a town close to the border with Pakistan. On January 4, a crowd gathered in the Iranian city of Kerman to commemorate the fourth anniversary of the murder (by a US drone strike) of Iran’s Revolutionary Guard head general Qassem Soleimani. Two bombs exploded near the general’s burial site, taking the life of 84 people and injuring at least 284. It was the deadliest terrorist attack against Iranians since the 1979 Islamic Revolution, The attack was claimed by the so-called “Islamic State” (Daesh) terrorist group, also known as ISIS. In retaliation, on January 15, Tehran fired ballistic missiles at what it claimed to be Islamic State terrorist targets in Syria and in (Kurdish-controlled) northern Iraq. The next day, on January 16, Iran launched attacks against alleged militant group Jaish al-Adl’s bases in neighboring Pakistan (a nuclear state), thereby triggering heated protests from the Pakistani authorities in Islamabad. India, Pakistan’s main rival, defended the Iranian measure in a statement, describing it as an act of “self-defense” Two days later, on January 18, Pakistan’s airstrikes in Iran’s Baluchistan province (also targeting alleged Baluchi combatants) killed several people, according to Tehran.Let us now move from Baluchistan to the Levant. Tehran for years now has been describing the Daesh terrorist group either as a “creation” of the US-led West or as an American proxy group. It is widely known today the US and its allies have armed and funded Syrian rebels in their efforts to overthrow the Syrian government and empowered ISIS terrorism. The same formula applies to Libya, by the way.Since 2011, amid a civil war, Syria has counted on military aid from its allies Iran and Russia. The hard truth is that, on the ground, the Iranian Revolutionary Guard, together with the (Tehran-backed) Lebanese Hezbollah have been the main anti-terrorist actors in the Levant. These forces are largely responsible for wiping out ISIS terrorists and thus guaranteeing the safety of Christians and other minorities in a region where Wahabi extremists were beheading them, kidnapping them (even “an entire convent of Syrian Orthodox nuns”), and selling and abusing women as sexual slaves, as reported Nina Shea, a senior fellow and director of the Center for Religious Freedom at Hudson Institute. Already in 2012, journalist Ariel Zirulnick, writing for the Christian Science Monitor, reported that Christians found safe haven in a Hezbollah’s stronghold, where “images of Hezbollah leader Hassan Nasrallah share mantel and wall space with the Virgin Mary.”There is therefore nothing new about Iran’s recent retaliatory strikes against ISIS/Daesh terrorist bases in the Levant. It has been fighting terrorism in the region for over a decade. Likewise, there is nothing new about Tehran fighting ethnic and religious extremist separatism in its Pakistani border. The Persian and the Pakistani nation did not merely “struck each other” – it would be more accurate to say that both targeted their common enemy across their shared border. What is new in this situation is the Iranian role.

NATO admiral warns of potential all-out war with Russia -Top NATO official Adm. Rob Bauer warned Thursday that a larger war with Russia and other adversaries is a real threat amid the ongoing conflict in Ukraine.Bauer, chair of the Western security alliance’s Military Committee, said “not everything is going to be hunky dory in the next 20 years.”“I’m not saying it is going wrong tomorrow, but we have to realize it’s not a given that we are in peace,” he said at a press conference in Brussels. “That’s why we have the plans, that’s why we are preparing for conflict with Russia and the terror groups if it comes to it.”Bauer emphasized the security alliance is defensive and does not seek conflict or a wider war.“But if they attack us, we have to be ready,” he added.Bauer gave the dire warning as NATO announced large-scale exercises next week involving all 31 alliance members, as well as candidate nation Sweden.The military drills, which run until May and are the largest since the end of the Cold War, will involve 90,000 troops and numerous vehicles, aircraft and ships spread across Europe. When announcing the drills, NATO leaders emphasized this week that it was vital to prepare for conflict and maintain readiness, even as the alliance remains defensive by nature. The U.S. is aiding two wars in Israel and Ukraine in one of the most volatile global security challenges it has faced in years.

Doomsday Clock freezes at 90 seconds to midnight amid ‘unabated ferocity’ of global risks - The world is 90 seconds away from global catastrophe on the Doomsday Clock, a dire warning but one that has not moved since last year, according to the annual update from the Bulletin of Atomic Scientists. Global instability is being driven by Russia’s nearly two-year war in Ukraine, Israel’s war on Hamas after its Oct. 7 attack, proxy battles raging in the Middle East, nuclear powers failing on arms control talks, insufficient progress on combating climate change, and the growing risks of artificial intelligence and other emerging technologies. “The risks of last year continue with unabated ferocity and continue to shape this year,” said Rachel Bronson, the CEO of the Bulletin of Atomic Scientists. “Today, we once again set the doomsday clock to express a continuing and unprecedented level of risk.” The Doomsday Clock, created in 1947, serves as an annual warning and urgent call to action by a consortium of scientists to world leaders and society to address threats to humanity. It was created in the aftermath of the U.S. dropping atomic bombings on Japan at the end of World War II, with the fathers of nuclear energy and weapons — Albert Einstein, J. Robert Oppenheimer and Manhattan Project scientists and engineers — creating the Bulletin of Atomic Scientists to educate the public and warn them about the risks of unchecked nuclear power. The Doomsday clock has the potential to move backward — it was at 17 minutes to midnight following the end of the Cold War and commitments to nuclear arms control — but has moved into the seconds over the past few years given a wider range of threats and increased risk of nuclear war. “I firmly believe that the risks of plundering into a nuclear war given that we can launch them so quickly, are much, much higher,” said Alex Glaser, associate professor in the Woodrow Wilson School of Public Affairs and in the Department of Mechanical and Aerospace Engineering at Princeton University, and a member of the science and security board at the Bulletin of the Atomic Scientists.