Feb natgas stores at 8 year high; DUC backlog at 5.1 months w/ completions at 23 mo low; biggest distillates draw in 40 weeks

natural gas price hits new 3½ year low; natural gas in storage is highest mid-February level in eight years; DUC backlog is at 5.1 months with least completions since February 2022; refinery utilization rate matches 58 week low; biggest draw from distillates supplies since May 2023

US oil prices fell for the first time in three weeks on ongoing concerns about global demand, another large increase in​ US crude supplies, and fears that the Fed would leave interest rates higher for longer than had been expected…after rising 3.1% to a three month high of $79.19 a barrel last week on increasing violence in the Middle East and on a weaker US dollar, the contract price for the benchmark US light sweet crude for March delivery settled slightly higher in Asian trading on the US holiday Monday, as lingering supply concerns from tensions in the Middle East were offset by signs of weakening demand, but erased the​ modest weekend gains and traded to a low of $78.32 ​ barrel early Tuesday​ in New York on ongoing concerns about demand, but later retraced some of those losses before once again accelerating lower in market-on-close trading​, as the Mach contract expir​e​d $1.01 a barrel lower at $78.18 a barrel, while the more widely traded contract for the benchmark US light sweet crude for April delivery settled down $1.42 at $77.04 a barrel, as lingering concerns over Chinese and U.S. economic growth outweighed geopolitical tensions in the Middle East that risk disrupting oil flows through the Red Sea transit corridor….with markets now quoting the April contract’s price, oil prices rose in Asian trade on Wednesday amid concerns over attacks on shipping in the Red Sea and growing expectations that cuts to US interest rates w​ould take longer than thought, and traded higher in New York as the market remained well supported by the continuing geopolitical tensions in the Middle East​, and settled 87 cent higher at $77.91 a barrel as traders assessed signs of near-term supply tightness in Europe and the UAE…oil prices continued to trend higher in overnight trading despite industry data showing another hefty build in U.S. inventories, on news of a missile attack on a cargo ship off the southern coast of Yemen, then moved higher in post-inventory trade Thursday after federal data confirmed that U.S. commercial crude oil inventories increased sharply for the fourth straight week, as refiners struggled to raise run rates amid heavy seasonal maintenance and unplanned outages, and settled 70 cents or 0.9% higher at $78.61 a barrel, as hostilities continued in the Red Sea as Hamas-aligned Houthis stepped up attacks near Yemen…​howevroil prices fell sharply early Friday after Fed governors said interest rate cuts would be delayed for at least another two months, and settled down $2.12 or nearly 3% at a two week low of $76.49 a barrel, even as analysts noted demand had remained largely healthy despite the impact of high interest rates….oil prices thus ended 3.4% lower on the week, while the April oil contract, which had closed at $78.46 a barrel last Friday, ended 2.5% lower..

Meanwhile, natural gas prices fell for the 6th week in seven on a lower than expected withdrawal of gas from storage and ongoing forecasts for continued mild temperatures...after falling 12.9% to $1.609 per mmBTU and posting new 3½ year lows four days last week on an anemic midwinter withdrawal of gas from storage and ​on weather forecasts promising more of the same, the contract price for natural gas for March delivery opened 2 cents lower on Tuesday and stayed down all day, on increasingly bearish forecasts to close out the month, and settled 3.3 cents lower at another new 3½ year low of $1.576 per mmBTU on forecasts for mild weather and low heating demand through early March, near record output and a drop in global gas prices to their lowest in months…however, natural gas prices opened 19 cents higher on Wednesday after a major natural gas producer announced a planned reduction in active rigs in the coming year, but gained little momentum from that open and settled 19.7 cents higher at $1.773 per mmBTU as Chesapeake Energy also cut the amount of fuel it plans to produce in 2024 by roughly 30%​, due to the recent plunge in prices to a 3-1/2-year low…however, natural gas prices opened 8 cents lower on Thursday and sunk to an intraday low of $1.661 per mmBTU​ after traders booked profits following ​t​he rally in the previous session spurred by Chesapeake Energy's decision to cut its planned output for 2024​, before settling 4.1 cents lower at $1.732 per mmBTU after the EIA’s storage report came in in line with the market’s expectations …natural gas prices opened a penny lower on Friday and spiraled down to $1.581 on record output, sufficient fuel in storage and lower heating demand, before settling 12.9 cents lower at $1​.603 per mmBTU, thus ending down 0.4% for the week..

The EIA's natural gas storage report for the week ending February 16th indicated that the amount of working natural gas held in underground storage in the US fell by 60 billion cubic feet to 2,470 billion cubic feet by the end of the week, which left our natural gas supplies 265 billion cubic feet, or 12.0% above the 2,205 billion cubic feet that were in storage on February 16th of last year, and 348 billion cubic feet, or 22.3% more than the five-year average of 2,019 billion cubic feet of natural gas that were typically in working storage as of the 16th of February over the most recent five years, and the most gas in sto​rage in mid-February in eight years…the 60 billion cubic foot withdrawal from US natural gas working storage for the cited week was was lower than the 65 billion cubic feet withdrawal from supplies that had been forecast by analysts polled by Reuters, and was also lower than the 75 billion cubic feet that were pulled from natural gas storage during the corresponding first week of February 2023, and was well than half of the average 168 billion cubic feet withdrawal from natural gas storage that has been typical for the same mid winter week over the past 5 years…

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending February 16th indicated that even after an increase in our oil exports and an increase in oil demand that could not be accounted for, we still had surplus oil to add to our stored commercial crude supplies for the fourth consecutive week, and for the 12th time in the past 18 weeks….Our imports of crude oil rose by an average of 184,000 barrels per day to average 6,654,000 barrels per day, after falling by an average of 437,000 barrels per day the prior week, while our exports of crude oil rose by 618,000 barrels per day to average 4,965,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 1,689,000 barrels of oil per day during the week ending February 16th, 434,000 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 473,000 barrels per day, while during the same week, production of crude from US wells remained at a record 13,300,000 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 15,462,000 barrels per day during the February 16th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 14,574,000 barrels of crude per day during the week ending February 16th, an average of 31,000 more 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 609,000 barrels of oil per day were being added to the supplies of oil stored in the US... So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending February 16th appear to indicate that our total working supply of oil from net imports, from transfers, and from oilfield production was 279,000 barrels per day more than what was added to storage plus 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 plugged a [-279,000] 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... Moreover, since 464,000 barrels of oil supplies per day could not be accounted for in last week’s EIA data, that means there was a 743,000 barrel per day difference between this week's oil balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, and therefore worthless...however, since most oil traders react to these weekly EIA reports as if they were accurate, and since these weekly figures therefore often drive oil pricing (as is obvious to anyone who watches oil prices), and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably reliable by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….(note there is also an aging twitter thread from an EIA administrator addressing these ongoing weekly errors, and what they had hoped to do about it)

This week's rounded 609,000 barrel per day average increase in our overall crude oil inventories came as 502,000 barrels per day were being added to our commercially available stocks of crude oil, while 107,000 barrels per day were being added to our Strategic Petroleum Reserve, the twelfth SPR increase in nineteen 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 rose to 6,409,000 barrels per day last week, which was still 4.7% less than the 6,725,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at a record 13,300,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 12,900,000 barrels per day, while Alaska’s oil production was 8,000 barrels per day lower at 431,000 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 1.5% above that of our pre-pandemic production peak, and 37.1% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.

US oil refineries were operating at 80.6% of their capacity while processing those 14,574,000 barrels of crude per day during the week ending February 16th,​u​nchanged from the 58 week low utilization rate​ of a week earlier, ​but down from their utilization rate of 92.6% five weeks earlier​,​ due in part​ to damage from the arctic cold that penetrated to the Gulf Coast in mid January... the 14,574,000 barrels per day of oil that were refined this week were 2.9% less than the 15,010,000 barrels of crude that were being processed daily during week ending February 17th of 2023 (after the refinery-freeze-offs following Christmas 2022's winter storm Elliot), and 10.1% less than the 16,210,000 barrels that were being refined during the prepandemic week ending February 14th, 2020, when our refinery utilization rate was also at a lower than normal 89.4%..

Even with the modest increase in the amount of oil being refined this week, gasoline output from our refineries was somewhat lower, decreasing by 146,000 barrels per day to 9,029,000 barrels per day during the week ending February 16th, after our refineries' gasoline output had increased by 164,000 barrels per day during the prior week. This week’s gasoline production was 4.2% less than the 9,428,000 barrels of gasoline that were being produced daily over the winter storm impacted week ending February 17th of last year, and 5.2% less than the gasoline productio​​n of 9,525,000 barrels per day during the prepandemic week ending February 14th 2020....on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 95,000 barrels per day to 4,171,000 barrels per day, after our distillates output had decreased by 281,000 barrels per day to a 58 week low during the prior week. But after four prior decreases, our distillates output was 11.3% less than the 4,700,000 barrels of distillates that were being produced daily during the week ending February 17th of 2023, and 14.0% less than the 4,852,000 barrels of distillates that were being produced daily during the week ending February 14th 2020…

With this week's decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the fourth time in fourteen weeks, decreasing by 293,000 barrels to 247,937,000 barrels during the week ending February 16th, after our gasoline inventories had decreased by 3,658,000 barrels during the prior week. Our gasoline supplies fell by less this week even though the amount of gasoline supplied to US users rose 32,000 barrels per day to 8,299,000 barrels per day, because our exports of gasoline fell by 60,000 barrels per day to 908,000 barrels per day, and because our imports of gasoline rose by 298,000 barrels per day to 734,000 barrels per day…But even after thirty-one gasoline inventory withdrawals over the past fifty-two weeks, our gasoline supplies were still 2.9% above than last February 17th's gasoline inventories of 240,066,000 barrels, while still about 2% below the five year average of our gasoline supplies for this time of the year…

Even with this week's increase in our distillates production, our supplies of distillate fuels fell for the fifth consecutive week, following eight consecutive increases, decreasing by 4,008,000 barrels to 121,651,000 barrels over the week ending February 16th, the biggest draw from distillates supplies since May​5th 2023, after our distillates supplies had decreased by 1,915,000 barrels during the prior week. Our distillates supplies fell by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 426,000 barrels per day to 3,940,000 barrels per day, and because our exports of distillates rose by 78,000 barrels per day to 1,049,000 barrels per day, while our imports of distillates rose by 110,000 barrels per day to 245,000 barrels per day...With 28 inventory decreases over the past forty-nine weeks, our distillates supplies at the end of the week were 0.2% below the 121,935,000 barrels of distillates that we had in storage on February 17th of 2023, and about 10% below the five year average of our distillates inventories for this time of the year...

Finally, even after an increase in our oil exports and other unaccounted for demand, our commercial supplies of crude oil in storage rose for the 14th time in twenty-six weeks and for the 23rd time in the past year, increasing by 3,514,000 barrels over the week, from 439,450,000 barrels on February 9th to 442,964,000 barrels on February 16th, after our commercial crude supplies had increased by 12,018,000 barrels over the prior week... With this week’s increase, our commercial crude oil inventories remained about 2% below the most recent five-year average of commercial oil supplies for this time of year, but were more than 35% above the average of our available crude oil stocks as of the third weekend of February 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 February 16th were 7.5% less than the 479,041,000 barrels of oil left in commercial storage on February 17th of 2023, but 6.5% more than the 416,022,000 barrels of oil that we still had in storage on February 18th of 2022, while still 4.3% less than the 463,042,000 barrels of oil we had in commercial storage on February 19th 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 February 23rd, the second column shows the change in the number of working rigs between last week’s count (February 16th) and this week’s (February 23rd) count, the third column shows last week’s February 16th 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 24th of February, 2023...

DUC well report for January

Monday of last week saw the release of the EIA's Drilling Productivity Report for February, which included the EIA's January 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 40th time out of the past 43 months, as both drilling of new wells and completions of drilled wells decreased in January 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 13 wells, falling from a revised 4,399 DUC wells in December to 4,386 DUC wells in January, which was also 17.9% fewer DUCs than the 5,340 wells that had been drilled but remained uncompleted as of the end of January of a year ago...this month's DUC decrease occurred as 850 wells were drilled in the seven regions that this report covers (representing 87% of all U.S. onshore drilling operations) during January, down by 12 from the 862 wells that were drilled in December, while 863 wells were completed and brought into production by fracking them, the least completions since Febr​uary 2022, down from the 926 well completions seen in December, and down from the 1,040 completions seen during January of last year....at the January completion rate, the 4,386 drilled but uncompleted wells remaining at the end of the month represents a 5.1 month backlog of wells that have been drilled but are not yet fracked, up from the 4,7 month DUC well backlog of a month ago, and up from the eight year low of 4.6 months of last January, on a completion rate that is now nealy 25% below 2019's pre-pandemic average...

the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, was up by 8 from a month earlier, rising from 772 DUC wells at the end of December to 780 DUC wells at the end of January, as 80 new wells were drilled into the Marcellus and Utica shales during the month, while 72 of the already drilled wells in the region were fracked..

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Save Ohio Parks files emergency stay to delay fracking bid approval --The Oil and Gas Land Management Commission (OGLMC) will meet Monday, Feb. 26 at 10:30 a.m.-but a Franklin County judge may stay its decisions to award oil and gas bids to frack Salt Fork State Park and Valley Run and Zepernick wildlife areas. EarthJustice and Ohio Environmental Council announced yesterday they filed an emergency stay to suspend and delay OGLMC orders to frack, pending a decision on the appeal by Save Ohio Parks, Buckeye Environmental Network, and Backcountry Hunters and Anglers of OGLMC's Nov. 15 decision to approve nominations of these areas for fracking.A decision by Court of Common Pleas Judge Jaiza Page on the emergency stay was requested by Friday, Feb. 25.The Feb. 26 OGLMC meeting venue has been changed from Ohio Department of Natural Resources headquarters to the Ohio Dept. of Public Safety, Charles D. Shipley Building Atrium, 1970 W. Broad St. in Columbus. Save Ohio Parks said there may be a heavy police presence at this venue at the Feb. 26 meeting and warns audience members of possible arrest if they cause disruptions. The Nov. 15 OGLMC meeting was called "raucous" by media after attendees shouted against fracking Ohio's state parks and public lands and protested the secretive nature of OGLMC's process that muzzled the public's right to speak at OGLMC meeting and engage in the democratic process.Save Ohio Parks is the statewide, all-volunteer group concerned about harm to the environment, people's health, methane air emissions and freshwater depletion and pollution from fracking Ohio's public lands."Unless the judge grants the emergency stay, the commission is likely to award oil and gas bids to frack our state parks and public lands at this meeting," said Loraine McCosker, steering committee member for Save Ohio Parks. "Anyone who cares about the damage fracking and fossil fuels cause to our health; climate; Ohio forests and natural places; our clean air and fresh water; or our democratic process should attend this meeting." Save Ohio Parks reminds the public that:

• . Natural gas fracking causes methane air emissions that are 80 percent more potent than greenhouse gases from carbon dioxide and accelerate climate change. Proximity to fracking well pads increases cancers, asthmas, fertility issues and other chronic illnesses.
• . Fracking uses up to 16 million gallons (equivalent to 24 Olympic swimming pools) of fresh water from lakes, rivers and streams per fracked well, per fracking. Unregulated toxic chemicals and sand are used to "crack" molecules of oil and natural gas deep underground. This process poisons the water with radioactive waste, resulting in "produced water" that must be stored in underground injection wells for generations-taking it out of our usable water supply forever.
• . These wells can leak, and do. At least three injection wells storing produced water are currently leaking near Athens, Ohio, posing an imminent danger to human health and the area's water supply.
• . Fracking destroys habitats for forests, plants, animals, fish and insects.

The Feb.26 OGLMC meeting was announced despite three pending legal actions in Ohio regarding fracking.These include a lawsuit challenging the legality of H.B. 507, which mandated fracking Ohio's public lands; a pending state investigation by Attorney General Dave Yost regarding 1,100 allegedly fraudulent, pro-fracking emails submitted to the OGLMC by an oil and gas industry PR firm; and an appeal of the Nov. 15 OGLMC decision to frack Salt Fork State Park and Zepernick and Valley Run wildlife areas."We want people to attend the OGLMC meeting, but also want to communicate the restrictiveness and potential volatility of this meeting," said McCosker. "OGLMC already told us that signs will not be allowed in the meeting area. Honestly, is that even legal in Ohio?"Also on Feb. 26, Save Ohio Parks has teamed with Third Act Ohio to organize a second event at 12:30 p.m. to protest insurance companies and their support of fossil fuels.Third Act Ohio engages seniors over 60 years old working to limit and fight climate change. The groups will rally on the public High Street sidewalk outside of Nationwide Insurance headquarters, One Nationwide Plaza, 1 W Nationwide Blvd, Columbus, OH 43215.The protest will highlight hypocritical tactics American insurance companies engage in that cancel homeowner insurance policies or re-sells them to other companies, which jack up homeowner premiums due to hurricane or flood risk.These same insurance companies use customer premium payments to invest in fossil fuels-- which contribute to increased extreme weather events and climate change.

Antis Ask Court for Emergency Stop to Drilling Under OH State Parks --Marcellus Drilling News - The money behind Big Green never stops. Where in the heck do they get it all? In November 2023, the Ohio Oil & Gas Land Management Commission (OGLMC) met in a public forum and voted to allow shale drilling under (not on top of) three different state-owned tracts of land: all 20,000 acres of Salt Fork State Park in Guernsey County, more than 300 acres of Valley Run Wildlife Area in Carroll County, and 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 set in motion a window for drillers to submit official proposals. The OGLMC is scheduled to meet next week to announce the winners. Antis have just filed a court motion to block that meeting.

Clean Energy Future Sells Lordstown Power Plant to ArcLight Capital - In June 2016, Massachusetts-based Clean Energy Future broke ground on an $800 million, 940-megawatt Utica gas-fired electric plant in Lordstown (Trumbull County), OH (see Lordstown Energy Center Breaks Ground on $890M Electric Plant). The plant was completed and went online in October 2018 (see Lordstown (OH) Energy Center Now Online, Generating 940 MW). In 2019, the super-efficient, low-emission plant won an award from POWER Magazine (see Utica-Fired Lordstown Energy Center Wins POWER Mag Top Plant Award). And that’s all we had heard about that project, which continues to hum along, producing electricity for 850,000 homes. Until now.

19 New Shale Well Permits Issued for PA-OH-WV Feb 5 – 11 - Marcellus Drilling News - There were 19 new permits issued to drill in the Marcellus/Utica during the week of Feb. 5 – 11, versus 20 permits issued the prior week. Pennsylvania issued 13 new permits last week. Ohio issued 4 new permits. West Virginia issued 2 new permits last week. Range Resources scored the most new permits with 5 split between Allegheny and Beaver counties in PA. Chesapeake Energy received 4 permits in Bradford County, PA. Seneca Resources received 4 permits in Elk County, PA. Encino Energy received 4 permits in Guernsey County, OH. And Diversified Energy received 2 permits in Harrison County, WV. Allegheny County | Beaver County | Bradford County | Chesapeake Energy | Diversified Gas & Oil | Elk County | Encino Energy | Guernsey County | Harrison County |Range Resources Corp | Seneca Resources

DT Midstream 4Q – M-U Pipeline Operations Expand, Looking for M&A - Marcellus Drilling News -- DT Midstream (DTM), headquartered in Detroit, owns major assets in the Marcellus/Utica region and other regions like the Haynesville. DTM issued its fourth quarter 2023 update last Friday. The Marcellus/Utica region (which they call Northeast in the report) received several prominent mentions during a conference call with analysts. Also of note were comments by DT CEO David Slater, who said he’s positioning the company to take advantage of “bolt-on” opportunities in the regions where they operate. Meaning he’s on the lookout for mergers and acquisitions.

Bill That Would Ban New Fracking Method Advances in Assembly – The Legislative Gazette—A new bill (S.8357/A.8866) that would ban the use of carbon dioxide for fracking and gas extraction has been introduced in the Legislature following reports that homeowners in New York’s Southern Tier are being asked to lease their land by a fracking company.Southern Tier CO2 to Clean Energy Solutions, or Southern Tier Solutions, a Texas-based natural gas production company, started sending letters to residents last summer according to Assemblywoman Lupardo, D–Endwell, one of the bill’s co-sponsors. After learning that more than 6,000 residents received letters from the company, Lupardo and Senator Lea Webb, D–Binghamton, the Senate bill sponsor, sent a letter to the DEC in November requesting information about the company.The DEC responded in December, writing that the company had not reached out to the agency about the projects, and that if they were to receive permit applications from Southern Tier Solutions, there would be a “thorough review” to “ensure the agency’s decision is protective of public health and the environment.”“Our community has been through a lot when it comes to promises made about drilling in the Marcellus and Utica shale,” Assemblywoman Lupardo said. “In 2021 we permanently banned fracking with water, five years after it was initially banned by Executive Order. We now need to make sure that carbon dioxide is prohibited from being used in gas or oil extraction as well, by adding three words to our existing law. “We cannot allow a company with an unproven track record to move forward with this environmentally risky process.”While hydraulic fracking has been banned in New York since 2021 — and halted since 2014 via executive order — current law makes no mention of the use of CO2 for fuel extraction, a process that has been described as “experimental, dangerous and threatening to our water, health and climate,” by Food and Water Watch, an environmental group opposed to fracking. “It’s like conducting a chemistry experiment below our feet,” said Dr. Sandra Steingraber, a biologist who has extensively researched fracking and its effects, during a press conference. Dr. Steingraber stressed there is a lack of in-depth understanding about the interactions between CO2 and the shale formations Southern Tier Solutions is looking to drill into.Other risks associated with CO2 fracking include the creation of waste, leakage, habitat destruction, soil erosion, species die-offs, and increased risk of earthquakes, according to Steingraber and others who oppose the process.“Southern Tier Solutions doesn’t have adequate answers for questions about safety and contamination risks,” said Valdi Weiderpass, a chemical engineer and chair of the the Sierra Club’s Susquehanna Group. “The process of drilling and pressurizing CO2 and extracting gas releases countless chemicals and pollutants that can harm our food, water, air and bodies.”

‘Law & Order: SVU’ Star Chris Meloni’s Old Home Now at Center of Fracking Fraudster Drama --In the civil justice system, business fraud offenses are considered especially heinous. But the actors who play dedicated NYPD detectives can’t possibly know that one of their luxury condos will end up in the hands of a Georgian swindler. This is his story.Law & Order: SVU star Chris Meloni’s old flat in New York City is now at the center of some serious legal drama. It’s become the hideout for a fracking industry fraudster who duped a business partner in Texas, lost a court case there, and has been dodging the $1 million judgment for so long that he now owes three times that.David Sepiachvili and Natalia Sapir Antonni bought the actor’s Midtown Manhattan condo for $8.15 million eight years ago, according to the Observer. But on Friday, a scorned Russian investor named Nikolay Rastorguev sued the pair in New York state court, saying that Sepiachvili is now playing shell games to avoid losing the massive four-bedroom flat on prime real estate located just a block from Carnegie Hall.The lawsuit says that Sepiachvili recently transferred the condo’s ownership to Antonni to avoid payment—which has now ballooned with interest to $3 million.Sepiachvili, who hails from Russia’s neighboring country of Georgia, got into serious financial trouble shortly after buying the actor’s condo. According to federal court documents obtained by The Daily Beast, he accepted $800,000 in July 2016 from Rastorguev in exchange for shares of an oil-and-gas business venture called the Austin Chalk Development Project. But a court found that instead of holding up his end of the deal and acquiring the land he promised to buy, the money was routed in other directions—and Rastorguev never got it back.Harper Estes, a Texas lawyer who serves as a private judge when people resolve legal issues in arbitration, reviewed the case for a federal court and determined in 2021 that this was “garden variety fraud.” But he also called it a “rare case that supports the claim of civil conspiracy.”“Knowledge of the oil and gas industry or use of land brokerage firms cannot and does not justify in any way the taking of another’s funds under false pretenses and using the funds for other purposes,” he wrote.The arbitrator also noted something else: the scheme involved a company called Level One Advisors and another man with a similar name, David A. Sepiashvili. That confusing twist points to a New York Republican political operative who serves as an elected GOP district leader in Brooklyn and has previously worked for the city’s elections board. That second Sepiashvili—this time spelled with an “s”—lists himself on LinkedInas the founder and president of Level One, noting the company’s involvement in Austin Chalk and calling it an “unconventional oil & gas development project.” Calls, texts, and social media messages to that second man with a similar name went unanswered on Monday.

Layoffs Hitting the Gas Fields, Including Marcellus/Utica - According to Reuters, oilfield service companies and drillers have put the brakes on hiring and “further job cuts could loom” as natural gas producers respond to sliding prices by slashing spending on new wells to reduce excess production. We told you yesterday that Chesapeake Energy announced a coming rig and frac crew cut in the Marcellus (see Chesapeake Dropping 1 Rig in Marcellus as it Waits to Merge with SWN). But it’s not some far-off “maybe it will happen” thing. Layoffs in the M-U are already happening. For example, fracking company NexTier merged with Patterson-UTI last September. Because of duplication of services, Patterson recently announced it will close a facility in Mansfield, Pennsylvania, affecting some 104 employees.

13 New Shale Well Permits Issued for PA-OH-WV Feb 12 – 18 | Marcellus Drilling News -- There were 13 new permits issued to drill in the Marcellus/Utica during the week of Feb. 12 – 18, versus 19 permits issued the prior week. Pennsylvania issued 11 new permits last week. Ohio issued no new permits. West Virginia issued 2 new permits last week. Chesapeake Energy landed the most new permits, with 5 issued in Bradford County, PA. Range Resources had 3 new permits issued in Washington County, PA. Coterra Energy had 2 new permits in Susquehanna County, PA. Southwestern Energy also had 2 new permits issued in Ohio County, WV. And EQT, the largest natural gas producer in the country, had a single new permit issued in Greene County, PA. Bradford County | Chesapeake Energy | Coterra Energy (Cabot O&G) | Energy Companies | EQT Corp | Greene County (PA) | Ohio County | Range Resources Corp | Southwestern Energy | Susquehanna County | Washington County

2.4 GW of Gas-Fired Power Retiring in 2024, Incl. Boston's Mystic | Marcellus Drilling News - The number crunchers at the U.S. Energy Information Administration (EIA) published a post yesterday highlighting that in 2024, some 5.2 gigawatts (GW) of U.S. electric generating capacity will be retired. It is the least amount of capacity being retired since 2008, in the past 25 years. The graphic the crunchers used is somewhat stark and misleading. It shows the number one category of retirements is natural gas power plants, retiring 2.4 GW (46% of all retirements). What you don’t discover until deep into the post is that a single gas-fired plant, Boston’s Mystic Generating Station, which has been online since the 1940s (!), represents 1,413-MW (60%) of the gas plants retiring.

U.S. Utilities, Industrials Seen Offsetting Gas-Fired Electric Generation Retirements - Natural gas-fired generation is forecast for roughly a 100 MW net increase this year as overall electric power plant retirements decrease to 5.2 GW, the lowest level in more than a decade, according to the U.S. Energy Information Administration (EIA). While gas-fired capacity is slated to make up the largest share (46%) of electric generation retirements this year at 2.4 GW, EIA data show planned additions of power plants using the fuel would more than offset losses at more than 2.5 GW. The largest gas capacity addition is to be a 402 MW expansion of Duke Energy Corp.’s Carolinas segment Lincoln Combustion Turbine Station in Denver, NC. NV Energy Inc.’s existing 520 MW Silverhawk Generating Station, a gas-fired peaking facility north of Las Vegas, also is expected to add...

MVP Start Date Slips, but Finish Line in Sight as Equitrans Eyes Strong Southeast Natural Gas Demand --Recent construction setbacks will see Mountain Valley Pipeline LLC’s (MVP) long-delayed completion slip further, now into the second quarter. Still, the finish line is in sight for backer Equitrans Midstream Corp. (ETRN), and the company is also eyeing longer-term growth facilitated by the eventual start-up of the embattled Appalachia-to-Southeast natural gas conduit. Last summer, Congress rescued MVP from regulatory and legal limbo with the passage of the Fiscal Responsibility Act of 2023. Since then, crews have made “substantial construction progress,” and the “major tasks to complete the pipeline continue to narrow,” Equitrans CEO Diana Charletta said during a conference call to discuss the 4Q2023 results.

Another delay, cost increase for Mountain Valley Pipeline - Once again, builders of the Mountain Valley Pipeline have pushed back the finish line for the highly divisive and long-delayed project. Equitrans Midstream Corp., the lead partner in constructing the natural gas pipeline, said Tuesday that the it is now expected to go into operation sometime in the second quarter of this year. Also announced during a conference call with financial analysts was another cost increase, boosting the project’s total price tag to between $7.57 billion and $7.63 billion. It was the latest in a series of timing setbacks and budget overruns for a pipeline being built by five energy companies. When construction began in early 2018, it was projected to be completed by the end of that year at a cost of $3.7 billion. Work on the buried pipeline that passes through Southwest Virginia has been slowed by lawsuits filed by environmental and community groups, who say problems continue with muddy runoff from construction sites. “This news is as predictable as a mudslide on these steep slopes in the rain,” Russell Chisholm, co-director of the Protect Our Water, Heritage, Rights coalition, said of the latest delay. “MVP’s rush to work recklessly through winter has led to pollution in our streams and landslides near our homes while they bury corroding pipe and backfill their trenches with investor money,” Chisholm said in a statement released by POWHR. In an early January filing with the U.S Securities and Exchange Commission, Equitrans reported that it “has continued to make significant forward construction progress” and remained on target to have the pipeline in service by the end of March. But the company on Tuesday cited unanticipated problems — including heavy rainfall and “challenging construction conditions” — as the reason for adding another three months to its timeline. “While our construction plans took into account the potential effects of winter weather, these conditions were far worse and longer in duration than anticipated, imposing a significant impact on productivity, which, in turn, impeded our ability to reduce construction headcount,” Diana Charletta, Equitrans president and CEO, said during a quarterly conference call held to discuss financial earnings. “Collectively, these factors resulted in our updated timing and total project cost targets,” Charletta said. The 42-inch diameter pipe has been installed along all but about three miles of the pipeline’s 303-mile route from northern West Virginia, through the New River and Roanoke valleys, to connect with an existing pipeline near the North Carolina line. “While the majority of MVP construction is complete, the remaining construction includes some of the most difficult paths on the project, and could present further challenges,” Charletta said. By the end of this month, construction is expected to be completed on all but a few Virginia stretches — such as Poor Mountain in Roanoke and Montgomery counties and the Jefferson National Forest in Giles County — where some of the steepest slopes remain.

Facing more delays, company now expects Mountain Valley Pipeline to be in service by June | WVTF --Developers of the Mountain Valley Pipeline announcedthey’re pushing back their targeted completion by several months to June 1.In a call with investors Tuesday, company CEO Diana Charletta blamed the delay on snow, rain, and challenging construction conditions."While the majority of MVP construction is complete, the remaining construction includes some of the most difficult tasks on the project, and could present further challenges," Charletta said.She added that they have less than four miles left of the pipeline's 303 mile route to complete. These final miles include 13 water crossings, four of which are bores where horizontal drilling puts the pipes at least 10 feet underground."The construction work in these areas will consist of completing the Appalachian Trail crossing and installing pipe on some of the steepest slopes along the route," Charletta said.On the call, one listener asked if recent incidents of muddy water along the pipeline route had caused permitting delays. Charletta said these incidents have been cleared.Citizens have filed several complaints with the Virginia Department of Environmental Quality in recent months, citing muddy water, but DEQ has not stopped construction or issued any violations against the company this year.Charletta estimates most of the construction of the pipeline will be done by the end of March. Before the pipeline can be in service, they estimate it will take several months to do hydrotesting and other safety measures to ensure the pipeline is ready to hold gas. Much of the route, particularly in West Virginia, has already been through that process, Charletta said.Last fall, Equitrans Midstream entered into a consent agreement with the Pipeline and Hazardous Materials Safety Administration to make changes in how they assess whether the pipeline has any threats to its coating that could cause corrosion.The agency had earlier issued a safety order to the company, warning they were concerned of potential safety risks with their process of assessing the pipeline’s coating.Meanwhile, a sale of Equitrans Midstream, or portions of the company, to a third party may also be on the horizon. Charletta said their board “has been engaged in a process with third parties that have expressed interest in strategic transaction,” but would not comment further.The Mountain Valley Pipeline is now costing the company at least $7.57 billion, more than double what it initially estimated.

NatGas Soars After Chesapeake Cuts Production Outlook Amid Vicious Bear Market - With US natural gas prices crashing to lows not seen since early Covid in recent days, around $1.60 per million British thermal units, major shale producer Chesapeake Energy announced in a Tuesday earnings report that it would decrease the number of drilling rigs to reduce production this year. As a result, NatGas futures soared. Futures for next-month delivery jumped more than 12% to $1.77 in early afternoon trading on Wednesday. This followed news from Chesapeake: Chesapeake is currently operating nine rigs (five in the Haynesville and four in the Marcellus) and four frac crews (two in each basin). Given current market dynamics, the company plans to defer placing wells on production while reducing rig and completion activity. The company will drop a rig in the Haynesville and Marcellus in March and around mid-year, respectively, and a frac crew in each basin in March. These activity levels will be maintained through year end. Deferring new well production and completion activity will build short-cycle, capital efficient productive capacity which can be activated when consumer demand requires it. The company expects to drill 95 to 115 wells and place 30 to 40 wells on production in 2024. NatGas prices have collapsed over the past year due to an unseasonably warm winter produced by El Nino, which led to sliding demand for the heating fuel, as well as shale drillers that ramped up production and left stockpiles well above average levels for this time of the year. "The Chesapeake news of lowering production has set the tone that natural gas prices have become too low," said Dennis Kissler, senior vice president for trading at BOK Financial Securities.Kissler explained: "More producers could follow, which is needed to clean up excess supplies." In a recent note, Goldman's Samantha Dart told clients: "Solving oversupply in 2024 sets the stage for a bullish 2025." She expects prices to bottom this year and trend higher into 2025.

US natgas prices soar 13% from 3-1/2-year low as Chesapeake cuts output (Reuters) - U.S. natural gas futures soared by about 13% on Wednesday after Chesapeake Energy - soon to be the biggest U.S. gas producer after its merger with Southwestern Energy - cut the amount of fuel it plans to produce in 2024 by roughly 30% due to the recent plunge in prices to a 3-1/2-year low. Chesapeake, which said the gas market is "clearly oversupplied," was just the latest U.S. gas producer to slash spending and reduce rigs after prices dropped about 30% so far in 2024 after falling 44% in 2023. Last week, U.S. energy firms Antero Resources and Comstock Resources said they planned to reduce drilling this year, while EQT, currently the nation's biggest gas producer, reduced its 2024 production guidance range. Front-month gas futures rose 19.7 cents, or 12.5%, to settle at $1.773 per million British thermal units. That was the biggest one-day percentage gain since July 2022, when prices jumped by 14.3%. On an inflation-adjusted basis, U.S. gas prices have already collapsed to their lowest in over 30 years. On Tuesday, the non-inflation adjusted front-month contract closed at its lowest since June 2020, which was the height of COVID-19 demand destruction. Providing ammunition for Wednesday's price spike, analysts at energy consulting firm EBW Analytics Group said was "an enormous speculator short position near four-year highs." Chesapeake lowered its prior capital expenditure guidance by about 20% through rig count reductions and deferring well completions, which should cut gas production to around 2.7 billion cubic feet per day (bcfd) in 2024, down from around 3.5 bcfd in 2023. One billion cubic feet is enough gas to supply about five million U.S. homes for a day. U.S. LNG export capacity is expected to almost double over the next four years from about 13.8 bcfd now, representing about 15% of U.S. domestic gas demand, to around 24.4 bcfd in 2028. Analysts said projected LNG demand growth was the primary reason many producers have - until now - kept gas output near record levels despite low prices. Gas prices fell so far this year because a mild winter kept heating demand low, leaving stockpiles at well above normal levels, while output remained near record levels despite an Arctic freeze in January that briefly cut output and caused gas demand to soar to a record high. Even with less gas drilling, analysts said gas output could still increase in 2024 because crude prices were high enough to encourage oil producers to drill in shale basins like the Permian in Texas and New Mexico and the Bakken in North Dakota, where oil wells produce a lot of associated gas.

US natgas futures settle lower as investors book profits after rally (Reuters) - U.S. natural gas futures fell 2.3% on Thursday as investors booked profits following a rally in the previous session spurred by Chesapeake Energy's decision to cut its planned output for 2024. Front-month gas futures fell 4.1 cents to settle at $1.732 per million British thermal units. At the session low, prices were down almost 5%. On Wednesday, prices posted their biggest daily percentage gain since July 2022 after Chesapeake Energy - soon to be the biggest U.S. gas producer after its merger with Southwestern Energy - cut the amount it plans to produce in 2024 by roughly 30% in response to a plunge in gas prices to a 3-1/2-year low. "After the rally, the market is bound to pull back as the reality hasn't changed, which is that the market is in an oversupply. "It is hard to argue for any type of market tightness here in the short term. If more producers don't quite grow production or spend CapEx or not make investments and we get some summer demand then prices could move above $2 mark, but market could see lower curves if we get a mild summer and see no more production cuts." The U.S. Energy Information Administration (EIA) said utilities pulled a smaller-than-expected 60 billion cubic feet (bcf) of gas out of storage during the week ended Feb. 16. That was lower than the 65-bcf withdrawal analysts forecast in a Reuters poll and compared with a withdrawal of 75 bcf during the same week a year ago and a five-year (2019-2023) average decrease of 168 bcf for this time of year. Gas prices have fallen more than 30% so far this year because a mild winter kept heating demand low, allowing stockpiles to remain at well above normal levels, while output remained near record levels despite an Arctic freeze in January that briefly cut output and caused gas demand to soar to a record high. Last week, U.S. energy firms Antero Resources and Comstock Resources said they planned to reduce drilling this year, while EQT, currently the nation's biggest gas producer, reduced its 2024 production guidance range. For nearly a year, U.S. natural gas producers have cut production as prices fall, but relentless output gains, including from oil companies that pump gas as an oil byproduct, have unleashed record supplies. U.S. liquefied natural gas (LNG) company Cheniere Energy posted a 38.5% fall in its full-year LNG revenue on Thursday, hit by the fall in natgas prices. U.S. Energy Secretary Jennifer Granholm said on Wednesday the government's pause on approvals of exports of LNG will not affect relationships with allies that import the fuel. Last month, President Joe Biden paused pending approvals of exports from new LNG projects, a move cheered by climate activists that could delay decisions on new plants. "The U.S. LNG sector is projected to see substantial demand growth, from 13 Bcf/d in 2023 to nearly 25 Bcf/d by 2028, driven by projects already authorized. Key facilities like the Golden Pass and Plaquemines LNG are on track to start commissioning in 2024, promising increased demand," That said, the pause has led to delays in FIDs (Final Investment Decisions) for new projects in both the U.S. and Mexico and raised uncertainties about the U.S.'s role as an LNG exporter in the longer term,"

US natgas spirals lower on weak demand and plentiful supplies - U.S. natural gas futures shed more than 7% on Friday on record output, sufficient fuel in storage and lower heating demand. Front-month gas futures were down 7.5% or 12.9 cents to settle at $1.603 per million British thermal units. "The natgas market is simply in excess supply, and there is a lack of seasonal winter demand," said Thomas Saal, senior vice president for energy at StoneX Financial. "Prices can always fall further than you think, but it should only last a month or so. Once we are into summer and injection season starts, prices might recover." On Wednesday gas prices soared about 13% after Chesapeake Energy cut planned production for 2024 by roughly 30% after a plunge in prices to a 3-1/2 year low. "While gas producers are hurting, to what degree the intended production cut or curtailing would impact gas prices remains to be seen as oil companies are still enjoying a decent level of oil prices and producing associated gas in the meantime," Prices have slid more than 35% so far this year, pressured by a mild winter that has left stockpiles well above normal, while output remained near record levels despite an Arctic freeze in January that briefly cut output and sent gas demand to a record high. The U.S. Energy Information Administration (EIA) on Thursday said utilities pulled a smaller-than-expected 60 billion cubic feet (bcf) of gas out of storage during the week ended Feb. 16. The smaller than expected withdrawal "stretched the surplus against the averages out to 450 bcf, with additional expansion of another 100 bcf or more now possible next month," Financial company LSEG said gas output in the U.S. Lower 48 states has risen to an average of 105.5 billion cubic feet per day (bcfd) so far in February from 102.1 bcfd in January, still shy of the monthly record of 106.3 bcfd in December. The European benchmark gas price was also down for the day, hitting its lowest level in almost three years on high storage levels and low demand. Elsewhere nearly a third of Shell's profit in the fourth quarter of 2023 came from the $2.4 billion it made in trading LNG as it captured strong demand ahead of winter, three sources close to the company told Reuters.

U.S. Utilities Expanding Infrastructure, LNG Storage Amid Surge in Energy Demand - U.S. utilities are reporting growth in residential demand, as well as commercial and industrial (C&I) consumption, underpinning investments in more natural gas-fired generation and system reliability. Atmos Energy Inc. CEO John Akers during a call to discuss the fiscal first quarter earnings highlighted capital expenditures (capex) for modernizing its natural gas distribution system to serve “growing demand from all of our customer classes.” The Dallas-based natural gas utility serves more than three million customers in eight states, mostly in the South and Rockies. During the final three months of 2023, Atmos directed more than 80% of $770 million in capex to transmission and distribution pipeline, storage and compression and safety upgrades.

Cheniere Says LNG Expansions On Track Despite Suspended U.S. Export Authorizations - Cheniere Energy Inc. CEO Jack Fusco said Thursday the Biden administration’s decision to pause new LNG export authorizations has not slowed down the company’s expansion projects, which management expects to stay on track despite an ambiguous regulatory environment. “It does introduce regulatory and permitting uncertainty to the U.S. liquefied natural gas industry as a whole,” Fusco said of the pause during a call to discuss year-end results. Fusco stressed that a “fair and transparent regulatory framework is essential for the future development of natural gas infrastructure in the United States, particularly for liquefaction capacity, given the scale of investment, commercial support and time required to bring these projects online.”

Venture Global seeks more time to complete Calcasieu Pass LNG terminal - US LNG exporter Venture Global LNG has requested more time from the US FERC to complete the commissioning of its Calcasieu Pass LNG export terminal in Louisiana. Calcasieu Pass produced its first LNG on January 19, 2022, and the first commissioning cargo left the facility on March 1. However, Venture Global has not yet declared the start of commercial operations at the 10 mtpa facility which consists of 18 modular units configured in 9 blocks. “Calcasieu Pass has now completed nearly all of the construction of the project, but the commissioning phase continues with respect to certain essential facilities,” Venture Global told the US FERC in a filling dated February 15. According to Venture Global, the 2019 FERC authorization says that the Calcasieu Pass proposed liquefaction facilities shall be constructed and made available for service within five years of the order date, or by February 21, 2024. “Calcasieu Pass believes that it has complied with that condition, as written and read literally, because all of the project’s “proposed liquefaction facilities” (i.e., the 18 liquefaction trains configured in 9 blocks) have been placed in-service, following the Commission Staff’s October 2023 authorization for Calcasieu Pass to place its liquefaction blocks 7-9 in-service,” it said. “While the in-service condition in the order does not utilize a more encompassing term or phrase, such as: “all of Calcasieu Pass’ facilities”, or “the export terminal,” or Calcasieu Pass’ “proposed project,” some interested stakeholders may nevertheless interpret the condition more broadly than its plain language suggests,” Venture Global said. According to Venture Global, if the condition were to be so interpreted, Calcasieu Pass “would not be able to comply with the condition as a result of the continuing need for further commissioning, repair, rectification, and completion of certain facilities.” Venture Global said that Calcasieu Pass has encountered “circumstances that have prevented it from being able to bring all its facilities into service at this time.” That conclusion is reflected in the previously mentioned liquefaction in-service NTP, which recognized that reliability issues with certain other facilities, notably the heat recovery steam generators or “HRSGs”, require those facilities to remain in the commissioning process and the subject of a future in-service authorization, it said. Venture Global said the project’s power generation facilities would remain in commissioning and “cannot be placed in-service until that on-going remediation work is completed, which Calcasieu Pass currently expects to happen during the fourth quarter of 2024.” “Accordingly, to ensure compliance with the authorization order and full transparency, Calcasieu Pass hereby requests a one-year extension of the in-service condition set forth in ordering paragraph (B) to the extent that the Commission deems it necessary because certain of Calcasieu Pass’ authorized facilities — other than its liquefaction trains — will not be in-service by February 21, 2024,” Venture Global said. “Alternatively, if the Commission interprets the in-service condition as applicable only to those liquefaction facilities, Calcasieu Pass requests that the Commission instead confirm that Calcasieu Pass has complied with the in-service condition,” it said. Long-term customers of the Calcasieu pass facility include Shell, BP, Edison, Repsol, Galp, and PGNiG. Energy giants Shell and BP and other firms are in an dispute with Venture Global over the launch of commercial operations at the facility and previously launched arbitration proceedings against Venture Global. Shell’s CEO Wael Sawan recently said that Venture Global has sold around 250 commissioning cargoes up to date. “And what we see is that the plant is at or near capacity and has been consistently. So, we’re very much focused on continuing to enforce our legal rights and protect the sanctity of contracts that are there. I won’t get into the details of the legal proceedings,” he said.

Patterson-UTI Steadies Capacity Additions while Expanding Natural Gas-Powered Fleets, Rig Tech - Contract driller Patterson-UTI Energy Inc. has no plans to add drilling or completion capacity in the Lower 48, as activity is forecast to remain flat through the year, but opportunities exist to enhance and expand the natural gas-powered fleets, CEO Andy Hendricks said. Speaking to analysts during the recent quarterly conference call, Hendricks said the Houston-based oilfield services company would remain committed to optimizing performance to navigate an evolving energy sector landscape. “While we do not see a benefit to adding drilling or completion capacity into the U.S. shale market, we do have several levers that we will focus on this year that should help us improve our returns as the year progresses,” Hendricks said. Among them are “alternative power solutions”...

US weekly LNG exports climb to 26 shipments - US liquefied natural gas (LNG) exports rose in the week ending February 14 compared to the week before, according to the Energy Information Administration.The agency said in its weekly natural gas report that 26 LNG carriers departed the US plants between February 8 and February 14, two vessels more compared to the week before.Moreover, the total capacity of these LNG vessels is 90 Bcf, the EIA said, citing shipping data provided by Bloomberg Finance.Average natural gas deliveries to US LNG export terminals increased by 3.8 percent (0.5 Bcf/d) week over week, averaging 13.8 Bcf/d, according to data from S&P Global Commodity Insights.Natural gas deliveries to terminals in South Louisiana decreased by 1.3 percent (0.1 Bcf/d) to 9.1 Bcf/d, while natural gas deliveries to terminals in South Texas increased by 19.9 percent (0.6 Bcf/d) to 3.5 Bcf/d.The agency said that most of the increase in South Texas occurred at Cheniere’s Corpus Christi LNG terminal, where natural gas receipts increased by 28 percent (0.5 Bcf/d) week over week after declining by a similar amount the previous report week.Natural gas deliveries to terminals outside the Gulf Coast were essentially unchanged at 1.2 Bcf/d.Cheniere’s Sabine Pass plant shipped eight cargoes and the company’s Corpus Christi facility sent three shipments during the week under review.Sempra Infrastructure’s Cameron LNG terminal shipped five cargoes while Venture Global’s Calcasieu Pass LNG terminal, the Freeport LNG terminal, and the Elba Island terminal each shipped three cargoes during the period. Also, the Cove Point LNG terminal shipped one cargo, the agency said. This report week, the Henry Hub spot price fell 46 cents from $1.97 per million British thermal units (MMBtu) last Wednesday to $1.51/MMBtu this Wednesday. The price of the March 2024 NYMEX contract decreased 35.8 cents, from $1.967/MMBtu last Wednesday to $1.609/MMBtu this Wednesday. According to the agency, the price of the 12-month strip averaging March 2024 through February 2025 futures contracts declined 22.4 cents to $2.417/MMBtu.

Chevron's LNG carriers to get reliquefaction units - South Korea’s HD Hyundai Marine Solution has secured a contract from US energy giant Chevron to install reliquefaction units and other tech on the latter’s two liquefied natural gas (LNG) carriers. The unit of HD Hyundai, previously known as Hyundai Global Service, revealed the contract award in a statement issued on Thursday. In addition to reliquefaction units, HD Hyundai Marine will also install air lubrication technology and new gas compressors. HD Hyundai Marine said that the 2014-built 160,000-cbm, Asia Energy, is one of the two LNG carriers which will receive the upgrade. The firm did not provide the price tag of the deal. Last year, the company also won an order from LNG carrier operator CoolCo to retrofit five TFDE LNG carriers with sub-coolers for LNG boil-off reliquefaction in order to slash emissions and improve fuel consumption. This deal is worth $50 million or some $10 million per vessel. A reliquefaction unit reliquefies BOG generated during the operation of LNG cargo tanks, either returning the gas to the cargo tank or preventing natural evaporation using sub-cooled LNG. So far, HD Hyundai Marine won $100 million in orders to install reliquefaction units on eight LNG carriers, including the CoolCo order, it said. HD Hyundai Marine said there are about 100 LNG carriers without reliquefaction systems, and the total cost to install the technology on them is estimated at $700 million. As per Chevron, the company’s shipping unit contracted last year a subsidiary of Singapore’s Sembcorp Marine to install reliquefaction systems and other tech on Chevron’s LNG carriers as part of a move to further slash emissions. According to Chevron’s website, its shipping unit operates ten LNG carriers, including Asia Energy..

Texas LNG Inks Long-Term Deal with Gulf LNG Tugs Texas LNG Brownsville LLC has selected Gulf LNG Tugs of Texas, LLC to build, deliver, and operate tugboats under a long-term agreement to assist vessels arriving at its liquefied natural gas (LNG) facility in Brownsville, Texas. The tugboats will be “among the most modern, low-emissions tugboats available to serve a facility of Texas LNG’s size”, the company said in a recent news release. The financial details and the exact contract length were not disclosed. Brendan Duval, CEO and founder of Texas LNG parent company Glenfarne Energy Transition LLC, said, “The Texas LNG team undertook a comprehensive process to identify a marine service provider that not only matches our commitment to environmental stewardship, but also provides our customers with reliable, cost-effective marine services. We are pleased to have Gulf LNG Tugs on board as a partner and look forward to the jobs and local content they will bring to both Texas LNG and the local Rio Grande Valley community”. “Gulf LNG Tugs is excited to be providing marine services in a long-term partnership with Texas LNG”, Gulf LNG Tugs partners said in a joint statement. “We are proud to be the exclusive tug operator for LNG vessels to yet another successful LNG project in the Port of Brownsville and look forward to expanding our operations in the port and our presence in the Rio Grande Valley community”. Texas LNG is an LNG export terminal targeted to have a capacity of four million metric tons per annum. The terminal will be built in Brownsville, which is “ideally situated for consistent and reliable maritime operations, with low probability of storm impact, consistent operating temperatures, and a location in a protected port”, the company said. Glenfarne is the majority owner and managing member of Texas LNG and expects a final investment decision on the project later in the year, according to the release. Commercial operations are projected to begin in late 2027 or 2028. Gulf LNG Tugs of Texas is a joint venture formed to provide tug services for Texas LNG under a long-term tug services agreement. It is owned by Houston-based Bay-Houston Management, LLC, Connecticut-based Moran Towing Corporation, and Houston-based Suderman & Young Towing Company. It is the fourth joint venture formed by the ownership team to provide tug services to a Gulf Coast LNG project, according to the release. Texas LNG in January entered into a heads of agreement (HOA) with EQT Corporation for natural gas liquefaction services from its facility. The HOA is expected to be finalized into a definitive 15-year tolling agreement for 0.5 million tons per annum (mtpa) of LNG from the first train of Texas LNG, according to an earlier statement. In December 2023, Texas LNG selected ABB to collaborate on core automation and electrical equipment for the Brownsville LNG export terminal. As part of the memorandum of understanding signed by the two companies, Texas LNG and ABB have agreed on a framework for ABB to invest in the project. Further, Texas LNG in November 2023 selected Baker Hughes to supply gas compression technology equipment, including electric motor drives, to the facility. As part of the partnership between the two companies, Baker Hughes also has a framework agreement to make a strategic pre-final investment decision (FID) investment in the project’s late-stage development, Texas LNG said.

Flows Return to Freeport LNG After Train 1 Compressor Issue – Feed gas nominations to Freeport LNG started to tick up again Wednesday after being curtailed over the holiday weekend, according to Wood Mackenzie pipeline data. The Texas facility reported an outage at Train 1 on Feb. 16 caused by a compressor issue, according to a filing with state environmental regulators. Train 3 has been under repair since mid-January after Freeport reported issues because of winter storm impacts on the Texas coast. Available liquefied natural gas import capacity in southern Europe is expected to be reduced for much of the year as the floating storage and regasification unit Toscana undergoes extensive repairs until October. Operator OLT Offshore LNG said the 2.8 million metric ton/year unit offshore...

Shale Gas Market Set to Soar to USD 124.9 Billion by 2030, Driven by Surging Global Energy Demand - -- The SNS Insider report reveals that the Shale Gas Market, valued at USD 66 Billion in 2022, is set to witness an impressive leap, reaching USD 124.9 Billion by 2030. This robust growth trajectory, boasting a CAGR of 8.3% from 2023 to 2030, underscores the increasing prominence of shale gas in the global energy landscape." In the dynamic landscape of energy markets, shale gas emerges as a transformative force, shaping the trajectory of global energy security. With its abundant reserves locked within dense rock formations, the shale gas market presents a tapestry of opportunities and challenges. Its extraction involves a delicate dance between technological innovation and environmental stewardship, as stakeholders navigate the complexities of hydraulic fracturing. Yet, amidst debates on sustainability and geopolitical implications, shale gas ignites a beacon of promise, offering newfound energy independence to nations and driving economic growth. As the market evolves, it serves as a catalyst for diverse industries, from manufacturing to transportation, fostering innovation and redefining the contours of the energy landscape. In this intricate tapestry of supply and demand, the shale gas market stands as a testament to human ingenuity, resilience, and the ever-evolving quest for energy solutions.

DTM Looking Beyond ‘Current Realities’ in Natural Gas Market to Expand Haynesville LEAP Pipe - DT Midstream Inc. (DTM) has boosted the top end capacity estimate for its Louisiana Energy Access Project, or LEAP, to 4 Bcf/d, roughly double the amount of natural gas it could be transporting by 2026. Based on the work to expand LEAP, “it’s become clear to us that we actually can expand this beyond 3 Bcf/d up to the 4 Bcf/d neighborhood,” CEO David Slater said during the fourth quarter earnings call. The Detroit-based company completed a second expansion in January. A third phase would raise the capacity to 1.9 Bcf/d by the second half of the year. The 150-mile, 36-inch diameter pipeline carries Haynesville Shale natural gas in Louisiana to the Gulf Coast for LNG exports and industrial use. LEAP is one of eight pipeline projects underway through the end of the decade...

Port Arthur LNG Permit Question Facing Texas Supreme Court Scrutiny - A panel of federal judges has decided to withdraw its decision around a Texas air permit for Sempra Infrastructure’s Port Arthur LNG export project southeast of Houston. In November, the U.S. Court of Appeals for the Fifth Circuit vacated an air permit granted by the Texas Commission on Environmental Quality (TCEQ). In that decision, the circuit court sided with a local environmental group’s argument that the agency did not mandate the same pollution controls as other Texas projects, including Rio Grande LNG in South Texas. However, in the court’s latest order filed earlier this month, the justices wrote that the question boils down to the interpretation of the state’s environmental statutes, which should be answered by the Texas Supreme Court (No. 22-60556).

Bernhard Capital to buy natural gas assets from CenterPoint for US$1.2 billion - Services and infrastructure-focused private equity manager Bernhard Capital Partners is acquiring US$1.2 billion (€1.1 billion) Louisiana and Mississippi natural gas assets from US utility CenterPoint Energy. Bernhard Capital’s portfolio company Delta Utilities has agreed to buy CenterPoint Energy’s Louisiana and Mississippi natural gas local distribution businesses which include around 12 000 miles of main pipeline in Louisiana and Mississippi serving approximately 380 000 metered customers. Jeff Jenkins, founder and partner at Bernhard Capital Partners, said the acquisition builds upon the firm’s recent announcement to acquire Entergy’s New Orleans and Baton Rouge natural gas distribution businesses, adding that “once both transactions are complete, Delta Utilities will be a leading natural gas utility in Louisiana and Mississippi and among the top 40 providers in the US”. Jason Wells, President and CEO of NYSE-listed CenterPoint Energy, said the transaction will allow the firm to optimise its portfolio of utility operations and efficiently recycle approximately US$1 billion in after-tax cash proceeds “into our service territory where we have both electric and natural gas operations or where we have a larger presence at a valuation that is more efficient than issuing common equity”.“From an operational and strategic perspective, we remain confident in and committed to our regulated natural gas utilities in Texas, Indiana, Minnesota and Ohio, where we have significant footprints and rate bases.” CenterPoint’s Louisiana and Mississippi LDCs represent less than 4% of the company’s overall rate base.

Coast Guard, partner agencies respond to oil spill in Charleston > US Coast Guard Press Release — Coast Guard Sector Charleston and partner agencies concluded pollution response efforts for an oil product found in a water drain in Charleston, Feb 12. Pollution response efforts have concluded with no evidence of additional oil for future potential discharge, recoverable product, or threat to the marine environment. On Feb 8, Sector Charleston’s Incident Management Division, in coordination with the Charleston County Emergency Management Department and Charleston City Water Management Department, received a report of oil in a storm drain near a Chevron facility in Charleston, South Carolina. Boom was deployed and 5,000 gallons of oily water mixture were removed by vacuuming the drainpipe. “This response serves as an example of the collaborative efforts between the local industry, Coast Guard, and partner agencies to address illegal discharges, thereby reducing the impact on the crucial Lowcountry waterways,” said Lt. Michael Allen, Sector Charleston Incident Management Division Chief. “It is essential to recognize that illegally dumping toxic products harms our environment and violates regulations designed to protect our natural resources and public health.”

New River oil spill near Las Olas investigated -- Multiple agencies are investigating the source of an oil spill that appeared early Monday in the New River near downtown Fort Lauderdale, law enforcement officials said. A marine unit attached to the Fort Lauderdale Police Department discovered the spill off the 500 block of Las Olas Boulevard shortly before 11 a.m., Detective Ali Adamson, a public information officer, said in an email. “Officers were able to follow the fuel along the New River. However, due to the outgoing tide, they were unable to determine the source of the spill,” she said. “The Marine Unit officers called the spill into the United States Coast Guard. Additionally, the Department of Environmental Protection is responding to further assess the waterway.” Eric Rodriguez, a public affairs officer based in Miami Beach, told the South Florida Sun Sentinel on Monday that the source had not been determined and that the state environmental agency has taken the lead in the investigation. Witnesses reported that the oil was “dissipating on its own,” Rodriguez said. U.S. Coast Guard Petty Officer Diana Sherbs said as of Tuesday afternoon that the Coast Guard was still investigating and did not have any further update. Jon Moore, a spokesperson for the Florida Department of Environmental Protection, said in an email Tuesday evening that the source has not yet been identified but that the department is working with the Coast Guard, the Broward Sheriff’s Office and Fort Lauderdale Police’s Marine Patrol “to survey local waterways, marinas and nearby vessels to identify a potential source.” The New River is among the city’s most highly trafficked waterways, with a steady stream of private yachts, tour boats, taxis and commercial vessels passing through downtown each day to reach homes, restaurants, marinas and maintenance yards.

Beneficiaries of proposed surety rule point to strange bedfellows -- Oil well decommissioning is a hot button issue in the world of energy production. The idea is quite simple: when an oil well is erected, the company who controls that operation must have the resources to take down the facility at the end of its life. This federal law requiring “financial assurance” is to be maintained throughout the life of the project to prevent the taxpayer from bearing that cost.For decades, oil wells in the Outer Continental Shelf (“OCS”) have changed hands from large oil companies, who typically use the facility while it is in highly productive use, to smaller oil companies, who will continue to use the facility until the end of its productive use. These changing of hands may, and often, occur a few times over that lifespan. Federal regulations have followed this pattern. They have imposed joint and several liability, meaning that any company who has ever owned or controlled the lease can be held liable for the decommissioning costs. Because anyone who has owned a lease can be liable, the government has only required that any one of these facilities have the financial capability to cover decommissioning. The beauty of this simple rule is that the free market has done its job. When one company sells the rights to an oil rig to another, often, the selling company will do its due diligence and ensure that the buying company has the financial resources to pay for decommissioning. This means that the buying company, upon purchase, will already have bonds purchased when they purchase the facility. Or the larger company will risk the financial obligation and require the buyer to pay more. Either way, the government should not need to separately require these assurances from the new company. This system has worked. The Bureau of Ocean Energy Management (BOEM) has acknowledged that instances in which the taxpayer would have to pay for decommissioning are rare. Historically, only $58 million have fallen to the taxpayer, (to demonstrate scale, a rough estimate by industry insiders of decommissioning costs borne by private parties in that time is $25 billion), and all of these taxpayer losses stemmed from operators with no predecessor, meaning there was no other private party to share responsibility for decommissioning liabilities. Yet, last year, the federal government put forth a proposed rule that upends the already functional system by assuming that all $42.8 billion in potential future decommissioning liability is at risk of being borne by the taxpayers. For important context, only 2 percent of this large$42.8 billion estimate ($391 million) can be traced to sole owner platforms (i.e., no predecessors) where BOEM does not possess bonds in hand. If the rule is finalized, the law would have the effect of requiring new surety obligations to be incurred by entities, almost wholly consisting of small businesses and representing 98 percent of all potential future liability, that have demonstrated virtually no risk to the taxpayers. The industry responsible for creating the new insurance product has also expressed skepticism that a viable market could exist. So why is BOEM moving forward with the proposal? Typically, the answer lies in who is set to benefit from such a dramatic change in government regulations. In this instance, two distinct and rather strange bedfellows stand out. First, consider the environmental NGO industry, which has populated the leadership ranks of the Biden administration. With over 76 percent of the offshore oil and gas operators being small businesses, who are tasked with bearing over $9 billion in new supplemental bonding, the projected impact on energy production and development is dire. But while the public, consumers, and American energy security would suffer, this appears to be exactly what the climate change lobby wants. Second, consider Big Oil. Not only would this rule reduce their decommissioning liabilities, it would also decimate their competitors in the offshore oil and gas industry. This may be bad for energy consumers, but could be a great development for Big Oil. Public records reported on by the Daily Caller show senior Biden administration officials being courted by Big Oil representatives early on in their tenure lobbying for precisely this change in the regulations. While it may seem short-sighted to think you can leverage government power to torpedo your own industry competitors without feeling the consequences too, this may be exactly what is envisioned by Big Oil. For decades, the system of financial assurances has worked remarkably well in protecting taxpayers and responsibly decommissioning offshore rigs. Yet BOEM now proposes a $9 billion solution to fix a $391 million problem that also reduces energy security for the American people. As usual in Washington, the reason is not hard to understand. But this time the marriage of Big Oil and the environmental lobby could be tough to overcome.

Biden’s climate law fines oil companies for methane pollution. The bill is coming due. -- The Inflation Reduction Act, the 2021 U.S. climate law abbreviated IRA, primarily reduces emissions through financial incentives, rather than binding rules. But in addition to all its well-known carrots, lawmakers quietly included a smaller number of sticks — particularly when it comes to the potent greenhouse gas methane, which has proven to be a pesky source of increasing climate pollution with each passing year. New research suggests that those sticks could soon batter the oil and gas industry, which is responsible for a third of all methane emissions in the U.S.An IRA provision directs the Environmental Protection Agency, or EPA, to charge $900 for every metric ton of methane above a certain threshold released into the atmosphere in 2024. The issue is particularly challenging to tackle in oil and gas fields because methane is the primary component in natural gas, and it leaks from hundreds of thousands of devices scattered across the country. In 2022, oil and gas facilities emitted more than 2.5 million metric tons of methane. The methane fee is one of a handful of ways in which the Biden administration is trying to get the industry to clean up its act. Late last year, the EPA finalized a rule requiring drillers to take comprehensive measures to monitor for and fix methane leaks. Separately, the agency is revising a rule that governs how companies count up and report the volume of methane emissions from their operations. That rule in particular will determine the EPA’s ability to assess the success of its methane reduction rule and help it calculate defensible fees to penalize companies for their emissions. A new analysis by Geofinancial Analytics, a private data provider, found that some companies may be liable for tens of millions of dollars in fees — a possibility that could bankrupt some operators. The analysis, which relied on satellite data, found that the top 25 oil and gas producers in the country would together have been liable for as much as $1.1 billion if the methane fee was applied to emissions for a one-year period ending in March 2023.On the one hand, major players like Chevron and Shell, which have publicly welcomed the new methane fee rule, are well below the rule’s threshold for penalizing emissions, according to Geofinancial. (This is likely due to large companies’ relative technological sophistication and economies of scale.) The fee only goes into effect when companies emit methane at volumes equivalent to more than 25,000 tons of carbon dioxide, which means that smaller companies, too, are largely exempt from the rule. Still, a 2022 congressional analysis found that, despite the exemptions, the rule should effectively penalize about a third of all methane emissions from U.S. oil and gas infrastructure.As a result, industry trade groups like the American Petroleum Institute, which represents a large swath of the oil and gas industry, have pilloried the rule and backed a proposal to repeal the fee. Some of the largest potential liabilities stemming from the rule, according to Geofinancial’s analysis, belong to Diversified Energy Company, a seasoned operator with about two decades in the oil and gas industry but an unusual business model. While the Exxons and Chevrons of the world typically rely on drilling new wells and increasing fossil fuel production to generate revenue, Diversified’s growth is heavily dependent on buying old wells at the end of their lives and wringing every last bit of oil or gas out of them. These low-producing wells come with serious environmental liabilities: The older the well, the more expensive it is to complete the required steps to seal it and prevent additional pollution — and the more likely it is to leak copious amounts of methane. Diversified, which has become the largest owner of oil and gas wells in the U.S., has some 70,000 such old and potentially leaky wells — making it potentially one of the biggest methane emitters in the industry as well. According to Geofinancial, Diversified would be liable for as much as $184 million if its annual excess methane emissions are equivalent to what it released over the year ending in September 2023. While the satellite results are a snapshot in time and contain some uncertainty, Geofinancial’s overall finding is that Diversified is probably facing catastrophically steep methane fees — an outcome that Diversified disputes, arguing that it has lowered its methane intensity such that it will be exempt from the new fees.

Rystad Forecasts Net Production of Top Permian Producers in 2024 -The combined company of ExxonMobil and Pioneer Natural Resources will have the highest amount of total net production in the Permian this year, Rystad Energy projected in a market update sent to Rigzone recently. According to a chart included in that update, the combined ExxonMobil-Pioneer Natural Resources business has a 2024 forecasted net production just shy of 1.4 million barrels of oil equivalent per day in the region, with almost 53 percent of that output coming in the form of oil. Chevron has a forecasted net production just above the combined Diamondback Energy-Endeavor Energy company, which is anticipated to produce 819,500 barrels of oil equivalent per day in the Permian, the chart outlined. The Occidental-CrownRock combined business comes in just behind the Diamondback-Endeavor company, according to the chart, which shows ConocoPhillips in fifth place, with under 800,000 barrels of oil equivalent per day. Chevron’s output is around 47 percent oil, Diamondback-Endeavor and ConocoPhillip’s production is 57 percent oil, and Occidental-CrownRock’s output is just below 50 percent oil, the chart projected. In its latest drilling productivity report, which was released earlier this month, the U.S. Energy Information Administration (EIA) projected that oil production in the Permian will hit 6.071 million barrels per day in February and 6.085 million barrels per day in March. The EIA anticipated in the report that gas production in the region will come in at 24.628 billion cubic feet this month and 24.762 billion cubic feet per day in March. ExxonMobil announced a definitive agreement for it to acquire Pioneer Natural Resources in a statement posted on its site back in October 2023. The merger is an all-stock transaction valued at $59.5 billion, or $253 per share, based on ExxonMobil’s closing price on October 5, 2023, the company noted at the time, adding that, under the terms of the agreement, Pioneer shareholders will receive 2.3234 shares of ExxonMobil for each Pioneer share at closing. The implied total enterprise value of the transaction, including net debt, is approximately $64.5 billion, ExxonMobil said in the statement. In December 2023 Occidental announced that it had entered into a purchase agreement to acquire Midland-based oil and gas producer CrownRock L.P. for cash and stock in a transaction valued at approximately $12.0 billion, including the assumption of CrownRock’s debt. Earlier this month, Diamondback and Endeavor announced in a joint statement that they had entered into a definitive merger agreement under which Diamondback and Endeavor will merge in a transaction valued at approximately $26 billion, inclusive of Endeavor’s net debt. Andrew Dittmar, the Senior Vice President (SVP) of Enverus Intelligence Research (EIR), said in an earlier statement sent to Rigzone that the Diamondback Energy-Endeavor Energy combination creates a Permian pure play with an enterprise value of about $60 billion and 816,000 barrels of oil equivalent per day of pro-forma production. “When ExxonMobil announced its $64.5 billion acquisition of Pioneer Natural Resources in October, Rystad Energy underscored that the deal had ushered in a new era of unprecedented dealmaking for the shale sector, which we dubbed ‘Shale 4.0’,” Rystad Senior Analyst Matthew Bernstein said in the market update sent to Rigzone. “The months that have followed since have not disappointed in this regard, with the number and size of the ‘megadeals’ announced in the Permian since early October rapidly accelerating the timeline of consolidation for the most prolific U.S. onshore basin,” he added. “That merger spree has been propelled into overdrive with the announcement that Diamondback Energy and Endeavor Energy Resources, two regional heavyweights, would be merging in a deal that values Endeavor at $26 billion,” he continued. “The move will create the largest pure-Permian independent by production while also holding the second most undeveloped drilling locations, after ExxonMobil-Pioneer, according to Rystad Energy estimates,” Bernstein went on to state.

Matador Skirting Permian Natural Gas Constraints and Raising Output - Dallas-based independent Matador Resources Co., which works in the Permian Basin, Haynesville and Eagle Ford shales, reported record natural gas production for 2023, and it is not planning to reduce output this year, even with low prices. The independent “exceeded production expectations” for gas and oil. Output increased 38% year/year during 4Q2023, driven by the Permian’s Delaware sub-basin. Average total production was 154,261 boe/d during the quarter, up from 111,735 boe/d in 4Q2022. Average natural gas output surged to nearly 394 MMcf/d during the final quarter from 297 MMcf/d in the year-ago period. The gains came “despite…natural gas prices decreasing 58% from $6.36/Mcf in 2022 to $2.64 in 2023,” CEO Joseph Foran said.

Charting the Course of U.S. Oil Production - Despite facing significant challenges in recent years, the US remains the largest oil producer in the world and set a new annual production record in 2023. The narrative surrounding US oil production has gained significant relevance in the oil markets, especially at a time when supply and demand dynamics appear to be teetering on the edge.In a geopolitically charged world, the increase in US production (with the IEA estimating a 1.5 mbpd increase in non-OPEC production in 2024) is instrumental in keeping oil prices in check. However, the slowdown in the global economy might impact this growth as US producers begin to reduce their activity.Sustained high prices during the previous year, driven by Russia’s invasion of Ukraine and the reopening of the Chinese economy (which proved to be less catalytic over time), led to price spikes. Furthermore, when OPEC+ announced further cuts in April 2023 totaling 1.65 mbpd, building on the previous cut of 2 mbpd declared in October 2022, oil producers worldwide, including those in the US, were encouraged to increase production. Most importantly, technological advancements in the US, such as hydraulic fracturing and horizontal drilling, allowed producers to tap into previously untapped reserves.Apart from technological gains and increased prices, other factors contributed to US production growth, such as not being part of OPEC and therefore not being bound by any production curtailment agreements.However, given the precarious position of the global economy, the prospects for further increases in US oil production might be challenging. Production has already started to stagnate, with growth slowing to 100,000 barrels per day (bpd) between September and November and experiencing a slight plunge in October 2023. John Kemp has raised a pertinent question: given that there hasn't been an increase in rigs and Frac Spread Count, are these efficiency gains sustainable?Looking at the Frac Spread Count, it's evident that equipment is limited, with around 75% of available equipment currently in use. Even with the best efficiencies deployed on the well pad, it appears to be a flat year for US production growth. Pumpers need to add more equipment over the next 2-3 years, with hopes for electric-powered equipment!Similar observations can be found in the IEA's latest short-term outlook, which doesn’t anticipate production rising again until at least 2025, with a slight dip projected for 2024."In a landscape where oil prices are favorable, operators are strategically focusing on completions to ensure maximum returns," added Matt Johnson, CEO of PrimaryVision. This strategic shift is observable through Primary Vision Network’s Frac Spread Count, which stood at 250 in January 2023 and remains the same in 2024. The story of US oil supply is pivotal to the global energy order in general and oil markets in particular. If global economic conditions fail to improve and a recession sets in, we might witness oil production stagnating or declining, altering the overall supply-demand dynamics with repercussions for countries worldwide. The Frac Spread Count serves as a useful indicator to track this narrative, along with the global Purchasing Manager’s Index, global trade volumes, and the interest rates of major banks.

Lawsuit settled over 2018 train derailment, oil spill in northwest Iowa— A lawsuit has been settled between northwest Iowa landowners and BNSF Railway over a 2018 train derailment and oil spill.Plaintiffs Phillip Kooima, Krisi Kooima, John Kooima, Helen Kooima, and the four trusts in which they are each the trustees filed the lawsuit against the railway, asking for actual damages and punitive damages.According to court documents, a settlement had been agreed upon on Jan. 17 with the case being dismissed with prejudice on Feb. 13. Details of the settlement have not been provided.The lawsuit was initially filed in Lyon County as a district court case but was later moved to federal court.On the morning of June 22, 2018, a train owned by BNSF carrying more than 30 cars of crude oil derailedjust south of the community of Doon, Iowa. Some of the cars were compromised and leaked oil into floodwaters in Lyon County. The derailment and oil spill also forced the evacuations of several farms in the area.According to the lawsuit, the derailment caused 160,000 gallons of tar sand oil to spill into the waters, flooding the train tracks. The National Transportation Safety Board found that speed was not a factor in the derailment. Instead, over 48 hours of heavy rain washed out the tracks.Multiple agencies responded to the derailment and assisted in cleaning up the spill.The plaintiffs own approximately 464 acres of farmland in Lyon County that was damaged by the oil spill.In December 2021, BNSF Railway agreed to pay a $1.5 million settlement to the Environmental Protection Agency.

Enbridge Wants Line 5 Shutdown Order Overturned on Tribal Land in Northern Wisconsin - Eleven years after easements for a pipeline buried beneath the Bad River reservation in northern Wisconsin expired, five years after the tribe first sounded alarms over the risk of an imminent oil spill into their namesake river and eight months after a federal judge ordered a shutdown, Canadian pipeline giant Enbridge was back in federal court last week arguing that the flow of oil through its 71-year-old Line 5 pipeline be allowed to continue.“May it please the Court, the district court shutdown order in this case will cause a massive disruption in energy supplies and economies in the Midwest and Canada,” said Alice Loughran, an attorney representing Enbridge before the 7^th Circuit Court of Appeals in Chicago on Feb. 8.Citing a legal argument rarely used in pipeline disputes, Enbridge argued that a 1977 treaty between the United States and Canada prohibited any disruption in the flow of oil between the two countries. Some legal scholars say century-old treaties between the Bad River Band of the Lake Superior Tribe of Chippewa Indians and the U.S. government should supersede the 1977 pipeline treaty and that Enbridge lacks the legal standing to bring a nation-to-nation treaty before the court. “I think basically it’s a ‘Hail Mary’ from Enbridge,” said Matthew Fletcher, a federal Indian law professor at the University of Michigan and a visiting professor at Harvard University.The federal district court found Enbridge has been trespassing on the Bad River Reservation since 2013 when the company’s right-of-way easements for the pipeline expired. In January 2017, the Bad River Tribal Council voted not to renew its interest in the right of way and called for the removal of Line 5 because it threatens the tribe’s water resources, food sources and traditional ways of life. However, if the appeals court judges accept Enbridge’s argument—which the Canadian Government is also arguing—the implications could be wide ranging. “It would really limit the ability of state governments and tribal nations and others to protect the interests that have been widely accepted for many years,” said Debbie Chizewer, an attorney for Earthjustice, an environmental advocacy and litigation organization not involved in the ongoing lawsuit. “If you can’t protect your land from a trespass because of the oil pipelines, what’s the point of having your own land?” Meanwhile, the tribe’s years-long battle against Enbridge is gaining increasing attention.Bad River, a film about the tribe and its David-versus-Goliath fight against the pipeline company, will be released in theaters across the U.S. on Mar. 15. The film seeks to put the current pipeline fight in an historical context.“Enbridge’s trespass is one of many in a series of takings of Native land that goes back hundreds of years,” Mary Mazzio, the film’s producer, writer and director, said.

The Rising Cost of the Oil Industry’s Slow Death — In the 165 years since the first American oil well struck black gold, the industry has punched millions of holes in the earth, seeking profits gushing from the ground. Now, those wells are running dry, and a generational bill is coming due.Until wells are properly plugged, many leak oil and brine onto farmland and into waterways and emit toxic and explosive gasses, rendering redevelopment impossible. A noxious lake inundates West Texas ranchland, oil bubbles into a downtown Los Angeles apartment building and gas seeps into the yards ofsuburban Ohio homes.But the impact is felt everywhere, as many belch methane, the second-largest contributor to climate change, into the atmosphere.There are more than 2 million unplugged oil and gas wells that will need to be cleaned up, and the current production boom and windfall profits for industry giants have obscured the bill’s imminent arrival. More than 90% of the country’s unplugged wells either produce little oil and gas or are already dormant.By law, companies are responsible for plugging and cleaning up wells. Oil drillers set aside funds called bonds, similar to the security deposit on a rental property, that are refunded once they decommission their wells or, if they walk away without doing that work, are taken by the government to cover the cost.But an analysis by ProPublica and Capital & Main has found that the money set aside for this cleanup work in the 15 states accounting for nearly all the nation’s oil and gas production covers less than 2% of the projected cost. That shortfall puts taxpayers at risk of picking up the rest of the massive tab to avoid the environmental, economic and public health consequences of aging oil fields. The estimated cost to plug and remediate those wells if cleanup is left to the government is $151.3 billion, according to the states’ own data. But the actual price tag will almost certainly be higher — perhaps tens of billions of dollars more — because some states don’t fully account for the cost of cleaning up pollution. In addition, regulators have yet to locate many wells whose owners have already walked away without plugging them, known as orphan wells, which states predict will number at least in the hundreds of thousands.“The data presents an urgent call to action for state regulators and the Department of the Interior to swiftly and effectively update bond amounts,” said Shannon Anderson, who tracks the oil industry’s cleanup as organizing director of the Powder River Basin Resource Council, a nonprofit that advocates for Wyoming communities. Anderson and nine other experts, including petroleum engineers and financial analysts, reviewed ProPublica and Capital & Main’s findings, which were built using records from 30 state and federal agencies.“We have allowed companies intentionally to do this,” said Megan Milliken Biven, who reviewed the data and is a former program analyst for the Bureau of Ocean Energy Management, a federal regulator of offshore oil rigs, and founder of True Transition, a nonprofit that advocates for oil field workers. “It is the inevitable consequence of an entire regulatory program that is more red carpet than red tape.”

Rules to ensure there’s enough cash to plug all Colorado oil wells may not get the job done, study says - New Colorado rules to insure there is enough cash to plug each oil and gas well in the state at the end of its life may not generate enough money to do the job, according to an analysis by Carbon Tracker.The report by the nonprofit environmental think tank said that in the short-run the state may end up with less in financial guarantees than it had before the new rules were adopted nearly two years ago and about 39% of oil and gas companies still have not completed financial assurance plans.The Colorado Energy and Carbon Management Commission, which adopted and administers the financial assurance rules, disputes those findings.In April 2022, the state held 1,593 active bonds totaling about $243 million, the commission said in a statement to The Colorado Sun. The new rules were adopted in March 2022, and the ECMC now has 1,827 active bonds totaling $399 million.The commission said it has approved financial assurance plans that will grow that amount to a projected balance of $820 million.The financial assurance rules were required under Senate Bill 181, which reoriented oil and gas regulation in Colorado from promoting drilling to protecting public health, safety and welfare and the environment and wildlife.The biggest share of those funds, however, will come from operators with many low-producing wells paying into their state plans over the next 10 to 20 years.“This is a story of the haves and have-nots,” said Rob Schuwerk, executive director of Carbon Tracker’s North American office and a co-author of the report. The “haves” are the large companies, who in many cases will see their bonding requirements go down, and the “have-nots” are smaller operators with marginal wells, who may face increased obligations.“The money will mostly come from operators producing less than 2 boe/d (the equivalent of two barrels of oil a day) per well,” the report said. “Thus, the bulk of future bonding is exposed to low-producing operator default risk over a 10-year time horizon, replicating the problems SB19-181 was intended to solve.”The ECMC said that it will retain the bonds posted by these smaller companies under the previous rules, which required bonding for plugging wells and surface cleanup, and the status of each operator will be reviewed annually.The rules create five categories of financial assurance depending on the volume of oil and gas a company produces, with large companies able to cover their operations with blanket bonds.The smaller, low-producing companies could have either 10 or 20 years to pay into a fund to meet plugging costs for each well or seek a customized plan.“These strategies really aren’t going to be able to fix the problem because if you think about it, that means those entities will be contributing an additional 5% or 10% of their burden every year, as their wells produce less and less,” Schuwerk said.

Bill would stop new oil, gas permits in Colorado by 2030 -A group of Democratic legislators recently introduced a bill to stop new permitting for oil and gas development in Colorado by 2030.Senate Bill 24-159 would require the Colorado Energy & Carbon Management Commission to adopt rules to end the issuing of new oil and gas permits by Jan. 1, 2030, and additional reductions in the total number of permits for new wells in 2028 and 2029. The legislation also would require new permits issued after 2024 to stop operations by 2032."Climate pollution from oil and gas wells in Colorado exacerbates climate change, which has been declared the greatest global threat to public health by two hundred medical journals, and has adverse impacts on Coloradans' health and well-being," says the bill, which was introduced in the Senate Tuesday.“I think most Coloradans agree with us that we can’t keep drilling forever,” said bill sponsor Sen. Sonya Jaquez Lewis, D-Boulder County, according to the environmental advocacy group WildEarth Guardians. “It’s a finite energy source. Fossil fuel demand is going down in Colorado because we are starting to transition to clean energy.”“There are going to be thousands of wells producing well after 2050. No one at all is trying to halt oil and gas production,” she added.Kait Schwartz, director of the American Petroleum Institute Colorado, said the oil and natural gas industry has worked to meet the state’s climate targets and the legislation threatens employment and the economy.“The proposal pays no mind to private property rights, our industry’s dramatic economic contributions to Colorado, the livelihoods of tens of thousands of workers, nor a swath of rulemaking over the past half-decade that has cemented our state as a truly global leader in safe and responsible energy production,” Schwartz said in a statement. “… the sponsors of this bill are doing nothing less than championing the most extreme anti-energy proposal in the history of our state, all the while ignoring the needs of everyday Coloradans who are already struggling with increasing everyday costs, including utility rates.”According to the trade group, Colorado's oil and gas industry provides $34.1 billion in labor income or 12% of the state's total employment revenue. Oil and natural gas production in the state accounted for approximately $18 billion in 2021 and was approximately 85% higher than the $9.74 billion estimate for the previous year, according to the Colorado Geological Survey. In 2021, oil and natural gas production was approximately 88% of the state's total mineral and energy production value. “Although 2021 oil and gas production decreased in Colorado, oil and natural gas production remains higher than historical values and production values have increased from 2016 due to higher prices and an increase in demand,” the Colorado Geological Survey reported. “Colorado has the eighth-largest proven oil reserves and the ninth-largest proven natural gas reserves in the U.S.” Colorado is the eighth-largest producer of natural gas in the nation, according to the U.S. Energy Information Administration. The state's natural gas reserves make up approximately 4% of the U.S. total, the federal agency said. Colorado has all or part of the nation’s 100 largest natural gas fields and its natural gas output doubled from 2000 to 2022. Colorado’s crude oil industry is the fifth largest in the nation, providing approximately 4% of total U.S. output, according to the EIA. In 2022, the state produced almost five times more crude oil than in 2010 due to the increased use hydraulic fracturing. Monthly crude oil production peaked at slightly more than 17 million barrels in November 2019 and declined to approximately 11 million barrels by February 2021 due to the pandemic. In 2022, production increased 3%, the first year-on-year increase in two years.SB24-159 was assigned to the Senate Agriculture & Natural Resources Committee, but no hearing has been scheduled yet.

North Dakota Natural Gas Prices Hit 28-Year Low, Highlighting Takeaway Constraints - Oil producers in North Dakota’s Bakken Shale are facing the lowest natural gas prices in nearly three decades, according to the state’s top regulator. Department of Mineral Resources (DMR) Director Lynn Helms addressed the issue during a recent press conference. The price of natural gas delivered to the Northern Border pipeline system at Watford City, ND, stood at $1.17/Mcf as of Thursday, the lowest price since June 1996, according to DMR. Farther downstream on the same system, NGI’s Daily Northern Border Ventura price averaged $1.365/MMBtu on Tuesday (Feb. 20).

Chord, Enerplus Building $11B Bakken Oil, Natural Gas Heavyweight with Merger -- Chord Energy Corp. has agreed to acquire fellow Williston Basin producer Enerplus Corp. in a stock and cash transaction that would create a company with a combined enterprise value of about $11 billion. The purchase price equates to almost $4 billion, based on closing share prices Wednesday when the deal was announced, noted Enverus Intelligence Research Senior Vice President Andrew Dittmar. The two Bakken Shale heavyweights produced a combined 287,000 boe/d in the fourth quarter. They expect oil to account for 56% of the combined production after the deal is finalized. The oily Bakken produces vast amounts of liquids-rich associated natural gas, with gas-to-oil ratios on the rise as operators move from depleted core areas into gassier second and third-tier acreage.

California proposes fracking phaseout, making good on Newsom’s pledge -California regulators have released official plans for phasing out fracking in the Golden State — nearly three years after Gov. Gavin Newsom (D) declared his intentions to do so.The proposed regulation would amend the state’s Public Resources Code by including a clause “to phase out permits to conduct well stimulation treatments,” according to a notice from the California Department of Conservation’s Geologic Energy Management Division (CalGEM).Well stimulation treatments are processes employed at oil and gas wells to boost production, including hydraulic fracturing — also known as fracking — as well as acid fracturing and acid matrix techniques.“While these methods are highly effective at increasing well productivity, there has been significant public concern about their potential environmental and health effects,” an initial statement of reasons from CalGEM said.The proposed regulation, which would apply to projects both onshore and offshore, emphasizes that CalGEM would “not approve applications for permits to conduct well stimulation treatments.” Newsom first announced CalGEM’s intentions to initiate such regulatory action in April 2021, citing the need to “create a healthier future for our children.”“I’ve made it clear I don’t see a role for fracking in that future and, similarly, believe that California needs to move beyond oil,” Newsom said at the time.CalGEM’s statement of reasons behind the proposal described an aim of protecting life, property, public health and safety, while also mitigating greenhouse gas emissions related to California’s hydrocarbon sector.The regulator estimated that in 2020 — the most recent year with available data — 12.1 percent of total oil and 16.6 percent of total gas in California came from wells that had at some point undergone well stimulation treatments.While oil and gas industry representatives have long maintained that fracking is safe and necessary, activists have argued that the technology can cause undue harm to the environment and human health. Following Newsom’s initial April 2021 declaration, Catherine Reheis-Boyd, president and CEO of the Western States Petroleum Association, accused the governor of ignoring science and facts. Such a phaseout, Reheis-Boyd said at the time, would “only hurt workers, families and communities in California and turns our energy independence over to foreign suppliers.”

California’s Oil Country Hopes Carbon Management Will Provide Jobs. It May Be Disappointed -- On a recent Tuesday evening, several oil workers in Kern County, California, spoke out in support of a project that they hope will create much-needed jobs.“What I’m hoping to get out of this is hope for my grandson’s generation,” said Allen Miller, a third-generation oilman who came to work in the petroleum-rich region in 1984. “That they can provide for their family the way my grandpa did and the way I did.”The audience applauded Miller’s comments during a crowded public meeting in Taft, a city of about 8,500, in the heart of the state’s oil country. The proposed project, known as Carbon TerraVault 1, would store millions of tons of planet-warming carbon a mile beneath the nearby Elk Hills Oil Field. Oil production in that field and others nearby has sustained the county’s economy for over a century. “This is our oil field,” said Manny Campos, a longtime Taft resident and businessman. “I’m glad to see we are being intentional about keeping it that way and keeping the benefits local.” Some environmental advocates are skeptical of the carbon removal industry — and its ability to create a significant number of jobs — but California policymakers view carbon removal and storage as a necessary tool to manage greenhouse gas emissions. The fledgling technology is a key part of the state’s plan to fight climate change, which also includes phasing out oil drilling by 2045. The county and California Resources Corporation (CRC), the oil company hoping to build the TerraVault, see carbon management as a vital new revenue stream. Kern County stands to lose thousands of jobs and millions in tax dollars as drilling declines But carbon storage facilities themselves are not currently projected to generate large numbers of jobs, according to a report prepared for the county. Kern’s own analysis shows the initial phase of the TerraVault project will only produce five permanent positions.

Mexico End Users Securing Bargain Natural Gas Prices with Higher February Imports – North American natural gas prices have been hammered for the past two weeks, and despite a minor rally, remain well below the $2.00 mark. The March New York Mercantile Exchange gas futures contract on Thursday settled at $1.732/MMBtu, down 4.1 cents day/day. Prices had jumped on Wednesday after Chesapeake Energy Corp. said it intended to pull back production from the Haynesville and Marcellus shales. Still, U.S. production remained strong at around 103 Bcf/d and mild weather conditions have kept demand in check. “Prices have been low since they peaked during the mid-Jan winter storm,” Mexico trader Santiago Villareal told NGI’s Mexico GPI. “In Mexico, on the user side, they are very pleased. Everything that they budgeted for is getting cheaper. But this has had an...

UK Quits Treaty Allowing Oil Firms to Sue Governments Over Climate Policy -- The UK will leave the Energy Charter Treaty (ECT), a 1994 pact that allows oil and gas companies to sue governments over their climate policies for compensation for lost profits.The Energy Charter Treaty was originally designed to promote international investment in the energy sector and has historically provided protections for investors in fossil fuels. Efforts to modernize the treaty, which the UK considers “outdated” in view of its net-zero policies and ambitions, have failed, resulting in a stalemate, which prompted the UK government to announce on Thursday that it would leave the Energy Charter Treaty (ECT) “after the failure of efforts to align it with net zero.” After considering the views of businesses, industry, and civil society, ministers will now instigate the UK’s withdrawal, which will take effect after one year, removing protections for new investments after this period. ?The UK is not the only European country quitting the treaty—France, Spain, the Netherlands, and six other EU member states have announced similar moves.According to the UK, proposals to modernize the treaty to support cleaner technologies have been subject to months of talks between European countries, resulting in a stalemate. The UK government believes that the decision to leave the treaty “will support the UK’s transition to net zero and strengthen its energy security.”“The Energy Charter Treaty is outdated and in urgent need of reform but talks have stalled and sensible renewal looks increasingly unlikely,” the UK’s Minister of State for Energy Security and Net Zero, Graham Stuart, said in a statement.“Remaining a member would not support our transition to cleaner, cheaper energy, and could even penalise us for our world-leading efforts to deliver net zero.”

Spot LNG shipping rates flat, European prices dip - Spot charter rates for the global liquefied natural gas (LNG) carrier fleet were almost flat this week, while European and Asian prices decreased compared to the week before.Last week, charter rates rose for the first time since mid-November 2023 due to the opening of the US arbitrage to NE-Asia, coupled with the increased voyage time from the diversion of cargoes unable to transit the Suez Canal.“Freight rates have stayed almost level this week, with the Spark30S Atlantic unchanged at $54,500 per day, whilst the Spark25S Pacific increased by $500 (1 percent) to $58,000 per day,” Qasim Afghan, Spark’s commercial analyst, told LNG Prime on Friday.Since January, LNG carriers, including Qatari vessels delivering LNG shipments to Europe, are favoring the Cape of Good Hope for safer passage.Kpler said earlier this month that the Suez Canal has witnessed no LNG transits since January 17.Vessels face an extra 21-day voyage time on a round-trip basis via the Cape of Good Hope as opposed to the Suez Canal.In Europe, the SparkNWE DES LNG front month dipped compared to the last week.The NWE DES LNG for March delivery was assessed last week $8.172/MMBtu and at a $0.60/MMBtu discount to the TTF.“SparkNWE front month reaches a new 8 month low, with the SparkNWE DES LNG price for March delivery assessed at $7.339/MMBtu and at a $0.535/MMBtu discount to the TTF,” Afghan said. He said this is a $0.833/MMBtu decrease in DES LNG price, and a $0.065/MMBtu narrowing of the discount to the TTF.

Rystad Says European Gas Storage Is 65 Percent Full - In Rystad Energy’s latest gas and LNG market update, the company’s senior analyst, Lu Ming Pang, highlighted that European gas storage levels were at 75.23 billion cubic meters, “or 65.5 percent full”, as of February 17. European gas storage levels were at 77.05 billion cubic meters, “or 67.1 percent full”, on February 10 and at 70.50 billion cubic meters on February 17, 2023, Pang outlined in the update, which was sent to Rigzone late Tuesday. “Despite colder weather earlier in January, which reduced storage levels to those seen in January 2023, warmer than normal weather has since prevailed in Europe and is anticipated to continue until early March,” Pang said in the update. “This has allowed underground gas storage to build up again compared to previous years and is likely to reduce demand for restocking during the injection season,” Pang added. “As Europe approaches winter’s end with higher than normal gas in storage, the Title Transfer Facility (TTF) forward curve continues to reflect a relatively subdued market, with prices in the high $7 per million British thermal units (MMBtu) range until September 2024,” Pang went on to state. In the update, Pang noted that prices at Europe’s TTF have continued to decline, “falling from $7.8 per MMBtu last week to $7.48 per MMBtu at the time of writing on 20 February”. “Bearish fundamentals persist despite mild disruptions in Norwegian gas pipeline flows, as European storage levels remain high compared to previous years amid relatively warm weather across the continent,” Pang said in the update. Norwegian pipeline gas flows to Europe were 338.49 million cubic meters per day (MMcmd) as of February 18, according to Pang, who highlighted in the update that this was “slightly less than the 350 MMcmd seen earlier in the winter”. “A dip to 317.80 MMcmd on February 15 and 16 did little to reverse bearish fundamentals in Europe’s well supplied market,” Pang continued. A BofA Global Research report sent to Rigzone on February 16 highlighted that European gas prices “have continued to slide so far in 2024”. “Dutch TTF prices have fallen >20 percent year to date and now sit at ~$8 per MMBTU, having averaged $38/13/MMBTU across 2022 and 2023,” the report added. “Forward curves have slumped too, yet for context, they remain approximately double the historical price average prior to Russia’s invasion of Ukraine as Europe’s reliance on global LNG markets has jumped to >30 percent from <10 percent before - putting the continent in more direct competition for gas with Asia,” the report went on to state. In a separate gas and LNG market update sent to Rigzone on February 8, Rystad Senior Analyst Masanori Odaka said underground gas storage facilities in Europe were 68.6 percent full, highlighting that they were around 79 billion cubic meters. “Average withdrawals from storage fell 7.4 percent on the week to approximately 500 MMcmd, compared to 590 MMcmd in the same period last year,” Odaka said in the statement.

Norway’s Gas Exports May Hit a Record This Year, Equinor Says - -- Natural gas supplies from Norway may potentially reach a fresh record this year as the country works to reduce its maintenance schedule across its facilities. “We could get higher volumes than what we saw last year,” Helge Haugane, senior vice president for gas and power at the Norwegian energy giant Equinor ASA said in an interview in Essen, Germany. “In 2023, there was a lot of maintenance, in 2024 there will be less.” Norway is Europe’s largest supplier, having exported about 109 billion cubic meters of natural gas to the continent in 2023, according to data from grid operator Gassco AS. The country’s relevance for Europe’s energy security became clear last summer, when unplanned works at some of its facilities sent jitters across markets, just as the region was rebuilding its energy mix following the loss of much of Russia’s pipeline flows. With the continent’s gas market now impacted by a several global factors, volatility is likely to be a regular feature. “Russian pipeline gas is practically out for Europe and liquefied natural gas will definitely have a longer response time than pipeline gas,” Haugane said. “And that’s one of the reasons why we expect more volatility going forward.” Read More: Gassco Delivered Record Natural Gas to Europe in December Equinor has been working to increase the capacity of its facilities, including reducing bottlenecks at Kollsnes, that’s “increased capacity from 144 million cubic meters a day to 156,” Haugane said. LNG Portfolio Equinor is also building its liquefied natural gas portfolio, having signed two deals to buy the fuel from Cheniere Energy Inc. and to sell the super-chilled fuel to India’s Deepak Fertilisers. “We are building an LNG portfolio, with supply from Norway, the US and we have some other deals which we haven’t disclosed,” Haugane said. “And then we want to have a diversified outlet for that LNG as well.” Demand growth will come from countries looking to replace coal with gas, Haugane said. “India is going to be an even larger player in the future global market.” Equinor is discussing gas sales “across the board” with “big ones’ which could be concluded soon, he added. “Also, a lot of smaller contracts are being signed, especially in the Baltics region. And we are also in dialog with customers in the industrials segment.”

Equinor Bags 15-Year LNG Order from Indian Fertilizer Producer - Equinor ASA has signed a deal to supply about 650,000 metric tons of liquefied natural gas (LNG) per annum to Deepak Fertilizers and Petrochemicals Corp. Ltd. for 15 years starting 2026, the Norwegian energy major said.. “Equinor’s growing global LNG portfolio is based on LNG from the Equinor operated LNG Plant in Hammerfest, Norway and LNG supply sourced mainly from the US”, the majority-state-owned company said in a news release. “This portfolio will be the base of supply to Deepak, which will use the gas mainly as feedstock for production of ammonia in its newly commissioned plant for manufacturing fertilizers and petrochemicals”. Hammerfest LNG on the island of Melkoya has a declared normal production capacity of 230 billion cubic feet per year. “Deepak’s new ammonia plant has created new gas demand in the growing Indian market”, Equinor senior vice-president for gas and power Helge Haugane said in a statement. “The agreement is another proof of how we use our position in the Atlantic basin to strengthen our relationship with key players in the growing Indian market”, Haugane said, adding the two companies are exploring further collaboration involving petrochemical feedstocks such as ethane and propane, as well as on low-carbon ammonia. Deepak chair and managing director Sailesh C. Mehta said, “The agreement will help us absorb global volatility as well as enhance overall margins”. “We also look forward to exploring with Equinor further collaboration on feedstock and carbon footprint reduction initiatives”, Mehta added. This is Equinor’s first announced LNG order for the year. On December 19 it announced an agreement to supply around 10 billion cubic meters (353.1 billion cubic feet) of natural gas annually to Germany’s state-owned midstream energy company SEFE GmbH for 10 years, extendable for five years. Delivery was to start January 2024. “The annual volumes are equivalent to one-third of German industrial demand”, Equinor said in a press release at the time. “After the Troll gas sales agreement in 1986, this is one of the largest gas sales agreements Equinor has entered into as a company”, it noted.

Equinor seals 15-year LNG supply deal with India's Deepak Fertilisers - Norway’s Equinor and India’s Deepak Fertilisers have signed a 15-year deal for supplies of liquefied natural gas (LNG) with deliveries starting in 2026. The agreement covers an annual supply of around 0.65 million tons (ca 9 TWh) of LNG, Equinor said in a statement on Monday. The firm said its growing global LNG portfolio is based on LNG from its operated plant in Hammerfest, Norway and LNG supply sourced mainly from the US. This portfolio will be the base of supply to Deepak, which will use the gas mainly as feedstock for production of ammonia in its newly commissioned plant for manufacturing fertilizers and petrochemicals. Equinor’s senior VP for gas and Power, Helge Haugane, said Deepak’s new ammonia plant has created new gas demand in the growing Indian market. Equinor and its partners in the 4.3 mtpa Hammerfest LNG export plant are currently working to upgrade the facility located on Melkoya island. Hammerfest LNG liquefies natural gas coming from the Snohvit field in the Barents Sea. As per the US supplies, US LNG exporting giant Cheniere signed last year a long-term supply deal with Equinor. Under the SPA, Cheniere Marketing will supply about 1.75 mtpa of LNG to Equinor on a free-on-board basis. This agreement brings the total volumes that Equinor has contracted with Cheniere up to around 3.5 mtpa. Delivery of half of the volume associated with the new SPA will start in 2027, and delivery of the remaining half, which is subject to, among other things, a positive final investment decision with respect to the first train of the Sabine Pass expansion project, will start at the end of this decade.

European Natural Gas Demand Forecast to Stabilize, but Price Volatility Looms Large - European natural gas demand has shown few signs of recovery so far this year as warm weather and industrial curtailments persist, but the fall in gas consumption on the continent is expected to slow this year compared to its downward spiral of 2023. Between August 2022 and December, European Union (EU) countries reduced gas demand by 18% compared to the five-year average, according to the European Commission. Despite a limited number of forecasted heating days left on the calendar and storage volumes still above average in Europe, Rystad Energy Analyst Mathia Schioldborg told NGI that gas demand may have hit a balancing point for the rest of the year.

Israel's Tamar Gas Field To Double Exports To Egypt - The United States energy giant Chevron and its partners in the Tamar reservoir off Israel's Mediterranean coast on Sunday announced their decision to invest $24 million to bolster natural gas production capacity from the offshore field. The field’s output capacity is estimated to increase by approximately 1.6 billion cubic feet (bcf) per day to satisfy domestic energy demand and expand exports to Egypt that are reportedly planned to double in the coming years. The Tamar partners are said to have agreed to supply an additional four billion cubic metres (bcm) of natural gas annually to Egypt for 11 years, totalling around 43bcm. Chevron Eastern Mediterranean business unit managing director Jeff Ewing said: “Reaching [final investment decision] FID for phase two of Tamar’s expansion reflects Chevron’s ongoing commitment to partnering with the State of Israel to continue development of its energy resources for the benefit of domestic and regional natural gas markets," reported The Times of Israel. https://twitter.com/i/web/status/1387192385181036546 This post can't be displayed because social networks cookies have been deactivated. You can activate them by clicking manage preferences. With a 25% stake, Chevron is the key operator of the Tamar gas field. Other partners are Isramco with a 28.75% interest, Mubadala Energy from Abu Dhabi with an 11% stake, Tamar Investment 2 (11%), Tamar Petroleum (16.75%), Dor Gas (4%) and Everest (3.5%).

Magni Partners books more VLCCs in China - Tor Olav Troim’s firm Magni Partners has ordered two more LNG-powered very large crude carriers in China, according to brokers.The management consulting company ordered two 320,000-dwt LNG dual-fuel VLCCs at China’s New Times Shipbuilding, Clarksons said in a report.The broker said that Magni Partners declared options from the contract signed last yearfor two LNG-powered VLCCs.Andes Shipping is reportedly the entity behind the order.New Times is expected to deliver these two new ships in 2027.Also, the price tag has not been revealed but the first two vessels were said to be each worth at about $138 million. VesselsValue data also suggests that the new vessels are worth about $138 million.Some reports said that it has still not been decided for the two new vessels whether they would feature LNG propulsion.LNG Prime did not manage to get official confirmation for the LNG dual-fuel VLCC order by the time this article was published.Troim’s Himalaya Shipping already has twelve 210,000-dwt Newcastlemax LNG dual-fuel bulk carriers on order at New Times. The Chinese shipbuilder delivered nine of these LNG-powered bulkers up to date.

Nebula Energy Buys Majority Stake in AG&P LNG to Fast-Track Asian Natural Gas Projects - U.S.-based Nebula Energy LLC has invested $300 million for a majority stake in AG&P Terminals & Logistics Pte Ltd., aka AG&P LNG. The investment firm is expanding its business in the liquefied natural gas and carbon capture and storage sectors with its investment in AG&P, with plans to fast-track infrastructure development across emerging markets in South and Southeast Asia. “With this partnership, AG&P LNG will singularly serve as the one-point integrated source for the rapid unlocking of near-term market demand,” said CEO Karthik Sathyamoorthy. AG&P has six LNG terminals in development in Asia, with a proposed capacity of 25 million metric tons/per year (mmty). AG&P operates an LNG import and regasification terminal in the Philippines, a converted floating, storage and...

Adnoc Inches toward Improved Bid for Covestro: Sources - Abu Dhabi National Oil Co. is inching toward an improved bid for Covestro AG after finding a potential way to resolve the impasse over its EUR 11.3 billion ($12.1 billion) pursuit of the German chemical maker, people familiar with the matter said. Adnoc is working with a consulting firm that’s sent dozens of questions to Covestro about the details of its operations, according to the people. The responses could give the Abu Dhabi-based energy giant enough information to improve its bid to slightly more than €60 per share, the people said, asking not to be identified because the information is private. Shares of Covestro jumped as much as 8.1 percent in late Frankfurt trading Thursday. They were up 4.8 percent at 5:35 p.m. in Germany, giving the company a market value of about EUR 9.4 billion. In December, Adnoc improved its non-binding offer to EUR 60 per share, up from previous proposals of EUR 57 and EUR 55, Bloomberg News has reported. The latest increase wasn’t enough to win over some parts of Covestro’s supervisory board, which thus hasn’t granted Adnoc full access to its data room, the people said. While Adnoc executives were struggling to justify another bump without access to proper due diligence, Covestro’s responses to the latest questions may help bridge the gap, the people said. It’s still unclear how much Adnoc may be willing to increase its bid and whether it will be enough to win over Covestro. Deliberations are ongoing, and there’s no certainty they will lead to a deal. Representatives for Adnoc and Covestro declined to comment. Adnoc has been pursuing Covestro since the middle of last year, part of the Abu Dhabi company’s push to diversify internationally. Its overtures come as the European chemical industry struggles with the region’s anemic growth and a weaker-than-expected rebound in China. Producers including Lanxess AG and BASF SE warned of disappointing earnings last year. Covestro will announce its full-year results on Feb. 29, when investors also expect it to provide an outlook for the current year and beyond. Covestro indicated in November it’s on track to generate about EUR 1.4 billion in earnings before interest, taxes, depreciation and amortization in 2024, well below the EUR 2.8 billion it said it could achieve under average market conditions.

Russia remains top oil supplier to India, imports climb 25% in December -Russia remained the top supplier of oil to India in December, accounting for nearly a third of the crude brought into the country, according to commerce ministry's data. At $3.92 billion, the value of the crude oil supply from Russia increased by 25% year-on-year. Sequentially, crude imports from that country increased by 8% from $3.61 billion in November last year, the data showed. Moscow was the biggest crude supplier to India in 2023, accounting for more than 30% of its imports, and will likely remain so through early 2024 despite the Red Sea crisis, as per a report by S&P Global Commodity Insights in January. This is significant because, despite Russian oil initially remaining unaffected by the Houthi attacks in the Red Sea, the situation has evolved with recent reports of Russian oil cargoes coming under attack. This has forced ships to take different routes, via the Cape of Good Hope, and traders to recalculate costs. Meanwhile, the increase in oil supplies from Russia has coincided with a year-on-year decline in imports from traditional suppliers in the Gulf region. Iraq was the second-largest source of crude oil for India in December, supplying $2.42 billion worth of the commodity, 4% lower year-on-year. Supplies from Saudi Arabia and the United Arab Emirates (UAE) fell 24.84% and 3.01% to $1.91 billion and $973.85 million, respectively. The US was the fifth-largest supplier in December, with oil worth $413.61 million coming from the country. Imports from the US have declined by a massive 79.87% year-on-year. Prior to the Ukraine conflict, in fiscal year 2021-22, Russian oil accounted for only 2% of India’s total oil imports, with Iraq being the top supplier, followed by Saudi Arabia and the UAE. However, post-invasion, Russia climbed to the top, driven by substantial discounts on oil prices. Despite a decrease in these discounts from over $30 per barrel to $4-6 per barrel, India's procurement of Russian oil has continued, even amid Western concerns.

QatarEnergy Starts Construction for Major Petrochemical Complex -Qatar Amir Tamim bin Hamad Al Thani has laid the foundation stone for the petrochemical complex of QatarEnergy and Chevron Phillips Chemical Co. L.L.C. (CPChem) in Ras Laffan Industrial City, a project expected to raise the Gulf state’s petrochemical production to about 14 million metric tons per annum (MMtpa) by 2026. “The Ras Laffan Petrochemical Complex is being built at a cost of $6 billion, making it the largest investment in history of QatarEnergy in Qatar’s petrochemicals sector”, QatarEnergy president and chief executive Saad Sherida Al-Kaabi, who is also the country’s energy affairs minister, told the groundbreaking ceremony, according to a news release by state-owned QatarEnergy. “There is no doubt that this is an important landmark in QatarEnergy’s downstream expansion strategy as it will reinforce our integrated position as a global energy player and generate significant economic benefits for the country”. The 435-acre complex is planned to have an ethane cracker that can produce 2.1 MMtpa of ethylene, making it the biggest ethylene plant in the Middle East and one of the world’s largest, according to the owners. This would increase Qatar’s ethylene output capacity by over 40 percent, QatarEnergy said. The project also includes two polyethylene trains with a combined production of 1.7 MMtpa of high-density polyethylene polymer products, which would raise Qatar’s production of such products by about 50 percent, according to the owners. “This project advances CPChem’s long-held strategy to expand its operations in regions where feedstock is reliable and abundant and will help meet the global demand for polyethylene products”, outgoing CPChem president and CEO Bruce Chinn said in a separate press release. The bulk of the high-density polyethylene polymer products from the Ras Laffan complex is planned for export to other countries, CPChem said. Polyethylene is a plastic used in packaging for a variety of products from personal care products to food, as well as in the production of durable goods. CPChem said the project will use energy-saving technology and employ other measures that result in lower greenhouse gas emissions compared to similar global facilities. QatarEnergy holds a 70 percent equity share while Chevron Phillips Chemical Co. L.L.C. owns the remaining 30 percent. The partners earlier began construction for an integrated polymers production facility in Orange, Texas. The 1,600-acre Golden Triangle Polymers project has a planned capacity of 2.1 MMtpa for its ethylene unit and a combined 2.0 MMtpa for two polyethylene units. Qatar’s “prominent standing in the petrochemical industry will be further strengthened when we commence production of the Golden Triangle Polymers Plant in 2026, which we are developing in the US state of Texas at a cost of $8.5 billion in partnership with Chevron Phillips Chemical, and which is considered the biggest in the world”, Al Kaabi told the groundbreaking ceremony in Qatar. The ceremony was attended by executives from QatarEnergy, CPChem and the latter’s owners—Chevron U.S.A. Inc. and Phillips 66 Co. CPChem holds a 51 percent equity share in the project being built near an already operational polyethylene facility it owns. QatarEnergy has the remaining 49 percent. Both the United States and Qatar projects are expected to start production 2026.

World Oil Supply Posts Sharp Decline in January -- World oil supply in January posted a sharp decline of 1.4 million barrels per day month on month after an Arctic blast shut in production in North America and as OPEC+ deepened output cuts, the International Energy Agency (IEA) stated in its latest oil market report (OMR). “Extreme weather conditions shut in more than 900,000 barrels per day of production across North America,” the IEA said in its February OMR. “The steep loss coincided with fresh OPEC+ voluntary output cuts of around 300,000 barrels per day, resulting in a massive 1.4 million barrel per day month on month decline in global oil supply,” it added. “However, the rising wave of non-OPEC+ oil growth resumes in 2Q24, driving output on an upward trajectory for the rest of the year,” the IEA continued. In the OMR, the IEA said world oil supply is set to increase by 1.7 million barrels per day this year. The IEA highlighted in the OMR that total global oil supply rose by two million barrels per day in 2023. In its latest short term energy outlook (STEO), the U.S. Energy Information Administration (EIA) projected that global production of liquid fuels will hit 101.18 million barrels per day in the first quarter of 2024, 102.27 million barrels per day in the second quarter, 102.88 million barrels per day in the third quarter, 102.87 million barrels per day in the fourth quarter, and 102.30 million barrels per day overall in 2024. The EIA’s February STEO placed total world production at 101.75 million barrels per day in 2023. “We expect that global production of liquid fuels will increase by 0.6 million barrels per day in 2024, slowing from the increase of almost 1.8 million barrels per day in 2023,” the EIA noted in its latest STEO. “In our forecast, global growth in liquid fuels production is led by non-OPEC supply, which increases by almost 0.8 million barrels per day, offsetting an OPEC production decline of 0.2 million barrels per day,” it added. The EIA’s February STEO projected that total world output will hit 103.42 million barrels per day in the first quarter of 2025, 104.01 million barrels per day in the second quarter, 104.54 million barrels per day in the third quarter, 104.69 million barrels per day in the fourth quarter, and 104.17 million barrels per day overall in 2025. “Global liquids fuel production increases by almost 1.9 million barrels per day in 2025 in our forecast,” the EIA said in the STEO. “The expiration of existing OPEC+ production targets at the end of 2024 contributes to our forecast that OPEC will increase crude oil production by 0.7 million next year. However, we expect the increase will be limited because Saudi Arabia and other OPEC+ countries will maintain some level of cuts in an attempt to balance markets,” it added. “Our forecast for non-OPEC production growth averages 1.2 million barrels per day in 2025, led by the United States, Canada, Brazil, and Guyana,” the EIA continued. In its previous January STEO, the EIA projected that total world production would hit 102.34 million barrels per day in 2024 and 103.95 million barrels per day in 2025. That STEO forecast that total world output would come in at 101.33 million barrels per day in the first quarter of this year.

ADNOC CEO: Global Energy Demand Growth Is Unsustainable -- Last month, U.S. oil and gas supermajor Exxon Mobil released its long-term global energy outlook report. Exxon has predicted that global energy demand will reach about 660 quadrillion Btu in 2050, good for a 15% increase from 2021 levels reflecting a growing population and rising prosperity. The energy company has projected that renewables and nuclear will record strong growth through 2050, contributing around 70% of incremental energy supplies; natural gas demand will remain robust and reach almost 30% of all demand by 2050, oil demand will peak in the 2030s but only fall slightly over the next two decades while coal demand will continue to decline sharply. Interestingly, the developing world is expected to drive all of the demand growth, with Exxon predicting that non-OECD share of global energy demand will reach around 70% in 2050 while the combined share of energy consumption by the U.S. and Europe will decline from about 30% in 2021 to about 20% in 2050. Whereas these appear like healthy trends that might help the world ameliorate its climate crisis, not everybody is that sanguine. Al Jaber, chief executive officer of the Abu Dhabi National Oil Company (Adnoc) and president of last year’s Cop28 summit says that the current trajectory of rapid energy demand growth is unsustainable. “The energy transition will lead to energy turmoil … if we only address the supply side of the energy equation. We must be balanced, we must tackle the demand side … We cannot and should not pursue the energy transition by only looking and working on one side of the equation,” Al-Jaber has told the Guardian. According to Al-Jaber, it is unlikely that global carbon reduction targets can be met unless the world cuts energy demand, adding that many governments are reluctant to look at the complex issues around this area. Al-Jaber’s sentiments are shared by the U.S. climate envoy John Kerry, “Saying we will, for the first time in history, transition away from fossil fuel, and adjust in an orderly equitable manner … and in accordance with the science that by 2050 [we will] accomplish net zero, means everybody has to have a plan, and that is not where we are today,” Kerry has said. Kerry has taken a veiled swipe at China and its plan to bring 360 Gigawatts of coal-fired power online, saying, “And if that happens, it will wipe out all of the gains of Europe, the U.S. and other parts of the world.”

Nigeria Restricts Company Transfers of Oil Export Revenues Abroad The Central Bank of Nigeria (CBN) has decided to control the migration of export proceeds by international oil companies (IOCs) to their parent accounts offshore, saying the practice harms the liquidity of the domestic foreign exchange market. “While the CBN strongly supports the need for IOCs to have easy access to their export proceeds, particularly to meet their offshore obligations, this must be done with minimal negative impact on liquidity in the Nigerian foreign exchange market”, it said in a circular issued to dealer banks about the practice known as cash pooling. “In line with the ongoing reforms in the foreign exchange market, it has become necessary to take measures to address this trend”, the national bank said referring to its campaign to liberalize the West African country’s forex market. Now, Nigerian banks are only allowed to pool cash worth up to 50 percent of repatriated proceeds in the first instance. “The balance of 50 percent may be repatriated after 90 days from the date of inflow of the export proceeds”, read the circular, accessible on the CBN website. Dealer banks need to have a cash pooling agreement with the parent company of an oil operator before such a transaction, as well as obtain prior approval of the CBN for fund repatriation, according to the circular. IOCs are allowed to obtain currency abroad to exchange in Nigeria to meet their local expenses, according to credit guidelines on the bank’s website. On October 12 the CBN lifted a 2015 ban on the importers of 43 items to buy foreign currency in Nigeria. In its latest assessment published November 3 Fitch Ratings said foreign currency shortages continued “to weigh on economic activity and further FX liberalization, and deter foreign capital”. Reuters reported October 9 citing Nigerian National Petroleum Co. Ltd. (NNPC) chief executive Mele Kyari that the national oil and gas company has again become the only importer of petrol because private firms could not obtain foreign currency. In June Kyari told the news organization NNPC has started paying cash for gasoline imports in lieu of crude swap contracts. NNPC had been repaying gasoline imported from consortiums of foreign and local trading firms through crude oil under direct contracts since 2016 because the company did not have enough cash to pay for petroleum imports, Reuters said June 4 citing “data and trading sources”. On January 18 the CBN said it had paid $2 billion in foreign exchange liabilities across various sectors including petroleum, aviation and manufacturing. “The Bank has also cleared up the entire liability of 14 banks and started settlements with foreign airlines”, it said in a statement on social media platform X, formerly Twitter.

OPEC May Review Supply Curbs In March - The Organisation of Petroleum Exporting Countries(OPEC)+ nations may likely take a stand in early March on whether to extend oil production cuts into the second quarter, delegates said.Seven coalition members have pledged supply curbs totaling about 900,000 barrels per day, bpd this quarter, in tandem with a 1 million barrels a day MMbpd reduction by group leader Saudi Arabia.They will review whether to continue the curbs in about one month’s time, according to officials, who asked not to be identified.OPEC and its partners are trying to stave off a global supply surplus amid slowing demand growth and record U.S. shale production.Oil prices have seen only limited gains this year holding near $80 a barrel in London even as conflict rages in the Middle East and shipping comes under attack in the Red Sea.That is a little too low for some OPEC+ members to cover government spending.

Oil gains marginally as demand jitters counter Middle East conflict - Brent crude oil prices settled slightly higher in an abbreviated session on Monday, as lingering supply concerns from tensions in the Middle East were offset by signs of weakening demand. Oil markets' saw thinner volumes than usual due to the Presidents' Day holiday in the U.S.. Brent futures also settled earlier than usual because of the holiday. Brent futures gained 9 cents to settle at $83.56 a barrel. U.S. West Texas Intermediate (WTI) crude for March delivery, which will not have a settlement today and expires on Tuesday, rose 30 cents to $79.49 a barrel by 1:43 p.m. ET (1843 GMT). The WTI contract for April delivery was down 11 cents to $78.35 a barrel. Both Brent and WTI futures last week gained about 1.5 per cent and 3 per cent respectively, reflecting the increasing risk of the Middle East conflict widening. The conflict in the Middle East continued over the weekend as Israeli raids put the Gaza Strip's second-largest hospital out of service. On Saturday Yemen's Iran-aligned Houthi fighters claimed responsibility for an attack on an India-bound oil tanker. The U.S. has proposed the United Nations Security Council oppose Israel's Rafah assault and back a temporary Gaza ceasefire, according to draft text seen by Reuters. Capping oil's gains were slowing demand forecasts from the International Energy Agency and a bigger than expected increase to U.S. producer prices in January, amplifying inflation concerns and lifting the dollar. The dollar index, which tracks the currency against six peers, has gained for five straight weeks and edged slightly higher on Monday. A stronger greenback makes dollar-denominated oil less attractive to investors holding other currencies, denting demand. "Oil has been quite choppy in recent weeks, partly because of the dollar strength," said Fawad Razaqzada, market analyst at City Index. "The impact of the dollar has been offsetting supportive measures such as the Middle East situation, OPEC's ongoing intervention and hopes economic conditions in China will improve in the coming quarters," Razaqzada said. Demand jitters were magnified on Friday when U.S. Federal Reserve policymakers signalled the need for "patience" over expectations of cuts to interest rates. Markets are also awaiting indications of the direction of demand from China after it returns from a week-long Lunar New Year holiday.

The Market Weighed an Uncertain Outlook For Global Demand Against the Risk Premium From the Continuing Israeli-Hamas Conflict - The March WTI contract posted an outside trading day on Tuesday morning, ahead of its expiration at the close, as the market weighed an uncertain outlook for global demand against the risk premium from the continuing Israeli-Hamas conflict. During Monday’s shortened trading session in observance of the Presidents’ Day holiday, the market rallied to a high of $79.75 amid the ongoing Middle Eastern geopolitical tensions. Iran-aligned Houthis continued their attacks on shipping lanes in the Red Sea and Bab al-Mandab Strait, with at least four more vessels hit by drone and missile strikes since Friday. The market then traded mostly sideways in overnight trading following the holiday before it breached its previous high and posted a high of $79.80. However, the market erased its gains and traded to $78.32 on demand concerns. The March WTI contract later retraced some of its losses before it once again sold off to a low of $77.67 ahead of its expiration at the close. The expired WTI contract settled down $1.01 at $78.18 while the April WTI contract settled down $1.42 at $77.04. The product markets ended the session lower, with the heating oil market settling down 7.51 cents at $2.7315 and the RB market settling down 5.86 cents at $2.2774. At least two air strikes hit an area near the coastal Lebanese town of Ghaziyeh on Monday, after the Israeli military said it had struck weapons depots near the port city of Sidon. Lebanese state media said the strikes were Israeli and that a car had been hit. Lebanese security sources said the air strikes hit factories and warehouses in an industrial area south of Sidon but it was unclear what was targeted. One source said at least 14 people had been hurt, most of them Syrian workers. Israeli's chief military spokesperson said the air strikes on weapons depots near Sidon were carried out in response to a drone launched into Israel by the Lebanese militant group Hezbollah. Sources said the Greek-flagged bulker Sea Champion arrived in the southern Yemeni port of Aden on Tuesday after being attacked in the Red Sea in what appeared to have been a mistaken missile strike by the Houthi militia. Russia’s Deputy Prime Minister, Alexander Novak, said Russia intends to fulfil its OPEC+ quota in February despite a decline in oil refining. Russia’s Energy Minister, Nikolai Shulginov, said Russia plans to produce about 523 million metric tons of oil and condensate in 2024. Russia’s Deputy Prime Minister, Alexander Novak, said Russia produced 24 million metric tons of oil offshore in 2023. A union official said Nigeria's fuel tanker drivers began a strike on Monday over increasing operational costs due to the recent second devaluation of the naira currency within a year and over the state of the country's roads. IIR Energy reported that U.S. oil refiners are expected to shut in 1.8 million bpd of capacity in the week ending February 23rd, increasing available refining capacity by 500,000 bpd. Offline capacity is expected to fall to 1.2 million bpd in the week ending March 1st.

Oil Futures Slide 1% as Traders Gauge Mixed Demand Signals -- New York Mercantile Exchange (NYMEX) oil futures and Brent crude on the Intercontinental Exchange accelerated losses in market-on-close trade Tuesday. The step lower in price was exacerbated by the expiration of the March West Texas Intermediate (WTI) contract as lingering concerns over Chinese and U.S. economic growth outweighed geopolitical tensions in the Middle East that risk disrupting oil flows through the Red Sea transit corridor. NYMEX March WTI contract expired $1.01 a barrel (bbl) lower this afternoon at $78.18 bbl after touching a 14-week high of $79.80 bbl on the spot continuous chart in early trading. The new front-month April WTI futures contract narrowed its discount against the expired contract to $1.14 bbl on the session with WTI in a backwardated market structure. ICE April Brent futures fell a steeper $1.22 to settle at $82.34 bbl. NYMEX March RBOB futures declined $0.0586 gallon to settle the session at $2.2774 gallon, while NYMEX March ULSD futures dropped back $0.0751 to $2.7315 gallon. The oil complex kicked off the holiday-shortened week with a modest selloff as traders parsed through conflicting demand figures out of major global economies. In China, the Lunar New Year holidays saw a large spike in domestic travel and spending that exceeded its pre-pandemic trend for the first time since 2020. Some 474 million trips were made in China during the Lunar New Year festival Feb. 10-17. That's up 19% from the comparable period in 2019, according to data from the Ministry of Culture and Tourism. The fresh data might signal a rebound in Chinese fuel consumption for this year. Meanwhile, China's central bank announced on Tuesday that it would cut its five-year loan prime rate in a bid to revive a challenged property sector that has so far weighed heavily on the growth outlook. Domestically, investors continued to digest mixed macroeconomic data for January, showing inflation unexpectedly accelerated on both consumer and producer levels as retail sales dropped sharply. U.S. retail sales fell a seasonally adjusted 0.8% in January from a month earlier following a strong rebound during holiday shopping in December, which was revised to a 0.4% gain. Although January could often be a volatile month for consumer spending due to seasonal adjustments, the new data raises the possibility that consumer spending in the U.S. has not been as strong as many have suggested. As of Tuesday afternoon, most investors still expect the Federal Open Market Committee to make a 25-point cut in the federal funds rate at its June meeting, pushing back expectations for an earlier cut in the overnight bank borrowing rate. The U.S. dollar, however, continued lower into the new trading week after testing a three-month high 104.875 on Feb. 14. The U.S. dollar index weakened 0.2% against a basket of foreign currencies with a 103.978 settlement. On the geopolitical front, the Iran-backed Houthis militia over the weekend carried out a series of drone and missile strikes on commercial vessels passing through the Bab al-Mandab Strait, including an attack on an oil tanker carrying Russian crude to India. The tanker Pollux departed the Black Sea port of Novorossiysk on Jan. 24 and was scheduled to unload Urals grade crude at the Indian port of Pradip on Feb. 28. According to U.K. Maritime Trade Operations, the vessel was able to divert an attack and continued its route to eastern India but stopped transmitting a signal likely due to heightened safety risk. This marked the second attack by the Houthis on a Russian oil tanker in the Red Sea transit corridor three weeks after the first incident took place on Jan. 12. So far, there have been no signs of Russia rerouting oil cargoes heading to Asia around the Cape of Good Hope, which would have increased the transit time by weeks and sharply raise costs for Indian and Chinese refineries. According to tanker-tracking data compiled by Bloomberg, eight out of 10 tankers passing through Bab El-Mandeb Strait carry Russian oil. Continued attacks might change the risk profile of the Red Sea transit corridor and force broader divergence for companies to ship around Africa, pushing energy costs higher and stoking inflation.

WTI Futures Advance Ahead of Inventory Data as USD Softens -- While the Ultra Low Sulfur Diesel (ULSD) contract was an outlier, oil futures nearest delivery on reversed higher during the afternoon session Wednesday as investors parsed through minutes from the Federal Open Market Committee's (FOMC) Jan. 30-31 meeting for additional clues on the near-term path for monetary policy. The minutes revealed most central bank officials wanted more evidence that inflation was moving sustainably lower toward their 2% target before pivoting towards a rate-cutting cycle. At the meeting, FOMC decided to leave the federal funds rate unchanged in a 5.25% to 5.5% target range but signaled they could soon start discussions on when the timing would be appropriate to cut the key interest rate. "Most participants noted the risks of moving too quickly to ease the stance of policy," according to the minutes. As an upside risk to both inflation and economic activity, participants noted momentum in aggregate demand may be stronger than currently assessed, especially considering surprisingly resilient consumer spending last year. Since the end of January, investors grew increasingly skeptical over the early start of the rate-cutting cycle and bets for a March rate cut all but dissipated in favor of a June move. A pair of hotter-than-expected inflation reports have since unsettled the markets, showing prices paid on consumer and producer levels unexpectedly accelerated at the start of the year. The core Consumer Price Index, which excludes the volatile prices of food and energy, rose at a faster-than-expected 0.4% last month, bringing the annual rate of inflation to 3.9%, well above the Fed's 2% target. Producer-level inflation data on Friday similarly topped expectations. At last look, most investors still expect FOMC to make a 25-point cut in the federal funds rate at its June meeting, pushing back expectations for an earlier cut in the overnight bank borrowing rate, according to the CME FedWatch Tool. Wednesday afternoon, oil traders also positioned ahead of the release of weekly inventory data in the United States, starting with the private survey from the American Petroleum Institute this afternoon, followed by the official report from the U.S. Energy Information Administration Thursday morning. Consensus of analysts and traders surveyed by the Wall Street Journal reveal commercial crude oil stockpiles likely increased 3.2 million barrels (bbl) during the week ended Feb. 16 following an outsized 12 million bbl build reported in the prior week. Lending some price support for the WTI contract, the U.S. dollar index softened against a basket of foreign currencies to settle at 103.912. The international crude benchmark ICE April Brent futures contract settled above $83 bbl, advancing $0.69 bbl to $83.03 bbl on the session. NYMEX March RBOB futures added a modest $0.0086 to $2.2860 gallon, while NYMEX March ULSD futures eroded $0.0263 to $2.7052 gallon.

Oil rises 1% on signs of tightening supplies (Reuters) - Oil prices rose 1% on Wednesday as geopolitical tensions raged on in the Middle East and traders assessed signs of near-term supply tightness. U.S. West Texas Intermediate crude futures (WTI) rose 87 cents, or 1.1%, to settle at $77.91 a barrel, while Brent crude rose 69 cents, or 0.8%, to $83.03 a barrel. Oil contracts tied to near-term deliveries have been trading at their steepest premium to later-dated contracts in multiple months, a market structure known as backwardation and considered a sign of a tightly supplied market. Timespreads are showing markets tightening, as crude stocks declined in the Amsterdam-Rotterdam-Antwerp trading hub while product stocks slid in Fujairah last week. Also supporting the market, U.S. refineries are showing signs of returning from maintenance after slumping to their lowest operating rates since December 2022, spurring builds in crude stockpiles. "Recent refinery outages led to some crude oil builds across the globe but these could be coming back online, which will put pressure on crack spreads and could support more crude usage," Analysts expect U.S. refinery runs to have risen by 0.9 percentage point last week from 80.6% of total capacity in the previous week, according to a Reuters poll. U.S. crude stocks likely rose last week by nearly 4 million barrels last week, the poll showed. Figures from the American Petroleum Institute showed a larger 7.17 million barrel build in U.S. crude stocks, market sources said. Official data from the Energy Information Administration is due at 11 a.m. ET on Thursday, delayed a day by Monday's U.S. holiday. Houthi attacks on commercial vessels in the Red Sea and Bab al-Mandab strait have continued to stoke concerns over freight flows through the critical waterway. Drone and missile strikes have hit at least four vessels since last Friday. The U.S. Federal Reserve is concerned about cutting rates too soon, minutes of its January policy meeting showed. Traders of U.S. short-term interest-rate futures stuck to bets the U.S. Federal Reserve will begin cutting interest rates no earlier than June. Concerns that rate cuts by the Fed could take longer than thought have been weighing on the outlook for oil demand. U.S. inflation data last week pushed back expectations for an imminent start to the Fed's easing cycle.

WTI Extends Gains After Big Product Draw, Smaller Crude Build - Oil prices dumped and pumped overnight but are holding gains for now ahead of the official inventory data as traders continue to weigh tightening physical supplies (Brent’s prompt spread strengthening to 95 cents in backwardation, hovering at three month highs) against pressure from higher for longer rates (weighing on the demand side). “Crude oil continues to build a floor above $75 in WTI and $80 in Brent, but for now upside remains curbed,” “the dollar is heading for its first weekly loss this year, potentially adding some additional support to crude and other commodities.” Additionally, the ongoing tensions in the middle east are supporting prices.The “oil price is expected to continue to be range-bound short term despite escalating tensions in the Middle East,” “Continued strong non-OPEC production data, from Norway and Canada this week, combined with a soft global economic outlook counter the effect of higher Middle East tensions.”After last week's huge surprise crude build (and product draws) this week was expected to see more of the same, and API reported a sizable build... API

• Crude +7.17mm (+3.2mm exp)
• Cushing +668k
• Gasoline +415k (-2.1mm exp)
• Distillates -2.91mm (-1.4mm exp)

DOE

• Crude +3.5mm (+3.2mm exp)
• Cushing +741k
• Gasoline -293k (-2.1mm exp)
• Distillates -4.01mm (-1.4mm exp) - biggest draw since May 2023

The official data reported a smaller crude build than API reported but we also saw the biggest distillates draw since May 2023, (and small gasoline draw). The Biden admin added to the SPR for the 10th straight week (+748k barrels)...

The Market Continued to Trend Higher on News of a Missile Attack on a Cargo Ship - The oil market rallied higher on Thursday on continued tensions in the Middle East. In overnight trading, the market continued to trend higher on news of a missile attack on a cargo ship off the southern coast of Yemen that prompted U.S.-led naval forces to respond. The market traded to $78.42 before it retraced some of its gains and posted a low of $77.23 ahead of the release of the EIA’s weekly petroleum stocks report later in the morning. However, the market bounced off its low and retraced some of its losses ahead of the EIA inventory report. Despite the report showing a build of over 3.5 million barrels in crude stocks, the market continued to trend higher as the leader of the Houthis said the group would escalate its attacks on ships in the Red Sea and other waters. The market extended its gains to over $1 as it posted a high of $78.92 in afternoon trading. The crude market later gave up some of its gains ahead of the close, with the April contract settling up 70 cents at $78.61. The April Brent contract settled up 64 cents at $83.67. The product markets settled higher, with the heating oil market settling up 4.68 cents at $2.7520 and the RB market settling up 4.87 cents at $2.3347. British maritime agencies reported that a cargo ship was set on fire off the southern coast of Yemen after being struck in a missile attack on Thursday that has prompted U.S.-led naval forces to respond. According to maritime security firm Ambrey and ship tracking data, the UK-owned, Palau-flagged ship was en route to Egypt from Thailand. The United Kingdom Maritime Trade Operations agency said U.S.-led coalition forces are responding to the incident, which involved two missiles being fired at the ship some 70 nautical miles southeast of Aden, Yemen.The leader of Yemen’s Houthis, Abdulmalik al-Houthi, said the group will escalate their attacks on ships in the Red Sea and other waters and has introduced “submarine weapons” in continued solidarity with Palestinians in the Gaza war. Earlier, Yemen’s Houthis sent shippers and insurers formal notice of what they termed a ban on vessels linked to Israel, the U.S. and Britain from sailing in the Red Sea, Gulf of Aden and Arabian Sea.Standard Chartered Plc in a research note to clients said that “a Brent price above $90 would more adequately reflect current fundamentals and risks” and the bank sees supply deficits averaging about 1.5 million b/d in February and March.The Biden administration approved a request from Midwestern governors allowing expanded sales of gasoline with higher blends of ethanol in their states, starting in 2025, a year later than the proposed start date. The U.S. government currently restricts sales of E15 gasoline or gasoline with 15% ethanol, in summer months due to environmental concerns over smog, though the biofuel industry says those concerns are unfounded. The governors of Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin made the request for year-round E15 sales in 2022, saying the move could help them lower pump prices by increasing fuel volumes. However, some oil refiners have argued that allowing E15 in select states as opposed to nationwide could prompt localized fuel price spikes and supply issues.

Oil Gains Despite Crude Build, Refinery Rate at 10-Month Low - Oil futures nearest delivery on the New York Mercantile Exchange shifted higher post-inventory trade Thursday after federal data confirmed U.S. commercial crude oil inventories increased for the fourth straight week through Feb. 16 as refiners struggled to raise run rates amid heavy seasonal maintenance and unplanned outages. U.S. refinery run rate averaged 80.6% of capacity last week, a nearly 10-month low, for a second week with PADD 1 East Coast operators reducing utilization 1.8% to 79.7% and PADD 3 Gulf Coast refiners continuing to operate at a reduced 79.8% capacity. Nationwide, refinery crude inputs averaged 14.6 million barrels per day (bpd) during the week ended Feb. 16, 436,000 bpd below the 2023 input rate. U.S. crude production held at a record-high 13.3 million bpd for the third straight week. As a result, commercial crude oil inventories in the United States increased 3.5 million bbl in the reviewed week, slightly above calls for a 3.2 million bbl build. In refined fuel complex, distillate inventories increased 4 million bbl during the week ended Feb. 16 to 121.7 million bbl, roughly 10% below the five-year average. Implied demand for middle distillates jumped 416,000 bpd from a depressed level of 3.514 million bpd. Meanwhile, gasoline supplied to the U.S. market, a measure of demand, edged up a modest 32,000 bpd to 8.2 million bpd. Gasoline stockpiles dipped 292,000 bbl in the reviewed week to 247.3 million bbl. Near noon, April West Texas Intermediate futures advanced $0.89 bbl to $78.80 bbl, and March ULSD futures gained $0.0316 to $2.7362 gallon. Front-month RBOB futures advanced $0.0102 to $2.2962 per gallon.

Oil settles higher as pressure mounts in the Middle East (Reuters) - Oil futures settled higher on Thursday as hostilities continued in the Red Sea with Iran-aligned Houthis stepping up attacks near Yemen, but a large build in U.S. crude inventories weighed on gains. Brent crude futures settled higher, up 64 cents or 0.77% at $83.67 a barrel. U.S. West Texas Intermediate crude futures settled higher, up 70 cents or 0.9% at $78.61 a barrel. Israel's Army Radio reported on Thursday that Prime Minister Benjamin Netanyahu's war cabinet has approved sending negotiators to Gaza for truce talks taking place in Paris as pressure mounts in the Middle East. Meanwhile, Yemen's Iran-aligned Houthis will escalate their attacks on ships in the Red Sea and other waters and have introduced "submarine weapons," the group's leader said on Thursday, as it keeps up attacks on shipping to show support for Palestinians in the Gaza war. "The Red Sea situation continues to ferment and it is starting to register more with the market that this is an issue that is not going away," "Europe is bearing the brunt in terms of supply - but European supply problems become U.S. supply problems because that will put a call on US gasoline and diesel", On Thursday, the premium for front-month WTI crude futures to the second month was up to 75 cents per barrel. That spread has widened in recent sessions, and on Tuesday touched $1.95 per barrel ahead of the March contract's expiry. Market players are likely pricing in a potential disruption to supply in the near future, with the front-month contract's premium over the second widening, which "indicates a tightening market”. Still, crude gains were capped on Thursday by a build in U.S. oil inventories due to refinery maintenance and outages. U.S. crude inventories rose by 3.5 million barrels to 442.9 million barrels in the week ending Feb. 16, the U.S. Energy Information Administration said on Thursday, compared with analysts' expectations in a Reuters poll for a 3.9 million-barrel rise. U.S. crude inventories have climbed amid outages at large refineries that have left utilization rates at the lowest level in two years, though the plants are soon to resume output. Refinery utilization rates were unchanged last week, at 80.6%, according to EIA data on Thursday, compared with analysts' expectations of an uptick to 81.5%, according to a Reuters poll. BP's 435,000 barrel-per-day (bpd) Whiting refinery in Indiana, the largest in the U.S. Midwest, will return to full production in March, according to people familiar with plant operations, after a power outage from Feb. 1. TotalEnergies' 238,000-bpd refinery in Port Arthur, Texas, is also working to complete a restart, though it is still operating minimally following a weather-related power outage. The outages have drawn down distillate inventories, which include diesel and heating oil. Those stockpiles were down by 4 million barrels in the week to 121.7 million barrels, versus expectations for a 1.7 million-barrel drop, the EIA data showed.

Crudes Fall 2% on Gaza Peace Talks; Oil Posts Weekly Losses -- Both crude benchmarks fell more than 2% on Friday and registered their first weekly losses of February, pressured by growing optimism that the beginning of Gaza peace talks today in Paris could deliver a ceasefire agreement between Israel and Hamas in a move that would ease the geopolitical temperature in the Middle East region. Media airways on Friday were hit with reports suggesting high-ranking officials from Israel, United States, Qatar and Egypt arrived today in Paris to broker a ceasefire agreement between Israel and Hamas. Analysts say the talks appear to be the most serious push in weeks to halt hostilities in Gaza. Although no physical oil supplies have been disrupted, the lingering threat of the Gaza war spilling into a broader regional conflict has kept the oil market on edge. Just this week, Iran-aligned Houthis militia vowed to step up attacks on commercial vessels in the Red Sea region, threatening to use new "submarine weapons." Houthi militants have launched over a dozen drones and missile strikes in the Bab al-Mandab Strait and the Gulf of Aden since early November, forcing ships to go around the Cape of Good Hope, Africa's southern tip. So far, there have been no signs of Russia rerouting oil cargoes heading to Asia around Africa, which would increase the transit time by weeks and sharply raise costs for Indian and Chinese refineries. According to tanker-tracking data compiled by Bloomberg, eight out of 10 tankers passing through the Bab El-Mandeb Strait are carrying Russian oil. Friday's move lower also follows Thursday's inventory report from the U.S. Energy Information Administration (EIA) showing commercial oil supplies increased for the fourth consecutive week through Feb. 16 as domestic refineries struggle to raise runs. A combination of heavy seasonal maintenance and unplanned downtime pressed the U.S. refinery run rate to near a 10-month low 80.6% of capacity last week. Nationwide, U.S. refineries processed 14.6 million barrels per day (bpd) last week, which was 436,000 bpd or 2.6% below the 2023 processing rate. Offsetting weakness in domestic refinery runs, U.S. crude exports surged to nearly 5 million bpd last week, up 653,000 bpd, showed EIA data. On a four-week basis, exports broke above 4.2 million bpd, nearly 700,000 bpd higher year-on-year. Strength in crude exports helped to limit builds in domestic crude stocks. Last week, The International Energy Agency (IEA) released a rather bearish market outlook for 2024, forecasting a larger supply surplus for the year as growth in non-OPEC crude supply outpaces lackluster demand growth. Paris-based agency estimates world oil consumption to grow annually by 1.2 million bpd this year, down from a 2.3 million bpd annual growth rate in 2023. "Global oil demand growth is losing momentum, with annual gains easing from 2.8 mb/d in 3Q23 to 1.8mb/d in 4Q23," said IEA in its monthly Oil Market Report. "A sharp drop in China underpinned an 830 kb/d decline in global oil demand to 102.1 mb/d in the last quarter of 2023." On the session, NYMEX West Texas Intermediate contract for April delivery slipped below the 200-day moving average of $77.60 barrell(bbl) to settle at $76.49 bbl, down $2.12. Front-month Brent futures declined $2.05 to $81.62 bbl. NYMEX March RBOB futures dropped back $0.0580 to $2.2767 gallon, while NYMEX March ULSD futures moved $0.0623 lower to finish the session at $2.6897 gallon.

Oil ends lower, posts weekly decline as US rate cut hopes dim (Reuters) - Oil prices fell nearly 3% lower on Friday and posted a weekly decline after a U.S. central bank policymaker indicated interest rate cuts could be delayed by at least two more months. Brent crude futures settled down $2.05, or 2.5%, at $81.62 a barrel, while U.S. West Texas Intermediate crude futures (WTI) were down $2.12, or 2.7%, to $76.49. For the week, Brent declined about 2% and WTI fell more than 3%. However, indications of healthy fuel demand and supply concerns could revive prices in the coming days. Federal Reserve policymakers should delay U.S. interest rate cuts by at least another couple of months, Fed Governor Christopher Waller said on Thursday, which could slow economic growth and curb oil demand. The Fed has held its policy rate steady in a 5.25% to 5.5% range since last July. Minutes of its meeting last month show most central bankers were worried about moving too quickly to ease policy. "The entire energy complex is reacting, because if inflation begins to come back it will slow demand for energy products," "That is not something the market wants to digest right now, especially as it is trying to figure out a direction," he added. Some analysts, however, say demand has remained largely healthy despite the impact of high interest rates, including in the United States. JPMorgan's demand indicators are showing oil demand rising by 1.7 million barrels per day (bpd) month over month through Feb. 21, its analysts said in a note. "This compares to a 1.6 million bpd increase observed during the prior week, likely benefiting from increased travel demand in China and Europe," the analysts said. Meanwhile, Gaza truce talks were underway in Paris in what appears to be the most serious push in weeks to halt the conflict in Palestine and see Israeli and foreign hostages released. Ceasefire talks could prompt the market to anticipate an easing of geopolitical tensions, Still, tensions in the Red Sea continued, with attacks by Iran-backed Houthi militants near Yemen on Thursday forcing more shipping vessels to divert from the trade route. U.S. energy firms this week added the most oil rigs since November, and the most in a month since October 2022, energy services firm Baker Hughes said. The oil rig count, an early indicator of future output, rose by six to 503 this week, and increased by four this month.

Iran accuses Israel of sabotage attack after explosions strike a natural gas pipeline (AP) — An Israeli sabotage attack on an Iranian natural gas pipeline last week caused multiple explosions on the line, Iran's oil minister alleged Wednesday, further raising tensions between the regional archenemies against the backdrop of Israel's war on Hamas in the Gaza Strip. The accusations by Iran’s Oil Minister Javad Owji come as Israel has been blamed for a series of attacks targeting Tehran's nuclear program. The “explosion of the gas pipeline was an Israeli plot,” Owji said, according to Iran's state-run IRNA news agency. “The enemy intended to disturb gas service in the provinces and put people’s gas distribution at risk.” “The evil action and plot by the enemy was properly managed,” Owji added, without providing any evidence to support his claims. Israel has not acknowledged carrying out the attack, though it rarely claims its espionage missions abroad. The office of Prime Minister Benjamin Netanyahu, a longtime foe of Iran, did not respond to a request for comment. The Feb. 14 blastshit a natural gas pipeline running from Iran's western Chaharmahal and Bakhtiari province up north to cities on the Caspian Sea. The roughly 1,270-kilometer (790-mile) -long pipeline begins in Asaluyeh, a hub for Iran's offshore South Pars gas field. Owji earlier compared the attack to a series of mysterious and unclaimed assaults on gas pipelines in 2011 — including around the anniversary of Iran's 1979 Islamic Revolution. Tehran marked the 45th anniversary of the revolution just days before the pipeline blasts. Israel has carried out attacks in Iran that have predominantly targeted its nuclear program. Last week, the head of the United Nations' nuclear watchdog warned that Iran is "not entirely transparent" regarding its atomic program, particularly after an official who once led Tehran's program announced the Islamic Republic has all the pieces for a weapon "in our hands." Tensions over Iran's nuclear program comes as groups that Tehran is arming in the region — Lebanon's militant group Hezbollah and Yemen's Houthi rebels — have launched attacks targeting Israel over the war in Gaza. The Houthis continue to attack commercial shipping in the region, sparking repeated airstrikes from the United States and the United Kingdom. Despite a month of U.S.-led airstrikes, the Houthi rebels remain capable of launching significant attacks. This week, they seriously damaged a ship in a crucial strait and downed an American drone worth tens of millions of dollars. On Wednesday, ships in the Red Sea off the Houthi-held port city of Hodeida in Yemen reported seeing an explosion, though all vessels in the area were said to be safe, according to the British military's United Kingdom Maritime Trade Operations centers. The UKMTO earlier reported heavy drone activity in the area. The U.S. military's Central Command acknowledged shooting down a Houthi bomb-carrying drone Wednesday during that time. U.S. airstrikes separately targeted seven mobile anti-ship cruise missiles and one mobile anti-ship ballistic missile prepared to target ships in the Red Sea, Central Command said. The U.S. State Department criticized “the reckless and indiscriminate attacks on civilian cargo ships by the Houthis” that have delayed humanitarian aid including food and medicine bound for Ethiopia, Sudan and Yemen. That includes the Sea Champion, a ship carrying corn and other aid to both Aden and Hodeida. “Contrary to what the Houthis may attempt to claim, their attacks do nothing to help the Palestinians,” State Department spokesperson Matthew Miller said in a statement. “Their actions are not bringing a single morsel of assistance or food to the Palestinian people.” Meanwhile, a suspected Israeli strike killed two people a neighborhood in Syria's capital, Damascus, on Wednesday, an area where other likely Israeli strikes have targeted members of Iran's paramilitary Revolutionary Guard.

Iraqi Militias Stopped Attacks on US Forces at Request of Iranian General - A visit from an Iranian general to the Shia militias in Iraq led to a pause in attacks on US forces, Reuters reported on Sunday, citing Iranian and Iraqi sources.Brig. Gen. Esmail Qaani made the trip to Iraq on January 29, one day after three US troops were killed in a drone attack on a base in Jordan near the Syrian border. He warned that the death of the American soldiers would likely provoke a heavy American response and said the groups should lie low to avoid being targeted.A day after the visit, Kataib Hezbollah, one of the most powerful Shia militias in Iraq, announced it was suspending attacks on US troops. In its statement, Kataib Hezbollah said Iran “repeatedly declared opposition to our escalation against the US forces in Iraq and Syria.”Initially, one faction did not agree to the Iranian request, and there were a few more attacks on US bases, but there have been none since February 4, the day six US-backed Kurdish fighters were killed in a drone attack on a US facility in Syria.The lull in attacks is significant since US troops in Iraq and Syria have come under attack over 170 times due to US support for the Israeli slaughter in Gaza. The attacks started in October and only paused briefly in November during the seven-day truce in Gaza that was part of the Israel-Hamas hostage deal.The US launched a series of airstrikes on Iraq and Syria on February 2 that killed about 40 people, mostly members of Iraq’s militias. The US also killed a senior Kataib Hezbollah commander in a drone strike in Baghdad on February 7, but there was no response.The lack of response could also be attributed to the Iraqi government stepping up its efforts to get the US to withdraw from Iraq. The US airstrikes have infuriated Baghdad since Kataib Hezbollah and other Shia militias are part of Iraq’s security forces under the Popular Mobilization Forces (PMF), a coalition formed in 2014 to fight ISIS.The US and Iraq have restarted talks on the future of the US military presence. An Iraqi military spokesman said, “Based on these meetings, a timetable will be formulated for a deliberate and gradual reduction leading to the end of the mission.” Iraqi prime ministers have been under pressure to expel US troops since January 2020, when Qaani’s predecessor, Gen. Qasem Soleimani, and PMF leader Abu Mahdi al-Muhandis, were killed by a US drone strike. The Iraqi parliament voted unanimously for an end to the US military presence, but the US refused to leave.

Pakistan Mulls Completion Of Iran Gas Pipeline Stalled By US Sanctions - Pakistan is mulling over completing a much-delayed pipeline project with Iran, which has been stalled for years and has failed to move forward due to US sanctions. Islamabad is considering finalizing the first phase of the 80-kilometer pipeline, according to Pakistani news site The Nation. "Islamabad is contemplating to kick-off construction work on the 80 kilometers portion of Iran-Pakistan gas pipeline project… to escape a potential penalty of $18 billion," the report said. "Pakistan will submit an application to seek a waiver of US sanctions for the IP project. Initially, it has been decided that in the first phase of the IP project, work on the 80 km portion from the Pak–Iran border to Gwadar will be started," a source in the Pakistani energy ministry told the outlet. The project, which aims to connect the Pakistani port city of Gwadar to the Iranian border, was launched in 2013. It required Pakistan to complete the construction of its end of the pipeline by 2014. Iran said it has already completed its side of the pipeline and has invested $2 billion in the project. Pakistani officials warned in May last year that Islamabad could face an $18 billion fine if it fails to complete the Iran–Pakistan Gas Pipeline project. Islamabad suspended its participation in the project a few months later, in August, due to the threat of US economic sanctions. At the time, Pakistani Minister of State for Petroleum, Dr Musadik Malik, said in written testimony to the country’s National Assembly that Pakistan "issued a Force Majeure and Excusing Event notice to Iran under the Gas Sales and Purchase Agreement (GSPA), which resultantly suspends Pakistan’s obligations under the GSPA.""The matter will be finally settled through arbitration, should Iran take this matter to arbitration," the minister said back in August. "The exact amount of penalty, if any, is subject to the outcome of the arbitration to be determined by the arbitrators."

Iranian gas pipelines damaged in "terrorist blasts" resume operation (Xinhua) -- Iran's National Iranian Gas Company (NIGC) announced on Saturday the nationwide natural gas transfer pipelines that were damaged in recent "terrorist blasts" have been repaired and become operational. "The repair work of those sections of the nationwide gas transfer pipelines in Khorrambid County (in Fars Province) and Borujen County (in Chaharmahal and Bakhtiari Province), which had been damaged in an act of terror on Wednesday, has been completed and the pipelines have become operational," NIGC's Dispatching Director Saeid Aqli said in a statement published on the NIGC's website. The blasts occurred at around 01:00 a.m. on Wednesday local time (2130 GMT Tuesday) at two separate points along the national natural gas transfer network in the two provinces, Iranian Oil Minister Javad Owji was quoted by state-run Shana News Agency as saying on the day of the incident. Owji said the explosions were "acts of terror" aimed at disrupting gas supplies to major provinces. No group has yet claimed responsibility for the explosions.

Iran Partakes in Naval Drill in India - (Tasnim) – The Iranian Navy has deployed its Dena destroyer to India for a large-scale multilateral exercise. The deputy commander of the Iranian Navy’s southern fleet said the Dena destroyer has taken part in the naval war game in line with the “very good and growing relations” with the Indian Navy. Admiral Jalil Moqaddam said Iran and India, with their rich civilizational background, are two naval powers of the region. He added that naval cooperation between Iran and India would help ensure maritime security and serve the interests of the region. The Indian Navy’s largest-ever multilateral naval exercise, Milan 2024, is underway in the eastern port city of Visakhapatnam on the coasts of the Bay of Bengal. Warships from the navies of 50 countries have participated in the harbor phase of the drill. During the sea phase from February 24 to 27, the participating navies will conduct advanced air defense, anti-submarine, and anti-surface warfare drills, according to Indian Times.

Hungarian Foreign Minister in Iran for Economic, Political Talks - (Tasnim) – Minister of Foreign Affairs of Hungary Peter Szijjarto has traveled to Iran for talks on closer cooperation between the two countries. During the top Hungarian diplomat’s stay in Tehran, a meeting of the Iran-Hungary Economic Cooperation Commission was held to weigh plans for the expansion of relations between the two states in various fields such as trade, investment, industry, agriculture, energy, transportation, science and technology. According to Iran’s ambassador in Budapest, private companies from the two countries have actively taken part in the meeting. Szijjarto is going to hold talks with his Iranian counterpart Hossein Amirabdollahian on Thursday evening.

Repetition of Baseless Claims against Iran Becomes Tedious: Iran's FM - (Tasnim) - During a joint press conference with his Hungarian counterpart, Iran's Foreign Minister Hossein Amirabdollahian, expressed his view that the repetition of baseless claims against Iran has become tedious. Amirabdollahian and Péter Szijjártó, the Hungarian Minister of Foreign Affairs and Trade, held discussions at the Iranian Ministry of Foreign Affairs building on Thursday. After the meeting, the ministers held a joint press conference where they shared their thoughts on the discussions. Amirabdollahian stated that “productive talks” have been held with the Hungarian minister and various plans were discussed. "Today, we witnessed the holding of the Joint Economic Cooperation Commission of the two countries. We also had important discussions on topics of interest…, all dimensions of cooperation, including agriculture, water management, industry, energy, and student exchange, were discussed," Amirabdollahian added. He continued that the relationship between the two countries is progressing, as shown by the signing of the Economic Commission Protocol and the Agricultural Cooperation Roadmap, adding, “We also addressed international issues, including the focus on Gaza and the rights of the Palestinian people. Despite differences in political solutions, we emphasize the need to uphold Palestinian rights.” Amirabdollahian also emphasized that the two diplomats had “frank discussions on Iran's support for Palestine,” adding that Hungary should use its capacities to stop the war and restore security. Condemning “baseless allegations against Iran” regarding the use of Iranian weapons by Russia, Amirabdollahian added that crisis in Ukraine were also discussed Amirabdollahian emphasized that Iran does not see war as a solution. “War is not a solution in Gaza. The joint efforts of the United States and England to expand the scope of war to other areas are wrong,” he said. Stressing that the Yemenis have their own independent positions, he added that the US must stop its hypocrisy. “They talk about reducing war [but they actually] mean to continue genocide in Gaza. American officials talk about peace must turn into a decisive decision," he concluded. On his part Szijjártó stated that he was here in Tehran to prevent conflicts from escalating in the region and to improve the situation in the Middle East. "The escalation of the situation in the region could threaten global security. Hungary respects Iran and next year we will celebrate the 100th anniversary of our relations. Our relationship is strong, with 2,000 Iranian citizens in Hungary. We are concerned about the Middle East war and want to prevent any further attacks. The global community must ensure that the situation does not escalate further. All parties must act responsibly. We welcome Iran's role in this regard." Regarding the situation in the region Szijjártó mentioned that he has recently been to Lebanon, adding that the Arab country “does not want the situation to escalate”. Regarding the Iranian nuclear agreement he added that implementing the agreement can improve global security. He also said that he asked his country to hold educational programs for Iran regarding the JCPOA.

US says it struck underwater Houthi drone as rebel group claims critical hit on British ship Houthi rebels in Yemen on Monday claimed they nearly sunk a British ship in the Gulf of Aden, one day after the U.S. carried out self-defense strikes that took out an underwater drone for the first time. A Houthi statement carried by pro-Iranian media channels said fighters carried out a “special military operation” that struck the British ship Rubymar with several missiles, including a severe hit that brought the vessel to a complete halt. “Due to the large damage the ship has sustained, it is now at risk of sinking in the Gulf of Aden,” the Houthis claimed in the statement, also saying they ensured the safety of the abandoning crew. The United Kingdom Maritime Trade Operations confirmed an attack on a ship near Yemen on Sunday that forced the crew to abandon the vessel. The British organization also reported more attacks Monday on another ship, but the boat appears to be carrying on. The Associated Press reported the damaged ship at risk of sinking is a British-registered, Lebanese-operated cargo ship. The Houthis also claimed they downed a U.S. MQ-9 Reaper drone, which costs some $32 million to build. The Houthis shot down a U.S. Reaper drone in November. CENTCOM said Rubymar was hit around 10 p.m. local time on Sunday, forcing it to issue a distress call. Another merchant vessel, along with a warship involved with a U.S.-led coalition to defend ships against the Houthis, responded to the call and transported the crew of the Rubymar to a port. The Hill has reached out to U.S. Central Command (CENTCOM) for comment on the Houthi claims. The attack on Rubymar comes after CENTCOM said targeted American strikes over the weekend hit three mobile anti-ship cruise missiles, one underwater drone and one surface drone in Houthi-controlled areas of Yemen. CENTCOM said the underwater drone was the first launched by the Houthis since attacks began in late October.

Houthis Say They Shot Down US MQ-9 Reaper Drone - Yemen’s Houthis said on Monday that their forces downed an American MQ-9 Reaper Drone that was flying over Yemen. US officials have acknowledged that a US drone crashed and say they’re investigating the cause.“Yemeni air defenses were able to shoot down an American plane (MQ-9) with a suitable missile while it was carrying out hostile missions against our country on behalf of the Zionist entity,” Houthi military spokesman Yahya Sarea said in a statement, according to The New York Times.“Yemeni armed forces will not hesitate to take more military measures and carry out more qualitative operations against all hostile targets in defense of beloved Yemen,” Sarea added.The incident marks the second time a US MQ-9 Reaper drone was downed by the Houthis over Yemen since November.The Houthis, officially known as Ansar Allah, also said on Monday that they struck a British-owned cargo ship in the Gulf of Aden, which was confirmed by US Central Command.CENTCOM said two Houthi missiles were fired “toward MV Rubymar, a Belize-flagged, UK-owned bulk carrier. One of the missiles struck the vessel, causing damage.”The Houthis later said they sank the British ship, and CENTCOM said the crew was evacuated from the Rubymar. The Houthis also claimed they targeted two American ships, but that has not yet been confirmed by the US.The US has been bombing Houthi-controlled Yemen, where most of the country’s population lives, on a near-daily basis. The continued Houthi attacks demonstrate that the US strikes are not doing significant damage to Houthi capabilities and have only escalated the situation.The Houthis have been clear that the only way their o perations in the Red Sea will cease is if the US-backed Israeli onslaught in Gaza comes to an end.

Houthi Strikes Force Crew to Abandon Ship for First Time | Rigzone - The crew of a commercial ship in the Red Sea abandoned the vessel following a Houthi attack — the first such evacuation since the militant group began menacing trade in the vital waterway late last year. The strikes on the Rubymar, a relatively small cargo ship, were on the engine room and at the front of the vessel, a company official at GMZ Ship Management Co. in Lebanon said by email. There have been no reports of injuries to the crew, who are being taken to Djibouti, the official said. The UK Navy said the ship is continuing to receive military assistance. The ship-abandonment is a milestone in the violence that has swept through the Red Sea since November, when the Iran-backed Houthis escalated their attacks with a barrage of missiles and drone strikes on the merchant fleet. A tanker carrying Russian fuel was set ablaze in January. The Houthis say they are targeting ships with links to Israel, the US and UK — their response to the war in Gaza and western airstrikes that have sought to quell the attacks. However, the number of possible targets has been falling as ships avoid the waterway. The Rubymar’s registered owner is in Southampton, England, according to the Equasis international maritime database. Also on Monday, another ship reported a nearby explosion, but it continued to its next port of call. Maritime intelligence company Ambrey described the ship as a Greece-flagged bulk commodity carrier. A significant percentage of the world’s oil and gas carriers, bulk commodity ships and container vessels are now sailing thousands of miles around Africa, adding to voyage times and boosting costs to world shipping, in order to avoid the attacks. The European Union formally launched a defensive naval operation Monday aimed at protecting commercial vessels from Houthi attacks. The mission, commanded by Greece, will accompany some ships and protect them against attacks from the Red Sea and the Gulf of Aden to the Persian Gulf. Over the weekend, the US said it conducted five self-defense strikes against the Houthis, including one against an underwater vessel. Central Command said it was the first observed deployment of subsea attack capability since the attacks began.

US Confirms the Houthis Struck Two US-Owned Cargo Ships - The US military on Tuesday said that Yemen’s Houthis struck two US cargo ships a day earlier, confirming a statement made by the Yemeni group on the attacks.US Central Command said the Houthis fired two missiles at the Sea Champion, a Greek-flagged, US-owned grain carrier, causing minor damage. The command said the ship could continue to its destination of Aden, Yemen.The Houthis also fired a drone at the Navis Fortuna, a Marshall Islands-flagged, US-owned bulk carrier. The attack also caused minor damage, and the command said the vessel was able to continue its voyage to Italy. CENTCOM also claimed that it struck a surface-to-air missile launcher in Yemen and a drone that was preparing to launch. The US has been bombing Yemen almost every day, but the strikes have done nothing to deter the Houthis. From Monday night into early Tuesday morning, CENTCOM said that US and allied warships downed ten Houthi drones. “Between 8 pm on Feb. 19 and 12:30 am on Feb. 20, US and coalition aircraft and warships shot down 10 OWA UAVs [one-way attack unmanned aerial vehicles] in the Red Sea and Gulf of Aden,” the command said. Houthi military spokesman Yahya Sarea said Yemeni forces launched drones at US warships, likely referring to the incident reported by CENTOM. Sarea said the operations come “in support of the Palestinian people, who are still facing the Israeli aggression and siege, and in response to the US and British aggression on our country.” The Houthis, officially known as Ansar Allah, have made clear they will only stop their attacks on shipping once the Israeli onslaught in Gaza comes to an end. The US bombing campaign has only escalated the situation as the Houthis were not targeting American or British shipping before the US and UK launched the first round of strikes on Yemen on January 12.The US backed a Saudi/UAE-led coalition against the Houthis in a brutal war that killed 377,000 people between 2015 and 2022. During that time, the Houthis only became a more formidable fighting force and developed missile and drone technology that gave them the ability to hit Saudi oil infrastructure. A ceasefire between the Saudis and Houthis has held relatively well since April 2022, but new US sanctions are now blocking the implementation of a peace deal.

Yemen's Houthis Hit Another British-Owned Cargo Ship - The Houthis struck another British-owned cargo ship on Thursday as the US bombing campaign in Yemen is failing to deter Houthi attacks and has only escalated the situation in the Red Sea and the Gulf of Aden.US Central Command said that two Houthi ballistic missiles fired into the Gulf of Aden “impacted the MV Islander, a Palau-flagged, UK-owned cargo carrier, causing one minor injury and damage.” CENTCOM said the ship was able to continue its voyage despite the damage. Earlier in the day, CENTCOM said US aircraft and an allied warship shot down six Houthi drones in the Red Sea. On Wednesday, the command said it launched four strikes against Houthi-controlled Yemen and claimed the bombing destroyed “seven mobile Houthi Anti-Ship Cruise Missiles and one mobile Anti-Ship Ballistic Missile launcher that were prepared to launch towards the Red Sea.” The Islander is the second British ship the Houthis successfully targeted this week. They also hit the Rubymar, a bulk carrier, causing significant enough damage for the crew to abandon the ship. The Houthis said the Rubymar sank, but pictures of the vessel surfaced on Thursday, showing it down by the stern but still afloat. However, the ship’s operator said it could still sink as it’s being towed to Djibouti.The Houthis, officially known as Ansar Allah, also struck two US-owned cargo ships this week, causing minor damage. The Houthis did not start targeting American and British commercial shipping until the US and the UK launched their first round of missile strikes on Yemen on January 12.President Biden previously acknowledged that the strikes against the Houthis were not working to stop the attacks, but he vowed they would continue anyway. The Houthis have been clear that they would only stop their Red Sea operations if the Israeli onslaught in Gaza comes to an end.The US backed a Saudi/UAE-led coalition against the Houthis in a brutal war that killed 377,000 people between 2015 and 2022. During that time, the Houthis only became a more formidable fighting force and developed missile and drone technology that gave them the ability to hit Saudi oil infrastructure. A ceasefire between the Saudis and Houthis has held relatively well since April 2022, but new US sanctions are now blocking the implementation of a peace deal.

Another UK Ship On Fire Near Yemen As Sea Becomes Littered With Disabled Tankers - The last several days have witnessed well over half a dozen attacks or attempted attacks by Houthis on foreign vessels and tankers in the Red Sea. For example the US military confirmed Tuesday that two US-owned tankers were struck the day prior. Such attacks are now coming several times a day. On Thursday the Pentagon said its coalition ships in the Red Sea intercepted six more drones over waters off Yemen. This came after another UK-owned ship was struck, and is reportedly burning and immobile some 70 nautical miles southeast of Aden.A new United Kingdom Maritime Trade Operations (UKMTO) agency alert said the British-owned, Palau-flagged ship was hit by two missiles while en route from Thailand to Egypt.Increasingly, waters off Yemen are being littered with disabled and sinking tankers, as the saga of the Belize-flagged, British-registered Rubymar has shown. Earlier in the week it was hit by Houthi fire and the crew abandoned ship. There are reports that the vessel's operators are currently trying to tow the ship to Djibouti, and that it remains partially below water, the engine room having suffered severe damage.BBC wrote of one image widely circulating that it is "said to be from Tuesday and shows a vessel still above water. It is down by the stern, but has not sunk. Although the ship's name is not visible, all of its characteristics match those of the Rubymar." Based on the ratcheting rate of these attacks, expect more such images of other ships to emerge in the coming weeks and months, as the war in Gaza rages on. Meanwhile, the Houthis have issued a new alert, formalizing a ban on all foreign vessels' passage (presumably excluding Russian, Chinese, and Iranian ships of course). According to the Thursday notification: The Houthis’ communication, the first to the shipping industry outlining a formalized ban, came in the form of two notices from the Houthis’ newly-dubbed Humanitarian Operations Coordination Center sent to shipping insurers and firms. Ships that are wholly or partially owned by Israeli individuals or entities and Israel-flagged vessels, or are owned by US or British individuals or entities, or sailing under their flags, are banned from the Red Sea, Gulf of Aden and Arabian Sea, Thursday’s notices said. "The Humanitarian Operations Center was established in Sanaa to coordinate the safe and peaceful passage of ships and vessels that have no connection to Israel," a Houthi official told Reuters. According to the latest from the Houthi military spokesman Thursday: "In response to the US-UK aggression, the armed forces of Yemen carried out 3 operations"...

• The launching of a number of ballistic missiles and drones at various targets in Umm al-Rashrash (Eilat), south of occupied Palestine.
• The targeting of a British ship “ISLANDER” in the Gulf of Aden, using anti-ship missiles. The ship was directly hit, leading to a fire on board.
• The targeting of an American destroyer (warship) in the Red Sea using a number of kamikaze drones.

Tamas Varga of oil broker PVM has written in a new note, "If anything, Houthis attacks on cargo ships are intensifying in the Red Sea and around the Gulf of Aden." The US-led coalition named Operation Prosperity Guardian has not deterred these attack. If anything, they've only escalated.

Dryad Flags Reported Incidents of Vessels Being Targeted in Red Sea -- Over the last week, there have been five reported incidents of vessels being targeted while operating within the Red Sea and Gulf of Aden, Dryad Global outlined in its latest Maritime Security Threat Advisory (MSTA), which was released late Tuesday. “Reporting on Thursday … 15 and Friday 16 indicate that, following a brief hiatus, the Houthis returned to targeting commercial vessels,” Dryad said in the MSTA, adding that the Pollux vessel “was targeted by three attempted drone strikes whilst transiting southbound within the Gulf of Aden”. “On Sunday the 18th the MV Rubymar was struck by a projectile thought to be an anti-ship missile, causing significant damage to the starboard side. Water ingresses caused the abandonment of the vessel. Twenty-four crew were rescued,” Dryad stated in the MSTA. Dryad noted in the MSTA that the vessel continues afloat but added that it remains unclear whether it can be towed. “Throughout the 19th February three incidents occurred involving vessels targeted. Notably the U.S. owned Sea Champion and latterly the U.S. owned Navis Fortuna were targeted by Houthi drones,” Dryad said in the MSTA. “Further north, off coast Jizan, Saudi Arabia, a vessel reported being pursued by a drone. The geographic spread of attacks is considerable highlighting the continued capability of Houthi rebels,” Dryad added. Dryad’s latest MSTA designates Yemen with a “critical” risk and impact rating and highlights several incidents in the Red Sea and Gulf of Aden. The only other countries with a critical rating in the MSTA are Ukraine and Syria. In a statement posted on its X page on Tuesday, U.S. Central Command (Centcom) noted that, on February 19, between 12.30pm and 1.50pm, “two anti-ship ballistic missiles were launched from Houthi-controlled areas of Yemen toward M/V Sea Champion”. “Minor damage and no injuries were reported. The ship continued toward its scheduled destination to deliver grain to Aden, Yemen,” it added. “At 7.20pm, a one-way attack unmanned aerial vehicle struck the M/V Navis Fortuna, a Marshall Islands-flagged, U.S.-owned, bulk carrier causing minor damage and no injuries. The ship continued its voyage toward Italy,” it continued.

Israel Carries Out Strikes Near Major Lebanese City of Sidon - Israel has once again conducted two major airstrikes, now against the town of Ghaziyeh, near Lebanon’s third largest city of Sidon. The strike on Monday went much deeper into Lebanon than usual, about 40 miles.The Israeli military said this was retaliation for an explosive drone that hit near a community in Lower Galilee. They presented the attacks as hitting Hezbollah “terrorist infrastructure” and reported using artillery fire against other areas of Lebanon.The targeted buildings were termed in some Israeli reports as “weapons storage facilities,” although media reports from Lebanon dispute this. Lebanese sources referred to the Ghaziyeh sites as factories and quoted owners as denying any weapons were stored in these locations.Israel also earlier reported airstrikes against a building in the Ayta ash-Shab region of Lebanon at which a presumed terrorist was staying. Fighter jets were dispatched to hit the building early Monday following a Sunday sighting. The terrorist was not identified, nor is it clear whether he survived or not.There were definitely casualties in the factory airstrikes, however, as Lebanese media said fires ensuing from the airstrikes did “major destruction” to both sites, and that a number of wounded people were taken to the local hospital. All told, at least 14 people were reportedwounded. Seven of the wounded factory workers were said to be from Syria.While airstrikes this deep into Lebanon are unusual, the really unusual part is hitting so close to one of the nation’s major population centers, with reports saying this is the biggest strike near a population center since four months ago, when tit-for-tat strikes between Israel and Hezbollah began. This follows fairly substantial Israeli strikes last week, which killed at least 10 civilians according to reports. Hezbollah responded by retaliating against northern Israel in the tit-for-tat fashion that has brought events to the cusp of a full-scale Israeli invasion.

Israeli Cabinet Unanimously Rejects 'International Diktats' on Palestinian State - Israel’s cabinet on Sunday unanimously approved a declaration rejecting “international diktats” on a future Palestinian state amid reports the US is preparing to unveil an outline for a potential peace deal that includes establishing a timeline for a two-state solution.“Israel utterly rejects international diktats regarding a permanent settlement with the Palestinians. A settlement, if it is to be reached, will come about solely through direct negotiations between the parties, without preconditions,” the declaration said, according to The Times of Israel.“Israel will continue to oppose unilateral recognition of a Palestinian state. Such recognition in the wake of the October 7th massacre would be a massive and unprecedented reward to terrorism and would foil any future peace settlement,” it added.US officials have previously portrayed opposition to a future Palestinian state as unique among Prime Minister Benjamin Netanyahu and a handful of extremist settler Israeli ministers. But the declaration was approved by all ministers, including Benny Gantz and Gadi Eisenkot of the National Unity party, who are members of the emergency war cabinet and considered centrists in Israeli politics.In response to the cabinet’s decision, a US State Department spokesperson said the US still supported the idea of a future Palestinian state. “The best way to achieve an enduring end to the crisis in Gaza that provides lasting peace and security, for Israelis and Palestinians alike, is our strong commitment to the creation of a Palestinian state,” the spokesperson said. Netanyahu has vowed that there will never be a two-state solution as long as he’s in power and has bragged that it’s thanks to him there is no Palestinian state. “I will not compromise on full Israeli security control over the entire area in the west of Jordan – and this is contrary to a Palestinian state,” he said in January after a call with President Biden.

Netanyahu Boasts That He's Blocked a Palestinian State 'for Decades' - Israeli Prime Minister Benjamin Netanyahu on Monday boasted that he had worked “for decades” to block the establishment of a Palestinian state.“Everyone knows that I am the one who for decades blocked the establishment of a Palestinian state that would endanger our existence,” Netanyahu said, according to The Times of Israel.He made the comments while discussing a plan to introduce legislation into the Knesset that would match a declaration made by the Israeli cabinet on Sunday that rejected “international diktats” related to a Palestinian state.The strong statements came after reports said that the US and some of its Arab partners were looking to unveil an outline for a long-term peace deal that would include a “firm timeline” toward a Palestinian state. Netanyahu said Israel is facing “an attempt to force upon us the unilateral establishment of a Palestinian state which will endanger the existence of the State of Israel.” He said the Knesset legislation will “show the world that there is wide agreement in Israel against the international efforts to force on us a Palestinian state.”A vote on the Knesset legislation was initially scheduled for Monday night, but The Jerusalem Post reported that it was delayed by hardline factions who want a stronger statement against a Palestinian state. They say because the statement rejects a “unilateral” creation of a Palestinian state, it leaves open the possibility of accepting Palestinian statehood as part of future negotiations.

Israel sets Ramadan deadline for feared Rafah invasion - Israeli officials appear to have set a deadline to invade the southern Gaza city of Rafah — the largest refugee camp in the coastal territory — for the Muslim holy day of Ramadan on March 10. Benny Gantz, a member of the Israeli war Cabinet, delivered an ultimatum at a Sunday event with the Conference of Presidents of Major American Jewish Organizations, an umbrella group for the American Jewish community. “The world must know — and Hamas leaders must know — that if by Ramadan the hostages are not home, then the fighting will continue, including in Rafah,” Gantz said at the event. Israel has argued it must move into Rafah, which hosts more than a million Palestinians sheltering from the war, to ensure the complete military defeat of the Palestinian militant group Hamas. But the looming offensive is spurring major concerns from human rights groups and emergency responders on the ground, who warn that any invasion of Rafah could trigger a huge loss of civilian life and upend humanitarian efforts in the Gaza strip. Rafah, which borders Egypt, is the only place where humanitarian aid is consistently entering Gaza, and Israeli military operations there could hinder what few basic necessities many Palestinian civilians have access to, including food, water and medical aid. “Military operations in Rafah could lead to a slaughter in Gaza,” said Martin Griffiths, the U.N.’s emergency relief coordinator, in a statement last week. “They could also leave an already fragile humanitarian operation at death’s door.” To address those concerns, Israeli Prime Minister Benjamin Netanyahu said he ordered his military to draft a plan to evacuate civilians before the invasion. Israel’s main ally, the U.S., has backed a move into Rafah, but only if a plan is created to keep civilians safe. Speaking at the same conference as Gantz over the weekend, Netanyahu said it was necessary to root out Hamas everywhere they are hiding, arguing “we cannot leave a quarter of Hamas’s terrorist battalions intact.” “Once you destroy the battalions, there is no organized command and control structure,” he said. “You’re left with individual terrorists, which we mop up with ground action.” Although military and regional political analysts warn that Hamas represents an ideology and will be extremely difficult to wipe out, Israel insists the group’s military capabilities can be degraded, and Netanyahu has said victory is within reach.

Gantz: Israel Will Launch Assault on Rafah by Ramadan If Hostages Not Released - Benny Gantz, a member of Israel’s war cabinet, threatened on Sunday that Israel will launch an assault on the southern Gaza city of Rafah if Hamas does not release the remaining Israeli hostages by Ramadan, which begins on March 10 this year.“The world must know, and Hamas leaders must know — if by Ramadan our hostages are not home, the fighting will continue to the Rafah area,” Gantz told a gathering of Jewish American organizations in Jerusalem on Sunday. Rafah has a pre-war population of 275,000 and is now packed with 1.5 million people as the city has become a final refuge for Palestinians who fled other areas of Gaza. Israeli airstrikes have been hitting Rafah, but Israel has yet to launch a full-scale invasion. Israeli Prime Minister Benjamin Netanyahu has been vowing to follow through on his plans to invade Rafah, claiming it’s necessary to defeat Hamas, but Gantz’s comments are the first indication of a timeline on when the assault might start.“To those saying the price is too high, I say this very clearly: Hamas has a choice — they can surrender, release the hostages, and the citizens of Gaza will be able to celebrate the holy holiday of Ramadan,” Gantz said.Gantz’s comments came after Netanyahu vetoed further hostage deal talks, and there’s virtually no chance Hamas would release the remaining Israeli captives without some sort of agreement. The US has given Israel the green light to attack Rafah despite the risk of a huge number of civilian casualties. Publicly, US officials are saying Israel must come up with a plan to protect civilians in the city, but POLITICOreported that the US will not impose any consequences if it doesn’t.Gantz insisted Israel will attack Rafah “in a coordinated manner, facilitating the evacuation of civilians in dialogue with our American and Egyptian partners to minimize civilian casualties.” But it’s unclear where the Palestinian civilians could go, and Israel has bombed so-called “safe zones” over the past few months.The Wall Street Journal reported last week that Egypt is building a walled camp in the Sinai desert to prepare for an influx of Palestinians, signaling Cairo is softening on its position that it won’t allow refugees in its territory. Egyptian officials told the Journal that the camp could hold up to 100,000 people, but they would like to limit it to 50,000 to 60,000.

UK Warns It Could Restrict Arms Sales To Israel If Rafah Offensive Proceeds - Fresh headlines Wednesday say the United Kingdom is mulling restricting arms sales to Israel if it goes ahead with its planned major offensive on the southern Gaza city of Rafah, which is packed with over a million Palestinian refugees who've been forcibly relocated from other parts of the Strip. "Further escalation of Israel’s military action in Gaza without more effort to protect civilians could put it in breach of international humanitarian law, depending on how it conducts the operation, UK officials said, speaking on condition of anonymity about internal assessments," Bloomberg reports.Not only has London's High Court recently dealt with petitions from legal advocacy groups alleging British arms sent to Israel are being used to commit war crimes (petitions which thus far have been rejected), but the UK Foreign Secretary David Cameron has just issued a letter to Netanyahu's office calling for Israel to "stop and think seriously about the repercussions of a military offensive" on Rafah.Earlier this week Israeli defense officials for the first time said that the offensive would likely be launched by Ramadan, which begins on March 10 this year. The military has said Hamas can avoid this by releasing all of the hostages. At the UN Security Council, the UK abstained from a Tuesday vote on a resolution calling for immediate humanitarian ceasefire. It failed due to veto from the United States.The UK Foreign Secretary's letter said further, "we do not underestimate the devastating humanitarian impacts that a full ground offensive, if enacted, would have in these circumstances." Israel has vowed to allow Palestinian civilians to leave Rafah ahead of the ground offensive; however, there's the practical matter of where they would go from there. A massive fence separates Gaza from Egypt, and the Egyptians have erected a large walled-in refugee camp while anticipating that many civilians will flee into the Sinai desert regardless. But Egyptian authorities have said the camp can handle only up to 100,000 people.

Israel Demolishing Buildings to Construct Road in Gaza to Cut the Strip Into Two - Israel is demolishing buildings to build a road through central Gaza that will cut the Strip in two, demonstrating Israel’s long-term plans to occupy the territory.Israel’s Channel 14 reported on the road, which is being built in an area known as the Netzarim Corridor. The new road, known as Highway 749, will separate Gaza City from the rest of the Strip. Israel is creating a 1-kilometer “buffer zone” to the north and south of the road, similar to the zone it’s creating along the entire Israel-Gaza border. According to The New Arab, among the structures likely to be demolished to build the road is the Turkish-Palestinian Friendship Hospital, which was shut down in November due to an Israeli siege that cut off fuel.The construction will also require the demolition of Al-Aqsa University, several villages, amusement parks, and agricultural land. Israeli soldiers said the purpose of the road was to make it easier to launch incursions into Gaza, and it could also prevent the movement of Palestinians from the south to the north.The Wall Street Journal also reported on the highway and said it would effectively create a militarized belt across Gaza that will help prevent the 1 million Palestinians who fled the north from returning to their homes. Israeli officials told the Journal that the road will be patrolled until Israel’s military operations are complete, which they say could be years away.

Qatari PM Says Israel-Hamas Hostage Talks 'Not Very Promising' - Qatari Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani said Saturday that hostage deal talks Qatar and Egypt are mediating between Israel and Hamas are “not very promising” but vowed his country would continue the effort.“The pattern in the last few days is not really very promising but … we will always remain optimistic and will always remain pushing,” al-Thani said at the Munich Security Conference.Last week, Israeli Prime Minister Benjamin Netanyahu vetoed further hostage deal talks without consulting his war cabinet, a move that enraged family members of Israeli hostages who remain captive in Gaza. Israel is now preparing for a large-scale assault on Rafah, the southern Gaza city that’s packed with 1.5 million Palestinians.Hamas’s latest proposal was for a 135-day truce to facilitate the release of Israeli hostages and thousands of Palestinian prisoners and to work toward a permanent ceasefire. Israeli officials called the conditions “delusional,” and Israel did not make a counter-offer during talks with US, Egyptian, and Qatari officials in Cairo last Tuesday.US officials say the deal they’re pushing is for a six-week truce, but it’s unclear if Hamas would go for it as the Palestinian group has been calling for a permanent ceasefire and withdrawal of all Israeli troops.Al-Thani also said on Saturday that a ceasefire should not be conditioned on a hostage deal. “This is the dilemma that we’ve been in and unfortunately that’s been misused by a lot of countries, that in order to get a ceasefire, it’s conditional to have the hostage deal. It shouldn’t be conditioned,” he said.The US has rejected the idea of a ceasefire throughout the conflict. President Biden and other officials claim they’re pushing for a hostage deal and truce, but the US continues to provide unconditional military aid for the slaughter of Palestinians and is preparing to ship more bombs to Israel.

Israeli Knesset Overwhelmingly Backs Netanyahu's Rejection of a Palestinian State - The Israeli Knesset has overwhelmingly backed a resolution put forward by Israeli Prime Minister Benjamin Netanyahu that rejects a “unilateral” creation of a Palestinian state.Ninety-nine lawmakers out of 120 in the Knesset voted in favor of the resolution. According to Ynet, Israel’s Labor Party boycotted the vote, and 11 Arab lawmakers voted against it. The majority of the leading opposition parties, National Unity and Yesh Atid, voted in favor.Netanyahu celebrated the strong support for his legislation. “I commend the Knesset members, including those from the opposition, who today voted overwhelmingly in favor of my proposal that Israel opposes being unilaterally dictated to establish a Palestinian state,” he said.“I don’t recall many votes, in fact, hardly any, where the Knesset voted with a majority of 99, nearly 100 members out of 120, on any proposal,” Netanyahu added.The resolution came in response to reports that say the US is working with some of its Arab partners on an outline for a future peace deal that would include a “firm timeline” toward a Palestinian state. The Knesset vote happened after the Israeli cabinet unanimously approved a similar declaration that rejected “international diktats” on a Palestinian state.