Focus on Fracking: natural gas prices at a 3½ year low; US refinery utilization and distillates production are lowest in 57 weeks

natural gas prices at a 3½ year low; oil production back to record high; refinery utilization rate is lowest in 57 weeks; refinery throughput is lowest in 56 weeks; distillates production is lowest in 57 weeks

US oil prices finished higher for the third time in four weeks after Israel rejected a brokered ceasefire offer from Hamas and resumed attacks on the Gaza Strip amid ongoing US strikes against Yemen, Iraq and Syria….after falling 7.3% to $72.28 a barrel last week on concerning economic news out of China, a surprise increase in US oil supplies, and on hopes for a ceasefire agreement between Israel and Hamas, the contract price for the benchmark US light sweet crude for March delivery traded lower in Sunday overnight trading after Fed Chair Jerome Powell said In an interview that aired on Sunday that the central bank might wait till after March to cut interest rates, but opened higher and rose in the New York session on Monday after the U.S. had launched retaliatory strikes in Iraq and Syria against Iranian-backed forces over the weekend, raising the risk that the Middle East was heading toward a broader conflict, and settled 50 cents higher at $72.78 a barrel, as traders balanced the impact of a stronger U.S. dollar against an improved outlook for the domestic economy, underpinned by a robust labor market, income gains for the American consumer, and moderating inflation…the oil market maintained an upward momentum on Tuesday, as traders awaited the result of U.S. Secretary of State Antony Blinken’s efforts to de-escalate the situation in the Middle East, and settled 53 cents higher at $73.31 a barrel after the EIA forecast that U.S. crude production would plateau this coming year and not return to the 2023 high until February 2025…oil prices moved higher early morning Wednesday, propelled in part by an American Petroleum Institute report showing U.S. crude oil stocks building only moderately last week despite operations at the 435,000-barrels-per-day Whiting refinery in Indiana being halted since Feb. 1, then extended those gains after the EIA reported surprisingly large drawdowns of fuel supplies, and settled 55 cents higher at $73.86 a barrel….oil prices rose in overseas trading on Thursday on a weaker US dollar and Israel’s decision to reject a ceasefire offer from Hamas, then spiked 2% in early US trading in the aftermath of new Israeli air strikes on Rafah city in southern Gaza, and rallied to settle $2.36 or 4% higher at $76.22 a barrel as the market believed that the rejection of the ceasefire ensured that hostilities in the Red Sea would continue….oil prices were little changed early Friday, following a rally triggered by the U.S. Treasury's renewed enforcement measures on Russian oil sales, and settled 62 cents higher at $76.84 a barrel, as worries about supply from the Middle East mounted and as refining outages tightened refined products markets, and thus finished with a 6.3% increase for the week…

Meanwhile, natural gas prices fell for the 4th time in five weeks and ended at a three and a half year low on weak LNG and heating demand in the face of a building supply glut …after falling 4.4% to $2.079 per mmBTU last week on ongoing mild weather forecasts as the quoted price of natural gas fell 23.2% after the switch from the higher priced February contract, the contract price for natural gas for March delivery opened 2 cents lower on Monday and traded within a narrow band throughout the day as fundamentals remained largely unchanged, but managed to settle 0.3 cents higher at $2.082 per mmBTU as the market locked onto near-term weather forecasts for mild conditions ahead of an expected blast of mid-February cold…the March gas contract opened 3 cents lower on Tuesday and fluctuated near $2.030 for most of the day, as traders focused on near-term light heating demand and this week’s expected light storage pull, and then settled 7.3 cents, or 3.6% lower at $2.009 per mmBTU as well output slowly rose, the amount of gas flowing to LNG export plant declined, and the week’s forecasts indicated lower heating demand than had been expected…while natural gas prices opened 3 cents higher on Wednesday, they quickly fell below $2 for the first time since April 2023, as traders focused on near-term moderate temperatures and settled at an eleven month low of $1.967 per mmBTU as traders shrugged off outlooks for a mid-February cold spell and focused on the prospects of a storage glut as heating demand would likely falter through the last half of winter…natural gas opened lower and traded near $1.940 early Thursday morning ahead of the storage report, then traded sideways near $1.920 for the balance of the session, on bearish pressure from unsupportive weather forecasts and a historically weak storage pull, and settled 5.0 cents lower at a three year low of $1.917 per mmBTU on the small weekly storage withdrawal, near-record output, forecasts for lower than expected heating demand next week and lower amounts of gas flowing to LNG plants due to an outage at Freeport LNG's big facility in Texas…the week's drop in natural gas prices accelerated Friday on near-record well output, low LNG demand, ample gas in storage, and forecasts for milder weather over the next two weeks than had been expected, and settled 7.0 cents or 3.6% lower at $1.847 per mmBTU on Friday, a price level that was last seen in July 2020, and thus ended 11.2% lower on the week…

with a new 3½ year low for natural gas prices, we'll include a graph of current weekly natural gas prices over the past 5 years from Barchart.com....each bar on that graph represents one week's price range for the actively traded front month natural gas contract during that week, with green bars representing weeks when prices rose, and red bars representing weeks when prices fell...the small "wicks" extending from the "candlestick" bars for most weeks represent trading prices outside of the opening and closing prices indicated by the solid bars...as you can see, outside of a few weeks during the early pandemic lockdowns between March and July 2020, natural gas prices were never lower over this five year span..:

The EIA's natural gas storage report for the week ending February 2nd indicated that the amount of working natural gas held in underground storage in the US fell by 75 billion cubic feet to 2,584 billion cubic feet by the end of the week, which left our natural gas supplies 187 billion cubic feet, or 7.8% above the 2,397 billion cubic feet that were in storage on February 2nd of last year, and 248 billion cubic feet, or 10.6% more than the five-year average of 2,336 billion cubic feet of natural gas that were typically in working storage as of the 2nd of February over the most recent five years…the 75 billion cubic foot withdrawal from US natural gas working storage for the cited week was in line with the 76 billion cubic feet withdrawal from supplies that had been forecast by analysts polled by Reuters, but was way less than the 208 billion cubic feet that were pulled from natural gas storage during the corresponding fourth week of January 2023, and was also less than half the average 193 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 2nd showed that after a big increase in our oil imports, a rebound to record production from US wells, and ongoing troubles at US refineries, we had surplus oil to add to our stored commercial crude supplies for the fourth time in ten weeks, and for the 14th time in the past 34 weeks….Our imports of crude oil rose by an average of 1,302,000 barrels per day to average 6,907,000 barrels per day, after rising by an average of 25,000 barrels per day the prior week, while our exports of crude oil fell by 298,000 barrels per day to average 3,596,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 3,311,000 barrels of oil per day during the week ending February 2nd, 1,600,000 more 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 675,000 barrels per day, while during the same week, production of crude from US wells increased by a rounded 300,000 barrels per day to 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 17,286,000 barrels per day during the February 2nd reporting week…

Meanwhile, US oil refineries reported they were processing an average of 14,840,000 barrels of crude per day during the week ending February 2nd, an average of 9,000 fewer barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period the EIA’s surveys indicated that a rounded average of 877,000 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 2nd appear to indicate that our total working supply of oil from net imports, from transfers, and from oilfield production was 1,569,000 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 inserted a rounded [-1,569,000] 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 243,000 barrels of oil per day were unaccounted for in last week’s data, that means there was a 1,326,000 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 useless...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 errors, and what they had hoped to do about it)

This week's rounded 877,000 barrel per day average increase in our overall crude oil inventories came as 789,000 barrels per day were being added to our commercially available stocks of crude oil, while 88,000 barrels per day were being added to our Strategic Petroleum Reserve, the tenth SPR increase in seventeen 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 6,378,000 barrels per day last week, which was still 5.9% less than the 6,776,000 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 300,000 barrels per day higher 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 a rounded 300,000 barrels per day higher at 12,900,000 barrels per day, while Alaska’s oil production was 2,000 barrels per day higher at 435,000 barrels per day but still added the same 400,000 barrels per day to the EIA's rounded national total as it did last week...US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure 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 82.4% of their capacity while processing those 14,276,000 barrels of crude per day during the week ending February 2nd, their lowest utilization in 57 weeks, and down from their utilization rate of 92.6% two weeks earlier, apparently due to damage from the arctic cold that penetrated to the Gulf Coast in mid January... the 14,840,000 barrels per day of oil that were refined this week were the least in 56 weeks, 3.7% less than the 15,410,000 barrels of crude that were being processed daily during week ending February 3rd of 2023 (after the refinery-freeze-offs following Christmas 2022's winter storm Elliot), and 7.1% less than the 15,972,000 barrels that were being refined during the prepandemic week ending January 31st, 2020, when our refinery utilization rate was also at a lower than normal 87.4%..

With the decrease in the amount of oil being refined this week, gasoline output from our refineries was also lower, decreasing by 270,000 barrels per day to 9,011,000 barrels per day during the week ending February 2nd, after our refineries' gasoline output had increased by 956,000 barrels per day during the prior week. This week’s gasoline production was 0.9% less than the 9,093,000 barrels of gasoline that were being produced daily over the storm impacted week of last year, and 9.0% less than the gasoline production of 9,903,000 barrels per day during the prepandemic week ending January 31st 2020....at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 28,000 barrels per day to a 57 week low of 4,357,000 barrels per day, after our distillates output had decreased by 517,000 barrels per day over the prior iwo weeks. With those decreases, our distillates output was 6.6% less than the 4,664,000 barrels of distillates that were being produced daily during the week ending February 3rd of 2023, and 12.4% less than the 4,976,000 barrels of distillates that were being produced daily during the week ending January 24th 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 second time in twelve weeks, decreasing by 3,146,000 barrels to 250,988,000 barrels during the week ending February 2nd, after our gasoline inventories had increased by 1,157,000 barrels to a 35 month high during the prior week. Our gasoline supplies fell this week because the amount of gasoline supplied to US users rose by 662,000 barrels per day to 8,807,000 barrels per day, and even though our exports of gasoline fell by 286,000 barrels per day to 747,000 barrels per day, and even though our imports of gasoline rose by 136,000 barrels per day to 536,000 barrels per day…But even after twenty-eight gasoline inventory withdrawals over the past fifty weeks, our gasoline supplies were 4.8% above than last February 3rd's gasoline inventories of 239,606,000 barrels, while about 1% below the five year average of our gasoline supplies for this time of the year…

With this week's decrease in our distillates production, our supplies of distillate fuels fell for the third time in eleven weeks, decreasing by 3,221,000 barrels to 127 574,000 barrels over the week ending February 2nd, after our distillates supplies had decreased by 2,541,000 barrels during the prior week. Our distillates supplies fell by more this week as the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 60,000 barrels per day to 3,817,000 barrels per day, and as our exports of distillates fell by 3,000 barrels per day to 1,123,000 barrels per day, while our imports of distillates fell by 12,000 barrels per day to 125,000 barrels per day...Even with 26 inventory decreases over the past forty-seven weeks, our distillates supplies at the end of the week were 8.5% above the 120,522,000 barrels of distillates that we had in storage on February 3rd of 2023, but were now about 7% below the five year average of our distillates inventories for this time of the year...

Finally, after the increase in our oil production and in our oil imports, our commercial supplies of crude oil in storage rose for the 12th time in twenty-six weeks and for the 23rd time in the past year, increasing by 5,220,000 barrels over the week, from 421,912,000 barrels on January 26th to 427,432,000 barrels on February 2nd, after our commercial crude supplies had increased by 1,234,000 barrels over the prior week... With this week’s increase, our commercial crude oil inventories rose to about 4% below the most recent five-year average of commercial oil supplies for this time of year, and were more than 32% above the average of our available crude oil stocks as of the first 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 2nd were 6.1% less than the 455,111,000 barrels of oil left in commercial storage on February 3rd of 2023, but 4.2% more than the 410,387,000 barrels of oil that we still had in storage on February 4th of 2022, while still 8.9% less than the 469,014,000 barrels of oil we had in commercial storage on February 2nd9th of 2021, after early 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 9th, the second column shows the change in the number of working rigs between last week’s count (February 2nd) and this week’s (February 9th) count, the third column shows last week’s February 2nd 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 10th of February, 2023...

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Who wants to frack under an Ohio state park? State law keeps it a secret - The Cincinnati Enquirer - The road to fracking under Ohio's state parks and wildlife areas has been paved with secrecy, opponents say, and the application process is the latest example. Sunday marked the deadline for companies to apply to extract for oil and gas under Salt Fork State Park in Guernsey County, Valley Run Wildlife Area in Carroll County and Zepernick Wildlife Area in Columbiana County. But Ohioans won't know who applied until after Ohio's Oil and Gas Land Commission picks a winner. That's because of a 2011 law that keeps the details of these bids confidential.Fracking, or hydraulic fracturing, is a method that injects water, sand and chemicals into the ground to create new fractures in rocks and extract natural gas, oil and brine. The process can result in chemical spills at the surface, groundwater quality contamination and induced earthquakes, according to the U.S. Geological Survey. The reason for the confidentiality in Ohio's bids, according to state law, is to "encourage the submission of bids and the responsible and reasonable development of the state's natural resources." "The thought process was," explained Rob Brundrett, president of the Ohio Oil and Gas Association. "If the bids were not public when the bidding process was going on, it would encourage more bidders and hopefully better bids for the state." But opponents of fracking in Ohio contend that the secrecy is one more way that this process is rigged to favor oil and gas companies. "The gas and oil industry in Ohio has made sure that Ohio law reflects their wants and needs, and that process is all about secrecy," said Melinda Zemper, a steering committee member for Save Ohio Parks, which opposes fracking on state land. "The public and the media can't check the histories of these companies regarding any serious methane leaks or water contamination or other environmental harms that should disqualify them from doing business with the state," Zemper said. For Nathan Johnson, an attorney and public lands director with the Ohio Environmental Council, it begs the question: Why is secrecy needed to encourage bids?"I think it's because fracking public parks is deeply unpopular with the public," Johnson said. At least one company, Texas-based Encino Energy, has made its interest in leasing the oil and gas rights under Salt Fork State Park well known. The company, which did not respond to a request for comment, has asked Guernsey County residents about leasing their well pads. Cleveland.com reported that Encino offered to pay up to $1.8 billion between royalty payments and a signing bonus, according to a proposal that was ultimately rejected. Encino also has a new office in Carrollton near the Valley Run Wildlife Area, according to the Carroll County Messenger. The number of possible applicants is also limited to companies with well pads in the area, said Julie Weatherington-Rice, a senior scientist at Bennett and Williams Environmental Consultants. The top shale oil and gas producers in Ohio last year included Ascent Resources, Encino, Gulfport Appalachia, Southwestern Energy and Rice Drilling, according to Ohio Department of Natural Resources data. Nine companies operate in Guernsey County, four in Columbiana and three in Carroll, according to those records. Details about each applicant will be publicly available after the commission picks the "highest and best bid," according to state law. There is no set deadline for the commission to select a winner. Ohio lawmakers first approved fracking under state parks in 2011, but the process sped up after a series of changes were approved in recent years. Brundrett with the oil and gas association thinks the delays are behind them. "It's always better to have some sort of deadline to follow, but we're confident the commission is going to continue to work to award a bid, and we think they're going to do it in a reasonable time frame," he said. For environmental groups, the secrecy surrounding which companies have applied is the latest example of a process that hasn't been open and accessible to the public. Opponents were not able to speak at the Oil and Gas Land Commission's November meeting where members voted to greenlight accepting bids. They instead loudly protested throughout the meeting. Cleveland.com found dozens of letters sent to the commission in support of fracking under state parks were fake, and the Ohio Attorney General's office is investigating that. State lawmakers have ensured the commission has little leeway to reject these bids based on public feedback, Weatherington-Rice said. “Everything is rigged in favor of the oil and gas companies, which is what they planned in the first place."Two lawsuits could impact the timeline. Last April, environmental groups sued Ohio to block the law allowing fracking under state parks and lands. The environmental group argues that changes were added to an unrelated chicken bill, violating a rule that requires legislation to be limited to a single subject.In November, environmental groups challenged Ohio's decision to greenlight applications. Ohio Attorney General Dave Yost's office argued that the decision could not be appealed. The case is pending in court.

Radicals Push “Secrecy” Narrative re Drilling Under OH State Parks -- Marcellus Drilling News = Anti-fossil fuel zealots (climate catastrophists) have set their sights on blocking drilling and fracking under (not on top of) Ohio’s state-owned land, including several state parks. Their favorite tactic is to lie and smear the companies that seek to do such drilling. One tiny problem (for the zealots): they don’t know which companies are bidding to do the drilling. And that drives them even more crazy. So the zealots, with the help of mainstream media, are trying to paint the process as “secretive” — like there’s something nefarious that the fracking industry wants to hide. In reality, the identity of the winning bid is kept “secret” until the deal is officially announced because IT’S STATE LAW.

Utica Shale Academy Purchases Building for $500K - Business Journal Daily – With full classrooms and a new building project that came in far over bid, the Utica Shale Academy instead just added another $500,000 building to its campus. The three-story building at 10 Main St., formerly the Williams Energy office, will allow even younger students to benefit from the career-based programming at Utica Shale. Superintendent Bill Watson said the school has been growing strong, so much so that it had to cut off enrollment for seniors in December when the school reached 160 students in grades nine through 12. With the new building, the school can add seventh and eighth graders and move the ninth graders in with them, opening up space for up to 350 students. The younger students will be on the second floor of the building, Watson said, where they will receive early introductory classes into the trades. The first floor will allow Utica to offer more programming through its partnership with the Youngstown State University Excellence Training Center, including robotics and industrial technology trade programs. The building is being paid for with part of the $2.35 million the school received last summer from the Governor’s Office of Appalachian Regional Commission Grant program. At the time, the school’s plan was new construction, but Watson said bids came in 300% what was anticipated. Instead, the school on Jan. 30 was able to purchase the 22,695-square-foot Williams Building, which was built in 1995 and was the original headquarters of Citizens Bank. The third floor will be used for administrative offices, with the possibility of Utica’s partnering district, Southern Local Schools, moving the superintendent’s offices from the current location in a modular office behind the school. “Partnership and collaboration are the most important part of growth,” said Watson, who believes without partners like Southern Local, the ARC, YSU and others, the school would not be where it is today. More than 1,100 at-risk students have gained certifications from the school since 2021. The school started 10 years ago with just a handful of students in one room at Southern Local.

Utica Shale Academy receives COPS safety grant - – The Utica Shale Academy is taking steps to enhance campus safety after securing a $452,975 federal grant. The community school received the COPS School Violence Prevention Program grant from the U.S. Attorney General Merrick B. Garland and the Office of Community Oriented Policing Services (COPS Office) and will be supplemented with an additional $150,000 match from Utica Shale Academy as part of a total $604,000 plan for staffing and training. Superintendent Bill Watson said changes will be implemented over the next year and include hiring a safety official who will work with county and local law enforcement and adding security equipment to the campus. “[The new official] will travel to school districts to educate them about the academy’s safety plan, ensuring that each student is knowledgeable about the procedures,” Watson said. “The training is open to the Salineville Police Department and Columbiana County Sheriff’s Office and fosters a more collaborative approach to safety.” The new safety official should be in place over the next year while training is expected to begin Aug. 1. School staff have already undergone instruction on unarmed defense and crisis mitigation. Moreover, the grant will help cover the costs of essential equipment such as cameras and metal detectors to provide an extra layer of protection. Watson said this investment in safety is part of the academy’s broader effort to expand and improve its campus facilities, which includes various buildings for different educational purposes and plans for new construction to enhance educational offerings. He cited state and federal legislators for their substantial support in securing the funding, including Ohio Sen. Michael Rulli (R-33rd District) and state Reps. Monica Robb Blasdel (R-79th District) and Al Cutrona (R-85th District) and U.S. Sen. J.D. Vance and former Rep. Bill Johnson, both R-Ohio. He said their advocacy and assistance were crucial in obtaining the grant. “The support from the Senators and Representatives not only underlines the importance of political backing in educational advancements, it also reinforces the academy’s commitment to creating a safe and enriching learning environment for its students.” Utica Shale Academy, known for its focus on career-tech education for at-risk students, has been successful in helping students obtain more than 1,100 certifications since 2021. A total of 190 students in grades 9-12 are currently enrolled and it is seeking to expand to include seventh- and eighth-graders.

Peregrine Adds Mineral Rights in the Bakken and Utica --- Peregrine Energy Partners has closed on producing and non-producing royalty interests in both the Bakken and Utica Shales from multiple undisclosed sellers. The acquisitions feature production from over 120 producing wells from core areas within each basin. “The Bakken is an area that has appealed to us for the past two decades since shale’s early days,” commented Managing Director Josh Prier. “The production profile in North Dakota is mature, consistent and predictable which will help deliver solid cashflows for years to come.” The Utica Shale in Ohio has been commercially produced since 2011 with operators such as EOG, SWN, Chesapeake and Ascent leading the charge. Mr. Prier continued, “The gas properties in the Utica lend themselves to future development and will complement the more mature oil heavy assets from the Bakken into a diversified portfolio generating predictable monthly income with opportunity for upside.” Two years ago, Peregrine acquired one of their largest royalty positions, also in the Utica, spanning over 340,000 gross acres in 18 counties and has since become much more active in the area. According to C.J. Tibbs, Managing Director, “The Utica continues to prove itself not only as a one of the major natural gas basins, but also as a significant oil play with operators like EOG delivering strong early results.” While Peregrine continues to work with individual royalty owners to provide divestment options, the firm has been especially active in working with operators, funds, partnerships, and trusts who are looking to sell down non-core, passive interests in order to put that capital to work in more active assets that deliver a higher IRR. “We’ve been able to create a simple, fair, and painless path to exit for these groups who appreciate cleaning up their books and re-directing capital from non-core interests into active assets that they have more control over,” commented Mr. Tibbs.

NOG Announces Closings of Utica and Northern Delaware Acquisitions - Northern Oil and Gas, Inc has now closed on both of its previously announced acquisitions of Utica and Northern Delaware Basin assets from private sellers. NOG paid $162.6 million in cash in aggregate initial closing settlements, with $28.4 million of the closing costs incurred in the fourth quarter of 2023 and the remaining $134.2 million in the first quarter of 2024. The first quarter closings were funded in part by a $17.1 million deposit paid at signing in November 2023. The closing settlements are net of preliminary and customary purchase price adjustments and remain subject to post-closing settlements between the parties. More information regarding these acquisitions can be found in NOG’s November 21, 2023, press release announcing the transactions, which is available here. This press release contains forward-looking statements regarding future events and future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond NOG’s control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: changes in crude oil and natural gas prices, the pace of drilling and completions activity on NOG’s current properties and properties pending acquisition; infrastructure constraints and related factors affecting NOG’s properties; cost inflation or supply chain disruptions; NOG’s ability to acquire additional development opportunities, potential or pending acquisition transactions, the projected capital efficiency savings and other operating efficiencies and synergies resulting from NOG’s acquisition transactions, integration and benefits of property acquisitions, or the effects of such acquisitions on NOG’s cash position and levels of indebtedness; changes in NOG’s reserves estimates or the value thereof; disruption to NOG’s business due to acquisitions and other significant transactions; general economic or industry conditions, nationally and/or in the communities in which NOG conducts business; changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets; NOG’s ability to consummate any pending acquisition transactions; other risks and uncertainties related to the closing of pending acquisition transactions; NOG’s ability to raise or access capital; changes in accounting principles, policies or guidelines; events beyond NOG’s control, including a global or domestic health crisis, acts of terrorism, political or economic instability or armed conflict in oil and gas producing regions; and other economic, competitive, governmental, regulatory and technical factors affecting NOG’s operations, products and prices.

US natgas price plunge to 3-year low could force producers to cut output (Reuters) - U.S. natural gas prices plunged to a three-year low this week as production surged and mostly mild winter weather and recent liquefied natural gas (LNG) export plant outages depressed demand, prompting analysts to project some producers will cut back on gas drilling. Any reduction, however, will likely be offset by increased associated gas production from oil wells as energy firms spend more to drill more oil wells with crude prices up about 7% so far this year. "In our view, producers should likely be looking at activity reductions across all of 2024 given the current (gas price) strip outlook," Gas futures fell 5.0 cents, or 2.5%, to settle at $1.917 per million British thermal units (mmBtu) on Thursday, their lowest close since September 2020 for a second day in a row. The collapse in gas prices came as producers were already upset that the nation's biggest source of gas demand growth, LNG exports, could be limited by U.S. President Joe Biden's pause on permitting new projects. U.S. LNG exports have soared by an average of 34% a year over the past five years, while domestic demand for gas has only increased by about 2% a year on average over the same period, according to federal energy data. Toby Rice, CEO of EQT, the nation's biggest gas producer, told a U.S. House subcommittee this week that the LNG moratorium has inserted "significant disruption, uncertainty, costs and risks" into the industry. Analysts said that uncertainty will make it tougher for LNG buyers to sign long-term contracts needed to finance new export projects, which could reduce the need for more gas production in the future. To be sure, the U.S. is the world's biggest LNG producer and will need more gas supplies to meet growing demand with LNG capacity expected to almost double from about 13.8 billion cubic feet per day (bcfd) now to around 24.5 bcfd by the end of 2028 as projects already under construction enter service. One billion cubic feet of gas can supply about five million U.S. homes for a day. Analysts have said the expected increase in U.S. LNG exports was the primary reason gas companies kept producing record amounts of the fuel in 2023 despite a 44% drop in prices, and it is why they were on track to keep pulling record amounts of gas out of the ground in 2024 and 2025. Another factor weighing on the gas market this year has been abundant supplies of fuel in storage after a mostly warm winter kept heating demand low. "As hopes for a cold end to winter fade, producers are looking around seeing who will blink and cut production guidance first," "With oil-driven associated gas taking cues from oil prices and impervious to natural gas, the onus of production cuts will likely fall on dry gas producers in the Marcellus and Haynesville," Rubin said. Over the past year, U.S. drillers cut the number of gas rigs operating by 41, or 26%, leaving just 119 rigs operating at the end of January, according to energy service firm Baker Hughes BKR.O. Most of those cuts were in the Haynesville shale in Louisiana, Texas and Arkansas, which lost 27 rigs over the past year, and the Marcellus/Utica shale in Pennsylvania, Ohio and West Virginia, which lost 10 rigs.

US natgas price collapse to 3-year low is bad for producers, good for consumers (Reuters) - U.S. natural gas futures have collapsed about 22% so far in 2024, reaching a three-year low on Wednesday as near-record output and mostly mild weather this winter depress heating demand. Low prices are good for consumers who use gas for cooking and to heat homes and businesses. It is also great for companies exporting the fuel via pipelines to Mexico or as liquefied natural gas (LNG) to the world. But, low prices are bad for producers and energy service companies that make money pulling the fuel out of the ground. "The biggest losers are the speculators and those producers who didn't hedge," Gas producers can lock in the prices they receive for their gas by buying or selling futures and other contracts so they can profit no matter how low prices fall. Of course, the downside to this hedging strategy is when prices rise, producers could miss out on those gains. "This is devastating for the small producers,". "If they don't see some price relief, some folks in the industry tell me a lot of these smaller producers ... are just going to have to close up shop." Front-month gas futures fell 4.2 cents, or 2.1%, to settle at $1.967 per million British thermal units (mmBtu) on Wednesday, their lowest close since September 2020. One of the first things analysts expect to see with low prices is a reduction in rigs drilling for gas. U.S. drillers cut the number of gas rigs by 23% in 2023, leaving just 120 rigs in service at the end of the year, according to data from energy service firm Baker Hughes. That compares with a weekly average of 147 gas rigs active in 2022. Gas producers were already upset that the nation's biggest source of gas demand growth, LNG exports, could be limited by the Biden administration's pause in permitting new projects. "A continued acceleration of U.S. LNG exports is the single most impactful thing we could do to solve the global energy crisis and provide energy security to Americans," Toby Rice, CEO of EQT, the nation's biggest gas producer, told a U.S. House subcommittee this week. To be sure, the U.S. is the world's biggest LNG producer and its export capacity will almost double from about 13.8 billion cubic feet per day (bcfd) now to around 24.5 bcfd by the end of 2028 as projects already under construction enter service. One billion cubic feet of gas can supply about five million U.S. homes for a day. In fact, analysts have said the expected increase in LNG exports was the primary reason gas companies produced record amounts in 2023 despite a 44% drop in prices, and it is why they plan to keep pulling record amounts of gas out of the ground in 2024 and 2025.

MPLX Says Market “Underappreciates” Growth Potential in Marcellus -- Marcellus Drilling News - In late 2015, MPLX (i.e., Marathon Petroleum) bought out and merged in the Utica Shale’s premier midstream company, MarkWest Energy, for $15 billion (see MarkWest Energy Investors/Unitholders Approve Merger with Marathon). The “new” MarkWest, aka MPLX, plays on a much larger stage now, including ownership and operation of major assets in the Permian Basin and in the Bakken Shale, in addition to the Marcellus/Utica. Last week, MPLX issued its fourth quarter 2023 update. MPLX Chairman and CEO Michael Hennigan had an interesting comment during a conference call: “I think the market is underappreciating the growth potential up in the Marcellus.”

More questions than answers after Massachusetts order to transition from natural gas -- Massachusetts utilities, regulators, and lawmakers are beginning to chart their next steps following an order issued two months ago that signaled the beginning of the end of natural gas in the state. While hailed as a transformational win by clean energy advocates, the Dec. 6 decision is light on specifics, instead laying out broad, guiding principles that stakeholders will need to convert into policy. “The order poses the questions, but doesn’t answer them for the most part,” said state Sen. Michael Barrett, chair of the joint telecommunications, utilities, and energy committee. “It’s an opening statement in the huge conversation Massachusetts needs to have about truly reducing the footprint of the gas system in the state.” The order tops off a three-year investigation into how gas utilities can help Massachusetts achieve its goal of net-zero carbon emissions by 2050. Released by the Department of Public Utilities, the document sets an explicit policy goal of transitioning from natural gas and rejects utilities’ proposal to integrate renewable natural gas as a route to decarbonization. It also calls for gas and electric utilities to coordinate their planning and requires policies to ensure the transition doesn’t financially burden lower-income residents. “The most amazing part – and the part that I never thought I would see – is it’s actually saying we as a state need to reduce our emissions and you as a public utility need to be an active part of this,” says Amy Boyd Rabin, vice president of policy for the Environmental League of Massachusetts. “I think that’s the first time in this country that such a standard has been applied.” Utility companies, the legislature, and state regulators still have to lay out concrete strategies for translating the ideas in the order into meaningful change, advocates said. Perhaps the most pressing question, advocates said, is the issue of coordination between electric and gas utilities. While the two providers often have the same name and corporate parent — National Grid or Eversource, for example — the gas and electric sides of the business are run as separate companies, with distinct leadership, decision-making, and regulatory requirements. Though the gas and electric companies are legally allowed to share information and ideas, it is unclear how often they do so, Rabin said. The transition from gas, however, makes communication between the two essential: The electric side will need to do extensive planning to make sure it is ready to deal with surging demand as buildings transition from gas heat to electric heat pumps.

Duke Seeking More Carolinas Natural Gas Generation on Stronger Demand Forecast - Duke Energy Corp. is awaiting approval from regulators for updated Carolinas resource plans to increase natural gas generation, fueled in part by the Mountain Valley Pipeline LLC (MVP) system, which would transport more Appalachian supply to southeastern markets. Charlotte, NC-based Duke last summer filed a Carbon Plan and Integrated Resources Plan (IRP) for North Carolina and South Carolina. The IRP asked for approval to add 17,980 MW, including 5,780 MW of combined-cycle gas turbines (CCGT) and combustion turbines. After filing the IRP last August, however, revised forecasts for the next 15 years showed electricity demand would require an additional 2,000 MW. Duke late last month proposed adding more than 2,720 MW of CCGT in South Carolina, an addition to the August proposal

Transco Files to Add 1.6 Bcf/d of Southeast Natural Gas Takeaway Capacity - Williams has filed with FERC for authorization to build its Southeast Supply Enhancement Project that would add about 1.6 Bcf/d of capacity to its Transcontinental Gas Pipe Line Co. (Transco) for natural gas deliveries from Virginia to Georgia. The pre-filing request with the Federal Energy Regulatory Commission on Feb. 1 comes three months after Williams said customer interest was strong enough to attract 20-year agreements of more than 1.4 Bcf/d for firm capacity. At an official capacity of 1,586,900 Dth/d, the project is now roughly double the original offered amount of 800 MMcf/d in an open season last summer.

Williams Pre-Pre-Files for Southeast Supply Enhancement Project - Marcellus Drilling News -- Last November, MDN brought you the news that pipeline giant Williams had given the green light to proceed with a new Transco pipeline expansion project called the Southeast Supply Enhancement Project (see Transco Expansion to Add 1.4 Bcf/d Capacity to Flow M-U Gas South). The project was estimated to flow an extra 1.43 Bcf/d (billion cubic feet per day) of Marcellus/Utica molecules southward along the Transco pipeline system, delivering those molecules to states in the southern U.S. Since last November, Williams has upped the capacity to 1.587 Bcf/d (essentially from 1.4 to 1.6). Here’s the new news: On Feb. 1, Williams filed a request with the Federal Energy Regulatory Commission (FERC) to open a pre-filing review. In essence, Williams pre-pre-filed, giving us lots of new details about the project.

Henry Hub Natural Gas to Average $2.40 on Mild Weather to Close Out Heating Season, EIA Says - Henry Hub natural gas spot prices are set to remain subdued at around $2.40/MMBtu in February and March amid unusually mild weather, the U.S. Energy Information Administration (EIA) said in an updated forecast Tuesday. In its latest Short-Term Energy Outlook (STEO), EIA said it expects Henry Hub spot prices to average $2.650 for full-year 2024, up from $2.540 in 2023. Prices then would approach $3.000 on average in 2025, according to the STEO. The updated STEO prices for this year and next are flat versus the month-earlier forecast.

US natgas prices fall 4% to nine-month low on rising output, lower demand (Reuters) - U.S. natural gas futures fell about 4% to a fresh nine-month low on Tuesday as output slowly rises, the amount of gas flowing to liquefied natural gas (LNG) export plants declines and on forecasts for lower demand this week than previously expected. That was the third time the front-month closed at a nine-month low in the past week. Traders noted output was rising as gas wells continue to return to service after freezing during extreme cold in mid-January, while LNG feedgas remained low due mostly to an ongoing unit outage at Freeport LNG's export plant in Texas. Front-month gas futures NGc1 for March delivery on the New York Mercantile Exchange (NYMEX) fell 7.3 cents, or 3.55, to settle at $2.009 per million British thermal units (mmBtu), their lowest close since April 13, 2023. That pushed the front-month back into technically oversold territory for the fourth time in five trading days. Rising price volatility in recent weeks has increased interest in gas trading with open interest in NYMEX futures rising to 1.498 million contracts on Feb. 2, the most since February 2020, for a fourth day in a row. In California, over 139,000 homes and businesses were still without power early Tuesday following massive storms over the weekend, according to PowerOutages.us. In total, the storms knocked out service to over 1.1 million customers, according to local utilities. In Washington, D.C., a House subcommittee held a hearing on President Joe Biden's pause on approval of LNG export permits, the first of two in Congress this week. Financial company LSEG said gas output in the U.S. Lower 48 states rose to an average of 105.4 billion cubic feet per day (bcfd) so far in February from 102.1 bcfd in January. That, however, remained below the monthly record high of 106.3 bcfd in December. Meteorologists projected temperatures in the Lower 48 states would remain warmer than normal through Feb. 13 before sliding to near normal levels from Feb. 15-21. With seasonally colder weather coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would rise from 121.8 bcfd this week to 124.6 bcfd next week. The forecast for this week was lower than LSEG's outlook on Monday, while the forecast for next week was higher. Gas flows to the seven big U.S. LNG export plants slid to an average of 13.6 bcfd so far in February, down from 13.9 in January and a monthly record high of 14.7 bcfd in December. Analysts said U.S. LNG feedgas would likely not return to record levels until Freeport LNG returned to full power, which is expected to occur in mid- to late-February. Gas was trading around $9 per mmBtu at both the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and the Japan Korea Marker (JKM) benchmark in Asia JKMc1. NG/EU

Natural Gas Weekly Update – EIA - The Henry Hub spot price fell 26 cents from $2.23 per million British thermal units (MMBtu) last Wednesday to $1.97/MMBtu yesterday, the lowest price since June 12, 2023. The price of the March 2024 NYMEX contract decreased 13.3 cents, from $2.100/MMBtu last Wednesday to $1.967/MMBtu yesterday. This is the lowest settlement price for the March 2024 contract since trading of this contract began 12 years ago. The price of the 12-month strip, averaging March 2024 through February 2025 futures contracts, declined 12.5 cents to $2.641/MMBtu. Natural gas spot prices fell at most locations this report week (Wednesday, January 31 to Wednesday, February 7) in line with the decline in the Henry Hub spot price. Price changes ranged from a decrease of $1.01/MMBtu at Algonquin Citygate to an increase of $0.44/MMBtu at Northwest Sumas. Natural gas prices in the Northeast decreased from last Wednesday in anticipation of warmer weather moving into the region. At the Algonquin Citygate, which serves Boston-area consumers, the price went down $1.01 from $3.35/MMBtu last Wednesday to $2.34/MMBtu yesterday. At the Transcontinental Pipeline Zone 6 (Transco Zone 6) trading point for New York City, the price decreased 27 cents from $1.95/MMBtu last Wednesday to $1.68/MMBtu yesterday. During the report week, the Algonquin Citygate price reached a weekly high of $7.10/MMBtu last Friday and Transco Zone 6 reached a weekly high of $2.66/MMBtu on Monday. Natural gas consumption increased because of cooler weather this week and relatively low natural gas prices for this time of year. Temperatures in the Boston Area averaged 35°F, resulting in 210 heating degree days (HDD), 8 more HDDs than last week. Similarly, temperatures in the New York-Central Park Area averaged 39°F, resulting in 178 HDDs, 19 more HDDs than last week. Natural gas consumption in the Northeast increased 9% (2.2 billion cubic feet per day [Bcf/d]), led by a 12% (1.5 Bcf/d) increase in residential and commercial sector consumption, according to data from S&P Global Commodity Insights.International natural gas futures price changes were mixed this report week. According to Bloomberg Finance, L.P., weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia rose 4 cents to a weekly average of $9.46/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands fell 6 cents to a weekly average of $9.07/MMBtu. In the same week last year (week ending February 8, 2023), the prices were $18.30/MMBtu in East Asia and $17.83/MMBtu at TTF. The last time early-February prices at TTF averaged below $10/MMBtu was in 2021.

US natgas prices slide 3% to 3-year low on weak demand, ample storage (Reuters) - U.S. natural gas futures dropped about 3% on Thursday to a three-year low, on a small weekly storage withdrawal, near-record output, forecasts for lower than expected heating demand next week and low amounts of gas flowing to liquefied natural gas (LNG) export plants due to an outage at Freeport LNG's facility in Texas. With gas prices now down about 23% since the start of 2024 after collapsing 44% last year, some analysts say gas producers will likely reduce output by cutting the number of wells they drill. The gas rig count fell by 23% in 2023, leaving just 120 rigs in service, and was down by another three rigs so far this year, according to energy service company Baker Hughes. The U.S. Energy Information Administration (EIA) said utilities pulled just 75 billion cubic feet (bcf) of gas out of storage during the week ended Feb. 2. That was in line with the 76-bcf withdrawal analysts forecast in a Reuters poll and compares with a decrease of 208 bcf in the same week last year and a five-year (2019-2023) average decline of 193 bcf for this time of year. Analysts said the withdrawal was small as mild weather last week depressed heating demand. Front-month gas futures for March delivery on the New York Mercantile Exchange fell 5.0 cents, or 2.5%, to settle at $1.917 per million British thermal units (mmBtu), their lowest close since September 2020 for a second day in a row. In post settlement trade, the contract fell by 5%. But, looking ahead, market watchers said they expect gas prices to rise in coming days with much colder weather forecast to blanket much of the U.S. in mid- to late-February. That cold, however, may not last long enough or be intense enough for prices to rise too high. Meteorologists forecast the weather will turn colder than normal from Feb. 17-20 with temperatures on the coldest day averaging about 39 degrees Fahrenheit (4 Celsius) on Sunday, Feb. 18, according to data from financial data company LSEG. That compares with a normal average of 41 F in the U.S. Lower 48 states on that day. SUPPLY AND DEMAND LSEG said gas output in the U.S. Lower 48 states rose to an average of 105.6 billion cubic feet per day (bcfd) so far in February from 102.1 bcfd in January. That, however, was still below the monthly record high of 106.3 bcfd in December. Meteorologists projected temperatures in the Lower 48 states would remain warmer than normal through Feb. 15 before sliding to mostly near- to below-normal levels from Feb. 16-23. With seasonally colder weather coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would rise from 122.7 bcfd this week to 124.5 bcfd next week. The forecast for next week was lower than LSEG's outlook on Wednesday. Gas flows to the seven big U.S. LNG export plants slid to an average of 13.3 bcfd so far in February, down from 13.9 bcfd in January and a monthly record high of 14.7 bcfd in December. Analysts said U.S. LNG feedgas would likely not return to record levels until Freeport LNG was back at full power, which could occur in mid- to late-February.

Tellurian Eyeing Divestment of Haynesville Natural Gas Business to Keep Driftwood LNG Afloat - Tellurian Inc. said Tuesday it is exploring opportunities to sell its upstream natural gas business in the Haynesville Shale. The idea is to reduce debt and shore up cash to advance the troubled Driftwood LNG export project on the Louisiana coast, said management of Houston-based Tellurian. As it seeks to commercialize the liquefied natural gas project, “Tellurian has been reviewing its strategy, including the dynamics of the U.S. natural gas market in the context of global LNG demand,” said CEO Octávio Simões. “We have concluded that there are alternative gas supply strategies available to us from various basins and our ownership of upstream assets is not necessary at this stage of Tellurian’s development.

U.S. E&Ps Treading Cautiously, but Natural Gas Drilling May Rise Later in Year, Says NOV CEO - North American exploration customers have pulled back on activity, but that may change later this year as line-of-sight focuses on ramping up more U.S. LNG capacity in 2025, according to Houston-based NOV Inc. The oilfield services giant, which provides equipment and services for exploration and production (E&P) companies worldwide, secured higher-than-expected sales in the final three months of 2023. However, revenue still was short of the forecast “due in part to continuing activity declines in North America,” CEO Clay Williams said. “Revenues for North America land declined 5% sequentially, hitting our Wellbore Technology Services businesses disproportionately hard.” Williams discussed the final quarter of 2023 during a recent conference call.

100+ Groups Pressure Banks and Businesses to Stop Backing LNG -- On the heels of the Biden administration pausing approvals for liquefied natural gas exports, over 100 advocacy groups on Monday wrote to major banks, insurance companies, and private equity firms, urging them to also ditch the climate-wrecking LNG industry. "U.S. regulators are finally reevaluating their approach to the dangerous and destructive methane gas industry," said Adele Shraiman of coalition member Sierra Club in a statement. "With the Department of Energy stopping the rubber stamping of new LNG export projects in order to consider their full impact on our climate, communities, and economy, it's time for the financial sector to do the same. The message is clear: There is no place for LNG expansion in a net-zero future." The coalition—whose organizations represent frontline communities, Indigenous land defenders, organizers, researchers, and millions of concerned citizens—called the Biden administration's late January announcement "a critical step to reduce methane emissions, phase down fossil fuels, and protect communities living with industrial pollution.""Liquefied methane gas is toxic for the health of frontline and climate-impacted communities, and a bad investment for banks.""Given the negative impacts of methane gas extraction and export on local communities and the global climate, this decision is morally and scientifically sound," the letters states. "We believe it is now incumbent on financial institutions to align with this decision and to end financing for new and expanding liquified methane gas (LNG) terminals and their parent companies.""In addition to the obvious reputational and climate risks of continuing to expand liquified gas exports, we also urge your company to consider the financial risk," the letters continue. "This decision will have significant impacts on the ability for LNG facilities and their parent companies to move forward with proposed projects still awaiting approval. The future of U.S. exports of liquefied methane gas is in serious doubt and the potential of new facilities quickly becoming stranded assets is real."The coalition pointed to research showing that "the top 60 global banks have provided over $122 billion in lending and underwriting to the world's top LNG companies since 2016," and even customized the letters to individual banks to highlight specific contributions. For example, the groups wrote to Bank of America's CEO that "your bank has one of the highest exposures, providing at least $7 billion to the global LNG sector during this period."The coalition also sent letters to the leaders of Citi, Deutsche Bank,Goldman Sachs, ING, JPMorgan Chase, Mizuho Financial Group, Morgan Stanley, MUFG, Royal Bank of Canada (RBC), Scotiabank, Sumitomo Mitsui Financial Group, and Wells Fargo, as well as insurers and the investment firm Kohlberg Kravis Roberts & Co. "Major fossil fuel financiers like Citi and RBC should read the signs that the fossil fuel era is over, and end their financing for methane gas expansion now," said Hannah Saggau, a senior climate finance campaigner with coalition member Stand.earth. "Liquefied methane gas is toxic for the health of frontline and climate-impacted communities, and a bad investment for banks. It's time for fossil banks like Citi and RBC to stop holding us back from a climate-safe world." "Families and communities that live beside methane flaring, leaks, and even explosions welcome the change in U.S. policy, but it's just the start," Roishetta Ozane, founder of Vessel Project of Louisiana said. "It's now up to the financiers and insurers of LNG to listen to us, hear stories of the impact on our kids' health, and end the financial backing of this dying industry." Other coalition members include 350.org, ActionAid USA, Amazon Watch, Bold Alliance, Catholic Network U.S., Dayenu: A Jewish Call to Climate Action, Earthworks, Friends of the Earth, Gidimt'en Checkpoint, Hip Hop Caucus, Indigenous Climate Action, Leadnow, New York Communities for Change, Oil Change International, Presente.org, Rainforest Action Network, Stop the Money Pipeline, and Third Act. "The world said in Dubai it was time to transition away from fossil fuels—this means that no one should view LNG as safe, either for the climate or as an economic asset," declared Third Act co-founder Bill McKibben, referring to last year's United Nations climate summit. "The world has begun to move, and that move will accelerate."

Biden gas export 'pause' raises hope, concern in US coastal towns -- The U.S. government decision last week to pause new gas-export permits will not remove the massive facility retired oil and gas worker John Allaire sees from his Louisiana property, but it will at least likely halt the plant's planned tripling in size. The export terminal is one of several built in the rural, sparsely populated coastal area over the past decade that have transformed the local economy, but also led to rising protests and unease among residents worried about the environment."Given the jobs, people are ... waiting to see what's going on. But when they see the pollution and flaring that's occurring on an almost daily basis – they see what's happening," said Allaire. The United States last year overtook Qatar as the world's largest gas exporter. That stands at odds with its pledge at last year's COP28 U.N. climate talks to transition "away from fossil fuels in energy systems, in a just, orderly and equitable manner." Seven U.S. gas export terminals are now in operation, with five more set to soon come online, largely in Louisiana and Texas. The gas export terminal near Allaire's property opened in 2022 and today offers a view of hulking storage tanks, gas flares emitting from stacks and marine tankers coming and going.The arrival of the liquid natural gas (LNG) industry around 2015 was seen as a "saviour" for the area's dying offshore oil and gas drilling, Allaire said, but since then it has cut off local access to the sea and dried up tourism. The administration's new temporary freeze, which the government will use to study the sector and its economic and environmental impacts, will affect only facilities that have yet to be permitted. The decision has been applauded by residents such as Allaire, as well as national climate campaigners. But it has also sparked concerns over the potential effect on local economies and workers – and whether there is enough support for communities through a "just transition" from fossil fuel production. "How are we not thinking about entire communities dependent on these industries and how we should support them?" As U.S. gas exports rise, southern Louisiana has become home to three of the country's largest LNG export facilities with several others under construction or proposed. Despite this growth, the full impact of the LNG sector in Louisiana is unclear, with local trade groups and state development officials saying they do not have the data.Still, the sector clearly provides incomes and taxes that are desperately needed in a hard-hit area, said Loren C. Scott, professor emeritus of economics at Louisiana State University. "This is a metro area that is really struggling right now," he said, noting the region has been hit by four major natural disasters in recent years, including Hurricane Laura in 2020 and Hurricane Ida a year later. A decade ago, Scott studied a single large LNG-export facility in Louisiana and found it had a huge economic impact Over eight years of construction, it supported more than 5,600 jobs a year on average, he said, while spurring the creation of more than 16,000 jobs state-wide.Once operational, it employed 640 people and supported 2,800 more."For every new job created at the plant, there are 3.3 jobs created elsewhere in the economy," he said, "in retail, health care, construction."Today, that would translate into around $15 million in local government taxes, he estimated. The LNG sector "is really, really important, and it's very discouraging to see this pause," Scott said. Louisiana Governor Jeff Landry called the pause "a gut punch to our hard-working men and women" in an emailed statement."Anytime a company invests billions of dollars to expand or establish business operations in our state, local governments reap financial benefits. Postponing the deployment of those funds likewise delays the positive ripple effects of new jobs and new spending," the state's economic development office said in a statement.

Cheniere’s Corpus Christi LNG expansion project more than 51 complete - US LNG exporter Cheniere and compatriot Bechtel have completed more than half of the work on the expansion phase at the Corpus Christi LNG export plant in Texas. Cheniere’s Corpus Christi liquefaction plant now has three operational trains with each having a capacity of about 5 mtpa. In June 2022, Cheniere took a final investment decision on the Corpus Christi Stage 3 expansion project worth about $8 billion and Bechtel officially started construction on the project in October the same year. The project was 48.1 percent complete in November last year. It includes building seven midscale trains, each with an expected liquefaction capacity of about 1.49 mtpa.Cheniere’s unit Corpus Christi Liquefaction said in the December construction report filed with the US FERC this week that overall project completion for the Stage 3 project is 51.4 percent.Stage 3 engineering and procurement are 83.7 percent and 72.2 percent complete, respectively, while subcontract and direct hire construction work are 66.9 percent and 11.1 percent complete, respectively, it said.

How the U.S. Became the World’s Biggest Natural Gas Supplier - In just eight years, the United States has rocketed from barely selling any gas overseas to becoming the world’s No. 1 supplier, a remarkable shift that has profited oil and gas companies and strengthened American influence abroad. But climate activists worry that soaring exports of liquefied natural gas could make global warming worse. Last month, the Biden administration said it would pause the permitting process for new facilities that export liquefied natural gas in order to study their impact on climate change, the economy and national security. Even with the pause, the United States is still on track to nearly double its export capacity by 2027 because of projects already permitted and under construction. But any expansions beyond that are now in doubt.At the core of the debate over whether to allow more exports is a thorny question: With governments across the globepledging to transition away from fossil fuels, how much more natural gas does the world need?America’s gas export boom initially caught many policymakers by surprise. In the early 2000s, natural gas was relatively scarce at home, and companies were spending billions of dollars to build terminals to import gas from places like Qatar and Australia.Fracking changed all that. In the mid-2000s, U.S. drillers perfected methods to unlock vast reserves of cheap natural gas from shale rock. At the same time, natural gas prices began spiking elsewhere in the world, especially after Japan shut down its nuclear plants in the wake of the Fukushima reactor meltdown in 2011 and began demanding more fuel. That led to a stunning reversal. American companies, led by Cheniere Energy, began spending billions moreto convert import terminals into export terminals, and shipments of U.S. gas to other countries began to surge. Natural gas is most easily transported by pipeline. To send it across oceans, the gas must be chilled to 260 degrees Fahrenheit below zero, turning it into a liquid. The process of making and shipping liquefied natural gas adds complexity and cost, but if the difference between U.S. natural gas prices and overseas prices is big enough, it is profitable. “Production just keeps growing in the United States, which keeps prices low. And then we keep seeing major demand growth in the rest of the world.” Europe has become the biggest importer of American gas in recent years, enabling the continentto slash by more than half its reliance on Russian gas since Russia’s invasion of Ukraine in 2022. In the future, Europeis expected to curb its appetite for gas by adding more renewable energy sources like wind and solar power. The main growth markets for natural gas are expected to be fast-growing Asian countries such as China, India, Pakistan, Bangladesh and Vietnam that want to use the fuel for electricity, heating or industrial purposes. But as U.S. exports keep skyrocketing, critics have raised concerns about the climate change impact of transporting and selling more gas around the world. The last time the Energy Departmentstudied this issue, in 2019, it concluded that U.S. liquefied natural gas often produced fewer greenhouse gas emissions than other types of coal or gas used around the world. That meant that more exports could actually be beneficial for climate change if U.S. gas replaced those other fossil fuels. (When gas is scarce, some countries likePakistan and Bangladesh have recently opted to burn more coal instead.) But some environmentalistshave disputed those conclusions, arguing that the analysis didn’t fully account for all the planet-warming methane leaks that can accompany natural gas production, and that it didn’t study whether a glut of gas might displace cleaner renewable energy rather than coal. The Energy Department is expected to study these questions while it puts permits for new projects on hold. In the meantime, the U.S. gas boom is far from over, even with the permitting pause. Since 2016, U.S. energy companies have built seven large facilities in Texas, Louisiana, Maryland and Georgia that can export around 11.4 billion cubic feet of liquefied natural gas per day, according to the Energy Information Administration. Another five projects along the Gulf Coast are already permitted and under construction and will be able to export an additional 9.7 billion cubic feet per day by 2027 — nearly doubling America’s export capacity. Three more facilities are currently being built in Mexico that will receive U.S. gas by pipeline and then ship it abroad.

LNG Export Pause Facing Scrutiny as GOP Opposition Mounts - As congressional pushback against the Biden administration’s pause of LNG export permits heats up, EQT Corp. CEO Toby Rice said U.S. producers and exporters already have work ahead to abate the potential damage to project development. Rice joined a panel of witnesses Tuesday during a House Energy and Commerce subcommittee hearing. It was one of the first public debates between lawmakers and policy experts on the Department of Energy (DOE) decision to review the authorization process for liquefied natural gas exports since the move was announced in late January. For more than three hours, House members dissected the authorization process and whether DOE’s export curtailment was warranted or a potential attack on the ability to develop domestic LNG projects.

Red states build legal case against Biden LNG pause - Twenty-three Republican-led states are teeing up their legal claims against the Biden administration’s decision to halt overseas shipments of liquefied natural gas.In a Tuesday letter to President Joe Biden and the Department of Energy, the attorneys general of Louisiana, Texas and other states accused the administration of ushering in a “surprise freeze” that bows to the pressure of young climate activists, harms the economy and jeopardizes national security.“Instead of addressing America’s real energy challenges,” the states wrote, “your administration has decided to double down on a reckless environmental agenda through this TikTok-inspired ‘pause.’”In January, DOE announced that it would temporarily stop approving LNG exports while it studies the climate and economic impacts of shipping the superchilled gas to countries that do not have a free-trade agreement with the U.S. The department cited growing concerns over whether LNG exports are in the public interest, a fundamental consideration in DOE approvals.Red states in their letter to DOE invoked the “major questions” doctrine, a legal theory that says Congress must clearly authorize federal agencies to tackle politically and economically important issues. The Supreme Court has used the doctrine to invalidate an Obama-era rule governing climate pollution from power plants and the Biden administration’s plan to forgive $400 billion in student loans.“[O]ur allies rely on LNG exports for their energy needs,” the states wrote. “And meeting this demand requires new export terminals leading to billions of dollars in capital expenditures and tens of thousands of new jobs.”They added: “The Department’s pause jeopardizes all this work — all without the Department pointing to any ‘clear congressional authorization’ to issue this pause in the first place.”The state attorneys general also wrote that Congress has not authorized the department to issue “blanket denials” of export permits. Instead, the White House pointed back to Biden’s climate executive order.“But that order is not sufficient,” the states wrote.They added that the Natural Gas Act requires DOE to approve LNG export applications to non-Free Trade Agreement nations unless the agency determines the shipments are not in the public interest.The statute “creates a ‘general presumption of favoring [export] authorization,’” the states wrote, quoting a 1982 ruling from the U.S. Court of Appeals for the District of Columbia Circuit.“In short,” the states wrote in their letter, “you are reconstructing the NGA’s regulatory structures.”The states also argued that the pause violates notice-and-comment requirements under the Administrative Procedure Act, as well as the statute’s protections against unreasonable regulatory delays.While DOE’s pause only applies to pending export applications, the move is expected to ripple through legal challenges against existing projects.

What Does A Pause of LNG Export Authorizations Mean for the U.S.? Listen Now to NGI’s Hub & Flow - Natural Gas Intelligence --Click here to listen to the latest episode of NGI’s Hub & Flow podcast, in which NGI’s Jacob Dick explores the market implications of the Biden administration’s pause of new LNG export authorizations with Rapidan Energy Group’s Alex Munton. NGI Podcast. After the Jan. 26 announcement that the Department of Energy would be reviewing its policies for authorizing liquefied natural gas export projects, speculation has swirled about what that could mean for the industry and global supply. Munton, director of Rapidan’s global gas service, discusses what the pause means, why it happened and which developing projects might be the most impacted.

Is LNG dirtier than coal? It's complicated. - The White House decision to pause approvals of liquefied natural gas terminals has fed a contentious debate: Is LNG dirtier than coal? Many environmentalists argue that it is, challenging the conventional wisdom that gas is a sort of diet fossil fuel that could help reduce climate pollution as the energy system shifts to renewable power. But the picture is more complicated than that, say many researchers who study the carbon content of fuels. Gas — and LNG exports in particular — most likely contributes more to planetary warming than previously thought, but it still can reduce greenhouse gas emissions compared to coal in some instances. The idea is a bombshell in the world of energy politics, where gas has long been touted as having about half as many emissions than coal. In December 2023, 170 climate scientists signed onto a letter asking President Joe Biden to reject plans to build more LNG export terminals, mostly along the Gulf of Mexico, on the grounds that liquefied gas is “at least 24 percent worse for the climate than coal.” Biden’s announcement last month to temporarily halt the approval of future projects until it examines their climate impact took a step in that direction — and fanned the flames of the gas versus coal debate. The argument that LNG is dirtier than coal runs against previous academic and government studies, which have found that LNG can reduce planet warming emissions. Claims to the contrary are often based on a forthcoming Cornell University study, which has yet to be peer reviewed. Robert Howarth, a professor at the university who wrote the study, said previous research about LNG’s climate impacts failed to account for the carbon dioxide emissions associated with liquefying the gas, a process that requires chilling it to extremely cold temperatures. “We need to move away from all fossil fuels. But the U.S. is hugely increasing our production of natural gas. We’re the world’s largest producer of natural gas. We were not 10-15 years ago. We are the largest exporter of natural gas. We didn’t export any 10 years ago,” Howarth said in an interview. “It’s totally the wrong trajectory.”His assertions come as carbon emissions in the U.S. power sector fell by a third between 2005 and 2022, thanks in large part to a shift from coal to gas-fired power generation.But the climate advantages decrease when methane — the primary component of gas — is flared, vented or leaked into the atmosphere at wellheads, pipelines and other gas industry infrastructure.Comparing the greenhouse gases that are released by coal and gas is complicated because the characteristics of the emissions are different. Methane is a much more powerful greenhouse gas in the short-term, but it breaks up in the atmosphere after several decades, whereas carbon dioxide can remain in the air for more than a century.Howarth raised alarms about the climate downside of gas in 2011, when he co-authored a study that found that as much as 7.9 percent of methane associated with gas production was vented or leaked into the atmosphere. His numbers were far bigger than government estimates and, he argued, would make gas a greater contributor to warming than coal, particularly over the short-term.Subsequent studies found that methane leaks were bigger than the government had suggested, though few duplicated the numbers put forward by Howarth. A peer-reviewed 2018 Environmental Defense Fund study estimated that 2.3 percent of methane entered the atmosphere during gas production, or 60 percent higher than EPA estimates. A peer-reviewed 2020 study estimated that methane emissions in the Permian Basin, America’s largest oil-producing region where flaring is common, were 3.3 percent. A peer-reviewed 2022 EDF study estimated that low producing oil and gas wells are a particularly large source of methane emissions, with leakage rates of 11 percent.Industry groups have frequently criticized Howarth’s work as politically motivated, saying his numbers are inflated.The benchmark study for LNG’s climate impact is a 2019 analysis conducted by the Department of Energy. It found that the life-cycle emissions of U.S. LNG that’s exported to Asia ranged from 54 percent to 2 percent less than local coal over a 20-year period. In Europe, those figures ranged from 56 percent less than coal to 1 percent more than coal. A peer-reviewed 2015 Carnegie Mellon University study echoed those findings. It found that LNG emitted 32 percent less than coal when used for power generation. But it found LNG emissions were 4 percent higher than coal when used as a substitute for industrial heat over the short-term.The DOE study assumed methane leaks from the U.S. gas supply chain were 0.7 percent. To critics like Byers, that is evidence that Howarth’s numbers are inflated. But his supporters say it shows that DOE needs to update its assumptions. Howarth’s newest analysis assumes a leakage rate of 2.6 percent. Carnegie Mellon researchers, for their part, assumed a 3 percent leakage rate for U.S. gas production.

Texas Hits Record Natural Gas, Oil Production Despite Sharply Lower Prices - Texas achieved record natural gas and oil production in 2023 despite lower prices for both commodities, falling rig counts, and fewer drilling permits issued versus 2022, said the Texas Alliance of Energy Producers. The group, which represents the state’s independent exploration and production (E&P) firms, said its Texas Petro Index (TPI) fell in December for the 11th straight month to 154.4, down 13.4% year/year. The TPI is a monthly measure of growth rates and cycles in the state’s upstream oil and gas economy, based on indicators including wellhead commodity prices, drilling permits, well completions, production and employment.

How an Oklahoma earthquake showed danger remains after years of quakes becoming less frequent (AP) — After a dramatic spike in earthquakes in the early 2010s, state regulators in Oklahoma began taking steps to limit the injection of wastewater from oil and gas extraction deep into the ground. As a result, the number of earthquakes, particularly large ones, declined steadily over the years.But a couple of larger quakes in recent weeks, including a 5.1-magnitude temblor over the weekend that was one of the strongest in years, is a reminder of the danger after the last one shook an area dotted with such injection wells.The quake would be tied as the fourth-strongest in Oklahoma history if seismologists maintain the rating, according to Oklahoma Geological Survey data. Here’s the latest on what’s happening in Oklahoma.

US Diesel Supply Tightens As Manufacturing Comes Roaring Back - U.S. manufacturers are recovering from an extended slump in activity and their energy consumption is about to start rising, with the risk of tightening an already tight diesel market.Reuters market analyst John Kemp reported the index for manufacturing activity had improved to 49.1 for January from 47.1 in December. The latter figure was the highest since October 2022, Kemp noted in his report, adding that the trend signaled a return to growth.As manufacturing activity improves, however, diesel demand begins to increase in lockstep. This might be problematic in case of a fast recovery because distillate inventories in the U.S. remain below the five-year average, by 5%, per the latest weekly petroleum report of the Energy Information Administration.The state of distillate inventories, with the total as of January 26 standing at 10 million barrels below the 10-year seasonal average, per Kemp, is better than it was in late 2023. At that time, distillate stocks were 19 million barrels below the 10-year average. Even with the boost in stockpiles, the distillate supply balance remains elusive.This means that if manufacturing activity continues to improve, it will soon enough lead to higher fuel prices, which would in turn pressure that same manufacturing activity before too long, constraining any growth.Diesel prices are already on the rise, both thanks to the rebound in manufacturing activity and a refinery outage. BP’s whiting refinery in Indiana—the largest inland refinery in the U.S.—was shut down last week after a power outage. An analyst has said the return to operation could take as little as a week but there is no guarantee it will be so quick. BP has not given any timeline for the refinery’s return to operation.The outage comes on the heels of several weeks of lower fuel production across the country amid frigid winter weather, Bloomberg noted in a recent report. Supply, therefore, remains precariously close to a shortage.

Oil market will face supply shortage by end of 2025, Occidental CEO says - The oil market will face a supply shortage by the end of 2025 as the world fails to replace current crude reserves fast enough, Occidental CEO Vicki Hollub told CNBC on Monday. About 97% of the oil produced today was discovered in the 20th century, she said. The world has replaced less than 50% of the crude produced over the last decade, Hollub added. “We’re in a situation now where in a couple of years’ time we’re going to be very short on supply,” she told CNBC’s Tyler Mathisen at the Smead Investor Oasis Conference in Phoenix. For now, the market is oversupplied, which has held oil prices down despite the current conflict in the Middle East, Hollub said. The U.S., Brazil, Canada and Guyana have pumped record amounts of oil as demand slows amid a faltering economy in China. But the supply and demand outlook will flip by the end of 2025, Hollub said. “The market is out of balance right now, but again, this is a short-term demand issue,” Hollub said. “But it’s going to be a long-term supply issue,” she said. OPEC is forecasting global oil demand will grow by 1.8 million barrels per day in 2025 on a solid economy in China, outstripping crude production growth of 1.3 million barrels per day outside the cartel. The forecast implies a supply deficit unless OPEC ditches current production cuts and boosts its own output. West Texas Intermediate and Brent futures finished out 2023 more than 10% lower as record production in the U.S. and a weakening economy in China weighed on prices. U.S. crude and the global benchmark are up more than 1% so far this year with WTI on Monday settling at $72.78 a barrel and Brent at $77.99 a barrel. Hollub told CNBC in December that Occidental expects WTI to average around $80 in 2024.

I-85 South closed in Guilford County for oil spill cleanup - State Highway Patrol has confirmed that all southbound lanes of Interstate 85 in Guilford County at mile marker 113 (NC-62 exit) are temporarily closed for crash cleanup involving an oil spill. Troopers say that all traffic is being rerouted onto the exit ramp for NC-62, running parallel to I-85, and then rejoining the highway. Department of Transportation has been alerted to this incident. Stay tuned for any updates about this cleanup.

North Carolina: Triad driver charged after Interstate 85 crash caused oil spill — A driver has been charged after causing an oil spill and sending someone to the hospital after a crash, according to troopers with the North Carolina State Highway Patrol. On Wednesday, just before 12:30 p.m., the North Carolina State Highway Patrol responded to the report of a crash that occurred on Interstate 85 South near NC 62 in Guilford County. A tractor-trailer and a passenger car were traveling south on I-85. The tractor-trailer failed to reduce speed and hit the passenger vehicle. Oil from the engine area of the tractor-trailer spilled onto the interstate. Emergency crews closed all lanes of I-85 South near NC 62 until the surface could be treated with sand by the North Carolina Department of Transportation. The driver of the tractor-trailer was uninjured, but the driver of the passenger vehicle suffered minor injuries and was transported to a nearby hospital. The driver of the tractor-trailer was charged with failure to reduce speed. All southbound lanes of I-85 near NC 62 were closed for about two hours during the investigation.

Portion of Panama Lane remains closed due to oil spill: BFD — A pipeline discharging crude oil at the intersection of Panama Lane and Buena Vista Road is under investigation as officials work to determine the cause of the leak, according to the Bakersfield Fire Department. Fire officials said it’s too early to determine what caused the leak, which was reported Monday, Feb. 5, around 3 p.m. The pipeline has since been isolated and excavation is underway to pinpoint the source of the leak. Showers and thunderstorms expected in Kern County’s forecast On Tuesday, fire officials determined there was no threat to public health. However, westbound Panama Lane is closed from Buena Vista Road to Turia Way. Buena Vista Elementary School, located near the intersection, will not be impacted by the spill. Oil spill response teams are also on scene cleaning up and monitoring the area to ensure the safety of the community near the work zone. BFD officials said multiple agencies are involved in determining ownership of the pipeline, but Kern Energy is taking the lead in the investigation.

Great Lakes Moment: Lest we forget – A history of Detroit River oil pollution - During the 1940s, Detroit River oil pollution worsened when metropolitan Detroit became the “arsenal of democracy,” and no environmental laws existed. At that time, the nation’s sole purpose was to win World War II, and Detroit’s role was to help supply implements of war to achieve the Allied victory. According to the U.S. Department of Health, Education, and Welfare, massive amounts of oil and petroleum products totaling 5.9 million gallons per year were released into the Detroit River from 1946 to 1948. One of the consequences of this oil pollution was waterfowl mortality. Oil can mat the feathers of waterfowl, reducing feather-insulating properties, which can result in death due to exposure to cold water. Oil on the feathers can also result in buoyancy loss, leading to drowning. In 1948, 11,000 waterfowl died from this oil pollution. By the 1960s, water pollution of the Detroit River was rampant. Industry was king and provided good-paying jobs. As a result, citizens became indifferent to water pollution, seeing it as just part of the cost of doing business. Even though oil discharges declined substantially in the 1960s, they remained a significant problem.In 1961, the U.S. Department of Health, Education, and Welfaremeasured 158,000 gallons of oil discharged into the Detroit River annually. This volume was still substantial because one gallon of oil can pollute a million gallons of water. Oil pollution impacts continued to occur, with the Michigan Department of Natural Resources reporting 12,000 and 5,700 waterfowl deaths due to oil pollution during 1960 and 1967, respectively. It was during the 1960s that the Federal Water Pollution Control Administration (the predecessor of the U.S. Environmental Protection Agency) characterized the Detroit River as one of the most polluted rivers in the United States. During this decade, industries discharged oil and other petroleum products, heavy metals, and organic compounds like polychlorinated biphenyls (PCBs) like those immediately preceding it.They were killing organisms living on the river bottom, causing cancer in bottom-feeding fish, and making game fish unsafe to eat. Indeed, the lower end of the Rouge River – a tributary of the Detroit River – was so polluted with oil and other petroleum products that it caught on fire on October 9, 1969. On that infamous day, a welder’s torch accidentally dropped and ignited oil and oil-soaked wooden debris floating on the lower river. Flames climbed 50 feet into the air, and the U.S. Coast Guard had to halt traffic on the river. It would take ten fire engines and the Detroit fire boat named the John Kendall to contain the fire and let it burn out. “It seemed that the Detroit River always had an oil sheen on it. As a result, the river had its own unique oil smell during those years – sort of like a gas station,” said Jim Gorris, the retired mayor of Gibraltar, a small community located at the mouth of the Detroit River. “When fishing offshore, it was more of a faint smell, but if we were fishing from shore or along it, the rocks would be coated in oil and the smell would be stronger – a more pungent, oily-like smell of hydrocarbons.” Because of the substantial oil pollution, oil would accumulate on their boat hull, requiring a thorough cleaning after each fishing trip. Gorris said: “Even our fishing lines and reels would get coated with oil and had to be periodically cleaned.”“When we returned from rowing practice or a regatta to the Ecorse Boat Club, we would have to clean the oil off the hull and wipe off the oil on our oars.” River monitoring has since documented substantial improvements over the last more than 50 years, including reductions in critical pollutant loadings, upgraded municipal wastewater treatment from primary to secondary treatment with phosphorus removal, reduced contaminant burdens in levels in fish and wildlife, remediation of some contaminated sediment hot spots, and enhancement or rehabilitation of targeted habitats. This improvement in the river’s health has, in turn, resulted in an ecological revival, including the return of bald eagles, peregrine falcons, osprey, lake sturgeon, lake whitefish, walleye, beaver, and river otter. Oil spill data collected by the U.S. Coast Guard and the U.S. Environmental Protection Agency show a substantial reduction in the volume of oil spilled; however, there are still years when substantial oil spills occur. For example, a more than 100,000-gallon oil spill occurred in the Rouge River in 2002, resulting in a $7.5 million cleanup on the lower Rouge River and both the Canadian and American sides of the Detroit River. Ten ducks and geese died as a result of this oil spill. While this number may seem insignificant compared to years past, it reminds us that oil pollution continues to threaten waterfowl. Although there is no questioning the improvement in the Detroit River, much remains to be done to reach long-term ecosystem goals. Key challenges include preventing pollution, remediating contaminated river sediments and brownfields that are stymying further improvement in ecosystem health, addressing stormwater and sewage overflows, mitigating and adapting to climate change, rehabilitating and conserving habitats, and preventing the introduction of invasive species.

How the Oil Industry Indefinitely Delays Cleaning Up Oil and Gas Wells in California – DeSmog - A new report from the Sierra Club has found that more than 40,000 unplugged oil and gas wells are sitting idle across California — potentially leaking planet-warming gas and unsafe chemicals, but no longer actively extracting fossil fuels. In theory, it shouldn’t be possible to leave so many wells in that neglected state. Companies that operate in California are required to safely “abandon” wells that are no longer in use, removing pumpjacks and sealing off openings forever with concrete. And yet, the report found that more than 40 percent of unplugged wells in California haven’t produced oil or gas in at least two years, which is the state’s formal criteria for an “idle” well. According to Sierra Club’s review of California Geologic Energy Management Division (CalGEM) data, only three companies are responsible for most of these wells: Chevron, Aera Energy, and California Resources Corporation. And while operators do pay modest fees for letting their wells stay idle so long, aggressive industry lobbying has helped to keep those penalties as low as possible. It didn’t have to be this way, said Jasmine Vazin, a Los Angeles-based senior campaign representative at the Sierra Club and report co-author. She pointed out several other states with stronger rules: in Colorado and North Dakota, for instance, companies are given six months to shut wells once they’ve been idle for a year. “Compared to other states, it’s just unacceptable,” she said. Even with their productive lives behind them, these sites can still pose significant risks. “If not properly plugged and abandoned, these wells and facilities can contaminate waterways and soil, serve as a source of climate and air pollutants, and can present physical hazards to people and wildlife,” CalGEM writes in a 2023 legislative report. Unplugged wells frequently continue to emit methane, a greenhouse gas with a warming impact many times that of CO2. They’re also known to release benzene, a well-established carcinogen, as well as leak other hazardous chemicals like uranium and lead.Plugging a well is a complex process that can cost over $100,000 per site — and many California operators have simply opted to defer their obligation by paying fees as low as a few hundred dollars per year. Some companies manage to avoid footing the bill forever. Of the roughly 40,000 idle wells, about 5,000 are likely orphan wells, deemed by the state to no longer have financially viable operators. Orphan wells become the state’s responsibility, putting taxpayers on the hook for the cost of cleaning up the oil industry’s mess. For the remaining tens of thousands of idle wells, the fees that companies do pay are so minimal that those that can afford to close them down routinely choose to keep them unplugged for long periods instead. The Sierra Club analysis revealed that ownership of these California wells is intensely concentrated, with two-thirds owned by just three well-heeled companies.

SLB, Halliburton and Baker Hughes Tout International and Offshore Growth for 4Q - The top executives of SLB Ltd., Halliburton Co. and Baker Hughes Inc. said during recent quarterly calls that they see years of growth ahead for the oil and natural gas industry as they lean into efficiencies and new technologies. SLB was the first oilfield services (OFS) giant to roll out fourth quarter results, followed by Halliburton Co. and Baker Hughes Co. Each has a considerable presence in Latin America, both onshore and offshore, where they serve exploration and production (E&P) customers and an evolving mix of clients in the industrial energy technology sector. SLB, the world’s largest OFS provider, reported that the international markets are now the momentum driver. Most of the revenue is linked to strong gains in deepwater and shallow water activity.

Oil Giants Pump Their Way to Bumper Profits - Exxon Mobil and Chevron, the largest U.S. energy companies, on Friday reported sizable profits for the final quarter of last year, showing that the oil and gas industry remained robust at a time of doubts because of climate change concerns. The companies’ earnings were down from the bonanza year of 2022, when a surge in prices pushed up profits, but were otherwise the strongest in recent history. Exxon earned $7.6 billion in the fourth quarter of 2023, a 40 percent fall from a year earlier. For all of 2023, the company reported $36 billion in earnings, compared with $55.7 billion in 2022. Before that, the last time Exxon made more than $30 billion in a year was in 2014. Chevron reported earnings of $2.3 billion in the fourth quarter, down from $6.3 billion a year earlier. The change was due to lower commodity prices and write-downs, especially in the company’s home state, California. For the year, the company made $21.4 billion, down from $35.4 billion in 2022 but, like Exxon, otherwise its biggest annual profit in a decade. The companies generated enough cash to fund big dividends and share buybacks. Such payouts are what investors now look for in the industry, analysts say. “In 2023, we returned more cash to shareholders and produced more oil and natural gas than any year in the company’s history,” Mike Wirth, Chevron’s chief executive, said in a statement. The company said it bought back 5 percent of its outstanding shares during the year. 6:57 PM

Canadian Natural Gas Market Mirrors United States – Plump Production, Stout Storage and Low Prices - The state of Canada’s natural gas market largely reflects that of the United States: robust production, elevated storage levels and suppressed prices. To be sure, the Arctic blast in mid-January that briefly bolstered heating demand and caused wellhead freeze-offs that slowed production in the Lower 48 also gave the Canadian market a boost. Cash prices, especially, rallied on both sides of the border. NGI’s Spot Gas National Avg. reached an early 2024 high of $16.77/MMBtu in the second week of January, more than five-fold higher than the lows of this winter. Western Canadian cash prices topped the $16 level that week as well. And, of course, the winter season is far from over. But the weather warmed across North America in late January and, with forecasts for more of the same in northern markets during the first half of this month, prices swiftly retreated as traders focused anew on supply/demand imbalance and strong levels of gas in storage. NGI’s National Avg. for the Lower 48 stood at $2.290 on Monday. In Canada, NOVA/AECO C averaged C$1.965, while Westcoast Station 2 averaged C$1.650. The Canadian dollar is worth about 74 cents in the United States. “After exiting 2023 with more than 700 Bcf of gas in storage (the highest year-end level since at least 2017), Winter Storm Gerri brought higher demand in Canada, supply freeze-offs and growing exports to the U.S. to reduce Canadian storage off historic highs,” EBW Analytics Group analyst Eli Rubin said of late January conditions. “Still, Canadian storage remains 158 Bcf above year-ago levels and 93 Bcf above the five-year average and is poised to recover surpluses amid extremely mild near-term weather.” Lofty Canadian inventories remain “a bearish influence for Nymex gas prices,” Rubin said. If U.S. prices were to rally in late winter, “a flood of Canadian imports” in the Northwest “could quickly quell upside” for futures and cash prices at Malin and other western American hubs. Henry Hub futures already are under pressure. The prompt month contract on Monday closed up three-tenths of a cent at $2.082. But it was down about 20% from year-earlier levels. Following the January surge of frigid air, a government report also showed a huge storage withdrawal in the Lower 48. The U.S. Energy Information Administration (EIA) printed a draw of 326 Bcf for the week ended Jan. 19. The storage pull easily eclipsed the five-year average decrease of 148 Bcf and marked the third-largest on record. EIA printed four consecutive triple-digit storage increases. After all that, however, Lower 48 storage was still 5% above the five-year average at the end of January. In the Mountain West, stocks were 35% ahead of historical norms, and in the Pacific region, inventories were ahead 12%. Based on that and near-record U.S. production, markets in the West have no need for increased imports from Canada, as Rubin noted. At its January low, total U.S. production dropped close to 90 Bcf/d, down from the near-record highs around 106 Bcf/d at which output started 2024, according to Wood Mackenzie data. Production has since rapidly recovered and hovered just shy of 106 Bcf/d on Tuesday. Canadian production also hit a record near 19 Bcf/d late in 2023, according to RBN Energy LLC, and it has held strong early this year, aside from the January freeze. “Any way you cut it, we have plenty of supply right now,” Paragon Global Markets LLC’s Steve Blair, managing director of institutional energy sales, told NGI. Against that backdrop, bulls in the Canadian market – like the United States – may have to wait for coming LNG expansions to come to fruition later this year, including LNG Canada, and in following years. “Given that the Canadian natural gas market was already oversupplied and struggling with record-high gas storage levels as winter approached, even the most intense cold blast in mid-January wasn’t enough to return the supply/demand balance north of the 49th parallel to anything near normal,” RBN analyst Martin King said. “Being dependent on both a cold winter and strong gas exports to the U.S. to help balance out its natural gas market, the Canadian gas market has been put through the wringer,” King added. Even after the January chill delivered some relief, it remains “mired in a modest oversupply while still dealing with very high storage levels for this time of year.”

Oil spills and fading glaciers: a beautiful world in peril – in pictures | (14 photos)| The Guardian -- A huge retrospective of Canadian photographer Edward Burtynsky’s work showcases the terrifying, but oddly beautiful marks we can leave on the planet A new exhibition celebrates the four-decade career of world-renowned photographic artist Edward Burtynsky, who has dedicated his practice to bearing witness to the impact of human industry on the planet. Burtynsky: Extraction/Abstraction is at Saatchi Gallery, London from 14 February until 6 May 2024. The exhibition will feature 94 of Burtynsky’s large-format photographs as well as 13 high-resolution murals, and the European premiere of Burtynsky’s multimedia piece, In the Wake of Progress In the Wake of Progress will feature 94 of Burtynsky’s large-format photographs as well as 13 high-resolution murals, and an augmented reality (AR) experience. The Exhibition will use stunning imagery to explore how humanity impacts the planet and invites viewers to consider how we can find a sustainable way to live in the future. “With stinging irony and unwavering technical mastery, Burtynsky’s pictures confront our complacency and trouble our arrogance precisely by flattering our increasingly devastated biosphere with ravishing pictures.” Burtynsky’s aerial lens captures the pristine grandeur of the Coast Mountains of British Columbia while also highlighting the pressing issue of glacier retreat due to global warming. To coincide with Saatchi Gallery’s retrospective, Flowers Gallery also presents a solo exhibition. Edward Burtynsky – New Works runs from 28 February until 6 April 2024 New Works offers a compelling journey into the intersection of nature and industry, capturing the awe- inspiring beauty and the environmental consequences of human industrial activities. This exhibition brings together a selection of Burtynsky’s recent works, focusing on three geological themes: Coast Mountains in British Columbia, Canada; erosion in Türkiye; and the coal mines in Australia. Erosion Control #2, Yesilhisar, of Central Anatolia, Turkey, 2022 The Flowers exhibition brings together a selection of Burtynsky’s recent works, focusing on three geological themes: Coast Mountains in British Columbia, Canada; erosion in Turkey; and the coal mines in Australia Share on Facebook Share on Twitter His photographs of Turkey reveal the profound impact of erosion on the terrain Burtynsky’s images of the world’s largest coal port, dominating the shores of Newcastle, unveil the stark and expansive landscapes and the environmental implications of the global energy demand. His work serves as a critical reminder of what is at stake and the essential role that art can play in raising ecological awareness Through a deep historical understanding of image-making, and a mastery of the photographic medium, Burtynsky invites viewers to look at places that exist beyond our common experience, places that satisfy our wants and needs in the present while they determine the future of our habitat. Paired with the serious ecological concern that drives Burtynsky’s creative process is an equally compelling exploration of the strangely beautiful marks industry leaves on the canvas of the Earth Edward Burtynsky: ‘I have spent over 40 years bearing witness to the ways in which modern civilisation has dramatically transformed our planet. At this time, the awareness of these issues presented by my large-format images has never felt more urgent. I hope the exhibition experience will continue to provide inflection points for diverse conversations on these issues and move us all to a place of positive action’ A presentation of Burtynsky’s most ambitious project to date — In the Wake of Progress — will be a special feature of the Saatchi exhibition. This 22-minute multimedia experience, co-produced by legendary music producer Bob Ezrin (known for his work with Pink Floyd, Andrea Bocelli, Peter Gabriel, Taylor Swift and many others), will immerse audiences in the story of human industry’s impact on Earth, told through artistry and scale, urging us to rethink our legacy and seek a more sustainable future. Forty years in the making, In the Wake of Progress combines the most powerful photographs and film footage of Burtynsky’s career, choreographed to a compelling award-winning original score.ITWP Highlight Reel: https://vimeo.com/808786392/61d7e2180f?share=copy A never-before-seen element in this exhibition, referred to as the ‘Process Archive’ will also showcase Burtynsky’s navigation through each of the technological shifts in the photographic medium that have occurred during his career. The exhibition will also highlight local and national organisations that are making positive contributions to the areas of sustainability, biodiversity loss, conservation and climate change through a dedicated interactive space and connected online materials

Will U.S. Export Permit Freeze Impact Booming Mexico Natural Gas Market? Listen Now to NGI’s Hub & Flow - Natural Gas Intelligence -- Click here to listen to the latest episode of NGI’s Hub & Flow, which spotlights the latest developments in Mexico’s natural gas market. NGI Podcast. At a recent energy conference in the booming border town of Monterrey, NGI Mexico Senior Editor Christopher Lenton was among panelists exploring the changing dynamics of the Mexico natural gas market. In this podcast, NGI North America Senior Editor Andrew Baker interviews Lenton on the main takeaways from the conference from his viewpoint along with major industrialists, businessmen, traders and government officials in Mexico. They discuss the upcoming election in Mexico, the overall mood in the country, how the market has changed under the six years of President Andrés Manuel López Obrador, and how the U.S. pause on export licenses for...

Tobago coasts in danger after sunken boat causes oil spill - Trinidad Guardian - Officials are racing against time to prevent a mix of oil and fuel from reaching the coasts of Tobago, following the capsizing of an unidentified vessel in waters off the island yesterday. In an emergency media conference, Tobago House of Assembly Chief Secretary Farley Augustine explained that oil had been spotted hundreds of metres away from the overturned vessel, approximately 200 metres south of Cove at Canoe Bay. Tobago Emergency Management Agency (TEMA) CEO Allan Stewart said the oil had moved from Canoe Bay, heading northwest through Little Rockley Bay near Lambeau and into Rockley Bay, Scarborough, spanning just over eight kilometres. Clean-up efforts began yesterday afternoon through collaboration with TEMA, the Ministry of Energy and Energy Industries, which is the custodian of the National Oil Spill Contingency Plan and leads the Incident Command Team in the event of a major spill, and Kaizen Environmental Services, a company that specialises in oil spills. According to Augustine, Kaizen, which has equipment stored in Scarborough in the event of a spill, gave TEMA and the THA the green light to use the equipment “as we try our best to mitigate against further environmental damage from the oil spill.” He added that TEMA has in stock and will use sphagnum peat moss, which encapsulates the crude oil that floats on the water’s surface and can subsequently be recovered with a large net. Other equipment and service providers have been engaged to respond to the spill and capsized boat. “I am advised that we have some specialist divers on their way to Tobago. However, it will be relatively dark by the time they get here with their vessel. So, we had to go ahead and utilise experienced and PADI-certified divers from right in Tobago to begin some of the discovery for us. Because time is of the essence,” Augustine said. According to Augustine, Tobago’s Department of Natural Resources and the Environment coordinated the response from land, while the T&T Coast Guard coordinated the response at sea “to ensure that we can mitigate against further environmental damage.” The boat, which has unidentified origins and cargo, capsized sometime overnight Tuesday into yesterday and is stuck on Cove Reef, prompting concerns about the reef’s health as oil leaks.

BP Sees Gains in Global Trading Arm and Forecasts LNG Supply to Grow - A new executive team has taken the reins at BP plc, but the strategy remains focused on providing energy solutions while remaining pragmatic because the world continues to need natural gas and oil, CEO Murray Auchincloss said. Auchincloss discussed the London-based supermajor’s fourth quarter and full-year results during a conference call Tuesday. Formerly CFO, Auchincloss was tapped to take over late last year following Bernard Looney’s resignation. Newly appointed CFO Kate Thomson joined the CEO on the call. Transitioning BP to become a full-service “integrated energy company” (IEC), versus its long-time moniker as a traditional “international oil company” is still on plan, Auchincloss told investors.

US to Increase Military Aid to Guyana Amid Tensions With Venezuela - The US will increase military aid to Guyana amid tensions with neighboring Venezuela over the disputed Guayana Essequibo region, The Associated Pressreported on Monday.The AP report did not detail how much the US will provide but said the US will help Guyana acquire new helicopters, a fleet of military drones, and radar technology for the first time.In 2023, the US provided Guyana with about $2.7 million in total aid, including over $400,000 from the Pentagon’s International Military Education & Training program, which trains foreign militaries. Guyana is a small country with a population of only around 800,000. According to AP, the Caribbean nation’s military numbers less than 5,000 troops.News of the new military aid came after US Deputy National Security Advisor Jon Finer met with officials in Guyana. The US has been stepping up military cooperation with Guyana after Venezuelans voted in a referendum late last year to make the Essequibo region a Venezuelan state.Venezuela and Guyana agreed in December not to use military force to resolve the dispute, but tensions remain high as Venezuela deployed 6,000 troops to its border with Guyana.The resource-rich border territory is under Guyana’s control, but Venezuela has always disputed an 1899 American-British tribunal ruling that Essequibo belonged to the British Empire, which controlled Guyana at the time. In 1966, the opposing sides signed the Geneva Agreement that said they would pursue a mutually satisfactory solution to the dispute.Tensions have risen over Essequibo in recent years as more oil discoveries have been made. The American energy giant ExxonMobil discovered massive oil reserves off the coast of Guyana in waters claimed by Venezuela and has been involved in a major offshore drilling project.

Lithuania Probes Baltic Sea Oil Spill -Lithuania said on Thursday it had been informed by a subsidiary of Polish oil refiner Orlen PKN of an oil spill in the country's waters in the Baltic Sea and had launched a probe into the incident. Lithuania's Environmental Protection Department said in a statement the subsidiary, Orlen Lietuva, had informed it on Wednesday of a 300-litre spill near the Butinge oil import terminal in connection with the loading of a tanker. It said an inspection by Lithuania later on Wednesday showed the spill measured nine kilometers by two kilometers with at least 1.8 tonnes of oil on the surface, and was drifting towards neighbouring Latvia's waters. "It is likely that significantly more oil was spilled as part of the oil sank or evaporated," the department said. It said the probe aimed to determine the full extent of pollution from the incident and its environmental impact. Orlen PKN could not immediately be reached for comment. Orlen Lietuva declined to comment.

Sweden closes probe into explosions on Nord Stream pipelines, saying it doesn't have jurisdiction (AP) — Swedish officials said Wednesday that they have decided to close their investigation into the September 2022 explosions on the underwater Nord Stream gas pipelines which were built to carry Russian natural gas to Germany, saying they don’t have jurisdiction. Sweden’s investigation was only one of three into the explosions. Denmark and Germany are also examining the blasts. The attack, which happened as Europe attempted to wean itself off Russian energy sources following the Kremlin’s full-scale invasion of Ukraine, contributed to tensions that followed the start of the war. The source of the sabotage has been a major international mystery. Public prosecutor Mats Ljungqvist from the Swedish Prosecution Authority said in a statement that “Swedish jurisdiction does not apply.” The probe’s primary purpose was “to establish whether Swedish citizens were involved” and whether Sweden somehow was used to carry out the detonations, thereby putting the Scandinavian country at risk, the authority said. Hans Liwång of the Sweden Defense University called it “a natural decision.” “Already from the beginning, they said that it’s not necessarily the case that this is a crime performed toward Sweden,” Liwång said. The probe “was a fact-finding and evidence-finding process (and) that it may be dropped when they’ve gathered enough information to know what had happened and how.” The undersea explosions ruptured the Nord Stream 1 pipeline, which was Russia’s main natural gas supply route to Germany until Russia cut off supplies at the end of August that year. The blasts also damaged the Nord Stream 2 pipeline, which never entered service because Germany suspended its certification process shortly before Russia invaded Ukraine in February 2022. Kenneth Øhlenschlæger Buhl of the Royal Danish Defense College said the Swedish decision ”indicates there could have been some kind of a political involvement.” “There might be a good reason for not going out with a conclusion,” Øhlenschlæger Buhl said. “Sweden stands in a sensitive position as it wants to join NATO and may not want to rock the boat further.” After Russia invaded Ukraine, Sweden set aside decades of military nonalignment to seek protection under NATO’s collective defense umbrella. All NATO members must give their approval for new countries to join the grouping, and Hungary is the only member that hasn’t done so for Sweden. Its prime minister, Viktor Orbán, has been accused by critics of promoting Moscow’s interests over those of his EU and NATO allies. The explosions at the pipelines took place about 80 meters (260 feet) underwater on the ocean floor in the Baltic Sea in the Swedish and Danish economic zones but in international waters. Seismic measurements indicated that the explosions occurred shortly before the leaks were discovered. Ljungqvist, who declined to comment further on the Swedish investigation, said Swedes had “in-depth cooperation” with Germany and have “been able to hand over material that can be used as evidence in the German investigation.” In Germany, federal prosecutors said “our investigations are continuing,” declining to comment further. Copenhagen police, which are leading the Danish investigation, said their probe “is still not finally finished” and that an announcement is expected “within a short time.” Beyond their geopolitical impact, the Nord Stream pipeline leaks were a huge environmental disaster with local wildlife affected and huge volumes of methane discharged into the Baltic Sea in what analysts believe could be the single largest release of methane due to human activity. More than 16 months after the sabotage there is no accepted explanation. A series of unconfirmed reports variously accusing Russia, the United States and Ukraine are filling an information vacuum as investigations into the blasts continue. The pipelines were long a target of criticism by the United States and some of its allies, who warned that they posed a risk to Europe’s energy security by increasing dependence on Russian gas. Russian President Vladimir Putin and Russian officials have accused the U.S. of staging the explosions, which they have described as a terror attack. The U.S. has denied involvement. In Moscow, Putin’s spokesperson, Dmitry Peskov, called the Swedish decision “remarkable.” “Of course, now we will need to see how Germany itself reacts to this. After all, this is a country that lost a lot in connection with this terrorist attack, gave up a lot in connection with this terrorist attack,” Peskov told reporters. “It will be interesting how scrupulously the German authorities will approach this investigation,” he said. In March 2023, German media reported that a pro-Ukraine group was involved in the sabotage using a vessel and setting off from the German port of Rostock. Ukraine rejected suggestions it might have ordered the attack and German officials voiced caution over the accusation. The German and Danish investigations have yet to shed light on the incident and while Swedish prosecutors have said that a state actor was the most likely culprit, they cautioned that the identity of the perpetrator was still unclear and hinted that it was likely to remain so.

Spot LNG freight rates continue to drop, European prices rise - Spot charter rates for the global liquefied natural gas (LNG) carrier fleet continued to decrease this week, while European prices increased for the second week in a row.Last week, spot charter rates fell for the eighth consecutive week with the Atlantic rate dropping to $53,250 per day and the Pacific rate dropping to $55,000 per day.“Freight rates continued to drop this week, with the Spark30S Atlantic decreasing by $500 (1 percent) to $52,750/day, whilst the Spark25S Pacific decreased by $1,750 (3 percent) to $53,250/day,” Qasim Afghan, Spark’s commercial analyst told LNG Prime on Friday.“This is the tenth consecutive week LNG freight rates in both basins have dropped, but the lowest week-on-week decrease for this entire period, signaling a gradual levelling out of freight rates as the market has found some support from the Suez canal issues and from improved economics to send US LNG cargos to Asia,” he said. LNG ships, including Qatari LNG shipments to Europe, are now favoring the Cape of Good Hope for safer passage. Kpler said in a report earlier this week that the Suez Canal has witnessed no LNG transits since January 17. “For an LNG carrier transiting from Qatar’s 77 Mtpa Ras Laffan liquefaction facility to NW Europe on a round-trip basis, Kpler’s latest model runs show there is a $0.2/MMBtu increase in freight cost via the Cape of Good Hope ($1.4/ MMBtu) compared to routing via the Suez Canal ($1.2/MMBtu),” the firm said. This can largely be attributed to additional fuel and charter hire costs. 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, Kpler said. In Europe, the SparkNWE DES LNG front month rose compared to the last week. The NWE DES LNG for February delivery was assessed last week at $8.199/MMBtu and at a $0.62/MMBtu discount to the TTF. “The SparkNWE DES LNG price for March delivery is assessed at $8.561/MMBtu and at a $0.64/MMBtu discount to the TTF,” Afghan said. He said this is a $0.362/MMBtu increase in DES LNG price, marking the second consecutive week that SparkNWE has increased. “The last time SparkNWE experienced consecutive week-on-week price increases was in September 2023,” Afghan said.

Venture Global, Sonatrach Extend UK LNG Supply at Grain Terminal - National Grid plc has boosted long-term LNG supply to the UK from the United States and North Africa with two contracts as it expands imports at its Grain LNG terminal. London-based National Grid launched an auction in September seeking bids for up to 9 million metric tons/year (mmty) in regasification capacity at Grain, Europe’s largest liquefied natural gas import terminal. Venture Global LNG LLC was awarded a 16-year, 3 mmty equivalent contract for regasification at Grain starting in 2029. The agreement covers cargoes sent from any of Venture’s Louisiana terminals, including the proposed 24 mmty capacity CP2 LNG project.

Norwegian Production Outage Fails to Lift TTF Higher – LNG Recap - European natural gas prices gave up last week’s gains on Monday, despite an unplanned outage at a top field in Norway and ongoing conflict in the Middle East. Norwegian natural gas exports to the continent were nominated at 286 million cubic meters (MMcm) on Monday, down from recent levels of 340 MMcm/d due to unplanned outages at the offshore Troll gas field and Nyhamna gas treatment plant. The outages are expected to end Tuesday, according to grid operator Gassco. Any potential upside in both Asia and Europe is largely being limited by a rosy supply picture. European Union storage stocks are at nearly 70% of capacity, compared to the five-year average of 57% for this time of year.

Gaz System Taps MOL for FSRU in Poland's Gdansk Gulf -- Poland’s natural gas transmission system operator OGP Gaz System S.A. has selected Mitsui O.S.K. Lines Ltd. (MOL) to deliver and operate the floating storage regasification unit (FSRU) in the Gulf of Gdansk. The FSRU will serve as a liquefied natural gas (LNG) regasification terminal and will be located at a mooring platform near the shore in the area of the Port of Gdańsk, between the mouths of the Vistula River branches, Śmiała and Martwa. The necessary offshore and onshore infrastructure will also be constructed as part of the project, Gaz System said in a recent news release. The project commissioning is planned for 2027/2028. Gaz System said it is also exploring the potential of the construction market before launching tenders for the construction of offshore infrastructure. The company met with potential engineering, procurement and construction contractors last month as part of the procedure. According to the company’s website, the FSRU Terminal will be designed to provide regasification capacity of about 215.4 billion cubic feet (6.1 billion cubic meters) of gaseous fuel per year. The regasification capacity can also be increased depending on market development and growth in demand for natural gas in the country and region. In August 2023, the full regasification capacity of the FSRU terminal was booked for 15 years.

DNV says 10 LNG-powered vessels ordered in January - Classification society DNV has added 10 LNG-powered ships and 23 methanol-fueled vessels to its Alternative Fuels Insight platform in January. DNV reported orders for 18 LNG-powered ships in December and 130 LNG-powered vessels in 2023, down from 222 in 2022. As per January orders for LNG-powered vessels, car carriers and tankers made up the bulk of these ten orders, followed by RoPax, according to DNV. Moreover, 24 LNG ships were delivered in January, representing a record number for the segment, which has grown rapidly in recent years, it said. There are now 493 LNG-fueled ships in operation globally, representing growth of over 100 percent compared to 2021, DNV said. “Strong new order activity continues to demonstrate a promising trajectory in the uptake of alternative fuel vessels. As the data shows, the orderbook for methanol-fueled ships continues to grow rapidly. There are now 228 confirmed methanol-fueled ships on order, which will significantly expand the current global fleet of 29 over the coming years,” Martin Wold, principal consultant in DNV’s maritime advisory business, said. “Meanwhile, the LNG fleet has expanded to the point where we now observe a doubling of the number of LNG-fueled ships in operation between 2021 and 2024, bolstered by a record number of deliveries in January. Interest in ammonia is also on the rise, with two orders confirmed in January, and we expect this to continue to grow in the months and years ahead,” he said. 523 LNG-fueled vessels on order Besides 493 LNG-powered ships in operation, there are 523 LNG-fueled vessels on order, DNV’s platform shows. There are 77 LNG-powered crude oil tankers and 77 containerships in operation, followed by 53 oil/chemical tankers, and 48 bulk carriers. As per vessels on order, LNG-powered containerships account for a big part of the orders with 195 units. Shipping firms also ordered 149 car carriers, 48 oil and chemical tankers, 33 crude oil tankers, and 25 bulk carriers. These statistics do not include smaller inland vessels or dual-fuel LNG carriers. 53 LNG bunkering vessels and 218 LPG

LNG Ships Still Avoiding Red Sea, but Market Said Insulated from Diversions - LNG ships are still avoiding transit in the Red Sea via the Bab el-Mandeb Strait to Europe or Asia and instead diverting around Africa’s Cape of Good Hope to avoid attacks from Yemen-based Houthis militants. However, global liquefied natural gas buyers have yet to show signs that added shipping costs and delivery delays are impacting supply or prices. Europe in particular has a healthy inventory of gas because of pipeline imports from Norway and a steady stream of U.S deliveries. Poten & Partners’s Jason Feer, global head of business intelligence, said LNG buyers have been insulated from price shocks because of abundant storage and mild temperatures in the northern hemisphere. The Dutch Title Transfer Facility and North Asia LNG prices have been floating near the low-

Could the Red Sea Remain a No Go Route for Years? Could the Red Sea remain a no go route for years? The answer to that question is no, according to Carole Nakhle, the CEO of consultancy Crystol Energy. “This is not the first time shipping through the Red Sea gets distorted, nor is the Red Sea the only maritime chokepoint for global trade,” Nakhle told Rigzone. “The good news for global trade is that there are alternatives, albeit at higher costs and longer voyage. No one knows how the current situation will unfold but one remains hopeful that many players are directly affected and they have a strong interest in resolving the problem sooner rather than later,” Nakhle added. When Rigzone asked Nakhle what it would mean for the global oil and gas sector if the Red Sea did remain a no go route for years, the Crystol Energy CEO said, “as long as supplies are not lost from global oil and gas trade then the impact on prices will be limited”. Offering his view, Vikas Dwivedi, a global energy strategist at Macquarie, revealed to Rigzone that he thought it was unlikely that the Red Sea remains a no go route for a prolonged period. “Shipping routes will go back to normal as soon as the Middle East situation calms down,” Dwivedi told Rigzone. “That said, it is fair to assume that maritime trade will be the last thing to return to normal,” he added. “If we are wrong and it takes years, it would eventually decrease the netback profits to Middle East energy producers primarily and any others that rely on those routes,” he continued. “The extra cost would not be borne by customers because they would have choices to receive supply from other, cheaper global suppliers,” Dwivedi went on to state. Around 30 percent of the world’s container shipping traffic passes through the Red Sea, according to a note sent to Rigzone last month by BMI, a Fitch Solutions company, which highlighted that this also a “key shipping route for oil and gas tankers, as well as bulk shipping”. “The attacks by Houthis rebels on ships has prompted shipping firms to re-navigate their vessels, away from the Suez Canal (a major East-West shipping route) around Africa via the Cape of Good Hope, redirecting more than $200 billion worth of trade flows since mid-November 2023,” the note added. “The re-route is adding time and cost to the shipping of goods, with multiple nations exposed to this disruption in global trade,” the BMI note continued. In a statement posted on its X page on February 4, U.S. Central Command (Centcom) revealed that, on that day at approximately 5.30am Sanaa time, its forces conducted “a strike in self-defense against a Houthi land attack cruise missile”. “Beginning at 10.30am, U.S. forces struck four anti-ship cruise missiles, all of which were prepared to launch against ships in the Red Sea,” Centcom said in the statement. “U.S. forces identified the missiles in Houthi-controlled areas of Yemen and determined they presented an imminent threat to U.S. Navy ships and merchant vessels in the region. These actions will protect freedom of navigation and make international waters safer and more secure for U.S. Navy vessels and merchant vessels,” it added. In a separate statement posted on X on February 3, Centcom noted that, on February 3 at approximately 11.30pm Sanaa time, its forces, alongside UK Armed Forces and with the support from Australia, Bahrain, Canada, Denmark, the Netherlands, and New Zealand “conducted strikes against 36 Houthi targets at 13 locations in Iranian-backed Houthi terrorist-controlled areas of Yemen”. “These multilateral coalition strikes focused on targets in Houthi-controlled Yemen used to attack international merchant vessels and U.S. Navy ships in the region,” Centcom said in the statement. “These strikes are intended to degrade Houthi capabilities used to continue their reckless and unlawful attacks on U.S. and U.K. ships as well as international commercial shipping in the Red Sea, Bab Al-Mandeb Strait, and the Gulf of Aden,” it continued.

Russia’s Domestic Diesel Supply Jumps by 17% in January --Diesel supply on the Russian market jumped by 17% in January while gasoline supply increased by 7%, Russian Deputy Prime Minister Alexander Novak said on Tuesday, a few months after the government restricted in the autumn fuel exports to ensure stable domestic supplies.“Measures have been taken to increase the volume of gasoline production and to reduce the export of oil products by the volumes that allowed us to increase the volume of supplies to the domestic market in January for gasoline - by 7%, for diesel - by 17%,” Russian news agency TASS quoted Novak as saying in a presentation. At the end of last year, Russia’s gasoline production rose by 3.1% and diesel production increased by 3.5%, according to official data. Last year, Russia restricted diesel and gasoline exports on September 21 in an effort to stabilize domestic fuel prices in the face of soaring prices and shortages as crude oil prices rallied and the Russian ruble weakened. Prior to implementing the ban, Russia had raised mandatory supply volumes for motor gasoline and diesel fuel to deal with a supply crunch. The ban on diesel was lifted three weeks later, in early October, on the condition that at least 50% of producer supplies went to the domestic market. Since the EU embargo on imports of Russian fuel came into force in early February 2023, Russia had diverted most of its diesel exports – previously going to the EU – to Turkey, the Middle East, North and West Africa, and Brazil in South America. The ban affected those exports and analysts said at the time they didn’t expect a prolonged ban on diesel shipments, because of Russia’s limited storage capacity which, once full, could force refiners to cut processing rates. The gasoline export ban was lifted in the middle of November, after the country built a supply surplus.So far into 2024, diesel and gasoline supply on the domestic market has been stable, Novak said on Tuesday.

Europe Sours on Middle Eastern Crude Oil - European imports of crude oil from the Middle East are falling amid continued tension in the Red Sea off the coast of Yemen. Luckily, there is an alternative: the Atlantic Basin. Asia, meanwhile, seems only too happy to take in more oil from the troubled Middle East—at the expense of Atlantic Basin oil. A split is developing in oil markets, and it's anyone's guess how long it will remain in place with the oil market dynamics it brings with it. When the Yemeni Houthis began attacking ships in the Red Sea back in November, it seemed like a minor problem—at least judging by oil traders' reaction, which was pretty much non-existent. The assumption back in November was that as soon as the Houthis became too bothersome for shippers, the U.S. Navy would step in and take action that would eliminate the problem. The Houthis became too bothersome for shippers. The U.S. Navy stepped in and started shooting at Houthi targets on land. Only this did not have the desired effect. If anything, the U.S. reaction only made the Houthis more determined to continue attacking ships—any ships now—in the Red Sea. Despite several countries stepping in to escort ships via the shortest route between Asia and Europe, most shippers chose to reroute their vessels around the Cape of Good Hope or combine maritime and air transport to get commodities and products from Asia to Europe. This is already taking a toll on most parties involved as both options are costlier than the Suez Canal that the Red Sea route leads to, adding to the final prices of the abovementioned commodities and goods. Oil was no exception. The tankers that rerouted around Africa added not only a couple of weeks to more than a month to their journeys but also millions to the final bill for the oil. Increasingly cash-strapped, Europe had little choice but to look for more affordable alternatives to Middle Eastern oil that had suddenly become a headache to buy. Europe looked west, increasing its purchases of U.S. crude oil but also crude from Guyana, Bloomberg reported this month.. European buyers are also eager to pay for North Sea oil—that same North Sea oil that activists in the UK and Norway want to put an end to. For now, however, they have been unsuccessful, so Europe has some variety in its oil diet. Asian buyers, meanwhile, are buying Middle Eastern crude at the expense of U.S. oil, data from Kpler released by Bloomberg showed. Loadings from the United States to Asia shed a third in January, the ship-tracking data provider revealed.

Argentina crude oil, fuel export requests climb in JanuaryArgentine oil, gasoline and diesel export authorization requests inched up in January compared with the previous month.Officials published 42 requests last month, up from 37 in December.Under a measure designed to ensure local demand is met, drillers first need to obtain the green light from the federal energy department to export – a requirement that would be scrapped under President Javier Milei’s sweeping economic reform bill before congress. Draft measures also open the door for the end of locally set oil prices, something sector players have called for. In January, 28 companies sought to export around 1.25Mm3 (million cubic meters), compared with 809,200m3 in December, according to data from the federal energy department. The bulk are for roughly 30-day periods. In December requests from 25 firms were published.

Oil spill off Brazil sparks hunt for Panama-flag tanker Brazil is seeking further information over an alleged oil spill from a tanker off its northern coast in September. The executive secretary of the country’s environment ministry, Joao Paulo Capobianco, told reporters the government wants more details on the incident, Reuters reported. Philippine tanker spill claims bill tops $50m Read more He said early indications were that the spill was located in international waters, although the information needed to be corroborated. Non-governmental organisation Arayara Institute has said satellite images showed a 170 square-kilometre slick. Initial assessments suggested the leak may have come from a Panama-flag ship, it said in a statement. Brazil plans to contact the International Maritime Organization over the matter. The government is also working with the navy to identify the ships in the area at the time. This is the second time in five years that Brazil has investigated a major spill off its coast. In 2021, federal police filed charges against a company behind a Greek-flag tanker blamed for a leak that dirtied coastlines across 11 states in 2019 and 2020. Officials also charged the tanker’s chief engineer and captain. None of the defendants were named, and police did not say whether the company charged was the ship’s owner or manager. The charges came as part of a sweeping investigation over the spill, which hit swathes of Brazil’s coast between August 2019 and March 2020. Officials said the clean-up cost of BRL 188m ($32.5m) established the minimum value of environmental damages. As TradeWinds reported, the spill off northern Brazil sparked a hunt for clues that led to at least two tankers being blamed for the incident, with owners, flag state officials and researchers denying those ships were responsible. At one point, five Greek-flag ships were being investigated.

Ennore gas leak: TN govt imposes Rs 5.92 cr environmental compensation for Coromandel fertiliser plant - Tamil Nadu State government has imposed Rs 5.92 cr environmental compensation for Coromandel International Limited in Ennore responsible for the Ammonia Gas leak on December 26 last year. The government has also directed the Tamil Nadu Pollution Control Board to take legal action against the unit for non-compliance with the conditions of the consent order issued under the Air Act. The state government has further directed the Tamil Nadu Pollution Control Board to implement the recommendations of the 7- members Technical Committee, formed to look into the matter. According to the officials, the Technical Committee after a detailed inspection and deliberation concluded that the ammonia leak had occurred from the under-sea pipeline of the Coromandel International Ltd. close to the shore. It was also observed by the committee that significant relocation of heavy granite boulders around the pipeline due to Cyclone Michaung could have caused damage to the pipeline which resulted in the ammonia gas leakage. The Committee has recommended that the unit shall replace the existing offshore pipeline with a new pipeline with a state-of-the-art monitoring, automatic control and accident prevention system.

Crude prices: India's crude oil imports from Russia hit 12-month low but long-term appetite remains intact - India's crude oil imports from Russia fell for a second straight month in January to its lowest in 12 months but the nation's insatiable appetite for Russian crude remains for the long term, according to data from energy cargo tracker and industry officials. Russia supplied 1.2 million barrels per day of crude oil to India in January, down from 1.32 million barrels in December and 1.62 million barrels in November 2023, according to data from energy cargo tracker Vortexa. Russia however continues to remain India's top oil supplier, accounting for a little less than a quarter of 4.91 million barrels a day of oil that the world's third largest energy consumer imported in January.The decline in cargoes from Russia was made up by increased sourcing from Iraq, which supplied 1.1 million barrels per day (bpd) in January, up from 985,000 bpd in the previous month.

Oil Market Sees Temporary Fragmentation amid Red Sea Dangers - The global oil market is looking increasingly local as militant attacks in the Red Sea and surging freight rates make supplies from closer to home more attractive. A slump in tanker traffic through the Suez Canal is spurring the beginnings of a split, with one trading region centered around the Atlantic Basin and including the North Sea and the Mediterranean, and another encompassing the Persian Gulf, the Indian Ocean and East Asia. There’s still crude moving between these areas — via the longer and costlier journey around the southern tip of Africa — but recent buying patterns point to disconnection. Across Europe, some refiners skipped purchases of Iraqi Basrah crude last month, according to traders, while buyers from the continent are snapping up cargoes from the North Sea and Guyana. In Asia, a jump in demand for Abu Dhabi’s Murban crude led to a spike in spot prices in mid-January, and flows from Kazakhstan to Asia are down sharply. Crude loadings from the US to Asia, meanwhile, plunged by more than a third last month from December, ship-tracking data from Kpler show. The fragmentation will not be permanent, but for now it’s making it tougher for import-dependent nations like India and South Korea to diversify their sources of oil supply. For refiners, it limits their flexibility to respond to rapidly changing market dynamics and could eventually eat into margins. “The pivot toward logistically easier cargoes makes commercial sense, and that will be the case for as long as the Red Sea disruptions keep freight rates elevated,” said Viktor Katona, lead crude analyst at data analytics firm Kpler. “It’s a tough balancing act choosing between security of supply and maximizing profits.” Oil tanker transits through the Suez Canal were down 23 percent last month compared with November, Kpler said in a note released Jan. 30. The drop was even more pronounced for liquefied petroleum gas and liquefied natural gas, which fell 65 percent and 73 percent, respectively. In product markets, flows of diesel and jet fuel from India and the Middle East to Europe, and European fuel oil and naphtha heading to Asia have been most affected. Asian prices of naphtha, a petrochemicals feedstock, hit the highest in almost two years last week on fears it would become tougher to source it from Europe. The impact of the Red Sea attacks is feeding through to oil prices via higher transport costs, which is encouraging refiners to go local where they can. Rates for Suezmax crude tankers from the Middle East to Northwest Europe have jumped by around half since mid-December, Kpler said. Global benchmark Brent crude is up around 6 percent over the same period. Meanwhile, the delivered cost of oil to Asia from the US, where production is surging, rose by more than $2 a barrel over a three-week period in January, according to traders involved in the market. “Diversification is still possible, but it comes at a higher price,” said Giovanni Staunovo, a commodity analyst at UBS Group AG. “Unless it can be passed onto the end consumer, it would cut into the margins of refineries.” The situation in the Red Sea isn’t expected to lead to a long-term rearrangement of oil flows, but it’s also difficult to see a resolution of the conflict in the near term. Instead, there’s a significant risk of more disruptions, particularly after the Houthi strike on a tanker carrying Russian fuel late last month. That attack was noteworthy as the Iranian-backed militant group had previously indicated that Russian and Chinese ships wouldn’t be targeted.

Oil investors try to get bullish as global economy improves: Kemp -- Portfolio investors raced to build bullish positions in petroleum at the end of January amid signs the business cycle slowdown is coming to an end and fears about attacks on tankers near southwestern Arabia. Hedge funds and other money managers purchased the equivalent of 97 million barrels in the six most important petroleum futures and options contracts over the seven days ending on Jan. 30. Fund managers have purchased petroleum in five of the most recent seven weeks increasing their position by a total of 296 million barrels since Dec. 12. The most recent week saw most buying in crude (+71 million barrels) but extending to refined products as well (+26 million barrels). There were purchases of Brent (+53 million barrels), NYMEX and ICE WTI (+18 million barrels), European gas oil (+17 million), U.S. diesel (+7 million) and U.S. gasoline (+1 million). Two-thirds of the buying was to initiate new bullish long positions (+67 million barrels) rather than to buy back previous bearish short ones (+30 million). Chartbook: https://tmsnrt.rs/3Stl95P Inventory depletion around the NYMEX delivery point at Cushing in Oklahoma continued to draw buying in NYMEX and ICE WTI (at least until the BP refinery at Whiting was shut down by a site-wide electricity failure). Brent and European gas oil saw buying after attacks on shipping effectively closed the southern Red Sea and Gulf of Aden to tanker traffic associated with Western Europe and North America. Naval and air operations by the United States and the United Kingdom against the Houthis, as well as convoying by warships, had not yet re-opened the waterway to vessels at risk. Re-directing east-west crude and diesel trade on the much longer route around Africa will absorb inventories and temporarily tighten supplies to Europe. But the impact of re-routing on supplies, inventories and prices is a one-time event and likely to be relatively modest. Funds held a total position of 503 million barrels across the six major contracts (36th percentile for all weeks since 2013) up from just 207 million barrels (1st percentile) on Dec. 12. In crude, the position had risen to 379 million barrels (26th percentile) up from a record low of just 128 million barrels, according to exchange and regulatory records. Investors sold gas futures and options in despair as milder weather across North Europe and Northwest Europe crushed the outlook for gas consumption once again. Hedge funds and other money managers sold the equivalent of 298 billion cubic feet (bcf) in the two main futures and options contracts linked to prices at Henry Hub in Louisiana. Sales over the two most recent weeks have totalled 895 bcf, reversing more than half of the 1,409 bcf purchased over the previous five weeks. As a result, fund managers held a net short position of 484 bcf (19th percentile) down from a net long position of 410 bcf (42nd percentile) on Jan. 16. This is the third time since the middle of 2023 fund managers have tried to build a bullish position only to be forced to retreat as inventories remained above average. After a cold start to January across North America and Northwest Europe, temperatures have turned milder than usual, suppressing gas and electricity consumption. Front-month gas futures prices have been forced down towards $2 per million British thermal units from well over $3 at the middle of January. Mild weather has postponed the normalisation of inventories and ensured prices need to stay lower for longer to force a further slowdown in drilling and production.

Oil Seesaws Amid Stronger USD as Economic Outlook Improves -- Reversing midmorning losses, oil futures settled Monday's session with solid gains as investors balanced the impact of a stronger U.S. dollar against an improved outlook for the domestic economy that is underpinned by a robust labor market, income gains for the American consumer, and moderating inflation. Monday's session saw another release of bullish macroeconomic data in the United States, suggesting economic activity likely accelerated at the start of 2024. The Services Index published by the Institute of Supply Management rose 2.9% to 53.4% in January, driven mostly by faster growth for new orders, expanding employment and imports. All ten of the large service industries in the United States reported growth. "Economic indicators generally look good; however, there is still some uncertainty. It would be amiss not to mention that we are still seeing the effect of people returning to offices, which impacts demand. Though demand has continually increased, it is not at pre-pandemic levels," said a representative from the transportation equipment industry. During the post-pandemic years, there has been a growing disconnect between the strength of the U.S. economy and fuel demand that historically had a close correlation. For instance, while the labor market outperforms all expectations with neck-breaking job creation, gasoline consumption continues to lag far behind its pre-pandemic trend. U.S. gasoline consumption averaged 8.15 million bpd in the first four weeks of 2024, down from 8.9 million bpd in the comparable four weeks seen in 2019. For all of 2023, U.S. gasoline consumption averaged 4% below the 2019 consumption rate. In financial markets, investors continue to push back expectations for the first interest rate cut by the Federal Reserve into the second quarter. Fed Fund futures indicate only a 15% probability for the Federal Open Market Committee to reduce the federal funds rate in March and a slightly more than 50% chance for a May rate cut. As of Monday afternoon, investors expect the key overnight bank borrowing rate to be cut by 100 basis points this year, down from 150 basis points forecasted only a week ago. The aggressive repricing of Fed Fund futures follows a much stronger-than-expected employment report for January showing the labor market added 353,000 new jobs while the unemployment rate held near a 50-year low 3.7% for the third consecutive month. What's more, hourly earnings in January rose 19 cents or 0.6% to $34.55, lifting annualized wage growth to 4.5% at the start of 2024. Economists largely expected hourly earnings to ease to 0.3% at the start of the year. When the Federal Reserve began to raise interest rates in the Spring of 2022, the economy added more than 5 million jobs, with nominal wages steadily rising to exceed the rate of inflation. Fitch Ratings estimates American households' disposable income increased 6.9% year-on-year in 2023, helped by 5.1% increase in consumer net worth. During a Sunday CNBC "60 Minutes" interview with Fed Chairman Jerome Powell, Powell said "With the economy strong like that, we can approach the question of when to reduce interest rates carefully. We want to see more evidence that the inflation is moving sustainably to its 2% target." Powell added, "It's not likely that this Committee will reach the required level of confidence for the March meeting, which is just in seven weeks." Monday's sharp gains in the U.S. service sector combined with Friday's bullish employment report and comments from Powell, the U.S. dollar kicked off the new trading week with a solid rally, climbing to the highest settlement since mid-November at 104.319. The stronger dollar weighed on the front-month West Texas Intermediate contract, which has an inverse relationship with the currency. At settlement, WTI futures for March delivery advanced $0.50 to $72.78 bbl, while international crude benchmark Brent April futures moved $0.66 higher to $77.99 bbl. NYMEX March RBOB futures added $0.0617 to $2.2092 gallon, while the March ULSD contract jumped $0.0648 to $2.7248 gallon.

Oil prices rise after U.S. retaliatory strikes in Middle East - Oil prices rose Monday after the U.S. launched retaliatory strikes in Iraq and Syria against Iranian forces and their allies over the weekend, raising the risk that the Middle East is heading toward a broader conflict. The West Texas Intermediate contract for March rose 50 cents, or 0.69%, to settle at $72.78 a barrel. The Brent contract for April gained 66 cents, or 0.85%, to settle at $77.99 a barrel. The two benchmarks were down about 1% earlier in the session. "There was never a reason for oil to have traded negative this morning, given the weekend's ongoing military actions in the Middle East were favorable to oil," The U.S. launched retaliatory airstrikes Friday against Iran's Islamic Revolutionary Guard Corps and allied militias in Iraq and Syria. The airstrikes, which hit more than 85 targets, came in response to the deaths of three U.S. troops in a drone strike by Iran-allied militants. The U.S and the U.K. also launched renewed strikes Saturday against Houthi militants in Yemen. The Houthis, who are allied with Iran, have repeatedly targeted commercial shipping in the Red Sea. "That's coming dangerously close to firing up the hornets' nest in Iran — how long can they sit there while their allies get pounded one after another," U.S. Secretary of State Antony Blinken arrived in the Middle East on Monday to push for an extended humanitarian pause in Gaza in exchange for the release of hostages held by Hamas. Blinken will visit Saudi Arabia, Egypt, Qatar, Israel and the West Bank this week.The war in Gaza has pushed the U.S. and Iran to the brink of a direct confrontation, one which analysts have warned could affect crude supplies if there is a disruption in the Strait of Hormuz.The U.S. is also increasing its urgent military assistance to the small, oil-rich nation of Guyana, officials told the Associated Press on Monday. Guyana is locked in a border dispute with its much larger neighbor Venezuela, which is trying to claim the resource-rich Essequibo region.Oil had traded lower Monday morning as the dollar strengthened after Federal Reserve Chairman Jerome Powell reiterated the central bank's cautious approach to lowering interest rates.Powell said in an interview that aired on Sunday that the central bank is unlikely to slash rates in March. The Fed chair's comments came after a much stronger jobs report than expected Friday, with the labor market adding 353,000 jobs compared to the 185,000 expected."With the economy strong like that, we feel like we can approach the question of when to begin to reduce interest rates carefully," Powell told CBS' "60 Minutes." Lower interest rates typically boost economic growth, which would imply stronger crude oil demand.The dollar rose to its highest level in more than two months Monday as investors reduce their expectations for rate cuts. A stronger greenback makes crude oil, which is priced in dollars, more expensive for holders of other currencies, which can weigh on demand.

Oil Rises as Traders Weigh Red Sea Risks Against Fedspeak -Oil edged higher in rangebound trading as investors weighed shifting risks in the Middle East against hawkish comments from the Federal Reserve. West Texas Intermediate rose 0.7% to settle above $73 a barrel after rebounding from a three-week low on Monday. Prices have now returned to the roughly $5 channel where they’ve spent most of this year. Algorithmic trading has exacerbated price choppiness as its trend-following traders quickly flip from bearish bets to bullish ones. “Current price action is instead consistent with CTA buying activity across both WTI and Brent crudes, as rangebound trading activity whipsaws trend signals once again,” Continued tension in the Middle East is supporting prices. The US has vowed to conduct more strikes against Iranian forces and regional proxies, while Yemen’s Houthi rebels claimed another attack on merchant shipping. Prices pared gains and even briefly declined after Qatari Prime Minister Sheikh Mohammed Bin Abdulrahman Al Thani said at a news conference that Hamas’s response in negotiations over a ceasefire with Israel has been “positive.” Still, the potential that the conflict will disrupt crude flows has provided a counterweight to early-week gloom in financial markets as traders discounted the chance of a Fed interest rate cut in March. While headline crude prices remain rangebound, other corners of the market are showing more movement. BP Plc Chief Executive Officer Murray Auchincloss said the diesel market is short of supplies because of refinery shutdowns. A key Asian crude trading window has also seen heightened trading this week. Saudi Arabia, meanwhile, kept the price of its main crude grade steady for March as the Organization of Petroleum Exporting Countries and its allies stick with production cutbacks to avert a surplus. The kingdom will need prices to average more than $90 a barrel this year to balance its budget, Fitch Ratings said. OPEC+ is set to decide in early March on whether to extend the curbs into the second quarter. WTI for March delivery gained 0.7% to settle at $73.31 a barrel. Brent for April settlement rose 0.8% to settle at $78.59 a barrel.

WTI, Brent rise as U.S. production to flatline - Oil prices rose Tuesday as U.S. crude production is expected to plateau this year after setting a record in 2023.The West Texas Intermediate contract for March added 53 cents, or 0.73%, to settle at $73.31 a barrel. The Brent contract for April was settled at $78.59 a barrel, up 60 cents, or 0.77%. U.S. crude and the global benchmark have risen 2.32% and 2.01%, respectively, for the year.U.S. crude output set a record of 13.3 million barrels per day in December before pulling back to 12.6 million bpd in January due to winter storms, according to estimates from the Energy Information Administration released Tuesday.Domestic production will briefly return 13.3 million bpd in February but then decline through the middle of the year, according to the EIA. The U.S. will not exceed the production record of 13.3 million bpd until February 2025.U.S. crude production has weighed on oil prices for months as traders worry that that the market is oversupplied amid a faltering economy in China. Oil traders were also monitoring efforts to negotiate a truce in Gaza and looking for signs of further U.S. military action in the Middle East.U.S. Secretary of State Antony Blinken is visiting Egypt on Tuesday after meeting with the Saudi Crown Prince on Monday. Blinken is consulting with allies in the region in an effort to secure a truce in Gaza and prevent the war from spilling over into a broader regional conflict.Blinken's trip to the region comes after the U.S. again launched airstrikes against Iranian forces and allied militants in Iraq, Syria and Yemen over the weekend. The strikes came in response to the deaths of three U.S. troops in a drone attack in Jordan carried out by Iran-allied militants. White House National Security Advisor Jake Sullivan said on Sunday that the U.S. will take additional, "further action" after the latest weekend strikes.Tamas Varga, an analyst with oil broker PVM, said geopolitical tensions are keeping a floor under oil prices as expectations for rapid interest rate cuts in the U.S. diminish and the strength of China's economy remains a concern."The false prophecy of ostensible truce between Israel and Hamas has been followed by intense U.S. and UK strikes against Iranian-backed militant groups in Iraq and Syria and by attacks on Houthi groups in Yemen," Varga wrote in a Tuesday note. "The heightened tension will undoubtedly entail renewed Houthi hostilities in the Red Sea ensuring persistent re-routing of oil traffic around the Cape of Good Hope,"

Oil Up as US Crude Stocks Barely Built Amid Refining Halt - New York Mercantile Exchange oil futures and Brent crude traded on the Intercontinental Exchange moved higher early morning Wednesday, partially propelled by an industry report showing U.S. crude oil stocks building only moderately last week despite operations at the 435,000-barrels-per-day (bpd) Whiting refinery in Indiana being halted since Feb. 1. The American Petroleum Institute on Tuesday reported a larger-than-expected drop in distillate fuel oil stocks in the week ended Feb. 2, while the build in commercial crude oil inventories fell short of expectations and the increase in gasoline stocks was well above calls. API reported commercial crude oil inventories added 674,000 barrels (bbl), below calls for a build of 1.3 million bbl. Stocks at the Cushing, Oklahoma, tank farm, the New York Mercantile Exchange delivery point for West Texas Intermediate futures, added 492,000 bbl last week. Gasoline inventories jumped 3.65 million bbl, far above estimates for a 300,000-bbl increase, while distillate fuel oil stocks tumbled 3.7 million bbl, more than the expected 2-million-bbl draw. Data released by Germany's Federal Statistical Office this morning showed a 1.6% contraction in industrial output in December compared to November. The seventh consecutive monthly decline in energy-intensive manufacturing despite the drop in natural gas prices has industrial production trailing year-ago levels by 3.1% and raises concerns over Europe's demand outlook. In its February Short-term Energy Outlook released Tuesday afternoon, the EIA raised its draw expectation to global oil inventories to 800,000 bpd for the first quarter, due to OPEC+ production discipline and a near halt in U.S. production growth. More than half the draw is expected to be realized in total oil stocks held by countries that are part of the Organization for Economic Cooperation and Development bloc, which the agency estimates will end the quarter at 2.735 billion bbl. Nearing 8 a.m. EST, WTI futures for March delivery gained $0.50 to $73.81 bbl, while Brent for April delivery was up $0.50 bbl to $79.20 bbl. NYMEX March RBOB futures added $0.0198 to $2.2371 gallon, while the March ULSD contract jumped $0.039 to $2.782 gallon.

WTI Extends Gains After Surprisingly Large Product Draws - Oil prices extended yesterday's gains (helped by EIA's short-term outlook) after a mixed bag from API with a much smaller than expected crude build. API

Crude +674k (+1.3mm exp)
Cushing +492k
Gasoline +3.65mm (+300k exp)
Distillates -3.7mm (-2.0mm exp)

DOE:

Crude +5.52mm (+1.3mm exp)
Cushing -33k
Gasoline -3.15mm (+300k exp)
Distillates -3.22mm (-2.0mm exp)

A much bigger than expected build in crude inventories shocked the market but Cushing saw stocks decline for the 5th week in a row (though barely) while both Gasoline and Distillates saw big draws... The Biden administration added 615k barrels to the SPR - its 8th weekly rise in a row...

The Market Remained Supported Upon the Release of the Inventory Report The crude market posted a high of $74.22 in early morning trading before it erased some of its gains ahead of the release of the EIA’s weekly petroleum stocks report. The market remained supported upon the release of the inventory report, which showed larger than expected draws in both distillate and gasoline stocks of over 3 million barrels each. While crude stocks fell by over 5 million barrels on the week, the draw was attributed to low refinery runs due to increased maintenance. The crude market later settled in a 50 cent trading range during the remainder of the session. The March WTI contract settled up 55 cents at $73.86 and the April Brent contract settled up 62 cents at $79.21. The product markets ended the session sharply higher, with the heating oil market settling up 7.25 cents at $2.8152 and the RB market settled up 4.57 cents at $2.2630. The U.S. EIA said U.S. Gulf Coast refinery utilization in the week ending February 2nd fell by 3 percentage points to 77.1%, the lowest level since September 2021. Total U.S. refinery utilization fell by 0.5% percentage points on the week to 82.4%, its lowest level since December 2022. The EIA reported that U.S. domestic crude oil production returned to a record high of 13.3 million bpd in the latest week. U.S. gasoline stocks fell by 3.146 million barrels on the week to 251 million barrels as stocks in the Gulf Coast fell by 5.1 million barrels on the week to 84.7 million barrels. However, U.S. East Coast gasoline stocks increased by 600,000 barrels to 63.4 million barrels, the highest level since February 2023, and U.S. Midwest gasoline inventories increased by 1 million barrels to 61.7 million barrels, the highest level since February 2019.TotalEnergies said it has not sent ships through the southern strait leading to the Red Sea and the Suez Canal for several weeks, extending its ships' travel time to Europe. The Bab-el-Mandeb Strait at the southern end of the Red Sea has been disrupted by Houthi attacks on commercial vessels, driving up freight costs and restricting traffic. TotalEnergies’ CEO, Patrick Pouyanne, said that the costs of going through the Red Sea have gone up, partly due to higher insurance costs. Keisuke Sadamori, director of energy markets and security at the International Energy Agency, said deliveries of oil products are being delayed after ships have diverted away from the Red Sea to avoid attacks by Yemeni Houthis.Motiva Enterprises began restarting a 350,000 bpd crude distillation unit at its 626,000 bpd Port Arthur, Texas refinery on Wednesday. It plans to complete an overhaul of a 110,000 bpd coker unit at the refinery by February 15th.According to market participants, oil production in the Permian shale basin in Texas and New Mexico this year will see the slowest annual growth since 2021, as acquisitions reduces activity among private drillers. Reduced growth in the Permian will be a drag on overall gains in U.S. production. The slowdown comes even as output cuts from the OPEC and allies have supported prices, giving an incentive for non-OPEC+ producers to produce more.

Oil climbs on US fuel stocks draw, geopolitical tensions (Reuters) - Oil prices rose for a third consecutive day on Wednesday, boosted by a larger-than-expected fall in U.S. fuel stocks, and rising tensions in the Middle East. Brent crude futures settled 62 cents higher, or 0.79% at $79.21 a barrel as of 2:40 pm ET (1940 GMT). U.S. West Texas Intermediate crude climbed 55 cents, or 0.75% to $73.86. U.S. gasoline stocks fell by 3.15 million barrels last week compared with analysts' estimates for a build of 140,000 barrels, according to the U.S. Energy Information Administration (EIA). Distillate stocks fell 3.2 million barrels, compared with estimates for a 1 million barrel draw. Crude stocks, however, posted a larger-than-expected build of 5.5 million barrels as production recovered after a cold snap, while U.S. refiners stepped up maintenance. Analysts had estimated a smaller build of 1.9 million barrels. "This is the kind of report you would expect out of the post freeze-in with refineries not in any hurry to come back," . Refinery utilization shrank 0.5% to 82.4%. On the U.S. Gulf Coast, the deep freeze knocked off 15% of refining capacity, pressuring utilization rates to their lowest level since September 2021, according to EIA data. On the supply side, the EIA cut its 2024 outlook for domestic oil output growth on Tuesday, putting it far lower than the 2023 increase and predicting it would not reach December 2023's record levels until February 2025. As ever, the market is keeping an eye on developments in the Middle East. Israeli Prime Minister Benjamin Netanyahu said total victory in Gaza was within reach, rejecting the latest offer from Hamas for a ceasefire to ensure the return of hostages still held in the besieged enclave. The remarks dismissing the latest offer by Hamas for a ceasefire in Gaza show he intends to pursue conflict in the Middle East, senior Hamas official Sami Abu Zuhri told Reuters. Traders are also tracking the Iranian-backed Houthi rebels' attacks on shipping in the Red Sea that have disrupted traffic through the Suez Canal, the fastest sea route between Asia and Europe and one that carries nearly 12% of global trade. Elsewhere, Federal Reserve Bank of Boston President Susan Collins said if the economy met her expectations the central bank will likely be able to lower rates at some point later this year, potentially lending support to crude futures. "There is confusion in the markets from mixed signals out of the Federal Reserve ... they are now waiting too long to ease, adding an additional element of risk back into the market," In the longer term, the International Energy Agency (IEA) said India is expected to be the largest driver of global oil demand growth between 2023 and 2030, narrowly taking the lead from top importer China. That comes as struggling large economies, including China's, dent confidence in the global oil demand outlook.

Oil up over failed peace attempts in Gaza, weaker US dollar | Malay Mail — Oil prices increased today over Israel’s decision to reject the ceasefire offer from Hamas and resume attacks on the Gaza Strip, while a weaker US dollar and an expected build in US crude oil stocks limited further price rises, reported Anadolu. The international benchmark crude Brent traded at US$79.59 (RM379) per barrel at 10.24 am local time (0724 GMT), a 0.48 per cent rise from the closing price of US$79.21 a barrel in the previous trading session yesterday. The American benchmark, West Texas Intermediate (WTI), traded at the same time at US$74.19 per barrel, up 0.45 per cent from yesterday’s close of US$73.86 per barrel. Oil prices spiked after Prime Minister Benjamin Netanyahu vowed to continue attacks on the Gaza Strip until achieving a “crushing victory” against Hamas. Meanwhile, the falling value of the US dollar also supported dollar-indexed oil prices, with the greenback falling 0.03 per cent to 103.887 today. If the dollar depreciates against other currencies, dollar-indexed crude oil becomes cheaper for holders of other currencies and exerts upward pressure on prices. However, data released by the Energy Information Administration (EIA) yesterday suggested an increase in US commercial crude oil inventories, limiting further price increases. US inventories rose by around 5.5 million barrels to 427.4 million barrels, compared to the market expectation of an increase of around 674,000 barrels. —

Oil Gains 2% as Israel Rejects Gaza Ceasefire Deal, US Gas Inventory Plummets -- Crude oil prices have ticked up over 2% in the aftermath of the rejection of a ceasefire in Gaza, with Israeli forces launching new air strikes on Rafah city, and the Gaza Health Ministry saying that 130 people had been killed in the past 24 hours. U.S. Secretary of State Antony Blinken visited the Middle East this week, raising hopes of a ceasefire deal during his trip. However, Israeli Prime Minister Benjamin Netanyahu vowed to continue the war until “victory”. Earlier this week, Hamas offered a 4-½-month ceasefire deal that would have resulted in a hostage swap and the withdrawal of Israeli troops from Gaza, which the Israelis firmly rejected, while Blinken said there was still room for negotiation, Reuters reported. On Thursday at 11:12 a.m. ET, Brent crude oil was trading at $80.76, up 1.96%, while West Texas Intermediate (WTI) was trading at $75.34, up 2% on the day. According to the Gaza Health Ministry, some 27,840 Gazans have been killed in the war since October 7. According to the Israeli Defense Forces, 1,200 Israelis have been killed. The rejection of a ceasefire deal comes a day after the U.S. launched one of a series of retaliatory strikes following the death of three American soldiers in Jordan. Wednesday’s U.S. drone strike in the Iraqi capital killed a commander of Iran-backed Kataib Hezbollah, even as the group has suspended attacks on U.S. targets in the wake of the Jordan incident and ostensibly under pressure from Tehran. Also providing stimulus to prices on Thursday was a stronger-than-expected draw on U.S. gasoline and distillate stocks, from the Wednesday data release by the Energy Information Administration (EIA). The EIA showed a 3.2-million-barrel draw on distillate stockpiles, while expectations were for a 1-million-barrel drop. At the same time, gasoline stockpiles drew down by 3.15 million barrels, when analysts were expecting a far smaller draw.

The Market Believes That the Ceasefire Rejection Ensures Hostilities in the Red Sea Will Continue -- The oil market remained well supported and rallied over 2.8% on Thursday amid the news of Israel’s rejection of a ceasefire offer from Hamas. On Wednesday, Israel’s Prime Minister Benjamin Netanyahu rejected the latest Hamas ceasefire offer. The market believes that the rejection ensures hostilities in the Red Sea will continue. Wednesday’s release of the EIA petroleum stocks report also continued to provide support amid the larger than expected draws in product stocks. The crude market traded to a low of $73.56 in overnight trading before it continued on its upward trend. The market retraced almost 62% of its move from a low of $71.41 to a high of $79.29 as it rallied to a high of $76.25 ahead of the close. The March WTI contract settled up $2.36 at $76.22 and the April Brent contract settled up at $81.63. Meanwhile, the product market also ended the session sharply higher once again, with the heating oil market settling up 7.56 cents at $2.8908 and the RB market settling up 7.9 cents at $2.342. The White House said U.S. President Joe Biden will host Jordan's King Abdullah in Washington on February 12th. The two leaders will discuss the ongoing situation in Gaza and efforts to "produce an enduring end to the crisis." On Thursday, Jordan's King Abdullah began a tour of major western capitals that will take him to the United States to meet President Joe Biden to lobby for an end to the war in Gaza. Iraq’s Prime Minister's military spokesperson, Yahya Rasool, said repeated U.S. strikes against Iran-backed armed groups in Iraq are pushing the Baghdad government to end the mission of the U.S.-led coalition in the country. Damage to refineries from drone attacks and technical outages led Russia to export more crude than it planned in February, potentially undermining its pledge to cut sales under an OPEC+ pact. Under the deal with the OPEC+ group, Russia is capping its crude oil production at 9.5 million bpd. It is also voluntarily reducing exports of crude oil and fuel by 300,000 bpd and 200,000 bpd of fuel respectively from the average May-June level. Analysts say it would be hard for Moscow to stick to this as amounts of unrefined crude accumulate and Russia's ability to refine oil remains limited. The CEO of BP warned Thursday that Europe’s highest producing oil field, Johan Sverdrup, is expected to see its production declining late this year or early 2025 as increased signs of water production at some wells has raised concerns for an earlier than expected production decline. The field has reached a daily production rate of 755,000 b/d.BP Plc is making progress on restoring its 435,000 bpd Whiting, Indiana refinery to normal operations following a full shutdown because of a February 1st plant-wide power outage.Chevron Corp reported an unplanned flaring event at its 269,000 bpd El Segundo, California refinery. It reported a minor leak in a storage tank that caused a release. The U.S. Transportation Department said travel on U.S. roads in 2023 increased 2.1% to 3.263 trillion miles setting a new yearly record and surpassing pre-COVID 19 levels for the first time. Road travel overall last year was up 67.5 billion miles and up by 2.2% in December.

Oil Futures Little Changed, Head for Weekly Gains -- Oil futures closest to expiration on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange were little changed early Friday, following a rally triggered by the U.S. Treasury's renewed enforcement measures on Russian oil sales while products were supported by the low refinery utilization in the United States.All petroleum contracts are on track for weekly gains after the U.S. Treasury Department imposed sanctions on four entities and identified one vessel as "blocked property" in what it said was a network in a "price cap violation scheme in late 2023."The coalition of G7 countries set a price cap of $60 bbl on Russian oil exports in December 2022 with the goal of reducing Moscow's revenue for its invasion of Ukraine in February 2022 while keeping its oil flowing to avoid a global shortage that would stoke inflation. Today's action involved United Arab Emirates-based Zeenit Supply and Trading DMCC that "sold Russian Urals crude oil in November 2023 that was priced at over $80 per barrel that it delivered using the vessel NS Leader." The tanker, registered in Liberia, "made five port calls in Russian ports in 2023."Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson said, "Today's action against vessels violating the price cap on Russian oil should serve as a continued warning that we can and will enforce violations of the cap."The enforcement action added to a reaccelerating geopolitical risk premium in oil prices that had eased late last week on hopes a ceasefire agreement in the Israel-Hamas War in Gaza would be reached. Instead, Israel rejected the latest proposal in what Prime Minister Benjamin Netanyahu called "delusional" demands by Hamas leadership, with Israel's position appearing to harden. Additionally, the United States killed the commander of the Iranian-backed Kataib Hezbollah militia in Baghdad in a drone attack Wednesday in retaliation for a drone attack by the militants on a U.S. base in Jordan that killed three U.S. service members.The geopolitical incidents bolstered crude prices despite building inventory in the United States amid low refinery utilization. The Energy Information Administration on Wednesday reported commercial crude inventory increased for a second week through Feb. 2, up 6.754 million bbl since Jan. 19, building in large part due to a falloff in refinery runs. The U.S. refinery run rate was 82.4% of capacity during the week ended Feb. 2, a 13-month low, and will likely continue to slip amid an unplanned outage at BP's 435,000 bpd Whiting Refinery located in northern Indiana.BP said it was making progress in restoring normal operations at the refinery, the largest in the Midwest, while a Reuters report suggested the refinery could be shut for as many as three weeks as it investigates the cause of a power outage that forced a systemwide shutdown. In PADD 3, the refinery run rate continued lower for a fourth consecutive week through Feb. 2, declining to 77.1% utilization -- a 29-month low.The falloff in refinery runs prompted gasoline stocks to be drawn down for the first week in six, down 3.146 million bbl from a 35-month high 254.134 million bbl. Distillate stocks fell for the third straight week through Feb. 2, down 7.179 million bbl or 5.3% since Jan. 12 to 127.574 million bbl, widening a stock deficit against the five-year average to 9.564 million bbl or 7%.Bank of America Global Research said in a note to clients that winter refinery maintenance appears to be the highest in several years, and "expect to clean up elevated winter grade [gasoline] inventories."Near 7:45 a.m. EST, NYMEX West Texas Intermediate March futures were little changed near $76.13 bbl, and international crude benchmark Brent for April delivery slipped $0.21 to trade near $81.42 bbl. March RBOB futures slipped $0.0057 from an 11-week high $2.3420 gallon, up $0.0790. March ULSD futures were little changed near $2.8925 gallon.

Oil settles up, notches weekly gain on tight supply, Middle East conflict (Reuters) - Oil prices settled higher on Friday, up about 6% on a week-on-week basis, as worries about supply from the Middle East mounted and as reining outages tightened refined products markets. Brent crude futures settled up 56 cents, or 0.7%, at $82.19 a barrel. U.S. West Texas Intermediate crude futures settled up 62 cents or 0.8%, at $76.84 a barrel. Oil futures rose throughout the week, buoyed after Israeli Prime Minister Benjamin Netanyahu's rejection of a Hamas ceasefire proposal on Wednesday. This week's rise followed a 7% loss in the prior week. "We believe that this type of week-to-week wide price swings will further characterize the crude markets through the rest of this month short of major bullish headlines out of the Mideast that could force adjustment in global oil balances," U.S. energy firms this week also added 4 oil and natural gas rigs to 623 this week, its highest since mid-December, energy services firm Baker Hughes (BKR.O), opens new tab said in its closely followed report. U.S. domestic production returned this week to a record 13.3 million barrels per day level, according to the U.S. Energy Information Administration. Last month, frigid weather caused widespread shut-ins in oil producing regions. Israeli forces on Friday continued deadly air strikes on the Gaza Strip. On Thursday, the bombing of the southern border city of Rafah helped boost oil prices by around 3%. "With the words that, 'no part of the Gaza Strip would be immune from Israel's offensive', it was not hard for oil participants to conclude that without even a passing regard for peace, there was not enough conflict-premium priced in," Crude futures were also supported by strength in gasoline and diesel prices as significant U.S. refinery downtime, both planned and unplanned, tightened product markets. Gasoline futures rose about 9% in the week to $2.34 per gallon while heating oil futures increased by 11% to $2.96 per gallon. Ukraine launched drone attacks against two oil refineries in southern Russia on Friday, resulting in a fire at the Ilsky refinery. The Afipsky refinery, also in Krasnodar Krai, which borders Crimea on the Black Sea and Azov Sea coast, was the other facility in the attack. Russia has been exporting more crude in February than planned under an OPEC+ deal, following a combination of drone attacks and technical outages at its refineries. "Proof still needs to be provided that Russia is able to cut oil exports sufficiently even without weather-related constraints," Carsten Fritsch, an analyst at Commerzbank, said on Friday in reference to the country's OPEC+ cut quota. On Thursday, the U.S. Treasury Department sanctioned another three entities based in the United Arab Emirates (UAE) and one tanker registered by Liberia for violating a cap placed on the price of Russian oil by a coalition of Western nations.

Oil slicks blamed on Turkish strikes blight northeast Syria river – Farmer Nizar al-Awwad has stopped irrigating his land in northeast Syria from a local river polluted by an oil spill that residents and officials in the Kurdish-held area blame on Turkish strikes. "All the farmers in the area have stopped using the river for irrigation," said Awwad, 30, from a village near Tal Brak, in Hasakeh province. "We'd be killing our land with our own hands if we used the polluted water," he said. "Farmers already suffer from a lack of fuel and drought -- the polluted river has only added to our woes," Awwad added, standing near his wheat crops. Oil pollution has been a growing concern in Syria since the 2011 onset of civil war, which has taken a toll on infrastructure and seen rival powers compete over the control of energy resources. Hasakeh province residents told AFP they noticed the oil slicks in the waterway, which feeds into the area's lifeline Khabour River, after Turkey bombed Kurdish-affiliated oil facilities, including stations and refineries, last month. The spill has heaped more misery on farmers already struggling to make ends meet after 12 years of war, the growing effects of climate change and a gruelling economic crisis that has triggered long power cuts and fuel shortages. Turkey said it hit dozens of targets in northern Syria and Iraq belonging to the Kurdistan Workers' Party (PKK) and the People's Protection Units (YPG) after nine Turkish soldiers were killed in clashes with suspected Kurdish militants in Iraq. Turkey and many of its Western allies have blacklisted the PKK as a "terrorist" organisation, and Ankara views the YPG as an offshoot of the group. But the YPG dominates the US-backed Syrian Democratic Forces, the Kurds' de facto army in Syria's northeast who spearheaded the fight against the Islamic State jihadist group in the country. Mohammed al-Aswad, who co-chairs the semi-autonomous Kurdish administration's water authority, said "Turkish bombardment" in northeast Syria, particularly on Rmeilan and Qahtaniyah in the far northeast corner of Hasakeh province, "damaged oil installations and pipelines" and caused the pollution. Rudimentary traps set up by the administration have failed to limit the current spill. AFP correspondents saw oil slicks on water, plants and riverbanks across a 55-kilometre (34-mile) stretch between Tal Brak and the outskirts of Hasakeh city. While repairs to oil infrastructure were expected, authorities were advising farmers against letting livestock drink the polluted water, which could "threaten marine life and biodiversity" if it reached a dam along the Khabour river, Aswad said. But farmer Ibrahim al-Mufdi, 50, said he had already stopped irrigating his crops with the river before the warning. "The sheep can't be drinking from the river," he said, expressing concern over possible fish contamination. "I just hope that the rain will keep falling so we don't have to irrigate from the river," Mufdi said.

Blistering Saudi Statement Slams Door On Normalization With Israel - A hoped-for 'deal of the century' involving a permanent Saudi Arabia-Israel detente diplomatic recognition based on Trump's Abraham Accords looks to be effectively dead, at a moment that a hoped-for Hamas-Israel truce also looks dead. Saudi Arabia's foreign ministry has issued a new statement confirming the kingdom will not participate in deal with Israel until an "independent Palestinians state is recognized".Riyadh has made it clear in the Wednesday statement that Saudi-Israel peace off the table until an "independent Palestinian state is recognized on the 1967 borders with East Jerusalem as its capital."The statement included a demand for a full Gaza retreat on the part of Israeli forces. The Saudis say there can be no detente until "Israeli aggression on the Gaza Strip stops and all Israeli occupation forces withdraw from the Gaza Strip."It further calls for east Jerusalem to be established as the capital of a Palestinian state, "so that the Palestinian people can obtain their legitimate rights and so that a comprehensive and just peace is achieved for all.”Crucially it was only on Monday that US Secretary of State Antony Blinken was in Riyadh as part of his new Gaza-related tour. Blinken met with Crown Prince Mohammed bin Salman Al Saud in Riyadh. The top US diplomat is currently in Tel Aviv. Below is the full English translation of the Saudi statement...

Report: Israel Backing Off on Hostage Talks After Rejecting Hamas's Latest Offer - Israel is backing off from Qatari and Egyptian-mediated hostage talks with Hamas after Prime Minister Benjamin Netanyahu rejected the Palestinian group’s latest proposal, The Times of Israel reported on Thursday.An Israeli official told the Times that instead of offering a counter-proposal, Israel will try to get the US to apply pressure on Qatar, although Doha has insisted it’s only a mediator and cannot control Hamas.“The main target now is to create pressure from the Americans and other countries on Qatar, and from there on Hamas, in addition to the military pressure, to bring them down from their delusional demands,” the Israeli official said.Hamas’s proposal involved a 135-day ceasefire in three phases. Throughout the three phases, Hamas would release all remaining Israeli hostages in exchange for Israel freeing thousands of Palestinian prisoners. The goal would be to establish a permanent ceasefire by the end of the 135 days.Netanyahu immediately rejected the proposal and said there was “no solution besides total victory.” He made the comments after meeting with US Secretary of State Antony Blinken, who was in the region to work toward a hostage deal, but he left with nothing to show for his visit. Now, Netanyahu is threatening that Israeli troops will attack the southern Gaza city of Rafah next, where more than one million displaced Palestinians are sheltering. Israeli forces bombed areas of Rafah on Thursday as US officials cautioned against an assault on the city.

Former US Middle East Commander Says Israel's Success in Gaza Is 'Very Limited' - Retired US Marines Corps Gen. Frank McKenzie, former commander of US Central Command, described Israel’s success in Gaza as “very limited,” noting Israel has failed to dismantle the Palestinian group’s military and political leadership.McKenzie, who retired from his post at CENTCOM in 2022, made the comments while appearing on CBS News’ “Face the Nation” on Sunday. When asked about the level of Israel’s success, McKenzie said, “It’s very limited so far.”“I think they set themselves a goal of removing the political echelon, and the military leadership echelon of Hamas, when they went in. They have not been successful to date at doing either,” he said.His comments come as Hamas is reestablishing itself in northern Gaza, where Israel claimed it had eliminated the Palestinian group’s military structure. Israel is also McKenzie suggested Israel had not thought of what its end game in Gaza was going to be before launching the operation, which has killed over 27,000 Palestinians, including over 11,500 children.“You need a vision of an end state when you begin a military campaign, because everything you do then subtracts or adds to your ability to get to that point. And I would argue that needs to be something like a two-state solution,” McKenzie said. “You’re gonna need help from the Arab nations in the region to go in there and- and do something in- in Gaza. I think Israeli occupation would be the least desirable of all outcomes.”

Israel poised to expand war against Hezbollah in Lebanon - As the US escalates the war in the Middle East by targeting Iran and Iranian-backed militia, Israel is preparing to widen its genocidal war in Gaza by attacking Hezbollah military forces in southern Lebanon and Syria. Such a conflict would likely extend the barbarity being inflicted on Gaza and dramatically inflame the situation throughout the region and internationally. Israeli soldiers fire a mobile howitzer in the north of Israel, near the border with Lebanon, Monday, Jan. 15, 2024. [AP Photo/Ohad Zwigenberg] Fighting along Israel’s northern border has been underway for months since the eruption of the war in Gaza on October 7, including strikes by Israel and Hezbollah on virtually a daily basis. Israeli attacks have killed at least 177 Hezbollah fighters and 40 others, including 19 civilians, three of whom were journalists. Nine Israeli soldiers and reservists have been killed, along with six civilians. Some 76,000 civilians in Lebanon have been displaced by the conflict, as well as 80,000 Israelis. Israeli Defence Minister Yoav Gallant made a series of statements last week indicating that full-scale war is imminent. Amid negotiations over a temporary ceasefire in Gaza, he warned on Friday: “If Hezbollah thinks that when there’s a pause in fighting in the south, we will hold fire against it, it’s sorely mistaken.” Speaking to Israeli troops, Gallant emphasised: “I say here explicitly: Until we reach a situation in which it’s possible to restore security for residents of the north, we will not stop. Whether we reach this through a [diplomatic] arrangement or military means, we will [restore] calm.” Earlier in last week, the defence minister told troops on Israel’s southern border with Gaza that “forces close to you… are leaving the field and moving towards the north, and preparing for what comes next.” Gallant declared that “they very soon will go into action.” As it launched its onslaught on Gaza, the Israeli military boosted its presence in northern Israel. Tens of thousands of regular troops and some 60,000 reservists are deployed there already. The following day, Gallant declared again that “the stage will come when our patience will run out.” He warned that “a forceful action to enforce peace on the northern border” would impact the northern Israeli city of Haifa. Indicating the close involvement of the US in the war preparations, Gallant discussed tensions on the northern Israeli border with US Defense Secretary Lloyd Austin last Thursday night. Over last weekend, Israeli officials held talks with US special envoy Amos Hochstein who has been sent to the Middle East ostensibly to negotiate a deal to prevent the outbreak of war in southern Lebanon. Hochstein is hardly a neutral arbiter: he was born in Israel and served in its armed forces. He was heavily involved in negotiating a deal in 2022 that demarcated a maritime border between Israel and Lebanon, but the undefined land border between the two countries is far more contentious.

Palestinian Groups Warn of Catastrophe as Israeli Forces Close in on Rafah - A coalition of Palestinian human rights groups issued a joint statement Monday warning of impending catastrophe as Israel's military signaled plans to expand its ground assault to Rafah, the small city near Gaza's border with Egypt where hundreds of thousands of people have sought refuge from Israeli bombs. Roughly half of Gaza's population of 2.2 million is currently in Rafah, with many living in makeshift tents and struggling to survive without adequate food, medicine, and clean water. The city is so crowded that humanitarian relief officials have said there is just one toilet for every 500 people, conditions that are accelerating the spread of infectious diseases. The Palestinian Center for Human Rights (PCHR), Al Mezan, and Al-Haq appealed to the international community to intervene and prevent an attack on Rafah, warning that an Israeli incursion "would significantly exacerbate the ongoing genocidal acts perpetrated by the Israeli military and authorities against the Palestinian population in Gaza and blatantly violates the provisional measures order issued by the International Court of Justice on 26 January 2024.""Recent statements from top Israeli military officials and the observed pattern on the ground strongly suggest an imminent assault on Rafah, reminiscent of the destructive actions witnessed in Khan Younis and throughout northern Gaza in the past four months," the groups said. "Such an attack could result in an unprecedented loss of Palestinian lives." "The Israeli military has consistently shelled and bombed Rafah from air, sea, and land, with a recent attack killing 17 Palestinians, including children and women," they continued. "Notwithstanding this, a comprehensive ground invasion has not yet transpired. Nevertheless, statements from the Israeli defense minister, which include an expressed intention for Israel to control the border between Gaza and Egypt, coupled with the ongoing bombardments, heighten concerns about the imminent possibility of a ground invasion.""Everywhere you go, people are desperate, hungry, and terrified."Late last week, Israeli Defense Minister Yoav Gallant declared on social media that the "Khan Younis Brigade" of Hamas has been "dismantled" and that "we complete the mission and will continue to Rafah."During a recent visit to Israeli troops in Khan Younis, Gallant said that "we are completing the mission in Khan Younis and we will reach Rafah, as well, and eliminate every terrorist there who threatens to harm us." The United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA)—whose Gaza operations are at risk of total collapse after the U.S. and more than a dozen other countries cut off aid—said Monday that intense fighting in and around Khan Younis over the past two weeks has forced many Palestinians to "flee further south towards Rafah, which is severely overcrowded." U.N. experts last week described the city as a "pressure cooker of despair."

Focus on Fracking

Monday, February 12, 2024

natural gas prices at a 3½ year low; US refinery utilization and distillates production are lowest in 57 weeks

natural gas prices at a 3½ year low; oil production back to record high; refinery utilization rate is lowest in 57 weeks; refinery throughput is lowest in 56 weeks; distillates production is lowest in 57 weeks

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Monday, February 12, 2024

natural gas prices at a 3​½ year low; US refinery utilization and distillates production are lowest in 57 weeks

natural gas prices at a 3​½ year low; oil production back to record high; refinery utilization rate is lowest in 57 weeks; refinery throughput is lowest in 56 weeks; distillates production is lowest in 57 weeks

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Post a Comment

Followers

About me

natural gas prices at a 3½ year low; US refinery utilization and distillates production are lowest in 57 weeks

natural gas prices at a 3½ year low; oil production back to record high; refinery utilization rate is lowest in 57 weeks; refinery throughput is lowest in 56 weeks; distillates production is lowest in 57 weeks