US oil prices fell for the second week in three on soft U.S. economic data and weak demand from China….after rising 4.5% to a four month high of $79.97 a barrel last week on increasing conflict in the Middle East and on expectations that OPEC would extend its first quarter production cuts till the end of the year, the contract price for the benchmark US light sweet crude for April delivery slipped in quite active overseas trading on Monday, as traders took profits after OPEC and its allies agreed to extend their voluntary output cuts through mid-year, then sold off to a low of $78.56 in afternoon trading as the U.S. said a temporary ceasefire in Gaza was needed for a hostage deal and called on Hamas to accept the terms currently on the table, before settling $1.23 lower for the day at $78.74 a barrel…oil prices slipped for a second day in overseas trading on Tuesday as traders were underwhelmed by China's commitments to get its economy back on track and boost demand, and settled 59 cents lower at $78.15 a barrel in New York following a pair of U.S. macroeconomic reports showing the economy might have slowed more than previously thought, spurring bets on an earlier start to a rate-cutting cycle by the Federal Reserve…oil prices rose in overseas trading Wednesday after Saudi Arabia unexpectedly increased prices of its flagship Arab Light crude for April for customers in Asia, then extended those gains in New York after the EIA reported large draws from US gasoline and distillate supplies, and settled 98 cents higher at $79.13 a barrel as the domestic fuel consumption rebound suggested driving and commercial demand was picking up momentum heading into spring…but oil prices slipped in Asia on Thursday as China's crude import data for the January-February period painted a uncertain picture, then turned mixed as traders weighed expectations that U.S. interest rate cuts could be delayed against supportive Chinese trade data and increased tensions in the Middle East after the first fatal attack on Red Sea shipping, and settled 20 cents lower at $79.03 a barrel as traders balanced weaker-than-expected U.S. economic data against dovish comments from Fed Chairman Powell….oil prices eased early Friday as a brief outage on North America’s Keystone pipeline failed to shake prices out of what was set to be the smallest weekly range in years, then deepened their losses after a mixed U.S. employment report showed that stronger-than-expected job growth in February was accompanied by softer wage gains and a rising unemployment rate, and settled down 92 cents at $78.01 for the session, thus ending 2.5% lower for the week…
Meanwhile, natural gas prices also fell for the second time in three weeks on bearish weather forecasts and a building glut of gas in storage.. after rising 8.0% to $1.885 per mmBTU last week on a larger than expected withdrawal of gas from storage and lower production, the contract price for natural gas for April delivery opened 14 cents higher on Monday, as top U.S. natural gas producer EQT announced production cuts that would last a month, but pulled back late in the session to settle 8.1 cents higher at $1.916 per mmBTU as several producers cut output after prices collapsed to a 3-1/2-year low in recent weeks…natural gas prices were little changed while trading in a narrow band most of Tuesday, briefly rallying above the $2. level after the Golden Pass Pipeline updated federal regulators on its progress, and settled 4.1 cents higher at $1.957 per mmBTU as traders continued to weigh the ongoing EQT production cutbacks against healthy storage levels and weak demand….natural gas prices opened slightly higher Wednesday, but retreated throughout the session as modest changes to weather forecasts overnight provided a bearish influence, as the contract settled 2.8 cents lower at $1.929 per mmBTU…natural gas traded sideways near $1.910 leading up to the weekly storage publication on Thursday, but tumbled thereafter, with storage levels high and above the five-year average, and settled 11.1 cents or 6% lower at 1.818 per mmBTU on a much smaller-than-usual withdrawal from storage, as gas flowing to LNG export plants remained low due to an ongoing outage at Freeport LNG's plant in Texas… natural gas prices fell another 1.3 cents to settle at $1.805 per mmBTU on Friday, as warmer-than-normal weather slowed heating demand while inventories stayed high and thus ended 4.2% lower for the week
The EIA's natural gas storage report for the week ending March 1st indicated that the amount of working natural gas held in underground storage in the US decreased by 40 billion cubic feet to 2,544 billion cubic feet by the end of the week, which left our natural gas supplies 280 billion cubic feet, or 13.6% above the 2,054 billion cubic feet that were in storage on March 1st of last year, 551 billion cubic feet, or 30.9% more than the five-year average of 1,783 billion cubic feet of natural gas that were typically in working storage as of the 1st of March over the most recent five years, and at the highest level at any time in any March in 30 years of EIA records…the 40 billion cubic foot withdrawal from US natural gas working storage for the cited week was in line with the withdrawal from supplies forecast by a Reuters survey of analysts, but was less than the 72 billion cubic feet that were pulled from natural gas storage during the corresponding last week of February 2023, and less than half of the average 93 billion cubic feet withdrawal from natural gas storage that has been typical for the same winter week over the past 5 years…
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending March 1st indicated that as a pickup in our oil refining was more than offset by an increase in our oil imports, we again had surplus oil to add to our stored commercial crude supplies for the sixth consecutive week, and for the 14th time in the past 20 weeks, despite a jump in demand for oil that the EIA could not account for….Our imports of crude oil rose by an average of 837,000 barrels per day to average 7,222,000 barrels per day, after falling by an average of 269,000 barrels per day over the prior week, while our exports of crude oil fell by 91,000 barrels per day to average 4,637,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 2,585,000 barrels of oil per day during the week ending March 1st, 928,000 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, from natural gasoline, from condensate, and from unfinished oils averaged 469,000 barrels per day, while during the same week, production of crude from US wells was 100,000 barrels per day lower at 13,200,000 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 16,254,000 barrels per day during the March 1st reporting week…
Meanwhile, US oil refineries reported they were processing an average of 15,268,000 barrels of crude per day during the week ending March 1st, an average of 595,000 more barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period the EIA’s surveys indicated that a rounded average of 296,000 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 March 1st appear to indicate that our total working supply of oil from net imports, from transfers, and from oilfield production was 689,000 barrels per day more than what was added to storage plus our oil refineries reported they used during the week…To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a [-689,000] 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 52,000 barrels per day of demand for oil could not be accounted for in last week’s EIA data, that means there was a 637,000 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 ongoing weekly errors, and what they had hoped to do about it)
This week's average 296,000 barrel per day increase in our overall crude oil inventories came as an average of 195,000 barrels per day were being added to our commercially available stocks of crude oil, while an average of 101,000 barrels per day were being added to our Strategic Petroleum Reserve, the thirteenth SPR increase in twenty 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 6,682,000 barrels per day last week, which was 6.8% more than the 6,259,000 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 100,000 barrels per day lower at 13,200,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day lower at 12,800,000 barrels per day, while Alaska’s oil production was 3,000 barrels per day higher at 436,000 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 still 0.8% above that of our pre-pandemic production peak, and 36.1% 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 84.9% of their capacity while processing those 15,268,000 barrels of crude per day during the week ending March 1st, up from the 59 week low 80.6% utilization rate of two weeks earlier, but still below the normal operating range for early March, following a drop in refinery operations due in part to damage from the arctic cold that penetrated to the Gulf Coast in mid January... the 15,268,000 barrels per day of oil that were refined this week were 2.0% more than the 14,967,000 barrels of crude that were being processed daily during week ending March 3rd of 2023 (after the even worse refinery-freeze-offs following Christmas 2022's winter storm Elliot), but 4.5% less than the 15,990,000 barrels that were being refined during the prepandemic week ending March 1st, 2019, when our refinery utilization rate was at a closer to normal 87.5%..
With the increase in the amount of oil being refined this week, gasoline output from our refineries was also higher, increasing by 207,000 barrels per day to 9,626,000 barrels per day during the week ending March 1st, after our refineries' gasoline output had increased by 390,000 barrels per day during the prior week. This week’s gasoline production was 0.7% more than the 9,557,000 barrels of gasoline that were being produced daily over week ending March 3rd of last year, but 2.3% less than the gasoline production of 9,852,000 barrels per day during the prepandemic week ending March 1st, 2019....at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 56,000 barrels per day to 4,345,000 barrels per day, after our distillates output had increased by 118,000 barrels per day during the prior week. But even with those increases, our distillates output was 4.5% less than the 4,525,000 barrels of distillates that were being produced daily during the week ending March 3rd of 2023, and 11.7% less than the 4,919,000 barrels of distillates that were being produced daily during the week ending March 1st, 2019…
Even with this week's increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the fifth consecutive week, following five consecutive increases, decreasing by 4,460,000 barrels to 239,745,000 barrels during the week ending March 1st, the biggest draw since November 3rd, after our gasoline inventories had decreased by 2,832,000 barrels during the prior week. Our gasoline supplies fell by more this week because the amount of gasoline supplied to US users rose by 546,000 barrels per day to 9,013,000 barrels per day, and even though our imports of gasoline rose by 208,000 barrels per day to 588,000 barrels per day, while our exports of gasoline rose by 30,000 barrels per day to 782,000 barrels per day…But even after thirty-two gasoline inventory withdrawals over the past fifty-two weeks, our gasoline supplies were still 0.7% above than last March 3rd's gasoline inventories of 238,058,000 barrels, while still about 2% below the five year average of our gasoline supplies for this time of the year…
Even with this week's increase in our distillates production, our supplies of distillate fuels fell for the sixth consecutive week, following eight consecutive increases, decreasing by 4,013,000 barrels to 117,010,000 barrels over the week ending March 1st, the biggest draw in 10 months, after our distillates supplies had decreased by 510,000 barrels during the prior week. Our distillates supplies fell by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 538,000 barrels per day to 4,074,000 barrels per day, and because our imports of distillates fell by 133,000 barrels per day to 112,000 barrels per day, while our exports of distillates fell by 112,000 barrels per day to 937,000 barrels per day ...With 29 inventory decreases over the past fifty weeks, our distillates supplies at the end of the week were 0.8% below the 122,114,000 barrels of distillates that we had in storage on March 3rd of 2023, and about 8% below the five year average of our distillates inventories for this time of the year...
Finally, as an increase in our oil imports more than covered the increase in our oil refining, our commercial supplies of crude oil in storage rose for the 16th time in twenty-six weeks and for the 24th time in the past year, increasing by 1,376,000 barrels over the week, from 447,163,000 barrels on February 23rd to 448,530,000 barrels on March 1st, after our commercial crude supplies had increased by 4,199,000 barrels over the prior week... With this week’s modest increase, our commercial crude oil inventories remained about 1% below the most recent five-year average of commercial oil supplies for this time of year, but were still more than 35% above the average of our available crude oil stocks as of the first weekend of March 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 March 1st were still 6.3% less than the 478,513,000 barrels of oil left in commercial storage on March 3rd of 2023, but 9.0% more than the 411,562,000 barrels of oil that we still had in storage on March 4th of 2022, while still 10.0% less than the 498,403,000 barrels of oil we had in commercial storage on March 5th of 2021, after winter storm Uri added to the glut of oil remaining after 2020’s pandemic precautions had left a lot of oil unused…
This Week's Rig Count
In lieu of a detailed report on the rig count, we are again just including a screenshot of the rig count summary from Baker Hughes...in the table below, the first column shows the active rig count as of March 8th, the second column shows the change in the number of working rigs between last week’s count (March 1st) and this week’s (March 8th) count, the third column shows last week’s March 1st 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 March 1st, 2023...
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Dominion Energy Announces Closing of Sale of Ohio Natural Gas Distribution Company -- Dominion Energy, Inc. today announced closure of the sale of its Ohio natural gas utility – The East Ohio Gas Company – to Enbridge Inc. for approximately $6.6 billion, including assumed indebtedness and adjusted for customary closing items. This transaction was previously announced on Sept. 5, 2023. The East Ohio Gas Company is a Cleveland-based gas utility employing about 1,500 people and serving 1.2 million Ohio homes and businesses. Dominion Energy and Enbridge expect to close on the sales of Dominion Energy's gas distribution companies headquartered in Salt Lake City, Utah, and Gastonia, N.C., in separate transactions later this year. The transaction received all customary regulatory approvals.
Enbridge Completes Acquisition of The East Ohio Gas Company - Enbridge announced today the closing of its acquisition of The East Ohio Gas Company ("EOG") from Dominion Energy, Inc. The gas utility will be doing business as Enbridge Gas Ohio and will join Enbridge's Gas Distribution and Storage Business Unit. EOG is a premier single-state utility, serving over 1.2 million customers across more than 400 communities in Ohio, with key locations in major metropolitan areas. The gas utility has a robust portfolio of assets, including over 22,000 miles (over 35,400 km) of transmission, gathering and distribution pipelines, underground storage, and interconnections to multiple interstate pipelines and large natural gas producers. "The addition of a strong Ohio-based gas utility company is a great strategic fit for Enbridge. It further diversifies our business and enhances the stable cash flow profile of our assets," said Michele Harradence, Enbridge Executive Vice President and President, Gas Distribution and Storage. "Natural gas utilities have long useful lives and are 'must-have' infrastructure for providing safe, reliable, and affordable energy. This gas utility will help blend and extend our cash flow growth outlook through the end of the decade by adding a steady, regulated investment that supports our long-term dividend profile. With this acquisition, Enbridge has all four of its business units represented in Ohio, providing further value-add opportunities. We welcome EOG and its employees into the Enbridge family of companies and look forward to building long-term productive relationships with all stakeholders in Ohio and continuing to offer Ohio customers the same safe, reliable service they are accustomed to." The closings of the purchases of Questar Gas Company and its related Wexpro companies (collectively, "Questar"), and the Public Service Company of North Carolina, Incorporated ("PSNC"), respectively, are expected to occur following the receipt of required regulatory approvals applicable to each gas utility and are not cross-conditioned. The acquisitions of Questar and PSNC are on track to close in 2024. EOG is expected to contribute more than 40% of the total annualized EBITDA from the three gas utilities Enbridge has agreed to acquire from Dominion.
Canadian energy company Enbridge completes acquisition of East Ohio Gas -- Youngstown Vindicator — Enbridge, an energy company headquartered in Calgary, Canada, announced Thursday it has completed its acquisition of locally operating East Ohio Gas from Dominion Energy. The gas utility will be doing business as Enbridge Gas Ohio and will join Enbridge’s gas distribution and storage business unit. The deal is worth about $6.6 billion. Enbridge, in a bews release, called East Ohio Gas “a premier single-state utility.” It services more than 1.2 million customers across more than 400 communities, including Trumbull, Mahoning and Columbiana counties. The utility has more than 22,000 miles of transmission, gathering and distribution pipelines, underground storage, and interconnections to multiple interstate pipelines and large natural gas producers. “The addition of a strong Ohio-based gas utility company is a great strategic fit for Enbridge. It further diversifies our business and enhances the stable cash flow profile of our assets,” Michele Harradence, Enbridge executive vice president and president, gas distribution and storage, said. Enbridge in September announced it acquired three U.S. energy companies in deals worth about $14 billion. The others are Questar Gas, which serves about 1.2 million customers across Utah, and the Public Service Company of North Carolina, also known as PSNC Energy, which serves more than 600,000 customers across 28 counties in North Carolina. Enbridge reported then with the acquisitions, its gas utility business would be the largest by volume in North America.
Kirkland Attorneys Swat Down $100M Drilling Trespass Claim in Ohio Court | Texas Lawyer The dispute centered on whether a geological formation cited by the plaintiffs was part of an oil and gas field in Ohio known as the Utica Shale, and whether the defendants could develop it. A Kirkland & Ellis team from Houston helped secure a major defense verdict in an Ohio federal court for energy companies based in Oklahoma and Pennsylvania. Defendants EQT Corp. and Gulfport Energy were accused by large landowners of violating an oil and gas lease. A Kirkland & Ellis team from Houston helped secure a major defense verdict in an Ohio federal court for energy companies based in Oklahoma and Pennsylvania. In a two-week jury trial, large Ohio landowners claimed Pittsburgh-based EQT Corp. and Oklahoma City-based Gulfport Energy Corp. trespassed their property by drilling wells and converting natural gas without permission.
Oil, Gas Companies Get Jury Trial Win in Ohio Takings Dispute - Bloomberg Law -
- Dispute centers on formations included in lease agreement
- Companies argue shale formations aren’t separate
Energy companies won a jury against Ohio landowners who claimed their property was wrongfully taken when natural gas was produced from under their land without permission. The landowners alleged in their second amended complaint that the leases with the companies, including Gulfport Energy Corp., granted rights to produce natural gas only from the Utica and Marcellus Shale formations. The companies trespassed when they extracted minerals from the Point Pleasant formation because the leases don’t allow production from any formation below the Utica Shale, the plaintiffs said. The companies should have known they weren’t permitted to drill into the Point Pleasant...
Defense Win: Kirkland Attorneys Swat Down $100M Claim - A Kirkland & Ellis team from Houston helped secure a major defense verdict in an Ohio federal court for energy companies based in Oklahoma and Pennsylvania. In a two-week jury trial, large Ohio landowners claimed Pittsburgh-based EQT Corp. and Oklahoma City-based Gulfport Energy Corp. trespassed their property by drilling wells and converting natural gas without permission. The landowners sought more than $100 million in the case at trial. There are also a series of similar mineral trespass claims in state and federal court, and prior to this trial plaintiffs sought class certification in a related case where Kirkland was able to get a ruling denying class certification, according to court records. According to the defendants’ trial brief, Gulfport and EQT claimed the landowners entered into oil and gas leases that permitted drilling and production from their property. An eight-person jury heard testimony from 15 witnesses, including EQT chief executive officer Toby Rice, Gulfport Energy senior vice president Lester Zitkus, plaintiff landowners, geologists and petroleum engineers. The trial and related cases involve the Utica Shale boom that began in the early 2010s and still produces today. According to the plaintiffs’ trial brief, the primary issue was the legal interpretation of the oil and gas lease as to the lessee’s right to drill into and produce oil and gas from the Point Pleasant Formation, which the plaintiffs alleged was adjacent to, but distinct from the Utica Shale. “The central dispute, which the jury will decide at trial, is whether the language ‘formation commonly known as the … Utica Shale’ in the subject leases includes the Point Pleasant Formation,” the plaintiffs’ brief stated. The defendants’ trial brief, drafted by John Kevin West and John C. Ferrell of Steptoe & Johnson in Columbus, Ohio, asserted in rebuttal the plaintiffs were well aware of the Point Pleasant Formation when the original lease was signed, yet never made an issue of it during those extensive negotiations. Later, when the lease was revised, the plaintiffs kept the lease form’s disputed reservation language, the defense brief states. The defense brief went on to remind the court the plaintiffs’ case has been falling apart since the beginning. At summary judgment, the court dismissed “the greater part” of plaintiffs’ breach of contract claim, and plaintiffs subsequently dismissed the rest of that claim. The court also dismissed many of plaintiffs’ trespass claims as applied to specific plots because they failed to support the physical invasion element; and the court granted summary judgment in part in favor of defendants on the Rule of Capture, which is a rule of non-liability for being the first party to capture a natural resource.The jury never got past the first section of the six-page verdict and damages form. On the first question of whether plaintiffs reserved their rights to the Point Pleasant Formation, the jury said no.
Ascent Resources plans more liquids-focused development this year | Oil & Gas Journal -Ascent Resources Utica Holdings LLC, Oklahoma City, has set 2024 guidance with maintenance production of 2.0-2.1 bcfed (88-90% natural gas), and drilling and completions capex of $625-675 million, a decrease of 23% from 2023. For 2024, the company’s Utica shale development plan will be more liquids focused, resulting in a modest reduction in gas production as the company continues to rebalance capital allocation, said Ascent's chairman and chief executive officer, Jeff Fisher, in a release Mar. 7. “We also expect to see a substantial reduction in capital intensity in 2024, which is being driven by continued efficiency gains coupled with shallower declines and a focus on optimization of our production base,” he continued. The company plans to operate 2.5-3 rigs this year to spud 60-65 wells. The full-year 2024 total capital budget of $750-810 million is expected to be fully funded with operating cash flow and is expected to be more than sufficient to hold production flat on an annual basis, the company said in a release Mar. 7. Fourth quarter, full-year 2023 Ascent resources had net production of 2.10 bcfed (1,888 MMcfd natural gas; 10,826 b/d oil; 23,707 b/d NGL), and 2.14 bcfed (1,953 MMcfd natural gas; 10,244 b/d oil; 20,230 b/d NGLs) for the quarter and year, respectively. Liquids production increased to 35,000 b/d during the quarter, a 35% increase over the same prior year period. In fourth-quarter 2023, the company spudded 15 operated wells, hydraulically fractured 10 wells, and turned-in-line 19 wells with an average lateral length of about 16,700 ft. For the full-year, Ascent spudded 74 operated wells, hydraulically fractured 75 wells, and turned-in-line 71 wells with an average lateral length of about 14,200 ft. As of Dec. 31, 2023, Ascent had 882 gross operated producing Utica wells. Net income and adjusted net income were $757 million and $86 million for the quarter, and $2.1 billion and $317 million for the year, respectively. Ascent incurred $234 million of total capital expenditures in fourth-quarter 2023 consisting of $177 million of drilling and completions costs, $49 million of land and leasehold costs, and $8 million of capitalized interest. For the year ended Dec. 31, 2023, Ascent reported net income of $2.1 billion and adjusted net income of $317 million. Ascent incurred a total of $1.0 billion of capital expenditures during the year consisting of $844 million of drilling and completions costs, $138 million of land and leasehold costs, and $36 million for capitalized interest.
EQT Cuts 1 Bcf/d of NatGas Production - In response to the current natural gas price environment, Appalachian natural gas producer EQT Corp. cut 1 Bcf/d of gross production beginning in late February, the company announced March 4.The production cut will be maintained throughout March, and will be reassessed based off market conditions thereafter. Curtailments are expected to total approximately 30 Bcf to 40 Bcf in the first quarter.The company cited warm winter weather and high storage inventory as contributors to low natural gas prices.
Deferring Lower 48 Natural Gas Activity Possible, but Not Now, Gulfport CEO Says - Oklahoma City-based Gulfport Energy Corp., 92% weighted to natural gas, plans to remain nimble this year to ensure it may “defer or accelerate” activity depending on the direction of prices. Speaking to analysts during the recent fourth quarter conference call, CEO John Reinhart said the “volatile natural gas environment reinforces the importance of developing our assets in an efficient and sustainable manner.” For 2024, the strategy remains steady, with more development later this year on liquids-rich targets in the Utica Shale and in the South Central Oklahoma Oil Province, aka SCOOP, he said. At What Price? During the question-and-answer session, Reinhart was asked what it would take for Gulfport to “join your neighbor,” i.e. crosstown rival Chesapeake in pulling back on drilling...
17 New Shale Well Permits Issued for PA-OH-WV Feb 26 – Mar 3 -- There were 17 new permits issued to drill in the Marcellus/Utica during the week of Feb. 26 – Mar. 3, down 1 from 18 permits issued the prior week. Pennsylvania issued 8 new permits last week. Ohio issued 4 new permits. And West Virginia issued 5 new permits last week. Four companies tied for the top slot of receiving 3 permits each: Chesapeake Energy (Susquehanna County, PA), Seneca Resources (Tioga County, PA), Gulfport Energy (Harrison County, OH), and Antero Resources (Ritchie County, WV). Arsenal Resources received 2 permits (Taylor County, WV). Three companies received a single new permit: Laurel Mountain Energy (Butler County, PA), Campbell Oil & Gas (Westmoreland County, PA), and EOG Resources (Noble County, OH). Antero Resources | Arsenal Resources | Butler County | Campbell Oil & Gas | Chesapeake Energy | EOG Resources | Gulfport Energy | Harrison County | Laurel Mountain Energy | Noble County | Ritchie County | Seneca Resources | Susquehanna County | Taylor County | Tioga County (PA) | Westmoreland County
TC Offloading New England Natural Gas System to Advance Strategy - TC Energy Corp. has inked a $1.14 billion agreement to sell the Portland Natural Gas Transmission System (PNGTS) to BlackRock Inc. and Morgan Stanley Infrastructure Partners as it pares debt and streamlines its North American pipeline business. The Calgary-based pipeline giant holds 61.7% ownership of PNGTS, a 295-mile, 290 million Dth/d line. Énergir LP subsidiary Northern New England Investment Co. Inc. holds the remainder. CEO François Poirier said the transaction marked “progress toward achieving our 2024 strategic priority of enhancing our balance sheet strength by delivering” about $2.29 billion in asset divestitures.
Three large natural gas pipeline projects are proposed for NC: where they are and what's next -- They have sunny, optimistic names: MVP Southgate. T15 Reliability Project. Southeast Supply Enhancement. Three companies — Equitrans Midstream, Dominion Energy and Williams — have proposed building major natural gas pipelines in North Carolina, primarily in the middle third of the state. The energy companies justify these projects by claiming natural gas must serve as a “bridge fuel” to meet power demands while coal-fired plants are mothballed. Environmental and clean energy advocates argue that methane emissions from these projects — starting at the fracking operations where gas is extracted, to the compressor stations that move the gas through the system, to the pipelines themselves — will accelerate climate change. Methane is a potent greenhouse gas, and while short-lived in the atmosphere compared to carbon dioxide, does more damage. The locations of these pipelines also have environmental justice implications. Based on the number of incidents per 1,000 gas pipeline transmission miles, the rate of accidents in disadvantaged communities in North Carolina is 50% higher than those in more affluent, predominantly white areas, according to federal data. This disparity in the incident rate occurs even though disadvantaged communities have only 1,256 gas transmission miles, compared with 2,715 in advantaged communities.
- MVP Southgate: A separate project, but a continuation of the Mountain Valley Pipeline, the southern leg starts in Pittsylvania County, Virginia, and enter North Carolina near Eden, in Rockingham County. Originally, MVP Southgate was planned to traverse southeast through Alamance County, ending near Haw River. In December, Equitrans Midstream, the pipeline operator, announced it would shorten the route to remain solely within Rockingham County. An updated map has not been released. The southern segment hinges on the completion of the main MVP line. But already years behind schedule and billions of dollars over budget, the main line has again been delayed until the second quarter of this year. This pipeline is regulated by FERC, the Federal Energy Regulatory Commission, and will need state environmental permits.The green lines show the original route of the MVP Southgate natural gas pipeline. Alamance County is no longer in the project path. However, the pipeline owner has not yet published a new map of the redesigned route. (Base map: MVP Southgate)
- T15 Reliability Project: Dominion Energy recently announced it plans to construct a 45-mile pipeline between Eden and Roxboro. It would connect the MVP Southgate project to Duke Energy’s two proposed natural gas plants at Hyco Lake, which will replace the coal-fired units. The new units are scheduled for completion in about 10 years. Since this pipeline would not cross state lines, it would not require FERC approval, but would be regulated by the N.C. Utilities Commission. However, Dominion would have to secure permits from N.C. Department of Environmental Quality and, if the pipeline crosses navigable rivers, creeks or streams, the U.S. Army Corps of Engineers.This natural gas pipeline would run from Eden, to north of Reidsville and into Caswell County, where it would traverse north of Yanceyville. Once in Person County, the pipeline would route along an existing electric transmission right-of-way to Duke Energy’s proposed new natural gas plants. (Map: Dominion Energy)
- Southeast Supply Enhancement: Williams Companies, which operates the Transcontinental Pipeline over 10,000 winding miles from Texas, through the Southeast to New York City, plans to expand. The Southeast Supply Enhancement would build additional pipeline looping adjacent to the existing Transco corridor. In addition, three compressor stations, in Cleveland, Iredell and Davidson counties, would be upgraded. The company has set an operational date of late 2027. Since it spans several states, the project will require FERC approval.We’ve also provided a transcript of this presentation about pipelines.Eighty-six counties in North Carolina contain some length of natural gas transmission pipeline; 14 have none. Here is a list of mileage by county.Natural gas pipelines are different from hazardous liquid pipelines; the latter transmits gasoline, diesel and crude oil. Colonial Pipeline is a major carrier of hazardous liquids through North Carolina and owns an enormous tank farm in Guilford County along Interstate 40.
Inside the fight to stop LNG export projects in South… Juan Mancias is chair of the Carrizo/Comecrudo Tribe of Texas, an Indigenous people whose ancestral lands span the delta region where the 1,900-mile Rio Grande meets the Gulf of Mexico. On a drizzly day in December, we’ve come out to survey the patchwork of parcels the tribe recently purchased near the Bahia Grande tidal basin. These acres of sandy soil and hardy grass run along the proposed route of the Rio Bravo Pipeline — a 137-mile conduit that would funnel shale gas from East and West Texas to a major new fossil-fuel project on the Gulf Coast. Mancias was navigating the neglected county roads near the properties when we became ensnared in mud. By buying up acres of land, the tribe hopes to obstruct the pipeline’s development here and choke off some of the supply to the Rio Grande Liquefied Natural Gas export terminal. The facility, now in the early stages of construction, will super-cool and liquefy gas to be shipped overseas.“They’re trying to justify and redefine everything as ‘critical infrastructure,’” Mancias says of the fossil-fuel projects. “But the real ‘critical infrastructure’ is the air, the water and the land,” he adds while we await the rescue Jeep. We pass the time by spotting hawks and blue herons and swatting at big mosquitoes that snuck in through the open windows. If completed as planned, NextDecade’s Rio Grande LNG export terminal will be one of the largest projects of its kind in the country — accelerating the boom in U.S. LNG exports that’s taken hold over the last decade. The project’s first and largest phase is expected to cost around $18.4 billion to build.The new terminal will also be the first large oil and gas development on this largely unspoiled coastline near the United States–Mexico border. Over the last century, as companies built polluting petrochemical plants atop wetlands in much of Texas and Louisiana, the southeastern tip of Texas has remained a haven for birds, marine life and the thousands of people who live and work on the water. Rio Grande LNG is set to span nearly 1,000 acres along the Brownsville Ship Channel and, at full scale, could produce 27 million metric tons of LNG per year. That’s enough fuel to meet the heating and cooling needs of nearly 34 million U.S. households annually — except that the LNGis destined for other countries. Next door, on a 625-acre stretch of black mangrove, the developer Glenfarne Group is trying to build another export terminal, called Texas LNG.
US weekly LNG exports reach 26 shipments - US liquefaction plants shipped 26 liquefied natural gas (LNG) cargoes in the week ending February 28, while natural gas deliveries to these terminals increased compared to the week before. The US EIA said in its weekly natural gas report that 26 LNG carriers departed the US plants between February 22 and February 28, the same as in the week before. Citing shipping data provided by Bloomberg Finance, the agency said the total capacity of these LNG vessels is 97 Bcf. Average natural gas deliveries to US LNG export terminals increased by 2.2 percent (0.3 Bcf/d) week over week, averaging 13.9 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana increased by 3.6 percent (0.3 Bcf/d) to 9 Bcf/d, while natural gas deliveries to terminals in South Texas were essentially unchanged at 3.7 Bcf/d. The agency said that natural gas deliveries to terminals outside the Gulf Coast were flat week over week at 1.2 Bcf/d. Cheniere’s Sabine Pass plant shipped nine cargoes and the company’s Corpus Christi facility sent four shipments during the week under review. Sempra Infrastructure’s Cameron LNG terminal and the Freeport LNG terminal each shipped four cargoes during the period, while Venture Global’s Calcasieu Pass LNG terminal sent three cargoes. Also, the Cove Point terminal sent two LNG cargoes and the Elba Island LNG terminal did not ship cargoes during the week under review. This report week, the Henry Hub spot price rose 3 cents from $1.60 per million British thermal units (MMBtu) last Wednesday to $1.63/MMBtu this Wednesday. The March 2024 NYMEX contract expired Tuesday at $1.615/MMBtu, down 16 cents from last Wednesday. Moreover, the April 2024 NYMEX contract price increased to $1.885/MMBtu, up 2 cents from last Wednesday to yesterday. According to the agency, the price of the 12-month strip averaging April 2024 through March 2025 futures contracts climbed 9 cents to $2.817/MMBtu. The agency said that international natural gas futures decreased this report week. Bloomberg Finance reported that weekly average front-month futures prices for LNG cargoes in East Asia fell 39 cents to a weekly average of $8.26/MMBtu. Natural gas futures for delivery at the Dutch TTF fell 11 cents to a weekly average of $7.64/MMBtu. In the same week last year (week ending March 1, 2023), the prices were $14.76/MMBtu in East Asia and $15.10/MMBtu at TTF, the agency said.
Tellurian expects to take FID on two Driftwood LNG plants in 2024 - US LNG firm Tellurian said on Monday it expects to take a final investment decision in 2024 to build the first two plants at its Driftwood LNG export plant in Louisiana. “Plants 1 and 2 are expected to FID in 2024 with plant 3 expected six to nine months thereafter,” the company said in a new presentation posted on its website. Tellurian expects to own 35-40 percent of the first two plants and an “increasing share” of expansion plants. It expects to have a 50 percent ownership in the third plant, 60 percent ownership in the fourth, and 65 percent ownership in the fifth plant. The company also said it expects to issue a full notice to proceed to compatriot engineering and construction giant Bechtel to begin construction for for the first phase of the plant in the second half of this year. Under the first phase, Tellurian aims to build two LNG plants near Lake Charles with an export capacity of up to 11 mtpa. Tellurian issued a limited notice to proceed to Bechtel in March 2022 and it said in August last year that Bechtel completed piling work for the first plant and also concrete pouring for all plant one compressor foundations. The firm claims it invested more than $1 billion in Driftwood with construction of the first two plants about 30 percent advanced. The full project would include five plants with a total capacity of about 27.6 mtpa. Tellurian also said in the presentation that potential expansion options could include a second facility with up to 30 mtpa of capacity.
Tellurian Looks to Start Major Driftwood LNG Construction By Year’s End - Tellurian Inc. has made another executive leadership change, this time choosing to part ways with its CEO, as it tries to fast track development of its Driftwood LNG project. The Houston-based company has been awash in personnel and strategy shifts since December, when its board of directors moved to dismiss co-founder and executive chairman Charif Souki. In the latest shuffle, Tellurian disclosed in a recent filing that the board chose not to renew CEO Octávio Simões’ contract. His current contract expires in June. Tellurian’s other co-founder, Martin Houston, was named executive chairman days earlier.
Delfin Midstream Requests DOE Extension to 2029 for Gulf of Mexico LNG Project - Delfin Midstream Inc. is seeking an additional five years to complete its LNG export project offshore Louisiana, marking one of the first tests of the Department of Energy’s (DOE) stance on extensions since last year. For more than a decade, Houston-based Delfin has been developing a proposed export project offshore Louisiana that would use four floating liquefied natural gas (FLNG) vessels with a combined capacity of more than 13 million metric tons/year (mmty). After signing around 5.6 mmty in tentative or binding offtake agreements, Delfin informed DOE that it has more than covered the capacity of the first FLNG vessel and is on its way to fully marketing the second. However, before it begins construction of the vessel, the company said it would need an extension, with...
Commonwealth LNG Pushes Potential FID into 2025 as DOE Pause Adds Uncertainty - A final investment decision (FID) for Commonwealth LNG will have to wait until next year, or even later, as Gulf Coast export project developers continue to adapt to the fallout of the Department of Energy’s (DOE) indefinite authorization pause. Commonwealth LNG LLC, currently developing a self-named export facility near Cameron, LA, was previously expected to reach an FID on the 9 million metric ton/year (mmty) project by the end of March. However, after the Biden administration ordered a pause for non-free trade agreement (FTA) export permits in January, Commonwealth is now expecting an FID could be delayed until at least July 2025. Commonwealth Spokesman Lyle Hanna told NGI the open-ended nature of the pause also has the potential to impact the timing of Commonwealth’s decision.
US natgas prices drop 6% to one-week low on small storage withdrawal, mild weather (Reuters) -U.S. natural gas futures dropped about 6% to a one-week low on Thursday on an expected much smaller-than-usual storage withdrawal last week when warmer-than-normal weather kept heating demand low. Traders also noted prices were down as the amount of gas flowing to liquefied natural gas (LNG) export plants remained low due to an ongoing outage at Freeport LNG's plant in Texas. That price decline came despite a drop in output over the past month aftergas prices collapsed to a 3-1/2-year low in Februaryand forecasts for cooler weather and more heating demand over the next two weeks than previously expected. Even though the forecasts called for a little more cool in coming weeks, meteorologists forecast the weather across the Lower 48 U.S. states would still remain mostly warmer than normal through at least March 18. The U.S. Energy Information Administration (EIA) said utilities pulled 40 billion cubic feet (bcf) of gas out of storage during the week ended March 1. That was in line with the 40-bcf withdrawal that analysts forecast in a Reuters poll and compares with a decrease of 72 bcf in the same week last year and a five-year (2019-2023) average decline of 93 bcf for this time of year. That decrease left gas stockpiles about 31% above normal levels for this time of year. Analysts projected that storage surplus would grow in coming weeks as mild weather keeps heating demand low. "Many analysts are projecting another small withdrawal next week, with some models even reflecting an (unusual) injection into working gas stocks rather than a withdrawal," analysts said in a note. Front-month gas futures NGc1 for April delivery on the New York Mercantile Exchange fell 11.1 cents, or 5.8%, to settle at $1.818 per million British thermal units (mmBtu), their lowest close since Feb. 27. Prices collapsed to an intraday low of $1.511 per mmBtu on Feb. 27, their lowest since June 2020, as near-record output, mostly mild weather and low heating demand this winter allowed utilities to leave significantly more gas in storage than usual for this time of year.
Enbridge Earmarking More Capital to Build Out Gulf Coast LNG, Oil Infrastructure - With a portfolio of North American projects from which to pick and choose, Enbridge Inc. is zeroing in on the Gulf Coast to advance a plethora of natural gas and oil projects to move more supply overseas. The Enbridge executive team during the annual investor day conference on Wednesday laid out the near-term strategy in New York City. The Calgary-based midstream giant is planning a plethora of investments from Western Canada to the deepwater Gulf of Mexico (GOM) centered around LNG exports, oil infrastructure and natural gas utilities. CEO Greg Ebel shared the stage with his executive team to discuss the broad gas and oil expansions across the continent.
Enbridge to Invest in Midstream Expansion, Pipelines -- Enbridge Inc. said it is making new capital investments in line with its Permian export strategy and gas transmission plans. Enbridge President and CEO Greg Ebel said in a statement Wednesday, “Today we are announcing accretive new capital investments focused on our U.S. Gulf Coast strategy. These include additional export docks and storage tanks at Enbridge Ingleside Energy Center (EIEC) and connecting egress for Shell's Sparta assets offshore of Louisiana's coastline”. “These accretive investments provide near-term growth in the U.S. Gulf Coast and set the stage for the future expansion through high quality partnerships and embedded organic opportunities. In combination with today's announcements, our secured growth backlog sits at $25 billion and is made up of more than 20 highly executable projects”, Ebel noted. The new capital investments include the expansion of the Planning Gray Oak Pipeline of approximately 120,000 barrels per day (bpd), pending a successful open season. The expansion will increase crude capacity throughout Enbridge's entire integrated Permian super system. Enbridge sanctioned 2.5 million barrels of additional storage at EIEC (Phase VII), which will bring overall storage capacity to approximately 20 million barrels by 2025. The timely addition of storage tanks at Ingleside supports higher crude throughput by ensuring customers have on-demand access to their export-ready crude supply, the company said. The company also plans to acquire two marine docks and land from Flint Hills Resources adjacent to the EIEC terminal for around $0.2 billion. The transaction is expected to close in the third quarter, subject to receipt of customary regulatory approvals and closing conditions. Enbridge plans to fully integrate the waterfront between EIEC and the newly acquired docks, which will add immediate crude oil export capacity and streamline existing Ingleside operations by increasing very large crude carrier (VLCC) windows on the primary facility docks. Further, the company has sanctioned around $0.2 billion of offshore pipelines to service Shell and Equinor's sanctioned Sparta development. Enbridge and Shell Pipeline have extended their relationship through additional investment in growing Gulf of Mexico offshore plays with a newly formed joint venture, Oceanus Pipeline Company, LLC. "Global demand for affordable, reliable and sustainable energy continues to rise and North America has a critical role to play”, Ebel said. “Abundant, cost-competitive and sustainable conventional and lower carbon energy sources provide people with the energy they need while supporting countries and communities in meeting global emission targets. At Enbridge, we're building out our integrated infrastructure super systems, to enable the continued delivery of energy in a planet-friendly way, everywhere people need it". “Disciplined capital allocation remains a top priority and we are laser focused on protecting the balance sheet. We plan to invest $6-$7 billion annually on secured projects and stay within our target leverage range of 4.5x to 5.0x. When it comes to deploying additional investment capacity, we will live within our means and ensure all investments are accretive on per share metrics, enhance our growth profile and maintain our balance sheet flexibility”, he added. Regarding its planned acquisition of three U.S. gas utilities, Enbridge said it is investing approximately $3 billion annually “in low-risk natural gas utility infrastructure, inclusive of the assumed capital for the acquisitions”. In September 2023, Enbridge entered into three separate definitive agreements with Dominion Energy Inc. to acquire natural gas distribution companies East Ohio Gas Co. (EOG), Public Service Co. of North Carolina Inc. (PSNC), and Questar Gas Co. for an aggregate purchase price of $14 billion (CAD 19 billion), composed of $9.4 billion of cash consideration and $4.6 billion of assumed debt.
Following FERC Approval, Oneok Eyeing Midyear FID for Saguaro Connector Natural Gas Pipeline - Oneok Inc. is aiming to take a final investment decision (FID) by the middle of this year on the 2.8 Bcf/d Saguaro Connector natural gas pipeline. The U.S. Federal Energy Regulatory Commission (FERC) approved the project’s Presidential Permit in February. Saguaro Connector would transport Permian Basin natural gas to the U.S.-Mexico border. From there, it would connect with the Sierra Madre pipeline planned by Mexico Pacific Ltd. LLC, and onto Mexico Pacific’s proposed Saguaro Energía LNG export terminal in Puerto Libertad, Sonora. Although it has secured several high-profile offtakers, Mexico Pacific has yet to reach FID on the liquefaction terminal. Saguaro Connector is “the most economic route” for U.S. liquefied natural gas to reach the Asia Pacific market.
West Texas Spot Natural Gas Prices Tank as Pipeline Work Traps Supply - Spot natural gas prices for Wednesday flow at Waha and nearby delivery hubs in West Texas fell into negative territory as pipeline maintenance prevented some gas from leaving the basin and mild, spring-like weather reduced demand. Waha Hub spot prices for next-day delivery tumbled 72.0 cents day/day to minus 54.5 cents. The last time Waha’s spot averaged in the negatives was on Oct. 24, 2023, at minus 24 cents, NGI’s daily historical data show. Elsewhere in the region, an 81.5-cent loss at El Paso Permian sent the average to minus 52.0 cents, and Transwestern tumbled 63.5 cents to minus 53.5 cents, according to NGI daily spot gas price data.
Weekend oil spill, produced water spill reported in North Dakota -- The North Dakota Department of Environmental Quality is inspecting two sites of reported spills in Billings and Burke counties. A crude oil spill of over 75-hundred gallons happened on Friday at Murex Petroleum near Grassy Butte. On Saturday at Formentera Operations southeast of Portal a produced water spill released over 12-thousand-gallons on to agricultural land. The state Department of Environmental Quality will monitor the cleanup and remediation. Tags: North Dakota
BlackRock to Buy TC Energy Natural Gas Pipeline System in $1.14 Billion Deal -- BlackRock Inc. and Morgan Stanley investment funds agreed to buy TC Energy Corp.’s Portland Natural Gas Transmission System in a deal valued at about $1.14 billion as the world’s largest asset manager bulks up in infrastructure. The sale by TC Energy and partner Energir LP to BlackRock’s diversified infrastructure business and investment funds managed by Morgan Stanley Infrastructure Partners includes the assumption of $250 million in debt. TC Energy said Monday it will reap pretax cash equity proceeds of about C$740 million ($545 million). BlackRock is working to become a player in the expanding market for alternative assets, snapping up Global Infrastructure Partners for about $12.5 billion and investing $500 million in an arm of Canadian Solar Inc. just this year. For TC Energy, the sale moves it closer to achieving a goal of selling C$3 billion in assets this year to reduce its debt. The Portland Natural Gas Transmission System consists of 295 miles (475 kilometers) of natural gas pipelines in northern New England and Atlantic Canada. Barclays provided financial advice to TC Energy and Energir on the sale. Bracewell LLP was legal adviser to TC Energy.
Paramount Resources Shuttering Some Montney Dry Natural Gas, Reducing ‘24 Forecast - Western Canada independent Paramount Resources Ltd. has curtailed some of its natural gas production in Western Canada amid the low price environment. The independent, whose development is focused in the Montney Shale region, has shut in dry gas production and reduced its forecast 2024 average sales volumes by about 2,250 boe/d. The “company continues to closely monitor market conditions and may restore or further reduce production as conditions warrant,” management said in its recent quarterly results. Paramount cut its 2024 forecast to a range of 100,000 boe/d to 106,000 boe/d (47% liquids), which is 9,000 boe/d lower at the midpoint than prior guidance.
Mexico Natural Gas Market Undergoing Restructure Amid Sub-$2 Prices – Spotlight - North American natural gas prices got a bump earlier in the week when top U.S. producer EQT Corp. announced it was curtailing output, but the rally was short-lived. On Thursday, the New York Mercantile Exchange contract for April settled at $1.818/MMBtu, down 11.1 cents day/day. Mexico pipeline imports of natural gas for the 10-day period through Thursday were 6.83 Bcf/d, according to NGI figures. West Texas flows have dimmed in March amid prices that again went negative this month. Wood Mackenzie analyst Kara Ozgen said the West Texas cash weakness aligns with an apparent drop in flows on the intrastate Whistler Pipeline on Tuesday. Ozgen also forecast “more weakness ahead at Waha a month from now” with Gulf Coast Express Pipeline LLC conducting maintenance in April and..
LNG Exports from Mexico in Limbo While Pipeline Project Plows Ahead - Mexico anticipates exporting liquified natural gas for the first time this year. But prospects for the country’s nascent LNG industry—where each export terminal requires more than one billion dollars in investment—have cooled following the Biden administration’s pause in January on new export permits.The Department of Energy issues permits for LNG terminals in Mexico that would re-export natural gas from the United States. On Jan. 26, the Biden administration announced a pause in pending permits for LNG export to non-free trade countries while the DOE updates its economic and environmental analyses for these projects. The move came after increasing public pressure to reject new LNG export permits in places like the Gulf Coast. The new analysis is expected later this year. Meanwhile, projects in Mexico waiting on permits, or seeking additional export capacity, are now in limbo. At least four LNG export projects on Mexico’s Pacific Coast are impacted by the pause, and another three on the Gulf Coast. Mexico is already the biggest importer of natural gas from the U.S. If proposed LNG export facilities go forward, it could also become a major player in the global LNG market. But it remains to be seen whether additional scrutiny from U.S. regulators will scare off investors or merely slow down the rise of LNG exports from Mexico. For now, the pause is encouraging environmental advocates in Mexico who question the country’s reliance on U.S. natural gas and the climate impacts of LNG exports. “The fact that Biden paused these projects, and that he used a climate argument to do so, is good news,” said Pablo Ramírez, a climate and energy campaigner for Greenpeace Mexico. “But we don’t know just how good that news will be for Mexico.”Other advocates worry that natural gas export capacity will continue to rise despite the pause. Houston-based Mexico Pacific Limited’s proposed Saguaro Energía terminal would export LNG from the coast of Sonora to Asia. The facility will now face additional review as it seeks more export capacity. But in February the Federal Energy Regulatory Commission approved the pipeline that would cross from Texas into Mexico to transport gas to the proposed export facility.“At a time when the Biden administration is saying we need to take a closer look at the public interest factors that go into these gas exports, here we have the FERC essentially ignoring that,” said Doug Hayes, a senior attorney with the Sierra Club.The eight facilities already exporting LNG from the United States are unaffected by the recent pause. But in Mexico, the announcement comes as the country prepares to export LNG for the first time. Thanks to its proximity to the Permian Basin and other Texas oilfields, Mexico’s imports of U.S. natural gas have already skyrocketed in recent years.The proposed LNG export projects in Mexico that have received or applied for non-free trade country export permits have a combined total capacity of 60.8 million metric tons per year, according to global ship brokerage Poten & Partners. According to industry data, the United States exported 88.9 million metric tons of LNG during 2023, an all-time high.As fracking revolutionized the oil and gas industry, Texas produced a glut of cheap natural gas. Exporting to Mexico was a logical next step. Energy reforms in 2014 opened Mexico to more foreign investment and free trade agreements facilitated natural gas exports. Companies like TC Energy, an infrastructure company based in Calgary, formerly known as TransCanada, and Energy Transfer Partners, one of North America’s largest midstream energy companies, built an extensive network of pipelines crossing from Texas into Northern Mexico and the center of the country.By 2022, imports from the United States met 69 percent of the demand for natural gas in Mexico, according to Mexico’s Secretary of Energy. “Mexico has had access to a relatively stable, affordable and substantial supply of natural gas,” saidDiego Rivera Rivota, a senior research associate at Columbia University’s Center on Global Energy Policy who previously worked as an advisor to Mexico’s state-owned utility. “This has been good news for Mexican users… but now we are in a situation in which Mexico is heavily dependent on these imports.”As Mexico imported more natural gas, U.S. LNG exports from the Gulf Coast to Europe and beyond soared from 2016 on. But to reach growing markets in Asia, LNG tankers departing from the Gulf Coast had to pass through the Panama Canal. Meanwhile, efforts to build LNG export facilities on the west coast of the U.S., such as Jordan Cove on Coos Bay in Southwest Oregon, foundered.
Peru LNG terminal sent four cargoes in February - Peru LNG’s liquefaction plant at Pampa Melchorita has shipped four liquefied natural gas cargoes in February, one less shipment compared to the previous month. According to the shipment data by state-owned Perupetro, during February the 4.4 mtpa LNG plant sent three shipments each to South Korea and one shipment to Japan.The shipments loaded onboard the LNG carriers Maran Gas Hydra, Maran Gas Achilles, Maran Gas Roxana, and Malaga Knutsen equal about 301,227 tonnes, the data shows.These four LNG cargoes loaded at the Peru LNG plant in February compare to five cargoes in February last year, while Peru LNG shipped five cargoes in January 2024.The 135,423-cbm, Seapeak Madrid, also departed the Peru LNG plant on March 3, its AIS data shows.Peru LNG increased its exports last year compared to the year before, and it also expects to boost the number of shipments in 2024.The terminal loaded 55 vessels in 2023, compared to 51 vessels in 2022.Peru LNG said that the main destinations in 2023 were United Kingdom and South Korea, and also Japan, China, Spain, France, Netherlands, and Canada.
Spot LNG shipping rates down, European and Asian prices up - Spot charter rates for the global liquefied natural gas (LNG) carrier fleet decreased this week, while European and Asian prices rose compared to the week before. Last week, Atlantic spot LNG freight rates dropped below $50,000 per day as the spot fixing window moved into the seasonally softer Q2 period. “Spark freight rates fell further this week, with the Spark30S Atlantic spot rate falling by $2,000 to $47,750 per day, and the Spark25S Pacific rate falling by $4,750 per day to $53,500 per day,” Qasim Afghan, Spark’s commercial analyst, told LNG Prime on Friday. He said these are the lowest freight rates reported since June 2023. LNG freight rates are continuing to decrease despite the fact that LNG carriers are still avoiding the Suez Canal due to the situation in the Red Sea. Since January, LNG carriers, including Qatari vessels delivering LNG shipments to Europe, are favoring the Cape of Good Hope for safer passage. Kpler said previously that the Suez Canal has witnessed no LNG transits since January 17. In addition, due to a drought situation impacting the Panama Canal, LNG transits through the waterway keep declining as well. Official data previously showed that LNG transits dropped to 326 in fiscal 2023 from 374 in 2022 and 537 in 2021. In Europe, the SparkNWE DES LNG front month rose compared to the last week. The NWE DES LNG for March delivery was assessed last week at $6.858/MMBtu. “The SparkNWE DES LNG price is reported at $7.401/MMBtu, corresponding to a $0.543/MMBtu week-on-week increase,” Afghan said. “This is the first week-on-week increase in 4 weeks, and the largest weekly gain since October 2023,” he said. Levels of gas in storages in Europe remain high for this time of the year due to mild weather. Data by Gas Infrastructure Europe (GIE) shows that gas storages in the EU were 62.78 percent full on February 28. Gas storages were 64.69 percent full on February 22. This week, JKM, the price for LNG cargoes delivered to Northeast Asia, rose when compared to the last week, according to Platts data. JKM for April settled at $8.370/MMBtu on Thursday. According to Platts, Chinese buyers are buying spot LNG cargoes due to low prices and to rebuild inventory after the Lunar New Year holiday.
U.S. Production Cuts Help Lift European Natural Gas Prices – European natural gas prices continued climbing higher on Tuesday, lifted partly by the largest U.S. gas producer’s decision to curb output significantly this quarter. The Title Transfer Facility (TTF) gained across the curve, with the prompt month adding another 4% to finish about a quarter shy of $9/MMBtu on Tuesday. EQT Corp.’s announcement on Monday to cut 1 Bcf/d of its U.S. gas production through the end of March helped support TTF’s momentum as it followed other commodity prices higher. The contract gained 7% last week and another 4% on Monday. Engie EnergyScan analysts said weaker renewables output, an increase in coal and U.S. gas prices, and profit taking have pushed TTF higher in recent days. In the United States, the April Henry Hub contract added another 2%...
More Israeli Natural Gas Could Reach Global Markets Via Egyptian LNG Facilities - -Natural gas output from Israel is again poised to increase as Chevron Corp. and its partners plan to invest more in the Tamar field, raising prospects for additional Eastern Mediterranean volumes to reach the global market via Egyptian liquefaction facilities. Tamar’s production is set to go from 1.2 Bcf/d to nearly 1.6 Bcf/d now that Chevron has reached a final investment decision (FID) to expand Tamar’s production and export capacity by 2025. Last month, Israeli energy minister Eli Cohen said “dramatic growth” in gas exports to Egypt and Jordan are a strategic asset for Israel and the region. But how much Israeli gas Egypt designates for LNG exports depends on its domestic gas demand. Chevron’s FID came after the Tamar partners signed a new gas sales agreement with Blue Ocean Energy. Per the agreement, the Tamar partners will sell an additional 4 billion cubic metres (BCM) of natural gas per year to Egypt for a duration of 11 years.
Oil spill from capsized barge near Tobago soils beaches hundreds of miles away - -- An offshore oil spill that prompted Trinidad and Tobago to declare a national emergency earlier this month involves hundreds of thousands of gallons of fuel, some of which has reached the shores of the Dutch Caribbean island of Bonaire hundreds of miles away, authorities said. This is the first estimate of the size of the spill, and the first sign of how far the leaked oil has traveled. A minimum of 420,000 gallons (1.6 million liters) of oil mixed with water have been vacuumed near Tobago where a barge capsized, officials announced Wednesday. However, they warned the number is likely larger since it does not include oil picked up with sand and sargassum. “A substantial amount of this material found its way out of Tobago as well,” said Farley Augustine, chief secretary of the Tobago House of Assembly. “It’s hard to estimate precisely how much leaked out of the vessel.” Augustine warned that “a spill of this size” would take up to eight months to be fully cleaned, with waste-management efforts taking more than a year and remediation efforts such as replanting mango trees and repopulating ecosystems taking up to three years. “We are in this for the long haul,” he said at a press conference. Officials have not provided a preliminary estimate of the damage the spill caused, noting the investigation is ongoing. Augustine said the government has some leads but declined to share details: “We will have sufficient time to prosecute this matter, and we most definitely will.” The oil spill was blamed on an overturned barge that had departed from Panama and was being tugged to nearby Guyana when it began to sink, according to a preliminary investigation. The owner of the barge has not been identified. Allan Stewart, director of Tobago's emergency management agency, said rugged terrain and cliffs in Lambeau and parts of Scarborough in the island's southern region have complicated cleanup efforts. He said the local government also needs more personal protective equipment as well as water and detergent to wash the one currently in use. In addition, officials need more frac tanks. “We are running out of space in terms of containment,” Stewart said. Meanwhile, government officials in Bonaire said the oil poses a “serious threat” to the island and its nature including its mangroves, fish and corals. The oil washed up in areas along the island's east coast despite efforts to contain it, the government statement said Monday. Bonaire is more than 500 miles (830 kilometers) east of Tobago, where the spill occurred. Augustine said local and international experts working to contain and clean up the spill have not identified any leak from the barge in days, but the danger may not be over. “It may very well have other compartments that...have not leaked as of yet,” he said, adding that crews are still probing the barge. Trinidad and Tobago’s Ministry of Energy said Tuesday that crews completed an investigative hydrographic survey of the wreck to allow officials to create a map of the seabed and other data around the wreck, which foreign experts are helping to remove. Crews are working to contain and collect the oil, officials said. Environmental activists have questioned who will pay for the cleanup costs and demanded help for fishermen whose livelihood and equipment were affected. Augustine said relief efforts will start Friday, with the government distributing vouchers to those affected so they can buy groceries.
Joint investigation points to identity of tug owner involved in Tobago oil spill - In the hunt to find the owners of a tug and a barge responsible for one of the Caribbean’s worst oil spills in recent years, a joint investigation carried out by Bellingcat and the Trinidad & Tobago Guardian has laid the finger of blame on a Panama-registered company called Melaj Offshore. According to Bellingcat, a Netherlands-based investigative journalism group, and ship registration documents provided by the Zanzibar Maritime Authority, the listed owner of the Tanzania-registered, 1976-built tug Solo Creed which accompanied the Gulfstream barge during its disastrous journey was Melissa Rona Gonzalez, an official of Melaj Offshore Corporation. The authority confirmed that the period of registration for the tug includes the start of the journey on December 30, 2023, until it abandoned the Gulfstream barge on or around February 6. The registration period expired on February 29. The Panamanian corporate registry shows that Gonzalez is an officer of Melaj Offshore and that the power of attorney for the firm belongs to her husband, Augustine Jackson. The tug and the barge have a history of towing Venezuelan oil. The barge’s final, fateful voyage saw it take some 35,000 barrels of oil on a voyage that was meant to end in Guyana, but along the way, the barge ran into difficulties. After the 48-year-old barge capsized off the coast of Tobago, the oil slick spread hundreds of kilometres west and reached the east coast of the Dutch Caribbean island of Bonaire and later Aruba and Grenada. Curaçao is another island currently on alert. Last Friday, Bonaire’s acting governor Nolly Oleana said that clean-up efforts are in full swing. Oil has washed up periodically on the island’s eastern coastlines but has not made it to the dive sites and heavily trafficked tourist areas on the island’s western side. She has pointed out that more oil could spill into several inlets on the island. The island officials are working with the government of Trinidad and Tobago regarding compensation for the spill. “We are in contact with Trinidad and Tobago. Together, we do want to prosecute. A legal expert from the Netherlands is in contact with a lawyer from Trinidad and Tobago. We both just don’t know who owns the ship yet. And we also don’t know who owns the oil product on the ship. Once this is known, follow-up steps will be taken,” Orellana said.
CAF approves US$250,000 for Tobago oil spill --CAF–Development Bank of Latin America and the Caribbean–has approved a donation of US$250,000 to Trinidad and Tobago to alleviate the effects of the oil spill that has affected the coast of Tobago.A release from CAF yesterday posted online by the Ministry of Finance said that in a letter from executive president of CAF Sergio Díaz-Granados to Prime Minister Dr Keith Rowley, Díaz-Granados announced the immediate donation.“CAF stands in solidarity with T&T and offers all its technical and financial tools to support the Government in facing the effects of the oil spill on the country’s coasts and achieving a prompt solution to the problem,” said Díaz-Granados.The release added that CAF aims to contribute through the appropriate channels deemed by the Government.It also reiterated its commitment as a “strategic ally for the development of its member countries”.Responding to Díaz-Granados’ letter was Minister of Finance Colm Imbert, who said he was “very appreciative and truly grateful” for the financial and moral support extended by CAF.
CPCL leaks oil deliberately, alleges WRD - The state water resources department (WRD) has alleged that the CPCL (Chennai Petroleum Corporation Limited) deliberately leaks the oil through its pipeline during the monsoon periods and urged Tamil Nadu Pollution Control Board (TNPCB) to ensure no such actions happen in the future. In a status report submitted to the southern bench of National Green Tribunal (NGT), which is hearing a suo motu case regarding Ennore oil spill, WRD said that the CPCL premises is at a much lower elevation compared to Buckingham Canal bund level, “which would have caused {ooding in the CPCL campus contradicting with the statement of CPCL having an adequately well-designed storm water system which tackled the 2015 monsoon deluge.” Also Read - Ajith to be discharged from hospital today, treated for cerebellar infarction Saying that the peak discharge capacity of the Kosasthalaiyar river at the tail end is 1,25,000 cusecs, the WRD claimed that it had released only 45,000 cusecs. Earlier, CPCL submitted that the reznery was inundated to a height of one metre owing to the excess water of around 45,000 cusecs released from Poondi and Puzhal reservoirs. “This {ooding caused the {ood waters to mix with oil reznery, in order to ensure their CPCL premises devoid of oil spilled {ood water, CPCL would have discharged this surplus {ood waters into the nearby water bodies such as the Redhills surplus course and the North Buckingham Canal, “ WRD alleged. Pointing out that the oil spill has caused severe environmental damage, WRD said that the petroleum manufacturing enterprises such as Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) adjoining the Ennore Creek were developed on the wetlands and Salt Pan lands. These wetlands would have once acted as a {ood- buffer during {ood circumstances several decades ago before the development of BPCL and HPCL. “It is further respectfully submitted that CPCL deliberately engages in leaking the oil through its pipelines during the monsoon periods which was visualised by the oil {oating at top surface of the Buckingham Canal. The dilution of the Canal during monsoon makes it easier for CPCL to deliberately leak the oil into the Buckingham Canal. The periodical inspections have to be carried out by the Tamil Nadu Pollution Control Board to ensure that no such environmental havoc happens in the future, thereby safeguarding the natural ecosystem and livelihood of the zshermen in the Ennore creek, “ WRD told the NGT.
Oil prices slip after OPEC+ extends voluntary oil output cuts Oil prices fell Monday after oil cartel OPEC+ agreed to extend voluntary output reductions until the second quarter, in an effort to support the short-term stability of crude markets. Global benchmark Brent fell 75 cents, or 0.9%, to settle at $82.80 a barrel Monday, while U.S. West Texas Intermediate futures lost $1.23, or 1.54%, to settle at $78.74 per barrel. OPEC+ announced on Sunday that the 2.2 million barrels per day of voluntary output cuts that were planned for the first quarter of this year will continue into the next quarter. "As market expectations for a rollover had grown more apparent recently, we believe the extension may have been increasingly priced in," OPEC+ kingpin and de facto leader Saudi Arabia said it will prolong its voluntary cut of 1 million barrels per day until the end of the second quarter, state-owned Saudi Press Agency said Sunday. Riyadh's crude production will stand at approximately 9 million barrels per day until the end of June. "With OPEC loadings appearing steady and aggregate OPEC supply potentially showing little effect from incremental voluntary cuts implemented in Q1, we do not view the extensions from the broader group as particularly impactful," Chancellor wrote. Russia, another OPEC+ heavyweight, will slash its production and export supplies by a combined 471,000 barrels per day until the end of June. Moscow had volunteered to reduce its supplies by 500,000 barrels per day in the first quarter. Other key producers Iraq and UAE will also extend their voluntary production cuts of 220,000 barrels per day and 163,000 barrels per day respectively, until the end of the second quarter. "This new move by OPEC+ clearly shows strong unity within the group, something that was put into question after the November ministerial meeting, which saw Angola leaving OPEC," Rystad Energy's Senior Vice President Jorge Leon wrote in a note following the oil cartel's decision. The extension signals "robust determination" to defend a price floor above $80 per barrel in the second quarter, he said, adding that if OPEC+ rapidly unwound the cuts, oil prices will drop to $77 per barrel in May. "Such a move by OPEC+ might also be seen as a sign that demand prospects in the second quarter are less optimistic than the group thought in November last year," he said. Oil prices have been languishing in a narrow $75 to $85 per barrel range since the start of the year, in spite of OPEC+ supply cuts, persistent Houthi maritime attacks in the Red Sea artery and ongoing geopolitical risks from Israel's war against Hamas.
An Inside Trading Day on Monday Following the Widely Expected Extension of Voluntary Output Cuts The oil market posted an inside trading day on Monday following the widely expected extension of voluntary output cuts through the middle of the year by OPEC+. On Sunday, OPEC+ decided to extend their voluntary oil output cuts of 2.2 million bpd into the second quarter to cushion the market. The crude market also saw some retracement of Friday’s gains as pressures are mounting for a ceasefire between Israel and Hamas. The market posted a high of $80.41 in overnight trading, failing to trade higher after the OPEC+ announcement as the market had already priced in an extension of the output cuts. The oil market continued to trend lower and sold off to a low of $78.56 in afternoon trading as the U.S. said a temporary ceasefire in Gaza was essential to a hostage deal and called on Hamas to accept the terms currently on the table. The April WTI contract settled down $1.23 at $78.74 and the May Brent contract settled down 75 cents at $82.80. The product markets ended the session in negative territory, with the heating oil market leading them lower amid above normal temperatures seen in the Midwest and Northeast. The heating oil market settled down 5.7 cents at $2.6472 and the RB market settled down 2.87 cents at $2.5857. OPEC+ members, led by Saudi Arabia and Russia, on Sunday agreed to extend voluntary oil output cuts of 2.2 million bpd into the second quarter, giving extra support to the market amid concerns over global growth and increasing output outside the group. Saudi Arabia said it would extend its voluntary cut of 1 million bpd through the end of June, leaving its output at around 9 million bpd. Russia will cut its oil production and exports by an extra 471,000 bpd in the second quarter. Russian Deputy Prime Minister Alexander Novak gave new figures showing that cuts from production will make up an increasing proportion of the measure. He said in April, Russia will reduce output by an extra 350,000 bpd, with exports cut by 121,000 bpd. In May, the extra output cut will be 400,000 bpd and exports cut by 71,000 bpd. In June, all the additional cuts will be from oil output. Saudi state news agency SPA said the cuts would be reversed gradually, according to market conditions. For the second quarter, Iraq will extend its 220,000 bpd output cut, UAE will keep in place its 163,000 bpd output cut and Kuwait will maintain its 135,000 bpd output cut. Algeria also said it would cut by 51,000 bpd and Oman by 42,000 bpd. Kazakhstan said it will extend its voluntary cuts of 82,000 bpd through the second quarter. According to Reuters calculations, the total OPEC+ pledged cuts since 2022 stand at about 5.86 million bpd, equal to about 5.7% of daily world demand. OPEC+ is scheduled to meet on April 3rd to review market conditions and assess members’ production data, while output policy for the second half of the year will be discussed on June 1st.IIR Energy said U.S. oil refiners are expected to shut in about 1.6 million bpd of capacity in the week ending March 8th, increasing available refining capacity by 284,000 bpd. Offline capacity is expected to fall to 712,000 bpd in the week ending March 15th. According to the draft text of a funding bill, the U.S. may sell its 1 million barrel Northeast gasoline reserve in fiscal year 2024. The proceeds from the sale of the refined products in the reserve would be deposited into the Treasury’s general fund. The bill stipulates that once the Northeast Gasoline Supply Reserve is closed, the secretary of energy cannot establish any new regional petroleum product reserve unless funding is explicitly requested in advance of an annual budget submitted by the president and approved by Congress.
Oil slips as China reforms underwhelm despite OPEC+ support - Oil slipped for a second day on Tuesday as concern over China’s plan for growth and uncertainty over the pace of U.S. interest rate cuts offset the prospect of a tighter market due to continued OPEC+ supply restraint. China set an economic growth target for 2024 of around 5%, similar to last year’s goal and in line with analysts’ expectations, but the lack of big ticket stimulus plans to prop up its struggling economy disappointed investors. Brent crude fell 42 cents, or 0.5%, to $82.38 a barrel by 1213 GMT, while U.S. West Texas Intermediate (WTI) was down 39 cents, or 0.5%, to $78.35. Brent has gained about 7% this year. “Public enemy No 1 of a protracted rally and the $90 oil price is the uncertainty surrounding interest rate cuts,” said Tamas Varga of oil broker PVM, who added that concern over China’s growth target was adding downward pressure. The U.S. Federal Reserve is under no urgent pressure to cut interest rates given a “prospering” economy and job market, Atlanta Fed President Raphael Bostic was reported on Monday as saying. Oil inches lower amid profit taking on OPEC+ cut extension Some support came from the prospect of a tighter market after members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) on Sunday extended their voluntary oil output cuts of 2.2 million barrels per day (bpd) into the second quarter. “The market has been moving higher in recent weeks amid improving fundamentals. Rising spot prices indicate the physical market has begun to tighten amid a host of other supply-side disruptions,” analysts at ANZ said in a note on Monday. Even so, the latest round of U.S. inventory reports are expected to show crude stocks increased about 2.6 million barrels last week, while distillates and gasoline stockpiles are forecast to decline.
Oil Softens as Traders Eye Crude Build, Fall in Services -- Oil futures settled lower for the second straight session on Tuesday following a pair of U.S. macroeconomic reports showing the economy might have slowed more than previously expected during the first quarter, spurring bets for an earlier start to a rate-cutting cycle by the Federal Reserve. Business activity across the U.S. services sector, accounting for roughly 70% of gross domestic product, unexpectedly cooled in February, according to data released Tuesday morning by the Institute of Supply Management (ISM). While still in expansion territory, ISM Services Index eased to the lowest reading since November 2023 at 52.6, which was 0.8% below January. Interestingly, the Employment Index contracted for the second time in three months in February with a reading of 48%, a 2.5% decrease from 50.5% recorded in January. Similar labor dynamics are already evident in the goods-producing side of the economy, which has remained in recession for 16 consecutive months through February. The employment sub-index in ISM Manufacturing deteriorated to 45.9% last month. Fresh macroeconomic data might suggest the U.S. labor market, which has provided bedrock support for economic growth in recent years, might be weakening under the weight of high-interest rates. Investors will get a deeper look at labor market dynamics with weekly unemployment claims due out Thursday morning and February's non-farm employment report scheduled for a Friday morning release. January factory orders sank to -3.6% in January from a downward revised 0.3% drop in December, underpinned by weak consumer demand for manufactured durable goods and transportation equipment. New orders for manufactured goods in January were down three of the last four months. Separately, U.S. commercial crude oil inventories likely increased for a sixth consecutive week through March 1 amid a laggard return of domestic refinery utilization following the lingering effects of bad weather on refinery operations in January, unscheduled shutdowns and seasonal maintenance. A consensus of analysts surveyed by the Wall Street Journal said commercial oil stocks increased 1.3 million barrels (bbl) last week following a 4.2 million bbl build reported in the previous week. Refinery capacity use is expected to have risen 1% to 82.5%, according to the survey. Over the last four weeks, U.S. refiners processed an average of 14.657 million barrels per day (bpd), 449,000 bpd less than the comparable four-week average period in 2023. At settlement, West Texas Intermediate April futures on NYMEX retreated $0.59 to $78.15 bbl, continuing a retreat from Friday's $80.85 four-month high on the spot continuous chart. International crude benchmark Brent for May delivery declined $0.76 to $82.04 bbl. NYMEX April RBOB futures fell back $0.0529 to $2.5328 gallon, and April ULSD futures declined $0.0407 for a $2.6065 gallon settlement.
WTI Extends Gains After Big Product Draws, Crude Production Cut -Oil prices are rising this morning after Saudi Arabia unexpectedly increased prices of its main grade to buyers in Asia and broader financial markets rebounded from Monday’s losses.Traders will be closely watching Powell's testimony before the House Financial Services Committee for more detail on the possible timing of interest rate cuts that the market is expecting this year."Public enemy No 1 of a protracted rally and the $90/bbl oil price is the uncertainty surrounding interest rate cuts," "The Fed chair's testimony and the ECB interest rate decision on Thursday could revive hopes for a June reduction in borrowing costs," Varga said.Crude was supported technically (at its 200DMA) and by last night's smaller than expected crude build. API
- Crude +423k (+1.3mm exp)
- Cushing +500k
- Gasoline -2.8mm (-1.4mm exp)
- Distillates -1.8mm (-400k exp)
DOE
- Crude +1.37mm (+1.3mm exp)
- Cushing +701k
- Gasoline -4.46mm (-1.4mm exp) - biggest draw since Nov
- Distillates -4.13mm (-400k exp) - biggest draw since May
Large product draws dominated the official data with a crude build that met expectations...
Oil price news: oil rises near 2024 high on signs of growing U.S. gasoline demand - Oil climbed to near its highs for the year after a U.S. report showed signs of rising fuel demand heading into the summer driving season. West Texas Intermediate rose 1.3 per cent to top US$79 a barrel after government figures showed U.S. gasoline inventories falling 4.46 million barrels last week. That built off an earlier gain driven by Saudi Arabia’s decision to raise prices to Asia and a rally in equities as Federal Reserve Chair Jerome Powell spoke to Congress. U.S. crude prices have tested the $80 psychological level for the last few sessions, but have been unable to push through it decisively. Yet now that WTI has had a “clean break” above $79 a barrel, “the technical path of least resistance has been confirmed to the upside,” said Fawad Razaqzada, a market analyst at City Index and Forex.com. Embedded Image Crude prices have been on a slow and steady grind higher this year, supported by the OPEC+ cutbacks, tensions in the Middle East and disruptions to shipping in the Red Sea, including a strike on a commodity ship on Wednesday. The creeping pace of gains has crushed market volatility, and the Organization of the Petroleum Exporting Countries and allies agreed on Sunday to extend their existing output cuts to the end of June, potentially tightening the market and drawing down stockpiles. Signs of tightness in the physical market are apparent, with near-term futures for U.S. benchmark WTI strengthening to a premium of as much as $1 over later-dated barrels. That’s near the highest in four months, excluding volatile contract-expiration dates. WTI for April delivery climbed 1.3 per cent to $79.13 a barrel in New York. Brent for May settlement rose 1.1 per cent to settle at $82.96 a barrel.
Oil Mixed as US Dollar Retreats Ahead of Employment Report - Oil futures nearest delivery on the New York Mercantile Exchange (NYMEX) and Brent crude traded on the Intercontinental Exchange settled Thursday's session mixed as the U.S. dollar retreated and stocks on Wall Street rose to all-time highs ahead of Friday's employment report. Investors are betting the Federal Reserve will begin cutting interest rates as early as June. The U.S. dollar extended losses into the fifth consecutive session on Thursday, having lost 0.45% against a basket of foreign currencies as market participants balanced weaker-than-expected U.S. economic data against dovish comments from the Fed's Chairman Jerome Powell. "If the economy does as expected, we will think carefully about removing the restrictive policy stance over the course of this year. I am waiting to be more confident; we are not far from it," noted Powell at the hearing in front of the Senate Banking Committee. He further noted the number of rate cuts will depend on the development of the economy, recalling that the Fed's latest projections indicate a median preference for three rate cuts in 2024. So far, macroeconomic data for the January-February period came in on the softer side with business activity in both manufacturing and services slowing at a faster rate under pressure from high interest rates. Investors will next shift focus to Friday's Non-Farm Employment report, scheduled for 7:30 a.m. CST release, with economists anticipating 190,000 new jobs added in February, down from January's robust addition of 353,000 jobs. Analysts attribute the anticipated deceleration to seasonal adjustments and an uptick in jobless claims. As a precursor to the Non-Farm Employment report, the Automatic Data Processing (ADP) data released earlier this week showed softer-than-expected private employment growth. In February, private employers added 140,000 jobs, a figure that fell short of the anticipated 150,000 mark. Thursday's mixed settlements also follow a bullish inventory report from the U.S. Energy Information Administration, showing total U.S. commercial petroleum stocks declined by 5.5 million barrels (bbl) last week as demand for refined fuels rebounded sharply, suggesting driving and industrial activity is picking up momentum into the spring months. U.S. gasoline consumption jumped by 546,000 barrels per day (bpd) from the previous week to 9.013 million bpd -- the highest levels since mid-December 2023, which marked one of the busiest holiday travel seasons. The Federal Reserve Bank of St. Louis estimates the 12-month moving average of total vehicle miles traveled in the U.S. in December 2023 nearly matched pre-pandemic levels. For distillate fuel oil, consumption also rose above 4 million bpd for the first time this year, up by 538,000 bpd from the previous week's average. On a four-week average level, U.S. distillate demand has fallen in line with year-ago levels but remains 14.4% below 2022 levels for the seasonal period and 7% below 2019 levels. Commercial crude oil stockpiles increased for the sixth consecutive week through March 1, up 1.4 million bbl from the previous week to 448.5 million bbl. U.S. refinery inputs averaged 15.3 million bpd last week, which was 595,000 bpd more than the previous week's average. Domestic refiners raised run rates 3.4% in the reviewed week to 84.9% of capacity compared with expectations for a 1% gain. Domestic crude oil production unexpectedly decreased by 100,000 bpd from a record high 13.3 million bpd, lending further price support for the oil complex. At settlement, West Texas Intermediate April futures on NYMEX eased $0.20 to $78.93 bbl and the international crude benchmark Brent for May delivery settled unchanged at $82.96 bbl. NYMEX April RBOB futures settled modestly higher at $2.5548 gallon, and April ULSD futures advanced $0.0258 for a $2.6891 gallon.
Expectations That U.S. Interest Rate Cuts Could Be Delayed Against Supportive Chinese Trade Data and Increased Tensions in the Middle East - The oil market posted an inside trading day on Thursday as it weighed expectations that U.S. interest rate cuts could be delayed against supportive Chinese trade data and increased tensions in the Middle East after the first fatal attack on Red Sea shipping. U.S. Federal Reserve Chairman Jerome Powell’s statement that continued progress on lowering inflation “is not assured” continued to weigh on market sentiment. The crude market posted a low of $78.02 by mid-morning. However, it bounced off its low and rallied to a high of $79.53 in afternoon trading. The market’s losses were limited by the continuing tension in the Middle East. The oil market later erased some of its gains ahead of the close. The April WTI contract settled down 20 cents at $78.93, while the May Brent contract settled unchanged at $82.96. The product markets ended in positive territory, with the heating oil market settling up 3.14 cents at $2.6947 and the RB market settling up 9 points at $2.5548. According to Kuwait Petroleum Corp’s Chief Executive Officer, Sheikh Nawaf al-Sabah, global oil consumption is strong and the market looks relatively balanced this year as OPEC+ tries to stabilize prices. He said the market is expected to tighten further as the year goes on. He added that U.S. shale production has helped meet some of the recent growth in demand. He sees room for growth in both OPEC+ production and U.S. shale production in the long-term as consumption increases. He said Kuwait plans to increase production capacity to 4 million bpd by 2035. In regards to Kuwait’s new Al-Zour refinery, he said the refinery’s operating rate has been increased to its full capacity of 615,000 bpd, producing mostly diesel-like fuels. It is selling mostly distillates from the refinery, with most product going to Europe. The head of the IEA’s oil markets and industry division, Toril Bosoni, said the global oil market is relatively well supplied this year with demand growth slowing, while supply is increasing from the Americas. She said the IEA expects “relatively calm markets” even though OPEC recently decided to extend supply cuts. Palestinian militant group Hamas said its delegation left Cairo on Thursday during ongoing negotiations for a temporary ceasefire with Israel, making it unlikely a deal will be reached before the start of the Muslim holy month of Ramadan. India's navy evacuated all 20 crew from a stricken vessel in the Red Sea on Thursday, after a Houthi attack killed three seafarers in the first civilian fatalities from the militant group’s campaign against the key shipping route. The Iran-aligned militants fired a missile at the Barbados-flagged, Greek-operated True Confidence on Wednesday about 50 nautical miles off the southern Yemeni port of Aden, setting it ablaze. S&P Global Commodity Insights is forecasting some 2.0-2.1 million b/d of U.S. refining capacity will be offline in March, basically unchanged from the 2.05 million b/d of capacity offline in February.
Oil Advances After Canada-US Keystone Pipeline Briefly Halts-- Oil rose after services were briefly suspended at the Keystone pipeline, a crucial conduit carrying Canadian crude to the US.West Texas Intermediate futures climbed as much as 0.8% in early trading after a modest decline on Thursday, when Brent crude closed near $83. Operator TC Energy Corp. confirmed the pipeline’s integrity in a statement, adding that service was temporarily suspended “as a precautionary measure” and that no crude was released.Oil has traded in a relatively narrow range this year, with cutbacks by OPEC+ and rising tensions in the Middle East and Red Sea countered by surging supply from producers outside the cartel including the US. Comments from Federal Reserve Chair Jerome Powell suggesting the central bank is getting close to the confidence it needs to start lowering interest rates were also supportive.China’s oil demand, meanwhile, has entered a low-growth phase as the nation shifts away from fossil fuels, the country’s biggest energy producer said. While overall consumption will continue to grow, increased take-up of electric vehicles and trucks powered by liquefied natural gas will eat into gasoline and diesel use this year, Lu Ruquan, president of China National Petroleum Corp.’s Economics & Technology Research Institute, told Bloomberg Television.
Oil Deepens Losses After Mixed US Employment Report - Oil futures accelerated losses in the afternoon session Friday, sending the West Texas Intermediate April contract towards $78 bbl after a mixed U.S. employment report showed stronger-than-expected job growth in February was accompanied by softer wage gains and a rising unemployment rate, which has reinforced the case for the Federal Reserve to lower interest rates in coming months. The U.S. labor market added 275,000 new jobs last month, even as the unemployment rate unexpectedly climbed to a 2-year high of 3.9%, according to data released this morning from the Bureau of Labor Statistics. While the headline figure exceeded market expectations for a 190,000-gain, that was only after the previous two months of payroll data was revised lower by 167,000. Additionally, average hourly earnings eased to 0.1% month-on-month, down sharply from a 0.6% gain at the start of the year, suggesting that the January surge in pay was an anomaly rather than a sustained trend. "The bottom line for policymakers and most economists, this employment report doesn't contain much new information. If you think that the labor market is too hot, you will point to the headline number and increased hours worked; if you believe that the labor market is softening, you will point to the revisions and hourly earnings," said Mohamed El-Erian, President of Queens College, Cambridge, and chief economic advisor at Allianz to Bloomberg TV. However, financial markets, that are biased towards rate cuts from the Federal Reserve this year, appear to favor the report as it supports the case for easing monetary policy. More than 50% of investors anticipate the Federal Open Market Committee will make its first move on rates in June, followed by three more rate cuts in July, September, and December. In his testimony to the Senate Banking Committee yesterday, Federal Reserve Chairman Jerome Powell reinforced the narrative that interest rates are on the way down "sometime this year." "If the economy does as expected, we think carefully removing the restrictive stance of policy will begin over the course of the year," Powell said. He further noted that the number of rate cuts will depend on the development of the economy, recalling that the Fed's latest projections indicate a median preference for three rate cuts in 2024. On Friday, the U.S. dollar index continued its week-long retreat against foreign currencies, having fallen below the 200-day moving average of 103.543, but this failed to lend price support for the prompt-month West Texas Intermediate futures contract. WTI April contract on NYMEX declined $0.92 bbl to settle at $78.1 bbl, while international crude benchmark Brent for May delivery shed $0.88 bbl to $82.08 bbl. NYMEX April RBOB futures fell back to $2.5272 gallon, down $0.0276 gallon, and April ULSD futures eroded $0.0538 to $2.6409 gallon.
Oil prices post weekly loss as China demand weighs on market -- Crude oil futures posted a weekly loss as lackluster demand out of China collided with a market that the International Energy Agency views as well-supplied. The West Texas Intermediate contract for April fell 92 cents, or 1.17%, to settle at $78.01 a barrel on Friday. The Brent contract for May dropped 88 cents, or 1.06%, to settle at $82.08 a barrel. U.S. crude and the global benchmark lost 2.45% and 1.76%, respectively, for the week. Crude oil imports in China fell about 5.7% to 10.8 million barrels per day in the first two months of the year, compared to 11.44 million barrels per day in December, according to S&P Global Commodity Insights. "The big burst of China demand recovery continues to just not pan out and without it, it's going to be hard for these prices to sustain themselves and recover further and get WTI back above 80 bucks," A senior official at the International Energy Agency, meanwhile, told Reuters this week that the oil market should be relatively well-supplied this year. Traders were also studying the latest nonfarm payroll data for February together with Federal Reserve Board Chair Jerome Powell's testimony before Congress this week to assess where interest rates — and oil demand — may go. The U.S. added 275,000 jobs in February, compared to 198,000 expected by economists surveyed by Dow Jones. But the unemployment rate rose to 3.9%. Powell told Congress on Thursday that the central bank is "not far" from cutting rates. Powell told the Senate Banking Committee that the Fed wants more confidence that inflation is moving sustainably at 2%. "When we do get that confidence, and we're not far from it, it'll be appropriate to begin to dial back the level of restriction," Powell said. Lower interest rates typically stimulate economic growth, which supports crude oil demand. Kilduff said the petroleum complex's reaction to the interest rate outlook has been "almost schizophrenic." While lower rates are supportive of demand, the Fed will also only cut rates due to slack in the economy and signs of weakness.
Fatalities Reported, Crew Abandons Ship After Houthi Missile Attack; US & Allies Sending Warships -- Attacks on commercial vessels in the Red Sea continue to escalate and risk sparking a regional conflict as President Biden's Operation Prosperity Guardian to shield ships from Iran-backed Houthi attacks miserably fails. The latest incident involves a commodity ship hit by at least one anti-ship ballistic missile in the Gulf of Aden, close to the Bab al-Mandab Strait, marking the first fatality of crew members of the multi-month Red Sea crisis. "Two killed and six injured in a Houthi missile strikes on the MV True Confidence, a Liberian-owned vessel, in the Red Sea today, per two US officials," Politico's Pentagon reporter Lara Seligman posted on X. Seligman said, "These are the first fatalities of the Houthi campaign against international shipping since November." A US Department of Defense source told the journalist that "no Americans were on board" the vessel at the time of the incident. There were no Americans onboard, but the incident "speaks to how the Houthis are terrorizing international commercial shipping," per U.S. official — Lara Seligman (@laraseligman) March 6, 2024 "The 23 crew members were forced to abandon the ship, which was damaged but has not sunk yet," she said. The 23 crew members were forced to abandon the ship, which was damaged but has not sunk yet, per another DOD official. An Indian destroyer was the first on the scene, and the crew was moved aboard that vessel. Seligman added: "Coalition warships have responded and are assessing the situation," including an "American guided-missile cruiser." An American guided-missile cruiser, the USS Philippine Sea, also headed in the direction of the True Confidence after the incident. Maritime tracking data via Bloomberg shows True Confidence abruptly turned before the Bab al-Mandab Strait on Tuesday, around 1900 local time. There is reason to believe the missile attack was around that time.
British-Owned Cargo Ship Sinks Days After Being Hit By Houthi Missile - The US military said on Saturday that the Rubymar, a British-owned cargo ship, sank in the Red Sea after taking on water for days following a February 18 Houthi missile strike.In response to the news, the Houthis, officially known as Ansar Allah, vowed they would sink more British ships. The Houthis began targeting American and British commercial shipping after the US and the UK started a bombing campaign against the Houthis on January 12.“Yemen will continue to sink more British ships, and any repercussions or other damages will be added to Britain’s bill, as it is a rogue state that attacks Yemen and partners with America in sponsoring the ongoing crime against civilians in Gaza,” said Hussein al-Ezzi, the Houthis deputy foreign minister.The US and British bombing campaign in Yemen has only escalated the situation in the Red Sea and Gulf of Aden as the Houthis are not backing down. US officials recently acknowledged to CNN that they are unable to assess if the strikes are degrading the Houthis’ missile capabilities.The US and the UK have launched four joint rounds of heavy missile strikes so far, and the US has been launching unilateral bombings almost every day. On February 29 and March 1, CENTCOM reported that it launched a total of three strikes on Houthi-controlled Yemen, which is where between 70% and 80% of Yemenis live.The Houthis have made clear they would only stop their attacks in the region if the Israeli onslaught in Gaza comes to an end, and some US officials have said they think the Houthis would be true to their word. But the Biden administration refuses to press for a permanent ceasefire in Gaza and continues to provide unconditional military aid for the slaughter of Palestinians.
Rubymar, first casualty of Houthis, is pouring oil and fertilizer into Red Sea – Oil and fertilizer have poured into the Red Sea from a sinking cargo ship attacked by Yemen's Houthi rebels, putting the local environment and a critical waterway for cargo shipments to Europe at risk.U.S. officials confirmed early Sunday that the MV Rubymar carrying 21,000 metric tons of fertilizer had sunk two weeks after it was attacked on February 18. It's the first vessel to sink from a Houthi attack after the group started targeting commercial shipping in the waterway last November.The Rubymar, a Belize-flagged vessel, started leaking fuel shortly after the attack, leaving a 30-kilometer oil slick across the waterway. Although the 24 crew members on the ship were safely evacuated, the U.S. Central Commandsaid on X early Sunday that the leak poses an "environmental risk" in the area and could put other vessels moving through the Red Sea's busy shipping lanes in danger.The Houthi attacks have heightened concerns for the Red Sea’s coral reefs, which scientists have found to be so far resilient to climate change. Dozens of ships have been attacked by the Iranian-backed group, who says they are singling out vessels linked to Israel.The U.S. central command said the Houthis "pose a heightened threat to global maritime activities."Houthi revolutionary committee leader Mohammed Ali al-Houthi said in a post on X that U.K. leader Rishi Sunak and his government "bear responsibility" for the Rubymar attack because of their support of "genocide and siege" in Gaza. "You have a chance to salvage the MV Rubymar by sending a letter of guarantee," allowing aid trucks into Gaza, he said.
Yemen faces environmental disaster over sunken Red Sea ship The sinking of a Belize-flagged bulker off Yemen after a Houthi missile attack poses grave environmental risks, as thousands of tonnes of fertiliser threaten to spill into the Red Sea, according to officials and experts. The Belize-flagged, Lebanese-operated Rubymar sank on Saturday with 21,000 metric tonnes of ammonium phosphate sulfate fertiliser on board, according to US Central Command (CENTCOM). It had been taking in water since a Houthi missile strike on February 18 damaged its hull, marking the most significant impact on a commercial ship since the rebels started targeting vessels in November. After already leaving a slick from leaking fuel while it was still afloat, the Rubymar now poses a new set of environmental threats under water. Abdulsalam al-Jaabi of the Yemeni government's environmental protection agency warned of "double pollution" that could impact 78,000 fishermen and their families - roughly half a million people. "The first pollution is oil pollution resulting from the large amount of fuel oil on board" which could continue to leak, he said, estimating the quantity to be over 200 tonnes. The second risk is posed by the fertiliser cargo, which is highly soluble and could harm "fish and living organisms such as coral reefs and seaweed" if released into the water, Jaabi added. The overall contamination could incur "significant economic costs", especially on war-torn coastal communities that depend on fishing for survival, the official warned. Yemen's Iran-backed Houthi rebels seized the capital Sanaa in 2014, pushing the internationally recognised government south to Aden and prompting Saudi Arabia to lead a military coalition to help prop it up the following year. A ceasefire since April 2022 has largely held.
Houthis Offer Safe Passage To Ships Through Red Sea If They Obtain Permit - The Houthis are currently threatening to unleash more 'painful' attacks on Red Sea shipping. "Yemeni naval forces are closely monitoring all movements in the Red and Arabian Seas and our appropriate responses will make anybody found to be involved in such operations regret their allegiance to America and Britain," a Houthi military spokesman said Tuesday.Nadwa Al-Dawsari, an analyst with the Middle East Institute in Washington, has described that the US/UK-led Operation Prosperity Guardian has essentially failed. "The Houthis feel confident. They were never held accountable for any of their violations, including attacks on the Red Sea." And now the Iran-linked Houthis are so confident that they have announced a new system for entry into the Red Sea which they are unilaterally imposing."Ships will have to obtain a permit from Yemen’s Houthi-controlled Maritime Affairs Authority before entering Yemeni waters," according to a Monday statement of Houthi Telecommunications Minister, Misfer Al-Numair."(We) are ready to assist requests for permits and identify ships with the Yemeni Navy, and we confirm this is out of concern for their safety," the minister said further, in an official statement carried by the Houthi-run Al Masirah TV.According to details of the permit plan via Middle East Monitor:The territorial waters affected by the Yemeni order extend halfway out into the 20-km (12-mile) wide Bab Al-Mandab Strait, the narrow mouth of the Red Sea through which around 15 per cent of the world’s shipping traffic passes on its way to or from the Suez Canal. In normal times, more than a quarter of global container cargo – including apparel, appliances, auto parts, chemicals and agricultural products, like coffee – move via the Suez Canal.Previously the Houthis have said that Russia and China owned vessels would receive safe passage, but foreign tankers headed to Israeli ports risk coming under attack.Washington officials have already expressed doubt over the new offer of permits, saying that even permitted ships could likely face missile or drone attack.
US Says Three Crewmembers Killed in Houthi Attack on Commercial Ship - The US military said Wednesday that a Houthi attack on a cargo ship killed three crewmembers and wounded four, marking the first casualties in the Houthi operations against commercial shipping that were launched in response to the Israeli slaughter of Palestinians in Gaza.US Central Command said a Houthi ballistic missile hit the M/V True Confidence, a Barbados-flagged, Liberian-owned bulk carrier. The Houthis took credit for the attack and said the ship was American-owned, but the True Confidence’s owner and manager said in a statement there was “no current connection with any US entity.”Houthi military spokesman Yahya Sarea said Yemeni forces “struck the US ship in the Gulf of Aden, which caused a fire to break out.” He said the “operation was carried out after the crew of the American ship rejected warning messages from the Yemeni naval forces.”In response to the reports of civilians being killed, Houthi officials said they don’t intentionally target crew members. “We do not intentionally harm the crews of ships belonging to enemy countries, so we ask them to return and warn them not to cross,” Mohammed al-Bukhaiti, a member of Ansar Allah’s political bureau,wrote on X.“America and Britain’s insistence on the continuation of genocide in Gaza, the starvation of its population, and its aggression against Yemen is what led to this dangerous escalation,” al-Bukhaiti added. Later on Wednesday, Yemeni media reported that US and British strikes targeted an airport in Yemen’s Hodeidah province, which is on the Red Sea. The new US bombing campaign against the Houthis in Yemen has killed at least one civilian and wounded 10 others in February. According to the Yemen Data Project, one civilian was killed, and seven were injured in a US strike on a telecommunications site, two were wounded in a strike on a pesticide factory, and one was injured in a strike on a farm. The US has killed at least 17 Houthi fighters since it began bombing Yemen on January 12.The US has a long history of killing civilians in Yemen in its drone wars, and the US backed a brutal Saudi-UAE war against the Houthis from 2015-2022. The war and blockade on Yemen killed at least 377,000 people, and more than half died of starvation and disease caused by the siege.The new US war against the Houthis has only escalated the situation in the Red Sea and Gulf of Aden, as the Houthis are now targeting American and British commercial shipping. The Houthis were initially only targeting Israel-linked commercial shipping and have made clear the only way they’ll stop is if the siege on Gaza comes to an end.
Iranian 'Spy Ship' In Spotlight After Undersea Data Cables Linking Continents Severed 00In a statement on Monday, Hong Kong-based HGC Global Communications revealed that four undersea communications cables in the Red Sea were severed, impacting about a quarter of the data transmission between Asia and Europe. The incident occurred one week ago, with the full extent of the damage only now coming to light. The cut data cables include Asia-Africa-Europe 1, the Europe India Gateway, Seacom and TGN-Gulf, HGC Global said, adding this is "estimated impact 25% of traffic - around 15% of Asia traffic goes west-bound, while 80% of those traffic will pass through these submarine cables in the Red Sea." HGC said it had taken measures to "successfully devised a comprehensive diversity plan to reroute affected traffic." What severed the undersea cables remains unclear - and there are mounting concerns that Iran-backed Houthis were part of the attack. But in recent days, the rebels have denied attacking the lines. AP News quoted a US government official who said an investigation is underway to determine the cause of the cable cuts. The official said the investigation will decide whether it was an intentional act or an accident involving an anchor. However, some believe the Houthis are not the most capable group in the region to conduct such an attack; in fact, it might be Iran."Cutting off critical lines communications and driving up the costs of everything from internet to oil across the Middle East is a clearly articulated economic warfare goal of the IRGC Qods Force. Iran seeks to undermine global access to the region as part of its cost-imposition strategy," said David Asher, a senior fellow at Hudson Institute. Asher said: "The Qods Force is operating a spy ship called the Behsad that is reportedly in the Gulf of Aden, not far from where the undersea cables were cut. This ship highly likely carries a Qods Force special underwater warfare force component more than capable of carrying out an undersea cable attack." Bloomberg data shows that the Behshad, an Iranian vessel in the Red Sea, was in the region around the time the incident occurred last week.
UNICEF Warns Child Deaths in Gaza Due to Israeli Siege Will 'Increase Rapidly' - At least 16 Palestinian children have starved to death in the Gaza Strip over the past few days due to the US-backed Israeli siege, and the UN’s child relief agency is warning that the number of child deaths will “rapidly increase” if conditions don’t immediately change.“Last week, we warned that an explosion in child deaths was imminent if the burgeoning nutrition crisis wasn’t resolved,” said Adele Khodr, UNICEF’s director for the Middle East and North Africa. “Now, the child deaths we feared are here and are likely to rapidly increase unless the war ends and obstacles to humanitarian relief are immediately resolved.”The latest Palestinian child reported to die of hunger was Yazan al-Kafarna, a 10-year-old with cerebral palsy who was in the al-Najjar Hospital in Rafah. Fifteen children have also died of malnutrition and dehydration at the Kamal Adwan Hospital in northern Gaza.The UN has previously warned that Gaza’s entire population of about 2.2 million people is acing “crisis” levels of food insecurity, and at least 576,000 Palestinians in Gaza are “facing catastrophic levels of deprivation and starvation.”Despite the dire situation, the State Department reaffirmed on Monday that it will continue to provide military assistance for Israel’s genocidal war. The US is still not pushing for an immediate ceasefire or using military aid as leverage over Israel to allow more aid trucks into Gaza. Instead, the US dropped aid out of planes over the weekend, a move criticized by aid groups as a public relations ploy since the amount was just a drop in the bucket of what’s needed in Gaza.According to the latest numbers from Gaza’s Health Ministry, 30,534 Palestinians have been killed by Israel, and 71,920 have been injured. About 70% of the casualties are women and children.
Israel Still Blocking US-Funded Flour Shipment Into Gaza - Israel is still blocking a US-funded flour shipment into the Gaza Strip that was announced by the White House 46 days ago, a US official told The Times of Israel on Tuesday.Israeli Finance Minister Bezalel Smotrich initially said he blocked the shipment because it was going through the UN’s Palestinian relief agency, known as UNWRA. About two weeks ago, US officials said Israel agreed to unblock the shipment and send it through the World Food Program, but it still hasn’t entered Gaza, where children are dying of starvation. The flour is stuck at the Israeli port of Ashdod.Israeli Prime Minister Benjamin Netanyahu told the US in January that he would allow the shipment to go through, but he has not been true to his word. The US official did not elaborate on why the flour continues to be blocked.State Department spokesman Matt Miller referenced the flour when asked about Israeli ministers who are restricting aid into Gaza. “You have seen ministers in the Israeli Government block the release of flour from the port at Ashdod; you have seen ministers of the Israeli Government supporting protests that blocked aid from going into Kerem Shalom,” he said.Miller insisted the US has said the restrictions on aid are “unacceptable,” but the Biden administration isn’t using any of its significant leverage over Israel since it continues to provide unconditional military aid for the slaughter and starvation of Palestinians.Instead of using its leverage on Israel, the US began dropping aid from planes over Gaza over the weekend and carried out another airdrop of about 36,000 meals with the Jordanian Air Force on Tuesday. Oxfam said the airdrops “mostly serve to relieve the guilty consciences of senior US officials whose policies are contributing to the ongoing atrocities and risk of famine in Gaza.”On Tuesday, an elderly Palestinian man died of dehydration and malnutrition in northern Gaza. In recent days, at least 16 Palestinian children have died of starvation, and the UN is warning the number will “increase rapidly” if the situation on the ground doesn’t dramatically change.
Bullets Found at Gaza Flour Massacre Site Belie Israel's 'Stampede' Claim - Bullet wounds caused by the same type of large-caliber ammunition used in several Israel Defense Forces rifles and machine guns undercut Israeli officials' dubious claim that most victims of last week's "Flour Massacre" near Gaza City died in a stampede, one human rights monitor said Wednesday.Gaza officials said at least 118 Palestinians were killed and 760 others injured when Israeli troops shot and shelled a large crowd of starving people waiting for food distribution in the al-Nabulsi Roundabout area south of Gaza City on February 29. Israeli officials said many or most of the victims were trampled as the large crowd of people starving due to Israel's siege and blockade of Gaza desperately rushed aid trucks.However, Dr. Mohammed Salha, the acting director of Al-Awda Hospital,told reporters last Friday that more than 80% of Flour Massacre victims treated at the facility suffered gunshot wounds. A United Nations team that visited al-Shifa Hospital in Gaza City found "a large number of gunshot wounds" among the 200 or so patients being treated there.On Wednesday, the Geneva-based Euro-Mediterranean Human Rights Monitor, which is investigating the massacre, said that many victims suffered injuries from 5.56x45 mm NATO bullets, which are used in various guns carried by Israel Defense Forces (IDF) troops including M4 and Tavor assault rifles and IWI Negev light machine guns."A sample of 200 dead and injured victims revealed that they were indeed hit by this type of bullet, and that the bullets were discovered and examined at the massacre site along with shrapnel found in the bodies of the wounded and dead," the group said.Israel imports some of its 5.56 mm rounds from the United Kingdom, where Palestine advocates are calling for an investigation and the suspension of arms exports to the country.Numerous Flour Massacre survivors have described how Israeli troops opened fire on them while they attempted to secure food for their starving families."We had been waiting for hours when we finally spotted the trucks. At that very moment, the Israeli occupation opened fire at us with gunfire and artillery shelling," Hajj Mahmoud Daghmash toldThe Palestine Chronicle earlier this week. "Fear filled all our hearts, and people started running everywhere. We didn't know where to hide. The screams of the wounded, women, and children were heard everywhere.""The occupation killed us twice," Daghmas added. "Once when it shelled our homes, and then again by starving us."A group of U.N. special rapporteurs on Tuesday condemned the massacre and Israel's policy of deliberately starving Gazans to death and attacking humanitarian aid and those delivering and receiving it."Israel has been intentionally starving the Palestinian people in Gaza since October 8. Now it is targeting civilians seeking humanitarian aid and humanitarian convoys," the U.N. experts said. "Israel must end its campaign of starvation and targeting of civilians."
Air-Dropped Aid Crushes 5 Palestinians to Death in Gaza - (video) The parachutes of air-dropped pallets of aid failed, causing the large objects to plummet to the ground in northern Gaza, killing five. The US and several other countries have dropped a token amount of aid onto northern Gaza because Israel is only allowing a trickle of aid to enter the Strip by land. A witness speaking with Al-Jazeera explained the botched aid drop caused a building to collapse, killing some of the people sheltering inside. “People were waiting for the drops when they noticed they were coming in fast. So a group of people took cover in a construction site,” he said. “One of the packages fell atop the site, causing it to collapse, killing and wounding people inside. I rushed to help the people inside when I realized my cousin was among them. He is now dead.” Palestinian health officials and an eye witness who spoke with CBS News said that the aid crate killed five people, including two children, on Friday morning in northern Gaza . Multiple videos have also shown pallets of aid that have fallen into the Mediterranean Sea floating on the surface where some appear to tangle and plummet down. Aid groups have criticized the air-dropped aid into Gaza as insufficient. The head of the Norwegian Refugee Council humanitarian group, Jan Egeland, explained earlier this week that “Airdrops are expensive, haphazard, and usually lead to the wrong people getting the aid.” Gaza-based Journalist Abdel Qader Al Sabbah told CNN that the air drops of aid are “useless” and are causing more chaos. “You are lucky if you even get a hold of these meals… I don’t even bother to go searching for these aid parcels because people are always fighting over them,” he said. Palestinians say they want Biden to stop sending Israel bombs, not aid. Hassan Maslah, a Palestinian in Khan Younis, described his feelings as he dug through the rubble caused by an Israeli air strike. “All these American weapons are killing our kids, and killing us wherever we go. We don’t need aid from them, we need them to stop the killing, stop the death,” he said. A Palestinian discussing the shipments on social media lamented that the nutrition information and instructions were in English without an Arabic translation. Rafah-based journalist Hani Mahmoud explained there was a growing sense in Gaza that even aid is becoming deadly. “This is the tragedy people are experiencing in the north of Gaza.” He continued, “Not only are they confronted with the lack of food and medical supplies, but as they wait for packages of food they are either targeted by the Israeli military or killed by a non-functional parachute.” Last week, the Israeli military opened fire on Palestinians near an aid shipment. Over 100 Palestinians were killed and about 700 injured. A report released by Refugees International on Thursday described the situation in Gaza as “apocalyptic.” “Our research makes clear that conditions inside of Gaza are apocalyptic,” the report said. “After five months of war, Palestinians are struggling to find adequate food, water, shelter, and basic medicine. Famine-level hunger is already widespread and worsening.” At least 20 people in Gaza have starved to death because of the Israeli blockade of aid. Still, President Biden has refused to use Washington’s significant leverage over Tel Aviv to allow more aid into the Strip.
Biden Announces 'Emergency' Military Mission to Establish Port in Gaza for Aid - President Biden announced during the State of the Union on Thursday night that he ordered a military mission to establish a port in Gaza to get more aid into the Strip as Palestinians are starving to death and Israel is still restricting aid.The drastic measure is being ordered instead of Biden using the enormous leverage he has over Israel to pressure them to allow in more aid or halt the genocidal campaign. The US also recently started conducting airdrops of aid into Gaza, which aid groups have slammed as a public relations ploy.“Tonight, I’m directing the US military to lead an emergency mission to establish a temporary pier in the Mediterranean on the Gaza coast that can receive large ships carrying food, water, medicine, and temporary shelters,” Biden said.US officials claimed to Axios that the pier in the sea off the Gaza coast will allow hundreds of aid trucks to enter the Strip per day. But the pier will take weeks to build, and Palestinians are already starving to death at a rapid rate.Biden insisted there would be “no US boots on the ground.” But the plan does still run the risk of US personnel being targeted off the coast, which could lead to a major escalation of US involvement in the Israeli slaughter of Palestinians.The aid will pass through Cyprus before heading to the pier and will be subject to Israeli inspections, which means some could be turned away.CNN reported that some of the items most frequently rejected by Israel include anesthetics and anesthesia machines, oxygen cylinders, ventilators, and water filtration systems. The CNN report said other items that have faced restrictions are dates, sleeping bags, medicines to treat cancer, water purification tablets, and maternity kits.Biden acknowledged in his speech that Israel has killed “thousands and thousands of innocent women and children” but gave no indication he was reconsidering his policy of unconditional military support for the slaughter.
Starving Children in Gaza 'Cannot Wait' Weeks for US Port, Aid Groups Say -- Leading humanitarian groups said Friday that starving people in Gaza, including more than a million children, are in need of immediate aid and can't afford to wait for the U.S. military to construct a port on the enclave's coast, a project that's expected to take weeks."Children in Gaza cannot wait to eat," said Jason Lee, country director for Save the Children in the occupied Palestinian territory. "They are already dying from malnutrition and saving their lives is a matter of hours or days—not weeks."At least 17 children have starved to death in Gaza, according to Defense for Children International – Palestine, and many more are currentlystruggling to survive.Condemning Israel's obstruction of ground-based aid deliveries as "a grave violation against children" and international law, Lee stressed Friday that "there is already a tried and tested system in place to effectively coordinate aid.""But trucks of food and medicines that could save lives are waiting at crossings, while children are starving just miles away," Lee continued. "Airdrops, with no on-the-ground coordination of who it reaches, and maritime corridors like the one announced yesterday, are no solutions to keep children alive. Neither are substitutes for unimpeded humanitarian assistance via the established land routes."U.S. President Joe Biden announced during his State of the Union address Thursday night that he has directed the nation's military to "lead an emergency mission to establish a temporary pier in the Mediterranean on the coast of Gaza that can receive large shipments carrying food, water, medicine, and temporary shelters."The president also said Israel, whose military is armed to the teeth with U.S. weaponry, "must do its part" by allowing "more aid into Gaza"—but did not threaten any consequences if the Netanyahu government refuses."Israel needs to facilitate rather than block the flow of supplies. This is not a logistics problem; it is a political problem."Ground deliveries into Gaza have plummeted in recent weeks as Israeli forces have attacked aid convoys and prevented trucks from entering and moving through the territory. A World Food Program (WFP) officialsaid earlier this week there's enough food to feed Gaza's "entire population" sitting just outside of the strip."We need land crossings, we need access to get it into Gaza, whether in the southern parts of Gaza or the northern part of Gaza because the situation is catastrophic. So having access is really our number one priority," said Samer AbdelJaber, WFP's director of emergency.The WFP has said aid airdrops—which Biden authorized last week—are a "last resort" and "will not avert famine." On Friday, aid packages dropped into Gaza by U.S. military planes killed five people and injured at least 10 others.Avril Benoît, executive director for Doctors Without Borders, arguedFriday that Biden's plan for a temporary port "is a glaring distraction from the real problem: Israel's indiscriminate and disproportionatemilitary campaign and punishing siege.""The food, water, and medical supplies so desperately needed by people in Gaza are sitting just across the border," said Benoît. "Israel needs to facilitate rather than block the flow of supplies. This is not a logistics problem; it is a political problem. Rather than look to the U.S. military to build a workaround, the U.S. should insist on immediate humanitarian access using the roads and entry points that already exist."Refugees International said in a report released Thursday that its research teams found Israel is engaged in "routine and arbitrary denial of legitimate humanitarian goods from entering Gaza," forcing aid convoys to undergo "a highly complicated" inspection process "without clear or consistent instructions." "Our research makes clear that conditions inside of Gaza are apocalyptic," the group said. "After five months of war, Palestinians are struggling to find adequate food, water, shelter, and basic medicine. Famine-level hunger is already widespread and worsening."
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